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 about the
author
N. Gregory Mankiw is professor of economics
at Harvard University. As a student, he studied
economics at Princeton University and MIT. As
a teacher, he has taught macroeconomics, micro-
economics, statistics, and principles of economics.
He even spent one summer long ago as a sailing
instructor on Long Beach Island.
Professor Mankiw is a prolific writer and a regu-
lar participant in academic and policy debates. His
work has been published in scholarly journals, such
as the American Economic Review, Journal of Political
Economy, and Quarterly Journal of Economics, and in
more popular forums, such as The New York Times
and The Wall Street Journal. He is also author of
the best-selling intermediate-level textbook Macroeconomics (Worth Publishers).
In addition to his teaching, research, and writing, Professor Mankiw has been a
research associate of the National Bureau of Economic Research, an adviser to the
Congressional Budget Office and the Federal Reserve Banks of Boston and New
York, and a member of the ETS test development committee for the Advanced
Placement exam in economics. From 2003 to 2005, he served as chairman of the
President’s Council of Economic Advisers.
Professor Mankiw lives in Wellesley, Massachusetts, with his wife, Deborah,
three children, Catherine, Nicholas, and Peter, and their border terrier, Tobin.

vi
 brief
contents
t

Part I Introduction 1 Part VI Money and Prices in the Long Run 321
1 Ten Principles of Economics 3 16 The Monetary System 323
2 Thinking Like an Economist 21 17 Money Growth and Inflation 347
3 Interdependence and the Gains from Trade 49

Part VII The Macroeconomics of Open Economies 373

Part II How Markets Work 63 18 Open-Economy Macroeconomics: Basic Concepts 375
4 The Market Forces of Supply and Demand 65 19 A Macroeconomic Theory of the Open Economy 399
5 Elasticity and Its Application 89
6 Supply, Demand, and Government Policies 111
Part VIII Short-Run Economic Fluctuations 421
20 Aggregate Demand and Aggregate Supply 423
Part III Markets and Welfare 133 21 The Influence of Monetary and Fiscal Policy on
7 Consumers, Producers, and the Efficiency of Markets 135 Aggregate Demand 461
8 Application: The Costs of Taxation 155 22 The Short-Run Trade-off between Inflation and
9 Application: International Trade 171 Unemployment 489

Part IV The Data of Macroeconomics 193 Part IX Final Thoughts 513

10 Measuring a Nation’s Income 195 23 Six Debates over Macroeconomic Policy 515
11 Measuring the Cost of Living 217

Part V The Real Economy in the Long Run 233

12 Production and Growth 235
13 Saving, Investment, and the Financial System 259
14 The Basic Tools of Finance 281
15 Unemployment 297

vii
 preface
ttoo the
the student
s

E
“ conomics is a study of mankind in the ordinary business of life.” So
wrote Alfred Marshall, the great 19th-century economist, in his textbook,
Principles of Economics. Although we have learned much about the economy
since Marshall’s time, this definition of economics is as true today as it
was in 1890, when the first edition of his text was published.
Why should you, as a student at the beginning of the 21st century, embark on
the study of economics? There are three reasons.
The first reason to study economics is that it will help you understand the
world in which you live. There are many questions about the economy that might
spark your curiosity. Why are apartments so hard to find in New York City? Why
do airlines charge less for a round-trip ticket if the traveler stays over a Saturday
night? Why is Johnny Depp paid so much to star in movies? Why are living stan-
dards so meager in many African countries? Why do some countries have high
rates of inflation while others have stable prices? Why are jobs easy to find in
some years and hard to find in others? These are just a few of the questions that a
course in economics will help you answer.
The second reason to study economics is that it will make you a more astute
participant in the economy. As you go about your life, you make many economic
decisions. While you are a student, you decide how many years to stay in school.
Once you take a job, you decide how much of your income to spend, how much
to save, and how to invest your savings. Someday you may find yourself running
a small business or a large corporation, and you will decide what prices to charge
for your products. The insights developed in the coming chapters will give you
a new perspective on how best to make these decisions. Studying economics will
not by itself make you rich, but it will give you some tools that may help in that
endeavor.
The third reason to study economics is that it will give you a better understand-
ing of both the potential and the limits of economic policy. Economic questions
are always on the minds of policymakers in mayors’ offices, governors’ mansions,
and the White House. What are the burdens associated with alternative forms of
taxation? What are the effects of free trade with other countries? What is the best
way to protect the environment? How does a government budget deficit affect
the economy? As a voter, you help choose the policies that guide the allocation of
society’s resources. An understanding of economics will help you carry out that
responsibility. And who knows: Perhaps someday you will end up as one of those
policymakers yourself.
Thus, the principles of economics can be applied in many of life’s situations.
Whether the future finds you reading the newspaper, running a business, or sit-
ting in the Oval Office, you will be glad that you studied economics.
N. Gregory Mankiw
December 2010

viii
Experience
Mankiw
The Art of Instruction, The Power of Engagement,
The Spark of Discovery

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ix
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will understand all of the material in that chapter of Mankiw.

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 acknowledgments

I
n writing this book, I benefited from the input of many talented people. Indeed, the
list of people who have contributed to this project is so long, and their contributions
so valuable, that it seems an injustice that only a single name appears on the cover.
Let me begin with my colleagues in the economics profession. The six editions
of this text and its supplemental materials have benefited enormously from their
input. In reviews and surveys, they have offered suggestions, identified challeng-
es, and shared ideas from their own classroom experience. I am indebted to them
for the perspectives they have brought to the text. Unfortunately, the list has be-
come too long to thank those who contributed to previous editions, even though
students reading the current edition are still benefiting from their insights.
Most important in this process have been Ron Cronovich (Carthage College)
and David Hakes (University of Northern Iowa). Ron and David, both dedicated
teachers, have served as reliable sounding boards for ideas and hardworking part-
ners with me in putting together the superb package of supplements.
For this new edition, the following diary reviewers recorded their day-to-day
experience over the course of a semester, offering detailed suggestions about how
to improve the text.

Mark Abajian, San Diego Mesa College Rita Callahan, Keiser University
Jennifer Bailly, Long Beach City College Tina Collins, San Joaquin Valley College
J. Ulyses Balderas, Sam Houston State Bob Holland, Purdue University
University Tom Holmes, University of Minnesota
Antonio Bos, Tusculum College Simran Kahai, John Carroll University
Greg Brock, Georgia Southern Miles Kimball, University of Michigan
University Jason C. Rudbeck, University of Georgia
Donna Bueckman, University of Kent Zirlott, University of Alabama
Tennessee Knoxville Tuscaloosa

The following reviewers of the fifth edition provided suggestions for refining
the content, organization, and approach in the sixth.

Mark Abajian, San Diego Mesa College Daren Conrad, Bowie State University
Hamid Bastin, Shippensburg University Diane de Freitas, Fresno City College
Laura Jean Bhadra, Northern Virginia Veronika Dolar, Cleveland State
Community College University
Benjamin Blair, Mississippi State Justin Dubas, Texas Lutheran
University University
Lane Boyte, Troy University Robert L Holland, Purdue University
Greg Brock, Georgia Southern University Andres Jauregui, Columbus State
Andrew Cassey, Washington State University
University Miles Kimball, University of Michigan
Joni Charles, Texas State University - Andrew Kohen, James Madison
San Marcos University
xi
xii ACKNOWLEDGMENTS

Daniel Lee, Shippensburg University Jeff Rubin, Rutgers University, New

David Lindauer, Wellesley College Brunswick
Joshua Long, Ivy Tech Community Lynda Rush, California State
College Polytechnic University Pomona
James Makokha, Collin College Naveen Sarna, Northern Virginia
Jim McAndrew, Luzerne County Community College
Community College Jesse Schwartz, Kennesaw State
William Mertens, University of Colorado University
Cindy Munson, Western Technical Mark Showalter, Brigham Young
College University
David Mushinski, Colorado State University Michael Tasto, Southern New
Fola Odebunmi, Cypress College Hampshire University

I received detailed feedback on specific elements in the text, including all end-of-
chapter problems and applications, from the following instructors.

Mark Abajian, San Diego Mesa College Christian Beer, Cape Fear Community
Afolabi Adebayo, University of New College
Hampshire Gary Bennett, State University of New
Mehdi Afiat, College of Southern York Fredonia
Nevada Bettina Berch, Borough of Manhattan
Douglas Agbetsiafa, Indiana University Community College
South Bend Thomas M. Beveridge, Durham
Richard Agnello, University of Technical Community College
Delaware Abhijeet Bhattacharya, Illinois Valley
Henry Akian, Gibbs College Community College
Constantine Alexandrakis, Hofstra Prasad Bidarkota, Florida International
University University
Michelle Amaral, University of the Jekab Bikis, Dallas Baptist University
Pacific Michael Bognanno, Temple University
Shahina Amin, University of Northern Cecil Bohanon, Ball State University
Iowa Natalia Boliari, Manhattan College
Larry Angel, South Seattle Community Melanie Boyte, Troy University
College Charles Braymen, Kansas State
Kathleen Arano, Fort Hays State William Brennan, Minnesota State
University University at Mankato
J. J. Arias, Georgia College & State Greg Brock, Georgia Southern
University University
Nestor Azcona, Babson College Ken Brown, University of Northern
Steve Balassi, St. Mary’s College/Napa Iowa
Valley College Laura Bucila, Texas Christian
Juventino Ulyses Balderas, Sam University
Houston State University Stan Buck, Huntington University
Tannista Banerjee, Purdue University Donna Bueckman, University of
Jason Barr, Rutgers University, Newark Tennessee Knoxville
Alan Barreca, Tulane University Joe Bunting, St. Andrews Presbyterian
Hamid Bastin, Shippensburg University College
Tammy Batson, Northern Illinois Rita Callahan, Keiser University
University / Rock Valley College Michael G. Carew, Baruch College
Carl Bauer, Oakton Community College John Carter, Modesto Junior College
Klaus Becker, Texas Tech University Kalyan Chakraborty, Emporia State
Robert Beekman, University of Tampa University
 ACKNOWLEDGMENTS xiii

