about a billion dollars every year, This increment may be drawn upon by enterprise anywhere. It is not gathered in huge fortunes, but is distributed among millions of holders in small sums of a few thousand francs each. These are collected by the great banking concerns, ready for employment on good security in any quarter of the globe. While France is the best saver, it is not the richest of the nations. The average wealth per capita in some other countries is higher. The per capita wealth in the United States shows the following changes in the last sixty years:

PER CAPITA WEALTH IN THE UNITED STATES

Undoubtedly, at the present scale of prices, the per capita wealth of the United States to-day is well over $1,500. In most other nations the growth, while not so rapid, has been steady and substantial. The addition of these uncounted billions to the aggregate wealth of the world has stimulated the spirit of financial adventure and the love of squandering inherent in mankind. Its availability has lulled to sleep natural prudence and quieted the alarm of moments of sanity in the spendthrift's life-with what results will presently be seen.

If credit has, as Daniel Webster said, done more than all the mines of the world to develop and increase its industry, the potential dangers of credit are equally great. Expansion or contraction of cash is measured by millions; of credits, by billions. The increase of apparent resources by an easy resort to borrowing, the mortgaging of a patrimony not our own to obtain material for present extravagance, the diversion of wealth from productive to unproductive - all these have gone farther than most people realize. It will be worth while to examine current public waste of cash and credit. It is measured by current debt and current expenditure everywhere, as compared with the same items only a few years ago.

uses

THE CAUSES OF RISING PRICES

The man who attempts to place entire responsibility for these changes upon one.

single act or influence lacks either fairness or intelligence. As in most great economic movements, the cause is complex. Something is due to enormous currency inflation. The total per capita circulation in the United States in 1896 was $21.41, and in 1909 it was $35.01. Although population had grown by many millions in these thirteen years, the amount of money to each individual had increased by $13.60, or more than 60 per cent. The increase in the total gold production of the world, which rose from $118,848,000 in 1890 to over $427,000,000 in 1908, has been made the basis for one form and another of credit issues aggregating a vast sum. Even a rudimentary knowledge of economics or monetary science shows that such changes must produce a rise of prices.

The tariff is another contributing cause. It is true that it can furnish but a partial explanation, for to only a limited extent can the rise in food prices be affected by or traced to the tariff. As to commodities that we export, the tariff is inoperative. It generally affects prices directly as we become importers. Nevertheless the tariff must bear its share of responsibility for rising prices. Common sense says that when the cost of the necessaries of life in a town on the Canadian side of the Detroit River is reported at nearly 25 per cent. less than on the American side, the tariff accounts for the difference. It says that a man will raise his charges to the full extent that he is guaranteed against competition. He who believes that the sudden and violent rise of prices in 1897, following the enactment of the Dingley law, and the similar movement following the passage of the tariff act of 1909 have no relation to those legislative achievements, would argue that the rise of the Seine had nothing to do with the recent inundation of Paris.

Combinations which are actually in restraint of trade, which have monopolized their field and are either controlled by a common secret management or a secret agreement to maintain exorbitant charges, are partly responsible. If the operations of these had been followed with the same interest by the public and checked with the same rigor by state and nation that are displayed in agitation against the railroads

-which for years have been subject to public control, open to public inspection, and which, practically alone among the agencies affecting directly the common life, have given their services at lower and lower prices every decade the country would not be so stupefied as it is to-day by a great hardship or so bewildered about the remedy.

PRODUCTION DOWN-PRICES UP

Still more of the rise of prices is due to the decline of agricultural products as compared with the increase of population. Taking the average for five-year periods, the wheat crop of the country increased 41 per cent. in the twenty-five years ended in 1908. From 1880 the population increased 74 per cent. The decrease in wheat exports was 24 per cent. When wheat sold at sixty-five cents per bushel, it was because the world's product was relatively in excess of the world's demand. The ratio is now reversed, and demand, taking the world as a whole, is gaining on supply. And this is particularly true of the United States, with its rapid increase in population, its drift to the cities, and its consequent actual falling off in important items of food products. Between January I, 1909, and January 1, 1910, the number of cattle other than milch cows in this country decreased by more than 2,000,000, following a decrease of 700,000 the year before. The number of swine decreased 6,365,000, on top of a decrease of nearly 2,000,000 the year before. The number of mouths to be fed is always increasing. These are conditions under which a simple exercise in division proves the necessity of price advances. It was definitely shown in advance that they must come.

When due allowance has been made for the effect of these forces that make for dearer living, there still remains a large unexplained balance. This be

credited to the lavish expenditure which has now grown to be a national trait, which is eating up our accumulated wealth, and which is forcing prices higher and higher by consuming our resources unproductively, encouraging indolence and luxury, and compelling resort to a constantly ascending scale of wages. With these three powerful economic forces converging upon the price

average, the country could no more escape the corresponding rise and no more cure it than a man could keep the mercury from rising in the tube of a thermometer while he was holding a burning-glass so as to focus the blaze of the sun upon its bulb. This is the full meaning of the somewhat widely quoted statement made by me, that it is not so much the high cost of living as the cost of high living that afflicts the country.

