CORNELL UNIVERSITY LIBRARY NEW YORK STATE SCHOOL OF INDUSTRIAL AND LABOR RELATIONS THE GIFT OF New York State Library Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924002366445 45th Congkess, ) HOUSE OP EErEESE]S^TATIVES. } Mis. Doo* Sd Session, | " ) iSo. 29. INVESTIGATIOX BY A SELECT COMMITTEE HOUSE OF REPEESENTATIVES REI.A.TI^-E TO THE CAUSES OF*THE GENERAL DEPRESSION IN LABOR AND BUSINESS, ETC. WASHI]N"GTOir: GOVEENMENT PRINTING OFFICE, 1879. DEPRESSION IN LABOR AND BUSINESS. Pursuant to the subjoined resolution, the committee met at the new poat-offioe build- iuff, New York, in room 1, Heooud floor, on Thursday, August 1, at 12 m. Present, Hon. Abraia S. Hewitt, of New York, chairman ; Hou. J. M. Thompson, of Pennsylvania; Hon. W. W. Eice, of Massachusetts ; Hou. Thomas A. Boyd, of Illinois. FOKTY-FIFTH OOISTGEESS— SECOND SESSION . Congress of the TJnitbd States, In the Souse of Representatives, June 17, 1878. Mr. Thompson sabmitted the following, which was agreed to : "Whereas labor aad the productive interests of the country are greatly depressed, and snfifering se- verely from causes not yet fully understood ; and whereas ourrealand permaientprosperityis founded and dependent upon labor, as the source of all wealth; that when labor suffdps from any cause which may be removed, or its rigor mitigated, our national harmony and prosperity are thereby imperiled; that it is, therefore, the solemn duty of Congress to inquire into and ascertain the causes of such pros- tration and to devise proper measures for their relief, that lab )r may be restored to its ju4t rights, to the end that labor and all our varied interests may be encouraged, promoted, and protected, by liberal, j ast, and equal laws : Therefore, Be^olved, That a committee consisting of seven members of this House be appointed, whose duty it 8faaUl>eJP inquire into and ascertain the causes of general business depression, especially of labor ; to devise and propose measures for relief ; and that, to enable said committee to perform its important ^duties hereby conferred, it has leave to sit during recess, to employ a clerk and such other assistance as may be needed ; to examine wLtn-isses, and to report at next session the result of its investigations, and the measures for relief it may recommend, by bill or otherwise. June 19, 1878. The Speaker appointed on said committee — Mr. A. S. Hewitt, of New York ; Mr. H. Y. Riddle, of Tennessee ; Mr. H. L. Dickey, of Ohio ; Mr. J. T. Jones, of Alabama ; Mr. J. M. Thompsox, of Pennsylvania ; Mr. W. W. iCiCE, of Massachusetts ; and Mr. Thomas A. Boyd, of Illinois. Attest : GEO. M. ADAMS, Clerk. VIEWS OF ME. THOMAS EOCK. In response to the annouucement of the chairman that the committee were ready to proceed with the investigation, and would hear such persons as might desire to give evidence, ■^ Thomas Eock presented himself for examination, and was questioned as follows : By the Chairman: Question. Do you appear in behalf of any organized body?— Answer. Yes, sir; the Journeymen Stonecutters' Association of the city and county of New York, My col- league (Mr. Cornelius Egan) and myself have been sant here by that association to see whether the work for the city of New York cannot be done in the city of New York, and given to the citizens of New York ; we are sent specially m regard to the barge- office to be built at the Battery. We are citizens of the United States and citizeas of New York and think it is our right to have this work to do, instead of it being taken to Dick's Island and done there. The stone-cutting for this building that we are sitting in now was not done in New York. ^ y- i.i. tt -i. j oi. j. Your grievance, as I understand it, is that the Government of the Unite 1 States in erecting buildings in the city of New York had a portion of the work done else- where ?— A. They had all the stone work done elsewhere, and brought it here ; yes, Lhat.the stone should and tlie same is an association 2 DEPEESSION IN LABOR AND BUSINESS. all over the United States. In Mullett's time the Chicago oustoiii-house was done out of stone cut in Cincinnati. Another grievance that we have is this : That on these buildings citizens of the United States have not been employed at all, till very lately. About four years ago there was a lot of men discharged from one of the works in Eock- land, Me., who were nob citizens, and when the work was done they went and drew their money out of the bank, and very nearly broke the bank. Q. You think that all work done for the government should be limited to those who are citizens, and not given to those who are not citizens ? — A. We think the citizens should have the preference. Q. Your view is that it should be limited to citizens. Is that it ? — A. Yes, sir ; but our principal mission here is to see that the work done for the government here is done in the city of New York. We were sent here principally in relation to the barge- oiBce. Q. Do you understand that the barge-office is to be built of stone ? — A. I don't know. Q. I understand it is to be built of iron ; and I would like to ask you whether yon want the same principle to apply to the iron work ; that the iron work in such cases should be done in New York ? — A. The iron-men should be able to talk for themselves. Q. Your idea, then, is that no work should be done out of the place where the build- ing is to he erected ? — A. Yes, sir. Q. And that that should be made compulsory by law ? — A. Yes, sir: By Mt. Rice : Q. How is it in regard to stone work done in the city by private individuals, other parties than the Government of the United States ; where is that done ? — A. Mostly all the work done by private individuals is done in the city of New York. Q. You claim that the government pursues a different policy from what individuals who are doing a similar kind of work, though, of course, not pursued on so great a scale? — A. Yes, sir; and I think our association are in favor of the strict enforcement of the eight-hour law. We are eight-hour men. By the Chairman : Q. Do I understand that you want the eight-hour law enforced ? — A. The association is in favor of the eight-hour law, which was considered a law by the government at one time. By Mr. Rice : Q. That is, for those employed by the government ? — A. Yes, sir. Q. You would not suppose that the government should do anything to protect you who are not in the employ of the government ? — A. O, no ; we don't wish that. By the Chairman : Q. The law now requires the work to be done by contract, by the lowest bidder. Yon would abolish that ? — A. They have not instructed us about that. Q. The law requiring the work to-be given lo the iDwest bidder, if the lowest bidder came from some other place, how could the government give the work to New York ? — A. I think the general government coald make that a part of the specifications, that the work should be done in the city of New York. Q. You would not allow competition outside the city of New York ? — A. People can come in here and compete. Q. Yon wonld limit it to people living in the city of New York? — A. Not at all; any party can come from any part of the United States and contract and estimate and do the work here. Q. Yon would let anybody bid, no matter where he lived, but the work should be done in the city ? — A. Yes, sir. By Mr. Rice : Q. That is, as a railroad contractor, who contracts for a railroad which is to be built in a certain section, must do the work on the road, so you suppose a contractor would come and do the work here ? — A. Yes, sir. It is certain if something of the kind is not done the residents of the city of New York will have to emigrate out of it. It is no good to have the work done down on Barren Island or Dick's Island, where the con- tractor gets the whole benefit of it. By the Chairman : ^ Q. The public officer takes the sum total of the bid ; all he has to guide him is t-o know how much it is going to cost the government, and he takes the lowest bid. The people of the United States have to foot the bill? — A. I don't think he took the lowest bid on this job. This job [referring to the post-office building, New York] was done on Dick's Island. It did not matter how much was done for a day's work at all. The less you did the better you were liked. DEPRESSION IN LABOR AND BUSINESS. 3 The Chairman. Fifteen per cent, was allowed on all disbursements ; that is, the contract law was not applied to that. In other words, there was no contract. By Mr. Rice : Q. How is it about the other contracts in the city of New York ?— A. The court- house was done under the Tweed ring, and I don't think it was done very profitably ; but the men worked well enough. Q. The building cost more in proportion even than this ?— A. I suppose it did, though this cost enough. Q. Do you knowanything about the capitol at Albany ? Was the work done there ?— A. The work was done by the State in the city of Albany. Q. How do you think it worked there ?— A. I think, as far as the work is concerned, it has worked very profitably to the State ; but I can give you an instance where they contracted for a portion of the capitals, and gave |150 to the contractor for the out- ting of the capitals. The State hauled the stone ; the contractor had nothing to do but cut it, and the contractor gave the men $85 for cutting the capitals, and the con- tractors did nothing, only received their money. The State might as well have had that profit. I was one of the men, and I got |85, and the contractor got $150. He did not have any expenses at all. By the Chairman : Q. Do yon think the State of New York can have its stone cut cheaper in New York than in Albany ? — A. Yes, sir. Q. And if the State of New York, in building the capitol, could get its work done cheaper in the city of New York, that it ought to be still done in Albany ?— A. I think the city where the job is done should have the right to the contract. Q. Who pays for the capitol ? — A. The citizens of the State. Q. Why, then, should not the citizens of the whole State have a chance to supply the work an equal chance t — A. Nobody is denying them, is there ? Q. Is It not in conflict with the principle you have laid down, that the work should be done in Albany, notwithstanding it can be done cheaper in New York ? — A. If you can do it cheaper outside, I don't think we should come here at all ; stonecutters can go up there, if they feel like it. Q. But you would compel the stonecutters to go up to Albany for it ?— A. In the first place, I know it could not be done as cheap in the city of New York, and sent to Albany, as it could be done in Albany. -..mr.,' By Mr. Rice : Q. Supposing the work could be done cheaper at Dick's Island and sent there cheaper than it could be done in Albany, would you have it done in Albany rather than at Dick's Island, where it could be done cheaper? — A. Of course, we would be in favor of having it done in Albany ; for the simple reason that in going to Dick's Island the mechanics of the country would be leaving their own homes and going to a place where it is not fit for a man to live. Q. It would be a saving to New York ? — A. I don't know that it would be. I don't think they could do it. Q. Is it not a law that we go to those places for our supplies where they can be ob- tained cheapest rather than otherwise ; and would you have the government follow a different policy from that ? — A. No ; I suppose the government has aright to have this profit ; but still, at the same time, it is not giving the citizens of the country a fair show at all ; it is giving it all into the hands of contractors. Q. And if a contractor has agreed to do a certain piece of work for a certain sum, that contractor will be apt to go for his work to the place where he can get it done to the best advantage, cheapest ? — A. In the first place, I don't think the government has a right to let out a contract to any party unless he can show he has sufficient to do the job. For instance, a contractor will take the job so low that the men who work on it wiU starve. You have not to go out of the city of New York to see that. For instance, on the Forty-second-street arch Q. Can the government prevent that? Have you any particular form of legislation in your mind that will correct that, which we both agree is an evil ? Can you see how it will be cured ? — A. I think the government is the judge of this work, and they know when a man puts in these bids that he is not fit to do the work. I think the gov- ernment should allow every man a living. By the Chairman : Q. The great fraud on this building was the payment of 15 per cent, to a private cit- izen without compensation. Would you apply a different rule to the government from that you would apply to an individual? If a private individual wanted work done, you would not restrict him ? Would you restrict by law a private individual just as you propose to restrict the government ? — A. We propose this: if a private in- 4 DEPRESSION IN LABOE AND BUSINESS. dividual went out of the city of New York and paid for his work, he should pay the same as we receive here. Q. Then you would have the government make a law to regulate wages? — A. No, sir. Q. Yon say if he went out of the city ? — A. As a general thing they don't do it ; hut I think the men of New York would claim that right. Q. You would apply the same principle to private individuals that you propose to apply to the government — that all work to be used in the city of New York be done in the city of New York ? — A. Yes, sir. Q. And so in all the cities in the Union, each city would be similarly dealt with? — A. Yes, sir. By Mr. Thompson: Q. If your organization were thorough, could not you control the price of your labor as well in the country as in the city of New York ? — A. I suppose if times were good we could do it, but at the starvation point things are now you can control nothing. Q. You can't confine them to the rules? — A. No, sir; there are mechanics in the city of New York to-day starving ; and good, sober men starving ; they have not got enough to eat. By the Chairman : Q. Have you any means of giving to the committee the number of stonecutters out of employment in the city of New York ? — A. I could get them. Mr. Thompson. We would like the whole number of stonecutters, and the proportion of employed to unemployed. The Chairman. That is one important thing to get at — the number employed and unemployed; and if the other trades can give that data, we would like it. Mr. EiCE. Any statistics in regard to the number of stonecutters employed noW; aa compared with five or ten years ago, you may also furnish. The Chairman. Stonecutters have suffered, perhaps, more than any other branch of tradesmen. Mr. EiCB. I would like to know whether, from the large operations which have been going on during the last few years, an extraordinary number of stonecutters have been attracted to New York, so that when these operations ceased they were left without ejnployment. If you can ascertain that, or anything bearing on that point, I would like you to do it. See whether the supply of the stonecutters here at the present time is in excess of the ordinary demands of the business — not in excess of the extraordinary demands of the business for the last few years, but now. The Witness. They are in excess of the ordinary demand now, Mr. Thompson. In other words, it involves this inquiry : Why is this depression t Wbat has produced it ? ' The Witness. You can see the depression in our business now, for five hundred men of our trade are in England trying to get work, and they had to leave their tools as security for their passage. The Chairman. 1 hey landed there last year, on the strike ; and that raised the ques- tion whether workmen from this country should take the place of men on the strike there. I saw them myself. The Witness. They went there because they were forced to. Mr. EiCE. That is what I wanted to know, whether any of them had come here in consequence of the demand a few years ago. The Witness. Five years ago many of them came; the Chicago fire brought them. By the Chairman : Q. What is the present wages of stonecutters ? — A. Three dollars a day. Q. Are there any of them working for less than $3 ? — A. That we can't tell; the sup- position is there is. Q. What is bricklayers' wages per day ?— A. 12.50 and $3. Q. And what is tlie wage of a carpenter? — A. I don't believe they have got any wages at all ; most of them lump out, taking jobs. Q. Still there must be journeymen carpenters ?— A. I understand the majority of them have got uo stated wages at all. I don't know whether I am speaking the truth or not ; that is what I understand. I don't think they have any organization at the present time. By Mr. Rice Q. How long have you been familiar with the stonecutting business in New York ? — A. I think I have been in New York since about 1863. Q. What were the wages of stonecutters when you began ? — A. 1862 was the second year of the war. They were $2.25 when I first came from Washington. Q. They are $3 now ?— A. Yes, sir. DEPRESSION IN LABOK AND BUSINESS, 5 By Mr. Boyd : Q. Have they been any lower than 12.25?— A. No, sir; they took arise to $5 a day. Q. Please state during what years they rated at $5 a day ?— About 1868 or 1867. Q. From 1865 up to this time they have decreased? — A. Yes, sir; I think so, from in 1868 to 1873. It was |5 for a few months. By Mr. Rice : Q. "What were they before the war, in 1860 ?— A. Two dollars and twenty-five cents. By the Chairman : Q. And that was for ten hours' work 9 — A. Nine hours' work. Q. And now they are |3 for eight hours' work ? — A. Yes, sir. Q. Which do you consider more advantageous to the stonecutter, |3 for eight hours' work, at the present time, or |2.25 at that time, with nine hours' work ; with rents, provisions, fuel, &o., compared ? — A. I think $2.25. Q. Do you think the present prices are higher for clothes, fuel, house-rent, &c.? — ^A. I think they are higher, taking everything into acconnt ; house-rent is. Q. As to the mode of getting your supplies, how do you procure your supplies ? Do yon buy them from the shops m your immediate neighborhood ? — A. Yes, sir. Q. Have you no co-operative shops, by which you can buy in large quantities, and have the necessaries of life distributed among you ? — A. No, sir. Q. As a rule, do you think your branch of business is worse off than other branches of business ? — A. Yes, sir. The amount of work the men do Is not sufficient to pay their demands and support their families in any kind of a decent way. They have got to go into small apartments, in unhealthy locations, and to places that are not respectable to live in. I don't suppose the men are employed, as a general thing, one- hau of the year ; that is, the general run of them don't work six or five months in the year. Q. Then if they had full employment at |2.25 a da^, it would be better than irreg- ular employment at $3 ? — A. Almost any wages would be better than the way they are working now. By Mr. Rice : Q. Have you any idea of the number of stonecutters there are in the city of New York now ? — A. I guess there must be three thousand of all kinds. By the Chairman ; Q. Have you considered the rate of wages when you get full employment ? For in- stance, supposing you stood out for |5 a day, and that made building so expensive that building was stopped, whereas at $2.25 a day they might go on building, have you considered the effect of that state of things on the quantity of employment you could get ? — ^A. Well, no. Q. Yon said just now that steady employment would be better? — A. My opinion is that now there is not enough employment for the mechanics in the city of New York. Q. Is not that due to the high rate of wages that compelled parties to cease build- ing t — A. No. I think it is owing to the amount of machinery having thrown out hand- labor. Q. Have they introduced machinery for cutting stones? — A. Not for cutting it ; for sawing them and polishing. They saw them with a diamond saw. Q. There has been a large amount of hand-labor displaced in the city of New York by machinery ? — A. Yes, sir. Q. What is your view on that subject, as to how the government should deal with the use of the machinery ? — A. I don't think the government has any right to interfere at all. I think that in a very short time the men with machinery will go up com- pletely. I don't think they have made a dollar since they took them. By Mr. Rice : Q. It don't pay itself ?— A. No, sir. I know men in New York who went into ma- chinery, but to-day they have not a dollar. By the Chairman : Q. Still, as a rule, the introduction of machinery has cheapened the cost of produc- tion, and you are not opposed to the introduction of machinery in labor ?— A, There is no use saying we are not. Q. You don't think the government should prevent it ?— A. I don't think the govern- ment has anything at all to do with it. The way it has become in the city of New York— the first man who started machinery thought he was going to do a great busi- ness, but another says, I will try it too ; and so they had to contract. _ Q. Then you think they will cease to work, not because the machinery is ineffective, but because it is too effective?— A. The architects, I think, at the present time are 6 DEPRESSION IN LABOR AND BUSINESS. working in tlie interest oi the macliines and making the fronts of buildings to suit machinery. Q. Is not that the interest of the owner ? The architects' object is to make it cheaper for the owner?— A. It is haid to tell what their object is; hand labor is cheaper than machinery now. Q. YoQ say that the wages of stonecutters is |3 a day ?— A. Yes, sir. Q. Are there any stonecutters working for less ?— A. The supposition is there is a great many of them. Q. How many are there? — A I don't know. » By Mr. Rice : Q. Have not you an opinion on it ?— A. My opinion is they are working as low as $2. Mr'. Egan. Yes ; and I think they are working as low as $1.50. Q. What does the society do; do they discipline them?— A. Really, we can't get at them. Q. In other words, you have to wink at the facts. The times are hard and you can't help it ? — A. The times are hard and we can't help it. By the Chaikmak : Q. In other words, there are some laws that are more potent than the laws of trades- unions ?— A. The law of necessity. Q. Do you think the trades-unions can regulate wages ; as a rule, do yon think it is possible ? — A. They have done it. Q. In good times? — A. In middling times. Q. But in bad times, when machinery breaks it down A. And employers made more money when they worked up to trades-unions. Q. You mean the boss stonecutters and contractors ? — A. Yes, sir ; there is proof of that in New York; I can bring men — some of them are dead now — who claim that they never made as much money las wien they charged the wages of the union. By Mr. Rice : Q. Do you think that in those years of high prices it was not the workmen, but the employers of the workmen, who got the profits? Who were these employers? Did not they belong to the mechanic classes ? — A. Most of the employers in tlie city of New York now have all been journeymen ? By the Chairman : Q. Have not a large number of the builders failed? — A. Yes, sir; a great many of them are poor now. Q. The greater portion of them have failed? Some of the great east-side builders have gone under ? — A. Yes, sir ; I guess tbey carried too heavy a load of real estate. The Chairman. So it would appear that neither the builder, the workman, nor the . real-estate owner has made anything after so long ah era of business expansion. The conclusion would be that no real benefit had been derived from this era of expansion to anybody ? — A. I dou't see anybody that has money. Q. You want everything to come here in the rough and be worked up into the fin- ished article in the city ? — A. Yes ; that is our proposition. I suppose you know only that for Mr. Mullett all this work would not have gone to Dick's Island. The Chairman. That has certainly never been proved ; but it is certain Mullett has been removed from his position. This building has cost over $7,000,000, and of course it has cost a great deal more than it ought to have cost, but there is no private party who has built in tVin samo noriod that does not think it cost him too much. Witness. D. n't you think that the government has the right to enforce the eight- hour law ? The Chairman. I am not here to be questioned ; but I believe the government should enforce that as well as every other law that it has on the statute-book. The law is, that eight hours constitute a day's labor for work done for the United States Govern- ment or under its immediate direction ; and, of course, the law should be enforced. Mr. Rice. One of the difficulties you have to struggle against is that the Federal Government cannot make a law which applies to a great many laborers. It is for the States to make the laws ; but the Federal Government can only make a law that ap- plies to the work done by it. By Mr. Thompson : Q. What good would it do, supposing the government had the power to limit the right of the contractor to employ his laborers eight hours ? Would he not give them less ? The laws dou't fix the rate per day, and wouldn't he give them less ? — A. Well, if the government would only stick to its law. Q. But you observe that whenever the contractor takes the business and employs his laborers, the laborer is not then working for the government ? — A. I should think they were then working on a government job. DEPRESSION IN LABOR AND BUSINESS. 7 Q. O, no ; some of this work might have been done in England. Would the work- men be working uoder this government then ?— A. I should think they could make it conditional with the coatraotors that eight hours shall be the amount of a day's labor; for eight hours is enough for any stonecutter to work. Mr. Thompson. Yes ; I have uo doubt that could be done, if the law authorized it. The Chaiuman. The law does not authorize it. Witness . If we were all working iu the city of New York to-day, there is not enough work to keep us employed half the day. By Mr. Thompson : Q. I think the contractor should not work his laborers more than eight hours ; but then the question comes up again, would he not have to reduce the pay ?— A. It would come up again ; times would have to regulate that. Q. Do you mean to say that Congress would have the right to fix how many hours is a day's work, but not how much is a day's pay ? — A. No, sir. Q. Would not that question regulate itself in the manner you suggest ?— A. 1 think if Congress would only enforce the law as it is expressed, and state that parties taking this work must not allow laborers to work more than eight hours, the wages would regulate themselves. Mr. Thompson. There is no law to do that. The Chairman. I think the law was intended to deceive, if you want to know my opinion. Witness. The law in Albany was, no doubt. There is an excess of mechanics in the country for the amount of work to be done even at eight hours. Eight hours is enough for any man to work, especially at stonecutting. Some other trades may not be as bad, but a stonecutter must not work more — that is to live. It is a natural law. I think these two arguments are in favor of the eight-hour law. ■ Mr. Thompson. Certainly, the last suggestion is. Witness. It will result in employing a great many more men. Mr. Thompson. That probably would not be a legitimate argument ; but if you can show that eight hours would be sufificient for a man to work, aud that to work more would injure his health, that would be practicable. By Mr. Rice : Q. You think if Congress has the authority it would be well for it to limit all labor to eight hours a day. Do you mean that ? — A. Yes, sir. Q. But if Congress has not, and it is left to the State, each State to do for itself, and some do it and others do not, then the employers of labor in the former places would be under a disadvantage as compared with those that did not do it. That is, supposing there are manufacturers in New York and Connecticut, one on one side of the line aud one on the other ; and in New York there is a law limiting the time of labor to eight hours a day, and in the other State there is no such law, the one that worked his hands more than eight hours would get more work out of them, so that the work of the one that was limited to the eight hours would cost him more t — A. Well, of course it would work badly for that man. Q. So that, in order to have an eight-hour law operative, the Federal Gtovemment has to pass it and make it applicable to all labor everywhere ? — A. Yes ; th<» Federal Gov- ernment should adopt the eight-hour law and make contractors pay under the eight- hour law. Q. We are speaking now not in reference to your kind of labor, but in reference to all kinds of labor ? — A. Well, we are hare speaking for ourselves. The Chairman. I don't suppose you think Congress should legislate for stonecutters merely. Witness. No. By Mr. Rice : Q. You say stonecutting is more fatiguing than other kinds of labor ; but then there are other kinds of labor just as fatiguing, and you would not want the law adopted for your trade alone ? — ^A. No ; our real object is to get it for all mechanics. I think if the Federal Government enforced the eight-hour law, we could Very soon get the city gov- ernments all over the country to do it. By the Chairman: Q. Do yon think that if the government enforced the eight-hour law as to time, with- out doing anything in regard to wages, so that your men should only work eight hours, do yon think that would be effective! — A. I think so. Q. Without touching the question of wages ?— A. I think so. A great deal of trouble, I think, originates in this way, that the government is very apt to give out contracts to parties that are not responsible. You can see the eifect of that in the city of New York at the Forty-second street arch ; that man took the work at |23,000 less than the lowest bid. 8 DEPEESiSION IN.LABOE AND BUSINESS. The Chairman. I think the United States Government is not open to that charge. I think it gives its work to responsible persons who give bonds. There have been abuses in this regard, but they have been remedied. Is there anything elee that you desire to say to the committee ? The Witness. I think that is about all. THE SOCIALISTIC LABOR PARTY. The Chairman. Is there any other delegation present ? I have a card from the com- mittee of the Socialistic Labor Party. Who represents it? A Voice. I do. The Chairman. What is your name? Same Voice. E. H. Bartholomee. I have been sent down here to see what time yoa would receive our committee. The Chairman. The committee will meet here tomorrow at eleven o'clock, and will hear any person who comes to offer evidence. Is there any one else here? VIEWS OP ME. HUGH M'GEEGOE. In reply to the last interrogation — Hugh McGregor, of 421 East Fourteenth street, New York City, by occupation a jeweler, asked permission to be heard by the committee. His request having been granted, he spoke as follows: Congress has at length recognized the fact that the working people of this country, as well as the working people of all other countries, are suffering. Congress desires to know the reason of this suffering. That is a very vast subject ; it is an immense subject. I, as an individual, have my opinions of the reasons, but I would like to say a word now upon remedies. I think the best thing Congress can do, if it really wishes to do something for the working people, if it really wishes to take any progressive action, is, first of all, to understand the disease that labor and society in general is suffering from. To understand the disease, then, I think that a ministry should be formed. You know you have a Minister of War and of the Navy. These departments are well looked after. But industry, it seems, is neglected by Con- gress. Now, in this age of the world we men to-day have to work. In past ages men got their living by fighting, robbing. To-day society, and the individuals composing society, must have moral reasons ; they must get their living by industry. I claim that every individual has a right to get his living by working. Now, seeing that the design of mankind in general is an industrial one, I think it is the duty of the Govern- ment of the United States, of all the governments of the world, to consider primarily industrial questions rather than military questions. Therefore I demand that a co- ordinate branch of government be established. By Mr. ElCE : Q. A bureau ? — A. Yes, sir ; a ministry of labor. Q. You don't care what the name is so long as it be a department ? — A. No. This department should, first of all, know the number of people that exist in this country. They should first find that out. Then they should classify these people according to their occupations. They should then know how they live, how they get their living, and what their living consists of; that is, what they earn, how they get their living, what are their profits, what are their wages, and such like. Then they should find out what the people know, what is their education, what are their means and opportuni- ties of education. Then they should know how the people live, what are their surround- ings, what kind of houses they live in ; whether they are healthy or not ; their sanitary condition ; how long men live in the various branches of labor ; how long a stonecutter lives, a tailor ; how long a man living upon interest derived from money lives, and such things as these. It should be the duty of the government to gather in all these statistics; and until that is done, gentlemen, until we know what we are talking about, there is no use. I was listening when the request was made to bring forward facts and figures as to the number of stonecutters. Now, I will say, the men in the labor movement have not got this information. They can only guess at it. They have not got the means to get it. It is the duty of the state, the people in their corporate capacity, to get it. We have made petitions over and over f gain to the various States to have this information gathered, and now make this demand of Congress, because Congress is more capable of doing it than any State, There is no reason why each State should not; but the United States Government, representing the whole people, and having the greatest jurisdiction, that is the body which should examine and make this inquiry. By the Chairman: Q. Have you examined the last census of the United States ? — A. No, sir ; not fully. The Chairman Will you allow me to send it to you ? You will-then find that every- DEPRESSION IN LABOR AND BUSINESS. 9 tiling you have stated is in that volume. That work has been done every ten years since 1790, and the coming census will be arranged upon a more complete scale than those which have preceded it. Nevertheless, it does tell the number of stonecutters and the number of jewelers. It gives the information you describe, except the sani- tary condition, but the State of Massachusetts has taken that matter up. By Mr. Rick : Q. Have you seen the work of Mr. Wright, of Massachusetts, the chairman of just Buch a bureau as you are speaking of ? — A. Yee, sir ; that bureau is a sham and a fraud. It has not the power to examine a man under oath. It can't compel the attendance of any witness. This department of the government must have full power to examine all persons under oath or affirmation, and to call for all documents, all accounts, and such like, to get at the bottom truth in such matters. By the Chairman : Q. How often would you have this done ? — A. Every iive years. The Chairman. Under the Constitution it is done every ten years, and in the State it is done five years thereafter, so that you get it every five years. Mr. McGregor. It would not matter whether it took place every ten or five years, but you understand that I mean that the census should be extended in its operations ; that a scientific classification of the various matters should be made. Q. Have you seen charts (published forms) giving the social condition, all worked out upon diagrams ? — A. Yes, sir ; I have seen many charts based upon the census. Q. These particulars are published by the government. — A. Whether they were published by the government or not, I do not know ; but they were based upon the census, giving the density of the population, and the rain-fall, and such things. Q. All social conditions are given in the same charts, and the divisions of labor and the professions ? — A. Yes, sir. Q. And the state of education ? — A. Yes, sir. The Chairman. Every fact pertaining to social life is there given. Mr. McGregor. Do they show the hours of labor in the various trades ? Do they state how many days in the year a man is employed, or a woman or child ? The Chairman. Not in the United States census. In the Massachusetts bureau they do. Mr. McGregor. There is an attempt to do that in Massachusetts. It is the duty of the United States to establish a department of government that shall fully investigate this subject of labor in order that we shall know what we are talking about. The Chairman. You want more information ; yon want to extend the census so that it shall cover larger ground than it now does ? Mr. McGregor. Yes, sir ; and I want the inspectors to take every means within the limits of morality to gain that knowledge, by calling manufacturers and workmen be- fore them, and examining those persons under oath, calling for their books of accounts, rules and regulations, and such things ; every manufacturing or industrial occupation should be inspected by inspectors at stated seasons to see that the conditions under which the people are forced to labor are not prej udicial to their standing as men and citizens. The Chairman. If you go to the Cooper Union, where you will find the census, and see what is omitted from that which you think ought to be included, I think the super- intendent of the next census wiU include every thing of public value, and will be glad to do it. Mr. McGregor. The report should be made in the shape of details, and should con- tain suggestions as to the appropriate legislation to remove those evils under which we are suffering. Gentlemen, I tell you as a man who has worked with the people, and un- derstands them pretty much, you have got a dreadful mine ready to burst. You take the most ignorant man, take any workingman, and speak to him, and you see the smouldering element of discontent, and that discontent is ready to burst out at a mo- ment's notice, and nothing but a sweeping change, nothing but a radical, honest at- tempt to remove those evils will ever satisfy the people. It is no good playing with this question. The Chairman. Your recommendation is to get information in the first place ? Mr. McGregor. Yes, sir. The Chaikmai^. Do you go beyond that ? Do you recommend more than that at this time 1 Mr. McGregor. Yes, sir ; I demand that the same as the Department of War, the Department of Industry be established. When that department is established and when they have gained imformation, then they must propose to Congress proper legislation to remove the evils of which they become cognizant. It is no good one man getting up and performing a little bit of reform here, and a little bit of patch- work there, as our laws are made to-day ; we want a comprehensive scheme. Perhaps 10 DEPRESSION IN LABOR AND BUSINESS. an amendment of the Constitution may be necessary in order to establish this depart- ment. The Churman. A department can be established by law. Congress can establish it. It wants no amendment of the Constitution. Mr. McGregor. Yes, sir. A limitation of the hours of labor is one of the first things to be done, because the productive capacity of society is greater than its ability to consume, under existing conditions. That is, I want a pair of shoes just now very badly, but I am not able to get shoes because I have other demands, for instance, a doctor's bill to pay, and such little things, but I would buy those shoes if I could get the money ; I cannot get the money because my -work is intermittent ; I don't get full work. There are many workmen and tlaere is little labor for them to perform. By Mr. Thompson : Q. Do you say that Congress has a right to pass a law limiting the hours of labor, ex- cept for its own employes ? — A. Yes, sir ; Congress is intrusted with questions of pub- lic safety, and there is no limit to the power of Congress, except the limit of morality. Q. But the Constitution leaves to the States, does it not, a great many things, and only takes to itself what is especially granted ? — ^A. Whenever the people of the United States, or any other country, see that certain necessities exist, it is within the power of that people to change the Constitution and to change their laws in order to meet the new necessities that spring up. A new necessity is sprung upon the world to-day, which has been growing for a long time ; that is, how to give the people work. It has been formulated by the revolutionists as a demand to the right to labor. By the Chairman : Q. You say you want a pair of shoes. Do you think it would improve your ohanoe of getting them to reduce the number of pairs of shoes in the market ? — A. No, sir. Q. Do you think it would increase the employment of the people who make shoes to cut down the machinery employed to make them ? — A. No, sir. Seeing that men, by the means of machinery, can produce so much more to-day than what they could twenty or fifty years ago ; seeing that there are all the elements of wealth in the world — there is plenty of wealth, and the necessities of men are greater to-day, owing to their im- proved civilization, than they were yesterday — we demand that every man shall have a chance to share in this improvement, and since there is less work to be done, owing to the introduction of machinery, therefore we have got to equalize the chances of getting work, and if you first of all cut down the hours of labor to eight hours, you will give 80 many, more inen a chance to get work, and if all the people cannot find employment nnder that reduction, then cut them down to six hours ; but it should be the work of this department to gain the facts. By Mr. Thompson : Q. Do you think the number of laborers is reduced by the operation of machinery ? — A. Yes, sir. Q. Do yon suppose there are fewer men making shoes now than before shoe-machin- ery was introduced ?