The Online Library of Liberty

A project of Liberty Fund, Inc.

• Political Economy
• Part I.: Character and Logical Method of Political Economy.
• Part II.: Production.
• Chapter I.: Land and Natural Agents.
• Chapter II.: Labor.
• Chapter III.: Capital: Its Origin and Office.
• Chapter IV.: The Productive Capability of a Community.
• Part III.: Exchange.
• Chapter I.: The Theory of Value.
• Chapter II.: The Theory of International Exchanges.
• Chapter III.: Money and Its Value.
• Chapter IV.: Money and Its Value—continued—debased Coin: Seigniorage.
• Chapter V.: Inconvertible Paper Money.
• Chapter VI.: Bank Money.
• Chapter VII.: The Reaction of Exchange Upon Production.
• Part IV.: Distribution.
• Chapter I.: The Parties to the Distribution of Wealth.
• Chapter II.: Rent.
• Chapter III.: Interest.
• Chapter IV.: Profits.
• Chapter V.: Wages.
• Chapter VI.: Wages.—continued.
• Chapter VII.: Two Other Shares In Distribution.
• Chapter VIII.: The Reaction of Distribution Upon Production.
• Part V.: Consumption.
• Chapter I.: Subsistence: Population.
• Chapter II.: The Appearance of New Economic Wants.
• Chapter III.: Consumption: the Dynamics of Wealth.
• Part VI.: Some Applications of Economic Principles.
• I.: Usury Laws.
• II.: Industrial Co-operation.
• III.: Political Money.
• IV.: Pauperism.
• V.: The Doctrine of the Wage-fund.
• VI.: The Multiple Or Tabular Standard of Deferred Payments.
• VII.: Trade Unions and Strikes.
• VIII.: The Knights of Labor.
• IX.: Attacks On the Doctrine of Rent.
• X.: The Nationalization of the Land.
• XI.: The Banking Functions.
• XII.: The Present Banking System of the United States.
• XIII.: Foreign Exchanges.
• XIV.: Bi-metallism.
• XV.: The Revenue of the State.
• XVI.: The Principles of Taxation.
• XVII.: Protection Vs. Freedom of Production.
• XVIII.: Socialism.

CHAPTER VII.

THE REACTION OF EXCHANGE UPON PRODUCTION.

227. Evil Possibilities involved in the Division of Labor.—We have seen that the division of labor is an essential condition of large and varied production. But the division of labor, when carried far, involves possibilities of loss and disaster. These become more and more serious as production becomes more and more extended and complicated, until, in the most highly organized industrial state, we have to explain the failure of a community to realize its full productive capability, mainly by reference to industrial misadventures and even, at times, a partial paralysis of the productive powers of the community, originating in this very source.

The cause of the trouble adverted to is found in misunderstandings between producers and consumers, whom it is the nature of the division of labor to set apart, and, in an advanced industrial state, widely apart, often by half the circumference of the globe.

It is evident that, were there no division of labor into separate occupations, the relation between production and consumption would be a simple one. Production would, within the capabilities of the several agents concerned, viz., land, labor, and capital, only be limited by the effective desire of the several individuals of the community to consume wealth. Each man would work by himself, for himself, producing those things, and those only, which he wished personally to eat, drink or wear, or house or warm himself withal. There would here be no question of a market, for every man would be his own customer.

From this point, we may mark off three stages of industrial development.

228. The First Stage.—The first is where distinction of trades is introduced, and men no longer consume all, or perhaps any part, of the articles they have produced; yet where consumers live near the producer, and are personally known to him. In this condition, production, except in agriculture, generally waits for an order from the consumer. If goods are produced in advance of an order, the kinds are few, the forms are simple, the styles standard. There is, moreover, the reasonable expectation that some certain person, or some one out of a certain group of persons, will surely and soon need the goods, and will become the consumer. Here, we see, is not much liability to a misunderstanding between producer and consumer.

229. The Second Stage.—The second stage is where the element of personal acquaintance between producer and consumer disappears. Production no longer waits for orders, but anticipates demand. Goods are produced for a general market, and upon a calculation of the quantity probably to be required. The individual producer has no longer his own circle of customers; but competes with other producers for the largest possible share of the patronage of a wide circle of consumers. Yet it is still true that production is carried on by artisans working singly or in small groups. Tools and implements are simple and inexpensive; there is little of “plant” or fixed capital. Fashions are few and styles remain standard through long periods of time. Here, manifestly, the opportunity for misunderstandings between producer and consumer exists in a higher degree than under the former conditions described. Yet even here production may still go on with tolerable uniformity: all hands working steadily through all the seasons of the year, with a reasonable assurance that all goods which are well made, will find a market at fairly remunerative prices.

