creation of these railroads, and all that grew out of their construction, was the labor of man—and so it is in all that man produces and consumes; it is labor only that enters into the construction, crystallizes, and there remains, an addition to material wealth, whilst the capital always returns to the capitalist-and the true reason why our great industrial distress came upon us is found in the fact that only one twelfth of the late army employés found uncompetitive employment, while the other eleven twelfths remained in idleness, or by constant competition with those already employed forced a continual reduction in wages, uncertainty in and partial employment, a reduction in the means of living, a lessening of consumption, with continual decrease in the demand for manual labor in production. It is this great weight of idleness that is crushing the life out of us.

The allegation that excessive railroad building was a cause of our general distress, is not true. It was that enterprise that delayed and made more gradual its approach. The charge that we built "railroads running from point nowhere to point nowhere,” as well as the whole allegation against railroads, had its origin in the Northern Pacific, where the great financial panic of 1873 first developed; a road which had then only 585 miles completed, with starting points of no mean importance, and running through and opening up, so far as completed, as good a region of country as can be found in the valley of the Mississippi. If that road did not then pay dividends, it was simply in the same condition as some of the oldest and best roads in our country.

During the four years of the war, from 1862 to 1865, inclusive, there were built 3,799 miles of road ; during the next four years, 11,759 miles; and in the next four years, ending with 1873, 23,467 miles. Of this 35,226 miles of railroad built during the eight years which followed the war, 1,480 miles were in the Eastern States, being an increase of nearly 40 per cent. in that section; in the Middle States, 5,104 miles, and nearly 60 per cent. increase; in the Southern States, 3,877 miles, and 421 per cent. increase; in the Western States, 22,833 miles, an increase of 171 per cent.; and in the Pacific States, 1,932 miles, being an increase of nearly ten fold. Which and how many of these roads were not needed? It must be easy to point them out, and it would make a most interesting and instructive exhibit.

The industry that built this vast extent of railroad (that would reach one and one half times around the world), and incidentally the great number of furnaces, forges, mills, machinery, and structures of many kinds, and that created the great demands for food, clothing, shelter, and other necessaries that were used and consumed in the sustenance of the operatives, were not the cause of our great industrial distress, because they have all been created without the consumption or destruction of any portion of the material wealth or capital that before existed, and are just so much added to the means for providing for man's necessities and comforts.

The following extract from an editorial in the Chicago Times, of October, 1882, is in the same line of fallacious statement as that of the late Secretary of

the Interior. In commenting upon the railroad construction for the year, the writer says:

"At the same rate of construction for the current quarter the total trackage laid for the year would be about 10,700 miles. This construction, assuming the actual cost to be $25,000 per mile, on the average- and it is probably not far from that will involve the conversion of $270,000,000 of circulating capital into fixed capital."

"Circulating capi

What does this writer mean? tal" is generally understood to be money. Does he intend to be understood as saying that $270,000,000, in money, have changed their nature and been "converted" into iron, and wood, and roadbeds; and consequently, that there is just so much "circulating capital" lost to the world? Oh, no, he does not intend to say that. But that is the meaning of the language used, or it has no meaning. It is that kind of "conversion" that would make it "fixed," i. e., immovable.

The statement is a pure fallacy, without a grain of sense to sustain it. The truth is, that not one dollar of capital, of any nature, has been converted into railroads. All such capital has simply been temporarily used in the construction of the roads, as were the wheelbarrows of the laborers, and still remain as "circulating capital" for further, or other uses, as do also the old wheelbarrows, if not worn out; a liability to which "circulating capital" is not incident.

Labor is the only "capital" that has undergone a "conversion," and become "fixed" in the railroads that have been built. In that "conversion" the labor

that built those roads has gone into the hands of the capitalist as "fixed capital," upon which to obtain additional amounts of "circulating capital" by the methods too well known to require explanation here.

The two statements here commented upon may be accepted as fair samples of the fallacies that are being continually given to the public as facts, by the popular economists of the present period.

CHAPTER X.

MONEY AND THE INDUSTRIAL DISTRESS.

WH

~HAT is money and what are its uses? Adam Smith says:

"Money is neither a material to work upon, nor a tool to work with; and though the wages of the workman are commonly paid to him in money, his real revenue, like that of all other men, consists, not in the money, but in the money's worth; not in the metal pieces, but in what can be got for them."

"Money, by means of which the whole revenue of society is regularly distributed among all its different members, makes itself no part of that revenue. The great wheel of circulation is altogether different from the goods which are circulated by means of it. The revenue of society consists altogether in those goods, and not in the wheel which circulates them."- Wealth of Nations.

In the United States there are great numbers who charge all our industrial difficulties upon a contraction of the currency, a lessening of the volume of money; and other great numbers who have insisted that all that was needed to restore prosperity to all interests was the resumption of specie payments, the making of our money to harmonize with that of all other commercial nations. Some insisting that the greater the volume of money, hard or soft, the greater

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