— A. Yes, sir. Q. Fewer men making cotton cloth than before machinery was introduced ? — A. Yes, sir ; and I will show you how. England's commercial supremacy is established on the fact that she went into the production of cotton. Machinery was invented, and the first thing to be done — the first thing that was done — was turning out the able-bodied men and the employment of women and children ; and so great has that evil become that you can go through Lancashire to-day aud see the able-bodied men loafing in the public places, and in the market places, and in the highways , perfectly idle, and they go home on Saturday night, or whenever the women are paid — they go to their wives and collect enough money from the women for their drinking money. The head of the family has become a degraded loafer, and the women and children have to work. And to such a degree has it gone that the British Government has stepped in and made very stringent laws. For instance, that no child shall work more than four and a half hours a day, and cannot work that length of time unless it has been previously four and a half hours to school that day or the day previous ; but for every modicum of labor they perform they must receive a modicum of education. Q. Didn't women use to spin your yarn before machinery was introduced? — A. Yes, sir. Q. Didn't women use to (io that work proportionately in as great numbers to the work done then as they do now ? — A. Yes, sir. Q. Are there not more men really now, proportionately to the population, employed in work on those cloths than there were before the introduction of machinery ? — A. That doa't matter. We have got to start fair in this thing. We are not dealing with individuals, and we cannot deal with individuals. You are the representative of a nation, say ; I am the representative of a family. You have got the nation to loot after; I have got my family to look after. There are my wife and children; it don't DEPRESSION IN LABOR AND BUSINESS. 11 make any difference who makes my bed in tbe morning as long as the bed is made, as long as the place is kept clean. If a man who is fitted to labor is degraded into being a loafer, while the woman who is weak, and who is to bear future generations, is compelled to stand at the loom, and produce stunted and half-developed children, then I say something wrong is going to happen. Now, I say there are less men employed now. Go out in the country and see the tramps. The journals say that these men won't work. Is that not a libel upon our common humanity ? Of course those men would work if they could get the work to do under anything like decent conditions, and there is many a man who will not labor because he is a man and won't accept the degraded conditions. It is true there are some men who are tramps because they won't work ; but is because they have got some manhood in them, and they won't accept of work for sixty cents a day. What can we buy for sixty cents ? I say there are less men employed, that the people are being reduced, civilization is being de- stroyed, and we are returning to the nomadic state. By the Chairman : Q. Prior to the panic of 1873, was there not, generally, employment for everyone at good wages? — A. No, sir ; but more general than now. Q. Was there not generally employment for every one then at good wages ? — A. No, sir. Q. Was there not any quantity of men trying to get laborers whom they could not get? — A. For a short time. Q. For a considerable time ? — A. For a year or two. Q. For more than two years ? — A. Yes, sir. Q. Say from 1864 to 1872, there was an abundant demand for labor over the coun- try ? — A. Yes, sir. Q. Why has this change taken place ? — A. Certain operations have been progress- ing for a long space of time — for 300 years. There has been a steady development of labor-saving processes and machinery. It has been steady, going on continually all the time. Now, at a certain time war broke out in the United States, making a dis- turbance ; money was put in circulation. There was great destruction of property ; that had to be replaced. There was a general demand for labor; we will admit that, at a certain time ; but that was only temporary ; as soon as the waste was destroyed, the old condition of things returned. That general demand for labor was merely in- cidental. Q. Prior to 1860, from 1851 to 1860, did we have an era of prosperity or an era of de- pression? — ^A. We have had constant alternations of what you may call prosperity. Q. I mean by prosperity an active demand for labor at the current rate of wages ? — A. There have been periods of depression. Q. Does it differ now from what it was in 1837, in 1847, and in 1857 ? — A. Yes, sir. Q. There is a great difference ? — A. There is. Q. What is the difference ?— A. The difference is this, that less men are being em- ployed, and that more women and children are being employed. The task of support- ing the families depends upon the women and children to an immense degree. Q. Do yon mean in this country ? — A. In this country, and the same in all other countries. Those facts are generally peculiar to no one country, but embrace the whole of the civilized world. Q. Do you think the women on the continent of Europe are working more in the fields than they formerly did ?— A. There are different degrees and departments. In England, since the introduoilon of agricultural machinery, the field gang has been dis- Q. Has that been a benefit or an injury to the laboring classes ? Was the field gang a desirable thing to exist in a civilized community ?— A. Is it a benefit for a man to be a slave? I will say yes ; at one time it was. It was better that man should be reduced to slavery and compelled to* labor under the lash than that he should be sac- rificed as a prisoner of war ; but is slavery right to-day, under the condition of things that exists ? j i. ii. -i • * Q. The question is whether the field gang was an advantage, and whether it is not an advantage that the field gang has been displaced by machinery ?— A. It is an ad- vantage, but what we want is this : that when we displace labor under degraded con- ditions, or degrading conditions, we shall have work under better conditions. Q. What has become of the field gang ?— A. In the work-house. Q. But the number of paupers has been diminished?— A. We have got to take into consideration the fact that the spirit of humanity has been developed in England. England has assumed a brighter national aspect ; the people have taken higher grounds ; thev have got a more deepened spirit of humanity. Private charity has increased to an enormous extent, and people now are supported in England by voluntary associa- tions to an extent that would have been astonishing years ago. Q You mean trade organizations?— A. Voluntary charitable organizations. q The question is, what has happened to this field gang, who would naturally go 12 DEPRESSION IN LABOR AND BUSINESS. into the poor-house, but who are not found there, because the number of paupers has diminished? — A. A great many live on charity. Q. In passing over England the last year, I didn't iind the beggars — I didn't find where they were living. — A. If you read the papers carefally, you will see every now and then the arrest of a begging-letter impostor. Q. That is no more than it has always been. You mean to say the government should become the great employer ? — A. Yes, sir. Q. And that all persons should be employed by the government and paid wages by the government ? — A. No ; you understand the position I take. I am not a communist. Therefore, I do not believe in equal wages and the employment of everybody by the government, as that might result in a despotism. Q. Suppose the government took all the machinery into its possession. You- say it is the machinery now which employs labor? — A. Yes, sir. Q. Displaces some and employs the balance. Would it not then employ all the labor practically ? — A. Yes; but I don't wish you to misunderstand me. I am not in favor of the government possessing all the machinery and employing all the people. Q. Where would you draw the line? — A. I ask for the establishment of a bureaa which shall gather facts and figures, and, when that is done, you and other men will be able to make a correct theory. Q. Now you come back to your original proposition. — A. I am not a communist. I am a socialist. I believe in every man having the full result of his labor, and no more, except in cases of sickness and old age. Q. How will you arrive at that rule of division ?^A. I want to know. Q. That is what we all want to know. — A. Therefore I want the government to gather the facts and figures on which to form a theory. I am dissatisfied with the communistic theory — not but what communism would be infinitely better than the present system of society ; but I am afraid it might result in a despotism of a few men, as we can see in the Oneida community, under the rule of Noyes. I may be too timid, but in view of the necessity that meets us to-day, I would accept communism if nothing else was possible rather than see men dying upon the streets, as I have seen a fellow- workman with his child lying dead, that died for want of food, and he had not the money to bury his own child. He had to beg to bury his child. Q. Do you think the misery of the world is increaeing ? — ^A. That is a very broad question. Q. The real point of the question is whether machinery and other things have abso- lutely increased the misery, or whether, in other words, the average man is in a better average condition than he was formerly, or in a worse condition? — A. I believe society occupies a better position to-day than it ever occupied in any past epoch ; but what we are trying to get at is just this : Have the working classes, and do they get, their proper share of this property ? Q. There are evils and wrongs, but the question is whether with this introdnotion of machinery which you think has been an injury, the average condition of man is not better than it was in any previous age ? — A. I view this matter from a better stand- point. I am not working for the greatest good of the greatest number ; I am working for the welfare of all, bemg a socialist. By Mr. Thompson : ' Q. What you mean is, although society has improved, you want it to improve more ? — A. Yes, sir. Q. You think that tie lower classes, who, a hundred years ago, were oppressed beyond what we would think was endurance now, with their intelligence, with their advanced condition, should be advanced still further in the social grade ?— A. Yes, sir. Q. That is what you yourself want — to gather a formula to enable you to help ac- complish it? — A. Yes, sir. By the Chairman: Q. You would like to remove what suffering still remains. That is the great object of this inquiry. — A. And, if you will please, when you go back to Congress, introduce a law, or recommend the passage of a law — no more stringent than is necessary, but let it be sufficiently stringent to do its work — to gather the full facts in regard to those things. The Chairman. Congress adopted a resolution in regard to the coming census the re- sult of which will doubtless be to providefor almost all the things you refer to, and, if you can suggest anything to Mr. Walker, the superintendent, it will attract his attention. A letter addressed to Francis A. Walker, Superintendent of the Census Bureau, Wash- ington, D. C, will find him ; but the area of investigation will doubtless be very much enlarged. Mr. Thompson. The only new point the gentleman suggests is that this information should be taken under oath. The Chairman. You made that proposition, that we should introduce a law by which DEPRESSION IN LABOE AND BUSINESS. 13 other people should be compelled to testify under oath. The law says you shall either take an oath or affirm in the presence of the ever-living God. The Witness. No ; excuse me. The Chairman. If you deny the existence of the ever-living God, your testimony won't be received. The Witness. I do not believe in God. By Mr. BOYD : Q. You cannot make other people obey the laws and you not obey them yourself. — A. I obey the law, and am willing to obey the law. Q. Are you a Scotchman ? — A. No, sir ; I am English by descent. Q. You were talking about England a few moments ago, in regard to the increase of her charities and charitable institutions, public and private. — A. Yes, sir. Q. Do you consider that an evidence of a healthy condition of society ? — A. No, sir; I consider it as an evidence of a deepened morality, but I consider it a wrong economic condition. Q. You do not view the increase in the number of charitable institutions as evi- dence of an improvement of the temporal as well as other interests of the people ? — A. No, sir ; not as a national progress. It marks a disease, that the necessity exists for the exercise of those charities. By Mr. Thompson : Q. Dayou think that all these charitable institutions which w6 have in the States — the insane asylums, the hospitals for inebriates, and the various charitable institu- tions — on the whole mark a diseased state of society ; is that it ? — A. No, sir ; I would not say that. I would say the increase of those establishments marks a deepened source of morality, of philanthropy. There are certain hospitals for accidents, which are necessities, and which must be necessities under any condition of society ; but I say the necessity for the existence of many of the charities which exist marks a low eco- nomic condition. Q. That is what I understand you to say. Do you think on the whole that the con- dition of the poorer classes is benefited or injuriously affected by the increase of those charitable institutions ? — A. I am not prepared to say ; but I know it has an eifect, and its effect is often degrading. Q. I would like to have your judgment whether, on the whole, the poorer people are to 'be helped by governmental assistance when they could get along without it rather than to be left to suffer a little and get themselves out of it by their own efforts if they can possibly ? — A. I am in favor of the people doing everything for themselves as far as possible. Q. And on the whole their condition is improved by doing it for themselves — by acting independent of all assistance, and only being aided when actually they would suffer beyond endurance if they were not aided — is that it ? — A. Yes, sir ; I believe that in the struggle to attain a thing our powers are deepened by the struggle, and we become better fitted to meet dif&oulties in the future. Q. You have reached the same conclusion that I have ? — A. I take the position of the practical economist. Q. Apply that same result to the general%vtls under which society is at present suf- fering — this extraordinary depression — would not society, on the whole, be improved by patiently and quietly working out of it, even with a good deal of suffering, rather than by an interference on the part of the government directly to aid and remove their suffering by itself affording relief. Are the cases parallel— the one which you have just expressed your opinion about, and the one to which my present question refers ?— A. I will put a parallel. Two days ago my child had an attack of cholera infantum. I put him into a bath, and put a strong mustard plaster on his stomach. The child recovered, but there was pain. I bad to hold the child, because the plaster burned him. So I regard this whole thing. I would like the people to come together from the force of their own intelligence. Q. You want such inquiries to be made, and the information obtained by the govern- ment as will enable them to do so, rather than any special legislation ?— A. Ah, but while the people are being reduced to tramps, then those people always must be pre- served ; and if it cannot be done in any other way than by the government interfer- ing—— Q. But the government does interfere ?— A. Don't you know the law passed out West, that a man shall be sent to prison for two or .three years if he is caugUt tramp- ing along the road without any visible means of support? That is reinstituting slav- ery I say the government ought to provide for everybody if the people cannot get it, because men have got to be supported by society. All men have got to be supported by society. Morally, society has arrived at that decision. That is the moral decision of society, that all inen have got to be supported, either as a workman, as a pauper, as a criminal, as a prostitute, or by charity. 14 DEPEESSION IN LABOE AND BUSINESS. By the Cn airman: Q. I understand that practically the demand is that we shall secure all the informa- tion we can get on this very important sabject ? — A. Yes, sir. Q. That is as far as I understand yon to proceed now ?— A. My demand is simply this, that a governmental department be founded. Q. When I say " we," I mean representing Congress.— A. Yes, sir; and that they suggest appropriate legislation. VIEWS OF MR. CORNELIUS O'SULLIVAN. Cornelius O. Sulf.ivan appeared and offered to give evidence. By the Chairman : Question. Are you a granite-cutter?— Answer. Yes, sir. Q. The subjects which this committee is to consider are the causes of the depres- sion of labor and the remedies for those causes. As far as possible, confine yourself to that general subject. — A. I will endeavor to do so, though coming here, I didn't antici- pate meeting the committee to-day, and my greatest object in coming was to obtain an interview at as early a date as possible, wlien I would produce facts and figures to snb- etanliate my statement. Q. You can malje the statement now, and submit your figures in writing.' — A. Yes, sir. Like all other trades, ours nndonbtedly is depressed, ijut the cause is materially different. As you are very well aware, our government has been doing a large amount of granite work since 1870. Prior to that time the condition of the granite-cutters in the United States was very comfortable. The amount of labor that was then exacted from them was only a reasonable .amnunt, and didn't tax them physically any more than they could very well bear. At the introduction of these public buildings (and this is the great evil which I wish to impress upon the minds of this committee), you must bear in mind that there was then a great demand for that class of labor through- out the country, and you will also recollect that these buildings, even the building that we are now in, was let out in a measure under the control of contractors, though being executed by the government, and these contractors, for simply looking after the work, received 15 per cent, upon the entire expense of the cost of executing the work upon these buildings — I mean the dressing of the granite. Then, sir, you must bear in mind that, under these circumstances, it was a matter of secondary consideration to the con- tractor whether he employed a practical mechanic or not. If the work cost him more, lie received more in percentage, and, possibly, if they were not very conscientious about the matter, they might have employed very indifferent workmen, and in this building, in the execution of it, I know to my own certain knowledge that there has been a large number of this class of workmen employed at the expense of the government. This is to show yon that the employment of such men and the instruction of them was detrimental to our interests, and in time it glutted the market for our class of labor, and the man who legitimately acquired a knowledge of his trade suffered pro- portionately. Now, then, when the people cried for economy this percentage system was removed, and we have at the present time a contract system, something certainly that never should be tolerated by the go^rument or the people of the United States. Let me give you my reasons for saying it should not be tolerated. During the admin- istration by the government of those affairs there was a certain amount of attendant labor, timekeepers, &c., whioh created an enormous expense, and in many instances a very unnecessary one. This by the contractor is entirely dispensed with, and the mechanic has to attend to it himself, and what is the compensation ? Strange it is, but true. To-day, upon the government buildings, that the government is paying for, the contractors get 33 per cent, of the original cost to the government, minus the 15 per cent. That is about how this work is figured. Prior to the introduction of this contract system, when employment was scarce, a large number of mechanics made a practice of flocking down to those islands where those stones were being dressed, and during their stay there the contractor offered them work with scarcely any compen- sation at all, with the inducement that by working for a certain period upon this work for them they would be employed eventually by the government. Now, then, sir, by those means they got t his contract work for such a low figure that these contractors could afford to come in here, into New York, or any other city, and underbid any con- tractor in ir, and, as a result, forced many of us to leave our homes, because the con- tractors in this city could not compete with those down East, as a contractor here had at least to give the workmen a sufficiency to sustain his family, else the workman could not live. The man on the islands lived in anticipation of being employed by the gov- ernment, and for the period he was employed in tiiis way he cared not as to the amount of compensation received. Q. How long a period was this ? — A. This period varied. A man might go there to- day and work a week and be put on the government work. He might work a fortnight DEPKESSION IJfntSBOR AND BUSINESS. 15 or BIX weeks. That was governed entirely by cironmstaucea. The period was not lim- ited in any individual ease. Q. They went down there to get on the government work t — A. Yes, sir. Q. But the contractor said, "We cannot put you on the government work now ; we will put you on other work tor government parties, which they have at a low price, and by and by we will put you on government work." — A. " Will put you on this con- tract work we have," Q. I did not understand there was contract work and government work going on at the same time ? — A. Then understand it now. Q. I thought the government work stopped when the contract work began ? — A. On the contrary, those works were conducted side by side, and by the same firm, or rather under the jurisdiction of the same firm. The Bodwell Granite Company at the same time employed about 150, or perhaps more, stonecutters on contract work, and right across, or rather on the same plot, the government sheds were. Now, then, getting nearly through with that subject, we find at the present time that this contract system is still held, and even countenanced, by the government, or, at least, we don't find that there has been auy of the evils removed ; for in this same Bodwell Granite Company there are men employed on the government work under the circumstances that I have jnst described, and their compensation is precisely as I have just de.'scribed it in pro- portion to what they had formerly received for the same class of work. Q. Is there any government work going on now on the present system ! — A. None that I am aware of. There is none whatever The suppression of the percentage sys- tem was when this contract system was introduced, which I hold is still more outrage- ous — much more so by far than the percentage system, because it gives labor no chance. Then the laborer, or, rather, the mechanic, received a certain stipulated price for his" day's labor, and it was no cost to the contractor, because the more he paid the more he got in percent.age. Q. You would not recommend the continuance of that system ? — A. Certainly I wonld not ; but what I would recommend is this : that when it is made manifest, as it has been that the government conld take these works and execute them fully as well and at a less cost than it was then paying the contractor it should do so. Let me here be understood distinctly that I trace all the evils under which we have been laboring directly to the ujanagement of the government, because if it had taken hold of this matter and conducted those public buildings it would then employ about 30 per cent, of the entire granite-cntting element of the United St*tes. Now, you must bear in mind this would be a great advantage to any trade and it would relieve it very materially from any sense of depression. When an outside and independent influ- ence employs one-third of it and does it at a good, &ir, reasonable compensation, it never allows the market to be glutted. Q. I understand yon to say that yon are suffering from the fact that the government has been interfering in this business ; that that is the cause of yonr present suffer- ing J — A. As I have described it, hut in no other way. I have given you the reasons why, and in no other way. Now, then (producing a newspaper), here is a journal that we publish monthly. Many are prejudiced against trades-unionism. Such a thing as that never was heard among us in this country until this system of persecution was in- augurated against us. We appealed repeatedly not only to State legislatures but to Washington, and repeatedly presented onr grievances in what I should consider a very intelligible form, and never yet received any redress. Q. To whom did you appeal ? — A. This question was fully and clearly represented to a commission appointed — ^I think it was in l.^T7, with Captain Casey as chairman of it. Q. Appoined by whom t — A. By the Secretary of the Treasury, I think. Q. Not a Congressional commission ? — A. No, sir ; it was not. We have simply com- bined together in this union. Recollect we are nearly aU Americans, and we have a membership, and included in this body are some seven hundred honorably-discharged soldiers — men certainly who have some claim upon the government. I am one my- . eelf, and I have no reason to blush when I ^ay that I left a good, comfortable home when but sixteen years of age and remained, sir, until our starry banner came out triumphant on the battle-field; so that we have some little claim on the government. Now, then, we are banded together for the purpose simply, through this journal, of making the public acquainted with our grievances. There is not a solitary particle of what vou might consider an arbitrary or unjust spirit pervading our organization. It is eutireiy American and entirely republican and simply for the protection of our trade. Xowj then, to show yon the prejudices under which miiny of us who have made it a point to present this question from time to time to the proper authorities have labored, von will, probably, by looking over that paper, see an extract from an Albany paper where I used some remarks in Albany, and the substance of those remarks was against the „ , , ^ . i. i • Q. What limit would you put upon the functions of that bureau as to private bus:- 20 DEPRESSION IN LABOR AND BUSINESS. ness ; -would you unfold to the public all the details of every man's private business ? — A. There is no necessity for that. The government to-day claims the right to go into any one's business and examine his boolis. The revenue department claims that right. Q. No ; it not only does not claim it, but it has no such right. Let me ask you to ■what extent you propose to go ? — !4.. We propose, in the first place, that the sanitary conditions of the different factories and mills, workshops, dwelling-honses, &c., ought to be inspected. It ought to be ascertained what wages are paid to the people work- ing in each different employment, whatever they may be ; what profit it is that the employers receive from the earnings of their employes ; how the money is distributed otherwise than by paying wages ; what percentages are paid to stockholders of such concerns — for they are mostly joint-stock concerns; very few are held by any single individual ; also, what education children receive that work in these mills ; for we know there are thousands of them working in these mills that ought to have gone to school, who never grow up to a properly-developed race, but are crippled by beiug confined in these factories. There have been laws passed for these children to go to school a certain portion of their time, but they are not carried out. Six mouths ago a case happened in Massachusetts where a man was beaten because he dared to notify the authorities that a certain mill-owner was allowing the men to go into the factory before the proper hour of day. Such things would be done away with if the proper officers were employed. Q. In what place in Massachusetts was that incident that yon refer to ? — A. It was in Fall River. Q. Do I understand that this investigation is to be so complete into the private busi- ness of every man that his profits and losses are to be under the supervision and inves- tigation of the government, and made public ; is that your idea ? — A. I don't say that they should be made public ; they should be printed for reference. Q. What is the object of the inquiry if it is not made public ? — A. If a person is ill, and yon, as a physician, endeavor to treat the disease, whatever it may be, you have got to show where the root of it lies. Q. Who is the physician in this case ; who is going to treat the disease ? — A. The government. The people ought to do it through their proper officers. Q. How can they select the proper officers without having the knowledge you have got ? If you limit it to the officers the public will never know it. How can they se- lect proper officers ?— A. Certainly they can. We are supposed to know the daties of the different officers in the States, and in the United States, and in the cities. We also know the duties of the officers of the laboi bureau of statistics, and, knowing their duty, we know whom to elect for the office capable of carrying out the duties of that office. Q. What would you have those officers do with this information when they get it ? — A. Recommend laws to the different States and to the United States Government for the bettering of the condition of the people, because they would see by taking such an account that people are not paid, educated, and fed as they ought to be. Q. Would they not have to give this information to the public as tfce reason why they recommend the laws ?— A. Yes, sir ; they should. According to the table, there are 80 per cent, of the population of Massachusetts in those circumstances ; 14 per cent, are in comfortable circumstances, and 6 per cent, are rich enough to live in luxury, showing again by figures that the real producers do not receive what they ought to. We claim that the production, consumption, and distribution is unnatural as it exists to-day in the present state of society. By Mr. Thompson : Q. Do you hold, if those remedies that you speak of were ad%'ieable, that Congress has the power to pass a law regulating this question in Massachusetts ? — A. I hold that Congress, being the servants of the people, have to look to the interests of the people, and if they find there is anything wanted to remedy any evil in existence, then they have power to remedy it.; and I do believe that the United States to-day, the people at large — the vast majority of them — would hail any real act carried out by Congress, not only on the statute-book, but carried really into effect ; I don't believe there would be any objection to it. Q. Do you think Congress has any power to make purely local laws for Massachu- setts? — A. If, iu accordance to the Constitution as it now exists. Congress claims it has no right or power to remedy those evils, then you must change your Constitution to change that power. A common trade union goes on from year to year. If they find that their by-laws, as they are, do not answer the times, what do they do ? They call a general meeting, or wait for a general meeting to come along, to make propositions, and then change them to suit the times, and the government should do so more than any one else. Q, If the legislature of Massachusetts should fail to provide a common-school system, requiring ch Idrea between certain a^'es to attend school and forbidding those children DEPRESSION IN LABOR AND BUSINESS. 21 to labor in factories, do you tliinli Congress should supply that omission ?^A. No, sir; I don't mean it in that sense. Q. How do you propose for Congress to remedy that ? — A. If there is an amendment made to the Constitution of the United States, it is supposed to be ratified. Q. I ask you if Congress should supply that omission that I have suggested ? — A. That could be done if the Constitution of the United States was so changed. Q. I am speaking of it under the affairs as they now exist ?— A. I don't know that that is a material matter to the subject under debate — whether they could do so now. Q. You are now addressing a portion of the Representatives of Congress, asking, not aid from State laws, but through Congressional legislation. Now, has this committee or the body of Representatives powef to do the acts or pass the laws that you suggest ? — A. It is not proper to give a question in place of an answer, but under the circum- stances I am compelled to do so. By Mr. Rice : Q. Admitting that Congress has not the power to do it now, do you think that it is best that the Constitution should be so amended that Congress could establish these laws — these regulations for the different States — instead of having it left to the States themselves ? Which do you think would be the best for the people that you repre- sent ? — A. I think the Constitution should be so amended that Congress could enforce those laws in the different States. Q. And you think that more good would be done by leaving it to Congress to do the work than by leaving, it to the States to do the work, each in itself? — A. If it were co^ducted by one government only, instead of by so many different governments under the Federal Government, it might lie more just to the people at large. Q. You believe rather iu'a central government? — A. I do ; I believe in centraliza- tion. ■Q. Disseminating all things from a central source rather than haviiig it done by local governments in their respective jurisdictions? — A. Yes, sir; I do. I believe in centralization. Q. That is, you believe that the present system of the Federal Government, the States reserving to themselves these local powers, is rather a mistake than otherwise ? — A. That I consider a failure. I do believe there are in this city to-day thousands of bankers and merchants who certainly do not belong to our organization, but who would rather that the laws were more uniform in the United States, because you know better than I can tell you that the laws differ so ranch iu the different States of the United States, that they come in conflict with one another in all sorts of business. By the Chairman : Q. You have given us now some extracts taken from the census report and the labor bureau report of Massachusetts, of the difference between the earnings of differ- ent classes of the community. Have you investigated, or have you an opinion as to the causes of that difference of compensation to different classes in the community f — A. Yes, sir ; we have an opinion formed according to our honest conviction, and, hav- ing investigated the matter, we think we know the cause. In the first place, we all know that machinery has constantly been improved. It is being more and more used, you might say, every day. If you look at the record of the Patent OfSce and find all the patents that are taken out for improvements of machinery and new inventions, those facts would be established. By the introduction of machinery in mechanical labor and also in agricultural labor, thousands and thousands have been thrown out of em- ployment. It is well known, and true, that there are many people employed in manu- facturing these machines, but not a tenth are so employed that are thrown out of employment by the use of these machines. By Mr. Rice : Q. I would like to repeat the question to you that I proposed yesterday, or that some of us did. Do you think that production has been greatly increased by ma- chinery ?— A. There are two ways of answering that. It has been increased in one sense of the word ; that is to say, the people or the manufacturers can produce, quicker, faster, than they were able to with manual labor ; but iu quantity it has not been in- creased so much. Q. Supposing there had been no machinery, against which you are now complain- ing, would there not have been a great many fewer at work on those things which are produced by the aid of machinery than there now are ?— A. I believe not. I think there would be more employment than what there is now. Q. On those articles that are the product of machinery ?— A. There are some pro- ducts that could not be produced without machinery. Q. Suppose there were no boot and shoe machinery ; do you believe there would be as many people at work on boots and shoes as there now are f— A. I think there would be more. , , , , . Q. You think there would be more people making oottou cloth, mjre people mating 22 DEPRESSION IN LABOR AND BUSINESS. ■woolen cloth, if there had been no machinery, than there are as It is ? — A. Going back to the ages before machinery came into use, a great many of the people used to make these cotton cloths themselves. It was not so much a manufacturing article. Q. The question is whether, on the whole, in your .judgment, machinery has tended to increase or diminish employment?— A. Machinery has certainly diminished the actual employment of humanity. By the Chairman : Q. Do you think that machinery is beneficial or injurious to the great mass of hu- manity ? — A. I believe machinery is of the greatest benefit to the human race, but I do believe it, and know it, that as it is being used to-.day, it is a curse to humanity, because the benefits of all machinery are monopolized by capitalists. The laboring classes re- ceive no benefits from machinery Vf hatever. Our mechanics to-day are poor mechanics ■with very few exceptions. It is not necessary, except in very few cases, for a man to learn his trade. All he has to do is to attend the machine. The machine does the work. Therefore it is easy for one man to go from one business into another, because all he needs he can learn in a quarter of a day ; he don't need any knowledge of the trade. You not only through machinery have thrown men out of ■work, but yon have made a poor manufacturing race all over. Q. You think the owners of the machines get too much ? — A. They do, as I have shown in those tables. Q. Therefore it is the owners of the machines and not the machinery that, in your judgment, are injurious to the ■well-being of society ? — A. Yes, sir. Q. Could the machinery exist without capital to build and own it? — A. I believe it could. In order to answer that we would have to ascertain what capital is. Q. What is'your definition of capital ? I want you to define where the cause of the trouble is. You now say it is not in the machinery ? — A. No, sir. Q. Where is it? — A. It is in the false distribution of the results of labor. Q. That is, the owners of machinery get too much ? — A. They do, and the real manu- facturers of all wealth get, you might say, nothing. Q. Is there anything to prevent other capitalists from becoming the owners of machinery if machinery is getting too large a profit ? — A. There is, to the best of my knowledge, nothing to prevent it now in the constitution of any government, either State or Federal Government. Q. Or in the constitution of society, is there ?— A. Certainly there is in the consti- tution of society. Q. Suppose one capitalist has a lot of machinery aud it is making this enormous profit of which you speak, is there anything to prevent another capitalist buying that machinery and sharing that profit with him ? — A. No, sir. Q. How does it happen, then, that this excessive profit comes to the owners of the ma- chinery ? — A. It happens because they do not pay to their employes what they ought to pay them. Q- Here is capital begging to-day for borrowers at less than three per cent, in this city, and you say the owners of this machinery who are capitalists are getting excessive profits ?