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HUNDRED and fifty years ago the farmers, frontiersmen and tenants who composed ninetyeight per cent of the population of the North American wilderness, engaged in one of the great idealistic movements of history and, after unimagined toils, freed themselves and their posterity from the cramping British commercial system of the late eighteenth century. But the cost of the struggle represented in State and confederate debts was so great that no man dreamed that they could be paid in full; yet without payment the second estate of the thirteen colonies was apt to be worse than the first. To pay a part of the debt and to prevent anarchy, the representatives of the farmers who had urged revolution and of other farmers who had held back and warned men against independence, formulated and adopted one of the model constitutions of modern times. It was a farmer's constitution, a farmer's republic-ideas of social and economic equality instinct in the thought and habits of most of the three million men and women who supported or acquiesced in the régime set up in 1789. A crushing debt was about to be fixed upon the doubting community. Washington took upon himself the presidency of what the world

called the wild and dangerous American democracy, gathering about him a few hesitating advisers. How might a debt of a hundred millions, greater then than a hundred billions would now be, be discharged by a people whose exports did not amount to the interest due each year, England and the continent of Europe slow to open their markets?

At that moment the French people entered upon their great revolution, their wheat harvest so poor that famine threatened the excited country; a year or two later the nations of Europe became engaged in the twenty-year conflict which ended only in the overthrow of Napoleon in 1815: a war that involved the whole of Europe and consumed the goods of two generations.

American farmers began at once to supply the foodstuffs. The very first year of Washington's administration showed a remarkable increase of American exports; the fourth year the volume of exports surpassed anything ever dreamed of, thirty million dollars worth a year or six times as much as had ever been known before! And the farmers bought in return more than thirty million dollars worth of imports a year. Was it a miracle?

Alexander Hamilton easily ar

ranged his financial system. He laid a gentle tariff upon the returning imports and promptly found his treasury filled with good money. He funded a national debt of eighty millions and the States funded or paid in lands debts amounting to half as much more. With wheat and beef and pork selling at unheard-of prices, the insatiable European market ever calling for more, there was greater wealth in the thirteen States than men knew what to do with. It was then that Hamilton talked of having smitten upon the rock of the national resources; and Washington more modestly declared: "The earth has yielded her fruits bountifully. No city, town, village or farm but exhibits increasing wealth and prosperity." It was warring Europe that started the great republic with flying colors. The toil of three million farmer folk, the fertile fields of a new country did the rest, though politicians were not bound to make public declaration of the facts. It was not a miracle, but a world war.

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In June, 1815 the Napoleonic wars came to an end. After a moment of dazed prosperity, the prices of American farm products began to fall. Cotton that had sold for thirty-one cents a pound in 1814, sold for fifteen cents in 1821 and nine cents in 1829. Flour in wartime had brought twelve dollars a barrel. In 1821, it sold at four dollars and was only a little higher in 1829. Tobacco had been worth seven dollars a hundred pounds in 1814; in 1821 it was worth only five dollars a hundred, the price in 1829 hardly better. Beef and pork and forest products were even lower

in value. Nor were the returns of industry and finance much better. In 1819 the Bank of the United States failed, nearly all other banks closing their doors at the same time. The price of flannels fell from ninetythree cents a yard in 1814 to thirtyseven cents in 1829; shoes that sold in wartime for $1.56, sold in 1829 for $1.42; and cotton sheetings fell from fifty-eight cents to fifteen cents a yard. It was a period of unprecedented distress, business and industrial men suffering somewhat less than the others.

Farmers were in despair. Half the population of some counties in western Massachusetts emigrated to the wilderness beyond the Alleghenies, leaving homes, fences and cleared lands unoccupied or in the possession of old men or unambitious remnants of the people. In eastern Virginia a farm sold for the price of a year's rent-masters and slaves alike trekking to the free lands of the southwest. A little after Jefferson's death his beautiful estate of Monticello which had cost $25,000 sold at $2800. Farmers accustomed to prosperity through nearly a generation suddenly found themselves reduced to the necessity of trying their fortunes with the Indians and the wild life of the great woods. It was deflation.

