William Gouge
An Inquiry

Probable Consequences of the Continuance of the Present System.

To infer that because a system produces great evil, it must soon give way, would be to argue in opposition to all experience.  If mere suffering could produce reformation, there would be little misery in the world.

Too many individuals have an interest in incorporated paper money Banks, to suffer the truth in relation to such institutions to have free progress.  Too many prejudices remain in the minds of a multitude who have no such interest, to permit the truth to have its proper effect.

It is, therefore, rational to conclude that the present system may, at least with modifications, continue to be the system of the country – not for ever, as some seem to think, but for a period which cannot be definitely calculated.  It is also rational to conclude that the effect it will have on society in time to come, will be similar to the effect it has had in time past.  We have, then, in the present state of the country, the means of judging of its future condition.

No system of policy that can be devised, can prevent the United States from advancing in wealth and population.  Our national prosperity has its seat in natural causes which cannot be effectually counteracted by any human measures, excepting such as would convert the Government into a despotism like that of Turkey, or reduce the nation to a state of anarchy resembling that of some countries of South America.

Our wealth and population will increase till they become equal for each square mile to the wealth and population of the continent of Europe.

We are now very far from this limit.  Under a good system, we cannot reach it in less than one or two hundred years.  Under a bad system, in not less, perhaps, than three or four hundred.

If we had a political system as bad as that of Great Britain, with its hereditary aristocracy, its laws of entail and primogeniture, its manufacturing guilds, its incorporated commercial companies, its large standing army, its expensive navy, its church establishment, its borough mongering, its pensions and its sinecures, our advancement would be seriously retarded.  But our wealth and population would, notwithstanding, continue to increase, till they should bear the same ratio to the natural resources of the country, that the wealth and population of Great Britain have to the natural resources of that island.

The progress of opulence in the United States in the next forty or fifty years, will probably be very great.  Many of the natural sources of wealth are as yet unappropriated.  In no part of the country has their productiveness been fully developed.  The people have now sufficient capital to turn their land and labor to more profit than was possible in any previous period of our country's history.

The daily improvements in productive machinery, and especially in the application of steam power, the discoveries in science, the introduction of new composts and new courses of crops in agriculture, the extension of roads and canals, have all a tendency to increase the wealth of the country, till the aggregate shall be enormous.

But this increase of wealth will be principally for the benefit of those to whom an increase of riches will bring no increase of happiness, for they have already wealth enough or more than enough.  Their originally small capitals have, in the course of a few years, been doubled, trebled, and, in some instances, quadrupled.  They have now large capitals, which will go on increasing in nearly the same ratio.

As no kind of property is prevented from being the prize of speculation by laws of entail, it is not easy to set bounds to the riches which some of our citizens may acquire.  Their incomes may be equal to those of the most wealthy of the European nobility.  Think, for a moment, of the immense accession of wealth certain families in the neighborhood of large cities and other improving towns must receive, from the conversion of tracts of many acres into building lots.  For ground which cost them but one hundred dollars an acre, they may get ten thousand dollars, twenty thousand dollars, or twenty-five thousand dollars.  This will be without any labor or expenditure of capital on their part.  The land will be increased in value, by the improvements made around it at the expense of other men.

But this is but one of the ways in which the wealth of the rich will increase.  It has heretofore been found that capital invested in lots, even in the neighborhood of the most flourishing towns, doubles itself less rapidly than capital devoted to other purposes of speculation.  In whatever way it may be employed the capital of the rich will, in the aggregate, increase in nearly the ratio of compound interest.

The vicissitudes of fortune will be, as they have been in past years, many and great, but they will tend to increase the inequality of social condition, by throwing the wealth of several rich men into the hands of one.  It is seldom that the vicissitudes of fortune distribute the wealth of a few among the many.

An increase in the number of Banks must be expected.  If the system is to be perpetual, an increase in the number of these institutions would not, in some respects, be an evil;  for seven hundred Banks could circulate no more paper than three hundred and fifty.  But every new Bank is a new centre of speculation;  and one kind of stock-jobbing gives birth to another.  We shall have new schemes for growing rich without labor – similar perhaps to the British bubble companies of 1825 – perhaps to the former speculations in Washington City lots – perhaps to the recent speculations in Pennsylvania coal lands.  The present rage for rail-road stock shows that part of our population already want something to be crazy about – or rather want something by which to set their neighbors crazy.  The old modes of speculation no longer afford full employment for their time and talents.