Henry Check, Penn State University Monica Galizzi, University of

Xudong Chen, Baldwin-Wallace College Massachusetts Lowell
Clifton M. Chow, Mass Bay Jean-Philippe Gervais, North Carolina
Community College State University
Tina Collins, San Joaquin Valley College Dipak Ghosh, Emporia State University
Valerie Collins, Sheridan College Bill Goffe, State University of New York
Sarah Cosgrove, University of Oswego
Massachusetts Dartmouth Ryan Gorka, University of Nebraska
Dana Costea, Indiana University South Lincoln
Bend Marshall Gramm, Rhodes College
Maria DaCosta, University of Wisconsin Elias C. Grivoyannis, Yeshiva University
Eau Claire Eleanor Gubins, Rosemont College
Mian Dai, Drexel University Darrin Gulla, University of Kentucky
Joel Dalafave, Bucks County Karen Gulliver, Argosy University
Community College Ranganai Gwati, University of
Maylene Damoense, Monash Washington Seattle
University South Africa Mike Haupert, University of Wisconsin
Lorie Darche, Southwest Florida College La Crosse
Diane de Freitas, Fresno City College L Jay Helms, University of California
Ejigou Demissie, University of Davis
Maryland Eastern Shore Dr. David Hennessy, University of
Richard DePolt, Guilford Technical Dubuque
Community College Curry Hilton, Guilford Technical
Aaron Dighton, University of Community College
Minnesota George Hoffer, Virginia Commonwealth
Veronika Dolar, Cleveland State University
University Mark Holmes, University of Waikato
Fisher Donna, Georgia Southern Carl Hooker, Community College of
University Vermont
Harold Elder, University of Alabama Daniel Horton, Cleveland State University
Jamie Emerson, Salisbury University Scott Houser, Colorado School of the
Elena Ermolenko, Oakton Community Mines
College Fanchang Huang, Washington
Pat Euzent, University of Central Florida University in St Louis
Yan Feng, Hunter College, Queens Gregory Hunter, California State
College, CUNY Polytechnic University Pomona
Donna K. Fisher, Georgia Southern Christopher Hyer, University of New
University Mexico
Paul Fisher, Henry Ford Community Leke Ijiyode, St. Mary’s University of
College Minnesota
Fred Foldvary, Santa Clara University Chris Inama, Golden Gate University
Nikki Follis, Chadron State College Sarbaum Jeff, University of North
Kent Ford, State University of New York / Carolina Greensboro
Onondaga Community College Chad Jennings, Tennessee Temple
Ryan Ford, Pasadena City College University
Timothy Ford, California State Philipp Jonas, Kalamazoo Valley
University Sacramento Community College
Johanna Francis, Fordham University Robert Jones, Rensselaer Polytechnic
Robert Francis, Shoreline Community Institute
College Prathibha Joshi, Gordon College
Mark Frascatore, Clarkson University James Jozefowicz, Indiana University of
David Furst, University of South Florida Pennsylvania
xiv ACKNOWLEDGMENTS

Mahbubul Kabir, Lyon College Edward McGrath, Holyoke Community

Simran Kahai, John Carroll University College
David Kalist, Shippensburg University Shirley Ann Merchant, George
Camilla Kazimi, St. Mary’s College Washington University
Chris Kelton, Naval Postgraduate School William Mertens, University of
Brian Kench, University of Tampa Colorado
Hyeongwoo Kim, Auburn University Mitch Mitchell, Bladen Community
Miles Kimball, University of Michigan College
Alfreda L. King, Lawson State Mitch Mitchell, North Carolina
Community College Wesleyan
Elizabeth Knowles, –Univeristy of Mike Mogavero, University of Notre
Wisconsin La Crosse Dame
Fred Kolb, University of Wisconsin Eau Prof Ramesh Mohan, Bryant University
Claire Daniel Monchuk, University of
Risa Kumazawa, Duquesne University Southern Mississippi
Sumner La Croix, University of Hawaii Vasudeva Murthy, Creighton
Christopher Laincz, Drexel University University
Ghislaine Lang, San Jose State David Mushinsk, Colorado State
University University
Carolyn Langston, South Arkansas Paula Nas, University of Michigan Flint
Community College Russ Neal, Collin County Community
Richard Le, Cosumnes River College College
Daniel Lee, Shippensburg University Megumi Nishimura, University of
Tom Lehman, Indiana Wesleyan Colorado
University Peter Olson, Indiana University
Megan Leonard, Hendrix College Esen Onur, California State University
Larry Lichtenstein, Canisius College Sacramento
Tad Lincoln, Middlesex Community Stephen Onyeiwu, Allegheny College
College Margaret Oppenheimer, DePaul
David Linthicum, Cecil College North University
East Glenda Orosco, Oklahoma State
Sam Liu, West Valley College University Institute of Technology
Melody Lo, University of Texas at San David Ortmeyer, Bentley University
Antonio Thomas Owen, College of the Redwoods
Volodymyr Logovskyy, Georgia Jan Palmer, Ohio University
Institute of Technology Amar Parai, State University of New
Min Lu, Robert Morris University York at Fredonia
Gennady Lyakir, Champlain College Nitin Paranjpe, Wayne State and
Bruce Madariaga, Montgomery Oakland University
Community College Carl Parker, Fort Hays State University
Brinda Mahalingam, University of Michael Petrack, Oakland Community
California Riverside College
Rubana Mahjabeen, Truman State Gyan Pradhan, Eastern Kentucky
University University
Bahman Maneshni, Paradise Valley Michael Pries, University of Notre
Community College Dame
Denton Marks, University of Wisconsin- Joe Quinn, Boston College
Whitewater Mahesh Ramachandran, Clark
Timothy Mathews, Kennesaw State University
University Ratha Ramoo, Diablo Valley College
Frances Mc Donald, Northern Virginia Surekha Rao, Indiana University
Community College Northwest
 ACKNOWLEDGMENTS xv

Ryan Ratcliff, University of San Diego Justin Tapp, Southwest Baptist

Scott Redenius, Brandeis University University
Susan Reilly, Florida State College at Dosse Toulaboe, Fort Hays State
Jacksonville University
Imke Reimers, University of Minnesota Richard Trainer, State University of
Christopher Richardson, Merrillville New York at Nassau
High School Ngoc Bich Tran, San Jacinto College
Art Riegal, State University of New Sandra Trejos, Clarion University of
York Sullivan Pennsylvania
Richard Risinit, Middlesex Community Julie Trivitt, Arkansas Tech University
College Arja Turunen-Red, University of New
Michael Rogers, Albany State Orleans
University Diane Tyndall, Craven Community
Paul Roscelli, Canada College College
Larry Ross, University of Alaska Anchorage Kay Unger, University of Montana
Jeff Rubin, Rutgers University Lee J. Van Scyoc, University of
Allen Sanderson, University of Chicago Wisconsin Oshkosh
Jeff Sarbaum, University of North Lisa Verissimo-Bates, Foothill College
Carolina Greensboro Priti Verma, Texas A&M University,
Dennis Shannon, Southwestern Illinois Kingsville
College Patrick Walsh, St. Michael’s College
Xuguang Sheng, State University of Jing Wang, Northeastern University
New York at Fredonia Donald Waters, Brayant and Stratton
Mark Showalter, Brigham Young College, Virginia Beach, Virgina
University Campus
Johnny Shull, Central Carolina Patrick Welle, Bemidji State University
Community College Elizabeth Wheaton, Southern Methodist
Suann Shumaker, Las Positas University
Community College Luther White, Central Carolina
Jonathan Silberman, Oakland University Community College
Steven Skinner, Western Connecticut Oxana Wieland, University of
State University Minnesota Crookston
Catherine Skura, Sandhills Community John Winters, Auburn University at
College Montgomery
Gary Smith, D’Youville College Suzanne Wisniewski, University of
Warren Smith, Keiser University St. Thomas
William Snyder, Peru State College Patricia Wiswell, Columbia-Greene
Ken Somppi, Southern Union State Community College
Community College Mark Witte, College of Charleston
Dale Steinreich, Drury University Louis A. Woods, University of North
Liliana Stern, Auburn University Florida
Derek Stimel, Menlo College Guy Yamashiro, California State
Carolyn Fabian Stumph, Indiana University Long Beach
University Purdue University Fort Benhua Yang, Stetson University
Wayne Leslie Young, Kilian Community College
Bryce Sutton, University of Alabama at Karen Zempel, Bryant and Stratton
Birmingham College

The team of editors who worked on this book improved it tremendously. Jane
Tufts, developmental editor, provided truly spectacular editing—as she always
does. Mike Worls, economics executive editor, did a splendid job of overseeing the
xvi ACKNOWLEDGMENTS

many people involved in such a large project. Jennifer Thomas (supervising devel-
opmental editor) and Katie Yanos (supervising developmental editor) were crucial
in assembling an extensive and thoughtful group of reviewers to give me feed-
back on the previous edition, while putting together an excellent team to revise the
supplements. Colleen Farmer, senior content project manager, and Malvine Litten,
project manager, had the patience and dedication necessary to turn my manu-
script into this book. Michelle Kunkler, senior art director, gave this book its clean,
friendly look. Larry Moore, the illustrator, helped make the book more visually
appealing and the economics in it less abstract. Sheryl Nelson, copyeditor, refined
my prose, and Cindy Kerr, indexer, prepared a careful and thorough index. John
Carey, senior marketing manager, worked long hours getting the word out to po-
tential users of this book. The rest of the Cengage team was also consistently pro-
fessional, enthusiastic, and dedicated: Allyn Bissmeyer, Darrell Frye, Sarah Greber,
Betty Jung, Deepak Kumar, Kim Kusnerak, Sharon Morgan, Suellen Ruttkay, and
Joe Sabatino.
I am grateful also to Stacy Carlson and Daniel Norris, two star Harvard under-
graduates, who helped me refine the manuscript and check the page proofs for
this edition. Josh Bookin, a former Advanced Placement economics teacher and
recently an extraordinary section leader for Harvard’s Ec 10, gave invaluable
advice on some of the new material in this edition.
As always, I must thank my “in-house” editor Deborah Mankiw. As the first
reader of most things I write, she continued to offer just the right mix of criticism
and encouragement.
Finally, I would like to mention my three children Catherine, Nicholas, and
Peter. Their contribution to this book was putting up with a father spending too
many hours in his study. The four of us have much in common—not least of
which is our love of ice cream (which becomes apparent in Chapter 4). Maybe
sometime soon one of them will pick up my passion for economics as well.
N. Gregory Mankiw
December 2010
 table of
contents
Preface: To the Student viii FYI: Adam Smith and the Invisible Hand 12
Acknowledgments xi How the Economy as a Whole Works 13
Principle 8: A Country’s Standard of Living Depends on Its
Ability to Produce Goods and Services 13
In The News: Why You Should Study Economics 14
Principle 9: Prices Rise When the Government Prints Too
Much Money 15
Principle 10: Society Faces a Short-Run Trade-off between
Inflation and Unemployment 16
FYI: How to Read This Book 17
Conclusion 17

Chapter 2
Thinking Like an Economist 21
The Economist as Scientist 22
The Scientific Method: Observation, Theory, and More
Observation 22
The Role of Assumptions 23
Economic Models 24