But the story of industry for the period is different. Investments that had been made in wartime stood idle for a while, European goods crowding American goods off the market. There was loud clamor for public relief, for stopping the importation of cheap goods from England, the recent enemy. The mill owners went to Washington; they asked Congress

to guarantee protection to their investments. They organized associations and set up newspapers in their interest. James Monroe, the Virginia farmer, with all his lands under mortgage, liked to talk of his clothes made in American mills. John C. Calhoun, South Carolina farmer, urged national assistance to his distressed friends in New England; Andrew Jackson, a farmer-general, would protect American industrialists in order that the country might be self-sufficing in "the next war"; and Henry Clay would protect industry in order to thwart wicked Englishmen, create a home market for farmers and then build a road to the market. Everybody would help industrial men; and a protective tariff of some twenty per cent ad valorem was cheerfully laid; the proceeds were expected to pay the cost of the last war and build roads into the wilderness where the farmers had gone. It was the first governmental relief to business, a privilege to one class of citizens to be paid for by the rest of the community through higher prices for goods not made on the farms. A guarantee to business almost always demands renewal. In this case, the comparative prosperity of industrial concerns led at once to the setting up of many new plants, and in ten years there was distress. both because there were so many industrial goods and because the British had, as usual, found a way to increase their imports into the United States. Industrial men renewed their appeals to Congress in 1824, 1826 and 1828, supported by loud demands in the press and an unprecedented propaganda. Relief was granted in the form of a protec

tive tariff of fifty per cent ad valorem on imports; and the American market became a monopoly for the manufacturers, great sums of money being prematurely invested in mills, water powers and machinery, towns growing quickly into cities. Abbot Lawrence, a noble business man of Massachusetts, wrote Daniel Webster when the latter had changed from a free-trader to a protectionist: "This bill, if adopted as amended, will keep the South and the West in debt to New England the next hundred years."

In debt for the next hundred years! The young republic was too young to permit the great privilege now granted to the East, the millowners, to stand unchallenged. Calhoun had changed from a protectionist to a free-trader and with him every other Southern representative in Congress but four. Ominous, particularly as the Southerners had exacted guarantee of their privilege of holding slaves when the Constitution was written. And from 1828 to 1846 there was a violent conflict at every session of the national legislature. The privilege of the East presented a solid front to the privilege of the South; and the West began its great rôle of umpire. The Southerners by the help of the farmers of the West won in 1846, and the protective policy was abandoned in principle if not in practice, the East restive, the South always a little afraid of its allies beyond the Alleghanies. But there was prosperity almost unparalleled-broken only with the beginning of the next great war: a struggle of the South versus the East, Westerners taking the part of the East, doubtfully.

The farmers of the Middle West rallied to the calls of liberal men and Unionists everywhere. They fought Southern farmers with desperate valor, Southern farmers no less heroic in their fight for the privilege of holding slaves. Eastern men likewise engaged in the struggle for national unity, fighting the South with one hand, tending their mills with the other. A year passed and there was no glimpse of the end. A second year came and went and Abraham Lincoln, peering doubtfully into the future for a decision, said: "this fiery trial will light us down in honor or dishonor to the latest generation. We shall nobly save or meanly lose the last best hope of earth." A crucial moment in American history-the Union in grave need of help.

