Solution Manual for Economics of Money Banking and Financial Markets

11th Edition by Mishkin ISBN 0133836797 9780133836790

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Chapter 1
ANSWERS TO QUESTIONS

1. What is the typical relationship among interest rates on three-month Treasury bills,
long-term Treasury bonds, and Baa corporate bonds?
The interest rate on three-month Treasury bills fluctuates more than the other interest rates
and is lower on average. The interest rate on Baa corporate bonds is higher on average than
the other interest rates.

2. What effect might a fall in stock prices have on business investment?

The lower price for a firm’s shares means that it can raise a smaller amount of funds,
so investment in facilities and equipment will fall.

3. What effect might a rise in stock prices have on consumers’ decisions to spend?
Higher stock prices mean that consumers’ wealth is higher, and they will be more likely to
increase their spending.

4. Why are financial markets important to the health of the economy?

They channel funds from people who do not have a productive use for them to people
who do, thereby resulting in higher economic efficiency.

5. What was the main cause of the recession that began in 2007?
The United States economy was hit by the worst financial crisis since the Great Depression.
Defaults in subprime residential mortgages led to major losses in financial institutions,
producing not only numerous bank failures, but also the demise of two of the largest
investment banks in the United States. These factors led to the “Great Recession” which
began late in 2007.

6. What is the basic activity of banks?

 The basic activity of banks is to accept deposits and make loans.

7. What are the other important financial intermediaries in the economy, besides banks?
Savings and loan associations, mutual savings banks, credit unions, insurance companies,
mutual funds, pension funds, and finance companies.

© 2016 Pearson Inc. All rights reserved.

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Eleventh Edition 59

8. Can you think of any financial innovation in the past ten years that has affected
you personally? Has it made you better off or worse off? Why?
Answers will vary.

9. Has the inflation rate in the United States increased or decreased in the past few years?
What about interest rates?
In the period from 2007 to 2011, both inflation and interest rates have generally trended
downward compared to before that period.

10. If history repeats itself and we see a decline in the rate of money growth, what might you
expect to happen to
a. real output?
b. the inflation rate?
c. interest rates?
The data in Figures 3, 5, and 6 suggest that real output, the inflation rate, and interest rates
would all fall.

11. When interest rates decrease, how might businesses and consumers change their economic
behavior?
Businesses would increase investment spending because the cost of financing this spending is
now lower, and consumers would be more likely to purchase a house or a car because the
cost of financing their purchase is lower.

12. Is everybody worse off when interest rates rise?

No. It is true that people who borrow to purchase a house or a car are worse off because
it costs them more to finance their purchase; however, savers benefit because they can
earn higher interest rates on their savings.

13. Why do managers of financial institutions care so much about the activities of the
Federal Reserve System?
Because the Federal Reserve affects interest rates, inflation, and business cycles, all of
which have an important impact on the profitability of financial institutions.

14. How does the current size of the U.S. budget deficit compare to the historical budget deficit
or surplus for the time period since 1950?
The deficit as a percentage of GDP has expanded dramatically since 2007; in 2010 the
deficit to GDP ratio was 10%, well above the historical average of around 2% since 1950.

© 2016 Pearson Inc. All rights reserved.

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Eleventh Edition 60

15. How would a fall in the value of the pound sterling affect British consumers?
It makes foreign goods more expensive, so British consumers will buy fewer foreign goods
and more domestic goods.

16. How would an increase in the value of the pound sterling affect American businesses?
It makes British goods more expensive relative to American goods. Thus American
businesses will find it easier to sell their goods in the United States and abroad, and
the demand for their products will rise.

17. How can changes in foreign exchange rates affect the profitability of financial institutions?
Changes in foreign exchange rates change the value of assets held by financial institutions
and thus lead to gains and losses on these assets. Also changes in foreign exchange rates
affect the profits made by traders in foreign exchange who work for financial institutions.

18. According to Figure 8, in which years would you have chosen to visit the Grand Canyon
in Arizona rather than the Tower of London?
In the mid- to late 1970s and in the late 1980s and early 1990s, the value of the dollar was
low, making travel abroad relatively more expensive; thus it was a good time to vacation in
the United States and see the Grand Canyon. With the rise in the dollar’s value in the early
1980s, travel abroad became relatively cheaper, making it a good time to visit the Tower of
London. This was also true, to a lesser extent, in the early 2000s.