RECKLESS WASTE OF PUBLIC FUNDS

Waste, idleness, and rising wages-all inter-related to one another, now as cause and now as effect-are, next to an overissue of irredeemable paper, the three most powerful forces in the world to raise prices.

First, waste. This is shown in the Federal, state, and municipal expense bills already exhibited. There has been mild objection in Washington to the demand of a certain investigating body for an appropriation of a quarter of a million dollars to pursue inquiries on which it had already spent $651,000 without any practical results.

The people of the United States inherited from its founders a wholesome tradition against debt, which is only now disappearing from the conduct of national affairs. This, together with the enormous resources at our command and the consequent ability of our people to pay increasing taxes without distress, has kept our national debt at a moderate figure. Until the time of the Spanish War and the Panama Canal, it decreased. It now tends to rise, concealed under the polite fiction of certificates of indebtedness to cover treasury deficits. If the advocates of large bond issues for all manner of internal improvements should carry their point, if that resource is not definitely restricted to the emergency of war, we will be in the condition of Europe, where the the motto of every chancellory now seems to be: "After us the deluge."

The following figures give the estimated total of the national debts of the countries of Europe at different dates. Where statistics cover so wide a field there may be some inaccuracies of detail; but, in the

1785-89

1814-18

1845-48

1874 1905-07

NATIONAL DEBTS OF EUROPE

29,552,800,000 These are not statistics of expenditure, but of debt. After raising from their people by taxation all they could be made to contribute without dangerous unrest, the balance of money spent by these governments increased by twenty-seven and a half billion dollars in one hundred and twenty years. It increased eleven and one-half billions, or more than 60 per cent., in the last thirty years. The annual interest charge of Europe is now over $1,200,000,000 a year. It is in the position of a debtor who must. constantly add to the principal of his obligations in order to get money to keep him. from defaulting on the interest.

The new budget threatens to shake the political foundations of England with its revolutionary proposals for raising more money, where borrowing had become impossible without turmoil and another drop in the price of consols. Germany has been issuing treasury bills for years to cover deficits. The debt of the empire and the several states combined is over $4,000,000,000. The other nations of Europe are mostly traveling the same road. Now how about ourselves?

Leaving out the debts of counties, municipalities, and school-districts, the aggregate debt of all the states and territories, less sinking-fund assets, was $274,745,772 in 1880; in 1890 it was $211, 210,487; and in 1902 it was $234,908,873. The decrease for the first decade was 23.1 per cent.; and the increase for the twelve-year period to 1902 was 11.2 per cent. Inasmuch as there was in the former a readjustment of debts in many states by scaling down the principal, a fair comparison on equal terms would probably show that the actual burden of debt on the states only is growing slowly but with a tendency to accelerate its movement.

OUR MAD RUSH INTO DEBT

Very different is the showing when the obligations of counties and other minor

Debt figures, however, do not begin to tell the story of our national extravagance. Only a small part of our expenditure is represented by debt tables. The rest is raised by increased taxation. In part this consists of new imposts, new licenses and fees; and in part it comes from increased assessments of all property that provide more revenue without showing an increased tax rate. Nothing bears more directly or forcibly upon the subject of national waste and the conservation of national resources than the profligacy disclosed by our publicexpense ledgers. Every figure that follows has been taken from official records, or is the result of compiling their contents in summaries never before presented to the public.

First, as to the nation. For the United States Government the official statements cover only what are known as "net ordinary disbursements." This total does not include the whole of the disbursements for the postal service, or any payment on the principal of the public debt, or those extraordinary expenses that cut an ever-increasing figure in national finances. It covers mostly routine charges, and therefore falls short each year of the actual appropriations made by Congress for that year. Taken alone, figures so far under the fact would be misleading. Relatively, they are

Although the great business expansion of this country began right after the Civil War, the expenses for 1890 were but four million dollars greater than those of twenty years before. Since 1890 these expenditures have grown by $180,000,000 each nine years on the average, or $20,000,000 a year, until now they are 121.4 per cent. more than they were eighteen years ago. Expressed in terms of per capita outgo, these charges, which are only part of the cost of maintaining the Federal Government, rose from $4.75 in 1890 to $6.39 in 1900, and to $7.56 in 1908. Shift the focus of the glass a little closer and look at our states and cities. By official records the total expenditure of state governments alone in all the states and territories of the Union combined was $77,105,911 in 1890, and $185,764,202 in 1902. The increase in these twelve years was $108,658,291, or 141 per cent. The aggregate expenditures of all the states, together with their minor civil divisions of counties, municipalities, and school districts, rose from $569,252,634 in 1890 to $1,156,447,085 in 1902. The increase was $587,194,451, or 103 per cent. Expressed in per capita terms, this means that the cost of state government only was $1.24 for each person in 1890 and $2.35 in 1902; for states and minor civil divisions combined it was $9.09 in 1890 and $14.64 in 1902. A few exercises in compound proportion will show what it may be twenty or thirty years hence.