230. The Third Stage.—The third stage is reached, when increasing facilities of communication make the world one trading community. Then production becomes highly diversified, and the specialization and localization of trades proceed so far that one country, or perhaps one group of towns, produces the greater part of all the goods of a certain sort which are consumed throughout the world. Then luxury and refinement of living are carried to the maximum, so that not only are classes of goods multiplied almost indefinitely, but fashions and modes enter till standard styles almost disappear, each season bringing minute modifications of demand which are not to be satisfied except by an exact compliance, even the colors and shades of one year becoming intolerable the next.

It will appear that conditions like the foregoing increase enormously the liability of misunderstanding between producers and consumers. The possibilities of error in supplying the markets, no longer of a village, but of the world, become tremendous.

231. The Appearance of the Entrepreneur.—But it must further be added, that powerful and complicated machinery is now introduced, and costly structures and “plant” are required. Great numbers of operatives, of both sexes and all ages and of every degree of strength and skill, have to be gathered under one roof, each knowing only his or her own part; all requiring to be instructed and equipped, organized, energized, and directed by the intelligence and will of one man. In other words, we have reached the entrepreneur stage (pars. 106–9) of industrial development.

The introduction of the principle of mastership into industry makes a great gain of productive power; but this gain is not secured without an appreciable loss. The entrepreneur (to anticipate, for a moment, a topic in Distribution), finds his motive for organizing and conducting the great enterprises of modern industry in the profits (pars. 302, 429) which he hopes individually to realize. His entire personal interest is found here. It is, perhaps, to secure a net profit of twenty thousand dollars, that he leases land and buildings, and borrows capital, and hires the labor requisite to achieve an annual product of half a million of dollars. If, then, the conditions of trade and industry are such as to destroy for the time his profit; much more if they are such as to threaten a loss which will impair the integrity of the capital, his interest in production is greatly diminished, if not destroyed. He will either cease producing entirely, or, which is more likely, will contract the scope of his operations. Were he to produce %500,000 worth, as heretofore, a small fraction of his stock unsold might sweep away his own gains for the year, or leave a deficit; whereas, were he to produce but %400,000 or %350,000 worth, he would probably dispose of his stock at prices high enough to make himself good and perhaps leave a small margin of profit, while holding his laboring force and his customers together.

232. Fluctuations in Production.—Such being the conditions under which production takes place, under the modern organization of industry, we note that there is in the nature of the case a continuous loss through the failure of the producing body to meet, promptly and precisely, the demands of the body of consumers. Wherever, from any cause, there is a failure correctly to anticipate those demands and supply them perfectly, in time, in degree, in form, loss of value results. That there should be such failure in part, is inevitable.

But the loss which we had chiefly in view in beginning this chapter, and with reference to which we have written this long introduction, is not the steady, continuous loss of value due to the inability of those who direct production to comprehend, fully and seasonably, the varying demands of distant markets. It is the occasional loss resulting from the frequent and often furious fluctuations which are involved in the modern organization of trade and industry.

From that organization the alternation of highly stimulated and of deeply depressed production appears to be inseparable. The course of trade and industry through the cycle which the conditions of modern life seem to have established, is so well described by Prof. Alfred Marshall that I can not forbear to give it in full:

“The beginning of a period of rising credit is often a series of good harvests. Less having to be spent in food, there is a better demand for other commodities. Producers find that the demand for their goods is increasing, they expect to cell at a profit, and are willing to pay good prices for the prompt delivery of what they want. Employers compete with one another for labor; wages rise; and the employed in spending their wages increase the demand for all kinds of commodities. New public and private companies are started, to take advantage of the promising openings which show themselves among the general activity. Thus the desire to buy and the willingness to pay increased prices grow together; credit is jubilant and readily accepts paper promises to pay. Prices, wages and profits go on rising; there is a general rise in the incomes of those engaged in trade; they spend freely, increase the demand for goods, and raise prices still higher. Many speculators, seeing the rise, and thinking it will continue, buy goods with the expectation of selling them at a profit. At such a time a man who has only a few hundred pounds can often borrow from bankers and others the means of buying many thousand pounds' worth of goods; and every one who thus enters into the market as a buyer, adds to the upward tendency of prices, whether he buys with his own or with borrowed money.

