Cyclopædia of Political Science, Political Economy, and the Political History of the United States
By John J. Lalor
NEITHER American nor English literature has hitherto possessed a Cyclopædia of Political Science and Political Economy. The want of a work of reference on these important branches of knowledge has long been felt, especially by lawyers, journalists, members of our state and national legislatures, and the large and intelligent class of capitalists and business men who give serious thought to the political and social questions of the day. The present work, which will be completed in three volumes, is the first to supply that want. It is also the first Political History of the United States in encyclopædic form—the first to which the reader can refer for an account of the important events or facts in our political history, as he would to a dictionary for the precise meaning of a word. The French, the Germans and even the Italians are richer in works of reference on political science and political economy than the Americans or the English. The Germans have Rotteck and Welcker’s
Staatslexikon, and Bluntschli and Brater’s
Staatswörterbuch; the French, Block’s
Dictionnaire Général de la Politique, and the celebrated
Dictionnaire de l’Economie Politique, edited by Guillaumin and Coquelin.The “Cyclopædia of Political Science, Political Economy, and of the Political History of the United States” is intended to be to the American and English reader what the above-named works are to French and German students of political science and political economy. The articles by foreigners in our work are largely translations from the
Dictionnaire de l’Economie Politique, the
Dictionnaire Général de la Politique, the
Staatswörterbuch, and original articles by Mr. T. E. Cliffe Leslie, the eminent English economist; while the American articles are by the best American and Canadian writers on political economy and political science. The task of writing the articles on the political history of the United States was confided to one person, Mr. Alexander Johnston, of Norwalk, Connecticut, thoroughness, conciseness and the absence of repetition and of redundancy being thus secured…. [From the Preface]
First Pub. Date
New York: Maynard, Merrill, and Co.
Originally printed in 3 volumes. Includes articles by Frédéric Bastiat, Gustave de Molinari, Henry George, J. B. Say, Francis A. Walker, and more.
The text of this edition is in the public domain.
- V.1, Entry 1, ABDICATION
- V.1, Entry 2, ABOLITION AND ABOLITIONISTS
- V.1, Entry 3, ABSENTEEISM
- V.1, Entry 4, ABSOLUTE POWER
- V.1, Entry 5, ABSOLUTISM
- V.1, Entry 6, ABSTENTION
- V.1, Entry 7, ABUSES IN POLITICS
- V.1, Entry 8, ABYSSINIA
- V.1, Entry 9, ACADEMIES
- V.1, Entry 10, ACADEMIES
- V.1, Entry 11, ACCLAMATION
- V.1, Entry 12, ACCUMULATION OF WEALTH
- V.1, Entry 13, ACT
- V.1, Entry 14, ADAMS
- V.1, Entry 15, ADAMS
- V.1, Entry 16, ADAMS
- V.1, Entry 17, ADAMS
- V.1, Entry 18, ADJOURNMENT
- V.1, Entry 19, ADMINISTRATION
- V.1, Entry 20, ADMINISTRATIONS
- V.1, Entry 21, AFRICA
