The introduction of steam engines in Germany was the work of Prussian state administrators, a body of men who were technically trained, educated in Mercantilist traditions, and guided by the principles of Mercantilist policy. That fact was typical of the German political and economic setup in the late eighteenth century; Prussian administrators also introduced the modern iron industry into Germany. By contrast. English industrial leadership in the same years was already in the hands of co-operating inventors and entrepreneurs, as evidenced by the classical partnership of Watt and Boulton, the prototype of many to come in capitalistic industry.

Sixteen years ago, in happier times, Europe seemed about to become again what she had been to our American parents of the Victorian Age—a rich expanse of industrious and (according to the standards then prevalent) comfortable daily life, ornamented everywhere by monuments emanating from generations of culture, blessed by opportunities for quiet leisure, for travel at what was once considered a rapid pace, and for serious discussions of philosophy and art, such as provided Henry James and Henry Adams with the indispensable nourishment they missed at home. Sixteen years ago, for several weeks on end, I shared to my advantage a table in a modest Basque inn on the French side of the Pyrenees with a distinguished economic historian. In addition to our wives, we had as our companion an elderly professor from a lycée in Bayonne, named Georges Herèlle. We were told that the old gentleman was the greatest authority in France, if not in the world, on the Basque language. He was also the French translator of two writers then prominent, the Spaniard, Blasco Ibáñez, who rose to fame in the United States with Rudolph Valentino riding simultaneously all his “four horsemen,” and the Italian poet, Gabriele d'Annunzio, whose name was known round the world in those prehistoric times before any one had heard of “Mussolini,” let alone of “Hitler.”

Any attempt to discuss the way in which railroads have promoted the rise of the American economy must assume some theory of economic evolution. The following analysis is based upon Schumpeter's theory of innovations. Briefly this theory holds that economic evolution in capitalistic society is started by innovation in some production function, that is, by new combinations of the factors in the economic process. These innovations may center in new commodities or new services, new types of machinery, new forms of organization, new firms, new resources, or new areas. As Schumpeter makes clear, this is not a general theory of economic, much less of social, change. Innovation is an internal factor operating within a given economic system while the system is also affected by external factors (many of them sociological) and by growth (which means, substantially, changes in population and in the sum total of savings made by individuals and firms). These sets of factors interact in economic change. “The changes in the economic process brought about by innovation, together with all their effects, and the response to them by the economic system” constitute economic evolution for Schumpeter.

The sixteenth-century Price Revolution in Spain induced by the gigantic stream of Mexican and Peruvian silver was followed by a century of alternate inflation and deflation resulting from wars and weak governments. But in spite of frequent, long, and unsuccessful wars, monetary stability characterized the first half of the eighteenth century. Then a sharp rise in the output of the precious metals, particularly of Mexican silver, increased the Spanish monetary stock and forced prices upward by almost one third in the next three decades of comparative peace. To finance a bitter conflict with England in 1779–83, Spain was compelled to resort to her first issues of paper money. The paper currency depreciated rapidly during the war but rose to par after the conclusion of peace and remained there throughout the Nootka Sound controversy.

I am in entire sympathy with Mr. Nef's emphasis on historical synthesis or over-all interpretations, which is certainly in order after a period in which analytical fragmentation has been so stressed. We are also in agreement concerning the need for a study of the interrelationships between various aspects of history that are now usually treated as specialties.

David Parish is remembered today by readers of historical fiction as a colorful character in Hervey Allen's picaresque novel, Anthony Adverse, and students of American history know him as an underwriter of one of the loans that enabled the United States to wage the War of 1812. His career was far more important than his present-day reputation would suggest; for he was an international financial adventurer of the type that flourished during the Napoleonic era, when the spirit of nationalism had only begun to shackle men's thoughts and actions.

By reason of the war, a report to the Social Science Research Council more extensive than any I have hitherto submitted seems appropriate. The war has affected us in several ways. Our “terms of reference” reflected the international situation, since they directed our attention to the economic history of countries embraced in the Western Hemisphere; it has steadily diminished the speed with which our research work has gone forward, until that work is now largely at a standstill; and it lately has begun to make us think and plan in terms of a more effective postwar period. Inasmuch as the Committee has definitely selected the areas of special research interest that will probably engage its full attention in the years immediately ahead and inasmuch as the period of its present appointment may extend hardly beyond the war period itself, there appears to be particular reason why I should lay before you the general scheme of its research plans, the specific projects that it has thus far sponsored within its chosen fields, and a series of outlines of what might be attempted in these general areas by research people released sooner or later from war services. In a sense, this report of mine is an effort at postwar planning.

It is a kind of report on progress I am making this afternoon. In the last year or so a few of us have talked a good deal with corporation executives about opening their past records to historians now, and putting them in places where they can serve historians for generations to come. We have had some success; we have met some obstacles. I want to report on both to this Association, whose interest in the matter is the same as mine.