— A. They are. Q. Then why don't the other owners of capital go in and buy machinery and share the excessive profit with them, or what is to prevent them ? — A. Suppose a man received a certain amount of lumber, we will call it ten dollars' worth. Say he is a cabinet- maker. He receives this raw material to make bureaus, book-cases, or sofas, or what- ever the case may be out of it; after he has worked np this raw material, the material has thereby received the value of $50, for which it is sold. He receives for putting this value there through his own manual labor, about $15. The capitalist or the employer pockets |25 — for what ? For the mere buying of this ten dollars' worth of raw material, and furnishing a man to work it. A man has to furnish all his tools and his energy, for most of our manufacturers are incapable of conducting any concern f they have hired hands to conduct it for them. Do you think it is just that a man in that case should receive such a profit? for I can show you in this city where cabinet- makers do not receive as much as that. Q. The point of my question is this : If the employer is receiving this excessive profit, what is there to prevent other people with capital from going into that branch of busi- ness and getting this excessive profit also ? Do they all get this excessive profit who are in the business ? Have piano manufacturers been getting these excessive profits, and are they getting them now ? — A. As a class they do. Q. Then they aU get rich ? — A. They do. Plenty of failures have occurred, we know, but that does not alter the case. Q. Take the cabinet-makers of New York. AVhat percentage of the employers in making cabinet-work in New York have grown rich, in your judgment? — A. The large manufact- urers that have been able to monopolize trade are doing well aud becoming rich, while the smaller manufacturers who have employed from two to six hands are being crowded out, because they caunot compete with the large manufacturers. The large manufacturer is DEPRESSION IN LABOR AND BUSINESS. 23 aWe to furnish hisshop with machinery , therefore turning out everything so much cheaper Avhile the small manufacturer isnotable to buy machinery ; it is too expensive for him, and he has not got the capital to do it. In the last five years many of the smaller manu- facturers in the cabinet trade and in the piano business have been crowded out of busi- ness. They are either tuning, or repairing, or patching up furniture, or working for other employers. I know of a number working in that way who were well to do for- merly, but through the use of machinery they could not compete with, and they were undersold by, the large manufacturers, and the result was they had to go back to the bench. By Mr. Rice : Q. How long have yon been acquainted with the piano business? — A. I became an apprentice to the piano business in 1859, at the corner of Mercer and Broome streets. Q. Taking the whole of the great piano manufacturers, were not many of them orig- inally poor men — mechanics ? — A. Yes, sir. Q. Who have become capitalists by the force of their own energy, or the circum- stances by which they have been surrounded ? — A. They have become capitalists, but not by the efforts of their own energy. Q. They became capitalists from men of as humble origin and of as humble circum- . stances as anybody, have they not? — A. I know the Stein ways worked for the firm of Bacon & Raven, in Baxter street, corner of Grand ; also the Decker Brothers. There was Mr. Weber, also, my employer, he worked for Van Winkle in this city. Q. Is it not an advantage to the laboring class that things have come to such a point, , by machinery and by capital, &,o., that men may start from humble origin, as these men have, and work themselves up to the position of wealth and influence that they now occupy ; is' that not a great advantage ?— A. In the first place, I believe there is no such chance in existence now, and has not been for years, and I don't believe there will ever be again ; we don't want it to be ; we want a better condition of society. None of these men in the trade that I personally know, have through their own earnings or energy accumulated what they "possess to-day. I claim that those that have worked for them have been deprived of their earnings, for I claim, and am ready to prove, that capital is nothing but unpaid labor. If they had only taken what they earned them- selves, they would never have become capitalists. Q. Would you put a limit to the power of accumulation ?— A. I would have every- thing conducted co-operatively under the government. Q. Co-operation in the government would be one of your remedies ?— A. Yes, sir. By the Chairman : Q. W;ould you have a general co-operation of everything ?— A. No, sir ; a general co-operation under the government. Q. That the government should take all the property and pay all the wages ?— A. No sir Q. How would you work out your scheme ?— A. The different trades would manufac- ture or do their different branches of industry under the government as a co-operative society. ' ^ i j ■ Q. Under the government employ ?— A. Under the government employ, and superin- tended by government officers. . , , , „ iU J » Q Would the government collect the proceeds of the industry and sell the goods T Who would sell the goods ?— A. The heads of the different co-operative societies. Q. What would they do with the money ?— A. Use it to defray the expenses ot the Q. Would you have one general co-operative association of every branch of busines in the United States ?— A. Yes ; they would be united under one head. O. Who would that head be ?— A. The government or a government officer. Q. What would be the duties of that head; would he receive the money froni the proceeds?— A. He would receive uo money whatever, any more than his salary trom ^'^Qfwhat wTuid his functions be ?-A. To see that the thing was carried on regularly ^"q.^How^wouH the government live ; what would the government pay its other expenses from ? The government now pays tnem by taxation.-A. It would then also, but would receive its taxation from the different societies instead of receiving it from individuals. O. The question is how these members of the co-operative association are to live. Take your piano business. It is to be one great national piano trade ?-A. Yes, «r Q. And its products are to be sold by some one and to some one and at some price 1— 'o^ And where and how are they to collect the money and how is the ruoney to be is^ributed f-A. Gather it by a clerk appointed by the co-operative society. Q Then the piano trade is to meet together and lorm one commou stock ?-A. JNot tne 24 DEPRESSION IN uajsuic awjj jjusijness. entire trade in the United States. It is to be one common concern, but not done in one city. For instance, it would be one concern in New York and the same in Philadel- phia and in Baltimore. Q. Are they all to sell at the same price ?— A. Why should they not ? Q. I am asliing you what your idea is. Are they to sell the pianos at the same price ?— A. Certainly, because we are able to turn out an equal quality of work. Q. Suppose a piano made in Philadelphia has a better tone than one made in New York ?— A. We claim we are all capable of performine good work if we have the time. Q. Is it not a matter of fact that two pianos made m Albany by the same workman, ■nith the same care, will have a different value in quality and tone 1 — A. Yes, sir ; they have not got a diiferent value — one tone may be a little fuller than the other. Q. Would not a good judge of pianos give more for one piano than for the other ? — A. He might give more for it ; the salesman would ask as much. Q. There are a great many grades of pianos over the country? — A. Yes, sir. Q. These grades have to have different values and different prices. Who is to regu- late the values ? — A. The different co-operative concerns among themselves. Q. Suppose one undersells the other ?— A. That could not be done. I said the differ- ent co-operative societies in the different cities would be managed by a board of officers of that trade. Q. Philadelphia would be managed by one set of officers and New York by another. Suppose the Philadelphia board chose to sell their pianos for less than the New York society, what then ? — A. That could not be done, because the co-operative concern of each city would have a central organization. Q. Would you have one uniform price for pianos throughout the United States ? — A. Why not ? There would be different qualities, no doubt. You can buy an instrument for flOO in the city of New York and you can pay $1,000 for others. The different so- cieties would be obliged to make cheaper and higher instruments, but the cheaper in- struments would be of uniform price as would be the higher ones. You could not sell a first-class instrument in New York for $500 and I sell one like it in Philadelphia for |300. Q. Suppose the establishment in Philadelphia got short of money, what would hap- pen then ?— A. That could not happen. Q. Why not ? — A. Because the society, on the principle I speak of, would regulate the hours of labor according to the wants of the people, so as to continually keep the people employed. Q. Suppose the demand for pianos fell oft" at the other concern, and people had no money to buy pianos with, how would you regulate that — that would not bring money into tibe concern ? — A. No ; if such a thing should happen the hours of labor would be reduced to keep the men employed, and should the money coming in not be sufficient under an industrial government, as it ought to be, and not as it is to-day, the govern- ment would at all times, through other co-operative societies, step in to assist those, just as well as trade is carried on now by private hands, and they are all doing pretty well — why could not co-operative societies ? They could do it because they could sell at reasonable rates. Q. When a society got into distress for want of trade, you would help them out by taking the money from the other society ? — A. Yes, sir. Q. And you would make each trade guarantee the other trades all through the country ? — A. Yes, sir. Q. And you would enforce that by legislation ? — A. Yes, sir. By Mr. Thompson : Q. Then, under that system, no man would get any more than his mere living; he could not accumulate anything beyond his every-day existence ? — A. In the state of society I speak of there would be no desire for anybody to accumulate anything, be- cause he would know he would be taken care of, as it were. He knows he has got constant employment. What more does he desire ? Q. You have no family to support by your labor. Another man, who cannot do as much labor in a day as you can, has a wife and ten children. You each receive the same amount of pay for your services daily, you $5 for yourself and he $5 for his wife and ten children, although he cannot do, as much labor as you do ? — A. We claim in this State that every one should be paid according to his Q. Necessities? — A. No, sir; not according to his necessities. I beg your pardon. According to his deeds— according to his services and abilities. We don't claim that a man performing $10 worth of labor through a day should receive but $r>. Q. Suppose the man who has the family that I have described receives as much for his day's work as you do. You have enough to keep you, and he has not half enough.^ How is that deficiency to be made up ? — A. By the co-operative society. Q. Then you would have a premium on large families ? — A. I don't know that we would. Under those circumstances to-day a man is not able to raise a large family, because the children are sick before they are born. DEPRESSION IN LABOR AND BUSINESS. 25 By the Chairman: Q. You say each man is to receive pay according to his services? — A. Yes, sir. Q. Then some men -will receive more than other men '? — A. Yes, sir. Q. What will they do with that excess? — A. Use it for whatever they will. Q. And yon said just now there would be no desire to accumulate — they would pot accumulate it ? — A. No, sir. Q. What would they do with it ? — A. I have no doubt if the people had more money to-day they would know what to do with it. Q. But they would not accumulate it ? — A. No, sir ; there are plenty of necessaries of life we cannot buy to-day. It would take years to supply the people with the- necessities of life. Q. Is it not for the interest of society that property should be accumulated? — A. No, sir. Q. Then you would abolish property I— A. It ought to be abolished. Q. You would have no accumulation by any one? — A. Not privately; everything belongs to the government. Q. Then you would have everything belong to the community, but you would pay some men more than other men because they earn more ? — A. Yes, sir. Q. If they earned more and had more, would they not have a larger interest in this accnniulation than the men that didn't earn as much ? — A. No, sir. Q. What is the meaning of having more or less, except that one man has more of the property than the other man ? — A. Why should he not ? Q. You say he should not ? — A. We know the wants of people are not alike. By Mr. Rice : Q. Suppose a man gets $10,000 a year, and he earns that according to the rule which is established in your system, and suppose he does not want to spend but $4,000 of it, what will he do with the other $6,000 ?— A. He can turn it over to the society. Q. Is it any ojjiect to him to eai-n more than the other man that does not earn but $1,000? (The witness here sat down without answering the question, and stated that Mr. Isaac Bennett would now address the committee.) VIEWS OF MR. ISAAC BENNETT. Isaac Bennett appeared and made thefoUowing statement: By the Chairman : Question. You represent the same delegation as the last witness ?— Answer. I do ; I represent the same body. Q. What is your business ?— A. My business is cigar making. Q. Now, sir, proceed.— A. Mr. Chairman and gentlemen : We are glad and happy to meet your honorable body, so that we may be able to explain the real road that we are traveling, and what we desire. It is true, gentlemen, that you (may have been, through the public press, informed that there is such a party in existence, but allow me to assure you that the public press, although you may think they have done their duty, have wronged ns greatly by showing to the people, and to you gentlemen , at large, that we are a party of destroyers. We are willing to prove that we are not a party of destroyers, but a party of progress and a party of industry. For that very purpose we are happy to have a hearing before you. As the speaker previous to me has said, we do not represent a single branch, but the laboring classes at large. Q. You represent a delegation here ? — A. I do. Q. You belong to a committee ?— A. Yes, sir. , , ,„„ ,rr,n- j- i i Q. Your predecessor says he represents a body composed of 1,400 or 1,5UU individuals. Is that what you say when you say you represent the laboring classes ?— A. To answer your question it is also necessary to explain. Q Do you represent anybody by any credentials more than the 1,300 or 1,400 men ?— A. No, sir; but when we Say that we represent the people, we tiud it our duty to edu- cate the people ; to make the people think ; to show the people why they are in such a condition as they are in at the present time, where the great evil lies. The man that suflFers is the only one that knows where the great evil lies, and he is the only one that can understand where the remedy is. A question has been asked whether or not the middle classes are the greatest injury to the present system. I would answer no : because, if we look into the condition of affairs now, we would find out that the middle classes are composed of persons who, when the country was in prosperif.y, when trade was flush, did not use the amount of money they earned, but saved it, and with their savings went into what they call a little business, in manufacturing and in pur- chasinrand selling again. But we find also that those so-called middle classes are gofng fsfde, ai^d w^ho^is the party that drives them aside? . Not the laboring classes ; ft is certainly the man that is In possession of a greater capital, the man that controls 26 DEPRESSION IN LA'feOR AND BUSINESS. the market, and that man Is not only an injury to the laboring classes, but he is also an injury to trade and commerce at large. The Chairman. The committee is not here for the purpose of hearing general decla- mation. We want to know the cause of the existing depression of labor. We know- it exists ; we want to get at the remedies. If you will state distinctly what you think the causes of the present depression, and then suggest the remedies you have to offer, the committee will be obliged to you. Mr. Bennett. We find that as machinery is in existence, and is improved every day, throws manual labor on our highways and byways. We find that we have to-day millions of men unemployed. Q. How many millions?— A. Well, we are satisfied there are one or two millions, or more than that, that are constantly idle, working for a month, and some working for two months at a time, and some working for a week, and so on. Then a man is thrown out, and another man that offers his services for less is put in his place. Q. I understand you to say that the cause of the present distress is that there are millions of men unemployed? — A. Yes, sir. Q. Tell me what causes them to be unemployed? — A, The first cause that causes them to be unemployed is machinery. Q. How does machinery prevent their employment ? — A. By being greater pro- ducers. Q. Didn't the machinery exist between 1862 and 1873 all over the world, and all over this country, and was there not then plenty of employment ? — A. Yes, sir ; there was. Q. What causes machinery so suddenly to cause the non-employment of these mill- ions of men ? — A. That which we call at the present time overproduction. The ma- chines have produced more than has been consumed all along, and then. we find that the market is overstocked. We find, at the same time, that in those years every one was able, as I said before, to earn a living ; to receive a job and make good wages ; but as times became worse Q. What made them worse ? — A. The system of production — of overproduction. As those articles which were produced could not be consumed at the very same time, there must certainly have been a surplus of labor in the market. Q. Do I understand yon to say that the world has got more of everything in it than the world wants ? — A. Most positively it has. Q. Are there more shoes than people who want shoes ? — A. No, sir ; there is not, but the people cannot buy them. Q. Is there more wheat, and pork, and clothes, and the necessaries of life, than the people want 1 — A. There may be a little, but not much. Q. Has there been at any time ? — A. Yes, sir. Q. When was there this surplus more than the people • wanted ? — A. It is proven every day. Q. A gentleman said yesterday he wanted a pair of shoes, and he said he oonld not get them ? — A. Yes, sir. There are not more shoes ; there are not more clothes ; there is nothing of anything more than we need, but we have not the means to buy them with. Q. But you had the means from 1868 to 1873, and you have not had them since 1873; what is the cause of that change ? — A. That is what I am coming to, if you will only give me a chance. We are willing to prove that the laboring classes, by being thrown out, can certainly not be consumers at the same time to any great extent. Tbey were not producers, so they could not be consumers, but still they did consume. They de- prived themselves of what really they ought not to. As those parties were not con- sumers to that extent that they ought to be, there was certainly a great surplus of labor in the njarket, because it was not bought, and then the surplus of labor was always heaped up to a j^reat extent. The manufacturers were then compelled to reduce their army of laboring classes. Again, we will say that the first year there was only an army of, maybe, ten thousand thrown out of employment, because there was more stock in the market than was needed. The second year those ten thousand grew np to fifteen thousand, maybe, and so it increased. The manufacturers, having ' too much stock on hand, wanted to decrease the army they employed. When they found that would not do, when they found their stock still increased, then the compe- tition commenced. The manufacturer was compelled, as he said, to reduce the wages of his laboring classes. When a man received $12 a week he consumed $12 a week, but when his wages were reduced to |10 a week, he had to consume only |10 worth. Q. Didn't the prices fall ?— A. They did. Q. Would not $10 buy as much as $12? — A. If he was to make it a regular scale of wages the whole year through he could get along, but you must take into considera- tion these $10 were not the regular wages the whole year through ; they were only for the time being that they were employed. There may have been men that received §10 for their wages whea they were employed, but when we take into cousideratiou that DEPRESSION IN LABOR AND BUSINESS. 27 those very men only received |10 for their wages, and that they were only working tive, BIX, or seven months in the year, then their wages did not amount to more than, maybe,f5 or $b a week. We could not say they earned |10 ; we could only sav thev earned ^jlO when employed. j j oj Q. Is machinery the cause?— A. Machinery is the cause, and it is at the present Q. What would you do with machinery in order to remedy this thine ; would vou destroy the machinery ?— A. Machinery is a blessing to humanity. Machinery is needed. W e cannot produce as much as the human race really is in need of without machinery. But we claim that machinery under the present system is wrong, because machinery lies m the hands of the non-producers, and the real producers, bv the aid of machinery, are deprived of their rights. Q. What do you mean by a producer and a non-producer ?— A. A producer is a man that labors. Q. What do you mean by a non-producer?— A. A non-producer is a man that lives upon the labor of others. Q. Here is this committee. We are getting a salary from the people for attending to certain services. Do you consider us laborers or not laborers, producers or non-pro- ducers ?— A. We consider you a class of laborers which is necessary for the human race, bnt no produoerp. Q. We are not producers ?— A. No, sir. Q. Suppose you abolish the government and get rid of us, what would be the result then ?— A. That is a thing we do not wish to do. The people must be ruled, and there ■ must be a government to rule the people. Q. Do we not contribute as much to the earnings of society by laboring in this par- ticular sphere as other people by working with their hands ?— A. We admit you do. Q. Are we not producers in the sense of enabling greater production to take place in other quarters ? — A. No, sir. Q. The man that walks around the shop and tells the laborer what to do and never touches anything, is he a producer ?— A. He is the servant of the man that engages him to do that service. Q. Is he a producer ? — A. Such men must be in society. Q. Is he a producer or a non-producer, acccording to your definition ?— A. He holds a functionary position in society. Q. Is he a producer ? — A. He is not a producer. Q. Then your definition of a producer is the man that actually labors, and no one else? — A. Exactly. Q. Have the people who do not labor any value in society ?— A. They have, most undoubtedly. Q. Ought they to be paid ?— A. Yes, sir. Q. Ought they to be paid at any different rate from others ? — A. According to their abilities. Q. When a man is a good workman, and he has a good organizing mind, they make a foreman out of him, do they not ? — A. Yes, sir. Q. And if he is a good foreman, he generally gets to be an employer by and by ? — A. Yes, sir. Q. When he gets to be an employer, he gets to be a capitalist ? — A. Yes, sir. Q. Then when he reaches that class, you object to him having any pay for it ? — A. What we claim is that there is a class which calls themselves employers deriving a greater benefit out of labor than the man that really labors for it. Q. But you said just now that the foreman should get more than the workman ? — A. Yes, sir. Q. Then the employer is a bigger man than the foreman ? He gets to that position because he can do a higher class of work. — A. We claim there is no necessity for such positions in society. Q. Who would employ the people, then ? — A. The people claim that their employment conld be by a co-operative system. This is our aim. Q. Do you mean to say you would become partners in a general common interest ? — A. Yes, sir. Q. Would you have this partnership controlled by the government ? — A. Yes, air ; to some extent. Q. To what extent? — A. That they may oversee the business of the co-operative sys- tem as well as they oversee now the regulation of revenue. Q. Would you have them fix the rate of wages ? — A. No, sir. Q. Would you have any wages in the co-operative system ? — A. We would fix that ourselves. Q. Would the government fix the prices of produce? — A. No, sir. Q. It would have nothing to do with it ? — A. No, sir. Q. How would you prevent one co-operative society from selling at less rates than another co-operative society ? — A. We find that we are already in that system of under- 28 DEPRESSION IN LABOR AND BUSINESS. selling. We undersell our neighbor, for we are compelled to, but when the laboring classes are enlightened by the benefit that the co-operative system will have, there will be a regulation among themselves for the benefit of themselves that they will not uu- Q. Is there anything to prevent the formation of a co-operative society in cigar-mak- ing in New York ? — A. The present system prevents them from doing so. Q. Why could you not make a co-operative society ?— A. Because we have not the means. Q. Then you want capital ? — A. Most undoubtedly. By Mr. EiCB : Q. Supposing you were going to have a co-operative association ; and supposing some of your cigar manufacturers wouldn't want to go into it. ■ How would you get them in ? — A. That is a question of time. Q. You say you want to have the cigar business done by a co-operative association in New York. Suppose any proportion of the oigar-makersof New York didn't want to go into that co-operative association when it is formed, how would you get them in f — A. They would be willing to go into it; but under the present condition they are not. Q. Would they all be willing to go into it ? — A. They would. Q. Why don't you form it ? — A. Because we have not the means to do so ; we have got to have something to fall back on. We want the means of establishing a business and purchasing raw material, and of living and putting the goods on the market. Q. Have you not got means enough to make cigars now ? — A. No, sir. Q. Have not the cigar-makers of New York means enough to make their cigars ? — A. Some small parties have. Q. If they go into a pool, then there will be means enough ? — A. There will not. Q. How are you going to get men in afterwards if they won't go in now ? — A. By first showing the people at large how to labor, and what to labor for. Q. Can you not do that now ? — A. We are trying to do it. We claim that under the present system the co-operative system is impossible. Q. What will make it possible in your opinion ? — A. The abolition of private capital and machinery would make it, for the first thing, possible for all trades to go into the co-operative system. Q. The abolition of private capital and machinery 1 — A. Yes, sir. Q. Who is going to abolish it ? — A. It is for the government to do it for the welfare of the people. Q. Is it your idea of a republican or democratic government that it could or would have a right to abolish private capital and machinery ? Would that not make the worst despotism that ever existed — worse than your German empire or any other that exists — to give a government that power ?— A. It is at the disposition of the States whether they are willing to do so or not. We don't claim that the government has a right to do it ; but we claim when the people demand it, who are the government, and if it is the people's desire, such laws should be passed. We know that we demand at the present time too much. We come before your honorable body to show some way by which this great evil can be remedied, and the first thing we claim is, that as there is a great army of unemployed men in the market who find it impossible to find employment, there must be something done to find employment for them. By the Cilueman : Q. What do you recommend ? — A. We recommend the reduction of the hours of labor from ten to eight hours a day, for the first thing. We find it necessary to reduce the hours of labor. Q. What else do you recommend? — A. We recommend compulsory school education, up to fourteen years. Q. What else? — A. We recommend the regulation of woman's labor. Q. To prevent them from laboring ? — A. To regulate it and not prevent it. We re- gard it as the duty of the husband to be able to make a living for his wife and family. Q. Suppose a woman has not a husband? — A. Then she is able to work. Q. Then widows, are to be permitted to work, but not the wives ? — A. If they have no supporter, then they have a right to labor. Q. But not the wives of the working men ? — A. No ; not the wives, just as we recom- mend that all children under fourteen years of age shall not labor. We also recom- mend that a husband who has a wife shall be able to make a living for his family. Q. If he is sick? — A. The people at large are good-natured enough to see that the family don't want. We also recommend that women who labor as well as men, doing the same kind of work, they shall receive equal wages with men. Q. Whether they do the same quantity of work or not? — A. The employer will be the man to say what wages they should receive, what wages they will be able to make. What we mean is, when they work by piece-work they will make their wages the same as they do at the present time. DEPRESSION IN LABOR AND BUSINESS. 2& Q. Suppose the women work in some branch of business that men do not work in, how would you regulate that, where the women had the trade to themselves ?— A. I suppose you have reference to millinery and lady clerks, &c. Q. Yes.— A. I suppose that the trade will regulate itself; if we will be able to earn decent wages, they will receive decent wages. Q. Take shirt-makers, who I am told are making shirts for a very few cents apiece. That regulates itself. Do you think that is a proper state of things ?— A. There is too much competition in that line of business. Q. How are you going to get rid of the competition ?— A. By reducing the hours of labor. Q. Then you are going to forbid women working more than a certain number of hours a day? — A. Women and men. Q. These women live in their own houses ; how are you going to get in there to pre- vent them from making shirts ten hours a day ? Suppose the wages for a woman for working six hours is 75 cents, and that that woman'has two children, and finds that that is enough to support herself and two children ; another woman has six or eight children, and she wants to feed her children. Is she to be prevented from working ten hours a day, and doing enough work to feed her children ?— A. I think everybody is at liberty to labor according to the present system. Q. You say to us, " Go back to Congress and tell your fellow-Representatives to pass a law restricting the hours of labor." That must be a general law. How are you going to deal with this case ? Are the extra children of that woman to be allowed to starve? — A. I think that if a woman has got a large family Q. She ought to be allowed to work extra ? — A. Far from this ; but I think she will be able to earn more in eight hours than she earns now if she works fifteen hours. By Mr. Thompson : Q. If you reduce the hours of labor from ten to eight will the manufacturer pay you the same wages that you get now ? — A. It has always been shown that the longer we work the less we get for our labor. Q. Would you reduce the wages proportionate to the time you work, or would you keep the wages as they are ? — A. This will certainly throw a demand for the laboring classes into the market again. Q. If you reduce the time of labor 25 per cent, won't you have to pay an increase of 25 per cent, for the other labor you wish to buy, theshoes and coats and anything else ? — A. That may be the case in some instances. Q. Then what advantage is it to me or to you if we work less hours a day, but pay more for what we get, and get no more money to pay it with ? — A. I think the market would then regulate itself more than it does now. We don't receive a quarter of what we earn, but under the present system of buying the workman is charged just as, much or equally as much as when he made good wages. Q. Why not reduce the hours of labor to six instead of eight ? — A. We find it is not necessary at the present time. Q. Not necessary, how ? — A. We find if we were to reduce them from ten to eight there would be sufficient work left to employ those unemployed. By Mr. Boyd : Q. What, in your opinion, would be the actual eflfect on wages if you reduced the number of working hours from ten to eight ? — A. That there would not be a great army of unemployed men in the market ; that we would not have to compete with children's labor, and that the employer would be willing to pay his employ^ decent and respectable wages by which he can make a living.' Q. You think the reduction to eight hours a day would increase wages ? — A. Yes, sir. Q. Would it not still increase wages if you reduced it to six hours?— A. That is a 'question we cannot answer. We demand a bureau of labor statistics. When we have that before our eyes, then we can see how many hours of labor are necessary. We can then see what the raw material is worth, how much it takes to manufacture the raw material into a productive state, and how much the producer receives, and how much the nonproducer will receive. Q. How much would it increase labor if the eight-hour law was possible to be en- forced ? — A. I cannot answer that. When the hours of labor will be reduced, that will regulate itself. Q. You have uo means of information by which you can estimate what percentage labor would be increased if the eight-hour system should.be adopted?— A. We cannot do that. VIEWS OF ME. ADOLPH DONAI. Mr. Adolph Donai appeared in behalf of the same delegation represented by the two preceding gentlemen, and made the following statement : By the Chaikman : Question. You are not an American? — Answer. I was born in Germany. 30 DEPEESSION IN J^AJiOK AND BUSINESS. Q. Are you an American citizen 1 — A. I am. The Chairman. This commititee is appointedto consider the causes of the present depression in business, and to ascertain, if possible, what remedies can be offered as a solution for the existing troubles, and if you will be good enough to confine yourself as far as practicable to these matters, we will be obliged to you. Mr. DoNAi. I will do that, and will state the causes of the present depression as we consider them, and then the remedies. I beg leave to state that I have a pamphlet here entitled " Better Times," one copy of which I can leave in your hands. It is written by me, and was printed by order of the Socialistic Labor party of the United States. This states, in the shortest possible compass, the ideas of that organization, which are, at the same time, the ideas of that organization all over the world. You are aware that we have a powerful organization under this rarae in Germany. W^ have such a one in France, in Austria, and the beginning of it in England, and so in the United States ; in fact, nearly all over the world. This pamphlet, then repre- sents these ideas, and to it I refer for such points as should accidentally be left out to-day. The causes of the present stagnation in business have been foretold these thirty years by that same party, by the scientific men who founded that party, and they have come now to a great crisis which goes all over the world. The stagnation does not prevail in the United States alone, but in all those countries in which what we call capitalistic production is introduced, and everywhere from the same causes, and no remedy that refers only to the legislation of the United States could remedy those causes, because it must be remedied at the same time all over the world, and our party is formed for the purpose of propagating our ideas all over the world, so as to have the same kind of legislation introduced everywhere at the same time, if pos- sible. The first cause of the present stagnation of business is planless production, or production without plan, without regard to the need of the population as to consump- tion. It is carried on by private capitalists without considering the needs of the world. It presupposes the personal freedom of the laborer, without which labor you could not carry on the production, but at the same time proposes the laborer should be free from his own means of labor — that he should be a man dependent for existence on wages and on selling his laboring efforts every day and every week afresh to some cap- italist, who owns those means of labor. We can trace its birth back to about one hundred years ago. But it has been developed in England first, then in Belgium, then , in France, and now it has been developed in all the great civilized countries, and it assumes the shape of over-production, because it is a production without plan. It now brings about over-production, and at the same time the impoverishment, first of the laboring classes, and, as a consequence, the impoverishment of the middle classes, and, as a further consequence, the impoverishment of the small capitalistic class, until at last nothing is left but a very small class of very large capitalists, or share societies. This is the statistically proven scientific view of the facts as they are. The Chairman. Please explain to the committee what plan governed the production , prior to this plan you refer to in Great Britain one hundred years ago — this planless pro- duction that governed Great Britain. Mr. 0ONAI. There were some remnants of the feudal production that preceded it. You had at that time in England trades unions of the old style, in which there was a master and his fellows and apprentices, and who had its ban-rights in every city, so that no laborer could ever be without the means of existence. Likewise the la- borers had some share in the soil. They had the common lands in every place, on which they could produce something, to which they could fall back if they were not successful in any kind of business. There were in England 285,000 yeomen up to shortly after Cromwell ; then that yeomanry was destroyed, because they had furnished the cavalry and the infantry to the army of Cromwell; they were destroyed by the incoming of Charles the Second, and still further by James the Second. Then, when the King of Hanover came in, the government was at that time already in the hands of the rich capitalistic class, consisting of land-holders and the rich commercial men of the cities. Q. Take the iron business, which I am in myself. Was there any interference what- ever in Great Britain, at any time within the last three hundred years, with the pro- duction of iron on the part of any one ? Was not any one free to go into that busi- ness ? — A. It was impossible that every one should be able to. Q. Was there any restriction upon them going into the Ijusiness ? — A. There was a moral restriction. You must first be an iron-master. Q. Was there any law which compelled a man to be an iron-master in Great Brit- ain ? — A. There was a law. Q. Will you point it out now ?— A. I could not point it out now from the law-books, but if you wish to have the proof, I will bring it. This was an old-time institution that had lasted through the Middle Ages. They had ban-rights, and for that reason the iron manufacturer, who wished to carry out the iron business, had to go somewhere outside of where those rights existed. Q. Take the manufacturer of woolen goods; was there anything to prevent a man DEPRESSION IN LABOR AND BUSINESS. 