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Front Page > Reading Lists > 19th Century French Political Economy Part 3 - Léon Faucher

19th Century French Political Economy Part 3 - Léon Faucher

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These articles first appeared in the Dictionnaire d’Économie Politique, ed. Guillaumin and Charles Coquelin (Paris: Guillaumin, 1852) and were translated into English and included in Lalor’s Cyclopedia of Political Science, Political Economy, and of the Political History of the United States by the best American and European Authors, ed. John J. Lalor (Chicago: M.B. Carey, 1899) in 3 vols.

The French political economists of the the 19th century, or “the economists” as they liked to call themselves, are less well known than the classical school which appeared in England at the same time. The French political economists differed from their English counterparts on a number of grounds: the radicalism of their support for free markets, the founding of their beliefs on doctrines of natural rights and natural law, and the intellectual debt they owed to Jean-Baptiste Say (1767-1832). Some of their leading figures were Say, Charles Comte, Charles Dunoyer, Frédéric Bastiat (1801-1850), Charles Coquelin, Joseph Garnier, Hippolyte Passy, Gustave de Molinari (1819-1912), and Léon Faucher.

Léon Faucher (1803-54) was a journalist, writer, and deputy for the Marne who was twice appointed minister of the interior. He became an active journalist during the July Monarchy writing for Le Constituionnel, and Le Courrier français and was one of the editors of the Revue des deux mondes and the Journal des économistes. Faucher was appointed to the Académie des sciences morales et politiques in 1849 and was active in L’Association pour la liberté des échanges. He wrote on prison reform, gold and silver currency, socialism, and taxation. One of his better-known works was Études sur l’Angleterre (1856).

For additional reading see the following in the Library:

Lalor’s Cyclopedia
School of Thought: 19thC French Liberalism
Subject Area: Economics

In the Forum:

The complete Table of Contents of Lalor’s Cyclopedia
the list of French political economists and their articles which appeared in Lalor’s Cyclopedia

INTEREST - John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States, vol. 2 East India Co. - Nullification [1881]
LABOR, The Right to (IN FRENCH POLITICO-ECONOMIC HISTORY). - John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States, vol. 2 East India Co. - Nullification [1881]
PROPERTY - John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States, vol. 3 Oath - Zollverein [1881]

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1: INTEREST - John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States, vol. 2 East India Co. - Nullification [1881]

John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States by the best American and European Authors, ed. John J. Lalor (New York: Maynard, Merrill, & Co., 1899). Vol 2 East India Co. - Nullification Chapter: INTEREST

Accessed from oll.libertyfund.org/title/970/29678 on 2009-05-06

The text is in the public domain.

INTEREST

INTEREST is the product, the increase (incrementum), the return (reditus) from capital. When interest represents the sum paid at fixed periods by the borrower to the loaner of capital, it retains its generic name, or takes the more special designation of rent or income. The price charged by the proprietor for the use of land leased by him, is rent. The term income is more particularly applied to the product of capital employed in commerce, agriculture or manufactures. In brief, interest signifies equally the profit the capitalist derives from the direct employment of his capital, and the return he receives for granting its use to others for a certain length of time.

—No difficulty can arise with respect to the profits of a capitalist who employs his own capital: the interest on capital is in this case blended with the product of his labor. If a field be cultivated, or a workshop used by its owner, he has to render no account to any one. The operation is in a certain sense a domestic one, giving rise to nothing requiring regulation. Whether the capital employed by its possessor returns 5 per cent. or 20 per cent., whether it is productive or unproductive, concerns only the producer—pertains only to the proprietor. Nothing in relation to it comes within the province of legislation, which only extends to matters which affect relations among men. But the moment the owner of capital so far relinquishes its use as to lease it, if it be immovable property, or to loan it at interest, if it be movable property, a contract is formed between the one who delivers and the one who receives. From this contract arise rights and obligations for each of the contracting parties, which it is for the law to determine for the advantage of both parties; and consequences also arise from it which it is the mission of political economy to observe, in order to deduce from them, as much for the benefit of individuals as of society, the lessons of experience.

—I. LOANS AT INTEREST. Is it permissible to loan at interest? Can one legitimately derive a product from his capital, a revenue from his money? On this question, which no longer seems to be one, the world, until toward the latter part of the last century, was divided. Loans at interest had in their favor the constant practice of peoples, especially of those noted for their progress in wealth, commerce and industry; on the other side were the oracles of religion and the doctors of the law. Now that theology has become more humane on this point, and jurisprudence has relaxed its rigor, socialism has taken up the thesis of the abolition of interest. The sophism has only changed defenders. Instead of justifying this interference with capital on the ground of charity or in consequence of unenlightened views in regard to morality, appeal is now made to envy and the anarchical passions.

—The (so-called) laws of Moses recognized the legitimacy of loaning at interest, for it was only prohibited the Jews in their relations with their own countrymen, who were considered as members of the same family; and credit transactions with foreigners, as well as commercial ones, were wholly free. The laws of Solon, made for an essentially commercial people, placed no restriction or limit on the employment of money. At Rome, the severity of the legislation on this subject only provoked disobedience. Capital, which was persecuted, became exacting in proportion to the risks to which it was exposed. Nowhere was theory more strangely in contradiction with practice. Cato, who compared usury (i.e., interest) to assassination, was himself an avaricious and pitiless usurer; and the stern Brutus loaned at 48 per cent. per annum.

—In the middle ages the civil and religious authorities were in accord in prohibiting loans at interest. This interdiction, already written in the capitularies of Aix la Chapelle, in 789, was perpetuated in French law until the revolution of 1789. But, during this long millenium, the observance of the legal precept was purely nominal. To evade it, recourse was had to subtleties without number. First the bill of exchange, and afterward the establishment of annuities, furnished the most simple and usual means. Later, people came to tolerate loans by note, discount, and every species of money negotiation between tradesmen. Sovereigns themselves needed to borrow, and were obliged to submit to the conditions of money-lenders. Everywhere the force of circumstances overcame the obstacle of antiquated and anti-social legislation.

—The prejudice against loans at interest may be traced back to the time of Aristotle, and has its source in his writings. The following are the terms in which the Greek philosopher teaches the too-well-known doctrine of the sterility of money: "The acquisition of wealth being double, that is to say, at once commercial and domestic, the latter necessary and rightfully esteemed, the former not less justly despised as not being natural and not resulting from the sale of commodities, it is quite right to execrate usury, because it is a mode of acquisition born of money itself and not giving it the destination for which it was created. Money should serve only for exchange, and the interest of it increases it, as its Greek name sufficiently indicates. Here the fathers are absolutely like the children: interest is money which is the issue of money, and of all acquisitions, it is that most contrary to nature." The anathema pronounced by Aristotle against trade in money, extends, as may be seen, to every kind of commercial operation. He did not comprehend, though living in the midst of people pre-eminently commercial, the utility of the rôle commerce plays in society. He did not see that to bring nations into contact with each other, to open the ways to markets, to place products within the reach of consumers, was to give them value, was, in a certain sense, to produce them.

—In a treatise aimed against loans at interest, another Greek moralist, Plutarch, exclaims: "What! you are men, you have feet, hands, and a voice, and you say you do not know how to get a living! The ants neither borrow nor lend; yet they have not hands, or arts, or reason; but they live by their labor, because they are content with things necessary. If people were willing to be content with things necessary, there would be no more usurers than there are centaurs." Plutarch here alludes to the rich who expended money in excess of their income, and who ruined themselves by loans contracted to give free indulgence to passing fancies; but, even in those times, the debauchees and prodigals were not the only ones who borrowed. There were already industries which needed capital, and traders who had recourse to interest loans, or loans for a share in the profits to bring their operations to an end or to extend them. The treasures accumulated by saving acquired by commerce, or obtained by victory, were not always dissipated in luxury and in pleasures; they sometimes served to stimulate production and to develop wealth. Money was at that time an instrument of labor. The capitalists who loaned it for that use, rendered service to borrowers and to society. They had consequently a right to receive pay for this service. Plutarch, on account of his preoccupation with the abuses of loans at interest, failed to perceive their good results.

—The fathers of the church who treated this question, only copied Aristotle and Plutarch. "The lenders," said St. Basil, "enrich themselves by the poverty of others; they derive advantage from the hunger and nakedness of the poor. To take interest, is to gather where one has not sown." St. Chrysostom, insisting on this argument, exclaims, in a style loaded with metaphors: "What is there more unreasonable than to sow without land, without rain, without a plowshare? All those who devote themselves to that damnable agriculture, harvest only tares. * * * Let us, then, cut off these monstrous children begotten of gold and silver, let us stifle this execrable fecundity * * *." St. Ambrose, St. Augustine and St. Jerome held the same language. The following is a dilemma of the latter, which, if it is inspired by charity, is hardly so by logic: "Have you loaned to him who had, or to him who had not? If he had, why loan to him? If he had not, why do you ask of him more, as if he had?"

—It is easy to reply that if one loans to those who have, it is because they do not always hold all their resources at their full disposal, and a timely loan of money permits them to await the receipt of their revenues. As to those who possess nothing, by loaning them capital one gives them the means of making their labor productive; one places in their hand the lever of wealth. If they had no credit, they would be still poorer; and they should at least, in consideration of the unexpected good, pay for the use of the money they have borrowed.

—Another doctor in the church, Gerson, the author of "Imitation of Christ," says: "It is better that there be some light usuries which procure help for the indigent, than to see them reduced by poverty to theft, waste of property, and selling their furniture and immovable property at a very low price."

—The church also condemned sales on time, as a stipulation was made in them in regard to interest on deferred payments. This was, according to the schoolmen, "to sell time, which can not be sold, since God has made it common to all." Strange to say, this maxim of the canon law was first proclaimed by the council of Coventry, in England, the very country where the popular adage, "Time is money," was afterward invented.

—But no one carried the prejudice against loans at interest (which, since the ninth century, had been stigmatized by the name of usury) farther than Luther, the originator of the religious reformation. His view of the subject is thus given in his "Table Talk": "The civil laws themselves prohibit usury. To exchange anything with any one and gain by the exchange is not a deed of charity; it is robbery. Every usurer is a robber worthy of the gibbet. I call those usurers who loan at five or six per cent. To-day, at Leipzig, he who loans a hundred florins, asks forty for them at the end of the year as interest on his money. Do you think God will tolerate such a thing? There is nothing under the sun I hate so much as that city of Leipzig; there is so much usury, avarice, insolence, trickery and rapacity there."

—More passion than knowledge entered into the judgment given by Luther. The Roman church had at that time relaxed its severity in regard to loans at interest. Its allies, the Florentines, had become rich by trading in money throughout Europe. In inveighing against bankers, Luther thought he was also inveighing against popes. Calvin showed better judgment, in not allowing himself to be turned from the examination of doctrines by considerations of party or of persons. He vigorously attacked the economic theory of Aristotle on the sterility of money. "Money, it is said, does not beget money. And does the sea produce it? Is it the fruit of a house, for the use of which, nevertheless, I receive a rent? Is money begotten, to speak properly, from the roof and walls? No, but the earth produces it; the sea bears ships which serve in a productive commerce, and with a sum of money a comfortable dwelling may be procured. If, then, more profit can be derived from money negotiations than from the cultivation of a field, why should not the possessor of a sum of money be permitted to derive from it any sum whatever, since the proprietor of a sterile field is permitted to lease it for a farm rent? And when land is acquired by the payment of money, does not this capital produce an annual revenue? What, pray, is the source of the profits of the merchant? His industry, you will say, and his diligence. Who doubts that money unemployed is useless wealth? He who demands capital, apparently wishes to use it as an instrument of production. It is not then from the money itself that the profit comes, but from the use that is made of it." (Calvin's letters.)

—Doctrines have as much influence as laws on the development of public prosperity. Protestant nations certainly owe to Calvin their superiority to Catholic nations, since the sixteenth century, in commerce and manufactures. Freedom to loan for interest gave rise in them to credit; and credit has doubled their power.

—Not until two centuries later did Montesquieu dare, for the first time in France, to profess the same principles. "Money," says the author of the "Spirit of Laws," "is the sign of values. It is clear that he who needs this sign should hire it, as he does other things he needs. * * * It is indeed a very kind act to loan money to a person without interest; but we perceive that this can only be a religious precept and not a civil law. In order that commerce be successful, money must have a value. If money has no value, no one will loan it, and the merchant can no longer undertake anything. I err in saying that no one will loan it. The business of society must always go on: usury becomes established, but with the disadvantages always experienced from it. The law of Mohammed confounds usury with interest. Usury increases, in Mohammedan countries, in proportion to the severity of the prohibition. The lender indemnifies himself for the peril of the contravention."

—Montesquieu here, under cover of his criticism of the laws of Mohammed, brings a charge against Christian society. Loaning at interest was still under condemnation in France, both by the canons of the church and the laws of the state, at the time when the "Spirit of Laws" appeared. A magistrate could less openly brave that double authority than any other citizen. Hence the artifice of the author. He applies his criticism to the past, or transfers it to the Orient. It is for French society to recognize itself in the picture, if it desires. The following reign relieved writers from that somewhat hypocritical reserve; and political economy, in the writings of Turgot, set forth principles with entire freedom.

—The constituent assembly sanctioned these principles. The law of Oct. 12, 1789, by proclaiming the legitimacy of loans at interest, put an end to a controversy which had been prolonged for twenty centuries: "All private citizens, bodies, communities and mortmain people" (i.e., those holding property which they could not alienate) "shall be able henceforth to loan for a fixed time, for interest stipulated according to the rates determined by law." The new law was written, in terms no less explicit, in article 1905 of the civil code, thus: "It is permitted to stipulate interest for a simple loan, whether of money or provisions or other movable property."

—Since that time loans at interest have been in accordance with civil law in France. Is this likewise natural law? Can reason, based upon the principles of morality and public utility, approve what the law declares? The Catholic church itself no longer contests it. If any are still doubtful on this point, we would refer them to the fine dissertations of the Cardinal of Luzerne and Cardinal Gousset. And as to the jurists who still rely on the arguments of Pothier, they have only to read the learned and often eloquent refutation of them given by M. Troplong, in his "Treatise on Loans." But the thesis which jurisprudence and theology have abandoned, has become a revolutionary commonplace. Loans at interest could find no favor with the socialistic school, which has declared war on capital, and on whose banner is inscribed: "Property is robbery." The theological school, in its arguments against interest loans, showed itself inconsistent. While it forbade the capitalist to collect a monthly or an annual due for the money borrowed of him, it permitted the landowner to lease his land in consideration of a farm rent, and to grant the use of his house to a tenant for a stipulated sum. The prohibition consequently applied to the form of the investment and not to the investment itself. The capitalist was prohibited, not from investing his capital, but from investing it in a certain manner. For lack of having analyzed the nature and having followed in its course the circulation of wealth, and, in consequence, of taking the sign for the thing signified, and the precious metals for value, a sort of embargo was put on money. In virtue of a preconceived theory which represented money as a sterile metal, they really impressed it with sterility.

—It is clear, however, that if the possessor of a sum of money has not the right to make it productive and to derive a revenue from it, the possessor of land could not, with any better right, lease it to a farmer to cultivate, in consideration of an income or rent from it. The earth, in fact, does not spontaneously engender a revenue any more than does money. Under both forms, capital is only the instrument of labor. He who receives it, must pay the price to him who leases it. The borrower owes the price in both cases, or he owes it in neither. There is no way of getting out of this dilemma.

—"Coined money," says M. Troplong very justly, "the creation of man and not of nature, is in turn utilized as a commodity, or as a sign of values, without there being any reason to cry out against this two-fold employment of it. It must submit to the condition of matter, which is to be a slave of man, and must serve all the uses and necessities that it can reasonably satisfy. So far, then, from disparaging the means of acquisition invented by the genius of man, in imitation of the natural and primitive means of acquisition, we should, on the contrary, recognize that this is the masterpiece of civilization, which opens to social activity new careers, new sources of labor, new and admirable means of promoting comfort among the classes who have inherited no wealth. Plutarch thought he was overwhelming the loaners by an irresistible argument, when he told them that they made something out of nothing. But, without knowing it, he gave the finest eulogy on credit which derives wealth from sterility. Money is no more impressed with infecundity than everything around us; for there is nothing productive for man save what is fertilized by labor or utilized by necessities which pay for their satisfaction. What would the earth produce, save tares and thistles, without the plowshare? What revenue would a house give its owner, if the necessity of a dwelling did not oblige a neighbor to lease it? * * Money becomes productive by the need the borrower has of it, the same as a building becomes productive by the need the tenant experiences of occupying it. Money is sterile only when it remains unemployed. Hence we see the confusion into which the canonists fall, when, granting that money may be made productive by industry, they insist on saying that in interest loans, it is the industry of the borrower, which, keeping the money active, renders it productive, and that, since the lender has no part in that industry, he should have no part in the benefits it procures. But what matters it to the lender what use the borrower makes of the loan? * * It is about as if the lessor of property should have scruples about the legitimacy of his contract because the tenant who rented his house did not occupy it. * * The price the lender receives is not a part of the profit the borrower will make by his industry; it is the price of the transfer which the lender makes to him, for a certain time, of the ownership of a sum that he has declared will be useful to him: a price the legitimacy of which rests on the deprivation the lender imposes upon himself, and on the advantage alleged by the borrower, usura propter usum."

—What M. Troplong here affirms, with general assent, is exactly what socialism denies. "He who lends," says Proudhon, "in the ordinary conditions of the trade of the lender, does not deprive himself of the capital which he lends; he lends it, because he has nothing to do with it for himself, being sufficiently provided with capital; he loans it, in short, because it is neither his desire, nor within his power, to give it value himself; because in keeping it in his hands, this capital, sterile by nature, would remain sterile; while, by the loan and the interest resulting from it, he produces a profit which enables the capitalist to live without labor." (From third letter to M. Bastiat.)

—That eminent economist, M. Bastiat, whose early loss to economic science we deplore, has remarked that this argument attacks sales as well as loans. If it can be alleged that the possessor of a sum of money does not deprive himself of it, by loaning it, why could we not say the same of the one who sells commodities which he possesses in too great abundance? The system of Proudhon would render every commercial transaction impossible, because there is not a single one which is not based on interest on the capital invested.

—But we do not need to appeal to analogies nor to enter upon comparisons, to refute a theory based on a position outside of facts accepted by everybody, and in opposition to these facts. Let us go directly to the root of the sophism. Socialism claims that the loan should not bear interest while the one who loans does not deprive himself, and that the lender suffers no privation while the capital loaned would remain sterile in his hands. This is an absolutely gratuitous allegation. First, if the capital borrowed must not produce interest, I can not see why the capitalist should part with it in favor of the borrower. People keep money only to derive an income from it; and if money must remain unproductive, people will cease to loan it. This will be the end of credit.

—But nothing appears to have a weaker foundation than this thesis of the necessary unproductiveness of capital in the hands of the capitalist. In one form or another, a capitalist always employs his money. He loans it at interest only when other forms of investment offer either a less return or one more uncertain; but in lack of a profitable loan, what prevents him from employing his money in agriculture, manufactures or commerce? It is surely lawful for him to buy land or a manufactory; and if he does not wish to put his own hand to the work, he can always take an agriculturist or a manufacturer as a partner, invest his funds in a joint stock association, or obtain shares in some marine enterprise or in railroads. In interdicting loans at interest, the socialists have forgotten to interdict association or to close the ways to human activity.

—The socialists, however, more consistent in this than the canonists, prohibit rent of land as well as interest on money. For them, the productiveness of capital, as Proudhon does not hesitate to say, is a pure fiction. What is there, if one reasons in this way, real in the world? Will the socialists always have eyes only not to see? The earth, from one end to the other of the countries which civilization has touched with its wand, recounts the marvels of capital. Capital is everywhere present. It is the universal motor, the soul of industry; it is the trace of the sojourn or the passage of man on the earth, that which distinguishes culture from barbarism. The power of a people is measured by the extent of its accumulation of labor. A farm in Beance, in France, of the same extent of land as could be bought in Canada or New Zealand for $800, would cost $80,000; and in an uninhabited country it can be had for nothing. Whence the difference in value? From the fact that the land which the colonists buy in New Zealand, for instance, is land yet to be tilled, land without capital; while he who acquires a domain in Beauce pays for the capital incorporated in it. The productiveness of soil enriched by fertilizers, improved by cultivation, provided with cattle and instruments of tillage, furnished with farm buildings and dwellings, and near to great markets—all these make the difference.

—And should the owner of this wealth, which often represents the accumulated labor of many centuries, rent it for nothing, like land covered with bushes and brambles, such as met the eyes of the first occupant? Not only would this be contrary to equity, but it would be physically impossible. A state of society in which proprietors who did not cultivate the soil with their own hands should be condemned to give it over, without compensation, to farmers who would derive the benefits of the labor previously expended on it, in addition to the profits from their own labor, would not be long in coming to an end. The abolition of rent would speedily entail the abolition of property.

—The socialistic theory of exchange belongs to a purely imaginary world. At no period of history has it even begun to be applied. Suppose men reduced to their own powers in a newly forming society. As certain individuals prove to be more richly endowed by nature or make a better use of their faculties, there will necessarily be workmen who will produce more than others, whose products will not find their equivalents in exchange, and will form an excess, a reserve, a capital; hence inequality of conditions and of fortunes. This inequality, when it exists, is transmitted or may be transmitted. Property implies inheritance. When we recognize in man the right to dispose of the results of his labor, we are inevitably led to admit that he may dispose, by the same right, of the results of labor which have been accumulated by him or his ancestors—in a word, of capital. To arrest this natural direction of human activity, the Banque du Peuple is a poor invention. [An allusion to a "People's Bank" instituted by Proudhon for the suppression of capital. E. J. L.] It would not, in fact, be sufficient to abolish rent of money and rent of land; it would be necessary, by a more radical and more logical process, to go so far as to abolish property. Communism is the last term of that theory, in which a subtle mind has imperfectly succeeded in disguising the absurdity and violence of the ideas by the novelty and charm of the form.

—II. RATE OF INTEREST. The legitimateness of loans at interest is to-day recognized in the principal states of Europe. But while abandoning the ground of absolute prohibition, governments have not had the courage openly to avow the doctrines of liberty. Just as it is sought to protect agriculture and manufactures against foreign competition, it is claimed that the cause of the borrower may be defended against the lender, and of the poor against the rich, by fixing the rate of interest or limiting it by the establishment of a maximum. Whoever, in loaning, exceeds this legal rate, exposes himself to a penalty. Usury no longer signifies the interest on money. This word, modified from its primitive sense, takes an opprobrious meaning, and becomes a mark of infamy. To invest one's money at a rate the law discountenances, is called practicing usury, and is to commit a crime.

—The laws which interdicted loans at interest have had their day; the laws which regulate the rate of interest will pass away in like manner. By examining the effects of this legislation, it is easy to show that it defeats its purpose. What is proposed to be accomplished by excepting money from the common rule of values, the level of which is determined by competition in the market? It is desired to prevent the price of that commodity from rising beyond measure, or, in other words, to oppose a barrier to the rise in interest. Now, observation teaches us that the more restrictions the laws have placed upon trade in money, in the past, the higher has become the rent of capital. The penalties against usury give rise to it or develop it; they are an added risk to those naturally connected with investments of capital. In compensation for this additional peril, the lender can not fail to demand a premium. The laws which augment the risk also discourage competition. The number of lenders and the amount of the disposable capital then diminishes, the number and eagerness of the borrowers remaining the same; and people are then astonished at the high price of the commodity, when they have done all they could to produce this condition of the market!