I Introduction
Our First Model: The Circular-Flow Diagram 24
Our Second Model: The Production Possibilities Frontier 26
PART 1 Microeconomics and Macroeconomics 29
The Economist as Policy Adviser 29
Chapter 1 FYI: Who Studies Economics? 30
Positive versus Normative Analysis 30
Ten Principles of Economics 3 Economists in Washington 31
In The News: The Economics of President Obama 32
How People Make Decisions 4 Why Economists’ Advice Is Not Always Followed 32
Principle 1: People Face Trade-offs 4
Why Economists Disagree 34
Principle 2: The Cost of Something Is What You Give Up
Differences in Scientific Judgments 34
to Get It 5
Differences in Values 34
Principle 3: Rational People Think at the Margin 6
Perception versus Reality 35
Principle 4: People Respond to Incentives 7
Case Study: The Incentive Effects of Gasoline Prices 8 Let’s Get Going 35
In The News: Incentive Pay 9 In The News: Environmental Economics 37
How People Interact 10 APPENDIX Graphing: A Brief Review 40
Principle 5: Trade Can Make Everyone Better Off 10 Graphs of a Single Variable 40
Principle 6: Markets Are Usually a Good Way to Organize Graphs of Two Variables: The Coordinate System 41
Economic Activity 10 Curves in the Coordinate System 42
Principle 7: Governments Can Sometimes Improve Market Slope 44
Outcomes 11 Cause and Effect 46

xvii
xviii CONTENTS

Chapter 3 Demand 67
The Demand Curve: The Relationship between Price and
Interdependence and the Gains from Quantity Demanded 67
Market Demand versus Individual Demand 68
Trade 49 Shifts in the Demand Curve 69
A Parable for the Modern Economy 50 Case Study: Two Ways to Reduce the Quantity of Smoking
Production Possibilities 50 Demanded 71
Specialization and Trade 52 Supply 73
Comparative Advantage: The Driving Force of The Supply Curve: The Relationship between Price and
Specialization 54 Quantity Supplied 73
Absolute Advantage 54 Market Supply versus Individual Supply 73
Opportunity Cost and Comparative Advantage 54 Shifts in the Supply Curve 74
Comparative Advantage and Trade 55 Supply and Demand Together 77
The Price of the Trade 56 Equilibrium 77
FYI: The Legacy of Adam Smith and David Ricardo 57 Three Steps to Analyzing Changes in Equilibrium 79
Applications of Comparative Advantage 57 In The News: Price Increases after Disasters 82
Should Tom Brady Mow His Own Lawn? 57 Conclusion: How Prices Allocate Resources 84
Should the United States Trade with Other Countries? 58
In The News: The Changing Face of International Trade 59 Chapter 5
Conclusion 59
Elasticity and Its Application 89
The Elasticity of Demand 90
The Price Elasticity of Demand and Its Determinants 90
Computing the Price Elasticity of Demand 91
The Midpoint Method: A Better Way to Calculate
Percentage Changes and Elasticities 91
The Variety of Demand Curves 92
FYI: A Few Elasticities from the Real World 94
Total Revenue and the Price Elasticity of Demand 94
Elasticity and Total Revenue along a Linear Demand Curve 96
Other Demand Elasticities 97
The Elasticity of Supply 98
The Price Elasticity of Supply and Its Determinants 98
Computing the Price Elasticity of Supply 98
The Variety of Supply Curves 99
Three Applications of Supply, Demand, and Elasticity 101
Can Good News for Farming Be Bad News for Farmers? 101
Why Did OPEC Fail to Keep the Price of Oil High? 103
Does Drug Interdiction Increase or Decrease Drug-Related

PART II How
Work
Markets
63
Crime? 105
Conclusion 106

Chapter 6

Chapter 4 Supply, Demand, and Government

The Market Forces of Supply Policies 111
Controls on Prices 112
and Demand 65 How Price Ceilings Affect Market Outcomes 112
Markets and Competition 66 Case Study: Lines at the Gas Pump 114
What Is a Market? 66 Case Study: Rent Control in the Short Run and the Long
What Is Competition? 66 Run 115
 CONTENTS xix

How Price Floors Affect Market Outcomes 116 The Benevolent Social Planner 145
Case Study: The Minimum Wage 117 Evaluating the Market Equilibrium 146
Evaluating Price Controls 119 In The News: Ticket Scalping 148
In The News: Should Unpaid Internships Be Allowed? 120 Case Study: Should There Be a Market in
Organs? 149
Taxes 121
How Taxes on Sellers Affect Market Outcomes 121 Conclusion: Market Efficiency and Market
How Taxes on Buyers Affect Market Outcomes 123 Failure 150
Case Study: Can Congress Distribute the Burden of a
Payroll Tax? 124
Elasticity and Tax Incidence 125 Chapter 8
Case Study: Who Pays the Luxury Tax? 127
Conclusion 128
Application: The Costs of Taxation 155
The Deadweight Loss of Taxation 156
How a Tax Affects Market Participants 157
Deadweight Losses and the Gains from Trade 159
The Determinants of the Deadweight Loss 160
Case Study: The Deadweight Loss Debate 162
Deadweight Loss and Tax Revenue as Taxes Vary 163
Case Study: The Laffer Curve and Supply-Side
Economics 165
In The News: New Research on Taxation 166
Conclusion 166

Chapter 9
Application: International Trade 171
The Determinants of Trade 172
The Equilibrium without Trade 172
The World Price and Comparative Advantage 173
The Winners and Losers from Trade 174

PART III Markets

Welfare
and
133
The Gains and Losses of an Exporting Country 174
The Gains and Losses of an Importing Country 175
The Effects of a Tariff 177
FYI: Import Quotas: Another Way to Restrict
Trade 179
The Lessons for Trade Policy 179
Chapter 7 Other Benefits of International Trade 180
In The News: Trade Skirmishes 181
Consumers, Producers, and the Efficiency The Arguments for Restricting Trade 182
of Markets 135 The Jobs Argument 182
In The News: Should the Winners from Free Trade
Consumer Surplus 136 Compensate the Losers? 183
Willingness to Pay 136 The National-Security Argument 184
Using the Demand Curve to Measure Consumer Surplus 137 In The News: Second Thoughts about Free
How a Lower Price Raises Consumer Surplus 138 Trade 184
What Does Consumer Surplus Measure? 140 The Infant-Industry Argument 185
Producer Surplus 141 The Unfair-Competition Argument 186
Cost and the Willingness to Sell 141 The Protection-as-a-Bargaining-Chip Argument 186
Using the Supply Curve to Measure Producer Surplus 142 Case Study: Trade Agreements and the World Trade
How a Higher Price Raises Producer Surplus 144 Organization 186
Market Efficiency 145 Conclusion 187
xx CONTENTS

Chapter 11
Measuring the Cost of Living 217
The Consumer Price Index 218
How the Consumer Price Index Is Calculated 218
FYI: What Is in the CPI’s Basket? 220
Problems in Measuring the Cost of Living 221
In The News: Shopping for the CPI 222
The GDP Deflator versus the Consumer Price Index 224
Correcting Economic Variables for the Effects of Inflation 225
Dollar Figures from Different Times 226
Indexation 226
FYI: Mr. Index Goes to Hollywood 227
Real and Nominal Interest Rates 227
Case Study: Interest Rates in the U.S. Economy 229
Conclusion 230

PART IV The Data

of Macro-
economics 193
Chapter 10
Measuring a Nation’s Income 195
The Economy’s Income and Expenditure 196
The Measurement of Gross Domestic Product 198
“GDP Is the Market Value…” 198
“…of All…” 198
“…Final…” 199
“…Goods and Services…” 199
“…Produced…” 199
“…Within a Country…” 199
“…In a Given Period of Time.” 199
The Components of GDP 200
FYI: Other Measures of Income 201
PART V The Real Economy
in the Long Run 233
Consumption 201
Investment 201
Government Purchases 202
Chapter 12
Net Exports 202
Case Study: The Components of U.S. GDP 203
Production and Growth 235
Real versus Nominal GDP 203 Economic Growth around the World 236
A Numerical Example 204 FYI: A Picture Is Worth a Thousand Statistics 238
The GDP Deflator 205 FYI: Are You Richer Than the Richest American? 240
Case Study: Real GDP over Recent History 206 Productivity: Its Role and Determinants 240
Is GDP a Good Measure of Economic Well-Being? 207 Why Productivity Is So Important 240
In The News: The Underground Economy 208 How Productivity Is Determined 241
In The News: Beyond Gross Domestic Product 210 FYI: The Production Function 243
Case Study: International Differences in GDP and the Case Study: Are Natural Resources a Limit to Growth? 243
Quality of Life 211 Economic Growth and Public Policy 244
Conclusion 212 Saving and Investment 244
 CONTENTS xxi

Diminishing Returns and the Catch-Up Effect 245

Investment from Abroad 246
Chapter 15
Education 247
Health and Nutrition 248
Unemployment 297
In The News: Promoting Human Capital 249 Identifying Unemployment 298
Property Rights and Political Stability 250 How Is Unemployment Measured? 298
Free Trade 251 Case Study: Labor-Force Participation of Men and Women
Research and Development 252 in the U.S. Economy 301
Population Growth 252 Does the Unemployment Rate Measure What We
In The News: One Economist’s Answer 254 Want It To? 302
Conclusion: The Importance of Long-Run Growth 256 How Long Are the Unemployed without Work? 304
Why Are There Always Some People Unemployed? 304
In The News: The Rise of Long-Term Unemployment 305
Chapter 13 FYI: The Jobs Number 306
Job Search 306
Saving, Investment, and the Why Some Frictional Unemployment Is Inevitable 307
Financial System 259 Public Policy and Job Search 307
Unemployment Insurance 308
Financial Institutions in the U.S. Economy 260 In The News: How Much Do the Unemployed Respond to
Financial Markets 260 Incentives? 308
Financial Intermediaries 262
FYI: Key Numbers for Stock Watchers 263 Minimum-Wage Laws 310
Summing Up 264 FYI: Who Earns the Minimum Wage? 312
FYI: Financial Crises 265 Unions and Collective Bargaining 312
Saving and Investment in the National Income Accounts 265 The Economics of Unions 313
Some Important Identities 266 Are Unions Good or Bad for the Economy? 314
The Meaning of Saving and Investment 267 The Theory of Efficiency Wages 314
The Market for Loanable Funds 268 Worker Health 315
Supply and Demand for Loanable Funds 268 Worker Turnover 315
Policy 1: Saving Incentives 270 Worker Quality 315
Policy 2: Investment Incentives 272 Worker Effort 316
Policy 3: Government Budget Deficits and Surpluses 272 Case Study: Henry Ford and the Very Generous $5-a-Day
Case Study: The History of U.S. Government Debt 274 Wage 316