“This movement goes on for sometime, till at last an enormous amount of trading is being carried on by credit and with borrowed money. Old firms are borrowing, in order to extend their business; new firms are borrowing in order to start their business; and speculators are borrowing in order to buy and hold goods. Trade is in a dangerous condition. Those whose business it is to lend money are among the first to read the signs of the times; and they begin to think about contracting their loans. But they can not do this without much disturbing trade. If they had been more chary of lending at an earlier stage, they would simply have prevented some new business from being undertaken; but when it is once undertaken, it can not be abandoned without a loss of much of the capital that has been invested in it. Trading companies of all kinds have borrowed vast sums with which they have begun to build railways and docks and ironworks and factories; prices being high they do not get much building done for their outlay; and though they are not yet ready to reap profits on their investment, they have to come again into the market to borrow more capital. The lenders of capital already wish to contract their loans; and the demand for more loans raises the rate of interest very high. Distrust increases; those who have lent become eager to secure themselves and refuse to renew their loans on easy or even on any terms. Some speculators have to sell goods in order to pay their debts; and by so doing they check the rise of prices. This check makes all other speculators anxious, and many rush in to sell. For a speculator who has borrowed money at interest to buy goods may be ruined if he holds them a long time even while their price remains stationary; he is almost sure to be ruined if he holds them while their price falls. When a large speculator fails, his failure generally causes that of others who have lent their credit to him; and their failure again that of others. Many of those who fail may be really ‘sound,’ that is, their assets may exceed their debts. But though a man is sound, some untoward event, such as the failure of others who are known to be indebted to him, may make his creditors suspect him. They may be able to demand immediate payment from him, while he can not collect quickly what is owing to him; and the market being disturbed he is distrusted; he can not borrow, and he fails. As credit by growing makes itself grow, so when distrust has taken the place of confidence, failure and panic breed panic and failure. The commercial storm leaves its path strewn with ruin. When it is over, there is a calm, but a dull, heavy calm. Those who have saved themselves are in no mood to venture again; companies whose success is doubtful are wound up; new companies can not be formed. Coal, iron and the other materials for making fixed capital fall in price as rapidly as they rose. Iron works and ship, are for sale, but there are no buyers at any moderate price.

“Thus the state of trade, to use the famous words of Lord Overstone, ‘revolves apparently in an established cycle. First we find it in a state of quiescence—next improvement, growing confidence, prosperity, excitement, overtrading, convulsion, pressure, stagnation, distress, ending again in quiescence.’”

233. Periodicity of Panics.—So frequently have trade and industry made this weary round, that the writers on finance have undertaken to establish the law of the periodicity of panics and hard times. The term of ten years is that most often fixed upon for the completion of the cycle. There is at least a very curious series of coincidences to give some substance to this hypothesis.

But whether there are, indeed, forces operating which bring about commercial convulsions and industrial distress at regular intervals, or not, it seems clear that, under the conditions depicted in the first part of this chapter, it is inevitable that the producing and exchanging body should alternate frequently and even violently between a state of depression and partially suspended activity, and a state of highly animated, excited, almost convulsive exertion, in which the agencies alike of production and of exchange are strained to their utmost to meet demands which are stimulated to the highest extravagance by a universal passion of speculation.

234. Loss of Productive Force.—It is evident that this is not an order of things under which the largest production of wealth takes place. The two extremes do not offset each other, with the same result as if production had been proceeding calmly and equably through the entire period. On the contrary, each extreme involves great and permanent loss of productive force. There is much misdirection of energy, much waste of material, much vital injury to labor power and capital power, in the haste and strain and fever of highly stimulated effort.

On the other hand, the long, dull spell of inactivity that succeeds is not given wholly to recuperation of exhausted energies, renewal of stocks of materials, repair of machinery and plant. It is not a waste of time, merely, involving a proportional loss of productive power: that inactivity becomes itself a cause of mischief. It induces in the working classes a lethargy, a despondency, a recklessness, which are forces productive of evil. It generates habits of lounging and of drinking, perhaps of tramping, which may not be shaken off even with renewed employment.

