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295. For consumption and saving.-Wealth having reached the hands that created it-having undergone the primary distribution to laborers, capitalists, and business managers does not rest there; it begins immediately another movement of secondary distributions. By an innumerable series of exchanges, the values created are converted into the various articles desired by the several parties.

The laws of the secondary distributions are found partly in the natural desires of men, and partly in their surroundings.

The chief division which takes place in the secondary distribution, is into the part to be consumed and the part to be saved. Only among the thoughtful and provident is this division made at the outset, and intelligently; in most cases it is governed by accident, and seems to depend upon chance. Still, it occurs with a certain regularity, and in a definite proportion, when large populations are taken into view. It has been computed that ninety-five per cent of the annual production of wealth in the United States, is consumed within the year in the current support of the population.

296. Classes of consumption.-The wealth consumed may be counted as chiefly carried forward into new production. It may be coarsely subdivided into the following classes of expenditures:

1. The satisfaction of the vital wants, including food, clothing, housing, and care. These expenditures support life,

renew strength, and go to make up the labor-power for the year. It keeps good that great volume of uncounted capital which lies in the muscular and mental force of the active, laboring population; and, in the case of a growing people, it adds to that capital. Only when expended in the support of the dependent classes, including the idle and the unfortunate, may it be counted as lost.

2. Expenditures for personal pleasures, such as are innocent, if not also elevating, in character, including fine dress and equipage, ornament of the person or house, social entertainments and feasts, pleasure excursions, sight-seeing, and shows. These, though often wasteful and excessive, if wisely used, may improve health, stimulate higher tastes and activity, and open new fields of industry for large classes of laborers. They increase the desire and power to labor, and only entail loss when carried to excess. Luxuries, doubtless, consume and destroy large masses of goods; but all luxury is not loss. It often stimulates the production which it consumes, and induces industry which would not otherwise be exerted. Even savages are sometimes made industrious to obtain the luxuries offered them by their civilized neighbors.

Take, for example, a single article of luxury. The silk manufactures imported into this country, in the year ending June 30, 1881, amounted to $32,377,226.48. The duties paid on these goods raised the cost to more than $50,000,000. The home production probably nearly doubled this amount. In 1874, the 180 silk manufactories of the United States employed 141,479 operatives of both sexes, and produced over $20,000,000 worth of silk goods. Were these silks, satins, and velvets, worn by American women, a mere waste of luxury; or did the industries stimulated by it make up for the expenditure of these millions, and leave the country as rich as it would have been had all this silk never existed? The equal steps, by which the refinements of life and the wealth producing industries have gone forward together, amount

almost to proof that these luxuries have in some way increased rather than diminished the world's wealth. Cases of extravagance and loss may easily be found, without doubt, but the economist is concerned only with the grand totality of


3. Expenditures for personal and public improvement. These include the sums paid for good government, for education and books, for churches, libraries, museums, galleries, lectures, and the whole round of æsthetic, literary, and scientific work. These expenditures entail no loss, but, on the contrary, they enter into the mass of existing goods as a new element of value. They enlarge the value of wealth by enlarging its uses, by increasing the demand for it, and by giving to it greater safety and higher powers.

297. The economic maelstrom.-Expenditures for harmful and vicious pleasures are almost wholly a loss of property, being both a destruction of the values consumed, and a deterioration of the powers of production. Among the most public and conspicuous of these expenditures are to be noted those for intoxicating drinks, for opium, and for tobacco. No more serious drain upon the world's wealth exists than is to be found in the use of these substances..

Taking the total consumption of spirituous liquors, wines, beer, etc., as given in the quarterly report (No. 1, 1881-1882) of the bureau of statistics, and deducting spirits used in the arts, the remainder, at the common retail prices, would show an expenditure, in the United States, for the year closing June 30, 1881, of over $500,000,000 for intoxicating drinks. Some estimate it much higher than this, and count that it can not fall short of $1,000,000,000. As an absolute destruction, this would be an enormous loss to the land; but it carries with it loss of time, of health, of morals, and of life itself, that make it of frightful consequence.

The consumption of tobacco, though less enormous in amount, and less injurious to morals and health, must still

be classed among the harmful and useless expenditures. Over 147,000,000 pounds of tobacco, including more than 3,250,000,000 cigars and cigarettes, were taxed for consumption in the United States in the year ending June 30, 1881; and to this amount must be added over $10,000,000 worth, including cost and duties, of imported tobacco. The cost to consumers probably exceeded $250,000,000. Thus, into the smoky air and into the spittoons went a sum more than three times as large as the entire annual expenditure for the payment of the 272,000 teachers, and the education of the 15,000,000 school children, in the public schools of the United States.

Add to these items of spirits and tobacco, the millions consumed in opium and in the nameless vices, with the millions lost utterly in fires and floods, and we have before us that economic maelstrom into which goes as into utter perdition, more than one tenth of the entire annual production of wealth, leaving behind only the weakness, the stain, and the brooding discontents which threaten both society and the industries with riots and overthrow.

298. The savings. The other great stream of secondary distributions of wealth goes into the channels of savings and investments. These savings will seem at first but the fragments gathered up after humanity's feasts; but out of these grow that mighty mass of accumulated values which greets the eyes and fills the balance sheets of the world's gathered wealth. The enormous cumulations of riches which deck the great globe in myriad forms of magnificence and splendor,of comforts, luxuries, and solid values,-all these, it should be remembered, represent the results of savings. Traced from its beginnings, in the far away springs and rivulets of past industries, all capital is, at the outset, a saving. It is the part of his product which the first laborer saves from his consumption, which becomes capital in his hand. The savings of the first day unite with the savings of subsequent days,

and, multiplying the power of production, increase the opportunity of saving till the accumulated savings of the generations stand before us in the gigantic masses of wealth which excite the cupidity and, too frequently, also, the discontents of the beholders.

299. Laws of investment.-Savings naturally seek investment. Only in the earlier and less settled states of society are men disposed to hoard and hide their savings in order to keep them safe from the prevalent robbery and outrage. When industry feels safe in the possession of its earnings or products, it naturally seeks to gain a profit from its little wealth. Men wish to secure the advantages which may come from the employment or investment of their savings.

Two laws govern all investments, whether put into trade or into property. The first is the law of safety; the second is the law of profit. These two control all investment as gravitation controls the flow of rivers. They determine whether the spare dollar shall go to the hidden hoard, in which safe keeping alone is sought; or to the savings bank, where it is hoped to find equal safety and some profit beside; or to active trade, where more of risk is met, it is true, but where, also, more tempting profits offer themselves.

Safety and profit may be counted as counter-balancing forces in their influence upon investments. They stand always to each other in an inverse ratio. When an investment promises high safety, it promises but small profits; when the profits are high, the safety is small. The reason is sufficiently obvious. Where safety and profit are both small, no one cares to invest. The small returns would not repay the great risks, which mean, also, great possible losses. Where safety and profits are both high, the rush of investments will soon bring down the profits.

Agricultural property is known to have great security. Land. can not be easily lost or destroyed; but landed property yields only low profits. Were agricultural investments as profitable

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