Conclusion 276 Conclusion 317

Chapter 14
The Basic Tools of Finance 281
Present Value: Measuring the Time Value of Money 282
FYI: The Magic of Compounding and the Rule of 70 284
Managing Risk 284
Risk Aversion 284
The Markets for Insurance 285
Diversification of Firm-Specific Risk 286
The Trade-off between Risk and Return 287
Asset Valuation 288
Fundamental Analysis 289
The Efficient Markets Hypothesis 289
In The News: A Cartoonist’s Guide to Stock Picking 290
Case Study: Random Walks and Index Funds 291
In The News: Is the Efficient Markets
Hypothesis Kaput? 292
Market Irrationality 294
Conclusion 294
xxii CONTENTS

Menu Costs 362

PART VI Money and Prices

in the Long Run 321
Relative-Price Variability and the Misallocation
of Resources 362
Inflation-Induced Tax Distortions 363
Confusion and Inconvenience 364
A Special Cost of Unexpected Inflation: Arbitrary
Redistributions of Wealth 365
Chapter 16 Inflation Is Bad, But Deflation May Be Worse 366
Case Study: The Wizard of Oz and the Free-Silver
The Monetary System 323 Debate 366
In The News: Inflationary Threats 368
The Meaning of Money 324
The Functions of Money 325 Conclusion 368
The Kinds of Money 325
In The News: Mackereleconomics 326
Money in the U.S. Economy 327
FYI: Why Credit Cards Aren’t Money 328
Case Study: Where Is All the Currency? 328
The Federal Reserve System 329
The Fed’s Organization 330
The Federal Open Market Committee 330
Banks and the Money Supply 331
The Simple Case of 100-Percent-Reserve Banking 331
Money Creation with Fractional-Reserve Banking 332
The Money Multiplier 333
Bank Capital, Leverage, and the Financial Crisis
of 2008–2009 335
The Fed’s Tools of Monetary Control 336
How the Fed Influences the Quantity of Reserves 337
How the Fed Influences the Reserve Ratio 338
Problems in Controlling the Money Supply 339
Case Study: Bank Runs and the Money Supply 340
The Federal Funds Rate 340
In The News: Bernanke on the Fed’s Toolbox 342
Conclusion 344
PART VII The Macro-
economics of Open
Chapter 17 Economies 373
Money Growth and Inflation 347
Chapter 18
The Classical Theory of Inflation 348
The Level of Prices and the Value of Money 349 Open-Economy Macroeconomics: Basic
Money Supply, Money Demand, and Monetary
Equilibrium 349 Concepts 375
The Effects of a Monetary Injection 351 The International Flows of Goods and Capital 376
A Brief Look at the Adjustment Process 352 The Flow of Goods: Exports, Imports, and Net Exports 376
The Classical Dichotomy and Monetary Neutrality 353 Case Study: The Increasing Openness of the U.S.
Velocity and the Quantity Equation 354 Economy 377
Case Study: Money and Prices during Four In The News: Breaking Up the Chain of Production 378
Hyperinflations 356 The Flow of Financial Resources: Net Capital Outflow 380
The Inflation Tax 356 The Equality of Net Exports and Net Capital Outflow 381
FYI: Hyperinflation in Zimbabwe 358 Saving, Investment, and Their Relationship to the International
The Fisher Effect 359 Flows 382
The Costs of Inflation 360 Summing Up 383
A Fall in Purchasing Power? The Inflation Fallacy 360 Case Study: Is the U.S. Trade Deficit a National
Shoeleather Costs 361 Problem? 384
 CONTENTS xxiii

VIII Short-Run
The Prices for International Transactions: Real and
Nominal Exchange Rates 386
Nominal Exchange Rates 386 PART
FYI: The Euro 387
Real Exchange Rates 388 Economic
A First Theory of Exchange-Rate Determination: Fluctuations 421
Purchasing-Power Parity 389
The Basic Logic of Purchasing-Power Parity 390
Implications of Purchasing-Power Parity 390
Chapter 20
Case Study: The Nominal Exchange Rate during a
Hyperinflation 392
Aggregate Demand and Aggregate
Limitations of Purchasing-Power Parity 393 Supply 423
Case Study: The Hamburger Standard 393
Three Key Facts about Economic Fluctuations 424
Conclusion 394 Fact 1: Economic Fluctuations Are Irregular and
Unpredictable 424
Fact 2: Most Macroeconomic Quantities Fluctuate
Chapter 19
Together 426
Fact 3: As Output Falls, Unemployment Rises 426
A Macroeconomic Theory of the Open
Explaining Short-Run Economic Fluctuations 426
Economy 399 The Assumptions of Classical Economics 426
Supply and Demand for Loanable Funds and for Foreign- The Reality of Short-Run Fluctuations 427
Currency Exchange 400 In The News: The Social Influences of Economic
The Market for Loanable Funds 400 Downturns 428
The Market for Foreign-Currency Exchange 402 The Model of Aggregate Demand and Aggregate
FYI: Purchasing-Power Parity as a Special Case 404 Supply 428

Equilibrium in the Open Economy 405 The Aggregate-Demand Curve 430

Net Capital Outflow: The Link between the Two Markets 405 Why the Aggregate-Demand Curve Slopes
Simultaneous Equilibrium in Two Markets 406 Downward 430
FYI: Disentangling Supply and Demand 408 Why the Aggregate-Demand Curve Might Shift 433

How Policies and Events Affect an Open Economy 408 The Aggregate-Supply Curve 435
Government Budget Deficits 408 Why the Aggregate-Supply Curve Is Vertical in
Trade Policy 410 the Long Run 435
Political Instability and Capital Flight 413 Why the Long-Run Aggregate-Supply Curve Might
Case Study: Capital Flows from China 415 Shift 436
In The News: Alternative Exchange-Rate Regimes 416 Using Aggregate Demand and Aggregate Supply to Depict
Long-Run Growth and Inflation 438
Conclusion 416 Why the Aggregate-Supply Curve Slopes Upward in the Short
Run 438
Why the Short-Run Aggregate-Supply Curve Might
Shift 442
Two Causes of Economic Fluctuations 444
The Effects of a Shift in Aggregate Demand 444
FYI: Monetary Neutrality Revisited 447
Case Study: Two Big Shifts in Aggregate Demand:
The Great Depression and World War II 448
Case Study: The Recession of 2008–2009 449
In The News: Modern Parallels to the Great
Depression 450
The Effects of a Shift in Aggregate Supply 452
Case Study: Oil and the Economy 454
FYI: The Origins of the Model of Aggregate Demand and
Aggregate Supply 455
Conclusion 456
Another Random Scribd Document
with Unrelated Content
enthusiastic about the musical whims of one of their number, still less for
his "crank" in collecting "weeds"—as everything that is not eatable (or is
not a rose) is called in most places of the West. Tastes, therefore, could not
be cultivated for the want of means, and any special faculties which
members might individually possess were of necessity kept in abeyance.
Amid scenery that might distract an artist, and fossil and insect treasures
enough to send men of science crazy, the community can do nothing in the
direction of Art or of Natural History, unless they all do it together. For the
Order cannot spare a man who may be a good ploughman, to go and sit
about in the canyons painting pictures of pine-trees and waterfalls. Nor can
it spare the money that may be needed for shingles in buying microscopes
for a "bug-hunter." The common prosperity, therefore, can only be gained at
a sacrifice of all individual tastes. This alone is a very serious obstacle to
success of the highest kind. But in combination with this is of course the
more general and formidable fact that even in the staple industries of the
community individual excellence brings with it no individual benefits. A
moral trades-unionism planes all down to a level. It does not, of course,
prevent the enthusiast working his very hardest and best in the interests of
his neighbours. But such enthusiasm is hardly human. Men will insist, to
the end of all time, on enjoying the reward of their own labours, the
triumphs of their own brains. Some may go so far as nominally to divide
their honours with all their friends. But where shall we look for the man
who will go on all his life toiling successfully for the good of idler folks,
and checking his own free stride to keep pace with their feebler steps? And
this is the rock on which all such communities inevitably strike.

Security from the ordinary apprehensions of life; a general protection

against misfortune and "bad seasons;" the certainty of having all the
necessaries of existence, are sufficient temptations for unambitious men.
But the stronger class of mind, though attracted to it by piety, and retained
for a while by a sincere desire to promote the common good, must from
their very nature revolt against a permanent alienation of their own
earnings, and a permanent subordination of their own merits. At Orderville,
therefore, we find the young men already complaining of a system which
does not let them see the fruits of their work. Their fathers' enthusiasm
brought them there as children. Seven years later they are grown up into
independent-minded young men. They have not had experience of family
anxieties yet. All they know is, that beyond Orderville there are larger
spheres of work, and more brilliant opportunities for both hand and head.

Fortunately, however, for Orderville, the articles of incorporation give the

directors the very powers that are necessary, and if these are exercised the
ship may miss the rock that has wrecked all its predecessors. If they can
declare dividends, open private accounts, and realize the idea of personal
property, the difference in possibilities between the outer world and
Orderville will be very greatly reduced, while the advantage of certainties
in Orderville will be even further increased. Young men would then think
twice about going away, and any one if he chose could indulge his wife
with a piano or himself with a box of water-colours. Herein then lies the
hopefulness of the experiment; and fortunately Mr. Howard Spencer, the
President of the community, has all the generosity to recognize the
necessity for concession to younger ambition, and all the courage to
institute and carry out a modification of communism which shall introduce
more individuality. I anticipate, therefore, that this very remarkable and
interesting colony will survive the "twenty-five years" period for which it
was established, and will encourage the foundation of many other similar
"Family Orders."

