53 chapters
11 hour read
Selected Chapters
53 chapters
THE FORGOTTEN MAN AND OTHER ESSAYS
THE FORGOTTEN MAN AND OTHER ESSAYS
BY WILLIAM GRAHAM SUMNER EDITED BY ALBERT GALLOWAY KELLER NEW HAVEN YALE UNIVERSITY PRESS LONDON: HUMPHREY MILFORD OXFORD UNIVERSITY PRESS MDCCCCXVIII Copyright , 1919, By Yale University Press NEW HAVEN YALE UNIVERSITY PRESS LONDON: HUMPHREY MILFORD OXFORD UNIVERSITY PRESS MDCCCCXVIII Copyright , 1919, By Yale University Press...
21 minute read
PREFACE
PREFACE
With the present collection the publication of Sumner’s Essays comes to an end. The original project of publishers and editor contemplated but a single volume—“War and Other Essays”—and they accordingly equipped that volume with a bibliography which was as complete as they then could make it. But when, later on, other materials came to be known about, and especially after the discovery of a number of unpublished manuscripts, the encouraging reception accorded to the first venture led us to publi
5 minute read
PREFACE
PREFACE
During the last fifteen years we have had two great questions to discuss: the restoration of the currency and civil-service reform. Neither of these questions has yet reached a satisfactory solution, but both are on the way toward such a result. The next great effort to strip off the evils entailed on us by the Civil War will consist in the repeal of those taxes which one man was enabled to levy on another, under cover of the taxes which the government had to lay to carry on the war. I have take
3 minute read
Chapter I DEFINITIONS: STATEMENT OF THE QUESTION TO BE INVESTIGATED
Chapter I DEFINITIONS: STATEMENT OF THE QUESTION TO BE INVESTIGATED
1. The statesmen of the eighteenth century supposed that their business was the art of national prosperity. Their procedure was to form ideals of political greatness and civil prosperity on the one hand, and to evolve out of their own consciousness grand dogmas of human happiness and social welfare on the other hand. Then they tried to devise specific means for connecting these two notions with each other. Their ideals of political greatness contained, as predominant elements, a brilliant court,
21 minute read
Chapter II PROTECTIONISM EXAMINED ON ITS OWN GROUNDS
Chapter II PROTECTIONISM EXAMINED ON ITS OWN GROUNDS
20. It is the peculiar irony in all empirical devices in social science that they not only fail of the effect expected of them, but that they produce the exact opposite. Paper money is expected to help the non-capitalist and the debtor and to make business brisk. It ruins the non-capitalists and the debtors, and reduces industry and commerce to a standstill. Socialistic devices are expected to bring about equality and universal happiness. They produce despotism, favoritism, inequality, and unive
40 minute read
Chapter III PROTECTIONISM EXAMINED ADVERSELY
Chapter III PROTECTIONISM EXAMINED ADVERSELY
62. I have so far examined protectionism as a philosophy of national wealth, assuming and accepting its own doctrines, and following them out, to see if they will issue as is claimed. We have found that they do not, but that protectionism, on its own doctrines, issues in the impoverishment of the nation and in failure to do anything which it claims to do. On the contrary, an examination in detail of its means, methods, purposes, and plans shows that it must produce waste and loss, so that if it
42 minute read
Chapter IV SUNDRY FALLACIES OF PROTECTIONISM
Chapter IV SUNDRY FALLACIES OF PROTECTIONISM
108. I can now dispose rapidly of a series of current fallacies put forward by the protectionists. They generally are fanciful or far-fetched attempts to show some equivalent which the taxpayer gets for his taxes. 109. I know of no case where this hope has been realized, although we have been trying the experiment for nearly a century. The weakest infants to-day are those whom Alexander Hamilton set out to protect in 1791. As soon as the infants begin to get any strength (if they ever do get any
36 minute read
Chapter V SUMMARY AND CONCLUSION
Chapter V SUMMARY AND CONCLUSION
147. I have now examined protectionism impartially on its own grounds, assuming them to be true, and adversely from ground taken against it, and have reviewed a series of the commonest arguments put forward in its favor. If now we return, with all the light we have obtained, to test the assumptions which we found in protectionism, that the people would not organize their industry wisely under liberty, and that protective taxes are the correct device for bringing about a better organization, we f
9 minute read
TARIFF REFORM32
TARIFF REFORM32
A year and a half ago a gentleman who had just been reëlected, by Republicans, to the Senate of the United States, made a five-minute speech acknowledging the honor. In respect to public affairs he uttered but one opinion: that the people of the United States were confronted by a most serious problem, viz. , how to reduce taxation. On the face of it, this was a most extraordinary statement, and the chronicler or historian might well take note of it as a new event in the life of the human race. S