A little before the Civil War broke, a Virginian farmer turned inventor and went to Chicago; before 1861 he was selling thousands of reapers. It was Cyrus McCormick, bitterly opposed to the war. But his machines enabled old men, women and boys to harvest more wheat per year than had ever been harvested before. There were other inventors who made drills and mowers, all lending a hand to the farmers whose sons were at the front, the red caldron of war taking more wheat and pork than the Napoleonic wars had taken. Once more the price of farm products mounted. Wheat sold for a dollar and then two dollars a bushel. Beef doubled in value; and the wool from the increasing herds of sheep all over the Middle West rose to eighty cents a pound. War meant prosperity to farmers, as it had meant before. But to war was added

a strange European demand. There was a failure, or near failure, of the wheat crops of England in 1861, 1862 and 1863; and the price of flour once more reached twelve dollars a barrel, farmers becoming as rich as they had been in Washington's day. The farmers were not alone in their prosperity.

Industrial men in the East, after a moment of anxious doubt, turned their cotton-mills into manufacturies of woolen cloths at high prices; for shoes and firearms and blankets other mill mill men men received prices which yielded profits of twenty to fifty per per cent a year. European industrialists undertook to assist the great cause at a profit by offering clothing, arms and munitions. Eastern industrialists did not like the idea. They procured the passage of a protectionist tariff law in 1861 which alienated much needed support in Europe. The industrialists. risked the ruin of their country to save themselves from European competition. In 1864 Congress, after some demur from the President, raised the tariff schedules to the dangerous level of 1828. But Lincoln insisted upon an income tax and a direct tax upon manufactured goods, measures designed to bring into the treasury some of the returns lost in the high schedules. It was a bargain; but the East had now its privilege, a practical monopoly of the expanding American market. It was a situation much like that of 1763 to 1776 in England against which the Americans of that day revolted. If the Southerners lost, the great privilege of slavery would be gone; the industrial privilege, if unbroken, would take its place. To retain

While the industrialists made new fortunes overnight, the finances of the country were organized on a national basis; an association of national banks took control of the money and credit of the country in a way which Jefferson had feared, and which Jackson had stirred the masses of the people to resist to the bitter end. The new banks procured protection against competition in the law of 1863; they might issue banknotes for national circulation; and they were hardly taxed at all. It was a second great roof under which financiers might operate and, if they were wise, make themselves fairly secure against the setbacks and hard vicissitudes of other men. Thus in the hope of winning the war and of destroying the great privilege of the South, two new privileges came into existence, the industrialists holding competition at a distance by the help of the nation and the nationalbankers with the immemorial advantages of bankers. Next to these, though not so secure, were the rising railroad systems which took upon themselves to say what rates the public must pay for the transportation so necessary to win the war. It was a day of great though halfobserved change, five hundred millionaires in 1864 where there had been one in 1860.

But the "last best hope of earth" was safe at last. The South, so long a storm center, so filled with able men who sneered at democracy, was an inseparable part of the Uniona thousand burying-grounds white with the markers of dead soldiers, the South as poor and distraught as it

its great leaders making ready to reënter the councils of the nation. The West was still prosperous, its wheat and flour selling at fabulous prices, pigs and beef and wool in urgent demand, hundreds of thousands of returning soldiers ready to grasp the plow and have a share in the marvelous money-making. Amazing prosperity; though there was a national debt of three billions, a third of all the property of the North as assessed in 1860, such a debt as baffled the wits of the Fathers in 1789; and, moreover, every State and city and county, North and South, was similarly in debt. The farmers who had fought the war and been paid in paper money had come home to pay themselves for fighting, pay and make the Southerners pay a full third of it. (Nine tenths of the debt having drifted before 1868, into Philadelphia, New York and Boston.) Pay in gold?

If times continued good. But times did not remain good. A big crop was planted. The mills turned out great quantities of goods, drills, reapers and new corn-planters for the farmers; new machines in shoe factories and new looms for the making of cloths. The first crop of wheat sold at $1.50 a bushel; in 1880 wheat sold at $1.00, and in 1894 it had fallen to forty-nine cents a bushel! Cotton was worth thirty-one cents a pound in 1866; in 1878 ten cents; and in 1894 six cents. Pork and beef and wool were drugs on the market. It was deflation for the farmers again. And the farmers, poor students of the intricacies of economic life, knew not what to do. They applied the principle of mass