Seven years have passed since Mr. Spencer pitched his camp in the
beautiful wilderness of the Rio Virgin canyons. He found the hills of fine
building-stone, their sides thickly grown with splendid pine timber, and
down the valley between them flowing a bright and ample stream. The
vegetation by its variety and luxuriance gave promise of a fertile soil; some
of the canyons formed excellent natural meadows, while just over the ridge,
a mile or two from the settlement, lay a bed of coal. Finally, the climate was
delightfully temperate! Every condition of success, therefore, was found
together, and prosperity has of course responded to the voice of industry.
Acre by acre the wild gardens have disappeared, and in their place stand
broad fields of corn; the tangled brakes of wild-berry plants have yielded
their place to orchards of finer fruits; cattle and sheep now graze in numbers
where the antelope used to feed; and from slope to slope you can hear
among the pines, above the idle crooning of answering doves and the
tinkling responses of wandering kine, the glad antiphony of the whirring
saw-mill and the busy loom.
The settlement itself is grievously disappointing in appearance. For as you
approach it, past the charming little hamlet of Glendale, past such a sunny
wealth of orchard and meadow and corn-land, past such beautiful glimpses
of landscape, you cannot help expecting a scene of rural prettiness in
sympathy with such surroundings. But Orderville at first sight looks like a
factory. The wooden shed-like buildings built in continuous rows, the
adjacent mills, the bare, ugly patch of hillside behind it, give the actual
settlement an uninviting aspect. But once within the settlement, the scene
changes wonderfully for the better. The houses are found, the most of them,
built facing inwards upon an open square, with a broad side-walk, edged
with tamarisk and mulberry, box-elder and maple-trees, in front of them.
Outside the dwelling-house square are scattered about the school-house,
meeting-house, blacksmith and carpenters' shops, tannery, woollen-mill,
and so forth, while a broad roadway separates the whole from the orchards,
gardens, and farm-lands generally. Specially noteworthy here are the
mulberry orchard—laid out for the support of the silk-worms, which the
community are now rearing with much success—and the forcing-ground
and experimental garden, in which wild flowers as well as "tame" are being
cultivated. Among the buildings the more interesting to me were the school-
houses, well fitted up, and very fairly provided with educational apparatus;
and the rudimentary museum, where the commencement of a collection of
the natural curiosities of the neighbourhood is displayed. What this may
some day grow into, when science has had the chance of exploring the
surrounding hills and canyons, it is difficult to say; for Nature has favoured
Orderville profusely with fossil strata and mineral eccentricities, a rich
variety of bird and insect life, and a prodigious botanical luxuriance. Almost
for the first time in my travels, too, I found here a very intelligent interest
taken in the natural history of the locality; but the absence of books and of
necessary apparatus, as yet of course prevents the brethren from carrying on
their studies and experiments to any standard of scientific value.

Though staying in Orderville so short a time, I was fortunate enough to see

the whole community together. For on the evening of my arrival there was a
meeting at which there was a very full gathering of the adults—and the
babies in arms. The scene was as curious as anything I have ever witnessed
in any part of the world. The audience was almost equally composed of men
and women, the latter wearing, most of them, their cloth sun-bonnets, and
bringing with them the babies they were nursing.

Brigham Young used to encourage mothers to bring them, and said that he
liked to hear them squalling in the Tabernacle. Whether he really liked it or
not, the mothers did as he said, and the babies too, and the perpetual
bleating of babies from every corner of the building makes it seem to this
day as if religious service was being held in a sheepfold. Throughout the
proceedings at Orderville babies were being constantly handed across from
mother to neighbour and back from neighbour to mother. Others were being
tossed up and down with that jerky, perpendicular motion which seems so
soothing to the very young, but which reminded me of the popping up and
down of the hammers when the "lid" of a piano is lifted up during a
performance. But the baby is an irrepressible person, and at Orderville has
it very much its own way. The Apostle's voice in prayer was accepted as a
challenge to try their lungs, and the music (very good, by the way) as a
mere obligato to their own vocalization. The patient gravity of the mothers
throughout the whole performance, and the apparent indifference of the
men, struck me as very curious—for I come from a country where one baby
will plunge a whole church congregation into profanity, and where it is
generally supposed that two crying together would empty heaven. Of the
men of Orderville I can say sincerely that a healthier, more stalwart
community I have never seen, while among the women, I saw many refined
faces, and remarked that robust health seemed the rule. Next morning the
children were paraded, and such a brigade of infantry as it was! Their legs
(I think, though, they are known as "limbs" in America) were positively
columnar, and their chubby little owners were as difficult to keep quietly in
line as so much quicksilver. Orderville boasts that it is self-supporting and
independent of outside help, and certainly in the matter of babies there
seems no necessity for supplementing home manufactures by foreign
imports. The average of births is as yet five in each family during the six
years of the existence of the Order! Two were born the day I arrived.

Unfortunately one of the most characteristic features of this family

community was in abeyance during my visit—the common dining-table.
For a rain-flood swept through the gorge above the settlement last winter
and destroyed "the bakery." Since then the families have dined apart or
clubbed together in small parties, but the wish of the majority is to see the
old system revived, for though they live well now, they used, they say, to
live even better when "the big table" was laid for its 200 guests at once.

Self-supporting and well-directed, therefore, the Orderville "communists"

bid fair to prove to the world that pious enthusiasm, if largely tempered
with business judgment, can make a success of an experiment which has
hitherto baffled all attempts based upon either one or the other alone.
 CHAPTER XIX.
MORMON VIRTUES.

Red ants and anti-Mormons—Ignorance of

the Mormons among Gentiles in Salt Lake
City—Mormon reverence for the Bible—
Their struggle against drinking-saloons in the
city—Conspicuous piety in the settlements—
Their charity—Their sobriety (to my great
inconvenience)—The literature of
Mormonism utterly unreliable—Neglect of
the press by the Saints—Explanation of the
wide-spread misrepresentation of
Mormonism.

FROM Orderville (after a short tour in the south-west of the Territory) I

returned to Salt Lake City, and during my second sojourn there, over a
month, I saw nothing and learned nothing either from Mormon or Gentile to
induce me to erase a single word I had written during my previous visit.
Indeed, a better acquaintance only strengthened my first favourable
opinions of "the Saints of the Rocky Mountains."

I was walking one day up the City Creek, when I became aware of an aged
man seated on a stone by the roadside. His trousers were turned up to his
knees, and he was nursing one of his legs as if he felt a great pity for it. As I
approached I perceived that he was in trouble—(I perceived this by his
oaths)—and getting still nearer I ventured to inquire what annoyed him.
"Aged person," said I, "what aileth thee?"—or words to that effect. But
there was no response, at least not worth mentioning. He only bent further
over his leg, and I noticed that his coat had split down the back seam. His
cursing accounted for that. It was sufficient to make any coat split. And then
his hat fell off his head into the dust, in judgment upon him. At this he
swore again, horribly. By this time I had guessed that he had been bitten by
red ants (and they are the shrewdest reptiles at biting that I know of), so I
said, "Bitten by red ants, eh?" At this he exploded with wrath, and looked
up. And such a face! He had a countenance on him like the ragged edge of
despair. His appearance was a calamity. "Red ants," said he; "red Indians,
red devils, red hell!" and then, relapsing into the vernacular, he became
unintelligibly profane, but ended up with "this damned Mormon city."

Now here was a man, fairly advanced in years, fairly clothed, fairly
uneducated. As I had never seen him before, he may have been, for all I
know, "the average American" I so often see referred to. Anyhow, there he
was, cursing the Mormons because he had been bitten by red ants! Of his
own stupidity he had gone and stood upon an ants' nest, thrust his
hippopotamus foot into their domicile, overwhelming the nurseries and the
parlours in a common catastrophe, crushing with the same heel the
grandsire ant and the sucking babe at its mother's breast, mashing up the
infirm and the feeble with the eggs in the cells and the household provisions
laid up in the larder—ruining in fact an industrious community simply by
his own weight in butcher's meat. Some of the survivors promptly attacked
the intruding boot, and, running up what the old man was pleased to call
"his blasted pants," had bitten the legs which they found concealed within
them. And for this, "the average American" cursed the Mormons and their
city!

The incident interested me, for, apart from my sympathy with the ants, I
couldn't help thinking what a powerful adversary to Mormonism this
trifling mishap might have created. That man went back to his hotel (for he
was evidently a "visitor") a confirmed anti-Mormon. His darkest suspicions
about polygamy were confirmed. His detestation of the bestial
licentiousness of the Saints was increased a hundred-fold. He saw at a
glance that all he had ever heard about "the Danites" was quite true, and
much more too that he had never heard but could now easily invent for
himself. There was no need for any one to tell him, after the way he had
been treated within a mile of the Tabernacle, of the infamous debaucheries
of Brigham Young with his "Cyprian maids" and his "cloistered wives."
Wasn't it as plain as the sun at noonday that the Mormons were in league
with the red Indians, and went halves in the proceeds of each other's
massacres?
The ant-bitten man was a very typical "Mormon-eater," for such is the local
name of those who revile Mormonism root and branch because they find
intelligent men opposed to polygamy. They are under the impression, seeing
and talking to nobody but each other, that the United States in a mass, that
the whole world, entertain an unreasoning, fanatical abhorrence of the
inhabitants of the Territory, and share with them their mean parochial
jealousy of the Mormon tradesmen and Mormon farmers who are more
thriving than they are themselves.

Here in Salt Lake City there is the most extraordinary ignorance of

Mormonism that can be imagined. I have actually been assured by
"Gentiles" that the Saints do not believe in the God of the Bible—that
adultery among them is winked at by husbands under a tacit understanding
of reciprocity—that the Mormons as a class are profane, and drunken, and
so forth. Now, if they knew anything whatever of the Mormons, such
statements would be impossible (unless of course made in wilful malice),
for my personal acquaintance with "the Saints" has shown me that in all
classes alike the reverence for the God of the Bible is formulated not only
in their morning and evening prayers, but in their grace before every meal;
that so far from there being any exceptional familiarity between families,
the very reverse is conspicuous, for so strict is the Mormon etiquette of
social courtesies, that households which in England would be on the most
intimate terms, maintain here a distant formality which impresses the
stranger as being cold; that instead of the Mormons being as a class
profane, they are as a class singularly sober in their language, and indeed in
this respect resemble the Quakers. Now, my opinions are founded upon
facts of personal knowledge and experience.

Of course it will be said of me that as I was a "guest" of Mormons I was

"bound" to speak well of them; that as I was so much among them I was
hoodwinked and "shown the best side of everything," &c., &c. Against this
argument, always the resource of the gobemouche, common sense is
useless. "Against stupidity the gods themselves are powerless." But this I
can say—that I will defy any really impure household, monogamous or not,
to hoodwink me in the same way—to keep up from morning to night the
same unchanging profession of piety, to make believe from week to week
with such consummate hypocrisy that they are god-fearing and pure in their
lives, and to wear a mask of sobriety with such uniform success. And I am
not speaking of one household only, but of a score to which I was admitted
simply as being a stranger from whom they need not fear calumny. I do not
believe that acting exists anywhere in such perfection that a whole
community can assume, at a few hours' notice and for the benefit of a
passing stranger, the characters of honest, kind-hearted, simple men and
women, and set themselves patiently to a three months' comedy of
pretended purity. Such impostors do not exist.

The Mormons drunken! Now what, for instance, can be the conclusion of
any honest thinker from this fact—that though I mixed constantly with
Mormons, all of them anxious to show me every hospitality and courtesy, I
was never at any time asked to take a glass of strong drink? If I wanted a
horse to ride or to drive I had a choice at once offered me. If I wanted some
one to go with me to some point of interest, his time was mine. Yet it never
occurred to them to show a courtesy by suggesting "a drink."