8 minute read
WHAT IS FREE TRADE?33
WHAT IS FREE TRADE?33
There never would have been any such thing to fight for as free speech, free press, free worship, or free soil, if nobody had ever put restraints on men in those matters. We never should have heard of free trade, if no restrictions had ever been put on trade. If there had been any restrictions on the intercourse between the states of this Union, we should have heard of ceaseless agitation to get those restrictions removed. Since there are no restrictions allowed under the Constitution, we do not
7 minute read
PROTECTIONISM TWENTY YEARS AFTER34
PROTECTIONISM TWENTY YEARS AFTER34
I think it must be now nearly twenty years since I have made a free-trade speech or been able to take share in a free-trade dinner. When I was invited here this evening I thought I would try to come for the pleasure of hearing the gentlemen, especially the members of Congress, who were announced to speak here. I have been so out of health that it has been impossible for me to sit up evenings or to attempt public speaking in the evenings, but things are going a little better and I will make an at
11 minute read
PROSPERITY STRANGLED BY GOLD35
PROSPERITY STRANGLED BY GOLD35
Some of the silver fallacies were stated by Mr. St. John, in his address before the silver convention, with such precision that his speech offers a favorable opportunity for dealing with them. He says that “it is amongst the first principles in finance that the value of each dollar, expressed in prices, depends upon the total number of dollars in circulation.” There is no such principle of finance as the one here formulated. The “quantity doctrine” of currency is gravely abused by all bimetallis
6 minute read
CAUSE AND CURE OF HARD TIMES36
CAUSE AND CURE OF HARD TIMES36
It is an essential part of the case of the silver men that the country is having “hard times.” The bolters from the Republican convention say, in their manifesto: “Discontent and distress prevail to an extent never before known in the history of the country.” This is an historical assertion. It is distinctly untrue. There is no such discontent and distress as there was in 1819, or in 1840, or in 1875, to say nothing of other periods. The writers did not know the facts of the history, and they ma
7 minute read
The Program.
The Program.
In two former articles I have discussed some points which are presented by the advocates of the free coinage of silver, on the assumption that their project was feasible and their conception of its operation correct. They have laid out a program; free coinage, silver standard, great demand for silver, rise of prices, rise in the value of silver, cancellation of debts, prosperity. They now admit that this program would involve a panic, but it would come out, they say, at the desired result in two
39 minute read
Free Silver Means Fiat Paper Money.
Free Silver Means Fiat Paper Money.
The amount of circulating cash of all kinds in the hands of the people at the present time is about nine hundred millions. If the dollar was reduced to half its present value, and if allowance was made for reserves, two thousand million silver dollars would be the specie requirement of the country. We already have nearly five hundred millions of such dollars. Hence the country could not use at the utmost, if the new silver dollar was worth not more than half the present gold dollar, and if the t
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Limit of the Amount of Silver which could be Absorbed.
Limit of the Amount of Silver which could be Absorbed.
Let us, however, proceed upon the assumption that the plan proposed is sincere, and that the attempt would be made to carry it out in good faith. The circulation in the hands of the people would be paper, for they would become sick of silver and revolt against it. There would then be two thousand million dollars in paper afloat, each “dollar” being of silver and worth half a present gold one. We have now five hundred million silver dollars. At the utmost not more than another five hundred millio
1 minute read
It is Impossible Indefinitely to Increase the Circulation.
It is Impossible Indefinitely to Increase the Circulation.
The power of our currency to absorb silver is not unlimited. People seem to believe that they can go on and increase the monetary circulation indefinitely. This is possible with paper, which has no commodity value and cannot be exported, always understanding that the paper will depreciate as issued, but it is not possible with any money which has commodity value. When silver has been put into circulation here to such an amount that all the fictitious value given to it by the coinage law has been
57 minute read
Antagonistic Interests of Miners and Populists.