—In ancient times, the peoples who allowed the greatest liberty in the investment of capital were also those who saw commerce and the industries flourish in their midst, and among whom borrowers obtained the most moderate terms from lenders. The nations, on the contrary, who gave no latitude to credit transactions, or security for credits, were obliged to submit to pay more dearly than others for money. The history of Athens and that of Rome present conspicuous and instructive types of this contrast. At Rome a debtor who did not meet his engagements when due became the slave of the creditor. At Athens the right of the creditor to the person of the debtor was abolished by the laws of Solon. Solon did not attempt to regulate the interest on money, and no trace of usury laws is found in the annals of that commercial republic. The rate of interest at Athens varied according to the circumstances and with the security offered by borrowers. The lowest rate appears to have been 10 per cent.: this was in fact a very moderate charge for movable capital, at a time when the income from land was 12 per cent. to those who did not work their lands themselves, and when maritime commerce, which attracted money as well as men, borrowed at from 20 per cent. to 36 per cent., and when the industries, employing slaves as workmen, returned fabulous profits. The interest on money was in proportion to the profits on labor; and here we see why the question of debts, that permanent cause of troubles in the Roman empire, never excited either commotions or political agitations in Greece.

—In the early days of the Roman republic the rate of interest was not regulated by law. M. Troplong considers this latitude in regard to transactions as the cause of the oppression the people suffered from the patricians. But did the law of the Twelve Tables, which fixed the interest at 10 per cent. per annum, diminish the ravages of usury at Rome, and bring about a fall in interest? M. Troplong himself cites from Titus Livy and Plutarch numerous instances which superabundantly prove the contrary. Montesquieu was not in error on this point. "As the Roman people," he says, "were daily becoming more powerful, the magistrates sought to flatter them by having such laws enacted as were most pleasing to them: capital was restricted; interest diminished and finally prohibited; bodily constraint was taken away; and at last the abolition of debts was proposed, whenever a tribune wished to render himself popular. These continual changes, either by laws or by piebiscits, naturalized usury at Rome; for the creditors, seeing the people their debtors, their legislators and their judges, had no longer any confidence in contracts. The people, like discredited debtors, could borrow only at high rates; and this was the more so, because, though the laws only occasionally interfered, the complaints of the people were continuous, and always intimidated the creditors. Thus were all honorable means of loaning and borrowing abolished at Rome, and a frightful usury became established."

—The results in modern times have been the same. The only nations or states in which the trade in money has been most regular and confined to reasonable limits, are the very ones where the greatest freedom in money transactions has been tolerated or authorized. It is sufficient to mention Genoa, Venice, Florence, Holland and England. Holland, in the seventeenth century, although its credit was weakened by war, borrowed at 4 per cent.; in England, the current interest was 3 per cent. toward the middle of the eighteenth century. Owing to their ability to give value to their capital, the Florentines and Milanese, in the sixteenth century, under the name of Lombards, took the place of the Jews, in a large way, and became the bankers of Europe. Freedom in the matter of interest favored the establishment of credit institutions. The foundation of the bank of England and that of Amsterdam were nearly a century earlier than that of the bank of France.

—Moreover, the fall in interest and the development of commerce, in the states where there was the greatest toleration for credit transactions, appear to have followed step by step the progress of this liberty. Thus, in England, Henry VIII. had fixed the rate of interest at 10 per cent. Edward VI. absolutely interdicted loaning at interest. Elizabeth gave an impulse to trade by abrogating the statute of Edward and re-established 10 per cent. as a maximum rate, thus indirectly giving much latitude to traffic in money.

—The statute of Queen Anne fixed the rate of interest at 5 per cent. per annum, and pronounced every contract void in which the interest should exceed this rate. In accordance with the usual practice of the English, who rarely act from general principles, this statute was long nominally in force after being allowed to become practically obsolete. Then it was abrogated by successive degrees, a part at a time. The act of the fifty-ninth year of George III. (1812) was the first attack made on the principle. It was enacted that a bill of exchange or a bill payable to order, which might be declared void because of usury, should be valid in the hands of one who had taken it in good faith. Then came the act of the fourth year of William IV. (1833), which, in renewing the privilege of the bank of England, abrogated the usury laws in the kingdom, so far as bills of exchange and notes payable to order on three months or less were concerned. The act of the first year of Victoria's reign extended the exemption to bills of exchange and notes payable to order, the term of which did not extend beyond a year; and the act of the third year of the same reign comprehended also all loan contracts made for sums which exceeded £10, provided the loan was not secured by a mortgage on real estate.

—In consequence of the latter provision, landed property had now to pay higher than the current market rates for money, and was, therefore, at a disadvantage in comparison with manufactures and commerce. Such an inequality before the law could not permanently continue. In 1854 a law was enacted (17 and 18 Vict., ch. 90) repealing all existing statutes against usury, though not touching the statutes in reference to pawnbrokers. These were modified later (35 and 36 Vict., ch. 93).

—The above-mentioned changes in the laws made to regulate the rate of interest appear to have been a result of the celebrated resolutions which were reported to the house of commons in 1818, in the following language. "1st, Resolved, that it is the opinion of this committee that the laws regulating or restraining the rate of interest have been extensively evaded, and have failed of the effect of imposing a maximum on such rate; and of late years, from the constant excess of the market rate of interest above the rate limited by law, they have added to the expense incurred by borrowers on real security, and that such borrowers have been compelled to resort to the mode of granting annuities on lives, a mode which has been made a cover for obtaining higher interest than the rate limited by law, and has further subjected the borrowers to enormous charges or forced them to make very disadvantageous sales of their estates. 2d, Resolved, that it is the opinion of this committee that the construction of such laws, as applicable to the transactions of commerce as at present carried on, have been attended with much uncertainty as to the legality of many transactions of frequent occurrence, and consequently been productive of much embarrassment and litigation. 3d, Resolved. that it is the opinion of this committee that the present period, when the market rate of interest is below the legal rate, affords an opportunity peculiarly proper for the repeal of said laws."

—As to the effect of the repeal of these laws, unexceptionable official documents permit us to judge. In the year 1841 the bank of England took the initiative in that regard, and, in a country where it is customary to follow public opinion rather than to lead it, did not hesitate to give an impetus to public thought. On May 13, its court of directors met and embodied the results of eight years' experience in the following declaration: "Resolved, That the modification of the usury laws at present existing has contributed greatly to facilitate the operations of the bank, and is essential for the proper management of its circulation." Parliament, on its side, determined to obtain evidence of the good or bad results of the partial repeal of the usury laws. The house of lords, in the year 1841, investigated the subject, and the testimony brought before it (published in 1845), casts much light on the question.

—A distinguished economist. Mr. Norman, after having called attention to the fact that the bank of England, thanks to freedom of interest, had successively fixed the rate of discount, following the variations of the market, from 4 to 4½ per cent. on July 21, 1836; at 5 per cent. on Sept. 1 of the same year; at 5½ per cent. on June 20, 1839; and at 6 per cent. on Aug. 1 of the same year; terminated his deposition in these terms: "I have always regarded with surprise and admiration the way in which the mercantile pressure of 1839 was borne. It was very severe, and the number of failures of consequence was certainly small; and I can not help attributing in some degree the manner in which that pressure was sustained, comparing it with what had occurred on similar occasions previously, such as in 1826, to the state of the law which enabled capital and loanable accommodation to flow into those channels where it was most wanted and could be best paid for—in fact, into its natural channels."

—One of the most eminent practical bankers, Saml. J. Loyd (afterward Lord Overstone), confirmed this opinion by the following explanation: "Had the law which fixed the maximum rate of discount at 5 per cent. been maintained in operation, it would have produced inconveniences of two kinds: in some cases, parties requiring the command of money would have been unable to obtain it, and would consequently have been subjected to many very serious evils, such as forced sales of their goods at ruinous prices, injury to their general credit, and, in many cases, actual suspension of their payments; in other cases, parties would probably have obtained the money by resorting to circuitous contrivances for the purpose of evading the law, which would necessarily have entailed upon them great additional trouble, discredit and expense." Mr. Loyd hence concluded that the act of 1833 had saved British commerce, in the pressure of 1839.

—This was also the conclusion to which Mr. Samuel Gurney, one of the most able bankers and most revered men in London, finally arrived, who called attention to the fact that in 1818, when the state loans were the only ones exempt from the operation of the usury laws, and when considerable loans had been issued by the government, capital deserted the commercial market, which was subject to the legal limit, for the market of public funds; and commerce had to suffer much in consequence of the restrictions which fettered business. Mr. Gurney entered into detailed calculations which brought into relief the consequences of the two systems of restriction and freedom in the matter of interest. "The advantages of the relaxation in the law to the trading community," he said, "are that under every circumstance they are able to procure supplies of money and to carry on their business with facility. In the two or three last pressures which we have had, we have had very few failures. I will now take the other side. What is the disadvantage? It is that they have to pay this high interest for a limited time; the calculation of that disadvantage brings it to a very small sum. A firm of large extent may have under discount to the extent of £50,000, and have to pay 6 per cent. interest for that £30,000 instead of 5 per cent. for six months; this is the extent of loss, which comes to only £250. For that loss he gets the advantage of general facility, a less risk, as credit is much better preserved—advantages greatly beyond the loss. One other great advantage is the ability to borrow money upon the security of his goods, or sell them. If he borrow money upon his goods, it resolves itself into a calculation of a similar character; if he thus borrow £100,000, there will be a loss of £300 or £400; but if he is compelled to sell his goods, he can not, under such circumstances, at a less loss than from 10 per cent. to 20 per cent.; and therefore, on the one hand, he may have to lose some £300 or £400; but, on the other, if compelled to sell his merchandise, which he must do were he unable to pay more than the legal rate of interest upon a loan, the loss would be, under forced sales, of from £10,000 to £20,000." We might extend these quotations. The witnesses summoned, in the course of the inquiry, were, with scarcely an exception, unanimous.

—Some persons have observed that, if merchants in high position gained by the repeal of the usury laws, the same was not true of those whose credit was less firmly established, and that usurious rates were demanded of this class. But what does that prove? That there was, apparently, a certain risk in lending. If the usury laws had been operative, the embarrassed merchants would not have found money, or they would have had to pay still more to procure it. In either case, failure was imminent. Thus much for the example of England: let us now pass to France.

—Interest on money was certainly much higher at the time when legislation interdicted interest loans and burned Jews, than under the far more mild régime which authorized loans under the form of annuities, and fixed by law the rate at which loans could he made by alienating capital in this manner; it had become still lower, and commerce had become extensive at the time when Turgot wrote these remarkable lines: "It is a well-known fact that there is not a commercial place on the earth where the greater part of the commerce does not depend on money borrowed without alienation of capital, and where interest is not regulated by a simple agreement, according to the greater or less amount of loanable money in the place, and the degree of solvency of the borrower. The rigor of the laws has yielded to the force of things; jurisprudence has been obliged to modify in practice its speculative principles, and people have long since come to openly tolerate loaning by note, discount, and every species of money negotiation between parties. It will always be thus whenever the law prohibits what the nature of things renders necessary."

—The constituent assembly only half adopted the ideas of Turgot. The law of 1789 permitted loans at interest under any form, but it reserved to the legislator the right to fix, or at least to limit, the rate of interest. The civil code, promulgated in 1804, stipulated a similar reservation; these were mere preliminary and tentative changes, which prepared the way for the law of Sept. 3, 1807.

—We say nothing of the intermediary régime. Some claim that the convention declared money merchandise, and that in consequence of that unlimited freedom, usury for some years invaded and ravaged the country. The laws of the convention were contradictory. At one time, to raise the price of the assignats, it interdicted trade in the precious metals: again, it removed the prohibition and left every one free to buy and sell gold and silver at their actual value. Interest, the rent of capital, only resumed its liberty as a consequence.28 This liberty was the result of the toleration of the government, and not of a clear perception of a principle which it firmly proclaimed. But what matter is it whether the convention, in removing the barriers it had itself raised, removed also others or not, and rendered homage to political economy without willing it or knowing it? The events which occurred in the commercial world, during that period of anarchy and the disturbed times which succeeded it, prove nothing either for or against any system.

—We are, however, inclined to believe that, notwithstanding the calamities which were the inevitable result of the civil disorders and of war, and although commerce, manufactures and credit were nearly paralyzed in France from 1793 to 1797, the toleration accorded meanwhile to pecuniary transactions bore more good fruit than bad. People have quoted the protests of some chambers of commerce, which complained at that time of the dullness of trade, the great numbers of failures and the cupidity of loaners. In reply we will say, without having regard to these particular cases, that the speech of Joubert, who proposed the law of 1807, itself shows that interest on money had generally fallen. But, were it otherwise, can any one really suppose that laws more restrictive would have procured money for trade at a low price, at a time when the risks connected with every negotiation or credit transaction were so great, and when confidence was so weak?

—The legislators of 1804, more favorable to liberty than those of 1807, had left the way open. Article 1707 of the civil code provided that the interest agreed upon might exceed the rate fixed by law, whenever the law contained no prohibition to the contrary. This was directly to recognize that the value of money, like all other values, results from the state of the market and the terms arranged between parties. The legislators of 1807 shut this half-open door, by putting agreed-on rates of interest in the same line as legal interest. It may be well to quote here the language of a law which can serve as a starting point in the discussion. "Art. 1. The interest agreed upon shall not exceed 5 per cent. in civil matters [i.e., those coming under the cognizance of what are known as civil courts, in France, in distinction from mercantile courts. E. J. L.], nor 6 per cent. in mercantile matters, without retention. Art. 2. The legal interest shall be, in civil matters, 5 per cent., and in mercantile matters 6 per cent., also without retention. Art. 3. When it shall be proven that a loan has been made at a rate exceeding that fixed by Art. 1, the lender shall be condemned by the court before which the case is brought, to restore this excess, if he has received it, or to suffer a reduction of the principal of the debt, and he may even be remanded, if cause appear, to the court of correction, and, in case of conviction, condemned to a fine not exceeding half the capital he has lent on usury. If the result of the law process shows that the lender has practiced fraud, he shall be condemned, besides the above fine, to imprisonment for a term not exceeding two years."

—The economy of the law of 1807 consists entirely in a small number of rules. It lays down as a principle that freedom of agreement in regard to rate of interest must be exercised only within the limit of the legal maximum. Provisionally, this maximum is fixed at 5 per cent. in civil matters, and at 6 per cent. in mercantile ones.

—The law of 1807 makes usury a crime. But what is usury? Bentham said truly that it was not susceptible of definition. And in fact, if usury consists in loaning at a rate higher than that fixed by the legislature, one may be a usurer in England while loaning at a rate which would be permissible in France, and vice versa. In France the offense depends, not on the nature of the act, but on the quality of the lender. One is a usurer if he loans at 6 per cent. in civil matters, but ceases to be so if he loans at the same rate to one engaged in commerce. These inconsistencies in legislation prove that an attempt has been made to regulate that which, from its nature, evades legal rules. The authors of the law of 1807 perceived this; for, after having made the act of loaning at an interest in excess of the legal rate a crime, they did not affix any penalty. The court, in this case, can only sentence the lender to restore the excess. The sentence can only extend to a fine in the case of habitual usury, that is to say, when the offense becomes changed; when, instead of having to deal with parties whose bargains depend upon the variations of the market, the court finds before it a speculator who makes a business of seeking the most risky investments, those which serve as an excuse or pretext for unlimited profits.

—The law of 1807 has only one kind of merit. In a country where there is too little general information on matters of political economy, and where anticommercial prejudices have still much influence, it bears a certain relation to the average level of intelligence and the state of morals. In 1836 a motion was made by M. Lherbette aimed at the repeal of this law and the restoration of freedom in the matter of interest; but it failed because of the unenlightened opposition of the elective chamber. In 1850 the proposition of M. Saint-Priest to modify the law had no better success: the law which was enacted Dec. 15, instead of punishing the simple contravention of the law prescribing the legal interest, is only aimed against the habit of disregarding it, and confines itself to increasing the penalties.

—The law of 1807 governs the trade in money in all the countries of Europe which have adopted or imitated the French civil laws. To examine into the effects it has produced in France, is then to obtain the elements which may serve to give the most general view of the question. The law of 1807 did not, as we know, bring about a fall in the rate of interest, which is, notwithstanding the solidity of the operations, much higher in France, in every scale of credit, than in England, Holland and Belgium. The absolute prohibition it contains has not prevented the loaner, wherever there were risks to be incurred, from stipulating for excessively high interest which was legally usurious. That has been accomplished in a contraband way instead of openly. But the troubles from it have been only the greater; for the interest must include, besides the premium for the risk arising from the small degree of solvency in the borrower, that of the risk arising from contravention of the law.

—The mohatra, so much branded by Pascal, has reappeared, and the usurious loan has been disguised under the form of a sale. In other cases the fraud has been accomplished under the form of a donation; besides the legal interest, the lender has required a supplementary interest, under the title of gift. Sales with privilege of redemption have also served to conceal usury, which has, besides, taken place under cover of an exchange. But the most usual as well as the most simple form has consisted in stating in the loan contract, or on the notes given to the loaner, a sum higher than that which the borrower had received.

—The defenders of the system sanctioned by the law of 1807 themselves recognize that this law, far from uprooting usury, has perhaps aggravated it. Usury, it has been said, is devastating French rural districts; and it is certain that the debts of small property-holders had much to do with the socialism of the central and eastern departments of France in 1849 and 1850.

—A representative of the upper Rhine, M. Cassal, cited in the tribune curious examples of frauds practiced in Alsace to evade the provisions of the law of 1807. "The usurer," be said, "no longer proceeds in this fashion: 'I lend you one hundred francs in consideration of ten francs.' Nothing like that is written. A note of a hundred francs is made, but only ninety of it are given. Care is taken that it be done with no witnesses present, and then you have the provision of article 1322 of the civil code, which establishes a legal presumption in favor of the creditor who has a writing. In this case itself it is very difficult to prove usury. More frequently sales with power of redemption occur: property is bought for the consideration of one hundred francs, and only ninety are paid; and when the debtor wishes to obtain his property again, he is obliged to pay back the sum stipulated in the contract as price, and happy is he, too, if the purchaser will consent to restore him his property. In this case also, the stipulations of article 1325 of the French civil code are exactly fulfilled: you have no witnesses, and it is impossible to prove usury. When one of these men loans at 5 per cent. on a simple note, there is much reason for mistrust; the lender has evil designs. When the note falls due, the debtor can pay; but the creditor promises to wait. When the time comes that the latter knows the former has no money, he becomes pressing, prosecutes, hounds the debtor, forces him to make an assignment, lays down orders, and, finally, compels the unfortunate to pay what is called the interest of patience. Then he takes everything the former can give: fifty francs, a pair of sabots, a batch of bread, per week. But all this is the A B C of usury. The usurer but rarely makes his bargain in his own name. The borrower sometimes does not even know him; the business is done through an intermediary, a sort of broker, who, ordinarily, has nothing to lose, not even honor, who also takes brokerage, and thus increases still more the interest on the money. When loans are made, the first step is to ask for security. This security is the person who signs the note and carries it to the borrower, or vice versa; the intermediary likewise, signs the note, and it is sometimes covered by three, four or five signatures before reaching the real lender. The usurer is then in the position which, in the language of the law, is called 'a third carrier in good faith.' The aim of the business is to make some kind of a bargain: in primitive times, a trade in flocks or herds; later, in real estate. This is how it is effected. Sometimes one lends a sum, always by an intermediary, on a simple note or an obligation acknowledged before a notary, and on the other hand, he has a field or other real estate sold to him at an extremely low price. Care is taken, however, that the matter be so arranged that the lesion of the seven-twelfths may not be reached. These men, who thus exploit French rural districts, have divided the territory: each one has his chosen portion to exploit, and it is rare for another to permit himself to go there to do business. You comprehend then that they are perfectly well acquainted with the value of the estates, better than the peasants themselves. Consequently there may be usury of 100 per cent. or 200 per cent. without the cognizance of the law. At other times, and this is far more serious and more common, they force the borrower, giving him meantime the funds for the purpose, to buy a piece of land or some other commodity at a very high price. Here they do not take the trouble to put as large a sum as possible into the contract: they put the property at double or triple its value. Let them succeed in making a man contract a debt, and nothing can save him; he is soon dispossessed of his property. I know entire villages which do not contain two solvent private citizens."

—Looking at this social condition, one would think he was living in the middle ages. Is it necessary, in order to remedy this, to make the penalties greater and to increase the legal restrictions? M. Cassal, who is not, however, an economist, but who has had a near view of the evil, does not think so. "I know the country usurer well enough," he said, "to apprehend that our law (that of 1850) instead of producing the extinction of usury, may perhaps produce the contrary effect, by closing the purse strings and shutting out all credit. Usury is the only means, the single source of credit to the countrymen; and if that source dries up, I fear they may be more miserable than before."

—The defenders of restrictive laws in the matter of interest would do well to reflect upon this remarkable avowal. They think they have replied to all objections when they say: "If the borrower is not sufficiently solvent for loans to be granted him at the legal rate; if an additional premium is necessary to cover the risk—well, people will not lend to him at all." Shall credit be thus obliged to stop rather than exceed the level of interest which the legislator has supposed legitimate? But credit can no more be arrested in society than the circulation of blood in the human body. For the one as for the other, motion is life. You say that loaning at high interest will in the long run ruin the borrower. This is possible; but he will be ruined without usury, if he does not find a way to borrow what he needs to meet his obligations when they fall due!

—The capitalist who speculates upon the temporary distress of the borrower is a wretch. Science has no intention of sheltering such under her mantle. If usury extends to direct or indirect fraud, there are laws to punish it. But let no one attack the freedom of mercantile transactions, under pretext of preventing usury. Provided the loaner and borrower are free to make a bargain, the contract should be valid. It matters little at what rate the investment be made: the interest of money is naturally subject to one law alone, that which determines that the price of things, instead of being fixed arbitrarily by the civil power, results from the essentially variable relation between supply and demand. There is but one way to abolish usury, and that is to extend to property the benefits of credit institutions, and accustom proprietors punctually to fulfill their obligations. For the rest, the relation of demand to supply so bears upon the contracting parties, that governments, when they wish to borrow, are themselves subject to it. Whenever it was necessary to contract public loans, the French government took good care not to appeal to the law of 1807. In difficult circumstances it has borrowed at 7 per cent. and even at 8 per cent.; and instead of then considering the capitalists who undertook the loan at these high rates as usurers subject to the penalty of the law, it sought to attract them by all means in its power. Not to speak of the profits they have made by loaning to embarrassed governments, have not bankers obtained all the marks of distinction which could flatter their vanity? Have they not been covered with cordons and admitted to the ranks of the aristocracy?

—Thus the state itself sets the example of violation of the law. It seems that the legal rate of interest is obligatory on every one except itself. To loan at 6 per cent. to private individuals, is to expose one's self to the severity of the courts; to loan at 6 per cent. to the state, to cities, to departments, is to merit public gratitude. Who can henceforth take seriously this pretended crime of usury, which is not such for states, but is such in private transactions?

—This is not all. In testimony of the powerlessness of the legislator when he attempts to do violence to the nature of things, the French law of 1807 was obliged, in fixing a maximum rate of interest, to admit of exceptions and establish categories. Thus, loans on property security, on pledge, on provisions, and discount, escape its rules. The same observation applies to commissions charged by banks, and to the premium given to brokers who answer for the persons to whom they sell merchandise; as well as to those commercial practices which are so many additions and supplements to the interest stipulated in the money loans.

—III. LOANS WHICH EXCEED THE LEGAL RATE. The loan on pledge (or pawn), which entails at once numerous risks and considerable expenses of administration, is one of those which can be made only at a relatively high interest. All the pawnbrokers in Europe would be ruined in a few months, if they were compelled to loan at a rate corresponding to the price current of money in the market. The exception which has been made in their favor, or rather, the freedom in regard to interest which is allowed to be the rule in their case, has been favorable to those who patronize these institutions. To speak only of the mont de piété at Paris, the interest asked of borrowers has constantly diminished since the last century: it was 5 per cent. per month in the year III. (1795-6), 2½ per cent. per month in the year VIII. (1800-1), and 1¼ per cent. in 1831. As the rent of money becomes lower in the general market of capital, the pawnbroker will lend at a lower interest to necessitous families.