31 putting up a woolen factory in Great Britain, within the last two hundred years, in case he chose to ? Was there anything within two hundred and fifty years, or even longer, in British legislation, to prevent any one who chose to build a woolen factory from building it ? — A. There was nothing, except for cloth-making. The mere produc- tion of wool from the sheep was not prohibited by law, but the making of anything from that wool was prohibited by the law of the citizens. Q. That is, the manufacturing of clothing, but I said of the production of cloth, iron, flax, and linen, whether there was anything in the English laws which prevented any man who had the capital from engaging in that business ? — A. There was not, but there was no iron manufactory on any large scale. Q. As large a scale as the world demanded ? — A. I wish to ask you if we are here for historical discussion, or for the business you proposed to me ? Q. You have given us the history of production in England and in Europe, and I ask you a question in regard to it. — A. You asked me the question what was anterior to the time of capitalistic production, and I was proposing to speak only upon present circumstances as they are now. Q. I should be glad if you would confine yourself to that. — A. I will gladly give you any answer to your question if it is to the purpose, but we are getting out of our way, I think. Now, this system of capitalistic production forced in England the laborers in the country into the city. The lands were confiscated ; they were fenced in by law in 1689. These men, having lost their last means of subsistence, were forced to go into the cities. If they were found without the means of subsistence anywhere they were punished, first by being nailed with their ears to some post at a door of justice. Q. This is history you are giving us ; will you be good enough to give us the causes ? — A. This capitalistic production employs laborers who have not means of labor of their own. They must be furnished by some capitalist who has them. The laborer is forced to sell his laboring powers, first to his employer at the rate of the market, and by so trading he must leave a surplus value in the hands of the employer. This system is proposed by us to be reformed, not now, but in the course of time. It is founded on the capitalistic value of the land. You see it go down now in value. How long do you think it will take to bring the value of the lands to such a low state that iD will be more a burden than a profit to the owner? Q. Would it be an advantage to the laboring class to have it cheap? — A. Under the present system it is no benefit to the laborer to be a colonist, except merely enabling him to make bis labor useful. Q. Has capitalistic production in England reduced the value of land ?— A. No ; the value of land under this system must rise as the laud is made transferable. Q. How does it happen that it has risen in England under capitalistic production, and fallen in the United States under capitalistic production ?— A. I am going to ex- plain that. As soon as land is made valuable, when it can be sold or mortgaged, it begins to have a capitalistic value, and it never had it before. From that time on money becomes of great value, because for transactions in laud, for sales and mort- gages, there is a great sum of money in each case needed, while before that time money was not loaned out at interest, for those who loaned it out at interest were con- sidered usurers, and they were prevented from doing so. Money became of a greater value than it had been, and now first we can speak of the capitalistic production. Q. You have not answered my question. Y'ou said the result of capitalistic produc- tion was to reduce the value of land.— A. I am going to show now that, since cap- italistic production has increased in ratio money contracts, there is no market for the productions that are brought to market, the value of capital goes down, likewise the value of laud and all stocks. Q. Is it true that there is depression in Great Britain now ?— A. Y'es, sir. Q. Has land fallen in Great Britain ?— A. Yes, sir ; but land in Great Britain can hardly ever be sold. It is so encumbered by statute law that the great laud-holders cannot sell. , ■, ^ , i, Q. Have you ever looked in the London Times to find three and four columns of land offered for sale every day ?— A. Yes, sir; those small portions of land that were bonght by some proprietor. . „ , , , . , Q. No; large quantities of land.— A. There is a society in England which enables men of small means to hold land so as to make them voters. „ ■ ■ Q. No ; but sales of land just as it is sold here, by auction, going on in Great Britain daily in large quantities.— A. Not in such large quantities as it is here. Q. No ; because the country is not so large, but in proportion.-A. This is not to the point. The value of land is going down. Q. In Great Britain ?— A. Yes, sir. -,,•„« t Q. You testify to that ?— A. Yes, sir. It is going down everywhere. You will find, by comparison with the prices of 1873, that there is such a decrease everywhere, all over the world. Now, going on in the present way, capital will destroy itself. We, as a body, don't propose to destroy it now. 32 DEPRESSION m LABOR AND BUSINESS. Q. When capital gets to be worthless and destroys itself, then every one can have it ? — ^A. The government will be forced to take it. Q. What motive has any one to take care of it ?— A. Because by that time we will have become wise enough to see that it is to our advantage to never have any individ- ual owners of land. Q. Is it an advantage to the poor man to have such a course of legislation as makes' capital fall in value, so that the poor man can get it; is that of any value to the. poor man ?— A. Legislation needn't do it. Q. I ask you this question. You say the present state of things is making capital worthless. When it gets to be wortliless, or nearly so, there is no motive to take care of it. Will it be an advantage to the workingmau to have capital in such a condi- tion that he can have all he wants of it for nothing ?— A. By that time land and capi- tal will be so far worthless that people will'have the insight to see that it was by private ownership of capital and land that great distress has come on us, and they will then own it and force the government by legislation to own it in common. Q. Don't you think that if this committee could produce a scheme by which every man could have all the capital he wants it would be hailed with great delight by the peeople of this country ? — A. Not by the present class of lawgivers. Q. But by the people ? — A. My dear sir, oircnmstauces will so work a change that in a few years they will be lawgivers — the people themselves — and then they will know of a plan how to do it. Q. But you have come here to tell us what that plan is. Please do so. — A. So I have come now to the second point. Q. You tell us that the present system of capitalistic production is making capital of no value, so that every one will be able, sooner or later, to get all he wants for noth- ing? — A. No, sir; the law of communities will not allow that. Q. Some one will think it valuable still and keep it ?— A. How could any single per- son take it by the present law ? Q. Why, won't he abandon it if it has no value ? — A. The property-holders themselves will be able to oflfer it to the government or people at large for sale at such moderate rates as they can get for it. Q. Yon recommend the government to buy the property ? — A. It will take all the property. Q. Where will it get the money to buy it? — A. It will give an annuity to those property-holders as long as they live. Q. You intend that the laboring classes shall earn the money to pay an annuity to property-holders who have property now ? — A. As the people will be the owners of all the capital then, who should prevent them to do with greater ease what they cannot do now, namely, to reward those property-owners who give up their property with an annuity ? We now feed them with two-thirds of that which is earned, and then we need not do that. Consequently, we will be able to reward those who voluntarily give up their property. Q. But if it is worthless, all property will be equally worthless.— A- Then it will acquire no value from the fact of its being a means of support and of progress for all communities; the laboring class will then be able to keep more than we now keep. Q. You have given us one cause — planless production. Now, proceed with the other. — A. This planless production, of course, has a consequence — an under-consump- tion. If the laborfer sells his working force to the capitalist for only part of what it is worth, he must, of course, become poorer. He may get along for some time, wages may be high enough as long as there is a constant market for the produce of his employers ; but when the time has arrived that six or seven or more great capitalistic countries are competing in the world's market, that there is no more market for all that is produced, and long before that time has arrived, the wages of the laborer will have gone down greatly, and after having eaten up during such term of financial panics the savings — after having lost his property iu land which many of them had acquired, or in savings banks that have failed, or in a hundred ways that small capi- talists are destroyed — after having came down so low that they cannot have any more buying power, their purchasing power is so small that the production must in consequence be diminished, so that those alternate to be the cause and the effect. Less production, less consumption; less consumptiou, less production; and during all that time the under class sinking down into poverty. I think you cannot deny the facts as they are. Q. Did that state of things exist in 1857 and ISoi ?— A. From 187.3 until now, and every year worse than before. Q. Did it exist in 1857 and 1858? Was there great depression in business, great non-production, great non-consumption ?— A. It had not then begun. The United States had not yet entered upon their stage of capitalistic production on a large scale. You found in New England small factories employing fifty hands say. That was the most of it ; I saw it with my own eyes. So that you can now see with your own eyes that millions of men, or aay at least many hundred thousands of men who were small DEPRESSION IN LABOR AND BUSINESS. 33 capitalists are now no longer so. I am from Newark. There were buiWing societies there that laid out cities, that paid for the lots, paid for the land first; they were just beginning to build when the concern became bankrupt, because most of those laborers can now uo more save up enough to build. Most of those building associations that we had in the neighborhood of Newark, (whole cities consisting of such building associa- tions), are now impoverished to such a degree as never to hope any more to be capital- ists. Now as to the means to facilitate the transition without greatly changing the laws as they are. The first of these means is the general introduction of an eight-hour law. Q. That is the first remedy ?— A. We don't mean to say that it is the law alone which makes the change. Q. I understand yon to think that the other suggestions made about co-operation would be impracticable until a general arrangement of society throughout the world had taken place? — A. Co-operation on a large scale is impossible. Q. Now be good enough to go on— first the eight-hour law.— A. Tbis eight-hour law would be a dead letter, even if it could be then pursued everywhere in all the States— I mean Congressional legislation ; but we propose by our own efforts to bring about an eight-hour labor law all over the country. Our organizations of trades unions, as weU as of the social labor party, carried this through more and more by engaging among themselves not to labor any longer than eight hours. Q. Is there any law on the statute-book which prevents workingmen from making that agreement with each other?— A. There is no law anywhere, but I do not dispute that there might be such a law and a good righteous law. The most valuable prop- erty the country can have is the laboring force of the community. To save that from destruction is just as holy a purpose, and as necessary, perhaps, as to carry on a defense of the country by arms. You have no holier grouud to stand upon than to save labor from destruction. To let one single person go down by famine, or to starve, is the greatest crime a nation can commit, and I don't consider that any constitution should stand in the way of a law that would prevent people working themselves to death for starvation wages. Q. You think the Constitution should be amended ?— A. Yes, sir; and if you want to amend the Constitution, we guarantee to furnish you the votes to do so; all we want from the hands of Congress is a favorable consideration of that which we de- mand. By Mr. Thompson : Q. You would limit the hours of labor, because the welfare of the laborers, of our citizens, demands it. Now, are there not some persons who are unfittel for certain classes of l;ibor? Would you remedy that and prevent them engaging in a business that was detrimental to their health ? — A. I should consider it the duty of the law- givers to prevent any unhealthy business from being carried on. Q. One man can perform a labor that would be injurious to another? — A. You can- not by law prevent one single person, but you could prevent employers that employ men at unhealthy labor from doing so. Q. Are there not men that can perform one kind of labor that another man is un- fitted, physically, to perform ? Many a man can make a watch that could not act as a sailor, or act in a rolling-mill, or in a puddle-furnace. Would you have a law to prevent a man that was so physically constituted that to perform a certain labor would be injurious to him from doing it; and if you would, how would you ascertain the mode of doing it ? — A. How does that apply to the question here ? Q. You said a moment ago it is a holy duty for the government to protect any laborer, as holy as it is to save the life of the nation by arms, and therefore yoa say the government should prevent a man laboring more than eight hours, because more labor than that is detrimental to him as a man. — A. I would answer here that the government should not prevent him from laboring, but from being employed longer than eight hours — from the necessity to sell himself for longer than eight hours. If the government and the workingmen all over the country work hand in hand they may have in one or two years a law making it lawful all over the country to employ no person at any wages to labor for longer than eight hours a day. The people will help you at that. The government will then have the right to do it. Well, then, have I not answered your question in this respect? Q. No ; you have not answered it at all. In order to protect a man's life, you limit his hours of labor to eight hours a dsiy. Now, you find a man, for instance, working in a furnace who is not able to work in a furnace, but could do some other work ; do you propose to prevent him from trying to do what he is not able to perform ? — A. That is not the same principle at all. What we want to do is to prevent all the labor- ing people from being allowed to sell their labor to any unhealthy occupation for any greater length of time, or to any occupation for too great a length of time. What you want me to answer is whether I consider it a duty of the government to force individ- uals to abstain from unhealthy labor. I do not consider that a duty of ihe government,, butl consider it a duty of the people themselves to see to it by education of the masses , 3l 34 DEPRESSION IN LABOR AND BUSINESS. which is almost at the bottom of all our reform, that such insight should be instilled into the mind of every fellow-workman as to induce him to abstain from labor for which he is not fitted. I think I have answered your question. Q. Would it not be better to carry on the education of the working classes to restrict the hours of labor than to pass any enforced legislation for that pui'pose ? — A. If we should wait too long to see the fruit of this kind of legislation such as we need, we would have to wait very long, and meanwhile the capitalistic production will have so far broken down that the duty of legislating for a better state of affairs is at hand. We cannot wait for that, for times are urgent. By the Chaieman : Q. I understand you to say that the smaller manufacturers are being closed ud, and that the large ones are swallowing up the little ones '! — A. They are decreasing in numbfer, but increasing in size. Q. How is capitalistic production breaking down when it is increasing in size ? — A. That is quite easy to see, because when the production is so very large the market is 80 filled with merchandise that the manufacturers must stop producing; they must stop forquarter or half the year. The laborers are starving meanwhile. The communities are taxed to support them, and so the capitalists are forced to pay more taxes. They are threatened by force, and you cannot prevent it, for the people are starving, and you have to pay the military and police to keep dowu the starving people. And all those expenses will render large capital a burden to the owner more than a profit. Q. Still, notwithstanding that state of things, you say it is growing all the time ? — A. Yes, sir. Q. Yon mean to say that this extra tax has not yet aifected them — that it has not yet reached them ?— A. It has long ago begun to do it. Q. Take Krupp's works. They have been growing for the last tea years constantly. Why does not Mr. Krupp feel this taxation ?— A. You, perhaps, don't know that he has a monopoly. He is, by the way, half bankrupt, and has put the greatest portion of his fortune, in his wife's name, in the English Bank, and he would have closed his business long ago but for having a monopoly, namely, that of casting steel guns, the making of which cannot be carried on by anybody than by him with such effect. Q. Do not Sir William Armstrong and Mr. Whitworth, in England, make cast-steel guns? — A. They have bpguii to do so, but don't sell as many as he does. Q. Don't they make them ? — A. Yes, sir. Q. Have they not been making them ever since 1860 ? — A. I believe they are making them of Bessemer steel. Q. Are you sure Mr. Krupp does not make them of Bessemer steel ? — A. He may do that now ; for all I know that is possible; but his cast-steel guushave formed his renown, and have made him so prosperous. Q. I understand you to say he is bankrupt ? — A. He must be bankrupt as long as he has put away most of his property in his wife's name. Q. When a man gives property to his wife is it an evidence that he is bankrupt ? — A. He intends to be bankrupt. But what is that to the purpose ? Q. You said that capitalistic production was destroying itself, and was growing at such a rate that the great manufacturers were all ruined ? — A. I didn't say so. Q. Are going to be ruined? — A. The greatest manufacturers are these which live along when all the others are ruined. They can stand it for a while longer, but then they will feel it when no one can buy their merchandise. Q. If I were the sole manufacturer of iron in the world, don't you think I could stand it ? — A. If you had no buyers you could not stand it. Q. People will want iron for plowshares and reapers, &c., will they not? — A. If you have no money to buy with ? Q. The man who raises grain will sell grain and get money to buy my iron, and if I had a monopoly, it would not hurt me, would it? — A. The sales would be diminished from year to year. Q. But if I sold what there was to sell, it would not hurt me ? — A. If you were the largest manufacturer you might not feel it at once, but by that time I tell you the community would not brook it any longer, and therefore it is wiser to prevent than to increase danger. Q. Monopoly is what you are opposed to ?— A. Well, capitalistic production is not imaginable without monopoly. Monopoly is shared irf, say, by a decreasing number of capitalists. Q. Can you point out anything in the laws of the United States which creates a monopoly of capital or business ? — A. All your laws under which the Pacific railroads have been built were all to create monopolies; and most of your land-grant laws, laws by which land was donated away — for instance, under the swamp-land acts; these laws were all for monopolists. Laws by which subsidies are paid or were to be paid, would be laws of monopolies. Q. Can you point out any existing statute which creates a monopoly, or which gives DEPEESSIUU IN LABOR AND BUSINESS. 35 special privilege to any branch of capital ?— A. Joint resolutions of Conn-reas are, per- haps, not called statutes. ° Q. Joint resolutions are laws.— A. lean point out a great many: I have named some of them. Q. Those were in the past. Can you give us any reference to any statute of the United States which to-day gives special privileges to capital or creates monopolies except the patent law ? Is there anything else that you would have repealed which creates a monopoly, or gives a monopoly to any one ?— A. You can at once repeal all the laws which you have made in order to establish the Pacific Railroad. Q. But the railroad is now there, and that land, under the condition of the law, is vested in the railroad companies. I ask you if there is any law which creates any new monopolies ? — A. If you take hack these laws at once you have a right to do so, because the conditions were not fulfilled under which those railroads were to be built. They have broken every one of the conditions under which those companies were established. Q. That is a question for the courts.— A. No ; Earopeaa governments would not hesi- tate a moment to take them back. Q. Are you aware that, so far as the question has been litigated and decided, it has been litigated and decided in the courts in favor of the companies?— A. I may be; but I am not responsible for that. Q. When a law is made some one acquires rights under it. Ilia rights are, then, under our Constitution, to be determined l>y the courts. If these conditions have been violated, then the courts will set the grants aside. — A. There is a law in every govern- ment that evils that are no longer to be borne are to be abolished by legislation, all previous legislation to the contrary notwithstauding. Q, Then you would simply recommend this committee to report the repeal of every law by which any grant lias ever been made by the United States to any one ? — A. Provided it is a monopoly ; provided it is taking unjust advantage of the people. Q. Who is to judge ot that ? — A. Congress, if Congress does its duty. Q. But since Congress did just what you say, and these companies went into the courts and said this legislation of Congress is illegal and unjust, and the courts de- cided in favor of the companies (just what we have done in regard to taxation), what would you do then ? — A. The courts never would so decide. Q. But they have so decided, in regard to the retention of the 5 per cent, by the government now in the Treasury, that the railroad companies are entitled to that money, and an appeal has been taken to the Supreme Court. — A. That depends upon how the great body of the Supreme Court was constituted, and you recollect there were some irregularities connected with that. Q. If the courts decided in favor of those companies would you have Congress set out to abolish the courts? — A. To change the laws and change the courts of justice that they may not annul the law which is given by the supreme will of the people. |^I don't acknowledge any power superior to the legislature. Q. But the legislative power is restricted by the Constitution of the United States. — A. Then change the Constitution of the United States, and we, the working-people, will help you to do it by our votes. Q. Then your recommendation is that the Constitution of the United States be amended so that legislative power shall be supreme in this country and subject to no limitation whatever ? — A. When we come to that I would suggest a great many limita- tions, natural and necessary limitations. Q. Where is the line to be drawn and who is to draw the line? Where will we draw the new line ? — A. The first step in all such things is to acknowledge anecessity for the revision of the Constitution of the United States or of any State. The question arises, what may be improved in the present Constitution? and all people will have their say; they will, in a democratic way, say there are blunders here and defects there ; let us remedy that. They will consider that for a year or two, and then, by proper means, they will rectify it. Q. You say we should limit labor to eight hours ? — A. Yes, sir. • Q. Would you have that put into the Constitution of the United States ? — A. I would, for all things speak in Congress in favor of such legislation. I would uphold that law which was given in 1868, the eight-hour law for government labor. I would uphold the law, so that the workmen were paid full wages for eight hours. Q. Would von put a provision in the Constitution of the United States limiting labor to eight hours ?— A. I would put such a point in the Constitution of the United States. I would propose to amend the Constitution of the United States in this one respect— bring it before the people, this point, besides many others. I would go the constitutional way of amending the Constitution. Q. But you would propose to limit labor to elgbt hours ?— A. Yes, sir. Q. And'no one is to be permitted to labor more than eight hours ?— A. To forbid em- ployers to employ laborers for more than eight hours. Q. Would you allow any one to labor more than eight hours?— A. They would not do it then. 36 DEPRESSION IN LABOR AND BUSINESS. Q. Would yon permit it ? — A. I would not restrict tbe labors of any individual man, but they would not do it. Q. I ask you whether you would put into the Constitution a clause prohibiting people from working more than eight hours a day? — A. 1 would not. The people, themselves, however.willin their supreme power decide if they will allow it. Q. You wonld not recommend it ? — A. I would not recommend it. I prefer, in regard to all such things, not to urge my own opinion alone. I want in a democratic govern- ment the people to come up to this effect by talk and by discussion. Q. We are here to get at practical results with reference to legislation. You have come to give us the benefit of your experience and study, which is evidently very great. We ask you whether you think the law ought to limit the right of a man to work more than eight hours a day ? — A. I think not. Q. If that is so, what is to prevent men from working more than eight hours a day? — A. If the employer is prevented, what good is it for the laborer to ofler more than eight hours labor? The employer is to be prevented by law. Q. Suppose a man was working for himself : take the case of a cigar-maker. Here is a man employing men, and he is restricted from employing them for any more Than eight hours a day. Here is a co-operative association alongside, who say, "We will go In business and work twelve hours a day ;" could they not undersell the man that was prohibited from working more than eight hours a day ? — A. They would not do it. They would be allowed to do it as long as they have not an iuterest ; it is in their in- terest not to allow it among themselves. I would have them come up as a voluntary will, as an expression of the will of the people themselves. I would not put it into the law, because I consider it entirely unnecessary.- Q. Would you not substitute, as an inevitable result, the system of voluntary part- nership, (without an employer), for the employer? By that process of yours would not every one be compelled to go into partnership and work as many hours as he saw lit? — A. No; such a competitive system is not imaginable under a co-operative society; it is impossible. It ever you have been a workingman you will know this much, that the profit of your trade, the honor of your trade, the spirit of your trade, forbids you to underbid others if you can help it; if you are not forced by your own means. They will see that this is a movement going to benefit mankind, and that there wotild be such a spirit and such an interest in upholding that eight-hour law that there is no possibility of infringing it. Q. What is to prevent their doing that now without a constitutional prohibition ; why don't they now exhibit this spirit and make this arrangement among themselves, that they won't work more than eight hours ? — A. It would be useless for them now to do it. Q. Why would it not be useless then ? — A. Because we have started that movement in our society, as far as our organization is concerned. It is spreading rapidly, and we will in a few years be successful so far as to bring insight into every one's mind so that this should not be done. Q. How would the constitutional amendment make that any more limited ; would it not EO on as rapidly with it as without it? — A. By showing that our lawgivers are with us in spirit. Q. The moral force is what you are after ? — A. Yes, sir. Q.. Have you any other thing to suggest?— A. The second poiut has been referred to already, that is, a bureau of statistics and labor; but, I must add, at the same time accompanied with an inspection of factories and of the sanitary condition of the people — an inspection which is authoritative, just as in our city of New York we have a sanitary commission which is inve.'ted with certain rights. Q. Wonld you have the inspection go into the profits of business? — A. Certainly. The English inspectors of manufactories rarely make use of that right, but wherever there are directly antagonistic statements of the employer and employes they have a right to demand inspection of books just as the tax-collectors. Q. What inspectors in England have the right to inspect the private books of a man- ufacturing concern ? — A. They are government inspectors. Q. What is their name ? — A. The inspectors of factories, under the acts of 1833, 1856, 1863, and several inore. Q. And they have the right to inspect the private books of manufacturing firms ? — A. When they find there are such discrepancies between the statements of laborers and of employers they have a right to do that. Q. I have examined every English statute on that subject, and I have never found the statute you speak of I would like to have a reference to it. If there is anything an Englishman is more jealous of thau anything else, it is an inspection of his privatje books.— A. I know it, but government takes the liberty, if we can call it so, to have tax-collectors invested with the same rights. Q. No tax-collector in this country can inspect my private books. — A. Unless he can force people to make an oath to certain statements. When lawsuits are commenced the books are liable to be taken by the judges and examined. The collector can say any man is a perjurer if he believes him so— just the same right as an inspector of DEPEESSION IN LABOR AND BUSINESS. 37 factories has; when he believes a certain employer to have stated wrongly certain points, because his etnploy^j contradict him, he can carry the matter to "a court of justice, and he can carry it so far as to have the boolss laid'before the judge. Q. Now, having got at the iuformatlon, the private information, the private books, what would you do with the informatioQ ; make it public ?— A. It is not necessary to make it public to correct the statement, but the case may be so that it becomes public if it gets into the court. Q. These inspectors, you say, are to be charged with this duty of Inspecting private books ?— A. Only in extraordinary cases, wheu discrepancies are to be explained. You see, employers and employes so far control each other, if they are awake to the task, If they are awako to the spirit of the law, and we should help to make them so control each other. It is almost impossible for a man to make a wrong statement when his employes tell the truth correctly, and state it iu an agreement among themselves or in harmony. The inspectors of the factories will see there is a discrepancy to be explained only from a wrong statement of the employer, and he ought to have the right to let him swear on oath to his statement, and then, if he believes him to be a perjurer, he can call him into court. Q. When he has got the information what will he do with it?— A. He can force him to correct his statement, to remedy the evils of which he complains. Q. Suppose it turns out he is making large profits, would you then compel him to pass upon the wages of his workmen ?— A. That is not the question at all here. Q. I understand that to be the very question. What use would you laave the law- givers make of the information that certain capitalists were getting excessive profits ? How would you apply it practically ? — A. It is not necessary to answer that question. There is uo immediate need of doing anything against fellow-capitalists. It is the publicity of the fact which works wonders of itself. Q. How would it act — in what way? — A. Just as it has acted iti England. Asa consequence of these inspectors of factories publishing their blue Baoks it was that more and more laws were given. Q. Blue books in regard to property ? There are no such blue books.i'-A. Blue books which made public the wrongs which were done to the workingmen. ^ Q. I am talking now of the question of private profit. You say you would make it public — public to what end; that wages should be raised? — A. That the workingmen themselves may see how they are exploiU, as the French call it, to see which way they can help themselves by reforming society or insisting on higher wages or less, one or both. Q. But you would not have Congress do anything about it? — A. That is the second point I have mentioned. Those inspectors have been in England great benefactors of the workingmen. There are separate sanitary inspectors. Q. But there are no inspectors of profits in England, and there has been no legislation based upon such report ? — A. The workmen see themselves to it that there may be no excessive profit, but the workingmen, knowing they have a friend who consults their welfare, apply to him, and he goes to them and finds, out the cause of their wrongs, and he speaks to the employer and tries to better his workingmen, and the workingmen are now, as a body, encouraged to stand together to uphold their wages and curtail the hours of labor. • That is what the inspectors of England have brought about. Q. Have they reduced the hours of labor ? — A. They have reduced the hours of labor, which formerly had any possible length in the daytime, down from 15 hours even to now 10| hours, or 60 hours a week. You see this has been done by the factory inspect- ors. It could not have been done by the workingmen alone. They wanted friends among the powers that be. Q. Do you remember the legislation in this State by which the hours of labor were reduced, without factory inspectors, to ten hours? — A. I recollect once. It was not in all the States. It was by Massachusetts making a beginning, and the hours of labor being there reduced, as a rule, to ten, except in the cotton factories, which had no benefit of it. Q. Well, the State of Now York ?— A. In the State of Ne\v York there was a law, but not in all the States. Q. New Jersey ? — A. In New Jersey the only legislation I am aware of was in regard to children. Q. Ten hours is a day's labor in New Jersey also by statute ?— A. It may be so ; I don't deny it. May I go to the third point ? Q. Certainly. — A. I must, however, before going to that, insist on the necessity of having with that system of statistics the system of authoritative inspection, and an inspection that may go to the bottom of the facts that may be material, and enable us to call witnesses and make them swear, and even commence actions for perjury if they find out that perjuries have been begun, so as to encourage workingmen to stand to- gether as a body and to fight for their own rights. The third point is, we wish to have the contract system abolished, and not only in prisons, but in all governmental work Q. Would you prohibit contracts for private work also ?— A. No, sir ; I could not 38 DEPRESSION IN LABOK AND BUSINESS. under present circumstances go for that. The next point in order would be the labor of children before 14 years of age to be prohibited. The labor of women to be con- fined within certain limits, but especially the work of women to be paid for, if it is equally good, in every class of trade, at the same rate as men. Q. How would you regulate it where they work at things that men don't work at ? — A. I am going to that. We must not forget that the general introduction of the eight- hour law, which we insist on as a firstnecessity, would have already lifted a great many people of the poorest kind upon a higher level. They would have more courage to de- mand their rights. There would not be so many hungry people working at starving rates. They would not be inclined to offer themselves for such low wages as at pres- ent those poor shirt-makers get, or corset-makers, or other kinds of women's work. We will in the mean time organize them to stand up for their rights, but what legis- lation has done before the eight-hour law will help them materially, and so it is like- wise with all the other provisions or demands that we are bringing forth now. Q. Would you abolish piece-work? — A. I should abolish piece-work, or would have the law so worded that the price of all piece-work should be determined according to the wages of labor. Q. Who would determine that ?— A. That would be between the employer and the employed. Q. A bargain, as they make it now ? — A. They do not do that now. Q. Take the case of two shirt-makers, making shirts at five cents apiece, and one can finish two in an hour, and the other can only finish one in an hour, what would you do in that case ? — A. The case is an extreme case, as you put it. Q. Nevertheless the difference exists, as you know ? — A. The piece-work would be remedied by the means I mentioned before. There would be no more women willing to work at starving wages, and if one earns more than the other, that could not be remedied under the present system, but they would, as a rule, every one try to increase their wages. Q. Take the case of a woman with a large family, and who was driven, to get food for her family, to work ten hours a day. — A. I think it is a disgrace to a nation to per- mit any woman to work for her livelihood. Q. You would make the government take charge of all the widows ? — A. Not the government. The workingmen do more for the people among them than any city does. Q. Who would have to do it? — A. If the city government and the general govern- ment would do something to relieve the utter misery of just such persons — if they would keep them unemployed entirely, to kill that abominable system of employing poor women, the government would do the greatest good it could ever do. Q. You would have the cities do it? — A. I would vote for the city doing it, keeping all these poor women at home with their children. Q. Would you make a distinction between a woman whose husband ran away and a widow? — A. All such women should be taken care of. It is a disgrace to any govern- ment, because those children are a treasure for the government, and a treasure for the people ; they are to be saved ; and a woman ought to live sixty years instead of twenty- five or thirty, as she does now. It ought to be remedied. Q. Suppose a man wanted to transfer the support of his family to the city, all that he would have to do would be to go away. — A. Would the city be any poorer ? Q. Would it not be better if the man remained and supported his family? — A. Let the law provide for that man. Q. He has gone to some other place where they cannot find him. — A. The govern- ment gains by saving those lives and by making them grow up to old age, instead of dying young. Q. Whose business is it to providefor the family 1 — A. It is the business of the father, but under the present circumstances we are making criminals in that respect by thousands. Q. If you transfer the custody of families to the city, and the city takes charge of them, do you think they would be so well taken care of as they are now, with the head of the family to look after them ? — A. We propose to have better men in those places and to have better care taken of our institutions for the poor. Q. A great many efforts have been made to reform the city government here, but it is hard to bring it about. — A. This has been the hardest city in all the United States, but it is now going to be better. Q. Is there anything else ? — A. The next point in order is to take better care of edu- cation. This means not only that all children up to fourteen years of age should have an education free of cost to the parents, but also that the schools should be so improved that children could really be benefited by a full course of school ; that they could de- rive the benefit of the high-school law, of the grammar school. They cannot do it now. Our schools are so crowded in the city of New York ttat it is impossible for the teachers to do their duty. Three-fourths of all the children here— and it is so in many cities, and even in the flat country — never see any higher class than the A-B-C class. Only DEPRESSION IN LABOR AND BUSINESS. 39 two children among a hundrefl that are received in the low class reach the top class in the public schools. They don't receive the benetit of an education such as they mio-ht have. We intend to remove that by a better provision for education. That is included in our demand. Q. How would Congress deal with this question ?— A. Congress has been always an auxiliary to all interests of education, but what the community would do, the States would do, and what the States would uot do Congress would do it. Q. Would you have the general government come into New York City and take charge of the general education of the city of New York ?