Then, seriously, how can any one have respect for the literature or the men
who, without knowing anything of the lives of Mormons, stigmatize them
as profane, adulterous, and drunken? As a community I know them, from
personal advantages of observation such as no non-Mormon writer has ever
previously possessed,[1] to be at any rate exceptionally careful in
maintaining the appearance of piety and sobriety; and I leave it to my
readers to judge whether such solid hypocrisy as this, that tries to abolish all
swearing and all strong drink both by precept from the pulpit and example
in the household, is not, after all, nearly as admirable as the real thing itself.

This, at all events, is beyond doubt—that the Mormons have always

struggled hard to prevent the sale of liquor in Salt Lake City, except under
strict regulations and supervision. But the fight has gone against them. The
courts uphold the right of publicans to sell when and what they choose; and
the Mormons, who could at one time boast—and visitors without number
have borne evidence to the fact—that a drunkard was never to be seen, an
oath never to be heard, in the streets of their city, have now to confess that,
thanks to the example of Gentiles, they have both drunkards and profane
men among them. But the general attitude of the Church towards these
delinquents, and the sorrow that their weakness causes in the family circle,
are in themselves proofs of the sincerity in sobriety which distinguishes the
Mormons. Nor is it any secret that if the Mormons had the power they
would to-morrow close all the saloons and bars, except those under Church
regulation, and then, they say, "we might hope to see the old days back
when we never thought of locking our doors at night, and when our wives
and girls, let them be out ever so late, needed no escort in the streets."

And having travelled throughout the Mormon settlements, I am at a loss

how to convey to my readers with any brevity the effect which the tour has
had upon me.

I have seen, and spoken to, and lived with, Mormon men and women of
every class, and never in my life in any Christian country, not even in
happy, rural England, have I come in contact with more consistent piety,
sobriety, and neighbourly charity. I say this deliberately. Without a particle
of odious sanctimony these folk are, in their words and actions, as Christian
as I had ever thought to see men and women. A perpetual spirit of charity
seems to possess them, and if the prayers of simple, devout humanity are
ever of any avail, it must surely be this wonderful Mormon earnestness in
appeals to Heaven. I have often watched Moslems in India praying, and
thought then that I had seen the extremity of devotion, but now that I have
seen these people on their knees in their kitchens at morning and at night,
and heard their old men—men who remember the dark days of the Faith—
pour out from their hearts their gratitude for past mercy, their pleas for
future protection, I find that I have met with even a more striking form of
prayer than I have ever met with before. Equally striking is the universal
reverence and affection with which they, quite unconscious of the fact that I
was "taking notes," spoke of the authorities of their Church. Fear there was
none, but respect and love were everywhere. It would be a bold man who,
in one of these Mormon hamlets, ventured to repeat the slanders current
among Gentiles elsewhere. And it would indeed be a base man who visited
these hard-living, trustful men and women, and then went away to
calumniate them.

But it is a fact, and cannot be challenged, that the only people in all Utah
who libel these Mormons are either those who are ignorant of them, those
who have apostatized (frequently under compulsion) from the Church, or
those, the official clique and their sycophants, who have been charged with
looking forward to a share of the plunder of the Territorial treasury. On the
other hand, I know many Gentiles who, though like myself they consider
polygamy itself detestable, speak of this people as patterns to themselves in
commercial honesty, religious earnestness, and social charity.

Travelling through the settlements, I found that every one voluntarily

considered his poorer neighbours as a charge upon himself. When a man
arrives there, a stranger and penniless, one helps to get together logs for his
first hut, another to break up a plot of ground. A third lends him his waggon
to draw some firewood from the canyon or hillside; a fourth gives up some
of his time to show him how to bring the water on to his ground—and so on
through all the first requirements of the forlorn new-comer. Behind them all
meanwhile is the Church, in the person of the presiding Elder of the
settlement, who makes him such advances as are considered necessary. It is
a wonderful system, and as pathetic, to my mind, as any struggle for
existence that I have ever witnessed. But every man who comes among
them is another unit of strength, and let him be only a straight-spoken, fair-
dealing fellow, with his heart in his work, and he finds every one's hand
ready to assist him.

And the first commencement is terribly small. A one-roomed log hut is

planted in a desert of sage-brush "with roots that hold as firm as original
sin," and rocks that are as hard to get rid of as bad habits. Borrowing a
plough here, and a shovel there, the new-comer bungles through an acre or
two of furrows, and digs out a trench. Begging of one neighbour some fruit-
tree cuttings, he sticks the discouraging twigs into the ground, and by
working out some extra time for another gets some lucerne seed. Then he
gets a hen, and then a setting of eggs, by-and-by a heifer, and a little later,
by putting in work or by an advance from the Church, or with kindly help
from a neighbour, he adds a horse to his stock. Time passes, say a year; his
orchard (that is to be) has several dozen leaves on it, and the ground is all
green with lucerne, the chickens are thriving, and he adds an acre or two
more to the first patch, and his neighbours, seeing him in earnest, are still
ready with their advice and aid. Adobe bricks are gradually piled up in a
corner of the lot, and very soon an extra room or two is built on to the log
hut, and saplings of cotton-wood, or poplar, or locust are planted in a row
before the dwelling: and so on year by year, conquering a little more of the
sage-brush, bringing on the water a furlong further, adding an outhouse,
planting another tree. At the end of ten years—years of unsparing, untiring
labour, but years brightened with perpetual kindness from neighbours—this
man, the penniless emigrant, invites the wayfarer into his house, has a
comfortably furnished bedroom at his service, oats and fodder for his team,
ample and wholesome food for all. The wife spreads the table with eggs and
ham and chicken, vegetables, pickles, and preserves, milk and cream, pies
and puddings—"Yes, sir, all of our own raising." The dismal twigs have
grown up into pleasant shade-trees, and a flower-garden brightens the front
of the house. In the barn are comfortable, well-fed stock, horses and cows.
This is no fancy picture, but one from life, and typical of 20,000 others.
Each homestead in turn has the same experience, and it is no wonder,
therefore, when the settlement, properly laid out and organized, grows into
municipal existence, that every one speaks kindly of, and acts kindly
towards, his neighbour. A visitor, till he understands the reason, is surprised
at the intimacy of households. But when he does understand it, ought not
his surprise to give place to admiration?

Not less conspicuous is the uniform sincerity in religion. A school and

meeting-house is to be found in every settlement, even though there may be
only half-a-dozen families, and besides the regular attendance of the people
at weekly services, the private prayers of each household are as punctual as
their meals. In these prayers, after the ordinary generalities, the head of the
house usually prays for all the authorities of the Church, from the President
downwards, for the local authorities, for the Church as a body, and the
missionaries abroad, for his household and its guest, for the United States,
and for Congress, and for all the world that feels kindly towards
Mormonism. But quite apart from the matter of their prayers, their manner
is very striking, and the scene in a humble house, when a large family meets
for prayer—and half the members, finding no article of furniture
unoccupied for the orthodox position of devotion, drop into attitudes of
natural reverence, kneeling in the middle of the floor—appeals very
strongly to the eye of those accustomed to the stereotyped piety of a more
advanced civilization.
One more conspicuous feature of Mormon life is sobriety. I have been the
guest of some fifty different households, and only once I was offered even
beer. That exception was in a Danish household, where the wife brewed her
own "ol"—an opaque beverage of home-fermented wheat and home-grown
hops—as a curiosity curious, as an "indulgence" doubtful, as a regular drink
impossible. On no other occasion was anything but tea, coffee, milk, or
water offered. And even tea and coffee, being discouraged by the Church,
are but seldom drunk. As a heathen outsider I deplored my beer, and was
grateful for coffee; but the rest of the household, in almost every instance,
drank water. Tobacco is virtually unused. It is used, but so seldom that it
does not affect my statement. The spittoon, therefore, though in every room,
is behind the door, or in a corner under a piece of furniture. In case it should
be needed, it is there—like the shot-gun upstairs—but its being called into
requisition would be a family event.

No, let their enemies say what they will, the Mormon settlements are each
of them to-day a refutation of the libel that the Mormons are not sincere in
their antipathy to strong drink and tobacco. That individual Mormons drink
and smoke proves nothing, except that they do it. For the great majority of
the Mormons, they are strictly sober. I know it to my great inconvenience.

Is it possible then that the American people, so generous in their impulses,

so large-hearted in action, have been misled as to the true character of the
Mormon "problem"? At first sight this may seem impossible. A whole
people, it will be said, cannot have been misled. But I think a general
misapprehension is quite within the possibilities.

Whence have the public derived their opinions about Mormonism? From
anti-Mormons only. I have ransacked the literature of the subject, and yet I
really could not tell any one where to go for an impartial book about
Mormonism later in date than Burton's "City of the Saints," published in
1862. Burton, it is well known, wrote as a man of wide travel and liberal
education—catholic, therefore, on all matters religious, and generous in his
views of ethical and social obliquities, sympathetic, consistent, and judicial.
It is no wonder, then, that Mormons remember the distinguished traveller, in
spite of his candour, with the utmost kindness. But put Burton on one side,
and I think I can defy any one to name another book about the Mormons
worthy of honest respect. From that truly awful book, "The History of the
Saints," published by one Bennett (even an anti-Mormon has styled him
"the greatest rascal that ever came to the West") in 1842, down to
Stenhouse's in 1873, there is not, to my knowledge, a single Gentile work
before the public that is not utterly unreliable from its distortion of facts.
Yet it is from these books—for there are no others—that the American
public has acquired nearly all its ideas about the people of Utah.

The Mormons themselves are most foolishly negligent of the power of the
press, and of the immense value in forming public opinion of a free use of
type. They affect to be indifferent to the clamour of the world, but when this
clamour leads to legislative action against them, they turn round petulantly
with the complaint that there is a universal conspiracy against them. It does
not seem to occur to them that their misfortunes are partly due to their own
neglect of the very weapons which their adversaries have used so diligently,
so unscrupulously, and so successfully.

They do not seem to understand that a public contradiction given to a public

calumny goes some way towards correcting the mischief done, or that by
anticipating malicious versions of events they could as often as not get an
accurate statement before the public, instead of an inaccurate one. But
enterprise in advertisement has been altogether on the side of the anti-
Mormons. The latter never lose an opportunity of throwing in a bad word,
while the Mormons content themselves with "rounding their shoulders," as
they are so fond of saying, and putting a denial of the libel into the local
News. They say they are so accustomed to abuse that they are beginning not
to care about it—which is the old, stupid self-justification of the apathetic.
The fascination of a self-imposed martyrdom seems too great for them, and,
like flies when they are being wrapped up into parcels by the spider for
greater convenience of transportation to its larder, they sing chastened
canticles about the inevitability of cobwebs and the deplorable rapacity of
spiders.