—As to the loan of provisions, which the law of 1807 does not govern, and in which one may always, by the terms of article 1907 of the civil code, exceed the legal interest, jurists have found a reason to justify that exception, which, if they were disposed, might be made to apply equally well to loans of money. "How can we think," says M. Troplong in his "Commentary on Loans," "that the legislator could have intended to impose the same rate of interest on loans of provisions as on money? How can we suppose that he would have taken no account of the risks, which are much greater in the loan of provisions than in the loan of money; in the loan of provisions, we say, where an abundant harvest at the time of payment may take away so much of the value of the thing lent in time of dearth? Would he have condemned the system followed in all ancient nations by legislators and economists, of fixing the interest on provisions higher than the interest of money? We think, then, that there would be nothing illicit in an agreement which should obligate the borrower of a hundred measures of oil, grapes, or apples, to repay a hundred and ten or a hundred and fifteen at the following harvest."

—When one borrows money, it is not the metal exactly which one wishes to possess, but the value it represents. Under the form of money or under the form of provisions, the lender delivers capital: capital is the object of the contract. From the essential point of view, which is that of value, there is no difference. In vain has it been objected that the value of grain was variable; for the same objection would apply to the value of money. Who does not know that the power of the precious metals was much greater in the time of Charlemagne than in the reign of St. Louis; in the time of St. Louis than in the reign of Louis XIV.; and in the reign of Louis XIV. than in our day? No doubt money presents a more fixed and certain measure of value from one year to another than wheat; but from one century to another the advantage of fixity and constancy passes to the wheat. The price of cereals is, in fact, the light by the aid of which we find our way in studying the economy of society in the past.

—Under one form as well as another, the rent of capital depends on its abundance or rarity compared with the urgency of the demand. It is not the nature of the loan which can raise the premium; it is the situation of the borrower. Why did the legislator of 1809 allow the rate of 6 per cent. in mercantile bargains, while he imposed the minimum limit of 5 per cent. in civil matters? Apparently, that difference of interest signifies that the risks are greater in one case than in the other, and that the trader who invests his funds in uncertain operations does not give the same security for payment. Why does M. Troplong recognize in the lender of provisions the right to demand from 10 to 15 per cent. interest, if not because the certainty of payment is less in transactions of that nature? Starting there, to be consistent, one step more should be taken: the principle should be separated from the example, and one should say that the premium on the risk, which is one of the elements of interest, increases naturally in proportion as the certainty of reimbursement diminishes. In loans at interest, the premium on the risk acts as a sort of insurance on capital; this is why there are no reasons for refusing to allow it in the loan of money, when it is allowed in the loan of provisions. Credit is naturally personal. There exists no such thing as one rate of interest belonging to provisions and a different interest belonging to the precious metals. It is because those who borrow provisions generally place themselves in a more hazardous situation, that high interest is demanded of them. But a good number of borrowers to whom money is loaned personally merit still less confidence; why should it not be permitted to stipulate with them a premium for insurance, commensurate with the perilous chances they cause one to incur? The principle is admitted in wholesale contracts. Do you suppose that there is not, as M. Sainte-Beuve has so well said, any such debtor whose solvency makes the loaner run as much risk as he would incur from tempests? To sum up, either the exception made in the case of the loaner of provisions has no raison d'être, or the considerations which have determined it tend invincibly to liberty in the rate of interest, under a general law.

—On the question of discount the subtleties of jurisprudence are freely exercised. Certain jurists rank it in the category of sales; others, in that of loans. "The banker who discounts," says M. Troplong, "only makes a loan. Accustomed to trade in money and notes, he only purchases a credit; and as 10,000 francs, payable in one year, are not worth 10,000 francs payable now, he gives a less price than the nominal one. This price is calculated on the time to run, on the solidity represented by the signature of the one who signs it, the value of that signature, the place. etc. Discount is only the difference between the nominal and the real value. I have said that the banker buys a credit; I add that, on his side, the borrower buys a present sum for a sum not due. In all cases, the borrower who sells his credit does not contract the obligation of returning the same thing, characteristic of the loan; his obligation is, to deliver the chose and guarantee its payment. On the other hand, the banker becomes proprietor of the effect, with the same title as if he had bought any other article; he uses it as be pleases, and has nothing more to do with the one who assigned it to him except so far as pertains to the security."

—We see that if the rate of discount escapes in France the rules laid down by the law of 1807, it is not through respect to a theory which takes its point of support outside of realities. The legislator has yielded to the force of things, either by formally accepting or by tolerating usages which he could no more modify than destroy.

—M. d'Esterno has cited, in the Journal des Economistes, curious examples of loans at a high rate, which are negotiated, to the mutual satisfaction of borrower and lender, the department of Saône-et-Loire. "There are," he say, "small farmers who buy, in May, cattle for labor, and sell them again in November. If they buy them for cash, they pay 600 francs for them, for instance, but, as they only pay 300 francs at the time of getting them, and promise the other 300 at the time when they count on having sold them, they consent to give 50 francs more for that accommodation. This transaction is usual, and it is repeated in the case of other animals, hogs, for example." Thus, farmers who would probably not consent to borrow at the rate of 7 per cent. upon mortgage, willingly borrow under that form at 33 per cent. The transaction has no relation to the current rate of interest; but it is within the ability and convenience of the parties who contract. That is sufficient to explain it. Credit institutions, by furnishing circulating capital at lower rates to property owners and farmers, will alone be able to supplant this custom.

—Contraventions of the law of 1807 are especially frequent, and occur with impunity in civil matters. One has only to consult the notaries to be convinced that, if mortgage loans were confined to the strict limits of the legal rate, there would be to-day, outside of Paris and the range of the capital, few serious and effective loans. By means of accessory agreements, immediate deductions, and various compensations, people succeed, while inscribing only the legal rate in loan contracts, in winning and retaining capital in liens on real estate.

—As a general statement, it may be said that the only loans which the restrictive laws affect, are the large transactions in which an habitually low price for money renders that intervention at least useless. Those, on the contrary, which escape the action of the legislative enactments, and of the law of 1807 as well as the others, consist of transactions of slight importance and in which a high rate of interest is invariably found to be stipulated. This is true, especially of loans in retail trade and for a short term of credit. Those who loan by the week figure largely in that category. Those who loan by the day are a class of capitalists that should not be forgotten, and who, notwithstanding the high interest they obtain, render real service.

—"In the Paris provision market," said M. Aubréy in his speech against the proposition of M. Saint-Priest, "a well-known trade in money is carried on: one keeps a shop of five-franc pieces, that is to say, a certain variety of a banker keeps an office in the market and delivers to merchants of the four seasons and to vegetable gardeners a five-franc piece. With this five-franc piece the small trader buys provisions and food which he goes and sells about the city. At the end of his day's work he returns; he has often earned two or three francs with the aid of that five-franc piece. Do you suppose it is hard for him to pay the banker who furnished him the instrument of labor the sum of 25 centimes from his day's profits? * * In this case the interest of the money is 1800 per cent. Some people wished to enter complaint in the name of the law; but the magistrates of the bar of Paris were obliged to recoil before the numerous and incessant cries of the opposition; this resistance derived its strength from the good sense of the people and the benefits of liberty."

—It would seem that an investment by which money brings 1800 per cent. would call in the competition of capitalists, and that this competition would lower the rent of capital. Yet the loans which have taken in the French language the name of "loans by the little week" remain at a rate that varies little. The reciprocal advantages of the borrower and lender would not suffice to explain the permanency of so high an interest in these investments. To understand it we must consider the risks to which capital is exposed. The ambulating tradesmen are an essentially nomadic portion of the population: it is the business to which those have recourse, who, for the time being, can do no other, or whose indolence makes them shun labor. From such customers one can not expect great scrupulousness in the fulfillment of their obligations. Five-franc-piece bankers are those who most frequently become bankrupt. The petty dealer, who often spends in drink the day's earnings, consumes both capital and profits. To escape the surveillance and pursuit of the creditor, the debtor has only to migrate from one occupation to another, in the infinite circle of petty trades which spring up and multiply in the streets of Paris. The capitalist lends to strangers, to people who have neither a sou nor a trunk, and without other guarantee than their interest to meet punctually their obligations so as to create for themselves a species of credit, an interest which all do not comprehend. If the debtors were punctual and scrupulous, the creditors, renewing their capital eighteen times a year, would very quickly make their fortune. Many, however, become ruined; and the sphere of these transactions does not appear to enlarge, which proves that there is in them a commingling of good and had chances.

—And now, I ask, are not the laws which restrict liberty of interest judged, when we see that, for one transaction at 6 per cent. which they prevent in the average sphere of credit, they tolerate or do not prevent a little lower down the scale of loans, numberless public operations every day, in which the usury extends to 1800 per cent. per year?

—IV. BASIS OF INTEREST. It is time to abandon the historical controversy to examine the foundation of interest. Three principal elements co-operate to determine it: the rent of capital; the premium on the insurance to cover the risk, and, in a great number of cases, the charge for commission; and the salary of the intermediary who puts the borrower in communication with the lender. The rent of capital, the instrument of labor, the motor which sets commerce, agriculture and manufactures in motion, is the principal element in interest. How is its rate determined? and what is its measure? Has this element anything fixed, which depends not on places, time or persons? or must it vary with circumstances and according to individuals? There is, we know, no such thing as unchangeable value; the notion even of value, arising as it does from the idea of relation, implies change. The rent of capital, like the price of all things, must vary under the action of demand and supply; and the law of demand and supply is itself subordinated to all the vicissitudes of production as well as of consumption, not to speak of the influence which progress or decline in means of transportation may exercise. One may not, then, prejudge what the rent of capital should be; but should confine himself to stating what it is. The observation of facts must rule in this matter. No doubt it is recognized in studying the economic history of peoples, that the rent of capital diminishes as wealth increases. But it should also be remarked that, through that incontestable tendency to a fall, the oscillations of interest become more frequent in proportion as commercial relations, developed by increased comfort and intelligence, come to multiply. The rent of capital varies, perhaps, less, in that descending progression, from one century to the following one; but from one year to another, it changes more. Credit, which formerly seemed to have nerves of steel and a hardened epidermis, has contracted the impressionable nature and delicate temperament of the sensitive. One can then determine the rent of capital only approximately, under given circumstances and while these circumstances continue. The system which would make the government regulate the rate of interest, to remain true and not deviate from the facts, would require the rate to be revised each month, each week; and, in some cases, each day; but a rule that required incessant alteration would not be a rule. This system is then condemned either to unchangeability of interest which is contrary to justice, or to an incessant change which would be the negation of law. As to the theories whose pet chimera is a fixed and in some sort normal interest, we will speak of them only to recall a few facts. The bank of France attempted to put them in practice, by maintaining the rate of discount at 4 per cent., in times of pressure as in periods of prosperity; but its resistance was finally overcome: in 1847 it was obliged to raise its rate of discount to 5 per cent. in order to arrest the export of specie; and in 1852, not to remain outside of the business world, it reduced it to 3 per cent.

—The second element in interest is the tax for insurance or risk. This may be considered as still more variable than the preceding, and is certainly more difficult to estimate. The rent of capital is, as it were, the real part of interest, the part which is regulated by the value of things, the state of the market; and insurance is the personal part. The risk changes not only with the circumstances, but also with the situation and character of the borrowers: it is almost nothing in loans made on bills of exchange or notes payable to order which have several good indorsers; it is considerable in the case of a borrower who gives only his guarantee, and the lender raises the premium for the risk in proportion to the lack of solidity in the guarantee. This weakness of the guarantee may be diminished by the confidence of the lender or increased by his mistrust. This is an element to be taken into account, which, because it is personal on both sides, touches closely upon the arbitrary. "He who loans his capital," says M. Aubréy, "with risk of losing it in whole or in part, renders a greater and consequently better remunerated service than he who loans his capital without risking anything; this is what constitutes the difference between the lessor of real estate and of personal property; because the capital of the one always preserves its identity easy to establish, and is often secured by privileges and mortgages, while, on the contrary, the capital of the other is capable of being consumed by use and absorbed without return, as interest and principal; this is also the difference between the civil and the commercial loan, as well as the loan on pledge (pawn-loan), between obligations on short time and on long time, between maritime contracts and land contracts." The extent of the service is not measured by the extent of the risk; but he who consents to loan his capital, without the certainty of recovering it when due, is right in demanding of the debtor a premium for insurance against this danger: this is not a remuneration, it is simply a compensation, a guarantee. But whether remuneration or guarantee, in doubtful cases a prudent creditor would not dispense with this supplement to the rent of capital; yet it is not always sufficient to preserve him from ruin. When M. Proudhon said that the interest of money represented the risk, the chance that might befall, alea, he then exaggerated the truth, he took the part for the whole, he left out of account the very basis of interest, which is the rent capital gives. But even this shows that he took account of one element which all legislation has disregarded.

—The socialist school, in the theory of gratuitous credit, substitutes for the premium on the risk, a sort of mutual insurance which unites all those making exchanges in the bonds of universal solidarity, and which makes every member of society bear his part in the consequences of the bad speculations or bad chances of all. This is not distributive justice: for the people who offer securities are put in the same category as those who offer none. The socialists make the moral being which they call society intervene in human affairs in exactly the same way as the ancients had their gods engage in them. Society, as they picture it in their romances, distributes subsistence and even wealth to all individuals; all the difference consists in having the manna come from the bank of the people, or the phalanstery, instead of descending from heaven. The people's bank having failed, and the phalanstery having aborted, we have to examine if it is possible, in the ordinary course of transactions, to establish any test or measure whatever of the risk. This element of interest obeys no rules, even for a day, even for a given case; it is an affair of opinion, a question of individual chances. There is nothing in it which one can generalize sufficiently to establish an economic principle, or a legal regulation. The element of risk interposes still greater obstacles than does the element of rent, to any attempt to fix or limit the interest on money.

—The third element of interest is thus defined by M. Aubréy, who, as a banker, could speak from acquaintance with the subject: "The instruments of labor only reach the laborers through intermediaries; this is the consequence of progress. Capital in the form of money, being an instrument of labor, is as much under the law of division of labor as capital in any other form. As every one knows, capital is put in motion and circulates by the aid of motive agents called banks; labor improves and prospers by reason of the activity and abundance with which capital circulates in these great reservoirs; but every one should also know how much accumulated wealth, moral power and dignity of character is necessary, properly to direct these credit institutions. Now just these rare and valuable qualities, and this difficult and necessary labor in credit institutions, are remunerated by a charge for commission, which increases the interest on the capital furnished. M. Proudhon, in his people's bank, does not contest the legitimacy of this charge; for, when he decreed gratuitous credit, he reserved a discount of from 1 per cent. to 2 per cent. for expenses of administration. Is it possible to determine the measure of this third element? Evidently not. There are credit establishments of different kinds. The banker whose operations extend to millions in a day, takes only a very small commission and yet makes much money, while the petty dealer, who operates only with some thousands of francs, or with five-franc pieces, may charge a very high commission and yet earn but little; though he may give the same measure of his time and labor as the banker."

—The above definition is neither complete nor altogether correct. Although it no more belongs to the government to regulate this part of interest than other parts, we must recognize that this contains an element more easy to estimate and less fluctuating. The institution of banks of circulation and discount has reduced the commission charge to small proportions, wherever their influence extends; yet even the state has a share in it, under the form of the stamp duty it puts on their notes. The commission charge of the intermediary bankers is often blended with the premium for risk: it is thus, for example, at Paris, where a discounter, for giving the third signature, and rendering a commercial bill acceptable at the bank of France, takes a premium or duty of 1 per cent., ¾ per cent. or ½ per cent.

—In analyzing the elements of which interest is composed, we have seen that there is not one which gives a sure basis for estimating it. This has led M. Lherbette to say: "If you think there is a fixed, invariable basis for interest, why do you make it vary according to circumstances? and if you believe, on the contrary, that its basis is variable, why do you fix upon a rate from which the contracting parties shall not be allowed to vary according to the particular circumstances in which they find themselves and which they will understand better than you? In any case, if you determine to fix it, it will have to be continually modified; for circumstances constantly change; it would be necessary to establish mercurials for money as for bread." [The mercurials were registers of the price of grain and some other necessary provisions, and were formerly required to be kept in a public place in the market towns of France. E. J. L.] Even that would not be possible. The tax on bread embraces two or three qualities, of which it fixes the price by consulting the price of grain of corresponding quality; but the tax of interest does not depend on such simple calculations: in its case the rate in the mercurial would have to include as many qualities as there are particular situations, or individuals having recourse to credit. In the domain of credit, the list of classes is infinite: and this will infallibly baffle any pretension to a rule. Freedom in the matter of interest results not less from the powerlessness of the restrictive system than from the right which belongs to the contracting parties to dispose of their property as they think best. The experience of the past is here the most direct auxiliary of principles.

—It is henceforth a recognized fact, thanks to the intelligence of our time, that interest on money is a legitimate value; why, then, should other conditions be imposed on it than on other values? When merchandise is in the warehouse or brought into market, its price is freely discussed between the buyer and seller; both find this method to their advantage; and the seller would carry away his goods as well as the buyer his money, if any one pretended to dictate to them the conditions of sale and purchase. In the matter of guarantees, both spurn the intervention of the state, and think themselves better off with free competition. Is there the least reason at all serious why trade in money should be excepted from the general law of trade? Sometimes society enjoys a tranquillity favorable to business, while again it passes through periods of monetary pressure in which every enterprise becomes difficult, and the activity of labor seems paralyzed. Money is sometimes scarce and sometimes abundant; the rent of capital must then vary, like any other value, according to circumstances. As to borrowers, they are not all equally solvent: on the contrary, they occupy, according to their morality, their reputation, and the competence they enjoy, various degrees in the scale of securities. Shall one say to a lender: "Whatever be the state of society, tranquil or disturbed; whatever be the abundance or scarcity of money; whether capital moves in full security or under the pressure of great anxiety; you shall loan your money on the same conditions and to all"? That would be unjust and absurd; one of two things would inevitably happen: either the prohibition would not be regarded, or capital would be refused, and society would have to manage as it could, to live without credit. Let us change the hypothesis. If a limit may be imposed on the profits of money capital by establishing a maximum rate of interest for money, why may not a maximum be fixed for every species of revenues, all kinds of transactions, and every sort of merchandise? If it is forbidden to lend above a certain rate of interest, why should it not be prohibited to sell above a certain price? The people have a much greater interest in not paying a high price for wheat in time of scarcity, than in finding loans at a low rate of interest. If money capital must not bring its possessor more than a certain per cent. yearly, why should the profit from capital in machines, land or manufactures be unlimited? Suppose I lend my neighbor $20,000, with which he purchases a spinning mill which gives him an annual return of 50 per cent.; why should not I be permitted to obtain what interest I can for my capital, when the borrower who receives this capital from me is free to derive any profit he can therefrom?

—It is claimed that the interest of money is an exception to the general rules of trade. M. Paillet said that property rights must yield, the same as others, to public utility; and he compared the prohibition to loan above a certain rate, with the interdiction to build within the line of fortresses, with expropriation for the public good, with the prohibition to clear land, with all measures, in short, which society takes to protect the weak against the strong. Political economy does not contest the right of society; but it denies its applicability in this case. What public interest requires the state to regulate the rent of money? We find none. In a theocratic government, where the state is everything and does everything, that would perhaps be conceivable. The priests in that case fix the price of provisions, the form of garments and the number of ablutions. People are not astonished to see them interfere in the system of industries, when they behold their authority reaching even to the domestic hearth. But since the industries have come forth from their swaddling bands, and citizens of the same state can freely trade with each other, it is the interest of each and all that trade in money should be as free as in other commodities. What would the ability to buy and sell products signify, without any other rule than the price resulting from the relation between demand and supply, if capital, which begets the products, were subject to different conditions on the market? Competition determines the rent of capital as well as the price of merchandise; and that alone can bring about and surely will bring about a fall in the rate of interest. Only chimerical or violently-disposed persons demand other methods.

—The adherents of the doctrine of the balance of trade thought that money, instead of representing the capital in circulation, was the capital itself of each country. This is why they subjected money negotiations to special rules. It was with this feeling that M. Jaubert, who reported the law of 1807, said: "If commerce gives itself up to speculations in interest, it goes out of its way, and will in the end arrest the progress of industry." As if capital, or rather accumulated labor, was intended for any thing else than to serve as a motor, and to procure profits for those who possess it. Communities live by tradition as much as by progress. We increase in stature because we rise on the shoulders of our fathers. Capital prepares the way for labor. The regulation of interest, as we know from the experience of our predecessors, is of no more service to labor than it is to capital. If it makes the latter unproductive, it prevents the former from development. But this system has consequences still more fatal to society than to the individual. It was decreed in France, by the law of 1850, that the maximum interest should remain fixed at 5 per cent. in civil matters. But that did not satisfy either M. Pelletier, who demanded money at 3 per cent., nor M. Proudhon, who aimed to reduce it to zero. The moment the people get the idea that it belongs to the law-making power to determine the rate of interest or to fix a limit to it, we are exposed to all the demands of anarchy. When the people, complaining rightly or wrongly of the hard times, come to demand a reduction in the annual interest, by what right can opposition be made? Will it be said, "We can not"? The legislators would then falsify their own action. Will they respond, "We will not"? That would be opening the way to revolution. The people would withdraw to the Aventine Hill, claiming abolition of debts; or, perhaps, to avoid paying them, or to pay them in paper money, they will send to the legislature, as certain departments did in 1849, socialistic revolutionists. Regulating interest by legislation is the first step of society toward bankruptcy; for it is the substitution of arbitrary law for the right to make agreements freely.

—Freedom in the matter of interest is proper for all peoples who have attained their majority and who are governed by laws of their own making: but it is especially appropriate in republics. Where the right of a citizen to take part in governmental affairs is recognized, he can not, without injustice and contradiction, be denied the power to regulate as he pleases his own affairs; to buy, sell, lend or borrow on such conditions as the market offers. The component parts of the sovereign power can not be held in tutelage. It is ridiculous that the law should stipulate for them as for aliens or prodigals put under an interdict. Let them not be called upon to deliberate on the nature and direction of the government, if they are judged incapable of comprehending and defending their true interests; or if that honor is accorded to their independence and intelligence, let the horizon of sovereignty be at least extended to private transactions and the domestic hearth.

—The United States probably owe some measure of their prosperity to the comparative freedom in the matter of interest. In New York discount has sometimes been taken as high as 18 per cent. per annum. At San Francisco money has been worth 4 per cent. or 5 per cent. a month. What matters it, after all, if those who borrow at this rate employ it so as to make still greater profits?

—The rate of interest is generally in proportion to that of profits. Where industrial investments bring 12 per cent. to 15 per cent., it would be foolish to claim that one ought to borrow money at 4 per cent. to 5 per cent. The trade in money would, in fact, cease, if it could not take place under conditions similar to those prevailing in other industries. When, on the contrary, capital employed in agriculture and manufactures brings a return of 5 per cent. to 6 per cent., a moderate interest, say from 3½ per cent. to 4 per cent. is generally sufficient for the capitalist. Where the profits from agriculture are considerable, as in many of the western states, the remuneration of labor and of capital is high. Interest is high as well as wages. In Great Britain, on the contrary, where manufacturers, in order to become rich, must operate on immense quantities, the profit being very small on each fraction, capital obtains only a moderate interest. The abundance produced by the treasures accumulated by industry makes capital less in demand there than labor.

—Harmony of these diverse functions in society can only result from liberty. It is liberty which has caused the growth of manufactures and has given wings to commerce. Liberty can alone regulate the interest of money, to the satisfaction of everybody. Capital can have no other master than itself; and its tyranny will be best avoided by not seeking to reduce it to slavery. A just balance will here arise from the relations naturally established between men and not from the laws they may be tempted to enact.