- V.1, Entry 22, AGE
- V.1, Entry 23, AGENT
- V.1, Entry 24, AGENTS
- V.1, Entry 25, AGIO
- V.1, Entry 26, AGIOTAGE
- V.1, Entry 27, AGRICULTURE
- V.1, Entry 28, ALABAMA
- V.1, Entry 29, ALABAMA CLAIMS
- V.1, Entry 30, ALASKA
- V.1, Entry 31, ALBANY PLAN OF UNION
- V.1, Entry 32, ALBANY REGENCY
- V.1, Entry 33, ALCALDE
- V.1, Entry 34, ALCOHOL
- V.1, Entry 35, ALGERIA
- V.1, Entry 36, ALGERINE WAR
- V.1, Entry 37, ALIEN AND SEDITION LAWS
- V.1, Entry 38, ALIENS
- V.1, Entry 39, ALLEGIANCE
- V.1, Entry 40, ALLEGIANCE
- V.1, Entry 41, ALLIANCE
- V.1, Entry 42, ALLIANCE
- V.1, Entry 43, ALLOYAGE
- V.1, Entry 44, ALMANACH DE GOTHA
- V.1, Entry 45, ALSACE-LORRAINE
- V.1, Entry 46, AMBASSADOR
- V.1, Entry 47, AMBITION
- V.1, Entry 48, AMENDMENTS TO THE CONSTITUTION
- V.1, Entry 49, AMERICA
- V.1, Entry 50, AMERICAN MERCHANT MARINE
- V.1, Entry 51, AMERICAN PARTY
- V.1, Entry 52, AMERICAN WHIGS
- V.1, Entry 53, AMES
- V.1, Entry 54, AMISTAD CASE
- V.1, Entry 55, AMNESTY
- V.1, Entry 56, AMNESTY
- V.1, Entry 57, ANAM
- V.1, Entry 58, ANARCHY
- V.1, Entry 59, ANCIEN RÉGIME
- V.1, Entry 60, ANDORRA
- V.1, Entry 61, ANHALT
- V.1, Entry 62, ANNEXATION
- V.1, Entry 63, ANNEXATIONS
- V.1, Entry 64, ANTI-FEDERAL PARTY
- V.1, Entry 65, ANTI-MASONRY
- V.1, Entry 66, ANTI-NEBRASKA MEN
- V.1, Entry 67, ANTI-RENTERS
- V.1, Entry 68, ANTI-SLAVERY.
- V.1, Entry 69, APPORTIONMENT
- V.1, Entry 70, APPROPRIATION.
- V.1, Entry 71, APPROPRIATIONS
- V.1, Entry 72, ARBITRAGE
- V.1, Entry 73, ARBITRARY ARRESTS
- V.1, Entry 74, ARBITRARY POWER
- V.1, Entry 75, ARBITRATION
- V.1, Entry 76, ARCHONS
- V.1, Entry 77, AREOPAGUS.
- V.1, Entry 78, ARGENTINE CONFEDERATION
- V.1, Entry 79, ARISTOCRACY.
- V.1, Entry 80, ARISTOCRATIC AND DEMOCRATIC IDEAS.
- V.1, Entry 81, ARITHMETIC
- V.1, Entry 82, ARIZONA
- V.1, Entry 83, ARKANSAS
- V.1, Entry 84, ARMISTICE
- V.1, Entry 85, ARMIES
- V.1, Entry 86, ARMY
- V.1, Entry 87, ARTHUR
- V.1, Entry 88, ARTISANS
- V.1, Entry 89, ARYAN RACES.
- V.1, Entry 90, ASIA
- V.1, Entry 91, ASSEMBLY (IN U. S. HISTORY)
- V.1, Entry 92, ASSESSMENTS
- V.1, Entry 93, ASSIGNATS
- V.1, Entry 94, ASSOCIATION AND ASSOCIATIONS
- V.1, Entry 95, ASYLUM
- V.1, Entry 96, ATELIERS NATIONAUX
- V.1, Entry 97, ATTAINDER
- V.1, Entry 98, ATTORNEYS GENERAL
- V.1, Entry 99, AUSTRALIA
- V.1, Entry 100, AUSTRIA-HUNGARY
- V.1, Entry 101, AUTHORITY
- V.1, Entry 102, AUTHORS
- V.1, Entry 103, AUTOCRAT
- V.1, Entry 104, AUTONOMY.
- V.1, Entry 105, AYES AND NOES
- V.1, Entry 106, BADEN
- V.1, Entry 107, BALANCE OF POWER
- V.1, Entry 108, BALANCE OF TRADE
- V.1, Entry 109, BALLOT
- V.1, Entry 110, BANK CONTROVERSIES
- V.1, Entry 111, BANKING
- V.1, Entry 112, BANK NOTES.
- V.1, Entry 113, BANKRUPTCY.
- V.1, Entry 114, BANKRUPTCY, National.
- V.1, Entry 115, BANKS.
- V.1, Entry 116, BANKS, Functions of.
- V.1, Entry 117, BANKS OF ISSUE
- V.1, Entry 118, BANKS, Advantages of Savings.
- V.1, Entry 119, BANKS, History and Management of Savings,
- V.1, Entry 120, BAR
- V.1, Entry 121, BARNBURNERS
- V.1, Entry 122, BARRICADE
- V.1, Entry 123, BARTER.