Official figures from 1880 to 1909 have been obtained from thirty of the states, covering all New England; New York, New Jersey and Pennsylvania of the mid-Atlantic section; all the representative commonwealths of the rich Middle West and Northwest; and a sprinkling of the states of the South and the extreme West. These, includ

28.6% 58.0% 90.7%

All these different series of statistical facts, traced independently, confirm and reinforce one another.

It is always asserted, when the truth is told and a demand for economy is made, that the development of the country and its increase of wealth have been so great as both to require and justify this enlarged outlay. The answer to the charge of a billion-dollar session of Congress is that this has become a billion-dollar country. The apology is neither relevant nor true. It is not necessary that expense should increase in the same ratio as growth. But the growth of expenditure has so far outrun the growth of the country that the actual figures are almost incredible. The following little table, exhibiting the whole situation, might be printed at the top of every letterhead used by any man in public office anywhere in the United States:

CHANGES IN EXPENDITURE AND WEALTH

was in the eighteen from 1900 to 1908. Yet in the earlier era, when every great national asset was doubled in twenty years and the pressure for enlarged activities was correspondingly severe upon the state, the net ordinary expenditures of the United States increased but 1.4 per cent. If it is national growth that makes government costly, how about this period? Since then, with a commercial expansion expressed by a much. smaller percentage, these net ordinary expenses have jumped over 121 per cent. The wealth and business of the country as a whole increased but little more than half as fast in the second period as in the first. The expenses of the Federal Government increased 88 times as fast, and the expenses of the state governments in the last nineteen years went up over 200 per cent. By such facts as these, quite as convincing as slaughtered forests or exhausted mines or impoverished soils or appropriated water-powers, two things are settled once for all: no honest man should ever again adduce material development as a sufficient reason for the growing appropriation bills of nation or state; and the conservation movement should give to economy in national, state, and municipal expenditure a leading place on its programmes, and a share of effort commensurate with its importance and the country's need.

The phenomenal increase of public expenditure has already produced a plentiful crop of public ills. It is one of the causes of the increase in prices now disturbing the people. This increase follows in a suggestive way the inflation of national and local budgets. The average cost of the supplies that must be bought for practically every household has increased about 50 per cent. between 1896 and 1909. During the last year there has been a marked lifting of the price level. Foodstuffs cost from 10 to 70 per cent. more than ten years ago.

Inquiries are now under way which, when fairly and intelligently carried out, will give some accurate measure of the extent and force of the movement of prices. The reports of the Federal Bureau of Labor show that, if we represent the average prices of the ten years 1890-1899 by 100, the price of food in 1908 was 120.6; of clothing, 116.9; of fuel and lighting, 130.8; of metals

and implements, 125.4; of lumber and building materials, 133.1; and of all commodities combined, 122.8. These are wholesale prices. If to them be added the profit of the retailer, a fairly good idea can be formed of the new conditions of our national life.

A charge of over $7,000,000 a year for secret service, a relic of dictators and abhorred by every really free democracy, awakened a certain amount of criticism. In every state there have been created within the last thirty years dozens or scores of commissions, boards, officials, posts, all with salaries attached, all asking for more, and all heaping up incidental expenses. Billions of free capital have been absorbed by the great wars of recent times, and by such disasters as visited San Francisco, southern Italy, and Paris. We are spending some hundreds of millions at Panama, and the aim of legislators ambitious of popularity is to find new vents for the treasury. Capital in untold volume has been withdrawn by all these policies from productive employments. Now we cannot cheat the first four rules of arithmetic. We cannot spend money for one thing and also use it for another. The same money that has bought an automobile is not on hand to build a steam-thresher. There has been less capital for production; hence less production; hence a diminished supply; hence higher prices.

Second, habits of idleness thus encouraged diminish production. Where so much public money is flowing down the gutter, many a man finds it easier to scoop up what he wants than to work for it. The fashion of public extravagance is of all fashions the first and most easily imitated. As the supply of capital dwindles on the one side of the economic machine, the supply of labor dwindles on the other. We must expect to see this also reflected in higher prices. And as long as the world has to live by labor, there will be no escape from and no exception to this law.

THE STEADY RISE IN WAGES

Third, perhaps the greatest factor of all in the price problem, is the wage-rate. Everybody knows that labor cost is the principal item in all forms of industry. The wage-rate has been rising steadily