— A. Congress could come in in such a way as to take any city in which there is such a percentage of illiterate peo- ple and educate them, provided its money was spent in that way. Q. Grants from the public Treasury for local education you are in favor of ?— A. Just as the teachers' conventions did for a number of years demand at the hands of Con- gress that the negroes and the poor whites of the Southern States should be educated at the public expense by legislation in the way I have stated it before. Now, I think I need not read the other points. You will find them printed in the pamphlet I have presented to you. « " 8th. Strict laws, making employers liable for all accidents resulting through their negligence to the injury of their employiSs." Such a law exists in even such a despotic government as the German Empire is. Such laws are in course of introduction in France and England, and to some degree existed through the sanitary inspection. " 9th. All wages to be paid in the lawful money of the nation and at intervals of time not exceeding one week. "Violations of this rule to be legally punished." " 10th. All conspiracy laws operating against the right of workingmen to strike or induce others to strike shall be repealed." There is a conspiracy law of the United States on the statute-book which was applied only last year in a struggle in Indiana. The United States court stepped in becnuse it was a road which connected several States, and, under the force of this conspiracy law, condemned fifteen men to imprison- ment for three years because they had done nothing else but had given up their work and left their trains stand where they were. Therefore they were condemned under the United States law. " 11th. Gratuitous administration of justice in all courts of law." Q. For everybody ? — A. For everybody. I think as soon as the poor folks are enabled to seek justice in the courts of Jaw, from which they are now to a great extent pre- vented, there will not be so much litigation among the wearlthy classes. Q. Should the State pay the lawyers? — A. Well, no. y. How would the case be presented ? Who would present a man's case ?— A. I do not deny that the lawyers ought to be paid by the parties, except the court decides that the lawyer of the successful party is to be paid by the condemned party. Q. What do you mean by the word gratuitous ? because now, as I understand it, a man pays his lawyer and not the judge. — A. Administration on the part of the court itself. Q. Is that not now done by the community? — A. No, sir, it is not; you have to pay fees of all kinds ; subpcenas and other formulas which are served upon you must be paid for, and all such fees., Q. Would you have the State subpcena all the witnesses? — A. They ought to be handed out gratuitously. They ought to cost nothing. It would be no cost to the State to do that, or worth mentioning. " 12th. All indirect taxation to be abolished, and a graded income tax collected in its stead." As to this point, we- know for the present that it cannot be carried out. We propose to wait for that until other points ard secured ; but by and by we will come to that point. Q. Do you mean by " indirect taxation " such as custom duties ? — A. All custom du- ties to be abolished. " 13th. All banking and insurance to be conducted by the government." This is also one of the points that are not considered of immediate possibility or necessity ; but, as regards the postal savings-banks, we look upon them as a benefit ; for the pres- ent they are commendable. " 14th. The right of suffrage shall in no wise be abridged." You know there are parties now moving to have the right of suffrage abridged ; and, by the way, I wish to mention, to call the attention of the lawgivers in Congress to the fact that the State of Bhode Island confronts the United States, and defies the United States and the fif- teenth amendment to the Constitution, by still abridging the right of suffrage to aU those who own less than |275 worth of real estate, which is entirely a violation of the fifteenth amendment. In the State of Rhode Island, by this law, thousands of work- ingmen are prevented from exercising the right of suffrage. It may be said that in Congressional and Presidential elections they are allowed to vote, but the registry law does not take care of it ; they are not registered. They may offer their votes, but may be challenged. 40 DEPRESSION IN LABOR AND BUSINESS. By Mr. Rice : Q. You think that every male adult should he allowed to vote?— A. Yes, fsir ; if he ie a citizen, and hy and by we shall come in for women voting also. Q. You mean the property qualiticatiou in Rhode Island and the reading clause in Massachusetts are wrong, and should be done away with? — A. Of course, at present that is a privilege. It makes a privileged class, and, by the way, I know how it works. You know well enough that at election times these poor Irishmen, who have not had a chance to read and write, are gathered in a school, and there for a day or two exer- cised in writing their names and in reading a certain passage in the Bible, which is pointed out to them beforehand. It is a law good for nothing. The poll-tax of Cali- fornia ought also to be abolished. " l.Sth. Direct popular legislation enabling the people to propose or reject any law at their will, and introduction of minority representation in all legislative elections." I think I need not explain what is meant by this. We mean that legislation as it is now carried on in Switzerland, so that people may introduce in any legislative assembly a law of their own, a hill of their own, and may insist upon its being read before the people after the legislative body has brought it into proper form ; and, on the other hand, the right of the voter to vote on every important law, especially every law that dis- poses of money. " 16th. Every public officer shall be at all times subject to prompt recall by the elec- tion of his successor. That is the right of the people, to recall their lawgivers. Q. They do so every two years now ? — A. We claim the right of recalling any of our lawgivers during the session. We are through with our present demands. We are ready to answer any other ques- tions whenever it is pleasant to you, and we will lay before you such printed documents as we have published. The labor of children should be entirely forbid under fourteen years of age. By Mr. Boyd : Q. What is your business? — A. I am a teacher. Q. You live in Newark? — A. I do. Mr. DouAi. About .some points of my historical knowledge I wish to verify my state- ments. Whenever you have time to have me come here I will come here with the books. In regard to one point, one of the speakers before me may have misstated the intentions of the party unintentionally by being led astray through your cross-exam- ination, because it was a kind of cross-examination. I wish to correct the misimpres- Bion which might be created thereby. He seems to state that the laborer is defrauded of part of his earnings through the middle class, or, at least, the impression might have gone abroad. We regard the middle class as being embarked in the same ship as our- selves. They are living on ourselves. We have spent our wages in their stores and shops, and if we have nothing to spend, they have nothing to gain ; they have no profit left, and it is just the middle class that is going down most rapidly nowadays. Thou- sands, and I may say hundreds of thousands, of men of small means, keeping a store or shop, are unable to make more than their expenses, sometimes not even that. They are eating up their savings. We confess no enmity whatever to that class, and we have no enmity whatever to any class of people, because our party considers those things historical necessities ; these things have been brought about without any one's will or intention. This is the great bane of the world's progress, which could not be realized in any other way than by competition — the great double competition of the employers and of the employcSs, each among themselves. Those historical necessities we acknowledge, and this prevents us from being unjust to any other class. We don't make war upon capitalists as a class, but upon capital. Wemake war upon the wrong idea that any one could derive rightfully an interest on cajiital, because that interest must come from another person's labor, which is thus far not paid for. We find against the civilization that has come to all mankind, even 'among laborers as well as among the capitalist class, as though any one was by justice allowed to take profit from any man's labor by taxing him. Of course, the laws have allowed that. We are brought up under those laws, but I beg you to consider that we are not a class which is full of enmity to society, as we are represented. We are fellow-citizens, presenting a remedy that will come to be applied within a very short time, do what you may. We think that within five or ten years matters will have come to such a pass as I stated before. The great capitalists alone will be left, and the millions that are disinherited will be a threatening burden upon them, and then they will, perhaps, hasten to prevent the ills that might flow out of the present kind of production. If our organization is allowed to grow as it has grown before, we nee'd no auxiliary ; we need nothing else but the natural growth of our ideas. If those ideas have five or ten years more to grow in the minds of the people, there will be no one else who will share in the prejudices of the people. The Chaieman. I understand you to say you only make war on capital? — A. As an institatiou. DEPRESSION m LABOR AND BUSINESS. 41 Q. Do I understand you to say you are opposed to the acquisition of capital?— A. Certainly. Q. That capital should not be allowed to exist ?— A. Henceforth not allowed to exist ; in future society it should not be possible to have any private capital. Q. Capital is the surplus over a man's debts. The great bulli of capital consists of small sums piled up and aggregated ; are you opposed to the acquisition of capital, the accumulation of private property ?— A. Not at all, but that capital which we only honor by the name of capital, should be in the hands of all the people together com- bined as a government. Q. You mean a common ownership of the capital ?— A. Yes, sir ; in our future state of society. Q. There should be no private property ?— A. There should be no private property except what you earn through your own labor, and those earnings can never be again a source of new capital, and they will by better education of the people inure to a better arrangement of life and society. Q. If a man has accumulated a few dollars you are opposed to allowing him to lend it to any one on interest ?— A. No, sir ; he will not take any in our future state. Q. Would you prevent him tailing interest ?— A. Why should I give a law which is not necessary ? Q. Then why have any law at all if people are going to be so good that laws are un- necessary ? — A. Why are there thousands of useless laws in the world? That comes from the fact that nowadays everybody is striliing at everybody, and oar society is a war of everybody against everybody under the forms of law, so that if you organize that law you must do it by an innumerable number of laws which are so complex sometimes as to be unintelligible to the great mass of people. Therefore we say iu our future kind of society laws will be few and intelligent to everybody, and people will be so educated as to see that the greatest amount of capital can be gathered if the state is the owner of all men's labor. Q. If it is wrong to talie interest, is it wrong to take profit ? — A. Society cannot take any profit for itself. Q. I understand you to say you will permit the laborer to reap the reward of his own industry ? — A. Yes, sir. Q. And yon say when he gets a little money, he ought not to lend it on interest; that that is morally wrong, though you would not prohibit it. I ask you if it would be wrong for that man to take that money and put it iu the soil and raise a crop of wheat and wait a year for the benefit of it ? — A. Why should it be wrong ? Q. Then it is not wrong for a man to take profit out of his capital ? — A. He will have very little chance to do it under our system, because the circumstances of almost everybody will be very much alike. There may be differences, but they will never amount to any great contrast. You may have your own little garden and may lay out your money on that, or you may have collections of birds and animals, or whatever yon like, as far as your means reach. If you don't prefer to go to the museum and study there, you may study at home as far as your means allow you. Q. You would not prohibit a man to get beyond his little garden, would you ? — A. We would not restrict any one. We would have education make every one understand his standing in society, that he is to live for the benefit of all, and that society is to live for the benefit of everybody. Let us first get rid of this unchristian state of so- ciety. We demand that Chinese emigration under contract ought to be stopped im- mediately. The Chairman. Not otherwise ? Mr. DouAi. Not otherwise. ADDITIONAL STATEMENT OF MK. BAETHOLOMEE. Mr. Bartholomee made the following additional statement: In the State of Rhode Island there are 2,109 factories, with a capital of $50,000,000, employing 56,450 em- ployes. These employes receive |23,707,51ii. The raw material used in these factories costs 175,715,970. The material after being worked np and sold in the market at the time these figures were taken brought $126,659,187, leaving a surplus for the owners of those factories of $26,236,392, or $2,528,880 over and above the wages they paid to their men, who really produced the value of the article when it is placed in the mar- ket. If you allow 7 per cent, on the capital you will still have all but $1,000,000 less than the money they paid to the workingmeu. By the CHAiRivrAN : Q. Do you know whether the expenses of transportation, advertising, selling, and carrying on the business were deducted ? — A. I know that 7 per cent, on capital gen- erally pays all those expenses. Q. O, no ; we have to pay that for money we borrow, and I ask you whether those 42 DEPRESSION IN LABOR AND BUSINESS. other expenses were deducted from that statement. — A. The statement was given at the cost, which, I presume, includes everything. The Chairman. Well, it does not. I went through that process, and examined the statistics, and went to the Censns Bureau and found that they merely took the cost of the raw material, and excluded all the other expenses. ADDITIONAL STATEMENT OF ME. BENNETT. Mr. Isaac Bennett made the following additional statement : In regard to cigar- makers, 3fou have asked me a question and I am willing to answer it now, that there are in this city about three thousand cigar-makers ; that in the year 1870 they earned $11 per thousand for their labor. In 1872 the reduction was $2. In 1874 another re- duction of $2 was made, which left them $7. In 1876 it came down to 15, and at the present time the |11 work which was made in 1870 is now made for $3 a thousand. Now the cost of living in 1870 was $6 per head, and we find out now that the cost of living has only come down $1, and the wages earned at that time by the cigar-makers in general was $12 a week, and if a man earns now the whole year through $5 he is doing well. The committee hero took a recess. After recess the chairman called the delegations in the order in which their applica- tions had been liled, but none of them were present. The chairman then announced that the committee were ready to hear any person who desired to speak to them, and James Connolly presented himself. VIEWS OF ME. JAMES CONNOLLY. By the Chaihman : ' Question. What party do you represent ? — Answer. I am here from the National La- bor Greenback party ; not the one represented by Mr. Maddox. Q. Another Greenback party ? — A. The genuine Greenback party. Q. What is your business?— A. A painter. The Chairman. This committee is charged by resolution of Congress to investigate the causes of the depression of business, or lack of employment for labor, and to suggest or advise remedies, if possible ; and in any statements you make you will please con- fine yourself, as far as possible, in the first place, to stating the causes ; and, secondly, any remedies you have to suggest the committee will hear. Mr. Connolly. I don't propose to enter into a long statement at this time, but will beg leave to ask a further hearing at a future day. The causes, as I understand them, are various, the greatest of which, possibly, is the financial condition of the country to-day, the laws governing the finance question as passed by Congress. Q. What laws do you refer to ? — A. The finances. Q. Well, which of the laws of finance do you think is the cause ? — A. The bond system. Q. First, relating to bonds, in what way do you think the legislation in regard to the United States bonds has brought about the distress ? — A. We hold, Mr. Chairman, that the bonds, as issued by the government, being a tax on the people, the earnings of the people are slowly but surely drawn away from them and centered in the hands of the few who hold the bonds of the nation, thus depriving the many of the distribu- tion of the earnings. The earnings, instead of being distributed publicly, are centered in the hands of a few men. The depression of business is caused from this in this way : that a man who has a large capital to invest will take his 6 per cent, in gold or govern- ment bonds, and take it away from manufacturing and industrial pursuits, thus throw- ing a large portion of the mechanic and laboring classes out of employment. Q. Is there any deficiency of capital for carrying on industrial pursuits at the pres- ent time? — A. We hold there is. Q. What is the evidence of it ? — A. The evidence is the price of money. Q. What is the present rate of interest on money in New York ? — A. That is according to what length of time you desire to purchase it for. On call I suppose you can get it cheap. Q. At what rate ? — A. I understand that you can get it for 2 or 3 per cent, on call. The Chairman. It was 1| yesterday. On bond and mortgage ; at what rate can it be had on bond and mortgage ? Mr. Connolly. That is another system we complain of. Q. At what rate can you get money on bond aud mortgage ? — A. That is a question of donbt. Q. It is not a question of doubt; it is a question of fact. — A. I know a man who tried to get money to erect a building on boud and mortgage, and he could not be accommodated in the bank at 7 per cent., but a friend of the banking-company did DEPRESSION IN LABOR AND BUSINESS. 43 aocommodate bira, on condition that, ho should give him a certain amount for the accom- modation over and above the 7 per cent, jiaid to the bauker. Q. These are isolated cases ; but do you know the general rate of interest on bond and mortgage at the jnesent time !— A. As I understand it, 7 per cent. Q. Sis per cent, is the rate, and an unlimited amount can be got on bond and mort- gage at 6 per cent, to-day. Then the price of money ranges from 1| on call to 6 per cent, on bond and mortgage. Is that a high price? — A. I beg your pardon. I do not want to enter into the price of money on call, because I apprehend that has very little to do with the price of labor. Q. Now, I say money can be had on good bond and mortgage at 6 per cent. Is that a high price for money ? — A. I think it is a higher price than they should pay. Q. Is it higher than they have been in the habit of paying in the past history of New York? — A. It is not ; but when we go back into the past history of New York, a ques- tion you asked awhile ago as to the condition of labor in 1857, the condition was this : that the price of money was not greater than it is now, but the result of that stag- nation was that the banks failed themselves; it destroyed a number of business men. Q. You said that the reason business was stagnant was because of the high price of money. I asked yon what the price was, and we have got the figures, and it does not seem to ba the cause. Therefore the cause you set down as the cause of the stag- nation cannot be the cause. The price is not high. — A. You are aware, Mr. Chairman, as well as I can tell yuu, that a man having money will not loan it on bond and mort- gage for 6 per cent, for a great length of time if he can get 6 per cent, in gold on gov- ernment bonds. Q. But there is at present an unlimited amount practically of money to loan any length of time on bond and mortgage, in bank, at 6 per cent. — A. I don't so under- stand it. Q. Well, simi>ly put it down in your testimony. I give you the fact. If you bring me good security, I can get you $1,000,000 on bond and mortgage at 6 per cent. — A. Well, possibly I can bring a witness here on Monday to contradict you. Q. Well, yon can do that. What other canse do you give besides the high price of money for the depression ? — A*. As I said before, I don't proiiose to be led away from the question. Q. What is the question ? — A. I desire to make this point, that it is the system of legislation for which you as one, I believe, voted, to create a bonded system which robbed the people of money which drew no interest, and gave to us a bond which took from the people an interest. The Chairman. I did not vote for any such legislation. Mr. Connolly. I am glad to hear it. The Chairman. I never voted for anything about the bonds. I found that system in operation when I went to Congress, and I object to your saying that that is a sys- tem of robbing. It is a system by which the people may have been overtaxed, but robbing is something quite different. I did not vote for it, but what I would have done if I had had a chance is another question. Mr. Connolly. I don't suppose any member of Congress would put his hand in a citizen's pocket to take money out, but we do say there were means used in Congress to get these laws through in Congress that were not possibly moral. If we understand, they were paying the interest in the currency of the country, and these people came back and demanded that they should pay the interest in gold ; and, after having accom- plished that, they came back and demanded that the principal should be paid in gold ; and then Congress allowed the currency to be contracted so as to create a fall in price in such a commodity as real estate, &c. Q. Do I understand you to say that the interest on the bonds as originally issued was payable in paper ? — A. I did not say paper. Q. Well, currency ?— A. In the legal currency of the nation ; that is as I understand. The Chairman. You are wrong as to the payment of the interest ; the law expressly provided that it was to be paid in coin. Mr. Connolly. I am not an educated man myself, but I have looked into the dic- tionary, and I can't find where it says gold or silver is coin. The Constitution says the government shall coin money. Now, if you will show me where the meaning of the word coin is gold and silver, then The Chairman. We are not here to give definitions of words. Mr. Connolly. I understood you to say it was coin. The Chairman. I said the language of the act was coin. You have said that collect- ing the interest of the bonds from the people produced the stagnation of business.— A. It helps. , . . , 3 J, Q. Well, what else ?— A. The contraction of the currency and issuing more bonds tor to resume specie payment ; and the last $50,000,000 of bonds issued tor that purpose was direct fraud on the people and helped to continue this state of affairs. Q. How much has the currency been contracted in any period you choose to take?— 44 DEPRESSION IN LABOR AND BUSINESS. A. I suppose there is in the neighborhood of from $1,400,000,000 to |1,500,000,000 dur- ing the war of legal-tenders and other notes which passed as currency. Q. What date will yon fix for your $1,400,000,000 or $1,500,000,000 ?— A. Well, take it along about 1863 or 1864. I judge I am not exactly correct on the point, but will give you the figures, if you please, on Monday, if you desire them. As the committee had those matters before them in Congress, I did not suppose it was necessary. Q. You say the contraction is a cause of the business depression. I want you to de- fine what the contraction was. I understand you to say it was $1,400,000,000 about 1863 or 1864. Now, I want to know to what amount it was contracted.— A. Take the other currency itself— the greenback currency. If I am correctly in- formed, it was $800,000,000. Since you have adopted the national-bank system of let- ting a man owning $100,000 purchase a government bond and pay him gold interest for that bond, with the privilege of leaving it in the government vault, and then allowing him to issue $90,000 — in doing this you compel this man to hold a certain amount of greenbacks in his vault, as I understand it, which is not in circulation ; there is a certain amount of reserve of the currency, of the greenbacks, which are kept in reserve, and not kept before the people, but the bank-bill is kept before the people and bears interest on the face of it, which interest the people have to pay. Q. What is the amount contracted— from $1,400,000,000 to what ?— A. I judge that we have not now in circulation in the United States to-day, of bank-bills and green- backs, over $550,000,000. Q. Are there more issued than that ? — A. There was. Q. I mean are there now?— A. Some of the banks, I belidve, are coatraotiag these for the purpose of keeping the rate of interest up. Q. They do not succeed ? — A. They seem to do very well. Q. Do you mean to say they succeed in keeping up the rate of interest? — A. They seem to do it. I don't hear of any of them failing. I assure you if the rate of inter- est went down so low they would fail, as manufacturers do. Q. They would not. They might let their capital lie idle.— A. Theydo not fail. That fact itself shows that the rate of interest is not low. We hold that the banking sys- tem should be revised; that the present bank currency should be withdrawn and greenbacks issued direct by the government to the people, either through some bank- ing system or to the people direct. Q. How will that help the laboring man ? — A. It will withdraw from the bondhold- ers their money, and compel them to invest that money in business. Q. Won't he get his bonds back when the money is taken up ? He has his bonds lying there for security on his notes; the notes are withdrawn, and he gets his bonds back. Wonld he draw any interest on his bonds after that? — A. O, yes; unless we redeem these bonds. We want the government to redeem them. Q. Your next proposition is to retire the bonds, retire the national-bank notes, de- liver to the bondholder his bonds, and pay them otf. What do you propose to pay his bonds with ? — A. In the currency of the country, whether it is gold, silver, or paper; and, as silver is now cheaper, I think it is better to pay him in silver. Q. How would the government get the silver to pay off these bonds ? There are about $400,000,000 of these bonds deposited. Where would the government get the silver? — A. I would take the bond, and when we paid out all the silver, then we would fall back on the greenback. Q. There are only $12,000,000 of silver coin now in the country. You would pay off the $12,000,000 of silver and then pay off the rest in greenbacks? — A. In either one, Q. Would it not be cheaper for the government to print the greenbacks rather than pay the silver ? — A. I suppose it would. Q. Then you would pay these bonds off in greenbacks ? — A. In greenbacks, or silver, or gold. Q. Suppose the bondholder declined to take them, and said here is my bond — the principal is not due ? — A. Then I would stop the interest on the bond. By Mr. Thompson : Q. How would you pay the greenbacks ? — A. There would be no necessity for paying the greenbacks as long as the government took them for all debts, dues, and demands, public and private, including interest on the public debt and custom dues. Q. You don't mean that paying in greenbacks is paying the debtor? It is merely paying the form of the debt, promising to pay it ; but how will you pay the green- back when the time comes to fnlly pay it? — A. I will answer that question if the gentleman will be kind enough to answer me how he will pay his gold dollar. Q. You don't have so many in circulation ? — A. The question is the same. I mean the government stamps its silver, and saya that is a dollar. If you go to redeem that dollar it gives you a gold dollar for it, or any other currency the government credits, and, if the government credits paper money, it can redeem it in paper or silver, as long as it lasts. Q. Does the government have a dollar to redeem at all? The greenback system DEPRESSION IN LABOR AND BUSINESS. 45 makes the paper dollar eqnal to the gold dollar, although intrinsically and perpetually irredeemable? — A. I hold that the government is capable of issuing its own money. By the Chairman : Q. What limit would you put upon the issue 1 — A. I would limit it to the amount of bonds in circulation. Q. Why take that estimate ? — A. Because we want to wipe out the interest system. Q. Would a further increase of these greenbacks beyond the amount of the bonds outstanding depreciate the value of the dollar ? — A. If the nation required a further increase, then the government ought to increase it. Q. Would it decrease the value of the dollar ; would it purchase as much flour as before ? — A. How would that act in that way ? If there is only enough in circulation to carry on the business of the nation, and it was received for all debts, dues, and de- mands, it will purchase every commodity. , Q. My question is whether, if you increase the quantity of these greenbacks (which you say are as good as the gold dollar with the stamp on it) beyond the amount of your bonds, they would have the same value as before? — A. I think they would. I don't pro- pose to go into that. I propose we issue not beyond the amount of bonds now in exist- ence ; but, if the necessity of the nation ever demands it, the government has a right to issue any quantity that the nation requires. Q. Would they depreciate in value if the quantity issued were unlimited ? — A. I don't think they would. Q. Is there any other cause for the depression of business besides these ? — A. Yes ; there are several little things. There is another question now comes to my mind rela- tive to the railroads, which I heard discussed a little while ago. I think that also tends to injure the laboring classes. I don't mean in saying the laboring classes the laborer — I mean the industrial classes of the nation. The giving away public lands, securing the credit of these companies, was a fraud on this nation, and is injurious to this nation. Q. Why so? — A. Because they have created a monopoly of these companies, and prevented competition. By Mr. Rice : Q. Has not a private company a right to land for the purpose of building a, rail- road? — A. But when the government undertakes to give to the company more land than is sufficient to build the entire road, besides securing its bonds, it is creating a vast monopoly not only in the railroad itself, but in the laud also. Q. Your trouble would be that the government has given too much, not that it has given something? — A. No. The point I raise is this: that instead of the government giving the public lands to build railroads, had the government issued its own currency and built these roads, thus owning the roads for all time, it could have set the rate of fare on these roads at a price which would have met the requirements of the people. At present yon have given away everything. You have built the roads ; you have paid for them, secnring their bonds, besides giving them the public lands, and you don't own a dollar of it. By the Chairman : Q. Have you seen the recent decision of the Secretary of the Interior that the lands all lie open to entrjTat |1.25 an acre ?— A. Well, I have ; but, unfortunately for the peo- ple, these decisions have changed So often in Washington that it is almost impossible to tell where we stand. By Mr. Rice : Q. Suppose you were going to have a farm of 100 acres of laud, would you rather have it within 5 or 100 miles of a railroad ?— A. Five miles. Q. Would it not be more valuable there?— A. Certa,inly. Q. If the government has got a great quantity of laud there, and can give away sotue of it to have a railroad built, by doing it does that not increase the value of that which remains?— A. Certainly it does. ,. , , Q. If the government then gives away the alternate sections of this land and retains the others, so that they are made worth as much more, then would it not be a better operation than to have the whole land lying unimproved?— A. Certainly ; but it would be better for it to build the road itself. . Q. You mean that it would be a better operation for the government to do it by issu- ing greenbacks than getting it done by giving away alternate sections of the laud ?— A Ygs 81 r Tue Chairman. I suppose you are aware of the fact that the last Congress made provision for securing every dollar of that money, and it is now the law? Q The point I call your attention to is not whether the government has heretofore built more railroads than it ought to, but whether having given a certain amount, euongh to secure the building of the road, if it were given properly, is a disadvant- 4G DEPRESSION IN LABOR AND BUSINESS. age? — A. I claim that it would pay the people better for the governmeut to build the railroad itself aud own the whole railroad. Q. If the ffovernment had not money to pay for it. — A. The government could. It gave more land away than would pay for it ; and I hold that that money should be repaid. By Mr. Thompson : Q. Which road do you refer to ?^A. The Pacific. Q. By the laud grant they have the right to it. — A. If I understand the land laws correctly, no act passed by Congress or any legislature is good in law where corrup- tion was used iu its passage; and I think that this committee, if it will examine the records before Congress, will fiod it was through corruption this was obtained; there- fore it ought to he repaid. The CiiAiK^rAN. I wish yon would state iu that connection that none of the gentle- men present were members of that Congress. Mr. Connolly. 0, present company always excepted. Now, if the government had built these roads, the people would have got to tUtse sectious cheaper ; they would have had cheaper transportation. By the Chairman : Q. Do you think the government manages il-s business so well that the people would have cheaper transportation t — A. I suppose so. Q. What would havebeentheeffecton therunning of the Pacific Railroad by a change of administration from Republican to Democratic or from Democratic to Republican ? — A. From the information I can get from the papers, &c., I understand that wherever an administration is brought in contact with these corporations, there we find corrup- tion, but where the government runs the institution itself, we have not so much to find fault with ; but, in answer to the last jjortiou of the gentleman's question, we propose to answer this question as soon as possible. The Democratic and Republican parties have been in office long enough, and we propose to put in Greenback men. Q. Would you put in Greenback men in place of Democrats or Republicans? — A. The only question is, as it happens, which party happens to be in. My friend just refers me to this building we are in. We have not much fault to find with that, because it is run by the government direct. i Q. Did the government display good management in this building ? — A. O, no ; and I will tell you why it did uor. Because the government allowed a system of private contracts to prevail, and I had the pleasure of appearing before a Congressional com- mittee on one occasion, on this very building, and affidavits were drawn up aud pre- sented to Congress to show that the very lead pipes supplied for the use of the building were carted over to Brooklyn to private houses. Q. Is that evidence that the government can administer things more economically than a private corporation? — A. Yes, sir. The very moment dishonesty is found it will be shown up and remedied immediately, but where they come in contact with big corporations they invariably give the big bulk to the private corporations, aud they swindle the people. The same might be said with regard to telegraphs. I hold they should own them also. Q. Would you take all the railroads and telegraph-lines and pay for these also in greenbacks ? — A. If the government could not procure gold aud silver enough, I would do it. We had gold and silver enough previous to the war, and bank-bills, lor carrying on the business of the nation. When we stop paying interest on the bonds now held abroad, every dollar of which is paid out of the nation, that money would remain at home here for our own use, and industry would spring up all over the country. Q. But the value of the railroads in the United States is very large, and there never has been currency enough to pay for them. I ask you whether you would issue paper , to pay for them? — A. I think the government would have the right to build these roads on its own paper, and I apprehend if the government built these roads honestly, they would not cost one-tenth of what the companies now say they cost them. Q. The estimated cost of the railroads of the United States — have yon any estimate of how much it would be? — A. I think I would refer you to Mr. Thnrber for that ; he is better posted than me. Q. Thirty-five hundred millions of dollars is the estimated cost of the railroads of the United States. Would you print thirty-five hundred millious of greenbacks to pay for them ? — A. You will bear in mind it would uot require any such sum, be- cause some of these have earned enough to pay off the indebtedness. Q. And the owners of that property would not get anything ?— A. The governmeut would do it. Q. Existing railroads all belong to somebody. You say some of them have earned money enough to pay for them. The stockholders embrace all classes of people, and the widow to-day and the orphan to-morrow may call for their interest on the bonds they hold. Now, what would you do with that widow and orphan 'I Would you give them DEPRESSION IN LABOR AND BUSINESS. 47 monej' ? — A. The great stockholders of these roads invariably ask us, what would you do with these widows and orphans ? Q. Well, or with anybody ? — A. The stockholders of these roads take precaution to see that they get very little interest on their money ; they generally water the stock and divide the spoils in such a way that they get very little. Q. Well, what little they get ? — A. Certainly. Q. But the government is going to take and print greenbacks to pay them ? — A. I am speaking of the roads where the government gave land. Q. Would you have it own the railroads? — A. If it did not own them, I would have it control them. By Mr. Thompson : Q. If it became necessary for the welfare of the people, an advantage to own these joads, why not confiscate them at once, and be done with them ; why not do it directly and openly ? — A. Why confiscate them when we have got the power to direct them ? Q. If the roads have become injurious, and the welfare of the people demands that they should be owned by the government, why not confiscate them? — A. I don't pro- pose to confiscate. I only propose that the government shall not give a dollar to any raUroad or other corporation to build any institution of the kind. The government can protect its own citizens, and if there are too many people in New York City, poor men who cannot earn a fair livelihood for themselves, then the government should give these men such loans as would enable them to go on the lands to earn a living for them- selves and families. As it stands now, where is the mechanic that can go out West on a farm f He may have sufficient to pay his fare on the road, but when he gets there what is he to do ? Now, if you will propose to Congress to send our people oif to the West, and secure them for a year, as you did these railroads, you will thereby relieve distressed cities. By the Chairman : Q. Now you are at the remedies. That is one remedy ?— A. Yes, sir. Q. Have yon any other remedy besides sending people out to the West by the gov- ernment? — A. The next is these parties who own railroads ; I would compel them to pay their taxes, which they don't now do. Q. Do you mean the United States does not collect its taxes from the railroads ? — A. That is just what I mean, both State and national governments don't. Q. Can you point to any law of the United States that imposes a tax on railroads? — A. I judge one institution by another, whether it is a railroad or steamboat company or manufacturing establishment. We find right in this city corporations having large establishments underselling smaller dealers. For instance, we will take the banking interest, and I will give you a case in point. Q. You said you would have the government collect taxes from railroad compa- nies ? — A. Yes, sir. Q. Tell ns any company that it does tax. What taxes does the general government impose on them ! — A. That I don't know. The CHAiRsrAN. As a matter of fact it imposes none. Mr. Connolly. Then the quicker they do tax them the better. Q. That is a remedy ? — A. As you have just stated there is no tax on such companies by the general government, I may claim to be officially informed on that point. Then we hold it is the right of the goverumeut and Congress to tax these companies, or their earnings. By Mr. Eicb: Q. Would you have the States tax them, and then the General Government also — tax them twice over ?