New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1889-02-23

comments on Mr. MlITs hOesO PO ,,u.o,
Mr. AI,s doctrine was attacked by ME- ~ he ~
nm the ground that the alleged wage lunu; at cum
any value IN economies must be ue e ths ease OF
nS' s EMPLOYER and then in the aggregaSS
c of all employers how much money IL any. mS'
been set apart in advance for the Abstraction
was of no use. Mr.. Mill g ravesg '''n nt neither
validity Of Mr. Thorntons objection which renders
ba boe nronosition on an exact level Win ne
buys plan for finding the distance would
viz: Guess how much four tiines "0
be- and then quarter 1t. b.x,o ranid nrorress
Political economy can never nano on &c emf in 10
~ IL nntrv 10 ineuIcate or in some way develop
there the faculty Of apprehending @e oiS""'''" ~
tween stupidity and profnhohS' d
Egective demand finds expression in prices, ana
bcra the author digresses to argue the utility anu
benehcence of speculative markets, which nc cans
. nrice Mills He does not succeed in giving
anv justification for toleratng sahs of property
u,h;ob the seller does not own, nor does he con-
slider the destructive effect of violent ductua'io@
unon trade and industry. Yet he must see that
false or fictitious prices divert industry ln.o
wrong channels for he says: Prices on the
Produce Exchange control the operations oil 'ne
farm and induce farmers to stop raising corn am,
raise cattle OF fruit or tobacco. III the price Vi
meas is high relatively to oats, the farmer uropS
oats and raises peas" But ne U"0e' '--
90 anr one kind of consumable wealth man
oapacity TO make pleasura6e PerSoha anscitv Inv
by nature with great rightly, M Snd ~ conslmable
aids of various kinds TO produce 'niS ' VI
wealth is almost unlimited. h, ,,ealtb which, he
Q The portion of consumaoe Weo onsnme 1calIed
can nrodrce above his own power 20 CONSUME Wsni,,
lis market product or surplusD would nave M " abe
could he not find some person VINO neee Tor A. This
10 give return service In exchahge lVL aconomic
al NV and desire TO give return service Is econo"""
want of effective demand H..
Tins il comes to pass that the demand Ior 'niiis9
consumable is limited the demand Is never ce"s,ne
and unlimited for those instruments Vi iu, ~,
production which can only be used in con@i'uV
Ing to the happiness and welfare OF the race
The direction of industry toward prouucUion -
things is governed by the varying demahu
henGe pfo whose guidance rent interest and
wages all await and follow FRONTS ltnPe or ~
great They are the pillar OF cloud by day
and of fire by night in the onward march OF s5o
They keep breakng out in the most uheApec'eu sPoS'
and perpetually surprising The woflu
OF industry thus directed the prohtnlaRer
IS the rghtful leader his success earned ny actuaI
services 10 society proving his title whoever can
nightly see where profits are TO be made is inc
one who ought to direct industry for Its own DeS'
welfare. and all business is species oil seIl-so'
ernment each consumer voting by his purchases
for the trader or manufacturer who steers industry
wisely with reference to his demand. The question
then comes, how shall profits be divided
certain unit Of capital on a farm perhaps sl'2o9'
ON a railroad perhaps $4,000, Is necessary 10 seU
each laborer at work effectively:
should not that unit Of capital which employs a
man NAV own twenty units OF capital and in that
way get a return equal TO that OF twenty heh Nlss
matter II the service he renders TO each OF the twenty
exactly equals the service each renders TO him HIS
aggregate services 10 the twenty must DC olual W
the aggregate of the services of the twenty 10 MIN
he furnishes the capital WHICH empiogA
twenty five thousand he should receive an ssgIr
gate return equal to that OF e Whole am ao er
vice In this way only can there be equality ana
VICE Wee - -
That such an equal division does in fact occur,
Professor Denslow aims to show by many examples.
Thus fifty-four railroads in Illinois paid for the
use of capital in all forms ssl, 265 %, and
for wages and salaries ss1, 936,17O 81. Scores
of illustrations are submitted which, in the alb
sence of far broader information ncedful to es-
tablish a law do at least create a presumption
that there is a tendency toward an equal division
of profits between the capital and the labor en-
ployed in production.
To appreciate Professor Denslcw's philosophy
the inquirer must turn from this meagre outline
to his interesting work in which It's principles are
applied 10 economic problems with marked ability.
In treating of rent he holds that it is IA price
paid TO avoid transportation, but il may be doubted
whether interest on capital invested is not in fact
more potent. In controverting the position OF Mr..
Atkinson, that profits OF capital tend steadily TO
decrease, the author seems TO miss the true point,
which is that at any given place, or in any par
ticular industry, this tendency appears. Professor
Denslow's views on the money question lean toward
theories Of imitation, unless his language is mis-
construed He seems TO overlook the mischief
which results from an artificial advance in prices
in his strong impression that more money makes
business active, for he says: Hence IL has often
resulted that the most direct way 20 have good
times was TO have what the bankers would call
bad money; as the money gets better ldearer and
scarcer) the times get worse"
He argues that the payment of bonds virtually
contracted the circulating medium, and thus
caused the depression in business from $40 20
1878, though it might with more force be reasoned
that the discharge OF foreign debt in those years
prepared for the prosperity which followed. lie
leans TO the view that partial disuse of silver
since 1873, notwithstanding the enormous multi
plication Of substitutes has caused the worldwide
depression Of prices, and relates the following:
The theory was propoUnded more than a century
ago Dy Mr. Meggns, and combaicd by Adam Smith,
on the relative quantities produced for circulation
~ Europe Megglng held. therefore, that II the drain
SHNcr 70 ShOuld STOP the ratio between tho
two metals would fall TO Of GOLD TO twenty two Of
SILVER. smith thought IT. would not. But In 1876
me drain TO india stopped nearly so, and whether
rom ms or other causes the relative value of silver
fell as Meggins predicted.
The author gives no statistics on this subject Of
later date than 1888, and experience since that
date Is held by most economists strongly to con-
firm the belief that the course of prices in the
western world has been but little Influenced bv
the price Of silver bullion.
The ability of Professor DensIow as q defendcr
of the American policy OF protection has been dis
played IN many fields and it is the less necessary
here to quote at length his reasonings on the
tarin question. He shows with especial forco that
exchanges between two home producers keep two
sets OF laborers at work, while exchanges with
foreign producer keep but one set here at work.
that the history of all other countries iustes the
wisdom OF those who shield national Industry
from the warfare of foreign competition; and that