235. “Hard Times.”— Nothing needs to be added, of clearness or of force, to Prof. Marshall's statement of the course which trade and industry run from the time they first cross the line of reviving prosperity to the moment they plunge into the abyss of broken credit, falling markets, commercial panic, failing banks, and general distress. But there is one industrial phenomenon of great significance in respect to our question, why the actual production of a community comes so far short of its productive capability? which economists have not been accustomed to explain: this is, the long continuance of the periods of industrial depression and of restricted production.

It will readily appear that, after running such a rig as has been described, the agencies of trade and industry will require time to refit. The track must be cleared of the wreck. The places left vacant by the casualties of the great crash must be filled by new men. But the actual time covered by the period of depression is sometimes much longer than can be accounted for by the mere loss and destruction of a panic. “Hard Times” are protracted long after the capital power and the labor power of the community are in condition to resume their interrupted functions.

For several years after the panic of 1873, in the United States, industry did not reach its former proportions. During that period vast amounts of labor power and capital power remained unproductive. Tens of thousands, if not hundreds of thousands, of laborers were unemployed; an even greater number were employed only on half or three-quarters time. Hundreds of furnaces were out of blast; thousands of waterwheels ceased to turn; thousands of engines stood still. Yet, during this time, these workmen had occasion to consume food and clothing for themselves and their families; needed to work to earn the means, and were honestly willing, yea, heartily desirous to work. All this time the owners of capital were ready to secure a return for their investments, if they could find opportunity; the conductors of business were eager to win a profit by employing their abilities and experience in productive industry. Why, then, was it, when all were willing to work and needed to work, that they did not work? What was the force that kept these laboring men, these water-wheels and engines, these capable conductors of business, idle so long?

236. Diversifled Production.—We have seen that, as society makes progress toward a minuter organization of industry, productive capability is enhanced, but that, coincidently, at each stage, the opportunities for misunderstanding between the body of producers and the body of consumers are greatly multiplied, while labor power and capital power fall more under the control of men of exceptional abilities, with whom comes to rest all initiative in production.

Now, if we examine the list of articles sold in the market, in a modern community, we shall find some of them supplying wants which are constant and vital. We shall find others which minister to the most delicate tastes or gratify only the merest casual fancies. In a country like England, France, or the United States, tens of thousands of laborers are employed in producing articles of the most trivial character: fireworks, toys, bonbons, fripperies of dress, while hundreds of thousands more are employed in producing articles deprivation of which would not induce cold or hunger, or impair health, or be incompatible with public decency or personal self-respect.

237. Propagation of Economic Shocks.—Let us suppose, as the result of a period of prosperity, the variety of products to have been carried to a very high point, when a disaster, primarily affecting either industry or trade, it matters not, befalls a community. It may be a great fire, or a great flood, or an epidemic of yellow fever, or the destruction of some leading crop. No matter where it comes from, or where it first strikes, the immediate effect is to diminish the productive power of the community, as a whole. At once the consumption of those articles which are least essential to comfort and decency is checked. If we suppose the thousands of articles known to the market to form twenty-six groups, A to Z, their utility to the consumer regularly declining from the top of the list to the bottom, we may assume that the first effect of the calamity will be to reduce the consumption of articles forming groups X, Y and Z. No matter, as we said, where the blow first falls, the laborers affected produce for the time less, and must limit their own consumption accordingly, which they do by restricting their use of articles below W.

The labor and capital employed in groups X, Y and Z, can not easily or soon be transferred to other groups. The laborers, especially, find that the present is no time to seek employment in other avocations. They must stay where they are, and do the best they can there. Hence they find themselves employed on part time, and at reduced wages. The sums they formerly earned were expended in purchasing articles all the way from A to Z. In their sudden poverty they are obliged to cut off their own consumption of all articles except those which are necessary to comfort and decency, say from A to M, inclusive.

But this action of producers X, Y and Z involves a diminished demand for products, N to W. Each group of producers, at this end of the line, are obliged to curtail still further their consumption of articles X, Y and Z, while producers from S to W begin to restrict their use of articles below T. This action, however, becomes at once the cause of new effects. The unfortunate representatives of X, Y and Z are now obliged wholly to deny themselves all products from H downwards; producers T to W, in turn have to give up indulgence in products below N; producers N to S, in consequence, no longer purchase products below R.