—BIBLIOGRAPHY. A Tract against the High Rate of Usury, etc., by Sir Thomas Colepeper, London, 1623, 4to; Interest of Money Mistaken—or, a treatise proving that a fall in interest is the effect and not the cause of the wealth of nations, London, 1668, 4to—(this treatise was written against the work by Child, who had maintained the opposite opinion); Brief Observations concerning Trade and the Interest of Money, by Josiah Child, London, 1668, 4to; Usury Explained and Condemned by the Holy Scriptures and by Tradition, by Father Thorentier, Paris, 1673, 12mo; Treatise on the Practice among Merchants of dealing in Bills and Money Loans, by a doctor of theology, 1684; Treatise on Money Negotiations and Usury, by Father Thomassin, Paris, 1697, 8vo; Usury, Interest and the Profit derived from Loans, or the ancient doctrine opposed to the new opinions, by J. Arthur de la Gibonays, Paris, 1710, 12mo; Treatise on Commercial Loans, by a doctor of the theological faculty at Paris, 1736; Treatise on Commercial Loans, or on legitimate and illegitimate interest on money, by Abbé Étienne Mignot, Paris, 1738, 1759, 1767, 4 vols., 12mo; Dissertation on the Legitimacy of Interest on Money current in Trade, by J. B. Gastumean, Hague, 1750, 12mo; An Essay on the Governing Causes of the Rate of Interest, by Joseph Massie, London, 1750, 8vo; Discourse for and against the Reduction of Interest on Money, by Abbé J. P. de Gua de Malves, 1757, Dialogue between Bail and Pontas—a theological dissertation on usury; Theological dissertation on the Practice of Commercial Loans and on the three Contracts, against the author of the Dialogue between Bail and Pontas, with a critical examination of the Letter of a Merchant on Loans, by Pierre Lecoq. Rouen, 1767. 12mo; Recent Letters to a Friend on Usurious Commercial Loans, by Abbé de la Porte, Amsterdam and Paris, 1769, 12mo; Theological, Economical and Civil Principles in regard to Usury, by Abbé de la Porte, Paris. 1769-72, 4 vols., 12mo; Treatise on Usury, serving as a reply to a letter on this subject, published in 1770 under the name of Prost de Rayer, and to the anonymous treatise on the same subject, by Étienne Souchet, Cologne. 1769. Paris and Berlin, 1776, 12mo. Legitimacy of Legal Usury, in which its utility is proven, by J. Faiguet de Villeneuve, Amsterdam, 1770. 12mo; Remarks on the Treatise on Usury and Interest (by Abbé de La Forest. 1769). with on Analysis of the Reflections on Commercial Loans (1771), to serve as a supplement to the theological dissertation on usury, by Pierre Lecoq, Amsterdam. 1775. 12mo; Means of extirpating Usury, or a Project for the establishment of a Public Bank for loaning upon all kinds of Property, by a lawyer in the parliament (H. Prévost de Saint Lucien), 1776-8. 12mo—(the establishment of the mord de pieti was attributed to the effect produced by this book): The Theory of Interest on Money derived from principles of Natural Law. Theology and Politics, against the abuse of the imputation of Usury, by J. L. Gouttes, Paris, 1780, 12mo; The Defender of Usury Confounded, or a Refutation of the Theory of Interest on Money, by Abbé de la Porte (with a collection of the ordinances against usury, by Maultrot), Paris. 1782, 12mo: Observations on Interest Loans in Commerce, by the Abbé Prigent, Paris, 1783, 12mo; The Defender of Usury Confounded once more by the Author of Principles of Usury, a Refutation of the Theory of Interest on Money, by the Abbé de la Porte, Paris, 1786, 12mo: Usury Laws—or, an exposition of the impolicy of legal restraints on the terms of pecuniary bargains, by Jeremy Bentham, 1787; The new Patrons of Usury Refuted, including the last defender of Calrin on the same subject—a work dedicated to the states general, by the Abbé Rougane, Paris, 1789, 12 mo; Memoir on Loaning at Interest, by J. Turgot. 1789; Considerations on Loaning at Interest, by M. * * * (Baron Ambroise Render). 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Baconnière-Salverte, Paris, 1824, 8vo; Explanation of a simple Means of reducing the Rate of Interest on the Public Funds in France, by André D. Laffon de Ladébat, Paris, 1825, 8vo; Dissertation on Loans at Interest—an explanation of the circumstances which justify taking interest, by Abbé E. Pagès, Paris and Lyons, 1826, 8vo; Treatise on Usury in Civil and Commercial Transactions, by F.-X. P. Garnier, Paris, 1826, 12mo; Usury Considered in its Relations to Political Economy, Public Morals and Legislation—or, the necessity of repealing the Law of Sept. 3, 1807, and modifying Art. 1907 of the Civil Code, by Ch. Lucas, Paris, 1829, 8mo, pamphlet; Discussion on Usury, where it is demonstrated that moderate usury is neither contrary to the Holy Scripture, nor to natural law, etc., by Abbé Mastrolini, (translated into French from the 4th Italian edition, by the Canon of Annecy, and supplemented by a collection of the decisions of the Holy See on usury), Lyons, 1834, 8vo; Investigations made by the English Parliament in 1838 and 1841 on the effects produced by the Laws in regard to Usury; Monts de Piété (pawnbrokers' shops) and Banks which loan on Pledges, by M. A. Blaise, Paris, 1843, 1 vol., 8vo; Observations on the Usury Laws, by J. B. Byle, Serjeant at Law, (London?) 1845; Gratuitous Credit—a discussion between Bastiat and Proudhon, Paris, 1850, 1 vol., 16mo; Obstacles to Credit—considerations submitted to the commission of the legislative assembly, who examine the proposition of M. de Saint-Priest on usury, by J. Beauvais, Merchant, Paris, 1850, 8vo, pamphlet; Manual for Debates on Usury, Crédit Foncier (i e., loans secured by mortgage of real estate), Finance, etc.—a summary of the labors of the greatest thinkers, applied to France by a system immediately practicable, by Albert Polonius, Paris, 1850, 1 vol., 8vo; The Question of Usury, by Saint-Priest; Report of the Commission appointed to examine the Proposition of M. Felix de Saint-Priest on the Crime of Usury, by M. Paillet. The Moniteur of those times contains the speeches of MM. Aubréy (of the Vosges), Sainte-Beuve, Lherbette and Léon Faucher; in favor of the proposition by MM. Paillet, Saint-Priest and Corsan. Other writers have treated the subject of usury incidentally, among whom may be named Plutarch, Against Borrowing for Interest; Saumaise, Four Treatises on Usury, in Latin; Dumoulin, On Usuries; Voodt, De Pœnore; Scaccia, Questions; Montesquieu, Spirit of Laws; D. Hume, Essay on the Interest of Money (1752); Pothier, Loans, Contracts of Sale; M. Frémery, Studies in Commercial Law; Thieriet, Dissertation on Loans at Interest. To the above should be added: Some Considerations of the Consequences of the Lowering of Interest and Raising the Value of Money, by John Locke, 18mo, London, 1692; An Essay on the Law of Usury, by Mark Ord, Hartford, 1809, 8vo; Interest made Equity, by J. R. M'Culloch, N. Y., 1826; A Summary of the History and Law of Usury, with an examination of the Policy of the existing System, by J. B. Kelly, 8vo, Philadelphia, 1853; The History of Usury from the Earliest Period to the Present Time, together with a brief statement of general principles concerning the conflict of laws in different states and countries, and an examination into the policy of Laws on Usury, and their effect upon Commerce, by J. B. C. Murray, Philadelphia, 1866, 8vo; Labor and Loans at Interest, by Ch. le Lièvre, Paris (?); Labor and Usury in Ancient Times, by Ch. le Lièvre; Loans at Interest, by L. F. Vignon; A Treatise on the Law of Usury, Pawns or Pledges, and Maritime Loans, by R. H. Tyler, Albany, 1873, 8vo; Free Trade in Money the Great and Principal Cause of Fraud, Poverty and Ruin: Stringent Usury Laws the best defense of the People against Hard Times, etc., by J. Whipple, Boston, 1878. 8vo, paper; Encyclopedia of Commerce, article Interest, by Smith Homans; Appleton's Encyclopœdia, Johnson's Encyclopœdia, Encyclopœdia Britannica, article Interest. See also Poole's Index to Periodical Literature, under Usury and Usury Laws; also Saml. Jones Loyd's Testimony on Banks of Issue before the Select Committee of the House of Commons in 1840, queries 2841 and 2842; J. S. Mill's Political Economy, book iii., chap. xxiii.; H. D. Macleod's Principles of Economics, vol. i., pp. 215-219; Science of Wealth, by Amasa Walker, book iv., chap. vi.; Roscher's Political Economy, book iii., chap. iv.; Usury Laws: their Nature, Expediency and Influence—opinions of Jeremy Bentham and John Calvin, with review of the existing situation and recent experience of the United States, by Richard H. Dana, Jr., David A. Wells, and others, (Econ. Tracts, No. IV., series of 1880-81, N. Y., Society for Political Education); Essay on the History and Legislation on Usury, by Liégeois, Paris, 1863; Interest on Money and Usury, by M. Sabrau, Paris, 1865; Freedom of Money—official investigation into the project of repealing the laws which prohibit usury, by M. Dulae, Paris, 1865; Usury and Finance in relation to the Law of 1807, by M. Gorse, Paris, 1865.
E. J. L., Tr
LÉON FAUCHER.

[28.]"Not that the laws of the convention ever meant to proclaim the principle of absolute liberty in the matter of interest. It would be an error to suppose this: they only intended to remove the prohibitions on payments in money." (Troplong.)

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2: LABOR, The Right to (IN FRENCH POLITICO-ECONOMIC HISTORY). - John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States, vol. 2 East India Co. - Nullification [1881]

John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States by the best American and European Authors, ed. John J. Lalor (New York: Maynard, Merrill, & Co., 1899). Vol 2 East India Co. - Nullification Chapter: LABOR, The Right to (IN FRENCH POLITICO-ECONOMIC HISTORY).

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The text is in the public domain.

LABOR, The Right to

LABOR, The Right to (IN FRENCH POLITICO-ECONOMIC HISTORY). The right to labor, that fundamental principle of the French socialistic gospel, is not the power, which belongs to all men in a free state, of making use of their own industry. The right to labor has nothing in common with the freedom of labor. The apostles of this doctrine mean by it not the unobstructed use of strength and resources, but a claim given to the individual against society. They pretend that all members of society, who have neither the knowledge nor will to create means of subsistence, have good grounds for saying to the rulers who represent and govern them, "See that I have work, for you are obliged to maintain me." It is what M. de Lamartine, believing that the principle would be accepted if he softened the name, called "the right to existence." Before passing into the crucible of science this formidable question was planted in the soil of revolution. It does not date from 1848, and has nothing new but its form.

—It is the extreme result of every strict system of public charity. It is the danger which few of the Protestant states escaped after the destruction of the monasteries. The act of the 43d year of the reign of Elizabeth planted the germ of it in English legislation. It says, "And they [overseers] shall take order from time to time * * for setting to work the children of all such whose parents shall not, by the said church wardens and overseers or the greater part of them, be thought able to keep and maintain their children; and also for setting to work all such persons, married or unmarried, having no means to maintain them, and use no ordinary daily trade of life to get their living by; and also competent sums of money for and toward the necessary relief of the lame, impotent, old, blind, and such other among them, being poor and not able to work; and also for the putting out of such children to be apprentices." The same law gives them the power to raise taxes for this purpose, which must be borne by the people of the parish, or, if this does not yield enough, by the people of the district, or, if necessary, by those of the whole county. A law of Henry VIII. had already imposed a penalty on parishes in which the weak were not aided. From this the poor clearly received the right to demand help, and to bring suit against the authorities who should refuse them assistance. English legislation, therefore, created the right to assistance, modified by the obligation of labor.

—Examples abound in French revolutionary legislation. The constitution of 1791 declared in the first clause, which enumerated the guarantees given to all citizens, that there should be created a general bureau of public aid for the purpose of bringing up foundlings, of caring for the infirm poor, and of providing work for such of the able-bodied poor as were unable to obtain it for themselves. This was borrowing from England the system of a poor tax, with the enforced building of workhouses and charity schools, but that doctrine of the constitution was not put in practice; it was, indeed, considered a dead letter. The constitution of 1793 went a step farther. Art. 21 declared that public aid was a sacred debt; and that society owed a living to unfortunate citizens, either by procuring work for them or by assuring means of life to those unable to labor. The constitution of 1793 did not limit itself, like that of 1791, to proclaiming that society owed labor, under the form of help. It demanded that the labor thus given should assure subsistence. The right to live was implied in this formula, in this duty imposed upon society. Need we add, that the radical charter of 1793, having been suspended from the date of its promulgation, to give place to the revolutionary government, it is impossible to judge by its works the new theory of public aid?

—None of the constitutions following that of 1793 reproduced this formula, but all socialistic schools, born during the transition from the old régime to the new, drew inspiration from it. Babœuf deduced from it the community of goods. In this abortive theme, in these tables of the law, broken as they came from the furnace, like an impure or defective casting, the conspirators did not cease to search for the ideal of the future republic. Even perverted science wished to fasten itself to it. It was by following the road made by Robespierre and St. Just that Fourier constructed his formula of the right to labor. He wrote in 1819 in his Théorie de l'unité Universelle, "Scripture tells us that God condemned the first man and his posterity to work in the sweat of their brow, but he did not condemn us to be deprived of that labor on which our existence depends. We can from this derive a right of man to ask philosophy and civilization not to keep from us that resource which God left us, as a last resort or punishment, and to guarantee to us at least the right to that class of labor with which we are familiar. We have passed ages thus quibbling over the rights of man without recognizing the most essential—labor, without which all others are nothing What a shame to a people who consider themselves skilled in social science! Should we not dwell upon so ignominious an error, in order to study the mind of man and the social mechanism which is to give to man all his natural rights, whose civilization can neither guarantee nor even allow the principal one, that of labor?" While exhuming and proclaiming this new right of man, Fourier still recognized that it was incompatible with social order as moulded and developed by civilization according to the mandates of Providence. We shall see later whether the reformer and his disciples succeeded better with this in the mechanism of society, and on what arguments that pretended right, which is but the negation of all others, rested. Let us prove first that the impossibility recognized by Fourier was so generally admitted that outside his school and with the exception of a single paper by M. Considérant in the "Phalange," no one before 1848 had raised the standard of the right to labor.

—The two principal theorists of the social republic had very different projects. They absorbed and engulfed that theory in more vast and ambitious conceptions. M. Cabet, renewing the utopian schemes of the fifteenth and sixteenth centuries, placed beyond the seas the attraction of absolute community of interest. M. Louis Blanc, under the pretext of organizing labor, wished to remodel society. Fourier's thought was considered by them as wanting in greatness and as impossible of practical application. One man only, de Lamartine, in an article previous to 1844, admitted, with certain reservations, and in extreme cases, the right to labor. He had at first said, with eloquent logic, "There is no other organization of labor but its freedom, there is no other distribution of wages but that made by labor itself, remunerating itself according to its work and judging itself with an impartiality impossible to your arbitrary systems. The free will of labor in the producer, in the consumer and in the workman is as sacred as the free will of the conscience in man: touching one, you kill action; touching the other, you kill morality. The best governments are those which let it alone. Every time that it has been tampered with, an industrial catastrophe has stricken at the same time government, capitalists and working men. The law which governs them is invisible; it vanishes under the hand the moment we try to write it down." This law, on the contrary, is plainly visible; with a little attention any one can read it written in facts in brilliant characters It is the relation of supply to demand. The rate of wages regulates itself invincibly by the scarcity or abundance of labor. There is no power on earth that can raise the price of labor when unoccupied workmen throng the doors of the shops, or can lower or depress it when work presses, or the workmen are few. But after recognizing this law, although declaring it invisible, de Lamartine adds, "To sum up, we wish society to recognize the right to labor in extreme cases and under definite conditions." And the poet-economist does not see that the right to labor, which he admits, would lead surely to the organization of labor, which he had just opposed.

—Revolutions oblige men to be logical: they neither haggle over the application of theories, nor recoil from their consequences. In spite of a government which brought together weak conservatives and tribunes frightened at their own boldness, the revolution of February, 1848, proclaimed the right to labor. Feb. 26, the following decree was posted upon the walls of the capital: "The provisional government of the French republic guarantees the subsistence of the workman by labor. It agrees to guarantee labor to all citizens. It recognizes the fact that working men should associate themselves together, in order to enjoy the legitimate profit of their labor." That decree, M. Louis Blanc himself admits, was forced upon the provisional government. "Entering rudely," says he, "into the council chamber, and making his gunstock ring upon the floor, a workman came with sparkling eye and pale brow to demand in the name of the people recognition of the right to labor." This working man, in whose person M. Louis Blanc sees the incarnation of the people, was, not to wrong him, but the instrument of some member of the government who wished to force his colleagues to do what he desired. This was soon apparent from the docility with which the impulse from without was received and obeyed to the end. "Indeed, thousands of laborers," it is still M. Louis Blanc who speaks. "still black with the grime of the barricades, having filled the Place de Gréte with standards on which you could have read, Organization du travail, the organization of labor was decreed." The right to labor has produced thus historically its natural consequences. "Considering," says the decree of Feb. 28, "that revolution made by the people should be made for them; that it is time to put an end to the long and miquitous sufferings of working men; that the question of labor is of the highest importance; that there is none higher or more worthy the attention of a republican government; that it belongs particularly to France to study intently and to solve a problem had to-day before all the industrial nations of Europe; and that we must try, without any delay, to guarantee to the people the legitimate fruits of their labor—the provisional government of the republic resolves: That a permanent committee, which shall be called the committee of the government for the working man, shall be appointed with the express and peculiar mission of caring for their lot, * *."

—Here, then, is the system of the right to labor bound by law, to support all the fruit it could produce. The provisional government placed it under the shelter of the state, charged one of its members with its organization, and devoted to this end, or left at its disposition, the forces of the mob as well as that of the government. M. Louis Blanc was absolute master: what use did he make of this dictatorship? In order to give labor a new organization he commenced by making breaches in the organization which had existed from the earliest development of industry. A hateful rivalry, sown between masters and workers, by the inflammatory influence which came from Luxemburg. soon rendered discipline in shops, and, by a natural sequence, labor, impossible. The progress of industry had substituted, in a great many factories, as a measure of wages, a days task or work. The dictators of February could not pardon this method whose equity was in keeping with all interests concerned. They abolished the task or job. Master and workmen were forbidden free discussion of the conditions of wages. Soon the intervention of the state was pushed still farther. After having dictated to master and workman the manner in which labor must be carried on and paid, they wished to regulate its duration. A decree decided that the day's work should be but ten hours in every branch of industry and throughout the whole of France. Finally, after having misled the workmen, throttled the contractors, and frightened the capitalists, they talked of the state's appropriating manufactures. "To managers," said M. Louis Blanc, "who, finding themselves to-day in a failing condition, come and say to us, 'Let the state take our establishments and put itself in our places,' we reply, the state consents to do so. You shall be abundantly indemnified. But as this indemnity, which is your due, can not be taken from present resources, which would not be sufficient, it will be required of future resources. The state will give you notes, bearing interest, secured by the value of the ceded establishments, and redeemable by annuities or liquidation." The plans of M. Louis Blanc, we know but too well. were not an ephemeral inspiration. The provisional government followed up the execution of them, until they themselves made shipwreck and placed social order itself in peril. It desired to bring under the dominion of the state the large establishments of credit and labor, the banks, the insurance companies, and the railroads. Some were sequestered; others, stricken with a bottomless depreciation, awaited as a favor, derisive indemnity. The state commenced by becoming common carrier and insurer, and later became itself a producer. But as credit and money were both wanting, to pay, even at the lowest price, for all that they desired to take, it became necessary to allow those shops to close which had been disorganized. Manufacturers stopping, the workmen, whose hands were no longer busy, and to whom subsistence by work had been guaranteed, asked, amid loud cries, that this blockade of labor should be relieved. The government, which had disorganized ordinary works, saw itself under the necessity of organizing extraordinary ones.

—The Luxemburg conferences brought about, as a direct and immediate, consequence, the opening of the government workshops. M. Louis Blane need not have protested and traced back to another member of the government the thought of this outrageous creation. What difference did it make whether he had or had not signed the decree, if he had made it inevitable? I know that M. Louis Blanc imagined that he could have carried on, by the workmen of each trade, the industries from which he banished capital, and the management which was their soul. But without orders, capital holding back, and tried skill banished from them, how could factories run? To take away the director and the motive power from a factory, is to close it. Society would not know how, in any case, to improvise resources and management for all industries. Work stopping in the shops, and the dictator at Luxemburg unable to start it again where it had stopped, it became necessary in order to fulfill the guarantee given by the government, to open shops, whether useful or not, which were like a general refuge for all unemployed hands, and, to use the language of de Lamartine, a relief dépôt for the people of Paris. Indeed, all the theories of official communism were practiced there, commencing with equality of wages. All professions were placed on the same level. Labor, claimed as a right, was nowhere considered as a duty. The liberal alms given to this army of factious beggars, absorbed and exhausted rapidly the substance of society. The yards employing mechanics of the various kinds, which had gathered together hardly 6,000 men in March, 1848, had collected 87,942 just previous to the events of June. Recognition of the right to labor had brought about the conferences of Luxemburg. The conferences of Luxemburg had brought forth this great strike which found shelter and expression in the national shops. National workshops were destined to produce, and did produce, social war.

—This, then, is the result of the right to labor practically tested. Can we believe that a great assembly found it necessary to discuss it after an experience so full and decisive? Ought not the history of this heresy, in subjects connected with social economy, to have been closed after the bloody days of June? And what manifestation could have enlightened those who were unable to read the truth by the lightning flashes of such a storm? The first draft of the constitution read by Marrast from the tribune June 2, 1848, only a few days before the mob howled in the streets of the capital, asserted, in the most explicit manner, the decrees of the provisional government and the doctrines of Luxemburg. Article 7 read: "The right to labor is the right of every man to live by working. Society ought, by all productive and benevolent means at her disposal, and by those which will be subsequently organized, to furnish labor to able-bodied men who can not procure it in any other way"; and farther on, at article 9: "The right to assistance is that which belongs to foundlings, to the weak and to the aged, of receiving from the state the means of subsistence." After these articles which fixed the principles, article 132 indicated the means of application. "The main guarantees of the right to labor are liberty of labor itself, freedom to form labor associations, equality of relations between master and workman, free instruction, professional education, savings and other banks, and the establishment, by the state, of great works of public utility, to provide labor, in case of a stoppage of work, for unoccupied hands." The constitutional commission proclaimed at the same time the right to education, the right to labor and the right to assistance by the state. Society was thus about to substitute its own action and responsibility for those of the individual and the family. It took charge of man from the cradle to the grave, caring on the way for all his necessities from education to wages, opening, in a word, to all human beings, according to age, the cradle, the asylum, the school, the workshop and the hospital. These different formulæ, submitted to the examination of the bureaus, after the events of June, did not meet with that general reprobation which the indignation of the country led one to expect. Eight out of fifteen bureaus admitted the right to labor. The constitutional committee, warned by public opinion, and defeated in the preliminary debates in which the delegates of the bureaus engaged before them, thought best to modify their first draft. But at the same time they explained this forced retreat as a purely formal concession. "This formula (the right to labor)," said M. Armand Marrast, "seemed equivocal and perilous; it was feared that it would put a premium on idleness and dissipation; it was feared that legions of working men, giving to this right an extent it did not have, would consider it a right to insurrection. To these important objections is added another, more important still. If the state agrees to furnish labor to all those who have none, from one cause or another, it must give to each the kind of work to which he is adapted. So the state will become manufacturer, merchant, wholesale and retail producer. Charged with the satisfaction of all wants, it must have the monopoly of all industries. Such are the great evils which have been seen in our formula of the right to labor, and since it might lend itself to a construction so contrary to our own thought, we have wished to make the thought more clear and precise by replacing the right of the individual by the duty imposed upon society. The form is changed, but the substance remains the same."