19. When the dollar is worth more in relation to currencies of other countries, are you more
likely to buy American-made or foreign-made jeans? Are U.S. companies that
manufacture jeans happier when the dollar is strong or when it is weak? What about an
American company that is in the business of importing jeans into the United States?
When the dollar increases in value, foreign goods become less expensive relative to
American goods; thus you are more likely to buy French-made jeans than American-made
jeans. The resulting drop in demand for American-made jeans because of the strong dollar
hurts American jeans manufacturers. On the other hand, the American company that imports
jeans into the United States now finds that the demand for its product has risen, so it is better
off when the dollar is strong.

© 2016 Pearson Inc. All rights reserved.

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Eleventh Edition 61

20. Much of the U.S. government debt is held by foreign investors as treasury bonds and
bills. How do fluctuations in the dollar exchange rate affect the value of that debt held by
foreigners?
As the dollar becomes stronger (worth more) relative to a foreign currency, one dollar is
equivalent to (can be exchanged for) more foreign currency. Thus, for a given face value of
bond holdings, a stronger dollar will yield more home currency to foreigners, so the asset
will be worth more to foreign investors. Likewise, a weak dollar will lead to foreign bond
holdings worth less to foreigners.

ANSWERS TO APPLIED PROBLEMS

21. The following table lists foreign exchange rates between U.S. dollars and British pounds
(GBP) during April. Which day would have been the best for converting $200 into British
pounds? Which day would have been the worst? What would be the difference in pounds?
Date U.S Dollars per
4/1 1.9564
4/4 1.9293
4/5 1.914
4/6 1.9374
4/7 1.961
4/8 1.8925
4/11 1.8822
4/12 1.8558
4/13 1.796
4/14 1.7902
4/15 1.7785
4/18 1.7504
4/19 1.7255
4/20 1.6914
4/21 1.672
4/22 1.6684
4/25 1.6674
4/26 1.6857
4/27 1.6925
4/28 1.7201
4/29 1.7512
The best day is 4/25. At a rate of $1.6674/pound, you would have £119.95. The worst day is
4/7. At $1.961/pound, you would have £101.99, or a difference of £17.96.

© 2016 Pearson Inc. All rights reserved.

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random and unrelated content:
As they knelt and kissed your hand—

For they saw no stain upon it,

It was such a snowy hand!

But for me—I knew you better,

And, while you were flaunting there,

I remembered some one lying,

With the blood on his white hair!

He was pleading for you, Madam,

Where the shriven spirits stand;

But the Book of Life was darkened,

By the Shadow of a Hand!

It was tracing your perdition,

For the blood upon your hand!

A SERENADE.
HE moon is muffled in a cloud,

That folds the lover’s star,

But still beneath thy balcony

I touch my soft guitar.

If thou art waking, Lady dear,

The fairest in the land,

Unbar thy wreathed lattice now,

And wave thy snowy hand.

She hears me not; her spirit lies

In trances mute and deep;—

But Music turns the golden key

Within the gate of Sleep!

Then let her sleep, and if I fail

To set her spirit free!

My song shall mingle in her dream,

And she will dream of me!

 WALT WHITMAN.
“ .”

ERHAPS the estimates of critics differ more

widely respecting the merits or demerits of
Whitman’s verse than on that of any other
American or English poet. Certain European
critics regard him as the greatest of all modern
poets. Others, both in this country and abroad, declare that his so
called poems are not poems at all, but simply a bad variety of
prose. One class characterizes him the “poet of democracy; the
spokesman of the future; full of brotherliness and hope, loving
the warm, gregarious pressure of the crowd and the touch of his
comrade’s elbow in the ranks.” The other side, with equal
assurance, assert that the Whitman culte is the passing fad of a
few literary men, and especially of a number of foreign critics
like Rosetti, Swinburne and Buchanan, who were determined to
find something unmistakably American—that is, different from
anything else—and Whitman met this demand both in his
personality and his verse. They further declared that his poetry
was superlatively egotistical, his principal aim being always to
laud himself. This criticism they prove by one of his own poems
entitled “Walt Whitman,” in which he boldly preaches his claim
to the love of the masses by declaring himself a “typical average
man” and therefore “not individual” but “universal.”

Perhaps it is better in the scope of this article to leave Walt

Whitman between the fires of his laudators on one side and of
his decriers on the other. Certainly the canons of poetic art will
never consent to the introduction of some things that he has
written into the treasure-house of the muses. For instance,—
 “And (I) remember putting plasters on the galls of his neck and
ankles;

He stayed with me a week before he was recuperated and passed

North.”

