and outbreaks of social war, which occur in the world of collective humanity, and the storms and tempests of the physical world. These epidemics of unreason enlist great masses of men, even millions at a time, in their phantasies. As these millions could only cohere through the leadership of their noblest and purest minds, their most zealous, self-sacrificing, and just men, it is found that in these great social upheavals it is the very best men that lead in the work of mischief, if mischief it is to be called. The persecutions of the Christians by the Roman Emperors, the tendency of dying persons to bequeath their lands and goods to the church, and to overestimate the virtue of charity as compared with industry, led into the middle or dark ages. The exaggerated value which men, during several centuries, attached to the work of bringing the whole world under one religious government-a fanaticism which had its outcome in a sacrifice of industry to monasticism and in a waste of European life and energy upon the crusades-in religious persecutions, and in the prosecution and burning of witches, and the religious wars, all threatened to quench civilization in Europe wholly. There is little doubt that these veritable cyclones of human hate, black with all the destructive possibilities of reviving barbarism, were led on by the very best, purest, and noblest minds, the most spiritual and selfsacrificing, as they were judged at the time, in the world's best circles. There is equally little doubt that it was the substitution of the spirit of gain, of industry, and of business, caused by the revival of trade in Europe under the stimulus of the discovery of the Indies and of America, which rescued the world from the darkness into which it was ever more deeply plunging, by bringing back the thoughts of mankind to their secular and material interests.

Looking at these social tendencies, it becomes evident that they go far toward equalizing the ultimate influence of the more successful and the less successful, or of what are usually called the good and bad classes of society. The latter drift into the petty stage of individual crime, and are eliminated by society through some mode of punishment. The former take the lead in great holocausts of suffering and slaughter, which equal, in the evil and misery they inflict on the world in a single year, or generation, all that its combined criminal and vicious classes would inflict in a century. At the rate of 240 murders per annum, in France, the individual wickedness of that country would in seventy years take as many lives as its social and collective fanaticism, acting

AMBITION AND CRIME.

447

in the name of justice and public spirit, took in one year of the French Revolution,* and it would require four French Revolutions to make one St. Bartholomew's night. †

Roughly estimating, as many lives were destroyed in the crusades as have been ended in Europe by private murder in 3,240 years, or since King Sesostris led the armies of Egypt against Asia. Yet it would be doing injustice to the leaders in the crusades to suppose that their motives seemed to them less sacred than the absolute righteousness itself. It becomes those who have charge of the state, therefore, in its executive, legislative, and judicial functions, to observe with a wary and watchful eye the movements of those who have influence, popularity, and power, rather than those of the burglars, hall-thieves, and midnight assassins. The latter will be reached by the police and the courts, and opinion is united as to their quality. But the great upheavals and oppressions, holocausts and sacrifices, civil wars aud revolutions, will originate with the public-spirited, patriotic, pure, and virtuous. The people who give the statesmen most trouble, and the generals and armies most business, are those

RATE OF GROWTH OF THE WORLD'S NATIONAL DEBTS SINCE 1714, ON A SCALE OF $1,000,000 TO THE SECTION LINE PERPENDICULARLY, AND 5 YEARS TO THE SECTION LINE HORIZONTALLY.

* 17,000.

+ 80,000.

$7,000,000.

who are intent on making the world better, or on obtaining for some of its people enlarged rights and greater purity, and for themselves a higher niche in the temple of fame.

176. The Recent Growth of Debt.-The growth of the aggregated debts of the nations which borrow in the money market of Europe forms the unsettled problem in modern political finance. Since 1714 the world's national debts have multiplied fifteen-fold, viz., from 1,500 millions of dollars to 26,970 millions.* Measured by half decades, the rate of increase appears in diagram on page 447.

Mr. Adams says of a loan to government: "Its full effect is to check further industrial expansion, and this it does by turning the energy of the country into other channels." Yet Mr. Adams says that "employed capital will not be placed at the disposal of the state, and that a public loan at normal rates of interest can not exert any decided influence upon established industries, since there is no motive presented to one whose capital is well invested to withdraw any part of it from its accustomed employment, and place it at the disposal of the state."

Mr. Adams infers that it will take the fund that would have gone to new enterprises, because no man having a fund well in

*The Iron Age, referring to an address to the National Board of Trade by Mr. Price, quotes Lord Derby as having predicted that European nations must repudiate. The annual burden of $800,000,000 of interest is a load they can not carry. It continues: "Spain, Portugal, Austria and Greece are bankrupt; Russia and Italy are without credit; and the great States of Great Britain, France, and Holland are exhausting every measure of taxation to maintain solvency and credit.

