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writers on all sides on the causes of the fall in prices since 1872, it seems just to consider the following as causes important enough to deserve mention.

A. Not primarily connected with money. (1) Improvements in methods of production, including transportation, and, especially for the United States, those changes that have brought foreign grain into competition with that of the United States. (2) The lessened demand of the past few years caused by the non-employment of laborers.

B. Connected primarily with money. (1) The check in the output of gold until 1890. (2) The use of gold in the arts and in the East. (3) The demonetization of silver in several countries, together with the withdrawal of paper money and the introduction of the gold standard, increasing the demand for gold.

The benefits or evils of the fall in prices, or the remedies, if any are needed, are beyond the scope of this paper; but a word or two regarding the significance of the causes may be desirable.

The improvements in methods of production are permanent, and would seem to call for no change except watchfulness not to let other causes which might tend to bring speculation and a crisis go unchecked.

Non-employment is of course an evil that security and stability in business tend to overcome.

A fall in prices from a relative scarcity of gold would be permanent unless large new supplies - which now seem to be in sight — were furnished, or unless money substitutes of some kind, silver, bank-notes, checks, etc., could be made increasingly efficient enough to fill the gap. The real efficiency of such substitutes depends largely upon stability in business conditions and confidence of business men in the ability and willingness of their fellows and their governments to carry out business obligations in a business-like way; i.e., to live up to the letter as well as to the spirit of their contracts.


SINCE 1874



(Friday, September 3.]

The date here taken as the starting point of my remarks is that of the year when our Association, having existed nine years, divided its unwieldy Department of Trade and Finance, or Political Economy, and gave to the new portion the comparatively new name of Social Economy. The exact meaning of this phrase, like that of our general subject, “Social Science,” is much in debate. Both terms change their significance from time to time, and acquire meanings more or less extended, according to the needs of the moment or the opinions of the writers who use them. I find in a thoughtful book by that old publicist of Scotland who has lately died, - Samuel Laing, of Edinburgh, — a passage which shows how he understood the phrase in 1842, when he issued his “Notes of a Traveller on the Social and Political State of Europe.”


Social Economy — the construction of the social body of country, the proportions in numbers and influence of the elements of which it is composed; the arrangements and institutions for the administration of its laws, police and public business, civil, military, and ecclesiastical ; and the principles on which all this social machinery should be constructed for working beneficially on the physical and moral condition of the people -is a science distinct from the sciences of Government, Legislation, Jurisprudence, or Political Economy. These are but branches of Social Economy, in its most extended meaning. It embraces all that affects social prosperity, and the well-being, moral and physical, of the individuals composing the social body of the country.

In no such comprehensive sense have we used the term “social economy," but rather as including those economic relations of life which affect men in their social and domestic rather than their political interests. Thus the small savings of labor and capital,

the modes of housing the people, their amusements and recreations, the relations of sex to industry, the minor questions of pauperism and public relief, the bearing of diseases (such as insanity, for example) on the family life and the household earnings, education as concerned with industries, life insurance, and many other topics, have been discussed in this Department, while the larger questions of currency, taxation, commerce, immigration, etc., have remained in the older Department of Trade and Finance.

In all these matters great changes have occurred since 1874, but perhaps more in the minor and more popular matters than in those great interests with which governments must deal, and which become political issues. And one of these changes has been to bring within the scope of yearly legislation and official regulation much that was formerly left to be settled by social arrangement or individual agreement, with only a rare and general interference of the government. Whether we regret or applaud this new development of what is often called "paternalism,” or “State socialism,” we cannot fail to see that it is going forward rapidly and almost universally, for good or evil. One of its very latest manifestations has been the passage through the English House of Lords, by the urgency of Lord Salisbury, of the “Workingman's Compensation Bill,” which was fiercely denounced by his own party followers as "socialism.” “No,” replied Lord Salisbury, “socialism is the undertaking by the State of a burden or a duty which should be borne by the individual: whereas this measure proposes the very reverse.” To illustrate this rather sophistical proposition, the Premier went on :

Suppose there is a tremendous colliery accident, and fifty or one hundred persons are killed, and their wives and children left destitute : who pays ? The parish. That is to say that I, with my five hundred acres of meadowland, who do not get the slightest profit from the mine, have to pay for the accident, which is part of the profit and loss of the coal-owner; and I get no compensation whatever. If anything could be called socialism, it is this.

The real effect of the new English law is to throw the burden of paying for such accidents upon wealthy capitalists rather than upon the general public; and this, until recently, was a rarity in British legislation. That it is now not unusual is one of the evidences of progress in "social economy" as well as in politics.

A striking American example of such progress has been before

the eyes of our Association since 1874 in the extension of the so-called “ Building Associations," or Co-operative Banks, from the few States in which they then existed, over the whole cou

country. It was in 1874 that the late Josiah Quincy, grandfather of the present mayor of Boston, brought to the notice of this Association, of which he was an early member, the fact that societies of this peculiar kind had long existed in Philadelphia, and were there taking the place of our New England savings banks, and also promoting, to a remarkable extent, the ownership of their own homes by the industrious workingmen of Philadelphia. A fact so interesting, and to most of us so new, aroused attention ; and for several years this Association, and particularly Messrs. Paine, Bradford, and J. S. Ropes of Boston, investigated the matter, and did what could be done to promote the formation of similar societies in New England, where they were practically either unheard of or under suspicion. In other parts of the country similar efforts were made to bring this form of co-operation into favor ; and now, instead of perhaps one thousand small associations, mostly in Pennsylvania, New Jersey, and Maryland, twenty-three years ago, there are more than six thousand in the United States, and very few of the States are without them. They had proved their financial soundness in the long depression which existed from 1873 to 1879; but they exhibited this qualtty more conspicuously in the panic and depression of 1893-97, from which, after four years, we are just beginning to emerge. Four years ago, when bank after bank failed or suspended, and credit was paralyzed throughout whole sections of the country, the little “ People's Banks" went on their course almost without a ripple of disturbance. Their borrowers paid their loans, their members paid their dues, and the membership went on increasing, — not so fast as before the panic, but at a remarkable rate, all things considered. Since then instances of fraud - that besetting sin of American banking have appeared sporadically in the affairs of these institutions, but the instances are not many; and the losses are infinitesimal, compared with the sacrifice of millions on millions in the larger operations of credit.

The years since 1874 have witnessed a great advance in the insurance of families against the loss of support by accident, illness, and death, - first in the many forms of voluntary insurance, then in the compulsory insurance initiated by Bismarck in Germany, and latterly by such measures as that just adopted in England,

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