- V.1, Entry 124, BASTILLE
- V.1, Entry 125, BAVARIA
- V.1, Entry 126, BELGIUM
- V.1, Entry 127, BELL
- V.1, Entry 128, BELLIGERENTS
- V.1, Entry 129, BENTON
- V.1, Entry 130, BERLIN DECREE
- V.1, Entry 131, BILL
- V.1, Entry 132, BILL OF EXCHANGE
- V.1, Entry 133, BILL OF RIGHTS
- V.1, Entry 134, BILLION
- V.1, Entry 135, BILLS
- V.1, Entry 136, BI-METALLISM.
- V.1, Entry 137, BIRNEY
- V.1, Entry 138, BLACK COCKADE
- V.1, Entry 139, BLACK CODE.
- V.1, Entry 140, BLACK REPUBLICAN.
- V.1, Entry 141, BLAINE
- V.1, Entry 142, BLAIR
- V.1, Entry 143, BLOCKADE
- V.1, Entry 144, BLOODY BILL
- V.1, Entry 145, BLUE LAWS
- V.1, Entry 146, BLUE LIGHT
- V.1, Entry 147, BOARD OF TRADE.
- V.1, Entry 148, BOLIVIA
- V.1, Entry 149, BOOTY
- V.1, Entry 150, BORDER RUFFIANS
- V.1, Entry 151, BORDER STATES
- V.1, Entry 152, BOURGEOISIE
- V.1, Entry 153, BOUTWELL
- V.1, Entry 154, BRAHMANISM.
- V.1, Entry 155, BRAZIL
- V.1, Entry 156, BRECKENRIDGE
- V.1, Entry 157, BROAD SEAL WAR
- V.1, Entry 158, BROKERS
- V.1, Entry 159, BROOKS
- V.1, Entry 160, BROWN
- V.1, Entry 161, BUCHANAN
- V.1, Entry 162, BUCKSHOT WAR
- V.1, Entry 163, BUCKTAILS
- V.1, Entry 164, BUDDHISM
- V.1, Entry 165, BUDGET
- V.1, Entry 166, BULL
- V.1, Entry 167, BUNDESRATH
- V.1, Entry 168, BUREAUCRACY
- V.1, Entry 169, BURGESSES
- V.1, Entry 170, BURLINGAME
- V.1, Entry 171, BURR
- V.1, Entry 172, BUTLER, Benj. F.
- V.1, Entry 173, BUTLER, William Orlando
- V.1, Entry 174, CACHET
- V.1, Entry 175, CÆSARISM
- V.1, Entry 176, CALENDAR
- V.1, Entry 177, CALHOUN
- V.1, Entry 178, CALIFORNIA
- V.1, Entry 179, CANADA
- V.1, Entry 180, CANALS
- V.1, Entry 181, CANON LAW
- V.1, Entry 182, CAPITAL
- V.1, Entry 183, CAPITAL
- V.1, Entry 184, CAPITULATION
- V.1, Entry 185, CARICATURE
- V.1, Entry 186, CARPET BAGGERS
- V.1, Entry 187, CARTEL
- V.1, Entry 188, CASS
- V.1, Entry 189, CASUS BELLI
- V.1, Entry 190, CAUCUS
- V.1, Entry 191, CAUCUS SYSTEM
- V.1, Entry 192, CAUSE AND EFFECT IN POLITICS.
- V.1, Entry 193, CELIBACY, Clerical
- V.1, Entry 194, CELIBACY, Political Aspects of.
- V.1, Entry 195, CELTS.
- V.1, Entry 196, CENSURE.
- V.1, Entry 197, CENSURE OF MORALS.
- V.1, Entry 198, CENSURES
- V.1, Entry 199, CENSUS.
- V.1, Entry 200, CENTRALIZATION and DECENTRALIZATION.
- V.1, Entry 201, CEREMONIAL
- V.1, Entry 202, CHAMBER OF COMMERCE.
- V.1, Entry 203, CHARGÉ D'AFFAIRES.
- V.1, Entry 204, CHARITY, Private.