— A. That is a question we can't solve, for this reason ; When we in- quire where Vanderbilt pays his tax, we are informed that he pays his taxes in New York ; but when we come to New York and inquire, we find he swears he pays them in AU)any. t The Chairman. That is a point for New York. Mr. Connolly. Well, that is a point I make. Q. You want us to put a tax on the railroads ?— A. We want to put a tax on the sur- plus capital of every capitalist in the nation. Q. Suppose the railroad is in the hands of a receiver ?— A. I would bring that home to those who built that railroad. Mr. Boyd. You are speaking now of New York exclusively ? Mr. Connolly. Of the whole United States. Mr. Boyd. Where I come from we don't have so many of them in the hands of re- ceivers. They pay their taxes pretty well. Mr. Connolly. May I ask what part of the country yon come from ? Mr. Boyd. I come from the West. Mr. Connolly. Yes, I thought so. The green backers are there. I was out West not 48 DEPRESSION IN LABOR AND BUSINESS. long ago, and they seem to take hold of these matters pretty well there, and we will do it here. By the Chairman: Q. What other remedy would you suggest? — A. We suggest that the State does not collect the taxes on the bonds of these roads ; that the government should enforce the payment of the taxes on these jjoads. We do not see why a man that owns a little house, probably worth a thousand dollars, should have to pay taxes to support the nation and State both ; we don't see why he should be taxed for every dollar he can earn, while the other goes free, because he is wealthy. We propose to create a grad- uated taxation, and a taxation on the incomes of the people. A point I raised a mo- ment ago was this : that I find small manufacturers in this city, in the tobacco business, crushed out by the larger ones. Why ? Simply because the law suits these larger ones. If a man is a dealer on au avenue, having a small store, or desires to go into business for himself, he must give bonds; if he employs hut one man he must give bonds. He can't sell cigars in the same place he manufactures them. He must have his office fixed up, inclosed to the ceiling, thus forcing him to go out and get another place.' That is in the interest of the large manufacturer. He is compelled to pay for a larger place than he requires, and if he does not want it he is compelled to pay for it. The rich man can settle with the government, but the poor can't. Right hero in the city, an institution that was burned not long ago, the gentleman settled with the gov- ernment twice. He settled for a few hundred dollars. Those are some of the evils, and as this man increases in wealth it decreases the condition of the poor man. He is forced, in justice to his wife and family, to reduce the wages of that one man he em- ploys, and when he reduces, the wealthy man reduces his, and crushes him. Now, we find that, instead of working the eight-hour rule, as it should be doue, in certain cir- cumstances these men employ women and children, working ten, twelve, fourteen, and sixteen hours a day, and in some cases eighteen, enduring the smell of this tobacco all the time; yet there are laws created by Congress which grant the right to these men to manufacture in just such places. Souje may say you can't prevent a man manufact- uriug where he jdeases. I hold you can. If Congress has the right to say what a man shall be taxed for, what he may manufacture, that he must give a bond for the person he employs, it has equally a right to say w/jei-e they shall manufacture; and if you say they have not, then we call you back to this, that you say you must not sell where you manufacture your goods. This crushes the middle-men and the cigar-men in this city. We hold also that just as soon as you wipe out the government bonds there will bene necessity of this taxation on the people. That is what is ruining us now — this eternal taxation ; taxation to pay the interest ordered by Congress ; and unless this thing is wiped out, very likely there will be a day of reckoning some time, and if we can't right it in one way, Kearney will come here and right it in another. I hope to God he will. Still, we know France is not like this nation, but the remedy is in our hands. We are the people; of coarse we understand that. Tobacco is used just in this way, and it is tax after tax from the time it leaves the farm until it is used. Q. Have you compared the tax of England and Germany with this country ou to- bacco ? — A. I don't consider that is the question. Q. What is the present rate of taxation of Great Britain on tobacco ? — A. It is very great, I understand. Q. How much? — A. I don't know. Q. Do you know how much it is here? — A. I don't understand, sir, except as I hear the manufacturers state. In the first place, a man purchases his goods in the store; an account is kept ot how much is in that store, and he is required to produce just so many cigars, and no more, from that tobacco; and he must give a statement, a sworn statement, that he manufactured just so many from that tobacco. Q. Would you abolish the tax ou tobacco? — A. I would abolish the tax on every- thing, but just so far as would run this government. Q. Would you abolish the tax on tobacco ? — A. I would not tax a single article of American production where it can be put on foreign products. Q. You are in favor of protection, then ? — A. lam. If we do not protect the American mechanics they will sink. The same thing exists in the iron trade. We have iron ore enough in this country to manufacture all the iron the country needs; but, strange to say, while you prohibit the introduction of foreign iron without duty, you do not tax scrap iron coming to this country. Q. Do you state that as a matter of fact ? — A. Yes, sir. Q. When it is removed from the vessel and sold it does not pay any tax? — A. When removed from the vessel a tax it does not pay. Q. What rate of tax does it pay ? — A. I don't know. The chairman knows more about that than I do. Q. You are misinformed on that subject. — A. I understand from the Ironmolders' Union that they have petitioned Congress in that respect; but, if the gentleman de- DEPKESSIOX IN LABOR A\D BUSTXESS. 49 sires, perhaps I can get Mm the petition, and the information. I suppose Mr. Hewitt has seen the petition. The Chairman.- I have never seen it. Mr. Connolly. It seems to me that that is one of the evils under which we are liv- inrk for twelve years on that very plan. I would make the United States that asso- ciation, and I would make the government the nucleus of it. Q. Supposing there are a great majority of people that don't want it now, would it not be best for you to go into a small one and show an example ?— A. No, sir. Q. Supposing I don't want to go into one and you do, how will you get me in?— -A. Then we will convince you by argument and make you a Christian, and then you will. Q. Supposing I am so bad that you cannot do that, then what would you do ? — A. We would encounter such minds, but we expect to so far christianize them that we shall get a majority, and then we will bring you in any how. Q. It has been going on for eighteen hundred years, and I have not got to that point yet. Now, suppose you cannot get me so. Is it not better for you to have your co- -operative system out of those that think as you do, andgo into it and get the benefit of it, and let me stay outside and get the evils of staying outside ? Is that not the best way to do ?— A. That is a direct question, and it is necessary for me to answer it, and my method of answering it will be the same way in which I answer those greenbackers, and that is, until they become converted from competitive society into co-operative society, we cannot admit them into our party ; but when that comes, and in relation 60 DEPEESSION IN LABOR AND BUSINESS. or in proportion as that comes, do we build up the political party, which is called the Socialistic Labor Party. We already number several hundred thousands. Q. If you had your theory in practical operation, would you have all the people in the United States belong to that association and be a part of it ? — A. Yes, sir. Q. All governed by the same rule ?— A. Yes, sir. Q. And exactly pqual ? — A. Exactly equal. Q. Dress alike? — A. No; that would be infringing on individual liberty. Q. Where would the justice come in if you should allow one man to wear clothes like my colleague does and another like what I wear ?— A. We don't propose to cur- tail our people at all. Q. How could a man gratify his taste in that direction ?— A. The voice of the people- will always provide for diversities, for so-called varieties. Q. Would you not, as an officer, answer him that that is an extravagance that you cannot tolerate, and that it is opposed to your system of equality ? — A. It is no extrav- agance. Q. Yes, it is.— A. What is the opinion of a body-politic is the opinion of each indi- vidual — of the majority of individuals. Q. Suppose my colleague belonged to an association, and he wanted to take a jour- ney to the seaside or out to the mountains to have a pleasure trip, how would he pro- vide for the expenses ? — ^A. He would be provided for. Q. O, no. — A. O, yes. Q. You would soon get rid of your community. — A. Liberty is a part and parcel of citizenship, and citizenship is that which people want on the co-operative basis. Q. Would you place no restraint whatever on the individual rights of parties to the gratification of their desires? — A. Not within the code of the socialistic ethics. Q. What would be your socialistic limit ? — A. It would be the united voice of the people from year to year — the public opinion. Q. Then one year they might choose to let a man have a little more than the next ? — A. No ; on the contrary the next year they would have more people than they had then, and vice versa. Q. How would you provide for them ? — A. They would provide for themselves. Q. How would you regulate churches ? — A. We would make them pay taxes. Q. Who would pay the preachers ? — A. Our party is our religion, and the govern- ment is our chief judge. Q. What particular denominations would you introduce ? — A, Our own ; it is in re- ality original Christianity. Q. So I understand; but what particular branch of the Christian church would you adopt ? — A. The communistic one. Q. And you would enforce that on all others ? — A. We would not enforce it on any one. Q. If you adopted the communistic doctrine, and by a vote of the association you would fix the rule as to churches, schools, dress, food, labor, &c., might you not buck against a man's conscience occasionally ? — A. Not in regard to little things like dress, food, &c.; there would in all probability be an enlargement of variety. Q. The question of conscience, faith, and churches? — A. We have done the same wherever the co-operative idea has entered into practical ethics. Q. One of your members wovild probably believe in immersion, and another would not believe in it, and another would believe in this form and another in that, but you would recognize one system, and only one. Now. what would your system be ? — A. We would have no such system. We would not have so-called religion in our party whatever. Q. You said that your party was the Christian religion? — A. Originally. Q. In what form would you express that Christian sentiment ?— A. We would ex- press It in the form which would make it the most practically co-operative possible. Q. You would allow the majority to fix the form or the special denomination of the church ? — A. Yes, sir ; we do not have any church, understand. It is not a religious association ; it is a body-politic — a political party. By Mr. Rice : Q. You mean any man should think religiously as he saw fit ? — A. Yes, sir ; all relig- ion tolerated. Q. If he saw fit to entertain the Catholic faith or Presbyterian, you would not con- trol him ? — A. Not at all. Q. But supposing a man wanted to go to Newport, we will say, at whose expense would he go? — A. If he wishes to go to the seashore or to Newport, he has an oppor- tunity to do so, as he has perfect freedom. Q. That is he can go if he has got the means. Where would he get the money to go with ? — A. We propose to make a social money that should be given to him for his labor. Q. That is, there would be money, only it would be a different form from what it DEPRESSION IN LABOE AND BUSINESS. 61 now is ? — A. It would be pretty near suoli money as the greenback party desire at the presen t time. Q. Would each mau get it according as he earned it 7 — A. He would. Q. So that if one man earned $2 and another man only earned $1, one man would get bis |2 and the other man $1 ?— A. Yes, sir. Q. So that in process of time he would accumulate more than the other mun? — A. He would, until we got the plan so leveled down in the course of time that there would be equality. Q. In your system, as you now propose it, would not the man that got the $2 of your socialistic money accumulate more if he only spent as much as the man who only o-ot his dollar f — A. Yes, sir. Q. Then you would have capitalists ?— A. We would, until we got the thin" worked down to a state of perfection, and then we would not. ° Q. When you got it to a state of perfection, what would there be to live for any longer ? — A. Then we would have something to live for. As long as society rests upon the competitive basis, you cannot expect anything but injustice. By Mr. Thompson : Q. What is your business ?— A. I am a teacher at present. I was a machinist until I was not wanted any longer as such. Q. Is there anything else yon wish to say ?— A. Yes, sir; I would like to state one thing, and that is in regard to the money question. The idea of a social money may be «aid to be the soci alistic party's idea of a social money, but so long as the greenback party does not absorb itself into and become a part of us upon the co-operative idea, theB, of course, we cannot accept them into our party, but it is rapidly coming about, AS we see by what our friend Carsey has said. VIEWS OF ME. GEORGE W. MADDOX. Mr. George W. Maddox appeared and made the following statement : Mr. President : I appear as one of the delegation from the Congress of Humanity. My colleagues here are Mrs. S. Myra Hall, Colonel Bennett, and Professor House. " We would respectfully state that it is a principle in civil government to make pro- vision for all its people, either laborers, paupers, or criminals. In an efficient and eco- nomic government, whether city. State, or national, the factor of the utilization of the physical, mental, and moral force of its people is, of all others, the most important and first to be adjusted in harmony with the interest of each and all. "Under our competitive individual system of industry, we have, as a people, come to want and poverty, and the government are obliged to provide for the enforced idlers or paupers or criminals ; therefore it follows that our system of government polity is at fault, and thus the demand is made upon every statesman and philosopher to present for adoption a better, more just, and economic system. "We need not quote facts and figures to your honorable body to show that our indi- vidual competitive method of industry has filled the country with paupers, beggars, tramps, and criminals, and is already breaking out in brigandism, until there is more danger of anarchy arising from these idle persons than from corrupt politicians and partisan demagogues, and that we cannot neglect with impunity the duty we owe to the people to make provision for the useful employment of this increasing idle class, when we know that such neglect imposes upon the government the necessity of pro- viding for them either as paupers or criminals, and most likely as both. " To provide for them as paupers is a useless expense without moral or material return , and degrading to the recipient. To provide for them as criminals is still more expensive to good government and public morals ; but to furnish them employment in useful industry will save them from pauperism and crime and add wealth to the aggregate. Charity is temporary and will have to be gone over and over in constantly increasing munificence, because where persons find themselves under the necessity of subsisting on charity and are thus openly degraded, they lose faith and ambition in themselves, and finally come to depend upon this provision for a livelihood. The person naturally turns for relief and safety to the thing nearest to hand ; therefore such a system of Telief for the poor only increases the demand and aggravates the evil, while useful industry in the production of wealth ennobles both the employer and employed, and brings them into business relations upon terms of individual independence and equality. The charity method makes the relation of pauper and protector, or slave and master. Idleness provokes crime. The old proverb which says, ' the devil always finds some mischief for idle hands to do ' is verified at every turn, and once a person is in enforced idleness and living on charity he is easily persuaded to take by stealth or force what, if able to obtain by honest labor, he would never be tempted to take ; and once in the channel of lawlessness it is very doubtful whether he will ever change his life to useful industry even if an opportunity is presented; therefore idleness paves the way to crime 62 DEPRESSION IN LABOR AND BUSINESS. and degradation which the government mnst correct and remedy in order to protect the good and law-abiding citizens. " Both charity and the correction of crimes are most expensive systems of govern- mental economies, and our purpose in addressing your honorable body is to set forth another system, which, if adopted, will be less expensive and greatly productive to the peace, morals, and wealth of both country and individual. Therefore, we respectfully suggest that great works of industrial public improvements, such as canals, railroads,, widening and deepening rivers, &c., &c., for better communication between East and West, North and South, and for the cheaper transportation of the products of the country from one section to another, be at once commenced and rapidly completed and then run in the interest of the United States. All great lines of railroads from the Atlantic to the Pacific should be built and operated by the government by direct employment of the necessary workmen, artisans, engineers, &c., and never by contract, , which latter method of doing public work has largely enriched the contractor at the expense and often the ruin of the actual workingman. These works should be run at such a charge as will cover experises and leave a margin of profit to finally cancel the money or credit advanced for their construction, which money should then be de- stroyed. " Also, we would siiggest that at least 100,000 families in the large cities be organ- ized into colonies £tnd planted by the United States Government on the public lands, the United States issuing sufficient money to locate these colonies and place them in a self-sustaining condition, and take such lien upon the improvements of each of the colonists as that in a term of years all that was expended upon them could be paid back to the government, leaving the colonist free from debt and the government reim- bursed, when this class of money could be destroyed. "Also, the United States should issue to such States, cities, and towns as desire to- employ idle persons in useful industry all the money necessary for such purpose, which money should be a full legal tender, and take such a lien on the profits of such indus- try, holding the town, city, or State responsible, as will in a term of years cancel such indebtedness, when this money could be destroyed. All moneys thus advanced should bear no interest, because it is only the credit of the United States that is advanced,. and the waste or destruction by wear and loss in usage will cover the expense or cost of issuance, and when it is paid into the Treasury of the United States by the debts^ State, city, or town, the United States will have suffered no loss ; therefore it can justly be destroyed, having filled its purpose in creating wealth for such town, city, and State. "We would respectfully call your attention to the following examples where gov- ernments have profitably employed labor, diminishing idleness, creating wealth, and benefiting both the labor and the State: " Examples. — See Jonathan Duncan's Pamphlet on Bank Charters ; The Swedish Col- ony in the State of Maine ; The System of Immigration in the Argentine Republic ;.. Count Eumford's Method of Employing Vagrants in Munich, Bavaria. See Jared Sparks's biography of the count. The resolutions of the legislature of the State of Pennsyl- vania in 1836 for the employment of idle persons ; the assistance of the Canadian gov- ernment given to settlers upon the public lands ; and also the assistance by the gov- ernment in the settlement of the early colonists in New England, all of which is re- spectfully submitted by the Congress of Humanity." I will simply state those ; and if you would like to know what the other examples- are I will also explain them. The island of Guernsey, as you know, was owned originally by the French, I think, and pending its transfer to the English there was a sort of in- terregnum when it had its own government. The burghers came to the governor of the island and stated they wanted means to build a market. The governor said: "Have vou- the site upon which to build it?" "Yes." " The materials ? " " Yes." " The laborers ? " "Yes ; we have everything except the money." Said he : " I will furnish you all the money you want; " and thenceforth he issued a class of paper money which he called money whicli was good for everything due the government — good for taxes, good for licenses, and everything that was due the government — the necessary amount to build that market. With that money they built the market ; and in a period I think of ten- years, more or less, the market earned that amount of money, and it was paid into the treasury and the market was public property. The governor then called the burghers- .ogether, took that money out on the public plaza and burned it, and they got a market „or nothing — only the credit of the island. By Mr. Thompson : Q. AVho paid for that market?— A. It was built on the credit of the whole people-. Q. Who paid for it?— A. The people paid for it. Q. That is, the government paid for it?— A. Yes ; the people. Q. The government? — A. Tlie government. Q. The government took the money b.iok in payment for taxes, you say ?— A. Yes, sir. Q. Into tlie treasury ? — A. Yes, sir. DEPRESSION IN LABOR AND BUSINESS. GSi Q. And then burned it up ? — A. Yes, sir. Q. So that the government lost just so much money f — A. Not a bit of it ; it had the market. Q. It lost so much money? — A. No, it didn't. The money had filled its purpose ; it was- only credit. Q. It took it for taxes, didn't it ? — A. It did ; it took its own credit. Q. Suppose it had not taken that money, it would have taken gold or silver for taxes ? — A. Yes, sir. Q. Suppose that that was worth something ? — A. Yes, sir, Q. Supposing it had burned up the gold and silver ? — A. Inasmuch as gold and sil- ver is merchandise, it would have been so much property destroyed if it was burned up. But this money was not merchandise ; it was only the evidence of credit. Q. Was it anything ? — A. It was the evidence of credit — the same as if I took your check ; your check is not money, and yet it is money. By Mr. Rice : Q. Suppose the market cost a million o£ dollars ; and suppose the government had re- quired its taxes to bepaid in gold, and then took a million of dollars in gold and paid for the market, it would have cost a million of dollars to the government, would it not ? — A. Yes, sir. I simply state a fact, that there was money issued which was nothing but credit, and when the credit had filled its mission it could be destroyed. I don't propose to build a market or railroad on gold when we have not got it. All I want is the fifteen thousand millions of dollars in this country to start up all the industries, and we, the people, own every dollar that ig in this country absolutely. By Mr. Thompson : Q. Why did the governor of that island burn that particular money 1 Why not de- stroy an equal amount of the general currency ? — A. It would have done as well if an equal amount of the general currency had been paper like this. I don't say if I had been, governor that I would have destroyed it ; perhaps it was not any more money than, was necessary to do business with ; perhaps it was a mistake to destroy it ; I don't know but it was ; but I only say that with that credit the people built that market. Q. Did the people of that island pay into the general ootfers of the nation the taxes of that island ? — A. I said that during this time the island was in a sort of outside government. Q. Did the citizens pay any taxes to the general government, or was it their own local taxes alone that they paid ? — A. That I don't know. Q. If it had been a general tax on the people of the whole country, didn't the people in the other parts of the country, hundreds of miles away, assist to build that market ? — A. Certainly ; but that was only a small island. Q. Why should the people of Pennsylvania build a market-house in New York in the mode you describe ? — A. I don't propose to do anything of the kind. Q. That would be the effect of it? — A. No; don't misconstrue me. By Mr. Boyd : Q. If your doctrine is correct there would not be anything wrong in the general government building a market-house here ? — A. No ; I have said in this paper here— I will call your attention to it — that the United States should issue, to the city of New York, for instance, all the money that is necessary. to employ the idle people here in useful industry. The first question is: Are there ' any idle people? Haying settled that, now what do we want to build up here as an industry ? Now I will tell you. We have got twenty-six miles of wharves here. General McClellan says it will cost $10,000,000 a mile to put them up permanently. Why should not the Government of the United States issue to this city ,|lO,000,000 a mile to build those docks, which would all bring in a revenue into the city. When a tenth of the sum that is issued is paid into the treasury of the city it can afiford to pay that money over to the United States; and inasmuch as it is a full legal tender, no matter whether it be the money of Pennsylvania or any other State, it makes no difference; and when it is all paid into the trearary of the United States we could afford to destroy it if we hud a plethora of circulating medium. . ,, , ^ . . , Q. Do you call that money ?— A. I call it credit; and I give the same definition to money that Webster, that Plato, that Aristotle and Demosthenes did. Q. There is no difference between money and credit ?— A. Money is public credit. Gold and silver ain't money until you have stamped it and made it money. It is mer- chandise all the time. That is tlie curse of this country, that we take a thing and make money out of it that is merchandise, and it fluctuates in the market according to the value of it. By Mr. Rice : Q. Does the price of property fluctuate . acsoraing to [the amount of monryf— A. Largely so, owing to speculation. '64 DEPEESSION IN LABOR AND BUSINESS. Q. Supposing there are $800,000,000 of money in this country to-day, and supposing two years from now there are |il,600,000,000 of money in the country, would that differ- ence in amount affect the prices of property ? — ^A. It would under our present system, for money always goes into great centers. That is the mischief of it, and I would pre- vent that ; I would regulate that ; I would have the government, from the municipal- ity up to the national government, step in, and where private enterprise fails to keep the wheels of industry in operation the government should step in and keep them going, so that no individual would have an excuse for begging or stealing on the plea that he cannot get work at living wages. Thus, you see, the government would pre- vent these great monopolies in the hands of individuals ; would destroy speculation. Q. You are wandering from the point. Prices would be affected by the difference in the amount of the currency, you say. — A. Yes, sir, likely. Q. And is speculation encouraged by a fluctuation of prices ? — A. Speculation to-day 18 and has been in the great centers of money. That is where it is. Now, when those who control the money market — I don't care who they are — call it in it stops speculation, and the result is that everything shrinks, and as they let it out it inflates. As they lend it to A, B, C, and D it inflates values, because every one is going to bny something for cash and sell it for cash. He has borrowed something and thinks he can get some- thing for nothing. Q. If the government lets it out it will inflate the same as if a capitalist let it ont, ■would it not? — A. No; I beg pardon. What is the government? I am the govern- ment ; I am the sovereign ; you are the sovereign. The people are bigger than Con- gress, yet Congress to-day is bigger than the people, I acknowledge. They do what they please ; but the government should be the people and conserve the people ; and if the people make an industry that costs $10,000 or $10,000,000, and it earns 5 per cent, in dividends, it is earned for the whole people and not for a government nor for an individual. Q. We know all that you have been saying. We want to get information on some- thing else if you will give it to us. Why won't the money that is laid out by the gov- ernment inflate prices the same as money that is laid out by capitalists ? — A. I have made no provision for letting out money on interest. Q. I don't care whether it is laid out on interest or not. — A. I say money should be put in circulation by producing wealth. I make a provision here that when it has filled its purpose of producing that wealth, and that wealth has earned its dividend to the amount of the cost, the money is destroyed. Where is your inflation ? Q. Supposing there is going to be twice as much money next year as this, will the house we own to-day sell for more than it does now ? — A. Under the present system it will ; but under my system — that is, the government doing the work — it prohibits it being inflated to that extent that it would be under the competition system. Q. Supposing the government this year is going to do $100,000,000 worth of work all over the country, and is going to pay for it in the kind of money you speak of, there will be $100,000,000 more currency next year until that is taken in somehow ? — A. Yes, sir. Q. That will affect prices until it is taken in? — A. Yes, sir; individual prices. Q. Now, when it is taken in it will affect them again. Prices will go down when it is taken in, won't they ? — A. Yes, sir. Q. So that you have got prices up when the money is out, and down when it is taken in and destroyed, have you not ? — A. Yes, sir. Q. Does that promote speculation? — A. Yes, sir. I don't propose that you shall create a system for me. My system is to issue $100,000,000 this year and $100,000,000 next year, and one hundred or one thousand millions a year if necessary to develop the country, and when it has earned the amount by those useful industries, call it in and destroy it. Where is the inflation ? You constantly aid your people to work, and you say you cannot have this money unless you go to work. By Mr. Thompson : Q. But you say you would issue $100,000,000 or $1,000,000,000 a year if the people required it ? — A. Yes, sir. Q. And when it is earned you would call it in and destroy it ?— A. Yes, sir. Q. What do you mean by that— when it is earned, call it in and destroy it ?— A. I take the Guernsey market ; it earned that money ; it was paid in, and it was not further needed. Q. The government issues a hundred millions of dollars. I earn $1,000 of it, and I f;et $1,000 from the government, do I ? How will the government call in that money rom me? I have got it and own it.— A. Exactly: it has gone into your hands, but some one has to pay taxes. That property which was created earned a dividend, didn't it 7 Q. You want to call in and destroy my money ? — A. You want to know how it is that ,you are going to have the $1,000 and tlie government have it too ? Q. No ; I have earned $1,000 and have got it in my pocket ; you want to call it in DEPRESSION IN LABOR AND BUSINESS. 65 and destroy it. How will you call it in ?— A. You have got the money and you want to know ho\y the governnieut is going to get it. Now, that market ; just go right back to that ; it paid its dividend into the treasury and not to you : it paid some profit into the treasury. Q. What dividend ? — A. It earned something ; the stalls were rented out for so much a year. Q. That is a particular case you put.— A. It is a general case, and illustrates the whole thing. By Jlr. Rice : Q. You said a few moments ago you would issue a thousand millions of this kind of money, perhaps; did I understand you correctly? — A If necessary. Q. Now, supposing I have got $1,000 of that thousand millions in my pocket, I have given my labor for it. How am I going to get my consideration for it when the gov- ernment calls it in? — A. The government only calls it in through taxes and licenses. Q. There are only about two huudred millions of taxes to be paid in a year. What is going to become of the other eight hundred millions ? — A. Suppose we pay 5 per cent, of the whole money advanced in a year into the treasury. It will earn 5 per cent. That is paid into the treasury, ttnd in twenty years the whole would be paid into the treasury. We could take that one-twentieth as it came into the treasury — as that must necessarily come in straight as a string — we could take that one-twentieth and destroy it, and, at the end of twenty years, the last twentieth svould come in and we could take that and destroy it without violence to any one. Q. But you would have no more money in the country than you have now? — A. I said we would keep thus the industries ia operation ; would be constantly developing the country ; and I have said in my paper that, if it be necessary, we would destroy it and, if it was not, I would not. If we needed that money as a circulating medium among private individuals we would use it right over and over. There would be no objection to it at all. It would be a fair legal tender. It would be full money if it was necessary to do that. Q. Suppose I wanted to go to England and spend my $1,000 there, how much English money do you suppose I would get for it? — A. I think you would get 101 or 102 per cent. I think if our money to-day was a full legal tender for everything, it would be at a premium in the London market. Q. You think if there were one thousand millions of this money out, and only two huudred millions of it to be called in in a year for taxes, that every dollar of it would be worth par in the markets of the world? — A. Exactly so; provided the people that got it gave an equivalent for it. You never heard of a man running down his own property — his own money. Q. Why was not the continental currency valuable ? — A. Because we agreed to pay it in Spanish mill dollars, and we hadn't got them to pay. We never could have got through that war without that money, and the government should have said, " We will take this money for public and private debts and make it a legal tender ; " and such a period of prosperity would have come on this country as we have never experienced I have no doubt of it at all. By Mr. Botd : Q. According to your system you insist that success and speculation follow infla- tion?— A. Under our competitive monetary system it does. Q. Would there be any limit to it ; could you fix any limit ; would not the necessi- ties of this year beget greater necessities next, and would the time ever come when by the consent of the people you could call in the money, as you say, and destroy it? — A. Yes, sir. Q. When ?— A. The people are masters of the situation ; they ought to be in this government, but tbey are not; they are in the hands of a parcel of Shylocks. Q. You have gone on the basis all the time that this property you have spoken of was productive and paying. Now, as long as it would be the other way, as a great deal of the property in this State is non-productive, what would be the condition of things then ?— A. I would make a provision for it. We have our system of individual in- surance now. I would lay by out of the earnings of that property a certain amount, and out of the earnings of all the industries a certain amount as an insurance fund ; so that when the property was burned up or destroyed by the floods or any means, there would be a fund of money to replace it. Q. Suppose it was non-productive and not destroyed— suppose it didn t produce any income, what would you do then?— A. Then there would be so much loss to the whole people absolutely. We would be so much poorer. Q. The creation of that kind of property would not result in any good to any one.— A. Precisely the same as with individuals. Individuals don't build up property expect- ing it will be non-productive, but frequently, under our present system, it is unpro- ductive ; it is a source of taxation instead of income. 5l 66 deprj:ssion in labor and business. Q. When men own that kind of property, coulilthe government afford to take in and destroy these credits, as you term them f — A. We could not make the discrimination j we have got to make as good provision for it as we can. You have supposed a case where we could make no provision ; that it became non-prodnctive by machinery or invention ; that a new invention has taken the place of this other great invention, and we have thrown our money away. That is so much the public's loss. The whole people lose and not the individual, and the whole people are better able to lose than an individual is. The idea I want to convey is that all governments should conserve the public good all the way through — should look out for everybody instead of somebody. The government now conserves the advantage and interest of a few people, to the great injury of business. I want to change it so that whatever good is in the govern- ment should conserve to the good of the whole. By Mr. Rice : Q. In your letter, speaking of the effect of charity, you say : " Charity is temporary and will have to be gone over and over in constantly increasing muniUcence, because where persons find themselves openly degraded they lose faith and ambition in them- selves, and finally come to depend upon tbisprovision for a livelihood." I merely want to ask whether the same result would not in the same degree be caused by that which you speak of here as governmental provision for people ; whether you have considered that at all ? I agree with your statement. — A. I have not the example, because we have not tried what I propose fully. I will give jou the nearest example I can, and see whether it excites to indolence and sloth. Q. Suppose everybody knew that he could get work from the government if he did not get it somewhere else, would that not induce somewhat the same result upon him that would be induced if he knew he could get food from the government if he could not get it from somewhere else? Would it not take away some part of his own inde- pendence, of his own determination to earn a living for himself, and thereby have some- what of the ill effect on him that this provision by charity for him has ? — A. I think it would be quite the reverse. For instance, I am a laboring-man— which is not a fact; I wish it was — I am a laboring-man ; I know that if I go to Chicago I can get work in the government employ if I cannot anywhere else. It may be that I would not get quite as much in the government employ or I might be held to a stricter rffi/ime than I would be outside, for I would have this government employ as strict a regime as the Army. The body of the people are nothing but machines to be operated upon really. I would go there, and do you think it would make me slothful and indolent to change my locality? Why, it brightens up an individual to change his locality and go around among the people and undergo the different influences. Q. Suppose the government saw fit to leave you at work in New York instead of Chicago ; it would be for the goveri ment to si^y whether it would do so, would it not? — A. If I enter into the government service for one week or for one month or for one year, I fill the bill and mjist fill it if 1 am able to. Then when I fill that bill I am a free man ; I have got my pay and I can ^o to Chicago. I am a voter and everything that I ever was and a good deal more. Q. When you spend the money that you get from that work yon have got to go to work somewhere else, have yon not ? — A. Yes, sir ; and he that will not work, neither should he eat. Q. And supposing you were sure you would get more work from the Government when you would get through with that, you might spend the money ? — A. I might spend it for books. The great body of the people, if they were properly treated and lifted up by proper means, not be the ignorant scavengers they are to-day. It is be- cause capital to-day stands on the neck of the great body of the people and has no interest in them, and uses them as so much lumber timber to build up fortunes for themselves. That is the misfortune. You must lift those people up. The great body of the people of New York are fit for nothing except to utilize in building up a better structure. Q. Who will lift them up?