—M. Marrast was right; the changes made did not touch the substance of things. The second draft, like the first, gave to the individual a claim against society. Here is Art. VIII. of the preamble in the edition of Aug. 29: "Society ought to protect the citizen in his person, his family, his religion, his property, his labor, and bring the education indispensable to all within the reach of all. It owes subsistence to needy citizens. either by procuring work for them to the extent of its resources, or by giving the means of subsistence to those whose families fail to provide such means for them, and who are not in a condition to work." The earnest and brilliant debate which arose before the constituent assembly did not bear upon even the text of the commission. M. Mathieu (department of Drôme) took care to furnish a field more vast by proposing the following: "The republic recognizes the right of all citizens to education, labor and assistance." When we read this discussion we remark, as its characteristic trait, a certain timidity of reasoning which did not allow the orators to come to definite conclusions. For instance, M. Mathieu (of Drôme) defends his having wished to restore the first draft of the bill, and he makes an effort to weaken the force of his amendment, by explaining that he recognized the right, but did not guarantee its operation. As if the recognition of this pretended right did not confer upon the individual the right to hold society legally responsible for its violation. M. Lédru-Rollin, who came next, gave it to be understood that there was question only of a verbal concession, a purely ideal theory. "When you do grant the right to labor, you will not be obliged to enforce it at once." Finally, de Lamartine reduced the right to labor to a question of charity, and wished that the moral zone, to use his own expression, might penetrate the legal zone. The adversaries of the right to labor, on the other hand, confined themselves to opposing the amendment of M. Mathieu (from Drôme). They reject a too explicit form, without going farther with their opposition. M. Duvergier de Hauranne accepted the draft of the commission. M. Thiers wished the state in certain cases to undertake public works, with the object of furnishing labor to the unemployed. M. Dufaure, refusing to recognize in the individual the right to demand work, imposed upon society the duty of furnishing him work or the means of subsistence. So much logic and eloquence displayed to end only in a change of words! Discussion, thus carried on on both sides, necessarily degenerated into a useless passage of arms.

—Taking advantage of the situation, at the last moment M. Glais-Bizoin weakened by a new draft the amendment of M. Mathieu (from Drôme). The right to subsistence replaced the right to labor. The subamendment was expressed in this way: "The republic recognizes the right of every citizen to existence by labor, and the right to assistance." It is proper to notice, in the interest of history, that the constituent assembly, appointed under the influence and so to speak under the threat of February, gave only 187 votes out of 783 voters to the draft of M. Glais-Bizoin. But immediately afterward, and as if it feared to have done too much, it adopted the motion of M. Dufaure himself, which had for its object "to bring into greater prominence the idea that society ought to insure subsistence to needy citizens" Here is the text of that draft which became the second paragraph of Art. VIII. of the preamble in the constitution which governed, during three years, the destinies of France: "It [the republic] ought by fraternal assistance to insure the subsistence of its needy citizens, either by procuring work for them within the limits of its resources, or in giving assistance, their families failing to give it, to those who are unable to work." We have just indicated the place occupied by the right to labor in the French parliamentary debates. After this historical statement of the facts, it remains for us to examine the theory.

—The theorists who uphold the right to labor, take, voluntarily or unwittingly. for their starting point, the sophism of Rousseau: "Everything is good when it leaves the hands of the Creator; everything degenerates in the hands of man." They suppose a state of nature existing antecedent to that of society, and a contract, by which men established social order, and reserved certain rights inherent in and essential to existence. This contract is a pure fiction. There is nothing prior to, nothing higher than, society, because outside of society the existence of man is impossible. The social scale has an infinite number of degrees, from the savage state to that of the most advanced civilization. But the exploration of the globe has shown that in no country have man and the family struggled in a state of isolation to satisfy their wants or to develop their powers; that the tribes the least polished and the most wretched had a language, traditions, principles and a government. Man and society have the same date as well as the same origin. Man can not develop himself except in the bosom of society. He brings to it nothing but the germs of his faculties, and receives everything from it. His rights flow from the same principle as his duties. The individual finds in the rights of others the limit of his own and their guarantee in the duties which are imposed on each one of his fellows. Rights, like duties, are but the expression of the relations which the social state. which destiny here below, produces among men. The individual then could not reserve, at the moment when society took him up, a pretended right to existence. He comes into it weak and naked, supported by the family and protected by the state, until he has learned to take care of himself. Arrived at the age of manhood, he sees the limits of his rights extended, and his own powers grow greater in proportion as the power of society itself increases. Enlightenment, liberty, wealth, are so many steps in the progress of the social state, in which every member of society shares. As to existence, it is all the better guaranteed to individuals in proportion as the community is wealthier, more enlightened and stronger. Take for example a hunting or even a pastoral people, who, to live, need immense tracts of land. Famine, against which they struggle painfully all their days, often carries off whole tribes. In a less imperfect state of civilization, that of the middle ages in Europe, notwithstanding the bounty of the monasteries, the difficulty of communication as well as the absence of commerce and industry, rendered a deficit, however small, in the harvests, fatal to the population of serfs. In the eighteenth century the memory of these frightful calamities still weighed so heavily on the public spirit that Turgot had to perform prodigies in order that freedom might again be given to trade in grain through the interior of France. In our days, on the contrary, human foresight has inexhaustible treasures to repair such disasters. Trade carries the cereals from the country which has reaped a superabundant harvest to those which the inclemency of the weather has stricken with temporary sterility. Industry in turn redoubles its activity to pay for the produce of the soil with the products of the factory. In a word, famine is henceforth, for the civilized people of Europe, but an accident, which serves to test the strength and excellence of European institutions. In 1847, although the deficit of the harvest was at least a fifth, and although a hectolitre of wheat was worth fifty-three francs, that is, three to four times its normal price, not an individual died of hunger in France.

—It seems, then, idle enough to try to find what the rights of an individual to existence in society may be, when we see that the advance of society has the effect of overcoming the difficulties and of multiplying and making general the means of living. What is the use of examining whether there be such a thing as the right to labor, when the freedom of labor is fully guaranteed, and when each enjoys the fruit of his own labor without question or reservation? Finally, of what interest is it to discuss the right to assistance, another form of that claim which the socialists wish to give to man against society, in a time when the foresight of public authority, more watchful and more humane than it has ever been, is studious to repair the accidents of fortune, without weakening prudence and without checking individual activity? Notwithstanding the world as it is is ignored that men may have a pretext to take refuge in an ideal world, society is divided into two classes, those who have and those who have not. A weapon is placed in the hands of both these classes, as if thus equilibrium between them could be produced. The right of labor is arrayed against the right of property. The most subtle and most complete expression of this theory is found in the writings of M. Considérant, whom we have already noticed, and whose conclusions were advocated from the tribune by M. Lédru Rollin. The following are its principal features: "The human species is placed upon the earth to live and develop there; the species is therefore the usufructuary of the surface of the globe. But by the property system of all civilized nations, land, to which the whole species has a usufructuary right, has been confiscated by the few, to the exclusion of the many. Were there, in fact, but one man excluded from his right as usufruct of the land by the nature of the property system, this exclusion alone would constitute a violation of right, and the property system which upheld it would certainly be unjust and illegitimate. The savage, in the midst of the forests and plains, enjoys the four natural rights of the chase, of fishing, of the picking of fruit, etc., and of pasture. This is the first form of right. In all civilized societies the proletarian inherits nothing and possesses nothing, is purely and simply stripped of his rights. We can not say, then, that here the primitive state has changed in form, since it no longer exists. The form has disappeared with the substance. Now, under what shape could the right be reconciled to the conditions of industrial society? The answer is easy. In the savage state, to avail himself of his right, man is obliged to act. The labors incident to hunting, fishing, the picking of fruit, etc., or pasture, are the conditions of the exercise of his right. Primitive right is, therefore. only the right to these labors. Now, let an industrial society, which has taken possession of the land, and which has taken from man the power of exercising anywhere and in freedom, upon the face of the earth, his four natural rights; let this society recognize in the individual, as compensation for the rights of which it has stripped him, the right to labor; this done, the individual has no right to complain. In fact, his primitive right was the right to labor exercised in a poor workshop, surrounded by brute nature. His present right would be the same right exercised in a shop better provided and richer, where individual activity ought to be more productive. The sine qua non of the legitimacy of property is, therefore, that society should recognize in the proletarian the right to labor, and that it should assure him at least such means of subsistence for a given amount of action, as such an amount could have procured for him in the primitive state. But has the workman, to-day, who has no work, the right to go and say to the mayor of his commune, the prefect of his department, or any other representative of society, 'There is no longer work for me at the shop where I was engaged,' or 'Wages have become so low that I can't live on them. I come, therefore, to demand work of you. at such a rate of wages that my lot may be preferable to that of the savage in the forests'? Not only is this right not recognized, not only is it not guaranteed by social institutions, but society says to the proletarian, despoiled by it of the first of his most sacred rights, of his right of usufruct in the land; it says to him: 'Find work if you can, and if you can not find it, die of hunger, but respect the property of others.' Society pushes its derision to the point of declaring guilty the man who can find no work, who can not find the means of living. Every day we throw into prison unfortunates, guilty of begging or of vagrancy, that is, guilty of having neither means nor refuge, nor the way of procuring either. The régime of property in all civilized nations is then unjust in the highest degree; it is founded on conquest, upon the taking possession, which is but permanent usurpation as long as an equivalent for their natural rights is not given to those who in fact are excluded from the use of the soil. This régime is, besides, extremely dangerous, because in nations where industry, wealth and luxury are very much developed, the proletarian can not fail sooner or later to take advantage of this spoliation to disturb society." M. Thiers ridiculed this beautiful theory, when he asked if the insurgents of June, whom they were transporting to Madagascar or to Guiana, that is, to countries in which the four pretended primitive rights—fishing, hunting, the gathering of the fruits of the earth, and pasture—are reputed to exist, rights which they say have perished in civilized society, would esteem themselves happy to return to the savage state, or if, on the contrary, they would not accuse of barbarity the power which thus imposed exile upon them. We can say as much of laborers who rejoice in their liberty and who expect their subsistence to come from labor. The most unfortunate among them would not change his lot with that of the Ojibbeways or Osages. This proves, at least, that if society has stripped man of some right, held from nature, she has given him in return gifts of a greater value. A primitive, natural right is something which belongs not to one man, not to a generation, not even to a people, but to all nations, to each generation and to every individual. More than this, the rights truly natural to man are those which the progress of civilization makes easy and develops the use of, such as the liberty of thought and that of industry. Generations, in their course through history, do not transmit to those which succeed them either fictions of chimeras. We find the abolition of the right of property which the school of Fourier imagines, nowhere recorded by tradition. Has the earth, indeed, ever existed in that state of primitive capital, independent of all value created by the labor of man? Is this not a purely abstract proposition. conceived by the mind outside the data of reason and the realities of history? Who can teach us how far civilization dates back in time? Is there in the inhabited portion of the globe a spot of earth which has no trace of man, or which in some age or other his sweat has not made fertile? In order that every individual, at birth, should be virtually invested with the right of usufruct to the earth, of the right, represented, according to M. Considérant, by the power to fish and hunt, to gather the fruits of the earth and to pasture herds, the earth would have had to support, in its primitive state, which the disciples of Fourier imagine, under the form of tribes of fishers and hunters, not alone a small number of individuals scattered over immense tracts like the Indians of America, but nations as thickly settled as are those of France and of England. But we all know that in a nomadic state a large area of country is necessary for the support of one man, while, in countries which have reached a high degree of culture, the same territory will support from 1,500 to 2,000 inhabitants. What then is a right which can be exercised only in the wilderness, and in virtue of which that which is hardly sufficient to maintain one man should be bequeathed to his descendants to be shared among a thousand, two thousand, or divided into as many parts as the fecundity of the human race, as it grows, can make of it? There exists no natural right to the possession of the land in its natural state. Land belongs rightly to the person who appropriates it to himself by his labor. Labor creates property; it creates it by leaving on things the impress of man. It is human activity applied to natural forces which gives birth to capital. Here then, in the order of immovable property, is the real source of wealth. Hunting, fishing, and the other processes of the savage state, are at best but imperfect and ephemeral means of appropriation. They already suppose some action of man upon nature; this is the beginning of labor in society. Nomadic tribes divide the land among themselves; each tribe has its own territory, which thus belongs to the whole community, before it is distributed to families and individuals. Later, cultivation of the soil comes, and with it inheritance. The more value man gives to the soil, the deeper does property, as it develops, strike its roots. In the hands of the cultivator of the soil land becomes capital. Man draws this capital in a sense from himself, because capital is only an accumulation of labor. He has therefore a just right to the possession of what he has produced, and of what his fathers produced before him. Immovable capital, like movable capital, is produced by human activity; to give them another origin is to introduce a fable in the place of facts. What we should say, what is true, is that we ought not to consider property as a purely individual fact. The influence and power of society clearly cooperate, in its formation, with the action and the labor of man. Society is, in the hands of the individual, like a lever, with the assistance of which he lifts and removes burdens whose weight, without that help, would exceed his strength. Public power protects him, gives him that security which is the first implement of labor, and without which labor would be impossible. He can draw from the common fund of tradition and knowledge. Finally, he has an interest in producing, only because society opens up a market for his produce.

—The right of property is then at the same time individual and social. Property is legitimately held and transmitted only on condition of paying tribute to the state, in the form of a tax. By the same title, in countries where vast tracts remain to be cleared up, the state fixes a price at which it makes concession of land, because these tracts have already a value given them by their nearness to civilization and the guardianship exercised by power. As private property is consolidated and extended, we see the public domain—that is, undivided property, the patrimony of the entire people, the wealth common to all and which every one can enjoy at any time—grow. Means of communication and transportation increase; the police, public works, schools, libraries, monuments, all unite to render existence surer, easier and more agreeable. Each one has in reality his part in this common treasure which is not exhausted, which rather grows, and of which the state is but the dispenser for general use. No longer either privileged persons, or pariahs, and, whatever any one may say, no longer any proletarians. Every one has the right of citizenship, which is far better than the right to labor. Thus, civilization gives to the individual far more of common property that it could have taken from him of private property. Let us add, that in modern society the proprietor does not possess for himself alone. Property resembles those trees whose every branch, reaching the limit of its growth, drops to the earth again, is planted, and pushes out new shoots around it. Property produces and multiplies property. It makes capital, the instrument of labor, more and more accessible from day to day. It grafts industry upon agriculture, commerce upon industry, and credit upon commerce. This spreading of wealth makes, for acquiring and possessing, the barbarous process of confiscation, spoliation and war unnecessary. Wages wait upon labor; from wages come savings, and savings find the market of property always open. In the system of M. Considérant and of Fourier landed property would alone be under obligations, and would be exclusively burdened with the right of usufruct in the soil; for this theory leaves out personal property, a new world, which equals, if it does not exceed, the value of landed property. Personal property would thus obtain a privilege impossible to explain, and would owe nothing to society from which it receives the same protection. Principles which admit of such exceptions are not principles. No; society can not hope to buy of individuals the property which is the very condition of order. The right of property can not have for corollary, counterpoise, nor for an offset, the right to labor.

—It remains for us to show that the right to labor is the negation of the right of property, and that we can not admit the former without destroying the latter, as M. Prudhon himself admitted. We know that the author of "Economic Contradictions." the man who invented or renewed that hateful paradox, "Property is robbery," said one day to the committee on finance of 1848, in an outburst of frankness, "Give me the right to labor, and I abandon to you the right of property." The right to labor differs essentially, as M. Dufaure has noticed, from the various rights the free exercise of which it is the object of the constitutions of all countries to protect and guarantee. All these rights, in fact, are inherent in man; every individual can exercise and develop them in the sphere of his personal activity; it is a power he does not borrow, but which he draws, on the contrary, from himself, and which he only asks society to cause to be respected in him. Liberty to think, liberty to write, liberty to work and to possess, are in this condition. The right to labor, that socialistic claim, must not be confounded with the right of working, that possession of every man, of which Turgot has rightly said that it is the highest, the most sacred, the most indefeasible of all. The right of working is nothing but the freedom which belongs to every individual, of employing his reason, his hands, his time, in the manner he deems most profitable; while the right to labor, as we have already shown, is a claim given to the individual against society as a whole, or against a portion of it. In the right to labor are at the same time a right and an obligation created. It implies, between the individual and society, a contract, by whose terms society owes subsistence to each of its members—a contract not reciprocal, and which would hold but one of the parties. For while the state would have to furnish individuals, on demand, means of labor and of living by labor, it would not be armed with power of compelling them to seek by labor their usual subsistence; thus would the superiority of personal right over social right be proclaimed. The individual would become the master, the tyrant, and society the servant, the slave.

—M. Dufaure has not said too much. The right to labor is a species of servitude which is imposed on the whole community, in the interest of few or many, who would be tempted to avail themselves of it. Admitting this claim of the individual against society necessarily brings two interests face to face, and exposes them to a struggle. Suppose that society resists, the result is a battle. There is on both sides a call to arms, recourse to force is had to interpret the right. The rioters of Lyons, in 1832, blazoned on their banner this device of despair, "Live working or die fighting." Article 8 of the draft of the constitution reproduced only the first portion of the popular credo, events have brought the latter part to light; neither logic nor the force of circumstances permits of their separation. When we give a right or cause of action to individuals against society, we encourage and even justify revolt. We raise again the standard of Spartacus; we raise it in the midst of a people who know neither the separation of castes nor the difference of ranks; we proclaim civil war between members of the same political family, between equals, between brothers. Let us suppose, on the contrary, that society submits, and, accepting the right to labor, is ready to accept all the practical consequences of the principle. Let us see whither this would lead. To decree the right to labor is to make the state a purveyor for all, assurer of all fortunes and entrepreneur of all, industries. The right to labor is the right to capital, the right to wages, the right to competency; it is, in a word, the most extensive right with which individuals can be armed against the public treasury. When we go to the bottom of such a system, division of property seems a thousandfold preferable, because a community of wealth places at least on the same level the man who possesses and the man who does not; it takes, for the poor, only from the rich. and limits itself to making a new division of capital and existing incomes. The right to labor goes far beyond this; it is a seizure not only of that which is now, but of that which may be; it is not only the community of acquired wealth, but of producing power, perpetual servitude imposed upon the heads of society, in the interest of the numerous proletarians which society takes into her employ.

—The right to labor, as I have said elsewhere, implies the permanent existence and the unlimited power of production, whatever the circumstances may be, or whatever the organization of society. What value then should a principle have which is outside the limit of possibility? A social state does not exist which assures permanence or regularity of production. Let a commercial crisis come on, or some check to consumption, making the supply greater than the demand, and you will see a certain number of shops close entirely or diminish in activity. Industry, like the solar year, has its seasons; and the harvest of labor, like that of the fruits of the earth, has years of sterility as well as years of abundance. The foresight of man holds in reserve for these difficult times capital accumulated by saving, but it does not give at will impulse to the power which produces; nor does it create labor with the wave of its wand. Man can always employ his intelligence and his hands; but motion is a different thing from labor. Labor is the useful employment of forces; it is recognized by its products. To effect production at will one must be able to enlarge and contract the limits of consumption, because the most necessary products receive their value from the use which is made of them. Of what use would it be, for example, to gather quantities of grain or herds of cattle into a deserted city? And of what use would the wealth of Mexico be under circumstances in which a kilogram of silver would not procure an ounce of bread? If the troubles would stop when one had said that the workmen had a right to labor, the prescription would be simple. The state would only have to furnish funds to workshops which were about to stop, and to give orders to manufacturers to produce. But manufacturing is not all. We must find buyers for the merchandise which we create, so as not to add to the glut of the market. Production should not be increased at just the moment that the market is closed or diminished. To add in such a case to the amount of products is to depreciate them. To allay the sufferings of the present, we thus add new embarrassment to the near future.

—Socialists start from another supposition, which is not less extravagant than the first. They establish a dualism between the individual and society, instead of considering society as a union of all forces, and as the aggregate of all intellects. They make it a creature of the mind, a power apart, a fanciful person, a kind of fairy which has hidden treasures and faculties without limit. All then demand different things and more than they bring with them into the community. According to the socialistic ideal, the state always gives and never receives. Socialists refuse to understand that the state is only rich by individual wealth; that it produces only by the labor of each and every one; and finally, that its power is the result of a number and concert of wills. In a word, they forget that if the social tree bears leaves and fruit it is because it strikes its roots into the soil, and draws thence nourishing sap. Let us, nevertheless, take the right to labor as the natural right of every man who possesses nothing. Let us admit. for an instant, the fiction which invests the state with a chimerical omnipotence: how will it fulfill the obligations with which it is weighed down? This system desires that every individual who does not find employment for his intelligence or his hands. or to whom the employment which he has found does not suffice to give means of living, shall be allowed to ask from the government the work which he can not find, or a lucrative employment in the place of his labor which produces little. Thus the state would have to employ all unoccupied workmen, and make up for the insufficiency of wages. It would have to make up for a lack of demand in the market, and undertake to furnish the instruments of labor. In the social organization of France. when a prolonged stoppage occurs in manufactures, or when there are too many agricultural laborers, then, and only in extreme cases, the state and the communes open charity shops. They call upon the poor to macadamize the roads. All property owners bleed themselves to pay these workmen by their accumulated contributions. But under the system of the right to labor, things could not go on in this way. The workman armed with his absolute title, would not be content with the labor society had chosen and allotted for him. He would demand the work for which he thought himself fit, and require the most abundant remuneration. He would wish to follow his profession under the most favorable conditions: and determining the kind of employment, he would also fix the return for it. He would inform himself neither of the condition of the markets nor of the treasury. The wages that would be coming to him, a sum due to him by the state, would preserve an unvarying level. Thus the right to labor would lead to the complete exhaustion of property. This servitude would have no other end but ruin.

—In his admirable discourse upon the right to labor. M. Thiers incidentally gave an opinion with which socialists can arm themselves against him, and which is astonishing, emanating, as it did, from a mind so eminently practical. He admitted that the state holds in reserve for moments of stoppage or times of crisis, independent of great public works, a certain number of orders to distribute to industry. This would not be good, and seems hardly possible. A state, like all other consumers, buys and produces only as the wants of consumption become apparent. Its disbursements are annual, like its revenue, and it apportions them according to its political necessities. In the system marked out by M. Thiers it would reserve the progress of works and the bulk of the apportionments for calamitous times, which might not coincide with the greatest needs of the service. It might order, for example, the cloth and the linen to clothe a million soldiers, when it had not a hundred thousand men in arms. It would thus heap up in the state merchandise which would represent a large amount of capital, and it would be exposed to the danger of losing this capital through many years. It would be the same with public works. In order to develop them in times of crisis, states would have to support, during periods of prosperity, a numerous staff, to double and treble the size of the list of their officers. They would have to create, in the first place, sinecures, from which they might draw the elements of active service. when times were bad. I know of no system less national or in any way more fatal to the finances. But the gravest side to this experience is, that one would call upon the state to make its greatest effort and its greatest sacrifices under circumstances in which its resources would diminish with those of individuals. Men would place it under obligation to add one or two hundred millions to public disbursements at the very moment when the returns from direct taxation would be reduced, and when, even by paying a high rate of interest, it would be impossible to borrow. In a word, to use an expression of M. Thiers, they would ask for the largesses of the rich for a treasury which would be only the treasury of the poor.

—The right to labor carries with it the organization of labor. There is not room in a free society, and one which belongs to itself, for a proletarian aristocracy. As long as capital and property count for anything, they will protest against the chains with which socialists try to bind them. The ramparts of civilization must therefore be demolished to introduce this weapon of war. Social order must be transformed. Liberty must give place to monopoly; the action of individuals to that of the state. No more property, no more inheritance. The state must own everything, must produce everything, must distribute everything. The state must supply labor, and divide the wealth produced. The right to labor has neither sense nor value if it does not mean that every individual applying to the state to obtain employment has a right to the kind of employment for which he is best fitted; that the tiller can demand that he be given a plow to drive and land to cultivate; that the tailor shall receive orders for clothing; that the mechanician be asked to build a locomotive; that the painter be ordered to decorate palaces or churches; that the historian shall find hearers for his lessons, or readers for his writings. This supposes that the state has all rights and all power. It means that the government is the master, to regulate as it sees fit, or as the crowd sees fit for it, production and consumption, the loan of capital, the hours of labor, and the rate of wages; that in society there is no landed owner, no capitalist, no industrial and commercial manager, but the state. To have the right to labor is to have the right to wages, to wages which assure the subsistence of the workman; and as the needs of subsistence ("to each one according to his needs," said Louis Blane) vary with situations and individuals, it is having the right to wages which the laborer determines himself. Under the rule of industrial freedom no person has the right to fix the rate of wages, which follow the fluctuations of the market, and obey a law superior to the will of the employer as well as that of the employed.