- V.1, Entry 205, CHARITY, Public.
- V.1, Entry 206, CHARITY, State.
- V.1, Entry 207, CHASE
- V.1, Entry 208, CHECKS AND BALANCES.
- V.1, Entry 209, CHEROKEE CASE
- V.1, Entry 210, CHESAPEAKE CASE.
- V.1, Entry 211, CHILI.
- V.1, Entry 212, CHINA
- V.1, Entry 213, CHINESE IMMIGRATION.
- V.1, Entry 214, CHIVALRY.
- V.1, Entry 215, CHRISTIANITY.
- V.1, Entry 216, CHURCH AND STATE
- V.1, Entry 217, CHURCH
- V.1, Entry 218, CHURCH
- V.1, Entry 219, CHURCH
- V.1, Entry 220, CHURCHES AND RELIGIONS
- V.1, Entry 221, CHURCHES
- V.1, Entry 222, CINCINNATI
- V.1, Entry 223, CIPHER DISPATCHES AND DECIPHERMENT
- V.1, Entry 224, CIRCULATION OF WEALTH.
- V.1, Entry 225, CITIES
- V.1, Entry 226, CITIES AND TOWNS.
- V.1, Entry 227, CIVIL ADMINISTRATION
- V.1, Entry 228, CIVIL LIST.
- V.1, Entry 229, CIVIL RIGHTS BILL
- V.1, Entry 230, CIVIL SERVICE REFORM
- V.1, Entry 231, CIVILIZATION
- V.1, Entry 232, CLAY
- V.1, Entry 233, CLEARING, AND CLEARING HOUSES
- V.1, Entry 234, CLERICALISM
- V.1, Entry 235, CLIENTÈLE AND CUSTOM
- V.1, Entry 236, CLIMATE
- V.1, Entry 237, CLIMATE
- V.1, Entry 238, CLINTON
- V.1, Entry 239, CLINTON, George
- V.1, Entry 240, CL�TURE
- V.1, Entry 241, COASTING TRADE
- V.1, Entry 242, COCHIN CHINA
- V.1, Entry 243, COINAGE
- V.1, Entry 244, COLFAX
- V.1, Entry 245, COLONIZATION SOCIETY
- V.1, Entry 246, COLORADO
- V.1, Entry 247, COLOMBIA
- V.1, Entry 248, COMMERCE.
- V.1, Entry 249, COMMERCIAL CRISES
- V.1, Entry 250, COMMISSION
- V.1, Entry 251, COMMITTEES
- V.1, Entry 252, COMMON LAW
- V.1, Entry 253, COMMONS
- V.1, Entry 254, COMMUNE
- V.1, Entry 255, COMMUNISM
- V.1, Entry 256, COMPETITION.
- V.1, Entry 257, COMPROMISES
- V.1, Entry 258, COMPULSORY CIRCULATION
- V.1, Entry 259, COMPULSORY EDUCATION
- V.1, Entry 260, CONCESSION
- V.1, Entry 261, CONCLAVE.
- V.1, Entry 262, CONCLUSUM
- V.1, Entry 284, CONSTITUTION OF THE UNITED STATES
- V.1, Entry 301, CONVENTION
- V.1, Entry 375, DISTILLED SPIRITS
- V.1, Entry 384, DOMINION OF CANADA
- V.2, Entry 7, EDUCATION
- V.2, Entry 18, EMBARGO
- V.2, Entry 33, EXCHANGE
- V.2, Entry 35, EXCHANGE OF PRISONERS
- V.2, Entry 37, EXCHANGE OF WEALTH
- V.2, Entry 121, GREAT BRITAIN
- V.2, Entry 130, HABEAS CORPUS
- V.2, Entry 180, INDUSTRIAL ARBITRATION AND CONCILIATION
- V.2, Entry 225, JUSTICE, Department of
- V.2, Entry 246, LAW
- V.2, Entry 364, NEW GRANADA
- V.2, Entry 379, NULLIFICATION
- V.3, Entry 4, OCEANICA
- V.3, Entry 29, PARIS MONETARY CONFERENCE
- V.3, Entry 32, PARLIAMENTARY LAW.