— A. The whole people should, under the system of government regime. Q. Where is the money coming from to lift them up ?— A. Make it out of paper. Q. Who is going to make it ? — A. The United States. Q. Is the United States government to tell people where to go and work, and find work for them? — A. If you don't take care of yourself to-day, the public steps in and takes care of you as a pauper or a criminal. That is the fact about it. We have got . either to fill the labor journal or the pauper journal or the criminal journal. Q. Don't you underrate the intelligence of the laboring people of the country when you describe them, as you did a while ago, as being only fit for scavengers? — A. You didn't let me tret through. Q. Are the laborers of any country as intelligent, as well fed, and as well educated as the laboring people of this country ?— A. I don't know ; I never was out of this DEPRESSIOJT IN LABOR AND BUSINESS. 67 Oanutry but, ouce, and that not a great way. I know it is so that if you wantecl fifty thousand soldiers at $14 a month you could get them iu this city to shoot anybody, even to shoot themselves. Can you have anything lower thau that? Q. While yon have not traveled over secfions of other countries, yon are an intelli- gent man and giving your views very much from theory. Do not you know as an his- torical fact, as a statistical fact, that that is true as I put it to you ? — A. Yes, sir. Q. Then, why do you suggest this ridiculous law or experiment where other govern- ments have not introduced it, and where their people would seem to require it very much more than here ? — A. We are a progressing people ; we are a city upon a hill ;: we established the government on a basis of justice one hundred years ago, and at- tempted to inaugurate it, but made a mistake in the Constibntion of the United States. Q. In what particular? — A. I believe yon, honorable gentlemen, are my servants ; that is, you are representatives of the people. You are my servants. We clothe you with power to make and execute the laws. ■ By Mr. Boyd : Q. What did you say ' — A. I said we made a mistake in the Constitution of the United States. You are my servants. We made you ; you represent us ; but we have clothed the agent, the representative, under the power of the Constitution, with authority to make and execute the law, and we have no redress but to put some one else in your place when your term is out, and if that representative yields to temptations (and temptations are brou;;ht there by the thousands — powers are brought to bear there that no one but the Saviour of mankind could withstand) our rights are betrayed. Q. Then you want to amend your individuals and not the Constitution. It is anew classof men you want, and not a new Constitution 1 — A. No; we want to amend the Con- stitution so that neither you, sir, nor the President can make a law. You should only codify the will of the sovereign people into form, and send it back to them for approval or rejection. We should be masters. We want a democratic government and not a bastard republic, as we have got today. Q. Then it is your idea that every law should.be only proposed by the law-making powers or the acting powers and submitted for a vote to the people ? — A. It might be proposed, or the initiative might come from the people. The Representative sent from his district will know the wants and needs of his people better thau any one else, prob- ably. Q. Yes ; he ought to. — A. He would present it and confer with all of them in rela- tion to this proposition. He would codify it into form, and it would go back with all the rest of the laws to the people that are to be atiected by it. If it covers the whole nation, then the whole people of the nation should pass upon it. Q. Our laws can be changed and repealed ; they are not like the laws of the Medes and Persians. — A. Not a bit ; I know that. Q. They are changed by the servants and representatives of the people. — A. Yes, sir ; they ought to be ; they are. Q. That is the theory, the system, and the law of the government. — A. They are in theory the servants of the people ; but it is wonderful— I know of several Representa- tives (I belong down in Maine) that I have helped to send to Congress that went there poor ; they came out comfortably rich, and it could not have come from their salaries. Q. That is not the fault of the government, is it ? — A. No ; it is the fault of the damned system. Q. Of the elective system ?— A. No ; of the government system, of our regime, of our governmental economics. That is what I mean. Q. Then yon think the whole system of this government is wrong f— A. It is wrong in that particular. Slavery controlled the legislation of Congress for forty years. It even controlled the legislation of the free States. And the banks to-day, and the rail- roads, and the great corporations control the legislation of Congress in their interest. The' little finger of Tom Scott is bigger thau the whole Congress of the people. Mr. Boyd. I think you are slandering the Representatives of the people of the country as badly as you did the laboring clasg a moment ago when you said they had a lack of intelligence. That is all from you, sir. You may stand aside, sir. Mr Maddox. I desire to make a further suggestion : We would further add, for yonr favorable consideration, that there should be established a bureau of education and labor equal and co-ordinate with the other executive departments, the duties of which shall be to establish and operate industrial schools, at least one in every State, and out of which create and operate the various national industries needed through- out the country, filling up the rank and file, if necessary, in those industries from the bodv of the people, as we do the Army ; and the r^irtie of such schools and industries shall be as arbitrarily conducted as is the regime of the Army. Thns there might be nroduced for the benefit of the whole people, great depots of products in all the great centers of commerce, which would never fluctuate in price and quantity through the speculation, cornering, and control of a few designing men who have no interest in the 68 DEPRESSION IN LABOR AND BUSINESS. public good ; also, these depots would be preservers of food in case of fainiae or any great destruction of our resources. By Mr. Thompson : Q. Are you engaged in any business ; do you represent the laboring class ?— A^ I have been in the real-estate business in this city, but that has about ruined me. For the last two or three years I have been living on the fag ends. Q. Not engaged in anything ? —A. In nothing which would really produce a liveh- bood. VIEWS OF MRS. S. MYRA HALL. Mrs. S. Myra Hall next requested to be permitted to address the committee. By Mr. Rice : Qnestion. Whom do you represent ? — Answer. I represent the organization of which Mr. Maddox is the president— our common humanity. I am not a representative of the United States, but of the Congress of Humanity, the congress of the world. By Mr. Thompson : Q. That is, you mean yonr operations are not confined to this country f — A. No, sir. I also repreeent twenty millions of slaves belonging to this country that have never been admitted to the elective franchi.se ; that is, women. I will say what I am going to say in a few words. There is a law in creation which is absolute in its operation. This law is progress, and therefore all kingdoms of creation are unfolded according to this law. Mr. Thompson. I wish to Mrs. Hall. One moment, one moment. Mr. Thompson. What I wish to call your attention to is this fact, that this commit- tee is clothed with power only to examine into and inquire as to the labor question, and not the object you represent. Mrs. Hall. I understand. My remarks are perfectly relevant if you will only give me time. In one moment I will be at the point. Now you have scattered my thoughts. However, according to this law of progress, which brings unfoldings to this world, some people have communions and can foretell and prophesy what is going to happen. As one who is privileged with the communion of these unfoldings I want to tell you; as I am privileged with such communions I know that this country can never settle these important questions which are now being presented until it gives the franchise to women ; that is, in other words, until you enact the principles of justice and equity into your Constitution. We boast of being a republic of freedom and liberty. It is not true in practice ; and the next thing in our progress, the next in order, will be giving the franchise to women. It is a crime to the nation, a crime to all intelligent people, not to do so. You can't settle the question of labor for the workmen or of money for the business of the country until this one condition is achieved ; that will be by enact- ing justice and equity into law, into your Constitution, giving the vote to women ; that will settle all the other questions at once. This is the stone under the wheel ; it blocks up everything else, and will until this is done. It is the duty of me to say these words ; it is not optional with me, but the pressure comes upon nie to do this, and I should not be true to myself if I did not say these things. By Mr. Rice : Q. Y'our remedy is that the suffrage should be given to women ? — A. It is the first step. I will tell you why ; if the labor question were settled, or this finance question were settled, both satisfactorily to the people, they would say: " Let this alone ; woman is well enough." Many people say so now : " She is well enough, leave her alone, it is all right," and she would never get it ; therefore we would keep on generating a mis- erable life. By Mr. Thompson : Q. In other words, you think the condition of the country is a favorable one fortigi- tating the woman's rights question ? — A. It is the time, the important time. Q. But do you think that the withholding of the franchise heretofore has produced this state of affairs? — A. I do. Q. And the remedy you propose is the giving the right you speak of ? — A. It is the right thing in the order and progress of this country ; if it is not given, I would not hesitate to prophesy a conflict. Mr. Rice. Well, Mrs. Hall, we will take that as a new suggestion. That is one we have not had as yet. This will be all, thank you. VIEWS OF MR. J. J. O'DONNELL. J. J. O'DoNNELL was the next person to address the committee. By Mr. Rice : Question. Whom do you represent? — Answer. In the first place, my name is J. J. O'Donnell, and in the next nlace. I represent my sovereien self, a citizen of the DEPRESSION IN LABOR AND BUSINESS. 69 United States, who was sorry to hear the financial heresies found in this city and community to-day. The fact is I may say, in the language of Robert Burns, I am here for my " ain horn." I believe with all workingmen in all countries of the Old World that a man's labor is worth precisely what he can get for it. I furthermore believe that no dunce, botch, or impostor, or societies ought to draw their sustenance from the money earned by these horny hands [displaying his hands]. I furthermore may say that I affiliate not with that heresy. I say that that is a financial heresy that de- clares that you, I, or a million like you, could state that a piece of paper with no intrinsic value iu it can be made as valuable as that which has been the recognized standard of value since the very dawn of civilization. I affiliate not with those men or their societies. I trust you will not class me among those who say I respect the action of the men who marched under the blood-stained flag of the commune. I simply lay down my platform, that you may know who and what I am ; and I may say this, tha't I am one of this class of men who were stigmatized by the pedagogue who came from New. Jersey yesterday, who called them I-r-i-s-h-m-e-n, who in Massachusetts were schooled into writing their names in order to vote. In other words, I represent a lot of the citizens of the United States that when you want an army rush to the front ; when you waut a navy, that do the same; and when you want a Barron or a Sheridan, would give you one. This shows who and what I am. But as there is supposed to be an antidote for all poisons there ought to be a cure for all distempers. I believe that for the distemper that afflicts the American people at the present time you have it in your power to administer an infallible cure : that is a word in compliment to our greenback friends. A thing that is conceived in vice, de- veloped in villainy and brought to manhood in the same way, cannot have a good end. If I am not mistaken, the greenback heresy, or something akin to it — tbat says a piece of paper with no intrinsic value ought to be received as a valuable consideration — commenced, I believe, with the usurper and blood-spiller William of Orange, who went to the English and asked them for paper money, saying : " Give me one million and a half pounds with which to crush out the liberties of the people of England and to butcher the people of Glencoe." Since then the paper money has been used every time when it was wanted, or money, or something by which the government would spill tlie people's blood. Those are facts, and, as Burns says, facts are things tbat we '' dinna dare deny." As I say, there ought to be an antidote for every poison. It was admitted here by the pedagogue from New Jersey tliat the people a hundred y.ears ago were better off than they are now. Why ? Simply because the skilled artisan and the skilled mechanic in England was protected by the English artisans ; that is, a botch could not come in to represent a man who served his time at his trade. That was necessary at the time. It is not necessary now. Nevertheless, by a man selling his labor at the highest market, our pedagogue admitted that they were somewhat better then than uow. When the Democratic party of the United States held control free trade was the rule, protection was the exception. You are aware of that, gentlemen. But as soon as another party stepped in, then we have a protective tariff. O, yes, by all means we had to have a protective tariff. Well, as we can't come to a final conclusion unless we have an objective point to drive at, I select one and leave you, gentlemen, to select the other; because what applies in this case applies iu each and every other one, with no exeeption to the rule. If our emigrant ships are free to bring free labor from Europe to manufacture European iron, copper or brass, steel, &c., is it not constitutional and logical, and a very law of common sense, that if you introduce these free laborers you should also introduce the machine that the free laborer made three days before he left Manchester or Liverpool ? The mechanical parts have been made here— if you like, in Massachusetts, where one of you gentlemen comes from — the works of watches are made there ; they are sent to Manchester; the watches are made, and an ample duty is placed on the watches, and the watches are brought over in the same shin the watchmaker sails in. There is something illogical in this institu- tion, and therefore I say in that point we onght to have free trade. I speak as a machinist of somewhere about thirty years' experience. I have seen the birth of the sewing-machine concern ; I thought I saw its death on the 6th of last May was a year. I was mistaken. Like a Briareus it stretches out its thousand arms and says, "I still have the same power." Gentlemen, yon would be astonished to learn that herein this country there could take place what I am abont to tell you. I simply select the sewing-machine, and wish you to fill all the others, as I don't wish to take up your valuable time. Somewhere' about the 10th of Juue, 1846, a bad actor got a patent on that which a niacliinist made for him ; by enterprise he made himself rich. He was known in the world as a bad actor first; be started with a few dollars; when he ended hislife he left to his very large family somewhere about $1.S,000,000 extracted from the working classes of Europe and America, mainly America, made, gentlemen, from the enforcement of a cursed law that should not be recognized in this or any other country that boasts of freedom. I have reference now to the patent law in the wicked instance of extending from year to year that which should never have been given. By Mr. Rice : Q. You are opposed to patent laws ?— A. Yes, sir; totally opposed to patent laws. 70 DEPRESSION IN LABOR AND BUSINESS, Q. Do yoii think they stimulate the inventive genius of the people at all ! — A. Most unquestionably I think they stimulate it. Q. And result in more inventions than otherwise ? — A. Yes, sir ; I do indeed. Bat mark you — I thank you for that — I would have the patent laws used here as they were used in that country where the despotisms of Napoleon are spoken of. When this bad actor went to Paris in Ic.jO, a minister of Napoleon went and says to that bad actor : " You come here with a very valuable discovery ; the teeming millions of France want the beneiit of that discovery; we see what your people have been doing iu England with Mr. Thomas, of Southampton ; we see how you have changed the millions of England ; we wish to take care of the people of France ; you appoint an arbitrator, our government will appoint another, and the two shall select a third, and the con- clusion they come to — Mr. Bad Actor, you must take that sum that these three men of your own choice say you shall take ;" and this enterprising American got some mill- ions of dollars from the French Government. And here, then, sir, here iu fact is the kernel of the nut ; the French Government turns around to the thirty-six millions of theirs and says : "Here we have a splendid invention ; in the first instance we have this, and have put it into your arsenals, and the army of France is clothed with it." That is the first thing they did. Q. You would have the government pay to the patentee the value of the patent, and then have the invention free to all the people ?— A. No, sir ; I would not. I wish to give to Cajsar the things that are Ciesar's. As I said when I started, I want all I can get for my labor. I wish the government to take the thirty-six millions or forty- five millions of the United States and say : " You can purchase a right to make one rifle, one gun, one thousand or a million of the same : but you must pay so much into the exchequer of the United States, as a man who sells whisky, ale, and beer pays into the exchequer of the United States. By Mr. Thompson : Q. Then, would you pay the inventor nothing from auy"eouroe whatever ? — A. Pay him, unquestionably pay him. Q. How ? — A. As Louis Napoleon would have paid him, and paid this had actor. By Mr. EiCE : Q. We have misunderstood you. What did Napoleon do ? — A. When Isaac M. Singer went to Paris in 1858 — he went to sell his patent — the French Government stepped in and said: "This is a very valuable thing; you are an alien." That was an excuse, not a very good one, but excellent for one of the Napoleons. " I want to use that machine ; we know what you have been making in America ; we know you stopped the manu- factories of Southampton, of Dundee, of Manchester, and other places; we will not allow you to get a patent here in France to stop the French people from using it, but you appoint a man, one of your own countrymen, the Government here will appoint another, and let these two men select a third, and what the three conclude you shall receive for the right of your patent in France you shall get." Mr. Singer said: " I am perfectly satisfied." He was a wise, sober man in that case. He says, I am quite will- ing to submit my case to arbitration. They said Mr. Singer was to get some million of dollars. Q. Now, do you approve of that mode? — A. I do, most certainly. Q. How would you have Mr. Singer recompensed in this country — in the same way ? — A. Precisely in the same way. Q. When a man has cliscovered a new invention which is valuable to the community, would you have him receive a sum fixed by arbitration at the outset say, and then leave the invention free to all ?— A. Yes, sir. This applies not in one but in nearly every branch of business. Give us the freedom to sell our labor at the highest market ; let labor be untrammeled — I use a common phrase, but I don't mean it as common — let no " sucker " live on the resources of the intelligent classes or draw from any man the fruit of his labor, no communistic theorist plunder the producers. By Mr. THOMPSON : Q. You believe, then, that the use of machinery, under the laws that govern patents, is detrimental to the working classes ?— A. I believe that all that exists is good, and I believe that all is for the good of man, but then if any engine is detrimental to man let VIS break it up. Let us break up the steamboats of the Atlantic steamship com- panies: let us break up all machinery. Of course I am not in favor of the destruction of all kinds of machines. By Mr. Rice : Q, You do not believe the laboring classes have been injured by the results of the introduction of machinery? — A. No, sir; but I believe the laboring classes have been, injured by the government of which you are a member. Q. Tell us how.— A. I will tell you ; indeed I will. I tell you when the Demooratio party held power, free trade was the law ; but another party coming into power intro- DEPRESSION IN LABOR AND BUSINESS. 71 duced the system of protective tariffs. What was the result ? Why tens of thousands of those who afterwards became skilled artisans and mechanics flooded in from the country districts and settled in cities and towns. Capitalists invested their money, and men became machinists, and the virgin soil of the West was neglected. The gov- ernment protected capital, and tariff was put on anything that you could make here ; it became so that it glutted the market, as far as labor was ooucerued ; and when the government administers a poison, it behooves the government to administer the anti- dote. By Mr. Thompson : Q. What is the antidote? — A. Since the American Government has raised up a brass wall, miles in thickness, around capital, it becomes the absolute duty of the govern- ment to shatter that wall to pieces in various ways. One way is this: the surplus population of our cities can be assisted very much ; the moneys that we need to keep m existence a useless and unconstitutional Army, give them to take men from the ■cities and towns to the western plains. By Mr. Rice: Q. That is, you would help the surplus populations of the cities to go on to the pub- lic lands ? — A. Yes, sir ; j ust as the French Government did after the revolution of 1792. Q. What about the tariff? — A. Shatter it as England did. Q. You believe in free trade ? — A. Free as the wind from heaven, and I believe that the man that has not manhood enough to go out West ought _,to have the proud priv- ilege of starving in the city. By Mr. Thompson : Q. Did you not complain a moment ago that the government permitted machinery to come in from other cities and manufacture fabrics here to the injury of the laborer f A. No, sir ; I did not ; that is the absurd position the government is in. Q. You were repeating the old man eloquent, but so eloquent yon did not under- stand.— A. I did not come here to be eloquent. I am more eloquent with the hammer and file than with the tongue. Q. But I understood you to say so. — A. I showed that as one of the absurdities of the government ; the government allows free emigration ; I showed we had no protect- ive tariff for mechanics, skilled artisans, and mechanics. I said it was absurd to allow free emigration, to fetch the watchmakers and machinist with the machine or watch he made before he left England; it allows them to come here without paying a cent, but the watch or machine must pay a heavy duty. I simply said that to show the absurdity of the thing. I simply come here to give my ideas, not to make a speech. By Mr. Rice : Q. I understood you were opposed to the admission of foreign manufactures free of duty here ?— A. No, sir ; I am in favor of free trade, as free as England recognizes it. The next thing that the American Government ought to do is to fix the patent laws. In the first place, were the American Government to do what the French Govern- ment does, then we would not have this to complain of that I am about to complain of now. Five men form a sewing-machine combination, and Mr. Potter, now presi- dent of the Domestic Company, then president of the Grover & Baker Company, is one. Since 1862 or 1864, 1 don't remember the year, another extension of the patent rights was given to the sewing-machine company. Since that time there has been manufact- ured in the United States 8,000,000 of sewing-machines. I undertook, on one occasion, to make a sewing machine, two or three. 1 had to clear to Canada. Why? Because I dared to use that which the law says I had a right to use, the ordinary principles of mechanics. You are aware, sir, that none of the five principles of mechanics are pat- entable : nevertheless, every one of these principles is patented by the company own- iug the sewing-machines. Now, remember, I had to clear to Canada, unless I chose to allow myself to be put in Ludlow-street jail. Why? On account of infringing patent rights. . „ , ,- . ,, x -j: t Q You admit that the patentee ought to have compensation ?— A. Yes, sir ; but it 1 admit that you are to get a pound of my flesh, it does not follow that you are to take mv life, take my all. ..«»■«■ Q. Your point is, it ought to be different from what it is ?— A. Yes, sir. q. Yet so long as the United States has seen fit to give the patentee a royalty, he ought to be protected in that ?— A. No, sir ; he ought not to be. Q You say he ouo^ht to have a compensation ?— A. He ought to have compensation. Q If he has not had his compensation in a million of dollars at the outset, as Singer had from Napoleon, is it wrong that he shonld have it, say a royalty of a dollar on each machine ?— A. Wait a moment and you will see I am right. Suppose it were conducted here as it is in Saxony ; suppose it were conducted here as it is in Glasgow or Edin- burgh any kind of patent ; or, if you like, as I instanced, in the first place, that of 72 IJEPEESSION IN LABOR AND BUSINESS. France. I go to the government to ask permission to make so many of these siiblimet machines. The government says : "Are you able to pay a certain sum?" I say: "Yes, there is the money." I step into the market, and this is the result ; this would be the result: I would be able to offer to the people of the- United States a sewing-machine similar to that which Mr. MuUer, the president of the company in Saxony, exhibited in the Centennial Exhibition, where it was sold for fifteen German thalers, less than fifteen American dollars ; while on the very same floor of Machinery Hall this com- pany I have spoken of, and other companies protected by tariff here, were selling their machines for $ti5 ; and were Mr. Muller to come here he wonld be put in Ludlow-street jail ; were Mr. Muller to sell his machines here the company would take care that the high tariff would keep him away. By Mr. BoYD : Q. What you are opposed tp is the extension of the patent under royalty to the- inventor? — A. That is what I object to. There is a company that bought a patent two or three years ago; the patent is still in force. It is called the Domestic Com- pany. It was formerly called the Grover &, Baker Company. They come here to the market and advertise in a greenback organ, " No patronage ; co-operation ; buy from the manufacturer and save $10 out of |60." That is, they agree in this : they are free traders when their patent has expired ; but go to their office where the patent has not expired. Go to their office a Saturday and ask them what they think of the Domestic patent. Well, of the Domestic patent I think a great deal. Catch them in their other office on Monday, and ask them what they think of protection. I think nothing of protection at all. Allow me to put another case : Go out to Elizabeth, a company where I worked for years, and was not discharged either, ask them what they think of patent rights; they will tell you they were very sorry the injunction .did not lie against Mr. Stuart, of Thirty-seventh street, New York ; they were very sorry because- Judge Woodruff did not hold that to prevent Mr. Stuart from making their machine. They were very sorry that Judge Woodruff could not grant an injunction holding that the man who could make a barrel just round had a right to have the manufacture of it preserved to him by a trade-mark. Then that company tried to stop that man. I don't know the man. They are lovers of this tariff. When they found the people of Glasgow could beat them at their own game, they went forth to the city of Glasgow and established a large factory at Mile End, and are free traders there ; like, in fact, as the story of Esop says, they blow hot and cold ; they warm their hands with their breath and cool their hands with their breath. By Mr. Thompson : Q. Is there any other matter besides the patent laws that contributes to the depres- sion of business ? — A. Yes, sir ; I believe there are others. Q. Well, what others ? — A. Well, it is for the Government of the United States to ob- serve thoroughly, to enforce thoroughly democratic principles in each and all of their departments, no favoritism, to have no preference for any individual of the United States, and to recognize the Constitution to the very letter and spirit. When you asked me that question, perhaps I did not intend to say what I am about to say; but it is very proper it should be said. The Constitution provides for the equality of all' men, my right to pursue this, that, or the other mode of effort and life, and my right to express my views and say who shall represent me. I believe that the best thing you can do is simply this : the people in November, 1876, recognized free trade when they elected the head and front of free trade ; the capitalists combined one with the other against tlie spirit and letter of the Constitution ; they created another branch^ I was going to call it a legislative branch. It is not a legislative branch ; it is not recognized in the Constitution. The result was that the first wish of the people was set aside, and a fraud put into his place. I came not here to make a speech ; but, as you asked that question, the reason why I say a fraud was put in his place is that I came here as an advocate of free trade, and his platform was free trade. The poison can be eliminated by simply saying that all errors can be corrected, and the laws passed by the Congress of the United States are not like the laws of the Medes and Persians. Simply say we can correct an error, we can meet the complaints of the people, and if an error has been done we can rectify it, and will. By Mr. Thompson : Q. How would you rectify it ?— A. I am telling how I wonld rectify it, and if I can't give you a point, simply say again I am a fraud. I believe that here' yesterday by the- pedagogue of New Jersey, the yeomen were spoken of. The yeomen of England were imposed upon by a man who was pat in office ; his name was Cromwell. Tlie English! people did -what the American people should do ; they read up the law and they found that the heir to the throne was in France, and they said this man is a usurper. They turned to the constitution and corrected the error, what the American people ought to do through their representatives. You are aware of that. They said we have been irt error in allowing this usurper to be over us, and they did correct the error. DEPRESSION IN LABOR AND BUSINESS. 73 By Mr, Eice : Q. The representatives made the error in the first place by putting in the wrong^ man t — A. Yes, sir ; but, if I mistake not, the maker of the vessel can break the vessel ; the potter makes the vessel for good or evil, and he that creates can destroy. Q. Would you have them now do the other thing ? — A. Yes, sir ; consistency is & j ewel. By Mr. Thompson : Q. Is not that in process now ? — A. I think it is in process, very slowly ; and per- haps it is like the mills of the gods. By Mr. Eice : Q. I would like to ask you a few questions on points that have been presented here by others. You think there are a great many people ont of work now ? — A. I think about a million and a half idle men ; that is, men and women, who on Monday morning can say, " God knows, I don't know where to go and earn my dinner." Q. What do you think is the cause of this want of employment ? — A. There are various causes, but the principal one is encouraging monopolies. I am with my com- munistic friends on that. You can assist us. You can aid ns. Now, suppose for a moment that I spent about twenty years in this country trying to assist myself and help others, and I can't get work ; I have paid the taxes directly and indirectly; I have been of some little benefit to these people in the city of Brooklyn — I think I have, and some say I have — I find I can't get work as a machinist ; still my children are growing up ; I have got to go and ask a position of the politician ; often his influence can't get me a position ; I turn then to this government; I say, gentlemen, yon have given millions and hundreds of millions, in the shape of money and property, to men who had not the first mark in their pockets ; in fact who had to borrow the money to get their act through Congresp ; you put them in a higher position than the dukes of Germany ever held ; what is good for one should uot be bad for the other ; give me assistance. Mark me, although I am against this fraudulent money, as there is a gem in the head of the toad, there is a gem in this. Let the government assist us as they have assisted steamboat companies, as the government subsidizes day after day ; and is it not subsidizing every day the Pacific and other railroads? I say, then, give us means to get west to settle there, and in a few years the peasantry of America will be like the peasantry of France, the happiest and most prosperous people on the face of God's green earth. France has less large estates than what are here. What is the result ? These people have the land divided and subdivided among themselves, and this is the result. These people were able to step in with their means and wipe off the German debt in a few years. The French people had money, but they had also muscular brawn ; hence their success. Q. Then you would have the government aid the poor to go to the western lands? — A. Simply in this extraordinary case. Q. Do you believe in co-operation, such as has been advanced here ? — A. I do in- deed ; but if I recognize co-operation I don't recognize coercion. Co-operation is often used as a misnomer for coercion ; but, as Mr. Hewitt put it yesterday, say, if a, man wants tp work fifteen and another is for only eight hours, let each work according tinds of a large number of estates have been kept longer than they should be. Q. Does that show the number ?— A. Yes, sir, it does. Q. You make the point that by the aid of the bankruptcy court bankruptcy assets are kept too long lu hand, and used by rings ?— A. I do. I mean to say they are kept unnecessarily long, and injurious to the interest of the creditor class. Q. Any fact that will bear upon that that you desire to state we wiU be glad to hear. — A. I say that I have a large amount of record evidence which I would like to put in. Q. Suppose you make an abstract of it, and hand it to us in support of that point. We will be glad to take any abstract evidence you have, and consider it in connection with that point. — A. You must remeimber I am not paid for this work. Q. We do not desire to go into a long matter of personal interest unless it is of pub- lic interest. — A. It is of public interest. Q. You have made the point, and we would be very glad to have an abstract of any facts you have in your possession to substantiate that point ; but it is not necessary to take up our time, when so many gentlemen are waiting to be heard, to go into the details of those facts further than necessary.— A. I will give you the details of those. I will give you the title of the suit, with the names of the defendants, and I will also refer you to a large amount of documentary evidence bearing upon the subject. If the committee is not prepared to hear any more, I am prepared to stop. The Chairman. I think you have made the point very clear, but I would like to ask you a question. Have you stated in this room that any member of this committee is interested in a bankruptcy-ring bank ? Jlr. Hastings. I have not, sir. I did say, though, sir, that I was under the impres- sion that the chairman of this committee was interested sufficiently in the advance- ment of the interest of foreign capital as to be somewhat hostile to my introducing proof. The Chairman. Upon what ground did you state the chairman of this committee was interested in the advancement of foreign capital ? Mr. Hastings. Because you are connected with various foreign importers and other matters. The Chairman. In what way connected with foreign importers ? Mr. Hastings. Do you not sometimes import foreign goods? The Chairman. We do not. Mr. Hastings. Then you are not interested in any way in the manufacture of foreign goods ? The Chairman. Not at all. I am not au importer of goods. As you have made an imputation here — it is stated that you publicly said on Saturday last in this room that the Chairman was not willing to hear you because the Chairman was interested in a bankruptcy-ring bank — let me say now for the satisfaction of the public that I am not a shareholder in any bank of any kind whatever. Mr. Hastings. I am glad to hear it, sir. I deny that I said you were interested in stock or bankruptcy stock. Mr. Mullen. You stated so to me. VIEWS OF MR. MORRIS COHEN. Morris Cohen appeared and made the following statement : By the Chairman : Question. Whom do you represent ?— Answer. I represent the Socialistic Labor party of Brooklyn. I want to state individually how I am depressed in business. Q.' What is your business ? — A. I am a manufacturer of cloaks and suits. Q. State your case, then.— A. I employ when I have business 150 girls, but I don't employ any now ; I have no work. The average money that I have earned in the year is 4i a week. Now, gentlemen, I don't think any man can live on that and pay his expenses and rent. I am a small manufacturer, but I fear that the large manufact- urer is crowding me out, and thousands of others like me. Therefore I appear before you, and I think it is the right of our servants to see to it that they stop this fraudu- lent arrangement of monopoly to crowd out a small man that is trying to get along in this country. I think there is some screw loose. I am not a statesman, and I don't intend to say to you what to do or how to do it ; but Mr. Robb will tell you what we propose to do in regard to our business depression and labor depression. 84 DEPRESSION IN LABOR AND BUSINESS. VIEWS OF MR. ALEXANDER R. EOBB. Albxandbk E. Robb appeared and made tbe following statement : By the Chairman : Question. What ip yonr business ? — Answer. Plumber. Q. Are you a working plumber ?