Principles of Political Economy — A Closer Reading

A Science Without 'Wealth'

Perry's preface declares that his earlier Elements (1865) was the first attempt to construct economics 'without once using or having occasion to use the obnoxious word' wealth. He argues that the term is 'strangely indefinite and grossly misleading' and must be replaced with a scientific substitute. The excerpts do not reveal what that substitute is, but the subsequent text focuses on credit, exchange, and banking rather than on production or consumption. This terminological rejection is not a minor quibble; it shapes the entire structure of the book. Perry aligns himself with a tradition that sees economics as the study of exchanges, not of material abundance. Readers should note that the catalog subject 'Economics' may obscure this distinctive starting point: Perry is not writing a standard textbook but a polemical redefinition of the field's foundations.

The Mechanics of Credit Instruments

The longest excerpt details the operation of bills of exchange, which Perry calls 'the formal sale of a debt.' He provides a concrete example: a $3,000 bill drawn by Dan Storrs on Eli Tripp, payable to John Kent, at four months. Perry explains how such instruments allow debts to be 'set off against each other' without transmitting money, and how banks discount time bills. He distinguishes bills from promissory notes by noting that a note is a promise to pay, while a bill is an order to pay. The passage is dense with technical terms—'drawee,' 'payee,' 'acceptance,' 'indorsement'—and Perry emphasizes that banks care 'nothing except for names,' meaning the creditworthiness of the parties. This section reveals Perry's pedagogical method: he uses a single, annotated example to illustrate a general principle, a technique that recurs throughout the excerpts.

Banks as Intermediaries and Lenders

Perry describes banks as institutions that both discount negotiable paper and make loans 'on call' against collateral. He quotes the terms of a typical call loan contract, which gives the bank authority to sell collateral 'at the Brokers' Board or at public or private sale' without notice. This detail shows Perry's attention to the legal and practical realities of 19th-century banking. He also notes that promissory notes with a single name are often discounted 'partly on the strength of collateral securities.' The excerpts do not discuss broader economic theory, such as value, price, or distribution; instead, they focus on the operational details of credit markets. This suggests that Perry's Principles is less a general treatise and more a specialized study of exchange and banking, grounded in the institutional practices of his time.

Readers approaching Perry's Principles should set aside expectations of a modern economics textbook. The excerpts reveal a work deeply engaged with the legal and institutional details of credit, banking, and exchange in late-19th-century America. Perry's rejection of 'wealth' as a category is not merely rhetorical; it leads him to emphasize the mechanics of financial instruments over abstract theories. The book is best read as a primary source for understanding how one academic economist sought to reformulate his discipline, using concrete examples from commercial practice to build a system without what he considered a foundational error.