"I can assure you," said one of them, "it would be of no use trying to
undeceive the public. You cannot make a whistle out of a pig's tail, you
know."
"Nonsense," I replied. "You can—for I have seen a whistle made out of a
pig's tail. And it is in a shop in Chicago to this day!"

It will be understood, then, that the Mormons have made no adequate

efforts either in books or the press to meet their antagonists. They prefer to
allow cases against them to go by default, and content themselves with
privately filing pleas in defence which would have easily acquitted them
had they gone before the public. America, therefore, hearing only one side
of the case, and so much of it, is certainly not to be blamed for drawing its
conclusions from the only facts before it. It cannot be expected to know that
three or four individuals, all them by their own confession "Mormon-
eaters," have from the first been the purveyors of nearly all the distorted
facts it receives. Seeing the same thing said in many different directions, the
general public naturally conclude that a great number of persons are in
agreement as to the facts.

But the exigencies of journalism which admit, for instance, of the same
correspondent being a local contributor to two or three score newspapers of
widely differing views in politics and religion, are unknown to them. And
they are therefore unaware that the indignation so widely printed
throughout America has its source in the personal animosity of three or four
individuals only who are bitterly sectarian, and that these men are actually
personally ignorant of the country they live in, have seldom talked to a
Mormon, and have never visited Mormonism outside Salt Lake City. These
men write of the "squalid poverty" of Mormons, of their obscene brutality,
of their unceasing treason towards the United States, of their blasphemous
repudiation of the Bible, without one particle of information on the subject,
except such as they gather from the books and writings of men whom they
ought to know are utterly unworthy of credit, or from the verbal calumnies
of apostates. And what the evidence of apostates is worth history has long
ago told us. I am now stating facts; and I, who have lived among the
Mormons and with them, who have seen them in their homes, rich and
poor; have joined in their worship, public and private; who have constantly
conversed with them, men, women, and children; Who have visited their
out-lying settlements, large and small—as no Gentile has ever done before
me—can assure my readers that every day of my residence increased my
regret at the misrepresentation these people have suffered.
 Footnotes:

1. Except, of course, General Kane.

 CHAPTER XX.
DOWN THE ONTARIO MINE.

"Been down a mine! What on earth did you do that for?" said the elder
Sheridan to the younger.

"Oh, just to say that I had done it," was the reply.

"To say that you had done it! Good gracious! Couldn't you have said that
without going down a mine?"

No, Mr. Sheridan, you could not; at least not in these latter days. Too many
people do it now for the impostor to remain undiscovered. Take my own
case, for instance. I had often read descriptions of mine descents, and
thought I knew how it happened, and how ore was got out. But no one ever
told me that you had to go paddling about in water half the time, or that
mines were excavated upwards. Now, then, if I had tried to pretend that I
had been down a mine I should have been promptly found out, by my
ignorance of the two first facts that strike one. Again, it is very simple work
imagining the descent of a "shaft" in a "cage." But unfortunately a cage is
only a platform to stand on without either sides or top, and not, therefore,
such a cage as one would buy to keep a bird in, or as would keep a bird in if
one did buy it. Nor, without actually experiencing it, could anybody guess
that the first sensation of whizzing down a pipe, say 800 feet, is that of
seeming to lose all your specific gravity, and that the next (after you had
partially collected your faculties) is that you are stationary yourself, but that
the dripping timbers that line the shaft are all flying upwards past you like
sparks up a chimney.

Mines, of course, differ from one another just as the men who go down
them do, but as far as I myself am concerned all mines are puddly places,
and the sensations of descent are ridiculous—for I have only been down
two in my life, and both "demned, damp, moist, unpleasant" places. But the
mine to which I now refer is the "Ontario," in Utah, which may be said, in
the preposterous vernacular of the West, to be a "terrible fine" mine, or, in
other words, "a boss mine," that is to say, "a daisy."

As for daisies, anything that greatly takes the fancy or evokes especial
admiration is called a daisy. Thus I heard a very much respected Mormon
Bishop, who is also a director of a railway, described by an enthusiastic
admirer as "a daisy!"

Finding myself in Park "City" one evening—it is a mining camp dependent

chiefly upon the Ontario—I took a walk up the street with a friend. Every
other house appeared to be a saloon, with a doctor's residence sandwiched
in between—a significantly convenient arrangement perhaps in the days
when there was no "Protective Committee" in Park City, but—so I am told
—without much practical benefit to the public in these quiet days, when
law-abiding citizens do their own hanging, without troubling the county
sheriff, who lives somewhere on the other side of a distance. The result of
this is that bad characters do not stay long enough in Park City now to get
up free fights, and make work for the doctors. The Protective Committee
invites them to "git" as soon as they arrive, and, to do them credit, they do
"git."

However, as I was saying, I took a walk with a friend along the street, and
presently became aware above me, high up on the hillside, of a great
collection of buildings, with countless windows (I mean that I did not try to
count them) lit up, and looking exactly like some theatrical night-scene.
These were the mills of the Ontario, which work night and day, and seven
days to the week, a perpetual flame like that of the Zoroastrians, and as
carefully kept alive by stalwart stokers as ever was Vestal altar-fire by the
girl-priestesses of Rome. It was a picturesque sight, with the huge hills
looming up black behind, and the few surviving pine-trees showing out
dimly against the darkening sky.

Next morning I went up to the mine—and down it.

Having costumed myself in garments that made getting dirty a perfect

luxury, I was taken to the shaft. Now, I had expected to see an
unfathomably black hole in the ground with a rope dangling down it, but
instead of that I found myself in a spacious boarded shed, with a huge
wheel standing at one end and a couple of iron uprights with a cross-bar
standing up from the floor at the other. Round the wheel was coiled an
enormous length of a six-inch steel-wire band, and the disengaged end of
the band, after passing over a beam, was fastened to the cross-bar above
mentioned. On the bridge of the wheel stood an engineer, the arbiter of
fates, who is perpetually unwinding victims down from stage to stage of the
Inferno, and winding up the redeemed from limbo to limbo. Having
propitiated him by an affectation of intelligence as to the machinery which
he controlled, we took our places under the cross-bar, between the
stanchions, and suddenly the floor—as innocent-looking and upright-
minded a bit of boarded floor as you could wish to stand on—gave way
beneath us, and down we shot apud inferos, like the devils in "Der
Freischütz." We had our lamps in our hands, and they gave just light enough
for me to see the dripping wooden walls of the shaft flashing past, and then
I felt myself becoming lighter and lighter—a mere butterfly—
imponderable. But it doesn't take many seconds to fall down 800 feet, and
long before I had expected it I found we were "at the bottom."

Our explorations then began; and very queer it all was, with the perpetual
gushing of springs from the rock, and the bubble and splash of the waters as
they ran along on either side the narrow tunnels; the meetings at corners
with little cars being pushed along by men who looked, as they bent low to
their work, like those load-rolling beetles that Egypt abounds in; the
machinery for pumping, so massive that it seemed much more likely that it
was found where it stood, the vestiges of a long-past subterranean
civilization, than that it had been brought down there by the men of these
degenerate days; the sudden endings of the tunnels which the miners were
driving along the vein, with a man at each ending, his back bent to fit into
the curve which he had made in the rock, and reminding one of the frogs
that science tells us are found at times fitted into holes in the middle of
stones; the climbing up hen-roost ladders from tunnel to tunnel, from one
darkness into another; the waiting at different spots till "that charge had
been blasted," and the dull, deadened roar of the explosion had died away;
the watching the solitary miners at their work picking and thumping at the
discoloured strips of dark rock that looked to the uninitiated only like water-
stained, mildewy accidents in the general structure, but which, in reality,
was silver, and yielding, it might be, $1600 to the ton!

"This is all very rich ore," said my guide, kicking a heap that I was standing
on. I got off it at once, reverentially.

But reverence for the Mother of the Dollar gradually dies out, for
everything about you, above you, beneath you, is silver or silverish—
dreadful rubbish to look at, it is true, but with the spirit of the great metal in
it all none the less; that fairy Argentine who builds palaces for men, and
gives them, if they choose, all the pleasures of the world, and the leisure
wherein to enjoy them. And there they stood, these latter-day Cyclops,
working away like the gnomes of the Hartz Mountains, or the entombed
artificers of the Bear-Kings of Dardistan, with their lanterns glowing at the
end of their tunnels like the Kanthi gem which Shesh, the fabled snake-god,
has provided for his gloomy empire of mines under the Nagas' hills. Useless
crystals glittered on every side, as if they were jewels, and the water
dripping down the sides glistened as if it was silver, but the pretty hypocrisy
was of no avail. For though the ore itself was dingy and ugly and
uninviting, the ruthless pick pursued it deeper and deeper into its retreat,
and only struck the harder the darker and uglier it got. It reminded me,
watching the miner at his work, of the fairy story where the prince in
disguise has to kill the lady of his love in order to release her from the
enchantments which have transformed her, and how the wicked witch
makes her take shape after shape to escape the resolute blows of the
desperate lover. But at last his work is accomplished, and the ugly thing
stands before him in all the radiant beauty of her true nature.

And it is a long process, and a costly one, before the lumps of heavy dirt
which the miner pecks out of the inside of a hill are transformed into those
hundredweight blocks of silver bullion which the train from Park City
carries every morning of the year into Salt Lake City. From first to last it is
pretty much as follows. Remember I am not writing for those who live
inside mines; very much on the contrary. I am writing for those who have
never been down a mine in their lives, but who may care to read an
unscientific description of "mining," and the Ontario mine in particular.
In 1872 a couple of men made a hole in the ground, and finding silver ore in
it offered the hole for sale at $30,000. A clever man, R. C. Chambers by
name, happened to come along, and liking the look of the hole, joined a
friend in the purchase of it. The original diggers thus pocketed $30,000 for
a few days' work, and no doubt thought they had done a good thing. But
alas! that hole in the ground which they were so glad to get rid of ten years
ago now yields every day a larger sum in dollars than they sold it for! The
new owners of the hole, which was christened "The Ontario Mine," were
soon at work, but instead of following them through the different stages of
development, it is enough to describe what that hole looks like and
produces to-day.