The shock next reaches groups I to M, who have to diminish their consumption, to correspond to the reduced demand for their own products; X, Y and Z are now glad to get enough of A, B, C and D to barely subsist upon; while S, T, D, U, V and W carry their retrenchment upwards, till they stop at M. And so the movement goes forward until the favored producers A to D—favored, in that the articles they produce are of vital importance—experience some diminution of demand, and, producing less in consequence, have less to give in exchange for the products of others. So a stone, thrown into a lake, sets in motion a wave which extends outwards in all directions till it reaches the bank, even in the most retired nook along the shore.

238. Aggravation of Economic Shocks. — It is evident that, were the community perfectly intelligent and self-possessed, the ultimate result of this play of forces would be the distribution of the whole initial shock over the entire producing body. No addition would be made to the shock as the movement proceeded, and the effect upon each successive group of producers reached would be less and less. Those producing articles the most essential to life, health and social decency would suffer to hardly an appreciable extent, as the wave set in motion by the rock thrown into the lake becomes the merest ripple against the shore.

This is all that is necessarily involved in the propagation, through economic media of perfect elasticity, of an original blow like that assumed. In fact, industrial injuries are at times distributed in this way throughout the producing body, without panic, without apprehension, even without observation.

Let, however, the shock be sharp and severe, and communicated in some startling form, and let it occur when the public mind is in an apprehensive mood, or when the commercial body is unstrung by political or social disturbances, and we may see the impulse propagated with increasing force, from subject to subject, till the movement acquires fearful violence.

239. The Industrial Panic.—The commercial panic we are all familiar with, by experience or report. We know how some slight cause, acting on the fears and imaginations of men, will overthrow the financial structure of a nation in a few weeks, perhaps days, prostrating the proudest houses, and spreading ruin far around. There is nothing that can stand against panic. One man's fear makes another man afraid. One man's fall brings down another, who, but for that, might have stood firm; and thus the mischief proceeds, from bad to worse. So much for the trading body.

The progressive aggravation and acceleration of the forces of mischief throughout the producing body takes place not less surely, though it is here less ostensive.

A manufacturer feels the demand for his goods fall off somewhat. In ordinary times he would receive the fact as an intimation to reduce his production, but only to a corresponding extent. Indeed, in good times he would receive that intimation in a somewhat skeptical spirit. He would not be disposed to believe that any serious check was to be experienced. He would look to see trade start up again, and, in this mood, would reduce his production somewhat less than correspondingly. To that extent, he would speculate: that is, would anticipate events and discount the future. For the moment, then, he would transmit the shock, not aggravated but mitigated.

But let the shock be at first severe, and let it come upon the public mind in a suspicious mood, and the matter will take another turn. The merchant feels the demand for his goods fall off abruptly. He fears there is more to come. He is determined not to be caught with a large stock on his hands, and, in his orders to the manufacturer, he exaggerates the natural and proper effect of the change in the market. The manufacturer, on his part, knows nothing directly of the actual falling off in demand. He only learns it as it comes to him heightened by the apprehensions of the merchant. In his turn, he exaggerates the evil and reduces his production more than proportionally. His anxiety now is, not to make a profit, but to avoid loss. He knows he will be safe if he runs his mill on half or three-quarters time.

And it is here that the cause indicated in par. 231 begins to operate with great and destructive force. The entrepreneur's personal concern in production being derived wholly from his contemplated profit, which may be but a small percentage of the value of the goods produced, his individual interests may, for the time, become divorced from those of his laborers or of the general community. In his anxiety to save himself, he may act with as much needless cruelty as men do when panic-stricken in a fire or a wreck.

240. But the action of manufacturer Z, whether wisely or unwisely taken, becomes, as we have seen, an element in the conditions of production for all the lower letters of the alphabet. As he pays less wages, his workmen have less to spend for the products of other branches of industry. The merchants in these lines, feeling the falling off in demand, exaggerate it in their orders to manufacturers, especially manufacturers X and Y. These, in turn, apprehensive of worse to come, curtail their operations more than correspondingly, and so the movement proceeds, with increasing violence.

And, let us repeat, however unnecessary Z's action in reducing his production below a certain point, yet, if he actually does so, that action makes a corresponding reduction in X and Y's operations a necessity of their situation: just as truly so as if Z had a good reason for what he did. And if, in turn, X and Y become alarmed, and overdo the thing, that of itself constitutes an obligation upon manufacturers higher in the alphabet to cut down work and wages.