These worse than prosaic lines do not require a critic to

declare them devoid of any element of poetry. But on the other
hand, that Whitman had genius is undeniable. His stalwart verse
was often beautifully rhythmic and the style which he employed
was nobly grand. Time will sift the wheat from the chaff,
consuming the latter and preserving the golden grains of true
poetry to enrich the future garners of our great American
literature. No one of the many tributes to Lincoln, not even
Lowell’s noble eulogy, is more deeply charged with exalted
feeling than is Whitman’s dirge for Abraham Lincoln written
after the death of the President, in which the refrain “O Captain,
my Captain,” is truly beautiful. Whitman was no mean master in
ordinary blank verse, to which he often reverted in his most
inspiring passages.

One of the chief charms of Whitman’s poetry consists in the

fact that the author seems to feel, himself, always happy and
cheerful, and he writes with an ease and abandon that is pleasant
to follow. Like one strolling about aimlessly amid pleasing
surroundings, he lets his fancy and his senses play and records
just what they see or dictate. This characteristic, perhaps,
accounts for the fact that his single expressions are often
unsurpassed for descriptive beauty and truth, such as the
reference to the prairies, “where herds of buffalo make a
crawling spread of the square miles.” Whoever used a more
original and striking figure? Many of his poems strikingly
remind one in their constructions (but not in religious fervor) to
the Psalms of David. There is also often a depth of passion and
an intoxication in his rhythmic chant that is found perhaps in no
other writer, as this specimen, personifying night, will illustrate:

“Press close, bare-bosomed night! Press close, magnetic,

nourishing night!

Night of the South wind! Night of the few larger stars! still,
nodding night! Mad, naked, summer night!”

Again, Whitman was always hopeful. Like Emerson, he

renounced all allegiance to the past, and looked confidently to
the future. And this reminds us that Emerson wrote the
introductory to the first edition of “Leaves of Grass,” which
suggests that that writer may have exerted no small influence in
forming Whitman’s style, for the vagueness of his figures, his
disconnected sentences, and occasionally his verbiage, are not
unlike those of the “Concord Prophet.” Again, the question
arises, did he not seek, like Emerson, to be the founder of a
school of authorship? His friendliness toward young authors and
his treatment of them indicate this, and the following he has
raised up attests the success he attained, whether sought or
unsought. But the old adage, “like king like people,” has a deal
of truth in it; and as Whitman was inferior to Emerson in the
exaltation of his ideals, and the unselfishness and sincerity of his
nature, so his followers must fall short of the accomplishments
of those who sat at the feet of “the good and great Emerson.”

Walt Whitman was born at West Hills, Long Island, May 31,
1819, and was educated at the public schools of Brooklyn and
New York. Subsequently he followed various occupations,
among which were those of printer, teacher, carpenter, journalist,
making in the meantime extended tours in Canada and the
United States. During the Civil War he served as a volunteer
nurse in the army hospitals, and at the close was appointed as
government clerk at Washington. In 1873 he had a severe
paralytic attack, which was followed by others, and he took up
his residence in Camden, New Jersey, where he died in 1892. He
was never married.

Mr. Whitman’s principal publications are “Leaves of Grass,”

issued first in 1855, but he continued to add to and revise it, the
“finished edition,” as he called it, appearing in 1881. Succeeding
this came “Drum Taps,” “Two Rivulets,” “Specimen Days and
Collect,” “November Boughs,” “Sands at Seventy.” “Democratic
Vista” was a prose work appearing in 1870. “Good-Bye, My
Fancy,” was his last book, prepared between 1890 and his death.
His complete poems and prose have also been collected in one
volume.

Two recent biographies of the poet have been published: one

by John Burroughs, entitled “Walt Whitman, a Study;” the other,
“Walt Whitman, the Man,” by Thomas Donaldson. The titles
indicate the difference in the two treatments. Both biographers
are great admirers of Whitman.

DAREST THOU NOW, O SOUL.

The following poems are from “Leaves of Grass” and are published by special permission
of Mr. Horace L. Trauble, Mr. Whitman’s literary executor.

AREST thou now, O soul,

Walk out with me toward the unknown region,

Where neither ground is for the feet nor any path

to follow?

No map there, nor guide,

Nor voice sounding, nor touch of human hand,

Nor face with blooming flesh, nor lips, nor eyes, are in that
land.

I know it not, O soul,

Nor dost thou, all is a blank before us,

All waits undream’d of in that region, that inaccessible land.

