PREFACE

This book is the result of an effort to provide a manageable body of reading for college and university classes in American economic history. It was prepared in connection with a course of lectures on that subject by the editor giving an outline of our economic development and discussing the more important economic questions which the American people have had to consider. It is intended to be used as reading to supplement such a course of lectures, or in connection with a brief text-book serving the same purpose. The short essays at the beginning of each chapter, together with the footnotes and the headings under which the selections are arranged, will make their significance and bearing tolerably clear. Some effort has been made to render it useful also in those general courses in American history which give considerable attention to the economic and social as well as to the political side of our national development. It is not designed to be a collection of documents and sources, although it is made up largely of such materials. It is rather an account of economic affairs by persons who, for various reasons, were in a position to understand them. Travelers and other contemporary observers, statesmen and publicists who took part in the discussion of economic questions, a few economists who have been interested in American history, and still fewer historians who have given attention to economics are the sources from which most of the extracts are taken. Some compilation of this sort is greatly needed by teachers in order to make available such treatment of our economic history as exists, scattered through a great number of volumes and quite impossible of use by any considerable number of students. This is an attempt to bring together a portion of these scattered fragments and to indicate by their grouping

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and arrangement with some comment the important topics to be considered.

It may be well to add here a brief statement of the editor's conception of the scope of economic history in order to furnish a clue to his selection of topics and arrangement of materials. According to his view, the economic history of a country ought to embrace three fairly distinct matters: first, it should describe and explain the economic life of the people at all stages of their development; second, it should investigate the relation of economic affairs to politics; third, it should attempt to show the influence of economic life upon the social evolution of the country. The first of these is obviously the most important and constitutes the chief task of the economic historian. It should include much more than an account of the different industries of the country and the various branches of commerce carried on by it, which historians have long been accustomed to introduce into their narrative. The whole economic organization of the country ought to be examined and its chief features set forth. The so-called factors of production — the natural agents, labor and capital - must be considered in their relations and all the circumstances affecting their efficiency pointed out. All those institutions and devices which exist primarily for the production of wealth must be shown in their development, such as the currency, the transportation system, the ownership and control of the land, and the means by which the combination of labor and of capital have been secured. Important changes in economic conditions, commercial crises, periods of prosperity and depression, should be noted and the influences which produced them investigated. The economic problems which have had to be met ought to be considered and their discussion reviewed. In a word, economic history ought to illustrate and render concrete the science of economics so far as the experience of one country will do it. The economic historian ought to apply the science of economics to past conditions and past problems in exactly the same way that it is ordinarily applied to current conditions and current problems.

Such is the first and principal object of economic history. The other matters do not so obviously come within its scope. There are, however, good reasons for giving them a considerable amount of attention. The relation of politics to economics is a double one. It includes, on the one hand, the influence of the government on economic affairs, — its economic policy, — and, on the other, the influence of economic conditions on political action. The first of these has always been considered a proper subject for the consideration of economists, and more attention has been given to it than any other part of our economic history. The influence of economic conditions upon our political affairs has been enormous, and no correct understanding of American politics is possible without taking it into consideration. The economic historian better than any one else should be able to investigate economic conditions and estimate their influence upon the people. As to the third matter, whatever one may think of the so-called economic interpretation of history in general, no one can doubt that the character of the American people, as well as the form and spirit of their institutions, has been profoundly influenced, to say the least, by their economic life. It is in economic affairs that we have shown the greatest originality and energy. These have absorbed our interest more completely perhaps than that of any other people of modern times. No study of American economic life can be considered complete or satisfactory which does not attempt to show the way this fact has influenced American society. What marks has it left upon the national character and the structure of society? Why, for example, has the Anglo-Saxon developed a different character in the United States than in other new countries, like Canada and Australia? What was it that created the equality that so impressed De Tocqueville in the thirties? What has so completely destroyed that equality since that time and brought almost as great inequality into American as is to be found in European society? It is difficult no doubt, perhaps impossible, to find definite answers to such questions as these, but they should not for that reason be ignored. The economic historian