"To the constantly growing sum of obligations which constitute our credit system must be added an enormous total of public indebtedness contracted by minor divisions of the state, corporations, firms, and individuals. For our own country the showing is assumed to be about as follows:

"This total is more than one-half the entire census valuation of 1880. If our population is 60,000,000, it means a per capita indebtedness of $465, or more than the average income of the family in Massachusetts."

Singularly enough, while some are distressed by these predictions, Prof. MacLeod, of Cambridge, counts all this volume of debt as " currency," and therefore "means of payment," as well as principal to be paid.

+"Public Debts," p. 62.

EFFECTS OF DEBT.

449

vested in established enterprises would see sufficient profit in it. But, as we have repeatedly seen, the fund that goes into new enterprises demands as a rule a far higher rate of interest than is carned in established enterprises. Capital migrates only under the inducement of higher rates of profit. If it will not abandon its established enterprise, in which profits are fast descending to ordinary rates of interest and rent, and wherein perhaps they are fifteen per cent. per annum, why should it be withdrawn from the prospective venture in which 50, 100, or 500 per cent. are looked for?

Mr. Adams says: "If filled at all, it will be filled from that fund of free capital which would otherwise have been invested in new industries." On the contrary, the class of persons who buy government bonds are at the very opposite pole of the industrial world from the class which invests capital in new industries. The latter are the class full of ideas, but without a surplus, generally borrowers of the means they invest. The lenders to government are a class seeking safety by avoiding the risks of industrial investment, either because their capitals are too large to admit of their superintending industrial enterprises, or, as in the case of women and salaried employees, they feel too distrustful of their own judgment to venture.

Prof. Adams' suggestion of the effect of loaning to governments overlooks the fact, also, that no person could be deterred from investing in any new enterprise by the fact that he had already invested in bonds, since the bonds are as convertible as money. The ready answer of those who solicit him to invest, if he should object that he had already invested his money in government bonds, would be, "That is an aid rather than an obstacle, as we will take your bonds as even better than cash, for they will draw interest until we wish to use them, and whenever we wish to use them they are as good means of payment as money."

The confusing element, in tracing the economic effects of loans to government, is that the bond which is purchased is in the economic sense "money," or "inflation," as truly as if it were an additional issue of paper money. Hence, by its effect on prices generally, it has the same effect to stimulate new enterprises instead of discouraging them, which all additions to the volume of the currency have.

Mr. Adams * fully explains this use of government bonds as in

* "Public Debts," pp. 55-7.

ternational means of payment. He shows that when France, as a means of paying the German indemnity, called for a loan of 2,000,000,000 francs, more than four times that sum were offered. About two-thirds of the sum offered were offered from outside of France, one-tenth of it from Germany itself; that in fact it was only a readjustment of credits which did not involve any drain of capital from the industries of France, but only an addition of new "international values" to the security market.

*

Mr. W. L. Fawcett regards it as inconceivable that such an increase in the volume of national debts should have any other outcome than early general bankruptcy among all the weaker

nations.

Mr. Adams cites the attempt of the foreign bondholders to conquer Mexico and enthrone Maximilian, which failed, and the later successes of English bondholders in Egypt, of French bondholders in Tunis, and the abject subservience of Peruvian politics to foreign bondholders.

He also holds that it is the fact that the possessing or property-owning class, the moneyed interest, has captured the machinery of government that "affords such guarantee as exists, that moneys borrowed by government will be repaid."

Here again Prof. Adams clings to the "debt" idea and forgets the "international value" function, or currency office, which he explains so fully in the case of the French debt. The national creditor not only does not cling to the notion that his debt will be paid, but in the case of the debts of most of the governments of Europe the notion does not exist. All the European debts are interminable. They never fall due. They are merely permanent savings banks in which the people may make their deposits at interest when not needed, and when needed may, by sale of the bond, draw out their deposits. Of all financial investments they are that in which the people may most nearly "eat their cake and have it left." If the government, by paying off its debt, deprives the people of the privilege of lending to it, they take their money to the savings banks, or deposit it in the national banks, to be loaned out by them to merchants and manufacturers. In this case it is, usually, the substitution of a social loan of a narrow sort for a social loan of the broadest sort. For, all surplus uninvested funds have to be loaned in some way. Wherein lies the danger of lending them to the collective people through a

"Gold and Debt."

+"Public Debts," p. 9.