—To have a right to labor is to have a right to the instruments of labor to capital and credit. The army of laborers can not do without officers to lead them, any more than the army of soldiers. These officers are produced with the freedom of industry. They are the capitalists, manufacturers, inventors, contractors, head clerks, officers. They obtain these posts through merit, or through services rendered, or because of their experience. But from the moment that the individual has the absolute right to demand employment in his own sphere of aptitude, he can also demand that he shall be placed in those conditions which are most favorable to bring his intelligence and power into play. We thus see that the right to labor in individuals supposes necessarily the monopoly of labor in the hands of the state. We go back to the childhood of society. This system treats emancipated man, man arrived at the age of liberty, of strength and of enlightenment, in the same way that man in the age of ignorance consented to be treated, by the powers which placed him under guardianship. It is a question of overturning all the processes by the aid of which civilization has progressed in the world up to the present time. This necessary consequence of the system, admitted by the most frank defenders of the right to labor, has been contested by those whom I will call neophytes ashamed of socialism. They have held, that society interfered even now in questions of labor, that this interference was legitimate, and that, having already taken upon itself to guarantee to a certain extent the profits of the capitalist, the government might, with greater reason, guarantee the workman his wages "I do not speak to you," said M. Billault, in the session of Sept. 15, 1848. "of the irregular and transitory interventions, which in trying moments weigh upon the treasury, upon the government, and end in national workshops, in riots, or in aid more or less happily distributed. It is something more normal, more permanent, which I wish you to notice. The authority of society is engaged in such a manner in all combinations of national labor that there is not a single point at which it does not touch it. It is society itself, which by these customs tariffs, by their prohibitions, differential duties, subsidies, combinations of every kind, supports, retards or advances all the combinations of national labor. It not only holds the balance between French labor, which it protects, and foreign labor; but at home the diverse industries see it often and unceasingly interfere among themselves. Listen to the perpetual claims made by one against the other before its tribunal. See, for example, the industries which use iron complaining of the protection accorded to French iron against foreign iron, those which use linen or cotton thread protesting against the protection accorded to home manufacture against the introduction of foreign thread; and so on with others. Society, therefore, thus finds itself obliged to mingle in all the struggles, in all the embarrassments of labor. It interferes in them actively every day, directly or indirectly; and the first time that you have to consider a question of customs, you will see that you will be forced, willingly or unwillingly, to take the part yourselves of all interests." M. Bastiat has pointed out the identity of tendency which exists between the protective system and communism. Indeed, protection, by means of a tariff, is a guarantee that the state, in the name of society, gives to certain industries, against similar foreign industries; and the moment this principle is admitted, all branches of national labor can claim the same assistance. If the state guarantees a minimum of profit to the capitalist, it is not easy to see why it should refuse a minimum of wages to the workman. Protection should extend to all producers under pain of degenerating into injustice. Even under this hypothesis it sacrifices consumers to producers. The state builds up the fortune and insures the well-being of one class of citizens at the expense of other classes. It takes what it gives to certain ones from the pockets of all. This is the right to labor recognized by way of a guarantee. It is the organization of labor under the form of partnership. It is indirect communism, but, after all, it is communism. Advocates of protection have nothing to urge against the theory of the right to labor. All privileges grow one from another. Only those are in a position to combat the arguments of socialists who hold that the protective system is an economic heresy, and industrial privilege an evil. Let us, however, exaggerate nothing. Protection is not a new phenomenon. It has a tendency to diminish.

—Outside of the organization of labor, which is absurd and would be impossible in any case, the right to labor becomes a simple right to assistance. In this attenuated and at the same time unreasonable form. it is recognized in France by solemn vote. The constitution of 1848 is no longer of authority in the country, but the errors which it accredited and sanctioned still remain. Right is something certain, and power something uncertain. There is boldness in attempting to establish a direct relation between these two terms in the social order. Society will do nothing which Providence has not willed. God has permitted suffering and misery in this life. The best ordered state will not be able to suppress them. Progress of well-being is incontestable. It has grown, it will grow; and our efforts should tend to augment it still more. But let us not dream of an age of gold. Society should, as far as its resources allow, and within the limits authorized by wisdom, come to the assistance of unfortunate individuals; because individual foresight does not exclude the foresight of all. We must be careful, however, not to convert the duty of society into a right of the individual. If you say that all those who have reason to complain of their lot have the right to draw assistance from a common fund, you recognize that they may call society to account. You legitimize and even preach revolt. The right to assistance must invariably lead in the long run to the demoralization of individuals, and the weakening and ruin of the state. The law of Elizabeth proclaimed this right as we have already shown—the law which gave birth to the poor tax. The poor tax in England was intelligible. It represents a priori the equivalent of spoliation exercised by the rich against the poor, by the Norman against the Saxon, and that upon the largest scale. The aristocracy divided the land by right of conquest, and confiscated to its own exclusive advantage the public wealth and the wealth of the churches. Finally. it imposed the burden of taxes upon the laboring classes, and reserved the patronage as well as the lucrative positions of the government for itself. Did it not owe a compensation in return—an indemnification to the people whom it had excluded from all the goods of this world? The poor tax was this indemnity. The evil results of the system are known. In 1832, the time when the excess of the evil had caused an attempt at reform, the support of the poor cost England and Wales more than seven millions sterling a year. A little more increase to this tax, and the revenue of the landed owner, rent, would have been absorbed by it. Yet the poor did not become rich, while they ruined and consumed the wealthy; because misery and degradation were extending insensibly to the whole country. Assistance was given instead of work, or to serve as a supplement to wages. When parishes themselves employed the poor, their labor was a farce. The result was, that, on the one hand, the working men assisted by the parishes, fell into indolent ways and into debauchery, laying upon society the duty of nourishing them, and considering the alms which they received as an acquittal of a debt due to them: on the other hand, that the free laborers and those who wished to owe to labor alone their subsistence, as well as that of their families, having to meet the competition of laborers hired by public charity, saw the rate of wages lower, and found themselves led, against their will, by the insufficiency of the remuneration which they obtained for their daily labor, to solicit the assistance of the parish. Besides, as aid was proportionate to the number of persons in each family, it was to the interest of the family to contract premature and unwise marriages, because their revenue, or rather the prize offered to their inaction, grew with the number of their children. Immorality had no longer a check, because children born outside of wedlock fell to the care of the state. The reform of 1834 gave, as a corrective to the right of assistance, the duty of labor. The administration of public aid was authorized to detain and put to work all able-bodied persons who asked aid. Houses of charity and labor thus became at the same time prisons. The wife was separated from her husband, and the mother from her child. To give to the poor a taste for labor they attempted to disgust them with alms. The prosperity of the country, and the activity of industry coming to their assistance, there was obtained in a few years a considerable saving in the department of public charity. In 1837 the support of the poor, notwithstanding the growth of the population, cost barely four millions sterling. An annual saving of three millions was the result of the reform.

—It is an axiom accepted in England under a government of which property is the essential foundation, that property has duties as well as rights. How far do these duties extend, and what is their nature? Should the owner of property support, nourish, take on himself as a burden the man who has none? Is this an obligation by natural law? a species of servitude attached to wealth? Property would perish under it. We can conceive that in a despotic government the master would be responsible for the slave, and the feudal lord would have to care for the serfs who live upon the manor, because there exists here a sort of reciprocal obligation. The serf has the right to receive support from the proprietor because the proprietor has a right to the labor of the serf; but to emancipate the laborers from the soil in the first place, afterward from the claims of monopoly, and then to by hypothecate property for their subsistence, would be a contradiction. It would be confounding the conditions of liberty with those of slavery. The social bond unites men among themselves in mutual dependence, but in making this dependence too strict, in stretching the chain beyond measure, we risk its breaking. We must not immolate the individual to society, nor a fortiori society to the individual. Let us hold aloof with equal vigilance and equal energy from communism and egotism. Let not charity cease to be a moral duty. but do not make a legal obligation of it. M. Thiers demonstrated that the right to labor once recognized would destroy emulation among laborers; that is, the principle which urges one man to do better than others, and which is the cause of progress, of wealth in individuals. M. Dufaure demonstrated that the right to assistance would destroy human forethought, that is to say, the principle upon which the future of each individual as well as the future of society rests. "When the workman," the eloquent orator said, "shall once have acquired the habit of working as people work for the state for a stipulated salary which he is always certain of drawing, his taste for labor will gradually disappear. He will fall into indolence, idleness, and into all the vices which follow as a consequence. More yet. he will set this example to his children. You will have in the country an aristocracy of indolent families to whom the state will pay salaries; which will grow larger each day, and continue to grow; an aristocracy which, on the one hand, will ruin society, and, on the other, will see little by little its courage decrease, the enervation of all its strength, and the corruption of all its better instincts. The right to labor and the right to assistance are, in the thought of the socialists who use these expressions, but means to change the distribution of wealth. The state has not the capacity to do this. The laws which regulate the distribution of wealth in the social world are above the action of public powers. The state should see that the burdens of society should be equally divided among its members in proportion to their wealth. The state should endeavor to remove the obstacles which shall stop or hinder the development of enlightenment or production; but it should never forget that if it be a collective force, if it represent the association of individuals, it is not their absorption. And after all, what is the end sought for? What is wished to be done? When the right to labor and the right to assistance are proclaimed it is hoped doubtless, by means of this seizure of the accumulated results of production and of capital of every kind, to destroy poverty. An effort may indeed be made to diminish its extent and to moderate its effects, but to go beyond this, is, in way, to condemn providence. Evil exists upon the earth. It is a consequence of human liberty. A man can be deceived in his calculations, neglect his duties, relax his efforts, disregard his true interests. After all his faults, the punishment must appear, and this punishment in this world is, morally speaking, the loss of wealth, and the loss of the esteem of his fellow-citizens. The fear of losing goods so precious is the sole rein which keeps man from utter ruin. The desire to acquire them is the real force which quickens and develops his energy. Progress is born of difficulties. By taking poverty out of the world we would be taking labor out of it, and the law of labor is the very law of existence.
LÉON FAUCHER.
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3: PROPERTY - John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States, vol. 3 Oath - Zollverein [1881]

The lengthy footnote at the end of Faucher’s article was written by L. Wolowski and Emile Levasseur.

John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States by the best American and European Authors, ed. John J. Lalor (New York: Maynard, Merrill, & Co., 1899). Vol 3 Oath - Zollverein Chapter: PROPERTY

Accessed from oll.libertyfund.org/title/971/63517 on 2009-05-06

The text is in the public domain.

PROPERTY

PROPERTY. I. Right of Property. Political economy inquires into the principles which preside over the formation and distribution of wealth. It takes for granted the existence of property, which is its starting point; it considers it as one of those primary truths which manifest themselves at the origin of society, which are everywhere found impressed with the seal of universal consent, and are accepted as necessities of the civil order and of human nature, without even dreaming of discussing them.

—Read the fathers of economic science: they are almost uniformly silent on this great question. The chief and oracle of the physiocrates, Quesnay, who understood and enlarged upon the social importance of property, does not take the trouble to define it, except in a treatise on natural law. Turgot, the statesman, philosopher and economist, Turgot, who in his work on the distribution of wealth, has thrown brilliant light on the origin, has nothing to say on the principle, the right or the form of property. The master of masters, the author of the "Wealth of Nations," Adam Smith, scarcely makes mention of it, without doubt because he saw in it no subject for discussion. J. B. Say decides debate on this subject to be futile, and undeserving the consideration of the science. "The speculative philosopher," he says, in the fourteenth chapter of his book, "may busy himself in finding out the real foundations of the right of property; the jurisconsult may lay down the laws which govern the transmission of things possessed; political science may show what are the surest guarantees of this right; but so far as political economy is concerned, it considers property simply as the strongest incentive to the production of wealth, and pays little attention to what establishes and guarantees it." In other place (vol. ii., chap. iv.) he says: "It is not necessary, in order to study the nature and progress of social wealth, to know the origin of property or its legitimateness. Whether the actual possessor of landed property, or the person by whom it was transmitted to him, obtained it by occupation, by violence, or by fraud, the result, as regards the revenue accruing from that property, is the same."

—At the time when J. B. Say wrote, the problem which absorbed and agitated men's minds was the production of wealth. The European world felt itself poor; it began to understand the productiveness of labor, and craved wealth. Credit extended its operation; commerce spread in spite of war; and manufacturing industry, developing rapidly, presaged already the marvels which have since marked its course. Production in its different forms was the great business of the time. This rising tide carried all with it, population, labor, resources. All had a clear road to travel with their goal before their eyes, nor did they stop to revert to their own situation or that of others. Property seemed then a sort of common stock from which all, with a little effort, might draw in abundance, and which would reproduce itself unceasingly. No one dreamed of calling the right to it in question. The silence of economists is but a translation of the rational indifference of public opinion on the subject.

—At a later period, population having increased in all the states of Europe, the value of land and the rate of wages having generally risen, personal property, thanks to the progress of commerce and industry, equaling or nearly equaling immovable property, and competition, which affected every kind of work and all investments, reducing profits as well as the outlets for human activity, the problem of the distribution of wealth came to the front. The number of poor persons seemed to increase with the number of the rich. It was even believed, for a time, that industrial civilization tended to increase the inequality which naturally exists among men. In this transition period, which still continues, sects were formed to preach to those discontented with the social order, we know not what sort of a future, the first step to which was the abolition or transformation of property.

—Favored political revolutions, those fatal doctrines which at first held subterranean away in some sort until they had hardened the hearts and corrupted the minds of the people, broke loose in the streets of France; the arguments used against society served to load the muskets and point the bayonets of revolt. At first it was necessary to defend social order by armed forces; and now, whether we be economists, philosophers or jurisconsults, we all understand that our duty is to point out in such a way as shall convince the most incredulous, that society, having force on its side, has also reason and right in its favor.

—It was in the light of events that the programme of political economy was extended. A place has now been assigned it in the discussion of the origin and right to property. It must base its intervention here on observation of facts, just as philosophy does, in expounding and commenting on principles. Socialism, by attacking the foundation of social order, compels all the sciences to contribute, each its share, to its defense.

—II. Opinions of Philosophers and Jurisconsults on Propery. Until our time the question of property had been abandoned to philosophers and jurisconsults. The usefulness of their labors is incontestable; they prepared the ground and paved the way for political economy. If they did not always completely observe and demonstrate the nature of things, they had at least had glimpses of it. It was Cicero who showed that the earth became the patrimony of all by labor, and proved that the person who attacked this right of appropriation violated the laws of human society. After him Seneca, although he exaggerated, in accordance with the ideas of his time, the rights of sovereignty, yet recognized that property was an individual right. Ad reges, protestas omnium pertinet, ad singulos proprietas.

—Nevertheless the person would wander from his road who sought to find in the writings of philosophers or jurisconsults, either a complete theory of property, or even an exact definition of it. Grotius, who is in the front rank of doctors of natural and international law, has given in a few lines a history of property from which communism might draw its arguments. According to this author, after the creation God conferred on the human race a general right to everything. "This was done," he says, "that each might take for his use whatever he wished, and consume what it was possible for him to consume. * * Matters remained thus until, from the increase in the number of men as well as of animals, the land, which was formerly divided by nations, began to be divided among families, and since wells are a supreme necessity in dry countries, and are not equal to supplying a large number, each appropriated what he was able to seize."

—Charles Comte remarks that the publicists of this school, Wolf, Pufendorf and Burlamaqui, confined themselves to paraphrasing the ideas of Grotius. All supposed that, in the origin of societies, men, to satisfy their wants, had only to take what they found ready at hand, that the earth produced without labor, and that appropriated was nothing but occupation or conquest.

—Montesquieu did not understand, any better, the part played by labor in the formation of individual property. "Just as men," he says (book xxvi., of the "Spirit of the Laws,") "abandoned their natural independence to live under political laws they renounced the natural commodity of goods to live under civil laws. The first laws gave them liberty, the next property." Montesquieu, the only publicist since Aristotle who undertook to base the laws of social order on observation, was nevertheless unable to prove among any people, however primitive, the existence of that supposed community of goods which, according to him, has its origin in nature. The most savage tribes, in ancient as in modern times, had a very definite idea of mine and thine. Property and the family have everywhere served as the foundations of order, and law has only confirmed, by giving expression to them, relations already established.

—Blackstone does not go farther than Montesquieu, whose ideas agree with those of J. J. Rousseau, on the state of nature. Bentham himself, the writer who, more than any other, departed from the accepted ideas of his times, declares that property does not exist naturally, and that it is a creation of the law.

—There is some consolation for proprietors in Bentham's assurance, that property will perish only with the law. As human society can not exist without law, and since the end of the law would be the end of society, property may safely count on a long lease of life. Besides, Bentham, following the example of Montesquieu, confounded the idea of property with that of the guarantees which property receives from civil and political laws, guaranteed fifty represented by taxation. The best refutation of Bentham's theory is to be found in some passages from Charles Comte, which it may be well to reproduce here. "If nations can only exist by means of their property, it is impossible to admit that there is no natural property unless it be admitted that it is unnatural for men to live and to perpetuate themselves." "It is true that there is no image, no painting, no visible feature which can represent property in general; but it can not from this be concluded that property is not material, but metaphysical, and that it belongs entirely to the conception of the mind. There is no visible feature by which a man in general can be represented, because in nature there exist only individuals, land what is true of men is true also of things." "Individuals, families and peoples subsist by means of their property; they could not live on metaphysical relations or conceptions of the mind. There is in property something more real, more substantial, than a basis of expectation. A false, or at least a very incomplete idea is given of it when it is defined as if it were a lottery ticket, which is also a basis of expectation." "According to Montesquieu and Bentham, it is civil laws which give rise to property, and it is clear that both mean by civil laws the decrees of public power which determine the possessions which each one may enjoy and dispose of. It would, perhaps, be more correct to say that it is property which gave birth to civil laws; for it is hard to see what need a tribe of savages, among whom be property of any kind existed, could have of laws or of a government. The guarantee of property is undoubtedly one of the most essential elements of which it is composed; it increases the value of property, and assures its duration. A great mistake would be made, however, were it supposed that this guarantee was all there is of property; the civil law furnishes the guarantee of property, but it is human industry which gives birth to property. Public authority is needed only to protect it and to assure to all the power of enjoying and disposing of it." "Were it true that property exists or is created by decrees and by the protection of public authority, it would follow that the men who in any country were invested with the power of legislation, would also be invested with the power of creating property by their decrees, and could, without committing injury to the right of property, despoil some of it to the advantages of others: they would have no other rules to follow than their own desires or caprices."

—The Scotch school, from Locke to Reid and Dugald Stewart, was the first to give a nearly correct definition of the right of property; as the physiocratic school was the only one, previous to 1789, that understood its importance, and brought out into relief the beneficial influence it exercised on the economy of society. But at the time of the French revolution these teachings had not yet corrected the ideas of all; for Mirabeau said to the constituent assembly that "private property is goods acquired by virtue of the laws. The law alone constitutes property, because it is only the political will which can effect the renunciation of all, and give a common title, a guarantee to the use of one alone." Tronchet, one of the jurists who contributed most to the drawing up of the civil code, shared at that time this opinion, and declared that "It is only the establishment of society and conventional laws which are the real source of the right of property."

—There is not much difference between Mirabeau's statement and that of Robespierre, who wrote, in his declaration of rights, "Property is the right that each citizen has to the enjoyment of that portion of goods guaranteed to him by the law." And Robespierre is not far removed from Babœuf, who desired that the land should be the common property of all, that is, that it should belong to nobody. Mirabeau, who pretends that the legislator confers property, admits, by so doing, that he can take it away; and Robespierre, who expressly reserves the state's right in property, and reduces the proprietor to the position of a mere usufructuary, by refusing him the power of selling or disposing of it by will or otherwise, is the direct and immediate forerunner of communism.

—I know that the convention gave, in the declaration of rights which serves as a preamble to the constitution of 1793, a very reassuring and very sound definition of the right of property. Article sixteen reads: "The right of property is the right belonging to every citizen, of using and disposing as he likes, of his goods, his revenues, of the fruit of his labor and his industry." And article nineteen adds a guarantee, which all subsequent French constitutions reproduced: "No one shall be deprived of the least portion of his property without his consent, except when public necessity, legally proven, evidently demands it, and then only on condition of just compensation previously made."

—But, doubtless, the convention reserved the application of those fine maxims, as it did the abolition of capital punishment, for times of peace. No government ever committed more flagrant outrages on the right of property. Confiscations and maximum laws, to say nothing of the inflation of assignats and bankruptcy, marked its savage away, and if it made France victorious and terrible abroad, it ruined and impoverished her at home. The convention evidently thought, with Saint-Just, that "The man who has shown himself the enemy of his country, can not be a proprietor in it." It treated the nobles and priests as Louis XIV. had treated Protestant refugees after the revocation of the edict of Nantes. It adopted, in the interests of the republican state, the theory of feudal origin, that the sovereign, the king, had direct and supreme dominion over the goods of his subjects.

—M. Troplong called attention to the concordance of the demagogical doctrine of property with the maxims of despotism: "All that exists throughout the length and breadth of our states," said Louis XIV. in his instructions to the Dauphin, "whatever be its nature, belongs to us by the same title; you must be fully persuaded that kings are the absolute lords, and have naturally the full and free disposition of all the goods possessed both by church people and by laymen, that they may use it in everything; likewise husbandmen." Put this absolute sovereignty into the hands of a socialistic republic, and it will assuredly lead to the measures demanded in the following lines by Gracchus Babœuf: "The land of a state should assure a subsistence to all the members of that state. When, in a state, the minority of its people has succeeded in monopolizing its landed and industrial wealth, and by that means holds the majority under its sceptre, and uses the power it has, to cause that majority to languish in want, it should be known that such encroachment could only occur through the bad institutions of the government; therefore what former governments neglected to do, at the time, to prevent that abuse or to stifle it at the beginning, the actual administration should do to re-establish the equilibrium which should never have been lost, and the authority of the laws ought to operate a reform in the direction of the final maxim of the perfected government under the social contract: 'Let all have enough, and no one too much.' "

—At last the era of the civil code dawned on France and on Europe. Then for the first time the public power laid down and sanctioned the true principles respecting property. M. Portalis expressed himself before the legislative assembly in the following terms: "The principle of the right of property is in ourselves; it is in no way the result of human convention or of positive law. It lies in the very constitution of our being, and in our different relations to the objects which surround us. Some philosophers seem astonished that man should become the proprietor of a portion of the earth which is not his creation, which will outlast him, and which obeys only laws that are not of his making. But does not this astonishment cease when all the marvels of man's handiwork are considered, that is to say, all that human industry can add to the work of nature." Yes, legislators, it is by our industry that we have conquered and reclaimed the land on which we live; by it we have made the earth more habitable, and better fitted to be our abode. Man's task, so to speak, was to complete the great work of creation. * * Let us put no faith in systems which pretend to make the land the property of all, that men may have a pretext for respecting the rights of no one."

—The civil code (articles 544, 545), collecting and condensing the principles laid down in previous constitutions, defined property as follows: "The right of using and disposing of things in the most absolute manner, provided that they are not used in a way prohibited by the laws or regulations." Charles Comte has rightly pointed out that this definition applies to the usufruct's right as well as to property. The definition of the civil code sins in another way: it does not limit the power which is given to legislators, or to the administration, of making rules regarding the use of property. On that account, property lacks all guarantees; it is not defended against arbitrary power. The law might forbid a landowner to sow seed, to plant vines or trees, to errect any building on his land, to sell, exchange or give his property away. In a word, the definition of the civil code admits of Egyptian monopoly as well as of French liberty. Fortunately, legislative custom and public morals correct the rashness of the legal text.