Till when the ties loosen,

All but the ties eternal, Time and Space,

Nor darkness, gravitation, sense, nor any bounds bounding us.

Then we burst forth, we float,

In Time and Space, O soul, prepared for them,

Equal, equipt at last, (O joy! O fruit of all!) them to fulfil, O

soul.

O CAPTAIN! MY CAPTAIN!
CAPTAIN! my Captain! our fearful trip is done,

The ship has weather’d every rack, the prize

we sought is won,

The port is near, the bells I hear, the people all exulting,

While follow eyes the steady keel, the vessel grim and daring;

But O heart! heart! heart!

O the bleeding drops of red,

Where on the deck my Captain lies,

Fallen cold and dead.

O Captain! my Captain! rise up and hear the bells;

Rise up—for you the flag is flung—for you the bugle trills,

For you bouquets and ribbon’d wreaths—for you the shores a-

crowding,

For you they call, the swaying mass, their eager faces turning;

Here Captain! dear father!

This arm beneath your head!

It is some dream that on the deck,

You’ve fallen cold and dead.

My Captain does not answer, his lips are pale and still,

My father does not feel my arm, he has no pulse nor will,

The ship is anchor’d safe and sound, its voyage closed and
done,

From fearful trip the victor ship comes in with object won;

Exult O shores, and ring O bells!

But I with mournful tread,

Walk the deck my Captain lies,

Fallen cold and dead.

IN ALL, MYSELF.
“ .”
 The following lines have been commented upon as presenting a strange and erratic
combination of the most commonplace prose with passionate and sublime poetic sentiment.

AM the poet of the Body and I am the poet of the

Soul,

The pleasures of heaven are with me and the pains

of hell are with me;

The first I graft and increase upon myself, the latter I translate
into a new tongue.

I am the poet of the woman the same as the man,

And I say it is as great to be a woman as to be a man,

And I say there is nothing greater than the mother of men.

I chant the chant of dilation or pride,

We have had ducking and deprecation about enough,

I show that size is only development.

Have you outstript the rest? are you the President?

It is a trifle, they will more than arrive there everyone, and still
pass on.

I am he that walks with the tender and growing night,

I call to the earth and sea, half-held by the night.

Press close bare-blossom’d night—press close magnetic

nourishing night!

Night of the South winds—night of the large few stars!

Still nodding night—mad naked summer night.

Smile, O voluptuous cool-breath’d earth!

Earth of the slumbering and liquid trees!

Earth of the departed sunset—earth of the mountain misty-topt!

Earth of the vitreous pour of the full moon just tinged with blue!

Earth of the shine and dark mottling the tide of the river!

Earth of the limpid gray of clouds brighter and clearer for my

sake!

Far-swooping elbow’d earth—rich apple-blossom’d earth!

Smile, for your lover comes.

Prodigal, you have given me love—therefore I to you give love!

O unspeakable, passionate love.

OLD IRELAND.
AR hence amid an isle of wondrous beauty,

Crouching over a grave an ancient sorrowful

mother,

Once a queen, now lean and tatter’d seated on the ground,

Her old white hair drooping dishevel’d round her shoulders,

At her feet fallen an unused royal harp,

Long silent, she too long silent, mourning her shrouded hope
and heir,

Of all the earth her heart most full of sorrow because most full
of love.

Yet a word, ancient mother,

 You need crouch there no longer on the cold ground with
forehead between your knees;

O you need not sit there veil’d in your old white hair so
dishevel’d,

For know you the one you mourn is not in that grave;

It was an illusion, the son you love was not really dead;

The Lord is not dead, he is risen again, young and strong, in

another country,

Even while you wept there by your fallen harp by the grave,

What you wept for was translated, pass’d from the grave;

The winds favor’d and the sea sail’d it;

And now, with rosy and new blood,

Moves to-day in a new country.

PÆAN OF JOY.
“ .”

Reference has been made to the similarity in style manifested in some of Whitman’s poems
to the style of the Psalmist. Certain parts of the two selections following justify the criticism.

OW trumpeter for thy close,

Vouchsafe a higher strain than any yet,

Sing to my soul, renew its languishing faith and

hope,

Rouse up my slow belief, give me some vision of the future,

Give me for once its prophecy and joy.

O glad, exulting, culminating song!

A vigor more than earth’s is in thy notes,

Marches of victory—man disenthral’d—the conqueror at last,

Hymns to the universal God from universal man—all joy!

A reborn race appears—a perfect world, all joy!