A shaft, then, has been sunk plumb down into the mountain for 900 feet,
and from this shaft, at every 100 feet as you go down, you find a horizontal
tunnel running off to right and left. If you stop in your descent at any one of
these "stages" and walk through the tunnel—water rushing all the way over
your feet, and the vaulted rock dripping over-head—you will find that a line
of rails has been laid down along it, and that the sides and roofs are strongly
supported by timbers of great thickness. These timbers are necessary to
prevent, in the first place, the rock above from crushing down through the
roof of the tunnel, and, in the next, from squeezing in its sides, for the rock
every now and then swells and the sides of the tunnels bulge in. The rails
are, of course, for the cars which the miners fill with ore, and push from the
end of the tunnel to the "stage." A man there signals by a bell which
communicates with the engineer at the big wheel in the shed I have already
spoken of, and there being a regular code of signals, the engineer knows at
once at which stage the car is waiting, and how far therefore he is to let the
cage down. Up goes the car with its load of ore into the daylight,—and then
its troubles begin.

But meanwhile let us stay a few minutes more in the mine. Walking along
any one of the main horizontal tunnels, we come at intervals to a ladder, and
going up one of them we find that a stope, or smaller gallery, is being run
parallel with the tunnel in which we are walking, and of course (as it
follows the same direction of the ore), immediately over that tunnel, so that
the roof of the tunnel is the floor of the stope. The stopes are just wide
enough for a man to work in easily, and are as high as he can reach easily
with his pickaxe, about seven feet. If you walk along one of these stopes
you come to another ladder, and find it leads to another stope above, and
going up this you find just the same again, until you become aware that the
whole mountain above you is pierced throughout the length of the ore vein
by a series of seven-foot galleries lying exactly parallel one above the other,
and separated only by a sufficient thickness of pine timber to make a solid
floor for each. But at every hundred feet, as I have said, there comes a main
tunnel, down to which all the produce of the minor galleries above it is shot
down by "shoots," loaded into cars and pushed along to the "stage." But
silver ore is not the only thing that the Company gets out of its mine, for
unfortunately the mountain in which the Ontario is located is full of springs,
and the miner's pick is perpetually, therefore, letting the water break into the
tunnels, and in such volume, too, that I am informed it costs as much to rid
the works of the water as to get out the silver! Streams gurgle along all the
tunnels, and here and there ponderous bulkheads have been put up to keep
the water and the loosened rock from falling in. Pumps of tremendous
power are at work at several levels throwing the water up towards the
surface—one of these at the 800-foot level throwing 1500 gallons a minute
up to the 500-foot level.

Following a car-load of ore, we find it, having reached the surface, being
loaded into waggons, in which it is carried down the hill to the mills,
weighed, and then shot down into a gigantic bin—in which, by the way, the
Company always keeps a reserve of ore sufficient to keep the mills in full
work for two years. From this hour, life becomes a burden to the ore, for it
is hustled about from machine to machine without the least regard to its
feelings. No sooner is it out of the waggon than a brutal crusher begins
smashing it up into small fragments, the result of this meanness being that
the ore is able to tumble through a screen into cars that are waiting for it
down below. These rush upstairs with it again and pour it into "hoppers,"
which, being in the conspiracy too, begin at once to spill it into gigantic
drying cylinders that are perpetually revolving over a terrific furnace fire,
and the ore, now dust, comes streaming out as dry as dry can be, is caught
in cars and wheeled off to batteries where forty stampers, stamping like one,
pound and smash it as if they took a positive delight in it. There is an
intelligent, deliberate determination about this fearful stamping which
makes one feel almost afraid of the machinery. Some pieces, however,
actually manage to escape sufficient mashing up and slip away with the rest
down into a "screw conveyor," but the poor wretches are soon found out,
for the fiendish screw conveyor empties itself on to a screen, through which
all the pulverized ore goes shivering down, but the guilty lumps still
remaining are carried back by another ruthless machine to those detestable
stamps again. They cannot dodge them. For these machines are all in the
plot together. Or rather, they are the honest workmen of good masters, and
they are determined that the work shall be thoroughly done, and that not a
single lump of ore shall be allowed to skulk so without any one to look after
them these cylinders and stampers, hoppers and dryers, elevators and
screens go on with their work all day, all night, relentless in their duty and
pitiless to the ore. Let a lump dodge them as it may, it gets no good by it,
for the one hands it over to the other, just as constables hand over a thief
they have caught, and it goes its rounds, again and again, till the end
eventually overtakes it, and it falls through the screen in a fine dust.

For its sins it is now called "pulp," and starts off on a second tour of
suffering—for these Inquisitors of iron and steel, these blind, brutal
Cyclops-machines, have only just begun, as it were, their fun with their
victim. Its tortures are now to be of a more searching and refined
description. As it falls through the screen, another screw-conveyor catches
sight of it and hurries it along a revolving tube into which salt is being
perpetually fed from a bin overhead—this salt, allow me to say for the
benefit of those as ignorant as myself, is "necessary as a chloridizer"—and
thus mixed up with the stranger, falls into the power of a hydraulic elevator,
which carries it up forty feet to the top of a roasting furnace and
deliberately spills the mixture into it! Looking into the solid flame, I
appreciated for the first time in my life the courage of Shadrach, Meshach,
and Abednego.

The mixture which fell in at the top bluish-grey comes out at the bottom
yellowish-brown—I only wonder at its coming out all—and is raked into
heaps that have a wicked, lurid colour and give out such fierce short flames
of brilliant tints, and such fierce, short blasts of a poisonous gas, that I could
not help thinking of the place where bad men go to, and wondering if a
Dante could not get a hint or two for improving his Inferno by a visit to the
Ontario roasting-furnace. The men who stir these heaps use rakes with
prodigious handles, and wear wet sponges over their mouths and noses, and
as I watched them I remembered the poet's devils who keep on prodding up
the damned and raking them about over the flames.

But the ore submits without any howling or gnashing of teeth, and is
dragged off dumb, and soused into great churns, kept at a boiling heat, in
which quicksilver is already lying waiting, and the ore and the quicksilver
are then churned up together by revolving wheels inside the pans, till the
contents look like huge caldrons of bubbling chocolate. After some hours
they are drained off into settlers and cold water is let in upon the mess, and
lo! silver as bright as the quicksilver with which it is mixed comes dripping
out through the spout at the bottom into canvas bags.

Much of the quicksilver drips through the canvas back into the pans, and
the residue, silver mixed with quicksilver, makes a cold, heavy, white paste
called "amalgam," which is carried off in jars to the retorts. Into these it is
thrown, and while lying there the quicksilver goes on dripping away from
the silver, and after a time the fires are lighted and the retort is sealed up.
The intense heat that is obtained volatilizes the quicksilver; but this
mercurial vapour is caught as it is escaping at the top of the retort, again
condensed into its solid form, and again used to mix with fresh silver ore.
Its old companion, the silver, goes on melting inside the retort all the time,
till at last when the fires are allowed to cool down, it is found in irregular
lumps of a pink-looking substance. These lumps are then taken to the
crucibles, and passing from them, molten and refined, fall into moulds, each
holding about a hundred-weight of bullion.

And all this bother and fuss, reader, to obtain these eight or ten blocks of
metal!

True, but then that metal is silver, and with one single day's produce from
the Ontario Mine in the bank to his credit a man might live at his leisure in
London, like a nobleman in Paris, or like a prince among the princes of
Eulenspiegel-Wolfenbuttel-Gutfurnichts.
 CHAPTER XXI.
FROM UTAH INTO NEVADA.

Rich and ugly Nevada—Leaving Utah—The

gift of the Alfalfa—Through a lovely country
to Ogden—The great food-devouring trick—
From Mormon to Gentile: a sudden contrast
—The son of a cinder—Is the red man of no
use at all?—The papoose's papoose—
Children all of one family.

IT is a far cry from the City of the Saints to the city of the Celestials, for
Nevada stretches all its hideous length between them, and thus keeps apart
the two American problems of the day—pigtails and polygamy. But mere
length in miles is not all that goes to make a journey seem long, for
dreariness of landscape stretches every yard to six feet, and turns honest
miles into rascally versts, or elongates them into the still more infamous
"kos" of the East, the so-called mile, which seems to lengthen out at the
other end as you travel along it, and about nightfall to lose the other end
altogether. And Nevada is certainly dreary enough for anything. It is
abominably rich, I know. There is probably more filthy lucre in it per acre
(in a crude state, of course) than in any other state in the Union, and more
dollars piled up in those ghastly mountains than in any other range in
America. But, as a fellow-passenger remarked, "There's a pile of land in
Nevada that don't amount to much," and it is just this part of Nevada that
the traveller by railway sees.

"That hill over there is full of silver," said a stranger to me, by way of
propitiating my opinion.

"Is it" I said, "the brute." I really couldn't help it. I had no ill-feeling
towards the hill, and if it had asked a favour of me, I believe I should have
granted it as readily as any one. But its repulsive appearance was against it,
and the idea of its being full of silver stirred my indignation. I grudged so
ugly a cloud its silver lining, and like the sailor in the Summer Palace at
Pekin felt moved to insult it. The sailor I refer to was in one of the courts of
the palace looking about for plunder. It did not occur to his weather-beaten,
nautical intelligence that everything about him was moulded in solid silver.
He thought it was lead. A huge dragon stood in the corner of the room, and
the atrocity of its expression exasperated Jack so acutely that he smote it
with his cutlass, and lo! out of the monster's wound poured an ichor of
silver coinage.

"Who'd have thought it!" said Jack, "the ugly devil!"

Nevada, moreover, lies under the disadvantage of having on one side of it

the finest portion of California, on the other the finest portion of Utah, and
sandwiched between two such Beauties, such a Beast naturally looks its
worst. For the northern angle of Utah is by far the most fertile part of the
territory, possessing, in patches, some incomparable meadows, and corn-
lands of wondrous fertility. As compared with the prodigious agricultural
and pastoral wealth of such states as Missouri, Illinois, or Ohio, the Cache
Valleys and Bear Valleys of Utah seem of course insignificant enough; but
at present I am comparing them only with the rest of poor Utah, and with
ugly, wealthy Nevada.

Starting from Salt Lake City northwards, the road lies through suburbs of
orchards and gardens, many of them smothered in red and yellow roses, out
on to the levels of the Great Valley. Here, beyond the magic circle of the
Water-wizard, there are patches of fen-lands still delightful to wild-fowl,
and patches of alkali blistering in the sun, but all about them stretch wide
meadows of good grazing-ground, where the cattle, good Devon breed
many of them, and here and there a Jersey, loiter about, and bright fields of
lucerne, or alfalfa, just purpling into blossom and haunted by whole nations
of bees and tribes of yellow butterflies. What a gift this lucerne has been to
Utah! Indeed, as the Mormons say, the territory could hardly have held its
own had it not been for this wonderful plant. Once get it well started (and it
will grow apparently anywhere) the "alfalfa" strikes its roots ten, fifteen,
twenty feet into the ground, and defies the elements. More than this, it
becomes aggressive, and, like the white races, begins to encroach upon,