—The civil code declares property inviolable. Following the examples of the constitutions of 1791, 1793, and 1795, it declared that no one should be compelled to part with his property, unless for the public good, and in consideration of just compensation previously made. But is it absolutely the fact, as M. Troplong thinks it to be, that the state, by these provisions, only reserved to itself the rights attached to political requisition? But did the state by those provisions shelter property from the public power as well as from the usurpation of private persons? This is the weak side of the civil code. Its authors laid down principles, all of whose consequences they had not drawn. While declaring property inviolable, they failed to shield it from sequestration by government, or from confiscation.

—The emperor Napoleon said to the council of state, on Sept. 18, 1809: "Property is inviolable. Napoleon himself, with the numerous armies at his disposal, can not take away a single farm. For to violate the right of property in one man is to violate it in all men." Admirable words, to which his acts did not correspond.

—III. origin, character and progress of Property. Why is it that the great majority of philosophers and jurisconsults have succeeded so ill in defining property? How does it happen that the origin and nature of an institution which holds so high a place in social order, have been revealed to us with any degree of clearness, only since the end of the last century? How is it that the highest intellects, when brought to bear on this study, have too often evolved only such theories as the humblest of landowners could not reconcile with his every-day practice? It is because the phenomenon which they studied and described has more than once changed character. Property has shared in the general progress of civilization; it has, at the same time, followed a law of development of its own. It has advanced as liberty, as industry and as the arts have done, in the world; it has passed through different and successive stages, each corresponding to a different theory.

—The distinction of mine and thine is as old as the human race. From the time that man became aware of his personality, he sought to extend it to things. He appropriated the land and what it produced, animals and their increase, the fruit of his energy and the works of his fellow-men. Property exists among pastoral peoples as well as among those nations which have reached the highest point of agricultural wealth and of industry; but it exists among them under different conditions. The occupation of land was annual before it became lifelong, and it was lifelong, in the person of the tenant, before it became hereditary and in some sort perpetual. It belonged to the tribe before it belonged to the family, and it was the common domain of the family before it took an individual character. Poets, who were the first historians, attest this gradual transformation.

—The marked distinction between the ancient and the modern world is, that formerly property was too often acquired by conquest, while now its essential basis is labor. Not only in antiquity and in the middle ages did individuals, as well as peoples, enrich themselves by usurpation, but free men disdained industry, and the earth was tilled by slaves. Armed force, which was the surest title to the possession of land, procured also the instruments of production. How was it possible to sound the nature or take in the full horizon of property at a time when the conqueror arrogated to himself the right, at one time of selling the conquered like beasts of burden, and at another of making serfs of them; when men were treated as though they were goods and chattels; when labor passed first through the ordeal of slavery, and then through that of serfdom, before it became the honor of free men and the wealth of nations?

—This is not all. Property, in undergoing a progressive development similar to that of liberty, has extended and increased, and has, so to speak, invaded space. When civilization begins, what man possesses is very trifling: a few herds, some rude implements, a spot of land which produces corn in the middle of a desert waste; as yet he has scarcely appropriated any natural agents. Agricultural peoples, which succeed the pastoral tribes, soon increase ten-fold and a hundred-fold the property which now, little by little, becomes connected with the surface of the earth. But it remains only for nations skilled in industry and commerce to bring property to its highest development. When the land becomes, in some sort, individualized, and each portion falls into the hands of an owner who makes it productive with his capital and by the sweat of his brow, those who find themselves left out in this partition of the land are not, on that account, excluded from property. Capital has its origin in accumulation. Personal property is grafted on landed property. Treasures accessible to all are formed, of which each can have a share, and which he can increase by his labor. A parcel of land which in Algeria is worth perhaps $2, and in the western states of America about $5, sells readily in western Europe for from $100 to $1,000. In spite of the high price which improved agriculture speedily gives to rural property, there is no exaggeration in saying that to-day the personal property of England and France far exceeds the value embodied in the land.

—It may be added, that, as civilization advances, each citizen witnesses the increase and extension of the common property which he enjoys equally with all other citizens of the state. Roads, canals, railways, schools, and other public establishments are incomparably more numerous and better administered to-day than they were half a century ago. What would it be, if we were to compare the sum of enjoyments and capacities which society put at the disposal of its members in the republics of Greece and Rome and those enjoyed by them in our day? The humblest of our laborers would not like to find himself exposed to the misery or the humiliations which awaited the proletarian of ancient days in the agora or the forum. It is, then, rightly that M. Thiers, calling to mind that property is a universal fact, affirms, at the same time, that it is a growing fact.

—Let us listen to Thiers, portraying the origin and the growth of property in historic times: "Among all peoples, however rude they may be, we found property, at first as a fact, and afterward as an idea, an idea more or less clear according to the degree of civilization attained, but invariably settled. Thus the savage hunter has at least his bow, his arrows and the game which he has killed. The nomad, who is a shepherd, at least owns his tents and his flocks. He has not yet admitted property in land, because he has not yet thought of applying his labor to it. But the Arab who has raised numerous flocks, is satisfied that he is the proprietor of the land, and exchanges its products against the wheat which another Arab, settled on the land, has produced elsewhere. He measures exactly the value of the object which he gives, by that of the object which is given him; he knows that he is the proprietor of the one before the barter, and of the other after it. Immovable property does not yet exist for him. Sometimes only he is seen, during two or three months of the year, to establish himself on land which belongs to no one, to plow it, to sow it with seed, to reap the harvest, and then to wander off to other places. * * The duration of his property is in proportion to his labor. Little by little, however, the nomad becomes settled and turns agriculturist, for it is an instinct in man to wish to have a place of his own, a home. * * He ends by choosing a tract of land, by dividing it into patrimonies, on which each family establishes itself, and works and cultivates it for itself and its posterity. As man can not allow his heart to wander among all the members of the tribe, and as he longs for a wife of his own, children whom he may love, care for and protect, in whom his hopes, his fears, his very life, may be centred, so he has need of his own parcel of land, which he may cultivate, plant, beautify according to his tastes, fence in, and which he hopes to transmit to his descendants, green with trees which have grown not for him, but for them. Then to the personal property of the nomad, succeeds the landed property of an agricultural people; this second property grows, and with it come laws, complicated, it is true, which time makes more just and more provident, but the principle of which it does not change. Property, at first the result of instinct, becomes a social agreement, for I protect your property that you may protect mine. As man advances, he becomes more attached to what he owns; in a word, more a proprietor. In a barbarous state he is scarcely proprietor at all; civilized, he is one intensely. It has been said that the idea of property was weakening in the world. That is an error of fact. Far from growing weaker, it is being regulated, defined and strengthened. It ceases, for instance, to be applied to what is not capable of being possessed, that is, to man, and from that time slavery is at an end. This is an advance in ideas of justice, but not a weakening of the idea of property. * * Among the ancients the land was the property of the republic; in Asia it is that of a despot; in the middle ages it belonged to lords paramount. With the progress of the ideas of liberty, where man's freedom was accomplished, the liberty of his chattels and possessions was secured; he himself is declared to be the owner of his lands, independently of the republic, the despot, or the lord paramount. From that moment confiscation is abolished. The day the use of his faculties was restored to him, property became more individualized; it became more proper to the individual, more property than it was.

—There is another observation to be made, and one more directly within the domain of political economy. It is, that the more property increases, is firmly established, respected, the more society prospers. "All travelers," says M. Thiers, "have been struck by the state of languor, of misery, and of rapacious usury, of countries in which property is not sufficiently well guaranteed. Go to the east, where despotism claims to be the only property owner, or, which is the same thing, return to the middle ages, and you will see everywhere the same thing: the land neglected, because it is the readiest prey to the avidity of tyranny, and left to the hands of slaves, who are not free to chose their own career; commerce preferred, because it could more readily escape exaction; in commerce, gold, silver and jewels in request, being the valuables most readily hidden; all capital seeking conversion into these values, and when it actually seeks employment concentrating itself in the hands of a proscribed class, who, making a pretense of poverty, lived in houses wretched on the outside, gorgeous internally, opposing an invincible resistance to the barbarian master who would tear from them the secret of their treasures, and solacing themselves by making him pay more dearly for the money, thus, by usury, revenging themselves for his tyranny."

—Such are the roots of property to be found in history. As far as the right of property is concerned, it may be said that the universality of the fact is sufficient to establish it. Were property something accidental in human society, were the institution established only among an insular people, and were it an exception to the general custom, it might be called upon to produce its title deeds; but it stands to reason that men must have the right to do as they have done at all times, and in every inhabited place. Universal consent is an infallible sign of the necessity for, and consequently of the legality of, an institution.

—But the right can be proved independently of the historic reason. "Man," says M. Thiers, "has a first property in his person and his faculties; he has a second, less intimately connected with his being, but not less sacred, in the product of his faculties, which includes all that are called worldly possessions, and which society is in the highest degree interested in guaranteeing to him, for without this guarantee there would be no labor, without labor no civilization, not even necessaries, but, instead, destitution, brigandage and barbarism." This definition is neither sufficiently absolute nor complete. M. Thiers seems to place the foundation of property in labor alone. Undoubtedly it is its most legitimate source, but it is not the only one, nor, in point of date, is it the first. At the commencement of social life, man appropriated the soil by occupation, before he made it his own by the work of his arms. Everywhere wresting the ground from man or from beast, the taking possession of it preceded it cultivation. The land belonged to a tribe collectively before it was distributed among its different members. This is what the school calls the right of the first occupant, a right which is explained by the very fact of possession being taken without hindrance, and by the power to defend, to protect, and consequently to appropriate, the land occupied.

—Side by side with the men who acquired their possessions by occupancy or by labor, there are nations and individuals who usurped what they possess by violence and by fraud. Laws, and public forces at the service of the laws, justify that usurpation wherever their power extends, and commends both obedience and respect. But it happens, and history furnishes many examples of it, that the property thus wrongfully acquired is peaceably handed down from generation to generation, gives rise to an infinite number of contracts, and becomes the basis of fortunes. After all these fails accomplis, ought the origin of landed estates to be sought for with a view to securing their condemnation? Or, rather, does not the interest of society demand that the subsequent transactions be legitimized, and their origin wiped out? This state of affairs has given rise to the system of prescription, which is the real safeguard of property. "No transaction would be possible," says M. Thiers, "no exchange could be made, if it were not settled that after a certain time the person who holds anything holds it lawfully, and may transfer it. Imagine what would be the condition of society, what acquisition would be certain, if it were allowed to go back to the twelfth or thirteenth century, and dispute possession with the holder of a piece of property, by proving that a feudal lord had taken it from his vassal and given it to a favorite, or to one of his men-at-arms, who sold it to a member of the guild of merchants, who, in turn, transmitted it, through many hands, to a long line of owners more or less respectable. It is very right that there should be a term fixed, after which what is, simply because it is, should be declared lawful and held as good. Were this not so, what a scene the world would present."

—It must be said, however, that conquest and usurpation are not constant and exclusive facts, although it might be supposed they were, when we see Assyrians, Persians, Greeks, Romans, and, finally, the northern barbarians, each in turn dispossessing the other, and ruling the world by force of arms. Violence did not mark the beginning of all property. M. Thiers, after having stated, in contradiction to the well-understood and well-interpreted testimony of history, that "all society presented in the beginning this phenomenon of occupation more or less violent," admirably explains how it is that, the greater part of landed property had its origin in labor. (De la Propriété, by M. Thiers, vol. i., ch. 10.)

—Property draws after it, as a consequence, inequality of conditions in the social order, and this inequality in condition is itself only the reflection of the differences which nature has established among men. All men have not the same muscular strength, nor the same degree of intelligence, nor an equal aptitude for or application to work. By the very fact that there are some who are stronger, cleverer, and, it must be said, happier than others, there are some also who tread with a quicker and surer foot the way to wealth. Property does not aggravate these irregularities in nature, but it marks them in durable characters, and gives them a body. In the beginning the best farmer possesses most. What interest could society have in interfering with his better farming? The most skillful and robust cultivator of the soil, while enriching his family, adds to the general sum of products, and therefore enriches society also. Equality of condition, the equal partition of the land, and equality of wages, are three forms of the same idea, which amounts to saying that the stronger ought not to produce more than the weaker, and that the thought of the enlightened man ought to sink to the level of that of the ignorant man; this would be to limit production, to repress intelligence, and to stifle literature, science and art in their very germ.

—The right of possession includes, as a natural consequence, the right of disposing of the things possessed by you, of transmitting them to others, either for a consideration, or as a free gift; of exchanging, selling, or giving them away during life or by testamentary disposition, and of leaving them as an inheritance. Property implies the right of inheritance. Man is so constituted that he wishes to outlive himself. The care he feels for his self-preservation extends to his family; he would work much less for himself were he not, in working for himself, working for family. Property reduced to a usufructuary interest would be of but half its value to individuals, and of but half its value to society.

—This thought is expressed in pages which I prefer to borrow rather than attempt to adapt: "A man, if he had but himself to think of, would stop short in his career. As soon as he had provided for his old age, would you, through fear of encouraging idleness in the son, force the father himself into idleness? But does it follow, that, by permitting the hereditary transmission of property, the son must necessarily be an idler, consuming in sloth and debauchery the fortune left him by his father? Firstly, we would ask, what does the property which is to support the idleness of the son represent, after all? It represents previous work done by the father; and by hindering the father from working in order to compel the son to work for himself, all that is gained is that the son must do what the father has not done. There will have been no increase in the amount of work done. In the system, on the contrary, in which the right of inheritance is recognized, to the unlimited labor of the father is added the unlimited labor of the son; for it is untrue that the son remains idle because the father has left him a more or less considerable amount of property. To begin with, it is rare for a father to leave his son the means of doing nothing. It is only in cases of great wealth that this happens. But usually, in most professions, the father, in leaving the son his inheritance, only procures for him a better start in his career. He has only pushed him a little further, a little higher: he has given him the chance of working to greater advantage; of being a farmer, when he himself was only a farm servant; of fitting out ten ships, when he could fit out but one; of being a banker on a large scale, when he was one only on a small one: or of changing his position in life; of rising from one to another; of becoming a lawyer, a doctor, or a barrister; of being a Cicero or a Pitt, when he himself was a simple gentleman, like Cicero's father, or a cornet of a regiment, like Pitt's."

—Thus, the right of inheritance is necessary to property, as property is to social order; it is that right which, by permitting the accumulation of wealth, creates capital and makes labor productive. The laws of all free and industrious peoples sanction it; but it is so indispensable to the development of families and the progress of societies, that were it not the invincible consequence of human nature and of the social state, that, in a word, if it did not exist, it would be necessary to invent it.

—IV. Objections which have been raised against the Principle of Property. The objections which have been taken to the principle of property are taken sometimes to the right, sometimes to the fact itself. The great opponent of property, M. Proudhon, is forced to recognize, that, as the possession of property has become general among all classes, it has approached the ideal of justice. But this more general possession of property, inseparably connected with the advance of civilization, does not disarm M. Proudhon's hostility, he contests the principle of property itself. Property, according to him, does not exist as a natural right; it is founded neither on occupation nor on labor. "Since every man," says this author, "has the right to occupy from the simple fact that he exists, and that to continue in existence he can not dispense with a material of exploitation and of labor; and since, on the other hand, the number of occupants varies incessantly, owing to births and deaths, it follows that the quantity of matter which each worker may claim, is variable like the number of occupants; that occupation is always subordinate to population; and finally, that, possession never being able rightfully to remain constant, it is, as a fact, impossible that it should become the basis of property."

—To dispose of this paradox, all that is needed is to refute the point from which it starts. The prerogatives of the individual and of the species do not embrace a natural right to occupation any more than they do a natural right to labor. Undoubtedly, in the midst of a vacant space, the man who first occupies a field or a meadow, incloses it in bounds, and appropriates it, becomes its lawful possessor; but it is not by virtue of a right of possession inherent in every man, but because the ground previously belonged to no one, and because, in leaving his impress on that ground, he is not interfering with any previous right.—"A man," says M. Proudhon, "who was forbidden to travel over the highways, to rest in the fields, to take shelter in caves, to light a fire, pick the wild berries, to gather herbs and boil them in a piece of baked earth—such a man could not live. Thus the earth, like water, air and light, is a first necessity which each ought to be able to use freely, without injury to the enjoyment of them by another. Why, then, is the earth appropriated?" This thesis might have its good side in a condition of savagery. M. Proudhon's theory might succeed among a nation of hunters. But in an industrious and civilized community, it is but a late and faded echo of the declamations of J. J. Rousseau. Men nowadays do not live on wild berries or on herbs gathered in the fields; they are no longer reduced to live in caves, or to prepare coarse food in earthen vessels. Civilization has bestowed on them possessions which far more than compensate for any supposed natural rights to gather wild fruit, to hunt or to fish; and the humblest workingman of the nineteenth century is certainly better lodged, better clothed and better fed than the typical man of M. Proudhon could be, with all his right to common possession of the land.

—After having asserted that occupancy could not serve as a basis for property, M. Proudhon equally denies the title of labor. Charles Comte had said: "A piece of ground of fixed dimensions is only able to produce sufficient food for the consumption of one man for one day: if the owner by his labor can make it produce enough for two days, he doubles its value. This new value is his work, his creation; it is not taken away from any one; it is his property." M. Proudhon answers: "I maintain that the possessor is paid for his trouble and his industry by the double return, but that he acquires no right in the soil. I admit that the laborer may make the product of his labor his own, but I do not understand how property in the product carries with it property in the soil, or in matter. Does the fisherman who can catch more fish, on the same coast, than his companions, become, because of his skill, proprietor of the waters in which he fishes? Was a hunter's skill ever looked upon as conferring on him a right of property in the game of a whole canton? The cases are precisely similar: the diligent husband-man finds in a harvest, abundant and of better quality, the recompense of his toil; if he has made improvements on the soil, he has the right to a preference as possessor of it; never, under any consideration, can he be allowed to allege his skill as a farmer as a title to property in the soil he tills. To transform possession into property, there is more needed than labor, otherwise man would cease to be a proprietor as soon as he ceased to be a laborer: now, what constitutes property, is, according to the law, immemorial and uncontested possession, that is, prescription; labor is only the visible sign, the material act, by which occupation is manifested".

—As sources of property, occupation and labor are the complements of each other. Possession would certainly be far from lasting, if cultivation did not follow to sanction it, by revealing and bringing into play the productive forces of the soil; and as for labor, it does not necessarily imply property, since a farmer who has spent a large amount of capital in the improvement of the land he leases, while he can demand compensation for that capital, does not therefore acquire a right of property in the domain. This much is true, and can be said without exaggeration. But to suppose that the possessor who has cultivated a piece of land, and who, by so doing, has improved the land and increased the capital which that land represents, to suppose that he has no rights beyond the fruit of the year, is a glaring error. To whom would this improved land belong? Would any one bestow capital on it, give it a new value, just that this value might become the prize of the first comer? If this were so, no one would work.

—M. Proudhon admits that the husbandman who has improved land "has the right to a preference in possession." Here, then, is another case, and the case presents itself often, in which property, to use the language of Proudhon's book, ceases to be robbery. There is no doubt that the proprietor has no need to work to preserve his right: but work adds to the titles of property, and makes them skill more honorable. Now, the possessor who cultivates, even if he does not add to the, value of the land, would very soon grow tired of his passion for work, if he were only allowed to receive from it the produce of one harvest. Agriculture is the offspring of permanency in property, and without the guarantees which the law attaches to possession, agriculture would make no progress. M. Proudhon has only to look at what happens to the best of land when in the hands of nomadic tribes, among whom the land is only scratched to secure the meagre harvest of the year.

—But, it will be said, the land thus conceded in perpetuity is, little by little, sequestered, invaded; and the last comers are likely to see both hemispheres entirely filled up by the heirs of the first who occupied the land, or of those who wrested it, by violence or by fraud, from its original owners. Even if all this were so, the misfortune does not seem to us a very great one. Land, thanks to the progress of industry, is not the only source of wealth. The man who does not own a farm may buy a house, start a factory, or have an interest in some scheme for transportation. Property, supposing there were not enough for all in the form of land, would show itself abundant under new forms. Previous appropriation of the soil, instead of robbing future races, really tends to enrich them.

—Very high intellects refuse to admit this supposed confiscation of the soil to the detriment of the latest comers. M. Thiers gives us considerations on this point which are decisive. I shall try to epitomize them here. "Some engineers have thought that there was coal enough in the bowels of the earth to last indefinitely, while others have thought, that, at the rate at which industry was advancing, there was not enough for a hundred years. Should we, then, abstain from using it, lest there should be none for our posterity? * * The society which should abolish property in land for fear of the earth's whole surface being invaded, would be every whit as absurd. Let us make our minds easy on that score. European nations have not yet cultivated, some the quarter, others the tenth part, of their territories; and of the entire globe not the thousandth part is occupied. Great nations have run their course hitherto, without having brought under cultivation more than a very small part of their dominions. Nations have passed through youth, maturity and old age; they have had time to lose their characteristics, their genius, their institutions, all that they lived by, without having, we will not say, completed, but even much advanced, the cultivation of their territory. After all, space is nothing. Often, on the widest extent of land, men find it hard to live; and often, on the other hand, they live in plenty on the narrowest strip of ground. An acre of land in England or in Flanders supports a hundred times more inhabitants than an acre in the sands of Poland or of Russia. Man carries with him fertility; wherever he appears the grass grows and corn springs up. He brings with him his cattle, and wherever he settles he spreads around him a fertilizing soil. If, then, a day could be imagined when every corner of the globe should be inhabited, man would obtain from the same superficies ten times, a hundred times, nay a thousand times, more than he obtains to-day. What need be despaired of when the sands of Holland are transformed into fertile ground by man? Were he cramped for room, the sands of the Sahara, of the Arabian desert, of the desert of Cobi, would be covered by the fruitfulness which follows him; he would lay out in terraces the sides of the Atlas, of the Himalayas, of the Cordilleras, and cultivation would climb the steepest summits of the globe, and would only stop where, from the elevation, all vegetation ceases. This surface of the globe, invaded as is said, will not fail future generations, and, meanwhile, does not fail those of the present: for everywhere land is offered to men; it is offered them in Russia, on the banks of the Borysthenes, the Don and the Volga; in America, on the banks of the Mississippi, the Orinoco, and the Amazon; in France, on the coast of Africa, once the granary of the Roman empire. But emigrants do not always accept, and when they do, if nothing be added to the gift of the land, they go to their death on those distant shores. Why? Because it is not surface which is wanting, but surface covered with constructions, plantations, inclosures, the works of appropriation. Now, all these things exist only where former generations have been at the pains to put everything in such a position that the labor of the new comers may be immediately productive."

—It is plain, then, that the earth, in spite of the extent of property, is not going to fail man. It is property well established, fenced around with guarantees, and become hereditary, which makes the land habitable and productive. Let us add, that under this régime the lot of the cultivator or tiller of the soil improves more rapidly than that of the owner. Property is in a special way a benefit to labor. (Compare COMMUNISM, MONOPOLY, LAND, SOCIALISM, etc.) 55
L. FAUCHER.

[55.]Property and the family are two ideas, for the attack and defense of which legions of writers have taken up arms during the last half century. Recent systems, founded upon old errors, but revived by the popular emotions which they aroused, have in vain disturbed, misrepresented, sometimes, even denied, them. These ideas express necessary facts, which, under diverse forms, have been and will always be coming forth; they may thus be justly regarded as the fundamental principles of all political society, because from them originate, to a great extent, the two principal objects which concern social laws, namely, the rights of man over things, and his duties toward his fellow-men.

—The Right of Property. If man acquires rights over things, it is because he is at once active, intelligent and free; by his activity he spreads over external nature; by his intelligence he governs it, and bends it to his use; by his liberty, he establishes between himself and it the relation of cause and effect and makes it his own.