Women and men in wisdom, innocence and health—all joy!

Riotous, laughing bacchanals fill’d with joy!

War, sorrow, suffering gone—the rank earth purged—nothing but

joy left!

The ocean fill’d with joy—the atmosphere all joy!

Joy! joy! in freedom, worship, love! joy in the ecstasy of life!

Enough to merely be! enough to breathe!

Joy! joy! all over joy!

 JAMES MAURICE
THOMPSON.
.

URING the past forty years Indiana has been

prolific in producing prominent men. General
Lew Wallace, James Whitcomb Riley, Joaquin
Miller and Maurice Thompson are among the
prominent men of letters who are natives of the
“Hoosier State.”

Maurice Thompson is claimed as belonging to both the

North and South, and his record, perhaps, justifies this double
claim. He was born at Fairfield, Indiana, September 9th, 1844,
but his parents removed to Kentucky during his childhood and
subsequently to Northern Georgia. He grew up in the latter state,
and was so thoroughly Southern in sentiment that he enlisted and
fought in the Confederate Army. At the end of the war, however,
he returned to Indiana, where he engaged with a Railway
Surveying Party in which he proved himself so efficient that he
was raised from a subordinate to the head position in that work,
which he followed for some years. After a course of study in
law, he began his practice in Crawfordsville, Indiana, the same
town in which General Lew Wallace lived. It was from this
section that he was elected to the legislature in 1879.

Maurice Thompson is not only a man of letters, but is a

scientist of considerable ability. In 1885, he was appointed chief
of the State Geological Survey. He was also a Naturalist
devoting much attention to ornithology. Many of his poems and
most delightful prose sketches are descriptive of bird life.
 Mr. Thompson has traveled much in the United States, and
his writings in various periodicals as well as his books have
attracted wide attention for their original observation and
extensive information while they are excelled by few modern
writers for poetic richness and diction.

The first book published by this author was entitled “Hoosier

Mosaics” which appeared in 1875. Since then he has issued quite
a number of volumes among which are “The Witchery of
Archey;” “The Tallahassee Girl;” “His Second Campaign;”
“Songs of Fair Weather;” “At Loves Extremes;” “By Ways and
Bird Notes;” “The Boy’s Book of Sports;” “A Banker of
Bankersville;” “Sylvan Secrets;” “The Story of Louisiana;” “A
Fortnight of Folly.”

In 1890 Mr. Thompson published “Bankers of Boonville”

and the same year became a staff writer for the New York
Independent.

CERES. ¹
( .)

HE wheat was flowing ankle-deep

Across the field from side to side;

And dipping in the emerald waves,

The swallows flew in circles wide.

The sun, a moment flaring red,

Shot level rays athwart the world,

Then quenched his fire behind the hills,

With rosy vapors o’er him curled.

A sweet, insinuating calm,—

A calm just one remove from sleep,

Such as a tranquil watcher feels,

Seeing mild stars at midnight sweep

Through splendid purple deeps, and swing

Their old, ripe clusters down the west

To where, on undiscovered hills,

The gods have gathered them to rest,—

A calm like that hung over all

The dusky groves, and, filtered through

The thorny hedges, touched the wheat

Till every blade was bright with dew.

Was it a dream? We call things dreams

When we must needs do so, or own

Belief in old, exploded myths,

Whose very smoke has long since flown.

Was it a dream? Mine own eyes saw,

And Ceres came across the wheat

That, like bright water, dimpled round

The golden sandals of her feet.

 ¹ By permission of “Houghton, Mifflin & Co.”

DIANA. ¹
( .)

HE had a bow of yellow horn

Like the old moon at early morn.

She had three arrows strong and good,

Steel set in feathered cornel wood.

Like purest pearl her left breast shone

Above her kirtle’s emerald zone;

Her right was bound in silk well-knit,

Lest her bow-string should sever it.

Ripe lips she had, and clear gray eyes,

And hair pure gold blown hoyden-wise.

Across her face like shining mist

That with dawn’s flush is faintly kissed.

Her limbs! how matched and round and fine!

How free like song! how strong like wine!

And, timed to music wild and sweet,

How swift her silver-sandalled feet!

Single of heart and strong of hand,

Wind-like she wandered through the land.

No man (or king or lord or churl)

Dared whisper love to that fair girl.

And woe to him who came upon

Her nude, at bath, like Acteon!