- V.3, Entry 116, RACES OF MANKIND
- V.3, Entry 137, REPUBLICAN PARTY
- V.3, Entry 155, ROMAN CATHOLIC CHURCH.
- V.3, Entry 195, SLAVERY
- V.3, Entry 278, UNITED STATES OF AMERICA
- V. 2, List of Writers
- V. 3, List of Writers
- V. 3, List of American Writers
BANKS, Functions of. In the consideration of the functions of banks and of bankers it will be necessary to assume that the money in use, where the bank is located, is good money and not bad, because all the transactions of banks are stated in terms of money. In the United States the name by which money is designated is
dollar; in Great Britain,
sovereign; in France,
franc; in other countries, other names are used. Each name is the legal definition of a coin containing a certain quantity of gold or silver. It is the metal that gives value; the stamp certifies the weight and purity. Until it is admitted that such coins, and such coins only, are good money, the true function of the bank and of the banker can not be fully comprehended.
—The substitution of what is called inconvertible paper money, the “greenback,” for instance; that is to say, the substitution of the deferred promise of a thing for the thing itself, under a statute which forces its acceptance as a legal tender, not only works a fraud upon the people of the country in which such a statute is in force, but it also vitiates all reasoning in regard to money and banks, and perverts the moral sense so as to forbid a clear conception of what is right and just.
—True money must contain its own value in its own substance, and that metal will constitute the best kind of money which retains its value under the most uniform conditions through long generations. The two precious metals, gold and silver, have met these conditions; sometimes varying in their ratio to each other, but either one constituting a more unvarying standard by which to measure the transactions of men than any other substance that has ever been used to serve the purpose of money.
—The great commerce of the world, to which no act of legal tender is or can be applied, is conducted on a gold basis, and the final settlement of the sum due in money on the balance of account is made by a payment of gold coin or its equivalent. This practice would not have become established unless it had been proved by the long experience of the great commercial nations that gold possessed greater stability in its value than silver.
—On the other hand, in all transactions with some countries, China for instance, in which country there is no act of legal tender and no paper money, silver passes by weight and best serves the purpose of money.
—If there were no acts of legal tender in any country and if all contracts were subject to being enforced by the payment in coins of gold or silver according to the kind designated in the specific contract, the metal which proved to be best fitted to the conditions and circumstances of each country would be adopted by it, while the great commerce of the world would remain upon a gold basis, as it now is.
—This statement is made in order to clear the subject of banks and banking from the obscurity that may be caused if the quality of true money is not first defined.
—Banks must exist and must perform their work even when the money by which their transactions are measured is false or bad. For instance,
when an inconvertible government note has been made “lawful money” under an act that can only find legal justification as a measure of war, banks must still exist and work under the disadvantage of such a fluctuating and false standard of value.
—What, then, is the function of a bank, and how does it work?
—In general terms, it may be stated that a bank lends and borrows titles to capital measured in terms of money. If the money be good, that is, unvarying in its value, during the term of the loan, the risk of the bank will be in ratio to the solvency of its creditors only, and the rate of interest will be in ratio to the abundance or scarcity of the capital in the titles to which it deals. If the money be bad, that is, varying in its value according to the caprice of legislators or the decisions of executive officers of the government, another element of risk will enter into every transaction, and the rate of interest on loans will of necessity be higher in order that it may cover this element of hazard.
—No borrower wants to borrow money except as an instrument with which to buy the thing he actually needs, and no borrower pays interest upon money. The transaction is stated in terms of money and, in very rare cases, actual money is used, but the thing borrowed is the thing bought and the interest is paid for its service.
—What banks deal in are titles, measured and stated in terms of money, to capital of all kinds, such as gold, silver, copper, lead, iron, cotton, corn, potatoes, etc., etc.
—1. A bank lends its own capital or a title to a part of its own capital; such capital consisting of the coin that has been paid in by its stockholders.
—2. A bank receives from its depositors capital in the form of coined money, or a title to capital in the form of a note, check or draft payable in coin on demand.
—3. A bank lends such part of the capital or title to capital deposited with it, as the conditions of business will permit, to the applicants for loans whom its directors consider safe to trust.