In the history of federal aid to transportation in the United States the land grants given to assist in the construction of canals have been almost completely overshadowed by the far more munificent land subsidies to the railroads. The disparity between the two is, indeed, striking: the canals received altogether about 4,500,000 acres, as against the approximately 130,000,000 acres which ultimately passed to the railroads. Nevertheless, the importance of the canal grants is not to be judged solely by the amount of land involved. To the extent that they were effective they contributed to the building of waterways, the influence of which on the economic development of the Middle West was considerably greater than is generally appreciated today. The Ohio canals, for example, are credited with stimulating the growth of that state in a way comparable to the impetus given New York by the Erie Canal; the Wabash and Erie Canal in Indiana, chronically insolvent as it was, produced, within ten years of its opening, a fivefold increase in the population of the counties that it traversed; and the historian of the Illinois and Michigan Canal asserts that this waterway “not only transformed a wilderness into a settled and prosperous community, but it made Chicago the metropolis of the Mississippi Valley.” The natural enthusiasm of authors for their subject may require some discounting of these claims, but not enough, in the face of the evidence that is offered to support them, to detract seriously from the significance of the land-grant canals.

Like Mr. Pargellis, I am concerned with the history of business and the businessman. He has a professional pride in seeing a better job done and he proposes to put into the hands of scholars the necessary tools to improve the quality of their work. My approach is that of a businessman who is disturbed by inadequate and sometimes prejudicial use of facts and the possible effect upon the general welfare of conclusions based on misstatements. Both of us want the writing and teaching of history to be factual and fair and as thorough as possible. I have no quarrel with Mr. Pargellis' point of view or with the remedy he suggests, and I agree readily that, in so far as imperfect knowledge of American history is due to lack of access to records, the cause should be removed. I cannot but feel that general acceptance of his proposal by companies whose files have been preserved will go a considerable way toward improving the situation and I do not see what harm could come from making such reports available to scholars, provided of course that in using them consideration be given, as Mr. Pargellis says, to “the ethical and legal standards of the time, with full appreciation of the political and competitive setting in which a businessman had to work.” The availability of corporate documents certainly would tend to prevent the making of careless or misleading statements, which without the records might go unchallenged.

Corporations have been the big basic units of recent American business; in the Venetian Republic the basic units of business life were family partnerships. To be sure, since a Venetian family partnership was not an organization formed for business purposes only, it did not correspond exactly to a corporation. There were in the Venetian economy during the Later Middle Ages some enterprises which required the use of so much capital that normally several families banded together to spread the risks and for such occasions they formed joint ventures. From some points of view these joint ventures, rather than the family partnerships, corresponded in Venetian economy to the corporation in modern economy; for they were organized for strictly business purposes, they involved large capitals, and their ownership was divided into shares. But the joint ventures lacked the permanence of the modern corporation and they had quite limited objectives. They lasted only for the duration of a voyage or until a cargo had been sold. Moreover, they did not have so large capital funds as did the family partnerships which created them. Venetian business enterprise, having been fathered by the state and mothered by the family, remained subordinated to these older and stronger institutions. This fact is not surprising, for when viewed in historical perspective the modern corporation appears a parvenu of uncertain future. In most societies, at most times, it has been the great family which by its wealth, power, prestige, and presumption of permanence has been the outstanding institution in private economic enterprise.

The prices of commodities and wages of labor recorded in contemporaneous account books are the oldest continuous objective economic data in existence. Economic historians have not neglected this great intellectual resource. In fact, during the last hundred years a large proportion of the outstanding economic and historical talent has been lavished upon price history. Tooke, D'Avenel, and Rogers devoted more than twenty-five years each, at the most productive stage of their careers, to collecting price and wage statistics from manuscript sources and to writing an impressive total twenty-odd learned volumes. In the present century Beveridge in England, Elsas in Germany, Posthumus in the Netherlands, Pribram in Austria, Bujak in Poland, Bezanson and Cole in the United States, and a host of lesser lights on both sides of the Atlantic have uncovered new sources, combed old ones more exhaustively, and employed modern statistical technique to give us relatively complete and refined histories of prices in the leading economic areas of the Western world in modern times. If the old records of commercial transactions are not destroyed in total war, it seems safe to assume that future generations of scholars, seeking light from the past on recurrent inflation and deflation, will produce price histories that surpass all studies yet written in historical range, completeness, and scientific accuracy. In view of these achievements and prospects, social scientists should ask themselves what can be gained from a proper utilization of price history and what losses may result from its misuse.

The role money has played, and still plays, in the evolution of social organization and individual behavior remains a dark area though some corners besides price history have been studied intensively. You know better than I how much has been written by anthropologists, numismatists, and historians about such matters as the different forms of money men have used, the evolution of coinage, the relation of gifts and piracy to the rise of regular trade and organized markets, the commutation of dues in kind and services into money payments, the transformation of an agricultural peasantry into an industrial proletariat, the changing methods of governmental finance in war and peace, the development of credit and banking, the spread of bookkeeping and its refinement into accounting, the diverse forms of business enterprises, and the interrelations between making goods and making money. Some of the monographs I have read upon these and related topics are admirable pieces of work. But monographs are flashlights; they do not give general illumination. What we do not yet have, what we need, and what economic historians should supply is a coherent story of how monetary forms have infiltrated one human relation after another, and their effects upon men's practices and habits of thought. I am well aware that the spadework desirable for this job is far from completed; but even now wellequipped students could draw an authentic sketch of the process as a whole. By so doing they would both stimulate detailed research and enlighten the thinking of all who are concerned with social organization, past and present.