Antagonistic Interests of Miners and Populists.
What share, then, would the silver-miners get in the results of the enterprise? They could get none unless the new silver was bought only of them, and only bought gradually as they produced it, and bought at a rising price as the demand of debtors acted upon it. Not one of these conditions would be fulfilled. The debtors and the silver-miners really have antagonistic interests at every point. It has been proposed that only American silver should be accepted at the mint. That plan is impracticabl
1 minute read
The Rise of Prices.
The Rise of Prices.
The rise in prices would regularly occur only as the new silver or paper was put out, but as the consequences would all be discounted it would be sudden and rapid. It would not, however, affect all things at the same time or to an equal degree. It is here that one of the first disappointments would occur. It is not possible to put up prices when and as one would like to do it, even when the rise is due to inflation. The effect cannot all be distributed at once. An advance in price reacts on busi
58 minute read
Where the Expected Gains would Go.
Where the Expected Gains would Go.
It is said that the farmer would sell his grain and cotton, as now, for gold; that he would exchange the gold for silver; would get the silver coined and would pay his debts with it. Would any individual farmer do this? Would any one man go through the steps of this operation?—see the buyer of his products, handle the gold and silver, go to the mint? Certainly not. All these operations would go on through the commercial and financial machinery. They would be executed by different individuals, in
1 minute read
Playing into the Hands of the Money Sharks.
Playing into the Hands of the Money Sharks.
We hear fierce denunciations of what is called the “money power.” It is spoken of as mighty, demoniacal, dangerous, and schemes are proposed for mastering it which are futile and ridiculous, if it is what it is said to be. Every one of these schemes only opens chances for money-jobbers and financial wreckers to operate upon brokerages and differences while making legitimate finance hazardous and expensive, thereby adding to the cost of commercial operations. The parasites on the industrial syste
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The Re-monetization of Silver.
The Re-monetization of Silver.
An attempt is now made to impugn the coinage act of 1873 under various points of view, in order to lay a foundation for the claim that it is only sought now to re-monetize silver. Not a single imputation on the act of 1873 has ever been presented which will stand examination, but, if that were not so, that act was like any other act of Congress which has become the law of the land, and under which we have all been obliged to live for twenty-five years. We cannot go back and undo the law and live
1 minute read
Financial Institutions as Debtors.
Financial Institutions as Debtors.
The great financial institutions are intermediaries between debtors and creditors. They have received capital from some people and lent it to others. They have to recover it and pay it back. If they only recover it at fifty cents on the dollar, they can only repay it in the same way. What this would mean is that the creditors of those institutions would be paid “dollars,” but that when they tried to re-invest them they would find that prices had risen to a greater or less degree in those dollars
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Small Mortgagors.
Small Mortgagors.
The small mortgagors are either wages-men or farmers. As to the wages-men, their wages would undoubtedly go up in time as prices went up, but in the paralysis of industry which would be the first distinct effect of the plan, as soon as it was known that the experiment was to be made, immense numbers of wages-men would be thrown out of employment, and all wages would fall on account of this condition of the labor market. Later, when things began to adjust themselves to the new basis, wages would
1 minute read
Farmer-Mortgagors.
Farmer-Mortgagors.
The farmers expect to double the price of their products, and so get silver to pay off their mortgages. It has been shown elsewhere 39 how illusory this expectation is as regards prices. Prices would rise, indeed, in silver, but irregularly and unequally. They would rise for all things which a farmer buys as well as for all that he sells. If, as the silver theorists generally say, all prices were to rise uniformly, the farmer would gain but little. For the only means he would win toward paying o
43 minute read
Social War the Consequence.
Social War the Consequence.
But victims would not submit without resistance, and once more we come to the result that no effect can be expected from this undertaking but social war, and a convulsion of the entire social system, whose consequences defy analysis or prediction. If a man says that he “does not see” what great difference going over to the silver standard will make, it must be that he is little trained to understand the workings of the industrial system in which he lives and on which he depends. It is a monstrou
33 minute read
The Exploded Booms.
The Exploded Booms.