—In the vast majority of transactions no money passes, no money is lent and no money is borrowed. Only a title passes which may be converted into money, but as a rule the money itself remains in the vault of the bank, or in the place of deposit where the bank has put it for safe keeping.
—Let us consider an example of the first class. A bank lends a part of its own capital. In this case it is a national bank, and its managers desire to issue bank notes; such notes serving the general purpose of money more conveniently than the coin itself, being themselves promises to pay coin. The bank subscribes for a certain amount of bonds of the United States and pays for them with a part of its coin, which coin constitutes the capital loaned, saved, subscribed and paid in by its stockholders. Upon this loan the government pays interest. These bonds are then deposited with the government as security for the payment of bank notes that the bank may issue if payment in coin is demanded.
—These notes being secured by the bonds and being payable in coin by the bank, for which purpose a bank always keeps a reserve in coin on hand, are a good and convenient substitute for money, and for that reason borrowers desire to become possessed of them. The borrower has sold a quantity of merchandise on credit for which the buyer has given a note due at a certain future date. This note is a title to, or promise of money, but payment is deferred. It will not serve the purpose of money as it is not divisible, it is not due on demand, and few persons know whether or not it will be paid. Its owner desires bank notes for use in the purchase of other merchandise to add to his stock in trade. He takes this note, or title to money deferred, to the bank, and, after a discount or deduction of interest, the bank exchanges its notes or titles to money payable on demand for this note or title to money deferred. The interest deducted constitutes the profit of the bank. The whole transaction has consisted in an exchange of titles to money, but no money has been used. Each has rendered a service to the other. The borrower has obtained notes that he can spend, and the bank has been paid interest for the use of its credit. This transaction constitutes the function of a bank organized with a department for the issue of circulating notes.
—The second class of transactions consists in a bank receiving deposits, either of money or of titles to money, in the form of checks, drafts or bills of exchange payable in money on demand.
—A merchant having sold produce for cash, has received, in payment therefor, either bank notes or checks on banks in settlement for the same. These he gathers together and deposits in his own bank. The sum of these deposits, named in dollars, is passed to his credit on the books of the bank, and the bank is liable to have the actual coin demanded, but no money has been used, nothing but a title to money.
—As the sum of all these deposits of many merchants and manufacturers is never wanted at one time, the bank is now ready to enter upon transactions of the third class, that is, to lend a title to a part of the capital of its depositors.
—Another note, being a deferred title to money promised to be paid at a future date, is presented for discount, and the sum of the net proceeds is passed to the credit of the borrower, to be drawn upon by check as he may wish to use it in his daily transactions. In this, again, the transaction consists in an exchange of titles; one is a title to money deferred, the other a title to money on demand.
—Merchandise or commodities on the way from producer to consumer require time for conversion and consumption. During that period of time trust or credit is given by one man to another, and a deferred title to the value of this merchandise takes the form of a note, draft or bill, in which the value of the merchandise is measured in dollars or other coin; that is to say, in true money. These notes, drafts or bills are of limited use, because the credit of the promisors is known to but few. It is the business of bank directors to keep themselves informed and to exchange bank promises to pay money for these deferred promises of persons or firms. Hence it
follows that banks are most potent instrumentalities for enabling merchants or dealers to buy the products of farmers and manufacturers. They are as necessary to the quick movement of commodities as railroads, steamboats, carts or wagons.
—The conduct of the business of banks and bankers demands probity, integrity, foresight, and all other qualities that make a true man. All their profits depend upon the services they may render to the community. Hence it ensues that there is no better standard by which to gauge the intelligence and character of the people of any section, state or nation than by their use of banks. The place to choose for the establishment of a branch of industry or business is the one in which banks are numerous and well sustained, and the place to be avoided is the one where banks are subject to jealousy and suspicion. Men who can not trust their banks or bankers are not themselves fit to be trusted by bank or banker.
—The function of a bank is, therefore, to borrow and lend titles to property measured in money, and to keep in reserve a sufficient amount of actual money to meet the occasional demand for coin that may be made upon it. Their use is the measure of the trust reposed in, and deserved by, the merchants and tradesmen by whom they are sustained.