It is an important fact, not to be overlooked in our examination of incomes derived from wages, rent, interest, and profits, that all of these are not only greatly affected by the condition and character of the existing currency, but also in very unequal degrees. We have already spoken of the influence of an inflated currency upon wages and interest; but we are now to show its unequal operation upon all these different kinds of revenue.

The enormous inflation of currency during the rebellion has given a most favorable, because a most striking, illustra-tration of the degree in which different interests may be affected by any inflation.

Take, for example, the years 1864 and 1865. Wages were, on an average, fifty per cent above their usual rate. Where a skilful workman had previously obtained two dollars a day, he now got three: where the common laborer got one dollar, he now got one dollar and a half. From extensive inquiry and personal observation, we are satisfied that the rise of wages, take the country through, was equal to fifty per cent: such we have found the uniform testimony of employers.

Rents, during the civil war, except in some large cities, advanced but little, on an average, throughout the country: it is much to be doubted if they advanced more than ten, certainly not more than twenty, per cent.

The rate of interest advanced generally from 6 per cent to 7.30; but this was mainly from the action of the government, which negotiated large loans at that rate, and consequently fixed that as a general standard. Yet, of the immense amount loaned on mortgage, it is doubtful if a tenth part of it has been raised beyond what it was previous to the war. But we may safely assume that the rise of interest has been from 6 to 7.30 per cent, or about twenty per cent.

Profits may be safely estimated, during 1865, at a hundred per cent higher than ordinary; that is, where they were ten per cent on the business transacted, they were increased to twenty per cent. This we suppose a very low estimate. To recapitulate : —

Interest and rent, the remuneration of the capitalist,

advanced..............20 per cent.

Wages, the remuneration of the laborer, advanced 50 per cent.

Profits, the remuneration of the business man, advanced ..............100 per cent.

What is the result of this? Who wins, in consequence of this rise of wages, interest, rents, and profits, occasioned by the inflation of the currency? Prices rise, as we have seen, to an unprecedented height; say, one hundred and twenty per cent. Then we will suppose that —

A, the capitalist, has an income from interest and rent $4,000 Gains twenty per cent by rise of rate.......        800

Whole income in currency........$4,800

If he expends this amount in general commodities, at the advanced prices we have stated (one hundred and twenty per cent), he can only purchase with his $4,800 the same commodities he could have obtained before the general rise for $2,181.81.

From original income...........$4,000.00


Loss by change of prices........$1,818.19

equal to a loss of 45.4 per cent, notwithstanding the nominal rise of twenty per cent in his income.

And now as to the laborer. His wages were three hundred dollars: they are now four hundred and fifty dollars. This last sum is laid out in commodities, and brings him $204.54 worth, as reckoned at the prices before the rise. So, from $300 deduct $204.54, and his loss (in commodities) is found to be $95.46, or nearly one-third (31.82 per cent) of his sound-currency wages, or what they were before the expansion.

But how with regard to the third party, l'entrepreneur,— the merchant, manufacturer, &c. His income, at first, was $10,000: it is now $20,000. If laid out in commodities, the $20,000 would purchase, at the advanced prices, but $9,090.90 worth; which sum deducted from $10,000, his original profits, will give a loss of $919.10.

It is not to be presumed, however, that the whole of the income of the business man is expended in commodities, but a large share added to the capital. Suppose, before the rise of profits and prices, his expenses were five thousand dollars, and he purchases the same commodities now. He will then expend eleven thousand dollars, leaving him nine thousand dollars to add to his capital; while, before the general rise, he added only five thousand dollars. So that he is making a net gain of eighty per cent upon his income.

Recapitulation, on the foregoing suppositions: —

The capitalist makes a loss of.......45.4 per cent.

The laborer makes a loss of........31.8 per cent.

The business man makes a gain of......80 per cent.

Or, to state the result in another form: —

The capitalist gets but 54.4 on the dollar of his just due.

The laborer gets but 68.2 on the dollar of his wages.

The business man gets 180 cents where before he got $1.00.

This statement, which we think will be found correct in principle, and approximately so in the application we have given it, shows the position of each party in reference to the change in the standard of value occasioned by the war expansion of the currency. The two first classes lose, — the capitalist most heavily, but the laborer, perhaps, most distressingly; because, as a general fact, the latter must expend all his income, and, under such circumstances, can get only about two-thirds of the commodities to eat, drink, and wear which he could obtain with his wages under a sound currency. But one of the classes mentioned is getting rich; viz., that engaged in trade, manufactures, and general business. Nor will this class, perhaps, in the end, be so greatly benefited as might be at first supposed; for it must sustain the entire loss which will take place upon all the merchandise of the country, as the currency comes down to a specie standard. One class we have omitted; viz., speculators. To them, an expansion like that we have experienced affords a golden and most plentiful harvest; and they are not slow to enter the field of labor and fruition. To them an expansion is always a good; for it necessarily causes a rise of prices, and of course an opportunity for speculative operations. Expansion warms them into life and activity: contraction, to a sound standard of value, suspends their animation.

Upon certain facts, in regard to this matter, all will doubtless be agreed: —

(a) That those who live on fixed incomes from rent, interest, or salary, were never so straitened as during the war inflation.

(b) That laborers got less commodities for their services than before the expansion.

(c) That merchants, manufacturers, and business men generally, made extraordinary profits.

(d) That speculators flourished beyond all precedent.

But the importance of all these facts and considerations consists in this, — that all we find to be true, theoretically and practically, during the great expansion occasioned by the war, has always been true, in degree, during every expansion of the currency, though never before so palpable, because never before so excessive. There is nothing new in these phenomena: they are only more strikingly exhibited. The same effects have attended all previous expansions: the same process has always been going on, always must go on, under a currency capable of unnatural inflation.