The third class of debtors is by far the most important in this matter—those who are caught in exploded booms. The peaceful and honest mortgagors of farms and homesteads are not the ones who have gotten up this political agitation. The jobbers, speculators, and boom-promoters have been one of the curses of this country from the earliest colonial days. They are men of the “hustling” type, jobbing in politics with one hand and in land or town lots with the other. It is they who, at the worst perio
1 minute read
Legislative History of the Act of 1873.
Legislative History of the Act of 1873.
It is alleged that the law of 1873 was enacted surreptitiously. Mr. Bryan is quoted as having said that the free-coinage men only ask for a restoration of “that system that we had until it was stricken down in the dark without discussion.” Within the last ten years the facts of the legislative history of that law have been published over and over again. They are to be found in the report of the Comptroller of the Currency for 1876, page 170; in “Macpherson’s Political Manual” for 1890, page 157,
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Was it Passed Surreptitiously?
Was it Passed Surreptitiously?
How can a law be passed through Congress surreptitiously? We have indeed heard of bills being “smuggled through” in the confusion attending the last hours of the session, or as an amendment, or under a misleading title. There are the rules of order, however, by which all legislation is enacted. All laws which get through the mill are equally valid. There never has been and never can be any distinction drawn between them according to their legislative history. In the present case there was not th
29 minute read
That the People Did Not Know of It.
That the People Did Not Know of It.
It is said that “the people” did not know what was being done. How do they ever know what is being done? There is all the machinery of publicity, and it is all at work. If people do not heed (and of course in nearly all cases they do not), whose fault is it? Who is responsible to go to the ten million voters individually and make sure that they heed, lest twenty-five years later somebody may say that the fact that they did not heed lays down a justification for a new project which certainly is “
32 minute read
Motive of the Law.
Motive of the Law.
The act of 1873 did not affect any rights or interests. It took away an option which had existed since 1834, but had never been used, and, for ten years before this act was passed, had sunk entirely out of sight under paper-money inflation. Secretary Boutwell, when he first brought the matter to the attention of Congress in 1870, explained the proposed legislation as a codification of existing coinage laws. Later it took the shape of a complete simplification of existing law, history, and fact,
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Alternate Ruin to Debtors and Creditors.
Alternate Ruin to Debtors and Creditors.
The inflation of the Civil War had a direful effect upon all creditors on contracts outstanding in 1862. The resumption of specie payments had a similar effect on debtors under contracts made between 1868 and 1878. Greenbackism and silver debasement were produced by resistance to this operation. The debtors of to-day are not those of that period. The debts of that period are paid off. The pain and strain have been borne. The credit of the United States has been established, the currency restored
1 minute read
Demonetization Removed No Money from Use.
Demonetization Removed No Money from Use.
The law of 1873 never threw a dollar of silver or other currency out of circulation. We hear it asserted that “demonetization” destroyed half the people’s money. People say this who know nothing of the facts, but infer that demonetization must mean that some silver dollars which were money had that character taken from them. No one of the other demonetizations, which took place in Europe at about the same time, diminished the money in use. The result of changes in 1873–1874 was that the amount o
51 minute read
The Alleged Scramble for Gold.
The Alleged Scramble for Gold.
There has been no “scramble for gold.” Those who do not put any obstacle in the way of gold get more of it than they want. The Bank of England has had lately the largest stock of gold that it ever had, and complaints have begun to be heard of a glut. The gold-production in the last five years is the greatest ever known and there is no fear of any lack of it, whatever may be the sense in which any one chooses to speak of a “lack.” There is not and has not been any “scarcity of gold.” There is no
36 minute read
Proof that there has been no Scarcity of Gold.
Proof that there has been no Scarcity of Gold.
There is one proof that there has been no scarcity of money for twenty-five years past which has not indeed passed unnoticed, but which has not received the attention which it deserves; that is the rate of interest. The rate of interest is normally due to the supply and demand of loanable capital, and has nothing to do with money. The value of money is registered by prices, not by the rate of interest. But whenever there is a special demand for money of account—that is, for the solvent of debts—
1 minute read
How to Get Poor and Rich at the Same Time.
How to Get Poor and Rich at the Same Time.
Mr. St. John tries his hand at the relation between prices and interest in connection with our subject. He says: “If the dollar can be cheapened by increasing the number of dollars, so that each dollar will buy less wheat, the increasing price of wheat will increase the demand for dollars to invest in its production.” Evidently he fails to distinguish between the rise in price of wheat from one gold dollar to two gold dollars per bushel, and the rise in wheat from one gold dollar to two fifty-ce
1 minute read
Monopoly of the Money.