So dire his fate, that one who heard

The flutter of a bathing bird,

What time he crossed a breezy wood,

Felt sudden quickening of his blood;

Cast one swift look, then ran away

Far through the green, thick groves of May;

Afeard, lest down the wind of spring

He’d hear an arrow whispering!

¹ By permission of “Houghton, Mifflin & Co.”

 THOMAS BAILEY
ALDRICH.
ITHOUT the rich imagination of Stoddard, or the
versatility of Stedman, Mr. Aldrich surpasses
them both in delicate and artistic skill. His
jewelled lines, exquisitely pointed, express a
single mood or a dainty epigram with a
pungent and tasteful beauty that places him easily at the head of
our modern lyrical writers.

Thomas Bailey Aldrich was born at Portsmouth, New

Hampshire, November 11, 1836. In childhood he was taken to
Louisiana, where he remained a number of years, his father
being a merchant at New Orleans. After returning to Portsmouth,
he was preparing for college when his father suddenly died,
making it necessary for him to relinquish this design, to take a
position of immediate remuneration, which he found in his
uncle’s counting house in New York. This pursuit he found so far
removed from the bent of his mind, however, that he gave it up
after three years to take a situation as a reader in a New York
publishing house. During his mercantile career he contributed to
the current press, and afterwards became attached to various
periodicals as contributor or in an editorial capacity. Among
others, he worked on N. P. Willis’ “Home Journal,” the
“Illustrated News,” and the “New York Evening Mirror.” During
the Civil War he was for a time with the Army of the Potomac,
as a newspaper correspondent. In 1865, he married, and removed
to Boston, where he edited “The Weekly Journal” every
Saturday. He remained with this paper until 1874. In 1881 he
succeeded William Dean Howells as editor of the “Atlantic
Monthly.” This position he resigned in 1890 in order to devote
himself to personal literary work and travel. The degree of A. M.
was conferred upon him in 1883 by Yale, and in 1896 by
Harvard University.

Mr. Aldrich had published one volume of verse, “The Bells”

(1854), a collection of juvenile verses, before the “Ballad of
Baby Bell and Other Poems” appeared in 1858, and made his
reputation as a poet. Other volumes of his poetry issued at the
following dates are entitled: “Pampinea and Other Poems”
(1861), “Cloth of Gold and Other Poems” (1873), “Flower and
Thorn” (1876), “Friar Jerome’s Beautiful Book” (1881),
“Mercedes and Later Lyrics” (1883), “Wyndham Towers”
(1889), “Judith and Holofernes, a Poem” (1896).

Among the prose works of the author we mention “Out of

His Head, a Romance” (1862), “The Story of a Bad Boy”
(1869),—which became at once a favorite by its naturalness and
purity of spirit,—“ ♦ Marjorie Daw and Other People” (1873),
“Prudence Palfrey” (1874), “The Queen of Sheba” (1877), “The
Stillwater Tragedy” (1880), “From Ponkapog to Pesth”
(1883),“The Sisters Tragedy” (1890), “An Old Town by the
Sea;” and “Two Bites at a Cherry and other Tales” (1893),
“Unguarded Gates” (1895). “Complete Works,” in eight
volumes, were published in 1897. Mr. Aldrich is said to be a
man of the world as well as a man of letters and his personal
popularity equals his literary reputation. We cannot better
illustrate his companionable nature and close this sketch than by
presenting the following pen picture of an incident, clipped from
a recent magazine:

♦ ‘Majorie’ replaced with ‘Marjorie’

During a visit to England, upon one occasion, Mr. Aldrich

was the guest of William Black, with a number of other well
known people. An English journalist of some distinction, who
had no time to keep in touch with the personality of poets, met
Mr. Aldrich, and they became excellent friends. They went on
long shooting expeditions together, and found each other more
than good companions. The last night of their stay came, and
after dinner Mr. Black made a little speech, in which he spoke of
Mr. Aldrich’s poetry in a graceful fashion. The London journalist
gave a gasp, and looked at Mr. Aldrich, who rose to make a
response, as if he had never seen him before. As the poet sat
down he leaned over him, and said:—

“Say, Aldrich, are you the man who writes books?”

“Yes,” Mr. Aldrich said. “I am glad you don’t know, for I am

sure you liked me for myself.”
 THOMAS B. ALDRICH’S STUDY.

ALEC YEATON’S SON. ¹

, , 1720.

HE wind it wailed, the wind it moaned,

And the white caps flecked the sea;

“An’ I would to God,” the skipper groaned,

“I had not my boy with me!”