—Nature has not for man the provident tenderness imagined by the philosophers of the eighteenth century and dreamed of before them by the poets of antiquity when they described the golden age. She does not lavish her treasures in order to make life flow smoothly along in abundance and idleness for mortals; on the contrary, she is severe, and yields her treasures only at the price of constant labor; she maltreats those who have not sufficient strength or intelligence to subdue her, and when we consider the primitive races whom the arts of civilization had not yet raised above her, we may ask ourselves, with Pliny, if she did not show herself a step-mother rather than a mother. Left to itself, the earth presents here deserts, there marshes or inextricable forests; the most fertile portions are ordinarily the most inaccessible, because, situated in the valley; they are encroached upon by stagnant waters, and infected by the miasms which exhale from them, or haunted by noxious animals which seek their food there; poisonous plants grow among the nutritious ones, without any outward sign by which to distinguish them, while yet we have not the warming of instinct which the animals have. The best fruits themselves have as yet, for the most part, only a coarse savor before cultivation has corrected their bitterness. Doubtless man can live, as he has, amidst this indifferent or hostile nature; but he would live there, timid and fearful as the roe of the forests, isolated, or collected in small groups, and lost in the immense spaces. in which his frail existence would be but an accident in the luxuriant life of organized beings; he would not feel himself at home, and would in very fact be like a stranger on an earth which he would not have fashioned according to his will, and where he would be neither the swiftest in the chase, the best protected against cold, nor the best armed for strife.

—What even now distinguished him from other creatures, in this state of profound barbarism, were the divine powers of soul with which he was gifted. However torpid they might as yet have been, they would have taught him, without any doubt, to emerge from his nakedness and his feebleness: from the earliest times, they would have suggested the means of arming his hand with an axe of stone, like those which, buried in the calcareous deposits of another age, tell us to-day of the miserable beginning of our race upon the globe; they would have taught him to protect his body against the cold with the skin of the bear, and to shield his home and family from the attacks of ferocious beasts by arranging a cave for his use or building a hut in the midst of water, not far from the shore of a lake. But already man would have left upon matter some impress of his personality, and the reign of property would have begun.

—When centuries have elapsed, and generations have accumulated their labors, where is there, in a civilized country, a cold of earth, a leaf, which does not bear this impress? In the town, we are surrounded by the works of man; we walk upon a level pavement or a beaten road; it is man who made healthy the formerly muddy soil, who took from the side of a far-away hill the flint or stone which covers it. We live in houses; it is man who has dug the stone from the quarry, who has hewn it, who has planed the wood; it is the thought of man which has arranged the materials properly and made a building of what was before rock and wood. And in the country, the action of man is still everywhere present; men have cultivated the soil, and generations of laborers have mellowed and enriched it; the works of man have deemed the rivers and created fertility where the waters had brought only desolation; to-day man goes as far as to people the rivers, to direct the growth of fish, and takes possession of the empire of the waters. We reap the wheat, our principal food. Where is it found in a wild state? Wheat is a domestic plant, a species transformed by man for the wants of man. Thus products, natives of countries most diverse have been brought together, grafted, modified by man for the adornment of the garden, the pleasures of the table, or the labors of the workshop. The very animals, from the dog, man's companion; to the cattle raised for the shambles have been fashioned into new types which deviate sensibly from the primitive type given by nature. Everywhere a powerful hand is divined which has moulded matter, and an intelligent will which has adapted it, following a uniform plan, to the satisfaction of the wants of one same being. Nature has recognized her master, and man feels that he is at home in nature. Nature has been appropriated by him for his use; she has become his own; she is his property.

—This property is legitimate; it constitutes a right as sacred for man as is the free exercise of his faculties. It is his because it has come entirely from himself. and in no way anything but an emanation from his being. Before him, there was scarcely anything but matter; since him, and by him, there is interchangeable wealth, that is to say, articles having acquired a value by some industry, by manufacture, by handling, by extraction, or simply by transportation. From the picture of a great master, which is perhaps of all material productions that in which matter plays the smallest part, to the pail of water which the carrier draws from the river and takes to the consumer, wealth, whatever it may be, acquires its value only by communicated qualities, and these qualities are part of human activity, intelligence, strength. The producer has left a fragment of his own person in the thing which has thus become valuable, and may hence be regarded as a prolongation of the faculties of man acting upon external nature. As a free being be belongs to himself; now, the cause, that is to say, the productive force, is himself; the effect, that is to say, the wealth produced, is still himself. Who shall dare contest his title of ownership so clearly marked by the seal of his personality?

—Some authors have tried to establish the principle of property on the right of the first occupant. This is a narrow view: occupation is a fact and not a principle. It is one of the signs by which the taking of possession manifests itself, but it is not sufficient to make it valid before the philosopher or the lawyer. Let a man land upon a desert, and say: "As far as my eye can reach, from this shore to the hills which bound the horizon yonder, this land is mine"; no one would accept such occupation for a bona fide title. But let the man settle upon the most the most fertile hill-side, build a hut there, cultivate the surrounding fields, and the possession of the portion actually occupied will become a right, because he has performed a proprietary act, that is to say, has by his labor thereon impressed on it the seal of his personality. International law makes a distinction, in regard to this, between individuals and states; what it refuses to the former, it grants to the latter; and it recognizes the validity of a summary taking of possession, which does not injure any anterior right. It is because the occupation is of an entirely different nature: the one having as its object useful possession, the other sovereignty, which implies only a general protection; the proof of this is, that in modern society the sovereignty frequently passes from one state to another without property changing hands.* Montesquieu wrote: "As men have renounced their natural independence in order to live under political laws, they have renounced their natural community of possession to live under civil laws. The political laws gave them liberty; the civil laws, property". Bentham enlarged upon the same thought: "Property and law were born together, and will die together. Before law, there was no property; take away the law, and all property ceases." This was a narrow view. Montesquieu and Bentham, in order to consider but one side of the question, approached very near an exceedingly dangerous error, for it led to this consequence, that if the law had made property, the law could unmake it, and undid the very foundation which the authors intended to lay. It is evident that property originated before law, as before the formation of any regular society, since there has been appropriation of a certain part of matter ever since man had lived, and began, in order to extend his hand and his intelligence about him. Property and the family have been the cause, and not the effect, of society; and the laws, to follow the beautiful definition placed by Montesquieu himself at the beginning of his work, "are the necessary relations which flow from the nature of things"; the laws have consecrated this necessary relation which was established between man and matter, but they have not erected a relation which would have been factitious and accidental. It is true that, without law, property has no guarantee against violence, and that it lacks security and solidity. But what right is there the exercise of which would be secure outside of the social condition?

—It is also true that there are certain kinds of property which could not be produced without the protection of social law, because an advanced civilization and good government have the effect of widening the circle in which human activity can with safety move, and consequently extend the field of property. It is true, in short, that, in a certain number of particular cases in which natural right does not furnish sufficient light, the law decides and determines thus a positive right of property which it might perhaps determine otherwise, because it is important, in well organized society, that nothing, in such a matter, should remain in uncertainty, abandoned to the caprice of arbitrary power. But care must be taken not to confound a particular form or case with the principle of right itself.

—It is, then, to the human being, the creator of all wealth, that we must come back; it is upon liberty that it is expedient to base the principle of property, and if any one would know by what sign it is to be recognized, we will answer that it is by labor that man impresses his personality on matter. It is labor which cultivates the earth and makes on an unoccupied waste an appropriated field; it is labor which makes of an untrodden forest a regularly ordered wood; it is labor, or, rather, a series of labors often executed by a very numerous succession of workmen, which brings hemp from seed, thread from hemp, cloth from thread, clothing from cloth; which transforms the shapeless pyrits, picked up in the mine, into an elegant bronze which adorns some public place, and repeats to an entire people the thought of an artist. It is labor which is the distinctive sign of property; it is the condition(or the means) of it, not the principle, which traces its origin to the liberty of the human soul.

—Property, made manifest by labor, participates in the rights of the person whose emanation it is; like him, it is inviolable so long as it does not extend so far as to come into collision with another right; like him, it is individual, because it has its origin in the independence of the individual, and because, when several persons have co-operated in its formation, the latest possessor has purchased with a value, the fruit of his personal labor, the work of all the fellow-laborers who have preceded him; this is what is usually the case with manufactured articles. When property has passed, by sale or by inheritance, from one hand to another, its conditions have not changed; it is still the fruit of human liberty manifested by labor, and the holder has the same rights as the producer who took possession of it by right.

—Violence, confiscation, fraud, conquest, have more than once disturbed the natural order of property, and mixed their impure springs with the pave sources of labor. But they have not changed the principle. Does the theft by which a lucky rascal is enriched interfere with the fact that labor is necessary for the production of wealth? Moreover, we must not exaggerate at pleasure than extent of these deviations from the general rule. It has been said that if we could go back to the origin of all landed property, possibly none would be found untainted with some one of these vices, on the soil of old Europe, overrun and successively occupied by so many hordes of invaders in ancient times and the middle ages. But how far would we have to go back across the centuries? so far that it could not be told in the case of ninety-nine hundredths of landed estates, except by mere conjecture, based on the probabilities of history. French laws, for instance, have established the thirty-years limitation, firstly, because it is necessary, in order to give some fixity to property, that it should not be left exposed to endless claims, and then, because long possession is itself a title, and because a man who has himself or by his tenantry, or farmers, put continuous labor on the same soil for a generation, has made, so to speak, the property his own. Now what is this short legal limitation beside the long limitation of ages, and how would any one dare contest the lawfulness of the owner's right over lands now richly cultivated, covered with farms and manufactories under the pretext that a Frank of the fourth century expelled from them a Gaul who was herding his flocks there? On the land has accumulated immovable wealth, which has sometimes increased the value of it a hundred-fold, and the origin and transmission of which are equally lawful. Out of the soil has grown the personal wealth which now forms a large part of the patrimony of society, and this wealth, the fruit of modern labor, is for the greater part free from the stain of brute force. War is no longer in our day a means of existence; it is rather a cause of ruin; conquerors aspire to usurp sovereignty, but they respect property. The political societies which have settled in new worlds, in America and Australia, have been established for the greater part by the clearings of the pioneers who made the land what it is, and bequeathed it to their children. There has been little or no violence there, in the many places where they have not had to strive against savage tribes, even in the occupation of the land. In the main, if we consider property as a whole, how small a place is occupied by the exception as compared with the rule, by violence as compared with labor!

—Social Utility of Property. What is just always useful: Property has such a character of social utility that society could not exist without property, and there is no thriving society without individual property. Therefore, when persons have desired to bare property upon utility, arguments were certainly not lacking; but utility, which must be taken great account of in political subjects is, as we have remarked, a result, and not a principle, and we must content ourselves with saying that the excellent effects of property corroborate the lawfulness of the right. "Man", says M. Thiers, "has a first property in his person and his faculties; he has a second, less adherent in his being, but not less sacred, in the product of these faculties, which embraces all that is called the goods of this world, and which society is deeply interested in guaranteeing to him; for without this guarantee there would be no labor, without labor no civilization, not even the most necessary, but only misery, robbery and barbarism." We can not imagine a society entirely devoid of the idea of property; but we can conceive of one, and even find such in history, where property is in a rudimentary condition, and it would not be difficult to prove that such a condition is indeed, as M. Thiers says, misery and barbarism. Man is not a god; labor, which is a healthful exercise for both soul and body, is at the same time painful; it is only at the cost of an effort that man realizes his thought in matter, and oftentimes he would not make this effort, so painful to him, if he were not encouraged by the thought of producing a useful effect, and of himself enjoying the result of it. Who would take the trouble to fell a tree, to divide it into boards, of he knew that the next day a savage would seize upon it to make a fire with it, or even build a hut! Activity would have no object, because it would have no certain compensation; it would retire within itself, like the snail when threatened by danger, and would not venture out save for the satisfaction of the most immediate wants or the creation of property the easiest to defend—the hunting of game, or the manufacture of a bow or of an axe. In societies which have already risen to a certain degree of civilization, but which have not sufficient respect for property, this social imperfection alone is enough to impede progress and to keep men for centuries at a low level, to rise above which requires unheard-of efforts, and, above all, the knowledge of right. "All travelers," says M. Thiers elsewhere, "have been struck by the state of languor, of misery, and of greedy usury, in countries where property is not sufficiently protected. Go to the east, where despotism claims to be the sole owner, or what amounts to the same thing, go back to the middle ages, and you will see everywhere the same features; the land neglected, because it is the prey most exposed to the greediness of tyranny, and reserved for the slaves, who have no choice of employment; commerce preferred, as being able to escape more easily from exaction". A melancholy picture, but which has long been and still is, on a large portion of our globe, the true picture of humanity. When property, on the contrary, is fully recognized, respected and protected in its various forms, man does not fear to let his activity radiate in every direction. The picture of society is then entirely different: in place of a few thin, boughless shrubs, there will be seen a forest of immense oaks, spreading their branches far and wide, and exhibiting trunks more vigorous in proportion to the greater number of pores through which they breathe air and life. Far from injuring each other, men sustain each other by their individual development. For property is not a common fund fixed in advance, which is diminished by the amount which each appropriates; it is, as we have said, a creation of the intelligent force which dwells in man; each creation is added to the previous creations, and, putting new vigor into commerce, facilitates ulterior creations. The property of one, far from limiting for others the possibility of becoming owners, on the contrary increases this possibility; it is the strongest stimulus to production, the pivot of economical progress; and if the nature of things had not made a law with regard to it, anterior to all agreement, human law would have established it as the institution pre-eminently useful to the welfare and morality of nations.

—History of property. It will be understood, that, although the principle of property is always the same, it has not been comprehended and applied in the same manner at all times and in all countries. It is with the right of property as with most natural rights, which remain long buried in barbarism, and emerge from it gradually with the progress of civilization. We tend at present toward the plenitude of the right of property, and the most advanced nations of Europe and the new world appear to be very far from the ideal of our conception. But how many centuries has it taken to free it from the exigencies or the ignorance of the past? The savages of America, who did not cultivate the soil, had no idea of landed property; custom made sacred the right of possession only for personal property; the land was common to all; it was a vast territory for fishing and hunting, open to all belonging to the tribe, but defended with jealous care against the encroachments of the neighboring tribes. When they improved and formed societies wisely organized, as in Mexico and Peru, they were necessarily obliged to take into account the appropriation of land, but their ideas even then did not rise to individual property. "No one," says Robertson, speaking of Peru, "had an exclusive right over the portion allotted to him. He possessed it only for a year. At the expiration of that time, a new division was made according to the rank, the number and the necessities of the family. All these lands were cultivated by the common labor of all the members of the community." In Mexico the grandees had individual property, but, he adds, "the bulk of the nation possessed the lands in a widely different manner. A certain quantity of land was allotted to each district proportionate to the number of families which formed it. This land was cultivated by the labor of the whole community. The product was taken to a common warehouse, and divided among the families according to their respective needs."

—The primitive nations do not appear to have risen much higher in the conception of the idea of property. Among the pastoral peoples of the east, property, composed principally of personal property and cattle, was almost wholly in the hands of the father of the family, of the patriarch, of the chief of the tribe; such are the customs of the Arabs, and we find them to-day in Algeria, where the land belonging to the members of the same douar or village in common, is distributed among them by the caid. The same system, ascending from the head of a family to the prince, has concentrated all property in the hands of eastern despots, and enfeebled the progress of those beautiful countries by cutting into the roots of individual activity. The Jewish law had conceived the idea of the cancellation of personal debts every seven years and the restoration of alienated lands every fourteen years, at the great jubilee, with the view of retaining property in the same tribes and families: a law, which appears, however, not to have been very well observed. In Greece, Sparta and Athens there were indicated two opposite tendencies: one mutilating and suppressing almost the right of property, in order to fashion the citizen according to the will of the state; the other insuring, notwithstanding certain restrictions, civil liberty; but it is easy to see to which side the preferences of the philosophers inclined. Even in the laws, in which he tries to create a practical policy, Plato expresses himself thus: "I declare to you, as a legislator, that I regard you and your property as belonging, not to yourselves, but to yourselves, but to your family, and your entire family, with its property, as belonging still more to the state." Rome, while sanctioning territorial property more solemnly than most other ancient governments, guaranteed it to her own citizens only, and centred it in the hands of the father of the family; conquest, moreover, was still among the principal modes of acquisition, and had given rise to immense possessions of the state (ager publicus) and to the agrarian laws. During the empire the jurisconsults, under the influence of the new ideas propagated by the stoic philosophy and the Christian religion, set themselves to extricate persons too closely confined by family bonds, and property was the gainer by this advance in liberty. But in the middle ages the feudal system weighed heavily upon the land; confounding the ideas of property and sovereignty, it made the possessor of the land master of chattels and persons, bound both the one and the other by a multiplicity of bonds, the serfs to the glebe, the lords to the flef and interwove society in a vast net-work of reciprocal servitudes. Personal property, long smothered by these various systems, showed itself only with timidity, under the shelter of the franchise, in the guilds of the arts and trades; the laws of the princes protected it only by keeping it under strict tutelage; it gradually increased, however, and was even beginning to develop quite rapidly, when the discoveries of Christopher Columbus and Vasco da Gama had opened the great course of the ocean to maritime commerce. But, at this period, the absolute power of kings was being raised upon the ruins of feudalism in the principal states of western Europe, and if property freed itself somewhat de facto from bonds put on it, it de jure only changes masters without acquiring any further independence. Louis XIV., who may be regarded as the most illustrious and most fully convinced representative of absolute power, wrote, for the instruction of the dauphin: "Everything within the extent of our states, of whatever nature, belongs to us by the same title. You should be fully convinced that kings are absolute lords, and have naturally the full and free disposition of all property possessed as well by the clergy as the laity, to use as wise stewards". About a century later, in 1809, another sovereign, not less absolute, said during a session of the council of state: "Property is inviolable. Napoleon himself, with the numerous armies at his command, could not take possession of a single field, for to violate the right of property in one, is to violate it in all." His actions did not always exactly conform to this theory; nevertheless, this declaration shows what progress the idea of property had made in France, from the eighteenth to the nineteenth century. This was because the eighteenth century had passed between the two periods, and although it had not itself a clear idea of the sacred character of property, since it based it upon utility and the law, and declared it to have originated in a so-called primitive community, it had, nevertheless, shaken off the yoke of feudal servitude and the divine right of kings; it had pleaded the cause of liberty, and the revolution had made this cause triumph, by emancipating man, labor and the land; property could now be produced under its principal forms.

—Of the Objections to Property. Property triumphed with liberty, one of the forms of which it is. It was just the time when it was about to be obliged to defend itself against the most malevolent adversaries, who attacked it in the name of a pretended equality; jealous of seeing large fortunes displaying themselves side by side with extreme poverty, they foolishly believed that to deprive of the fruits of their labor those who had lawfully acquired them, was to encourage labor and to relieve poverty. The convention, guided by principles entirely different from those of the constituent assembly, slid more than once down this declivity, and following the convention, Gracchus Babœuf collected and exaggerated the doctrines of the mountain out of which he created modern communism. "When", says he, "the minority in a state have succeeded in engrossing landed and industrial wealth, and by this means hold the majority under their rod, and use their power to cause them to languish in want, the fact should be recognized that this encroachment could take place only under the protection of the government, and then what the old administration failed to do in its time to prevent the abuse or to repress it at its birth, the present administration should do, in order to re-establish the equilibrium which should never have been lost, and the authority of the law should effect an immediate change in the direction of the ultimate principle of the perfected government, of the social contract: that all should have enough, and no one too much." There have been at all times those who have dreamed of a community of property, and who could do so the better as individual property was in their time less extended and less firmly established. Plato wrote his "Republic"; Campanella, his "City of the Sun"; Thomas More, his "Utopia"; Fenelon, his "Bætica" and his "Government of Salentum"; but they created a speculative philosophy rather than a policy, and intended, above all, to trace for mankind an ideal of virtue: a mistaken, erroneous conception, but more disinterested, nevertheless, than that of modern communists. The principal object of the latter is enjoyment; their theories have been suggested by the sight of the wealth which was increasing rapidly in modern society, but distributing its favours in an unequal manner, as it proportioned them to the labor, to the intelligence, to the capital of each one and to the circumstances of production: they have wished that those less favored should have a larger share without having a burden of labor and they have conceived of no better way to do this than to limit or confiscate capital, that is to say, property, which is the lever of labor.

—The Saint-Simonians, to attain this end, proposed to organize a powerful priesthood, composed of the ablest men in science, the arts and manufactures. This priesthood would have given an impetus to all society; the priest would have been "the living law"; there would have been no longer emperor nor pope; there would have been a father "disposing of all the capital and products, and distributing them to each according to his merits "They arrived at this conclusion, that "all property is property of the church," and that "every kind of business is a religious function." They did not see that property is the very reward of the labor which they were extolling, and the fruit of the economy without which labor deprived of capital, is reduced to impotence; they did not see that hereditary transmission is the consequence and the extension of property, and under pretense of increasing social wealth, wealth which for lack of being managed and renewed by the force of individual interests, would have insensibly melted away in the hands of their high priest, they ended in an immense despotism; in order to pursue the shadow of comfort, they would have forfeited, without knowing it, their real welfare, and they did not hesitate knowingly to sacrifice liberty, the most important of all possessions in a society of civilized men. This is where the first of the systems hostile to property would have led to.

—That of Fourier dates from about the same period, that is to say, the consulate. But it found no echo until after the great eclat which Saint-Simonism caused at the beginning of the reign of Louis Phillipe. Fourier was not, properly speaking, a communist; he proclaimed liberty, and admitted capital. But, in fact, he incloses both the one and the other in a system of exploitation in common which maims them; there is no longer but one kind of liberty, that of abandoning one's self without restraint to one's various appetites; there is no longer but one kind of property, that of the phalanstery. Is that truly liberty which, with a firm will for a guide and responsibility for a guarantee, directs the spirit of man toward a definitive end? Is this truly property, that is to say, the full and entire possession of the various things which man had appropriated to himself by labor?

—The latest adversary of property is M. Proudhon, who in a famous pamphlet has taken up again a paradox of Brissot's, viz., that property is theft; M. Proudhon, does not recognize, either in possession or labor, sufficient reasons to justify property. "Since every man" he says "has the right to possess simply because he exists and can not do without material for exploitation and labor in order to live; and since, on the other hand, the number of occupants varies continually by birth and death, it follows that the quantity of material to which each laborer may lay claim is changeable, like the number of occupants; consequently, that possession is always subordinate to the population; finally, that as possession in law can never remain fixed, it is, in fact, impossible that it should become property." Elsewhere, in answering the argument of Ch. Comte, who sees a title to property in the superior value obtained by the possessor when the latter, thanks to his labors, has drawn subsistence for two persons from soil which had formerly fed but one, M. Proudhon adds: "I maintain that the possessor is doubly paid for his trouble and his industry, but that he acquires no right to the land. Let the laborer claim the fruits as his own; I grant that he should have them, but I do not understand that the ownership of the produce involves that of the material." This concession places all personal property outside of litigation, as it consists entirely of the produce which the laborer has made his own and has not consumed. There remains landed property, or, to express it more clearly, the very small portion of the value of real estate which is not the result of labor, a personal capital buried in the soil and confounded with it. Now, no economist maintains that every man, on coming into this world, has a right to a portion of it, and especially to a portion equal to that of others in the very country in which he is born. Possession is a fact, and not a right; it may give rise to a right when, having taken place upon land still unpossessed it is sanctioned by labor; that is all. Society guarantees the rights of individuals, it is her first duty; in the system, of M. Proudhon she would commit the double fault of wishing to do them too much good by seeking to make a fortune for them, and of doing them too much harm by spoiling some of a right logically anterior to herself, for the purpose of endowing others with a gratuitous benefit.—(The above note is the joint production of L. Wolowaki and Emile Levasseur.—ED.

* The word "cultivate" (to work and sow) must not be taken too literally: possession of land may also be taken by placing flocks on it, by opening a mine on it or otherwise. And if the government has taken possession in the manner indicated in the text, and an individual buys a piece of ground from it, this ground becomes individual property even if left unoccupied.

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19th Century French Political Economy Part 3 - Léon Faucher

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1: INTEREST - John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States, vol. 2 East India Co. - Nullification [1881]

INTEREST

2: LABOR, The Right to (IN FRENCH POLITICO-ECONOMIC HISTORY). - John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States, vol. 2 East India Co. - Nullification [1881]

LABOR, The Right to

3: PROPERTY - John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States, vol. 3 Oath - Zollverein [1881]

PROPERTY

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