BARBARIC

CHAPTER III

COMMERCIALISM

AND HARD

TIMES INCLUDING THE SHERMAN LAW

N their search for high trades and the whole market (i. e., all markets) our manufacturers gradually pile up an immense hoard of dead, commercially-poisonous, mismatched commodities which periodically become the economic monster called Over-production. This creature breeds panic. Panic leads to hard times and these by a painful, roundabout and largely unnecessary road bring us again to the highway of prosperity to repeat the process. In dealing with disease it is wiser to prevent its contraction than to allow patients to be inoculated in order to cure them. An equal amount of unnecessary waste of time, labor, capital and happiness can be avoided by preventing panics instead of creating them. The manner in which our present commercial system tends to create, instead of prevent, panics and hard times is here set forth in some detail. Many writers have dwelt much upon monopoly's tendency to encourage sloth. Monopoly's

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other, and perhaps greater, evils also deserve attention.

At any given time in any country, as in the world, there is a certain amount of exchangeable commodities, productive and unproductive, and exchangeable land, productive and unproductive. These somebody wants at some price who has either money ready to buy or something else readily exchangeable into money at some price. "Some" price means a price which is at least fairly reasonable in ordinary times. It does not mean a panic price. This exchangeable land and these exchangeable commodities now in this country, as well as the hard money ready for exchange, is the basic fund of the United States and merely a part of the world's basic fund. The latter also includes the world's hard money ready for exchange. Whether in the fullness of time either increases or decreases, it is still such basic fund. Other and formerly unexchangeable land and commodities may at times enter and leave.

It may be added to by new production, or reproduction, and some of its parts may withdraw from the magic circle for various reasons as by destruction, or wasteful or unproductive consumption. Consumption which decreases value is unproductive consumption. Value is power in exchange. Any part productively and profitably consumed remains in the basic fund with added value. Familiar examples, generally speaking, are leather made into

shoes, cloth into clothes and flour into bread. When there is productive, profitable consumption labor is enabled to congeal into capital and thereby increase the basic fund.

Aside from labor, the world's chief means of wealth increase is its basic fund in which all, with a share of it, have a common interest. It is not the sum total of the world's wealth. Outside of it are all unexchangeable commodities and land, whether productive or unproductive. But what is outside is at the moment, for exchangeable purposes, only economic corpse. "Exchangeable" is of course used in the sense above expressed-at some price. The basic fund is therefore the medium in which, in the main, that commerce moves which is profitable to both buyer and seller. With the expansion and contraction of the basic fund, business shuttlecocks from prosperity to hard times. Leaving out of account as, generally speaking, unimportant the panic-price transactions in the otherwise unexchangeable, it is only by exchanging part of the basic fund that one at any particular time procures another part, unless he receives it by gift, theft, or in return for labor or on credit. In no other way can he ever acquire any part except by holding something unexchangeable until it becomes, if it ever does, exchangeable.

The productive land and commodities which are unexchangeable are of comparatively minor impor

tance, while they remain in that condition, in adding to the world's wealth. Otherwise they would be exchangeable at some price. It is common knowledge that very little is unexchangeable at a fair price which is of much importance as an income producer. Land and commodities which are unproductive as well as unexchangeable obviously add nothing while they remain in that condition. Only by increasing its wealth can the world progress economically. Only by increasing its basic fund can the world thus progress much or with much speed. Such increase is necessary to satisfactory, or even appreciable, economic progress. Fixation of the basic fund with increase of population means, as a general proposition, certain retrogression for all without property and with only labor to exchange. Fixation without increase means, for such in general, stagnation without progress. The former means the nearing bread line, the latter that it is near enough. Society cannot avoid heavy indirect effects from dire results to labor. Practically speaking, retrogression for labor means retrogression for all.

The beginning of a period of prosperity is postulated at the start in order that we may not project the reader into gloom unless he sees himself projected there by barbaric commercialism. All wholesale and manufacturing sellers, monopolistic or otherwise, hereafter designated simply as sellers,

now join in the wild rush for high trades. Times boom. Most people turn over more money and many make more. Gradually, and soon more rapidly, prosperity climbs toward a dizzy but seemingly endless apex, when one morning some manufacturer finds himself without quite enough cash on hand to meet his pay roll.

To the bank he goes as usual for the loan heretofore ready but now refused. The president tells him he would like to help him, his paper is of the best, but loans are now as large as the capital and surplus make safe, and even larger. Business has been good so long he has become free handed in loaning, but he must retain enough money in the vault to cash a check for a depositor who has notified him of his coming. He asks the manufacturer, as a personal favor, to try another bank.

Several are tried with the same result, and finally the manufacturer tells one of his customers who has an overdue account that he must pay his bill at once. The customer then makes the round of the banks with a like result. He calls one of his customers. None has any more money than the manufacturer. One after the other, when pressed, they go out of business, accompanied by panic, and down to failure like the row of bricks in the books on economics.

It has been stated that over-production causes all this, though some are inclined to think it more at