Nearly all the secondary operations of society will tend to increase the disparity between the rich and poor as different classes of the community, and not a small proportion of the rich will, in due time, become as luxurious and as corrupt, as ostentatious and as supercilious, as the "first circles" in the most dissipated capitals of Europe.

Their early habits of industry and economy cleave to some of the rich men of the present day.  Hence they are as useful and, as modest members of society as many who are in moderate circumstances.  But when their immense wealth passes, as pass it must in a few years, to their heirs, who know not the value of money, because they never knew the want of it, it will be lavished in every way which corrupt inclination can dictate.

While some will be enormously rich, there will be a considerable number in a state of comfort, as in Great Britain, and very many in a state of disconsolate poverty.  Some years must, indeed, elapse, before the number of paupers and criminals, and of persons whose condition borders on pauperism, will bear the same proportion to population in Europe and America.  In our immense extent of uncultivated land, the poor have a place to fly to;  but the spirit of speculation will follow them there.  We need not wait till the country is fully peopled to experience a measure of these evils.  While some parts of the Union will have all the simplicity, the rudeness, and the poverty of new settlements;  others will exhibit all the splendor and licentiousness, and misery and debasement of the most populous districts of Europe.

The beginning of this state of things is already observable.  According to the estimates of Mr. Niles, the number of paupers in the maritime counties of the United States, was, in 1815, in the proportion of one to every 130 inhabitants;  and, in 1821, in the proportion of two to every 130.

The published accounts do not give the number of persons admitted into the almshouses or committed to the prisons of Philadelphia, in the course of the year;  but the number of commitments of criminals and vagrants amounts to three or four thousand annually, and the number of admissions into the alms-house is equally considerable.  As the same person may be admitted or committed several times, we cannot give the exact number of either paupers or criminals.  But at one time last winter, there were upwards of sixteen hundred poor persons in the Spruce Street Alms-house;  and many more were receiving outdoor relief.[5]

In some years the public expenditures on account of the poor in Philadelphia, exceed the expenditures on the same account in Liverpool.

Some of the members of a Commission appointed about twelve years ago to inquire into the causes and extent of pauperism in Philadelphia, estimated the cost of relieving the poor at between four hundred and five hundred thousand dollars a year.  In this estimate was included what is given in private charity, as well as what is given in public: and an allowance was made for rent of almshouses and hospitals, or for interest on the first cost of land and buildings set apart for the use of the poor.  At that time the population of the city and suburbs did not much exceed one hundred and twenty thousand.

We may increase the legal provision for the relief of the indigent, and multiply alms-houses and hospitals.  But no thing of this kind can supply the want of just laws and of equal institutions.

Efforts may be made in various ways to diffuse the blessings of education, and to promote moral and religious improvement.  But these efforts will only alleviate our social evils: They cannot cure them.

In no small degree will the public distress be increased by well-meant but ill-directed attempts to give relief.  There is a class of politicians, (and they are unfortunately numerous and powerful,) who have for each particular social evil a legal remedy.  They are willing to leave nothing to nature: the law must do every thing.

This is, most unfortunately, the kind of legislation which public distress is almost sure to produce.  Instead of tracing its cause to some positive institution, the removal of which, though it might not immediately relieve distress, would prevent its recurrence, men set themselves to heaping law upon law, and institution upon institution.  They in this resemble quacks who apply lotions to the skin to cure diseases of the blood, or of the digestive organs, occasioned by intemperate living.

These projects of relief and efforts at corrective legislation, will be numberless in multitude and diversified in character: but as they will not proceed on the principle of "removing the cause that the effect may cease," they will ultimately increase the evils they are intended to cure.


5   Part of this pauperism and criminality must be attributed to European institutions, as the character of the subjects was formed before they migrated to America.  Another part is of domestic origin.