Monopoly of the Money.
We hear it asserted that the gold standard gives the owners of gold power to appropriate the money and make it scarce, and that they have used this power. Why, then, under silver or paper, may not the holders of silver or paper do the same? That the holders of gold have not done it has been shown above. But nobody can do it with any kind of value money. There are no “holders of gold.” He who holds gold wins no gains on it. The bankers who are supposed to hold it, if peace and security reign, put
1 minute read
A CONCURRENT CIRCULATION OF GOLD AND SILVER [1878]
A CONCURRENT CIRCULATION OF GOLD AND SILVER [1878]
It seems as if the United States were destined to be the arena for testing experimentally every fallacy in regard to money which has ever been propounded. A few years ago only a very few people here had ever heard of the “double standard” or knew what it meant. In 1873 we became simply and distinctly a “gold country” in law, as we had been for forty years in fact. Immediately after that date silver began to fall in value relatively to gold, so that, if we had been on the “double standard,” and h
43 minute read
THE INFLUENCE OF COMMERCIAL CRISES ON OPINIONS ABOUT ECONOMIC DOCTRINES [1879]
THE INFLUENCE OF COMMERCIAL CRISES ON OPINIONS ABOUT ECONOMIC DOCTRINES [1879]
Any one who follows the current literature about economic subjects will perceive that it is so full of contradictions as to create a doubt whether there are any economic laws, or whether, if there are any, we know anything about them. No body of men ever succeeded in molding the opinions of others by wrangling with each other, and that is the present attitude in which the economists present themselves before the public. Like other people who engage in wrangling, the economists have also allowed
34 minute read
THE PHILOSOPHY OF STRIKES41
THE PHILOSOPHY OF STRIKES41
The progress in material comfort which has been made during the last hundred years has not produced content. Quite the contrary: the men of to-day are not nearly so contented with life on earth as their ancestors were. This observation is easily explainable by familiar facts in human nature. If satisfaction does not reach to the pitch of satiety, it does not produce content, but discontent; it is therefore a stimulus to more effort, and is essential to growth. If, however, we confine our study o
11 minute read
STRIKES AND THE INDUSTRIAL ORGANIZATION42
STRIKES AND THE INDUSTRIAL ORGANIZATION42
Anyone who has read with attention the current discussion of labor topics must have noticed that writers start from assumptions, in regard to the doctrine of wages, which are as divergent as notions on the same subject-matter well can be. It appears, therefore, that we must have a dogma of wages, that we cannot reason correctly about the policy or the rights of the wages system until we have such a dogma, and that, in the meantime, it is not strange that confusion and absurdity should be the chi
6 minute read
TRUSTS AND TRADES-UNIONS43
TRUSTS AND TRADES-UNIONS43
I have attempted to show, in foregoing essays, 44 what an immense rôle is played by monopoly throughout the whole social life of mankind in all its stages. There would not be any struggle for existence if it were not true that the supply in nature of the things necessary for human existence is niggardly. The struggle for existence consists in a contest against the constraints by which human life is surrounded; the process by which men have won something in that contest, in the course of time, ha
8 minute read
AN OLD “TRUST”45
AN OLD “TRUST”45
In the year 1579, Conrad Roth, a merchant of Augsburg, who had been interested in the trade in spices between Lisbon and Germany, proposed to an officer of the treasury of the Elector of Saxony a scheme for a company to monopolize the pepper trade. The Elector was one of the most enterprising and enlightened princes of his time, and the proposition was really intended to be made to him as the only person who could command the necessary capital and had, at the same time, courage and energy to und
6 minute read
SHALL AMERICANS OWN SHIPS?47
SHALL AMERICANS OWN SHIPS?47
Since the war, public attention has been drawn more or less to the marked decline in American shipping. It has been generally assumed and conceded that this was a matter for regret, and some discussion has arisen as to remedies—what to do, in fact, in order to bring it about that Americans should own ships. In these discussions, there has generally been a confusion apparent in regard to three things which ought to be very carefully distinguished from each other: ship-building, the carrying trade
15 minute read
POLITICS IN AMERICA, 1776–187648
POLITICS IN AMERICA, 1776–187648
