December 25, 1885. J 



SCIENCE, 



553 



BAD TIMES. 



In these days of many books, one gives a wel- 

 come to the man who can write a small book ; but 

 in this case the man is he whose work makes him 

 the rival of two not often found together in the 

 same comparison, — Charles Darwin and Henry 

 George. Mr. Wallace, as a naturalist, disputes 

 "svith Darwin the claim of having originated the 

 theory of natural selection ; while, as the defender 

 of the nationalization of land, he also appears in 

 the field where Henry George had been the most 

 prominent figure. Like Simon Newcomb, who 

 has lent the hours not occupied by severe mathe- 

 matical studies to the service of political economy, 

 so Mr. Wallace has turned from natural history to 

 explain to us the causes of the depression in busi- 

 ness which has in the years since 1873 become so 

 unfortunately familiar to us all. 



His definition of 'bad times' consists in "the 

 low prices of goods, the number of men out of 

 employment, and the numerous bankruptcies" 

 (p. 14), thus showing the influence of that com- 

 mon failing in business circles wherein men think 

 that high prices are in themselves good, and low 

 prices bad. It is owing to this prevalent opinion 

 that men are apt, even when they know better, 

 to wink at any measure which promises higher 

 prices, even though it be through increased quan- 

 tities of money. Indeed, our silver dukes hold 

 their vassals in obedience, to no small extent, by 

 making them beheve that demonetization of silver 

 leads to a contraction of the world's money, and 

 so to a faU of prices. When a man has a stock of 

 goods on hand, he wants prices to go up, no 

 matter how. This overlooks the fact that money 

 as a medium of exchange is only a means to an 

 end, or a road from one to another place. An 

 increase of money may raise prices, but not the 

 quantity of goods in the world. Doubling the 

 trucks in a store does not double the goods which 

 they are made to carry. 



But the real distress from low prices arises from 

 the fact that they once were high ; and that obli- 

 gations to a fixed amount, entered into when 

 prices were high, must now be paid off when 

 prices are lower. This is the painful process ; and 

 yet it is painful only because people, led away in 

 the period of speculation by sanguine expectations, 

 entered into obhgations which they did not have the 

 actual wealth to satisfy. They bought with an en- 

 larged faith, that is, with an expanded credit ; and 

 when the panic came, they found out that they had 



Bad times : an essay on the present depression of trade, 

 tracing it to its sources in enormous foreign loans, exces- 

 sive war expenditure, the increase of speculation and of 

 millionnaires, and the depoxmlation of the rural districts ; 

 with suggested remedies. By Alfred Russel Wallace. 

 London, Macmillan, 1885. 16°. 



only expectations, instead of real wealth, with 

 which to meet their engagements. Into this truth 

 our author takes us, with some natiaral traces of 

 English insularity, by explaining the effect of 

 foreign loans in producing the depression. In 

 1870-75 he claims that England furnished one 

 thousand three hundred million dollars as foreign 

 loans to Egypt, Turkey, Russia, Austria, Italy, 

 and Spain ; to Brazil, Peru, Chile, and Paraguay; 

 and to Costa Rica, Mexico, Guatemala, Honduras, 

 Japan, and the United States ; and to English 

 colonies. These loans left England in the form 

 of exports ; so that English exports appear to have 

 been so unusually increased during these years, 

 that they have never since been equalled. The 

 effect on England was to unnaturally stimulate 

 many manufactures. ",But soon came the inevi- 

 table reaction. The vast amounts of borrowed 

 capital were exhausted, and, instead of having a 

 plethora of money to spend, all these countries 

 had interest to pay ; and the people being heavily 

 taxed to pay this interest, their purchasing-power 

 was diminished, and the demand for our goods 

 suddenly fell off." These foreign loans being ex- 

 pended so largely unproductively in wars and 

 extravagant uses, nothing remained as a perma- 

 nent source of demand for England's goods, and 

 so English exports declined, business became de- 

 pressed, and men were left unemployed. In this 

 chapter our author gets nearer the essential truth 

 than in some other of his explanations of the ' bad 

 times ; ' for the above conditions were not solely 

 English, or true only of nations. Individuals and 

 corporations were everywhere lending and con- 

 suming beyond all wisdom, out of aU proportion 

 to their real means of payment. After our civil 

 war, that was what we were doing. 



The other causes seem to be of value only so 

 far as they lead up to the one already explained. 

 From 1870 to 1884 "the expenditm-e of the six 

 great powers of Europe has increased from £345,- 

 000,000 to £612,000,000, — an additional bur- 

 then of £266,500,000 a year. The population of 

 these six states is now a little over 269,000.000 ; 

 so that they have to bear, on the average, an addi- 

 tion of taxation amounting to nearly a pound a 

 head, or about five pounds for each family." As 

 this has come about owing to wars, or prepara- 

 tions for war, it explains how the wealtli has been 

 consumed unproductively. The author also esti- 

 mates that seven millions of men are involved in 

 producing for this wasteful expenditure, and re- 

 minds us of ' John Bull and Ms island,' when he 

 says that "the moral arguments against war 

 would doubtless be more generally effective if 

 it were clearly seen that always and everywhere 

 its direct and necessary effect is to produce more 