Snug in the stern-sheets, little John

Laughed as the scud swept by;

But the skipper’s sunburnt cheek grew wan

As he watched the wicked sky.

“Would he were at his mother’s side!”

And the skipper’s eyes were dim.

“Good Lord in heaven, if ill betide,

What would become of him!

“For me—my muscles are as steel,

For me let hap what may:

I might make shift upon the keel

Until the break o’ day.

“But he, he is so weak and small,

So young, scarce learned to stand—

O pitying Father of us all,

I trust him in thy hand!

“For Thou, who markest from on high

A sparrow’s fall—each one!—

Surely, O Lord, thou’lt have an eye

On Alec Yeaton’s son!”

Then, steady, helm! Right straight he sailed

Towards the headland light:

The wind it moaned, the wind it wailed,

And black, black fell the night.

Then burst a storm to make one quail

Though housed from winds and waves—

They who could tell about that gale

Must rise from watery graves!

Sudden it came, as sudden went;

Ere half the night was sped,

The winds were hushed, the waves were spent,

And the stars shone overhead.

Now, as the morning mist grew thin,

The folk on Gloucester shore

Saw a little figure floating in

Secure, on a broken oar!

Up rose the cry, “A wreck! a wreck!

Pull, mates, and waste no breath!”—

They knew it, though ’t was but a speck

Upon the edge of death!

Long did they marvel in the town

At God His strange decree,

That let the stalwart skipper drown

And the little child go free!

¹ By special permission of the Author.

ON LYNN TERRACE. ¹
 LL day to watch the blue wave curl and break,

All night to hear it plunging on the shore—

In this sea-dream such draughts of life I take,

I cannot ask for more.

Behind me lie the idle life and vain,

The task unfinished, and the weary hours;

That long wave softly bears me back to Spain

And the Alhambra’s towers!

Once more I halt in Andalusian Pass,

To list the mule-bells jingling on the height;

Below, against the dull esparto grass,

The almonds glimmer white.

Huge gateways, wrinkled, with rich grays and browns,

Invite my fancy, and I wander through

The gable-shadowed, zigzag streets of towns

The world’s first sailors knew.

Or, if I will, from out this thin sea-haze

Low-lying cliffs of lovely Calais rise;

Or yonder, with the pomp of olden days,

Venice salutes my eyes.

Or some gaunt castle lures me up its stair;

I see, far off, the red-tiled hamlets shine,

And catch, through slits of windows here and there,

Blue glimpses of the Rhine.

Again I pass Norwegian fjord and fjeld,

And through bleak wastes to where the sunset’s fires

Light up the white-walled Russian citadel,

The Kremlin’s domes and spires.

And now I linger in green English lanes,

By garden plots of rose and heliotrope;

And now I face the sudden pelting rains

On some lone Alpine slope.

Now at Tangier, among the packed bazars,

I saunter, and the merchants at the doors

Smile, and entice me: here are jewels like stars,

And curved knives of the Moors;

Cloths of Damascus, strings of amber dates;

What would Howadji—silver, gold, or stone?

Prone on the sun-scorched plain outside the gates

The camels make their moan.

All this is mine, as I lie dreaming here,

High on the windy terrace, day by day;

 And mine the children’s laughter, sweet and clear,

Ringing across the bay.

For me the clouds; the ships sail by for me;

For me the petulant sea-gull takes its flight;

And mine the tender moonrise on the sea,

And hollow caves of night.

¹ By special permission of the Author.

SARGENT’S PORTRAIT OF EDWIN BOOTH

AT “THE PLAYERS.”
By Permission of the Author.

HAT face which no man ever saw

And from his memory banished quite,

With eyes in which are Hamlet’s awe

And Cardinal Richelieu’s subtle light

Looks from this frame. A master’s hand

Has set the master-player here,

In the fair temple ¹ that he planned

Not for himself. To us most dear

This image of him! “It was thus

He looked; such pallor touched his cheek;

With that same grace he greeted us—

Nay, ’tis the man, could it but speak!”

Sad words that shall be said some day—

Far fall the day! O cruel Time,

Whose breath sweeps mortal things away,

Spare long this image of his prime,

That others standing in the place

Where, save as ghosts, we come no more,

May know what sweet majestic face

The gentle Prince of Players wore!

¹ The club-house in Gramercy Park, New York, was the gift of

Mr. Booth to the association founded by him and named
“The Players.”

RICHARD WATSON
GILDER.
 “ , .”