When the Continental Congress met in 1774, few persons in the colonies perceived that the ties to the mother country were about to be severed, and few, if any, were republicans in theory, or contemplated a “revolution” in the political system. The desire for independence was developed during 1775, and the question as to the form of government to be adopted came up by consequence. It presented no real difficulty. The political organization of some of the colonies was such already that there were
52 minute read
THE ADMINISTRATION OF ANDREW JACKSON49 [1880]
THE ADMINISTRATION OF ANDREW JACKSON49 [1880]
You must have observed that the social sciences, including politics and political economy, are the favorite arena of those who would like to engage in learned discussion without overmuch trouble in the way of preparation. I doubt not that you have also been struck by the fact that these sciences are now the refuge of the conceited dogmatism which has been expelled from the physical sciences. It follows that the discussions in social science are the widest, the most vague, the most imperative in
46 minute read
THE COMMERCIAL CRISIS OF 1837 [1877–1878]
THE COMMERCIAL CRISIS OF 1837 [1877–1878]
The decade from 1830 to 1840 is the most important and interesting in the history of the United States. The political, social, and industrial forces which were in action were grand, and their interaction produced such complicated results, that it is difficult to obtain a just and comprehensive view of their relations and influences. In the first place, the United States advanced between the second war with England and 1830 to a position of full and high standing in the family of nations. The sec
41 minute read
THE SCIENCE OF SOCIOLOGY58
THE SCIENCE OF SOCIOLOGY58
In the present state of the science of sociology the man who has studied it at all is very sure to feel great self-distrust in trying to talk about it. The most that one of us can do at the present time is to appreciate the promise which the science offers to us, and to understand the lines of direction in which it seems about to open out. As for the philosophy of the subject, we still need the master to show us how to handle and apply its most fundamental doctrines. I have the feeling all the t
6 minute read
INTEGRITY IN EDUCATION59
INTEGRITY IN EDUCATION59
In addressing you on the present occasion, I am naturally led to speak of matters connected with education. We are met here amid surroundings which, to the great majority of us, are unfamiliar, but we are assembled in the atmosphere of our school days and under the inspiration of school memories. Some of us are rapidly approaching, if we have not already reached, the time when our interest in education re-arises in behalf of the next generation. Many are engaged in the work of teaching. Others h
15 minute read
DISCIPLINE
DISCIPLINE
It occurs very frequently to a person connected as a teacher with a great seat of learning to meet persons who, having completed a course of study and having spent a few years in active life, are led to make certain reflections upon their academical career. There is a great uniformity in the comments which are thus made, so far as I have heard them, and they enforce upon me certain convictions. I observe that an academical life is led in a community which is to a certain extent closed, isolated,
23 minute read
THE COÖPERATIVE COMMONWEALTH Note by the Editor
THE COÖPERATIVE COMMONWEALTH Note by the Editor
Among Professor Sumner’s papers there turned up a curiosity which I do not like to pass over altogether, although it is more appropriate, perhaps, to the purposes of the biographer. Apparently Sumner amused himself, along in the seventies or early eighties, in figuring to himself the state of the world under a socialistic régime of the sort which he was always ridiculing and opposing. He did this by imagining the contents of a socialist newspaper, the New Era , of the date July 4, 1950, consisti
28 minute read
THE FORGOTTEN MAN [1883]
THE FORGOTTEN MAN [1883]
I propose in this lecture to discuss one of the most subtile and widespread social fallacies. It consists in the impression made on the mind for the time being by a particular fact, or by the interests of a particular group of persons, to which attention is directed while other facts or the interests of other persons are entirely left out of account. I shall give a number of instances and illustrations of this in a moment, and I cannot expect you to understand what is meant from an abstract stat
49 minute read
BIBLIOGRAPHY BIBLIOGRAPHICAL NOTE
BIBLIOGRAPHY BIBLIOGRAPHICAL NOTE
The following bibliography is as nearly exhaustive as we have been able to make it. There are doubtless other articles which have not come under our notice; and there are certainly a number of contributions to the press, signed and unsigned, to which we have no clue. The distribution of those which we have found will indicate the task of any one who should aim at exhaustiveness. It has seemed best to us to include the titles of certain unpublished writings, especially where these are to be made
16 minute read