241. How Far may this be Carried?—Two questions arise upon this view of the power of apprehension and suspicion to aggravate the force of any industrial or financial shock. The first: how far may it be carried? the second, how long may it last?

May the movement to check production proceed until all industry is locked fast in “a vicious circle”: no one producing, because others will not consume, while no one is able to consume the products of others because he himself produces nothing with which to buy them?

I answer, no. The staple industries, especially those yielding the necessaries of life, will never be suspended. The demand for their products is so constant and certain that panic has little power over them. Groups A to D will, therefore, continue to produce nearly as much as before; not, indeed, quite so much, because there will be individuals, thrown out by the revolution at the foot of the alphabet, who are unable to find a new place where they can produce enough to purchase even the barest subsistence. Groups E to H, or K, moreover, having to do with articles essential to comfort and social decency, will withstand the shock communicated to them sufficiently to maintain a production not very far below that of good times.

Now, so long as A to D produce liberally, and E to H or K, still produce considerably, all persons employed within those groups will have the means of purchasing the products of groups further down the list; and so industry will be kept alive, though but just alive, in those groups which produce articles not essential to life, or health, or decency.

242. How Long may such a Condition Last?—I answer: in theory, it may last indefinitely. Practically, it is liable to be terminated, after a longer or shorter period of suspense, by reviving courage and enterprise on the part of men of affairs, or through the stimulus to production administered from some quarter. It may be so slowly as to be almost imperceptible; it may be so rapidly as to outrun calculation, that the expansion takes place. This will depend much on the natural temper of the community; much on the immediate cause provoking renewed enterprise; much on accident.

The one essential condition is that speculation be initiated, that is, that men begin to look ahead, to anticipate demand, and to discount the future.

One man begins to produce, no longer on orders, no longer cautiously and fearfully, as if it were too much to believe that his goods will be taken off his hands, but in a sanguine spirit, assuming the initiative in production, and boldly encountering its risks. Producing more largely, his workmen have more to offer for the products of other industries, which is of itself a reason for a larger production in these branches, whose managers and proprietors respond in the same spirit. Finding the demand increasing, they act as if they believed it were about to increase still further. They produce somewhat in anticipation, and thus give their hands more to offer in exchange for the products of still other industries. From day to day the movement proceeds, gathering force as it goes, and production swells continually under the contagious influence of hope and courage, just as before it shrank and shriveled under the breath of fear and panic.

I have said that peculiarities of national character have much to do with the speedy or tardy revival of production. Nowhere ought recovery to be more rapid than in the United States. Among no people is there more of elasticity, greater alertness of action, more readiness to assume responsibilities and to run risks. Nowhere, too, does nature afford an ampler margin for subsistence, or more abundant material for the repair of mistakes and misadventures.

243. Two Examples.—The history of the panic of 1857 offers a capital illustration of the facility with which the American people recover from the sharpest contraction of productive industry, where nothing withstands the revival of trade, and where no second shock remains to be experienced. The country was in a generally sound condition, both as to capital and credit, when the blow fell. As the result, industry had scarcely shrunk to its minimum, under the influence of panic, when the enterprise and courage of merchants and manufacturers began to cause expansion. Within a few months production was again at the limits of our capital power and labor power.

When the panic of 1837 came, the country was in a wretched condition, through the misapplication of capital and the wide extension of credit.

The buoyancy of the national temper led, even at this time, to a speedy revival; but the succeeding shock of 1839 threw the country back again, and the fear and distrust thereby engendered kept the energies of the nation in a state of partial repression through a long period. Such may be the influence of a single instance of hard fortune upon reviving industry.

Quite as prejudicial to expanding production is the continual apprehension of hostile or meddlesome legislation. When the whole body of business men are sore from disasters; when much of the industrial and commercial structure still lies in ruins, it takes but little to check the disposition again to adventure capital. That little is abundantly supplied by the popular apprehension of legislation unfavorably affecting money and credit. It need not be a great thing under a man's arms which will so increase his margin of buoyancy as to enable him to float for hours. It is a very small thing around a man's neck which will so diminish his margin of buoyancy—narrow at the best—as to drag him to the bottom.

PART IV.

DISTRIBUTION.