MONG the current poets of America, few,

perhaps, deserve more favorable mention than
the subject of this sketch. His poetry is notable
for its purity of sentiment and delicacy of
expression. The story of his life also is one to
stimulate the ambition of youth, who, in this cultured age, have
not enjoyed the benefits of that college training which has come
to be regarded as one of the necessary preliminaries to literary
aspiration. This perhaps is properly so, that the public may not
be too far imposed upon by incompetent writers. And while it
makes the way very hard for him who attempts to scale the walls
and force his passage into the world of letters—having not this
passport through the gateway—it is the more indicative of the
“real genius” that he should assay the task in an heroic effort;
and, if he succeeds in surmounting them, the honor is all the
greater, and the laurel wreath is placed with more genuine
enthusiasm upon the victor’s brow by an applauding public.

Richard Watson Gilder does not enjoy the distinction of

being a college graduate. He received his education principally
in Bellevue Seminary, Bordentown, New Jersey (where he was
born February 8, 1844), under the tutelage of his father, Rev.
Wm. H. Gilder. Mr. Gilder’s intention was to become a lawyer
and began to study for that profession in Philadelphia; but the
death of his father, in 1864, made it necessary for him to
abandon law to take up something that would bring immediate
remuneration. This opportunity was found on the staff of the
Newark, New Jersey, “Daily Advertiser,” with which he
remained until 1868, when he resigned and founded the “Newark
Morning Register,” with Newton Crane as joint editor. The next
year, Mr. Gilder, then twenty-five years of age, was called to
New York as editor of “Hours at Home,” a monthly journal.
 His editorials in “Hours at Home” attracted public attention,
and some of his poems were recognized as possessing superior
merit. Dr. G. Holland, editor of “Scribner’s Monthly,” was
especially drawn to the rising young poet and when, in 1870, it
became the “Century Magazine,” Dr. Holland chose Mr. Gilder
as his associate editor. On the death of Dr. Holland, in 1881, Mr.
Gilder became editor-in-chief. Under his able management of its
columns the popularity of the “Century” has steadily advanced,
the contribution of his pen and especially his occasional poems
adding no small modicum to its high literary standing. His poetic
compositions have been issued from time to time in book form
and comprised several volumes of poems, among which are
“The New Day;” “The Poet and His Master’; “Lyrics;” and “The
Celestial Passion.”

Aside from his literary works, Mr. Gilder has been, in a

sense, a politician and reformer. By the word politician we do
not mean the “spoils-hunting partisan class,” but, like Bryant,
from patriotic motives he has been an independent champion of
those principles which he regards to be the interest of his country
and mankind at large. He comes by his disposition to mix thus in
public affairs honestly. His father, before him, was an editor and
writer as well as a clergyman. Thus “he was born,” as the saying
goes, “with printer’s ink in his veins.” When sixteen years of age
(1860) he set up and printed a little paper in New Jersey, which
became the organ of the Bell and Everett party in that section.
Since that date he has manifested a lively interest in all public
matters, where he considered the public good at stake. It was this
disposition which forced him to the front in the movement for
the betterment of the condition of tenement-houses in New York.
He was pressed into the presidency of the Tenement-House
Commission in 1894, and through his zeal a thorough inspection
was made—running over a period of eight months—vastly
improving the comfort and health of those who dwell in the
crowded tenements of New York City. The influence of the
movement has done much good also in other cities.

Mr. Gilder also takes a deep interest in education, and our

colleges have no stauncher friend than he. His address on
“Public Opinion” has been delivered by invitation before Yale,
Harvard and Johns Hopkins Universities. We quote a paragraph
from this address which clearly sets forth his conception of
public duty as it should be taught by our institutions of learning:
—

“Who will lift high the standard of a disinterested and

righteous public opinion if it is not the institutions of learning,
great and small, private and public, that are scattered throughout
our country? They are the responsible press, and the
unsensational but fearless pulpit—it is these that must
discriminate; that must set the standard of good taste and good
morals, personal and public. They together must cultivate
fearless leaders, and they must educate and inspire the following
that makes leadership effectual and saving.”

As appears from the above Mr. Gilder is a man of exalted

ideals. He despises sham, hypocrisy and all “wickedness in high
places.” He regards no man with so much scorn as he who uses
his office or position to defend or shield law-breakers and
enemies of the public. In his own words,—

“He, only, is the despicable one

Who lightly sells his honor as a shield

For fawning knaves, to hide them from the sun.

Too nice for crime yet, coward, he doth yield

For crime a shelter. Swift to Paradise