— A. I am. I have written down my views, so that they may not be garbled, and will not take five minutes to read them. I say to this committee : " If there is one fact that stands prominently forth in the appointment of the com- mittee which I have the honor to address, it is this : " The sufferings and wrongs that the laboring population are subject to have become so apparent and so grievous in their nature that Congress in its wisdom has appointed you, gentlemen, as a board of inquiry to discover, if possible, the cause of so much crime, so much prostitution, and so much destitution among the laboring people of this land of overproduction and underconsumption. "We have, on one hand, untold resources of wealth, and yet with a population spread- ing over half a continent, and that population no larger than what the State of New York could support under a scientific system of farming, one-fifteenth of the working population are tramps, another fifteenth are criminals, prostitutes, and paupers, and another fifteenth finds spasmodic employment for about one-third of the time ; and yet another fifteenth are not more than half of their time employed, and still another fifteenth not more than two-thirds of their time employed, while there is not more than one-fifteenth of the entire working population that are employed for their full time. " This honorable committee will readily perceive that with such a large population unemployed a very important cause of your apparent overproduction is accounted for. Were those six-fifteenths of our hardy sons of toil fully employed and properly paid for their labor, there would not be one bale of goods in any of our large marts of com- merce. So much for overproduction. " Having briefly stated a few facts that are no doubt better known to this honorable committee than they are to the obscure and humble individual who has the honor to address you, but as you are more particularly to find out the remedy — which I would to God could be made as apparent and as undoubted to your senses as the terrible na- ture of the disease has become — why are the people suffering for want of food, for want of clothes, for want of shelter ? Why is disease the rule and not the exception in the human family ? Why are bodies of the most refined and educated but the common sewers of disease engendered in the brothel ? There is but no answer. We have made the laws of men our standard and guide, and dethroned the laws of God, and we must come back to keep those laws of God before righteousness, justice, and truth will prevail. " Men do not gather grapes from thorns, or figs from thistles. By their fruits ye shall judge your rulers. What are those fruits? Frauds, perjury, and crime in high as well as in low places. The judges of your Supreme Court always decide political cases according to their partisan bias. Witness the Dred Scott case and the Hayes-Tilden Presidential contest, both cases undoubtedly decided on partisan principles and against the weight of evidence. "Where, then, will the people look for justice and relief? It is in vain for Congress to legislate while the wolf is left at the door of every man who lives by toil. You can- not put out a conflagration by pouring boiling oil over it ; no more can you relieve the distresses of the poor if you permit an interest-bearing money to exist. The one is just as easily accomplished as the other, no more and no less. "Now, you gentlemen, honorable members of Congress, are criminal, if not in intent at least in negligence, if you do not discover some means whereby the whole people of the land can be fully, honorably and remuneratively employed. Do not take the way I propose, the way God has proposed, if you can find a better ; but know this : God will hold you accountable for every.hungry stomach, for every naked back, for every un- housed tramp found in this land flowing with milk and honey. The shriek and wail of the prostitute will sound harsh in your ears when you will be told that with just laws prostitution would have been impossible. "Again, gentlemen, there are certain things in nature that all men have an inalien- able right in, no one man more than another, and those are air, light, water, and last (though not by any means least), land. I am aware that this is a bold assertion, but it is according to Divine law. Lev. xxv, 23 : ' The laud shall not be sold forever ; ' and why ? What is the reason God gave this command ? He says : ' Because it is mine,' No man has a right to give a title-deed away for that which the God of nature has bestowed for the benefit of all." By Mr. Eice : Q. How would a man have land to live on if he could not have a title to it ? — A, DEPRESSION IN LABOR AND BUSINESS. 85 That could be very easily regulated. The case is so very simple it is hardly worth while answering the question. Q. Suppose you wanted the house I live in, and I want it too ; which is goinK to have it ?— A. Could you live in two houses ? ' a o Q. I want the house I am living in, and yoa want the same house : how would you decide that?— A. I will explain that. If I want your house— under a proper system there is no taxation on your house until another would want it— you would be noti- fied by the register that your house has now become taxable, and as you have the prior nght to your improvements on the soil that you have made, you have the ri^ht to re- main there and pay the taxes that this party offers for the public good. There is no injustice practiced upon you by it. If you say you don't want to pay any taxes, this party is to pay in the value of your property. Q. I have got to pay whatever any one else offers for it?— A. If your property becomes valuable as a business site, of course all sites must belong to the people, the value of the property must belong to those who create the value. There is no value to a lot of ground in the prairies. If there is any value to the ground in the city it is because there are millions of people living within thirty miles of it. This is a system of slavery that the people are subject to by the ownership of the soil. Q. Take the question that I asked. My house is in a country town. I have a farm, I will suppose. Some one else wauts that. Your idea is that if that person should offer to pay a certain sum of taxes into the common treasury I have got to pay more than that or give up the farm ?— A. No ; you would have to pay the same. I don't think any injustice would be practiced upon you or any one else. You know in Phila- delphia the other day there were six hundred houses foreclosed. Q. If some one comes and offers to pay certain taxes for the Astor House, the man that owns it has got to leave it or pay it ? — A. We suppose the ground is free, and the man only owns the house aud the improvements, and the party that is giving the taxes gives it for the site and not for the bricks and mortar. That point could be regulated, but you have not got that in yet. It will be time enough to talk about how you are going to do it when you get at it. It is the doctrine of that Bible that our ministers have dishonored. They have taken God out of the Bible and are now preaching an emasculated religion. Such wolves in sheep's clothing raised a howl because three letters, G-o-d, are not placed in the Constitution, when the Spirit of God is manifest throughout the whole document. Title deeds in land are as great a crime as is a title deed in human beings. If you can save society and save title deeds too, there will be no objection to your plan. But with all your wisdom, gentlemen, you will fail; you cannot cultivate an evil tree and expect good fruit. If you sow the wind you will reap the whirlwind. Again, gentlemen, whom do we cheat if we place every man upon an equality before the law? Is it our fault that wrong is the rule aud not the exception ? Is it our fault that men have cultivated selfishness and rolled it like a sweet morsel under the tongue ? Are we to blame, who have no hand in making your laws, for the state of affairs that has made it necessary for this committee to sit and take testimony on the condition of the laboring class? We have no hand in it. It is your system that has filled the city with prostitution. It is the system that has carried the people along in a wrong career, and we must arrest this system ere we are expected to do anything with it. Within a stone's throw of where this honorable committee sits a lot of ground cannot be purchased for less than $1,000,000. Now, the question naturally arises, why is this the case when a lot in the prairie is worth only ten cents ? Simply because there are one million of people living within a radius of twelve miles of the one, and there may not be a single inhabitant within a hundred miles of the other. To save time I will dogmatically state that in all cases where land is worth more than its pristine value the people are virtually owned, the land only nominally. This is another question for you, gentlemen, to settle. Before it is too late save thepebple's patrimony and sell no more land. Take back your unrighteous grants to greedy railroad monopolists. Let the government own the railroads, and give the people free traveling. Q. Do you mean that people are to be allowed to travel free on the railroads ? — A. Yes, sir. Q. Who is to pay for that ? — A. It is to be paid by taxes. We are taxed to support a standing army, and we could as well be taxed to bring our wheat to market. Q. Traveling' would largely increase under that system, would it not ? — A. It would not unreasonably increase. Q. Free traveling is a novel idea. — A. You smile ; you smile ; but there is wisdom in the assertion ; there is morality in it ; there is justice in it, and -that is more than you can find in any part of your present unrighteous system. To carry out free traveling our standing arm^ must give place to a rotating, self- sustaining army ; but to be properly understood it will be necessary to go back to the school days. Children will attend school and graduate at the age of fifteen. They will then spend five years learning some useful trade or profession, and will attend night-school for six months of each year and graduate at a grade fit for the highest 86 DEPRESSION IN LABOR AND BUSINESS. collegiate education. They will then give two or three years, as the needs of the country demand, to the service of their country, during which time they will receive a military education, filling every grade of the military profession without changing their social standing when off duty. A certain portion of each day will be devoted to the highest branches known to science ; another portion of the day they will work at the trades they have been taught, and by a well-regulated system of detail or relays every young man, without exception, will work on the public conveyances and the mineral lands of the government. But in no case while under military training shall any man perform more than four hours' labor per day. The mineral wealth of the land must belong to the whole people. Can you show me, gentlemen of the committee, where injustice would be inflicted on any person if such was the case ? The labor of production and nothing more to be the value of the minerals. Do you think, gentlemen, you would have any MoUie Maguires if that law of God was obeyed ? Money must be furnished by the government to any and all persons on good security without interest — when every young man or woman as they enter into the real busi- ness of life, at the proper mature age, will be furnished sufficient money by the gov- ernment to pay for their homestead, and to be returned to the government only in in- stallments, to be mutually agreed upon. What mankind really needs is a retiring money, and not an increasing money. We want a money that will forever prevent a panic. Interest-bearing money always pro- duces panics, because money is not like corn or potatoes; it will not grow ; it only steals labor. But if you must have an interest-bearing money, let the government retain the power and not delegate such power to bankers, thus enslaving the govern- ment as well as the people. When our knavish Secretary of the Treasury bowed the knee to Baal and asked the Jew Belmont and his European coadjutors if it would be safe to resume specie payments, he insulted every true American citizen. The bankers said: "We won't ask for gold, but on the contrary will be ready to supply you one hundred millions in case of an emergency. We only want the evidence of debt so that we can live oflf the labor of your people. All we want is to bind you with a gold chain, and make you our servile slaves." Politics, or rather the abase of politics, is another cause of the degradation of the working people. The young of our land are demoralized by looking to politics for a living instead of honest labor, and one reason is, your political positions are too well paid; another is, labor is very uncertain. There ought not to be one political position better paid than the pay given to any honest laborer or mechanic. To make the laborer equal with the capitalist the laborer or mechanic ought to re- ceive (if you will retain interest) the value of seven days' labor for every hundred he works, said money to be assessed upon those who have lived on the increase of money. You have inflated your gold to such an extent that you have ten or twenty promises to pay when you have only one to pay with. And this is a gold-bearing instrument, and the only way the owners can get their money is by foreclosing on your property and selling, not only the one-third they have held in the property, but also the two-thirds the parties had in the property themselves. Now, there are several ways of remedy- ing these difficulties. You can do it by the government employing every man that is unemployed — that is one way of doing it. There is too much money taken from the people by interest. I will just state one case which is sufficient to show how it does through the whole. For instance: The heinous crime of interest will be more apparent to you if you just take the single case of Vanderbilt and see the number of slaves he owns through the said power of interest or increase. One hundred thousand dollars is the labor of 200 men ; $1,000,000 is the labor of 2,000 men ; Ij7,000,000 is the labor of 14,000 men— at $500 per year, which is nearly double what men have made of late. And that is just Mr. Vanderbilt's quota of the wage slaves of this countrj'. Call it justice if you dare. That is a power we demand of you to curtail, not by taking his money away — let the thief keep what he has got— but by issuing face money to those 14,000 slaves, and in that propurtion throughout the whole country, so that there would not be one wage slave in the whole land. He is allowed to accumulate this wealth. I know it is not possible to make a la w against men accumulating wealth. Under your system it would be unwise to do it. But we should have a law made that it would be impossible for a person to have such an enormous amount of money and to control such an amount of labor. Q, Where would you fix the limit ? — A. I would not fix it ; I would have a law passed that would make it impossible. If you withdraw interest from money, you would make it impossible for Mr. Vanderbilt to live on the labor of 14,000 people. He can go and live in Europe or anywhere, and yet we have got to hand up to him year after year $7,000,000, just the interest of his reputed wealth, which is said to be $100,000,000; I don't know whether it is more or less than that. That shows the injustice of the sys- tem. Aud that is one point your honorable body have to take into consideration. Some means of redress must be taken by the reduction of interest. DEPRESSION IN LABOR AND BUSINESS. 87 There is another thing we want your honorable body to recommend, that no more grants of land and no more public money be given to any of those railroad corpora- tions. It would be better wisdom for you to appropriate one hundred millions to the working poor. It is not unjust for us to ask some of the money that we have lielped to create. It is not unjust for us to ask that we be taken out of those cells of tene- ment houses and placed in the pure air of the prairies, and we would wish you to rec- ommend a plan whereby we could get territory large enough to carry on a State on the benevolent principle we propose. We will return you the money. We are able to work. There is no money made without labor, and if laboring people go into that territory we will pay you every cent ; and more than that, we wiU relieve your cities of a great many of the poorer class who are not able to find employment. It will be- come a kind of a house of refuge. This ought to be conducted on the co-operative plan, so that every trade or branch of industry in the State could become a govern- ment within itself, and the living of every man in the territory would be sure from the day of his birth to the day of his death. There would be no occasion for alms- houses or jails. You would not need a standing army to keep the republic in subjec- tion ; for all would live under the law of love. We have the Bible to support us in this. You take Levitical law, which says : " Thou shalt take no usury." Q. Won't you spare us those authorities. The committee are supposed to read their Bibles. Please give us facts. — A. This we bring before you for the purpose of seeing if you could not save some of the land for an inheritance for the people. There are several ways wWch will be recommended to you, and it will be for you to iind out and recommend to Congress which is the best way. Q. Are you aware that any citizen may now go and enter 160 acres of land without charge, by simply settling on it? — A. Yes, sir, I am aware of that; but I am aware that the same state of affairs would result under the same plan. One hundred years ago we had none of this trouble. The same thing would result. We want to prevent a recurrence of it under the law of equity, so that equal justice can be meted out to all. I can have no equal justice from a man like Vanderbilt that controls all that labor. There is to be given to him every year the labor of 14,000 men to support him, at |500 a year each. It is a startling thing, but it is so. Q. How many men do you employ ? — A. I am employing about three. Q. Is it an advantage to them that you find work for them to do, and emj^loy them ? — A. No ; not a bit. Q. Would it be any advantage to the men who are ont of employment in the city of New York if some one would furnish them employment ? — A. No ; it would not. Q. There is no need of seeking any means to employ these unemployed laborers, ac- cording to your idea ? — A. Understand me. I thought you meant for common advantage. AH this would be for a temporary advantage, but for a permanent advantage it would not amount to anything. We want permanent relief. Temporary relief would be of no advantage. There is a system of cooperation which I will hand to your body to read, which, I believe, after a careful study of the workingman's case for thirty or forty years — I have brooded over it for a long time, and have come from one idea to another, and with me it is simply a matter of doing justice to men. Q. Are you sure you have reached a practical working system now ? — A. No ; and I believe we will have to go on from step to step ; but I believe we have reached some- thing that is nearer to it than the system under which we are now living. I further say: While the present system lasts, temporary relief should be given by the govern- ment by employing every idle hand at a good salary, making every laborer a liberal consumer. Then you would soon get over your nightmare of overproduction. Gentlemen of the committee, after you have tried every method and exhausted every device for the elevation of the working classes on the principle of employer and employ^, on the principle of rich and poor, on the principle that one part of the human family is "saddled and bridled," and the other part "booted and spurred" to ride the weak and oppressed laborer, you will always fail. No system which cannot lift the peor to a higher plane will ever be of any permanent advantage, and that can only be done through co-operative labor, and I herewith present to this honorable committee a printed document setting forth one method of co-operation. "ConstiftUion of the Worki-nrjmen's Industrial Association. "The working men and women in solemn convention assembled do hereby resolve to use their utmost endeavors to strengthen the hands of the weak and oppressed, to -mitigate and relieve the hardships of the poor but honest toiler. We recognize the cause of suffering, which is the lot of nearly all who live by labor, and often of those who venture to trade in merchandise, to be in the power which the law bestows on those who control the cash capital, which says to the merchant, ' You must cease to sell ; ' to the mill-owner, ' Your spindles must cease to ruu ; ' to the mechanic and laborer, ' You must rot in your cells until I reap my ten years' harvest.' "At each decade the capitalist is strengthened, his coffers are filled four-fold, while 88 DEPEESSION IN LABOR AND BUSINESS. the men wlio liave created everything in the shape of wealth are reduced to poverty, depending on soup-kitchens for the means to sustain life. To meet the greedy and unrighteous capitalist, to pluck from him the power that wealth gives, we purpose the following plan as a constitution for the conducting of all branches of industry, whether performed by men or women : "Article I. Co-operation shall be the basis and the only legal manner for perform- ing manual labor. Every member of the particular branch of industry to which he or she belongs shall enjoy equal privileges, filling in rotation all the different grades appertaining to their business. "Art. II. Each branch of industry shall have for executive officers a president, vice-president, financial and corresponding secretaries, and treasurer, to be elected annually by the members of the association. The above-named officers shall superjn- tend the banking department. They shall at the close of each day's business certify to the correct amount of cash-balance in the bank. The above-named officers shall also perform the duties of their respective offices at all meetings of the association, said meetings to be held at least monthly. " Art. III. Each association shall have its own bank, where all money collected will be deposited, the members drawing their remuneration by check, all balances to be credited to the individual member, all profits to be divided jho rala by the number of members at the end of every quarter, and the amount thus ascertained to be credited to each individual member. At the commencement of every day's business the execu- tive officers will furnish the banking department a sum sufficient for the day's trans- actions. "Art. IV. Membership in all industrial associations to bo attained as follows : The sons of members, having reached the age of fifteen years, by right, without a vote. Sons of non-members to be received by a two-third vote. The term of apprentice- ship shall be five years. Members traveling shall be admitted by a card and a njajority vote. " Art. V. When the period of apprenticeship is past the member shall be known as a master- workrnan, and shall perform labor in that capacity till the age, say, of thirty- five or forty. The remuneration for master- workmen shall be one-third more than will maintain a wife and family in comfortable circumstances. When a master- workman has reached the age fixed by the association he shall cease to do actual labor, and act as overseer or superintendent. Duties of superintendent sh.ill be to instruct all as to the best methods of doing work, provide material, and render a correct account of all labor to the clerical department. Superintendents shall be provided with a horse, wagon, and driver, tlie expense of which to be charged jjco rata on all work under his charge. The hours of labor will not exceed eight hours. The remuneration for super- intendent shall be one-third more than a master-workman. "Art. VI. All earnings of apprentices shall be placed in a separate and distinct fund; to be called the sinking fund (or widows and orphans' fund). The money so invested shall be for the benefit of any who are unfitted for labor by means of sick- ness. They shall be entitled to draw from the fund an amount equal to what they would be entitled to draw from the general fund. This sinking fund shall also be held for the benefit of the widows and orphans of deceased brothers, who shall be entitled to draw an amount sufficient to support them in the same circumstances as if the hus- band or father was living. "Art. VII. Each industrial association shall provide lectures for its members, on scientific and other subjects which men accustomed to labor are unable to investigate. Amusements, such as concerts, theatrical performances, and sociables, will also be pro- with bowling-alleys and biUiard-tables, free to members, young and old. There shall also be one room adapted for sociables, lectures, &o. No intoxicating liquors to be permitted under any circumstances on the premises. "Art. IX. As it is important that all men and women should retire from active service at the age of, say, 50 to 55 (retaining his or her pro rata share of the profits until death), the compensation will be so regulated that each member with ordinary health will be able to retire at that age. "Art. X. The officers of any association may be removed for neglecting or refusing to perform their duty, by a two-third vote of the association. "Art. XI. As the paramount object of co-operative associations is to secure a living for all men and women the oHicers of the different industrial associations will form a council, so that all men and women can be placed in whatever branch of industry needs" most lielp, or where they are best fitted. Every person must be engaged at some useful employment, and the hours of labor will be so arranged that all will be employed." In recommeudiug the above plan as a basis for the government of all branches of the industrial classes, we would state that it does not in any manner interfere with the DEPKESSION IN LABOR AND BUSINESS. 89 ■wholesale or retail dealer. Goods can be bought and sold in the same manner as at present, with this difi'erenoe : that the wholesale dealer will have to depend upon his own energy, and not upon the cutting down of wages to starvation prices to increase his business. Neither does it interfere with any person, after he has learned his trade, to go into the business of buying and selling. The above system simply secures to every man and woman, who is willing to work, a sure living for life. The family rela- tion will not be interfered with except in the matter of crowding families into those hot-beds of demoralization, tenement-houses, a sad product of the Christian civilization of the nineteenth century. And to carry out this plan of co-operation, or one something similar, I would re- spectfully ask you to give the people one hundred millions of dollars without intent to relieve the poor of the cities, towns, and villages. As we have created all the wealth you can boast of, you would only be giving us our own. After all it would only cost you the price of the printing; it would absolute'ly cost you nothing. We would also ask yon to recommend to the government the desirability of giving us territory large enough to put the grand scheme in operation. We ask no title-deed for the land, and we will give none. We will dispose of the land in the following order : When a man or woman selects his or her site, he or she will call upon the surveyor, who will take note of the land as nature left it. The surveyor will then register in the register's office the condition of said land and the amount of labor required to make the land iit for occupancy, which will be credited to the occupant,- and when the house with surroundings, fence, &c., is furnished, the occupant will then furnish a correct account of the cost, which will also be credited to him in the register-books. We have now got a starting-point without title-deeds. Taxation as a rule will be direct. Houses or lands will only be taxed when more than one person wants the same site, and in the following order, viz : A person desiring an occupied site will state in writing to the register what tax he is willing to pay. The register will then notify the occupant that his site is now become taxable, and if he is willing to pay the same tax he remains and cannot be again disturbed for another year. But should he elect to leave he will have one year to build a home, which he can do with the money he received for his improvements, which will in all cases be the same as the original cost, never more and never less. ADDITIONAL STATEMENT BY ME. MORRIS COHEN. Morris Cohex made the following additional statement : I would like to make a statement here. The Socialistic party is a business party. They have got nothing to do with the God and Jesus Christ business. We are asking our servants to do right by us. Our plans are all practical plans. The Chairman. Do you belong to the same organization as Mr. Eobb? Mr. Cohen. Yes, sir; but his theory is an individual theory. Everyman may think for himself ; but let it be uuderstood'that our party is a practical party. We are pro- ducers and not destroyers. VIEWS OF MR. HERBERT GRAHAM. E. Herbert Graham appeared and made the folio ving statement: By the Chairman : Question. Whom do you represent ?— Answer. I am secretary of the Workingmen's Union of the city of New York. . ^ . Q. How large a body is that ?— A. It is a delegated body ; it numbers from sixty to seventy-five members. Q. They are delegates from other bodies?— A. Yes, sir. ,„ ■ t u j. Q. How large is the organization from which they are delegated ?— A. 1 could not tell you that, because in the present state of labor the organization m the city of New York has dwindled down one-half. I suppose the organized labor of the city of New York to-day does not cover over twenty thousand men ; it did formerly cover forty-five thousand. , . .^i « a tvt ■ t a i. Q. Has your body been represented before this committee ?— A. No, sir ; i do not represent my organization here now. . . ,, . .^, ^ Q. You are here in your own individual capacity ?— A. Yes, sir; the same as several other gentlemen I have seen here. ,.,„., ^ j.^ ■, Q Then we ask you to confine yourself to the subject of the causes of the depres- sion of labor, and the remedies you have to suggest, and to not give us a disquisition on general abstract principles; but tell us the causes succinctly, and give us the reme- dies succinctly.— A. The gentlemen that have been here— they advanced hobbies of their own ; I have my own hobby to advance. 90 DEPRESSION IN LABOR AND BUSINESS. Q. What are the causes of the general depression, and what remedies have you to give? — A. I speak in behalf of a large majority of workingmen in New York. My connection has been so close with them that I believe I have got a more thorough idea as to what they think about the government than a great many that have been heard here. I desire, in behalf of a large majority of the workingmen of New York (and my connection with them has been close enough to admit of my speaking for them with much better grace than the purchasable speakers to whom you have been listening), to say that, while they are ready to indorse any method of government that will better their condition, yet it is a question of supply and demand that con- trols the labor of the country, and to you they look for such a recommendation, sach fostering of enterprises that capital may be encouraged to embark in them, and at the same time they are opposed to the immense gifts given to large corporations, whereby some of our most obscure fellow-citizens have risen to affluence without giving any equivalent in return. I with many others believe the government that governs best governs least, and I thoroughly understand that all the laws of Congress cannot compel me to hire a man without I need him ; but at the same time I believe in the greatest good for the greatest number, and when I watch the immense amount of laws in the interest of the few, I think it time to remonstrate and ask for a change. Now, perhaps, after listening to the desires of those you have already heard, you think, with others, that the wants of the workiugmau are numerous, and may come to the conclusion that uuiler our form of government you can do so little for him without infringing upon the free exercise of his rights as a citizen of this great republic, that it is best to let bad enough alone and recommend nothing. I desire to change your views on that subject by telling yon, gentlemen, that we fully understand our situation, and we are bearing up under it with that patience for which the American workman is noted. We do not desire the refugee outlaws of the Old World to come here and attempt to upset our government. We are content with it as it is ; but we claim that its administrators, if I may use the term, are false to their charges and recreant to their trusts ; that they aid the few to the detriment of the many, and that in the eyes of our law-makers the moneyed man or capitalist is by long odds ahead of the laborer. I do not intend to deuoance capital where it is honestly accumulated, but where by stock-jobbing acts of Congress the land of the people is voted away to aid Mr. This or That in his great railroad scheme, it is in the interest of the mechanic and merchant for Congress to interfere and prevent the combinations that are made by the railroad kings to raise the cost of transporta- tion of coal and other necessary commodities, audi think they have the power, or could easily get it from an outraged people. Q. You know that there was a measure at the last session of Congress, which is still before it, intending to produce the result to'which you have referred. Congress is already undertaking, as well as it cau,to deal with that question ? — A. -There is a spirit of unrest pervading the community, caused by continued idleness, and yet I see that little aid can be gained from governmental interference while a general distrust pervades the people toward their law-makers. They look upon them as but the tools of this or that ring, as evidenced by their acts in the past, and until they amend those acts the people will not trust them. This is the feeling in regard to municipal. State, and national govern- ments. They have been promised better times by this and that candidate upon his election until they have about got to the end of their patience. Q. Why not get some honest candidates of your own and elect them ? — A. I hope we will. I know the fault lies ou our own shoulders. Yet you can aid the mechanic if you can effect the passage of a general lien law whereby he may be secured in getting paid for the work he actually performs, and not be left in the lurch, as he is now. True, you may say each State has a lien law of its own, and you cannot interfere, but take this State, for instance, and ask the mechanic how much good the law did him except in a chance case where the owner of property was inclined to be honest or not thoroughly posted in the mortgage business. Q. Could the United States pass a better lien law than your State ? — A. Yes, sir. Q. Why not have the State pass it ? — A. We have made that attempt. Our organ- ization has already presented a lien law to the State government at three or four ses- sions. It passed one House, and lay in another House, and finally lay under the table. We could not bring means enough to bear. Q. Could not the workingmen of New York secure enough legislators to get the legis- lature to pass a common lien law ? — A. They pledge anything before election. Q. Afterward they do not keep their pledges ? — A. They do not. Q. Can you not find any one who will keep his word ?— A. I tell you, gentlemen, you cannot imagine the feelings a workingman has that has not got paid for his labor ; you cannot imagine the feelings of a man who sees his mouth's labor lost, and is insult- ingly told to go file a lien if he wants to waste more money. I can take you to three houses not far from here where $55 of my money lies, and the tenants use the stairs every day that I put up, and I never got my money; but the owner draws his rents for the unpaid work and directs his clerks to chuck me out of the office if I come to see DEPRESSIOIT IN LABOR AND BUSINESS. 91 him, as under the law (supposed to be passed in the interest of right and justice) I have no claim on him. Right this wrong and protect the workman in getting what he earns, and you will do us more benefit than if you indorsed all the wild theories of government employment, &o., you have heard advanced here. No sane man can desire a people's government, as ours is, to embark in the manufact- ure of materials, and thus bring itself in competition with private employers. Why, the very men who advocate it, in the next breath deny the right of the State govern- ment to employ its convicts, so that they may be self-supporting, thus fully illustrating their ability to regulate our general affairs. It was the report of their presence that brought me here, and a desire to prevent the workmen of New York from being again misrepresented by a band of drones who toil not, bat do spin some terrible yarns of our wants and suffering. Let Congress lighten our burden of taxation, take its hands off our industry by checking monopolies, reduce the tariff in the interest of the whole country, and stop sectional legislation. We fought long years to keep our country together. Then do not by your actions in Congress proclaim that you are only citizens of your own congressional district, but be citizens and representatives of the United States and pass laws of universal benefit and not local subsidies, whereby you expect to keep your seats ; rise above party and represent the people ; do right and let time vindicate you ; and then the workmen of the Union will be benefited as well as the capitalists ; stop the railroad jobs, and when you gj'ant a valuable franchise get an equivalent sum, such as you would demand in your own business, and let the coun- try have the benefit and not the corporation. I would suggest, also, that the Arm y should be kept for some other purpose than to settle disputes between railroad mag- nates and their employes, miners and mine-owners. By Mr. Rice : Q. We understand you are in favor of the government, but think it should be ad- ministered more faithfully ?— A. Yes, sir ; and I speak for a large majority. Q. The remedy is in your own hands, is it not ? — A. Yes, sir. By the Chairman : Q. What would you suggest as an additional provision of law, or of the Constitu- tion, by which yon would get men who would do your work better than your present Representatives ? This government was arranged by wise men. How are we to take advantage of that knowledge of yours? What should we do ?— A. Hem our law- givers in by such laws as will make a premium on honesty and not on dishonesty, as it is now. Q. That is very vague ? — A. I am not a law-maker, and don't expect to be. By Mr. Rice : Q. Is not the trouble, after all, in the character of the men whom you elect to office ? If they knew enough and were honest enough they would make the laws right, would they not ?— A. You know better than I do the surroundings of a Congressman in Washington. Q. But you have got to elect men that will resist those surroundings, have you not ? — A. No ; I want to remove those surroundings. Q. How do you propose to that ? — A. That is the problem. By the Chairman : Q. What is the cause of the present depression in business?— A. In the first placet we will take our shipping. It has been driven off the seas. Q. By what ? — A. Steam. Q. Foreign steam ?— A. Yes, sir; foreign steam. Q. What would you do about it ?— A. I would tax foreign steamers. I would tax freighting-steamships so high that sailing-vessels could again compete with them. Q. Would that not add to the cost of the transportation ?— A. No, sir ; people here would employ the sailing-vessel. Q. Why would they employ the sailing-vessel ?— A. Because it would be cheaper. Q. They would have to pay them more than now ?— A. I doubt that. Q. Why can they not run now ?— A. They cannot compete. Q. They cannot compete in the cost ?— A. In the cost. „ , „ Q. If you put a tax on, would you not add to the cost of transportation ?— A. \ es, P*sir; on steamers. , , . j. <> Q. Would that not make the goods which the workingmen use cost more money 1— *Q. If they can do it cheaper on sailing-vessels, why don't they go on sailing-ves- sels ? — A. They cannot do it. , i n > The Chairman. Here is a gentleman who has just come into the room (Mr. Marsliall^f who runs a line of sailing-vessels out of New York and manages to make them pay. He has got a line that is running and has been running here for forty years. 92 DEPRESSION IN LABOR AND BUSINESS. Mr. Graham. He knows, I believe, as well as I do that steamers take back freight as ballast very often at a nominal charge, for the sake of filling up. Mr. Marshall, at the request of the Qhairman, here took the stand. The Chairman. I would like to ask you, Mr. Marshall, whether you want any pro- tection against steamers for your sailing-vessels ? Mr. Marshall. I want no protection of any kind for sailing-vessels as against steam- ers. My opinion in regard to the decadence of American shipping is that American ship- ping does not occupy the same position, so far as cost is concerned, that foreign steam- ers do. We have a prohibitory law, prohibiting us from purchasing our ships in for- eign countries, where we can buy them cheaper. If the American ship-owner could obtain his tools, so to speak, on a par with other nations, my opinion is that all Ameri- can shipping would revive, but it will never revive until it is placed on that footing. The Chairman. It is not the imposition of the tax, but the removal of the tax, that will give us a remedy ? Mr. Marshall. Yes, sir; and in connection with that we must do away with as many restrictions between our government and others as possible, and that can be only done by bringing down our tariff to a proper basis and taking away those restrictions which impede trade between this country and others. My opinion is that, if you remove these restrictions, you will see an immense degree of general prosperity in the country and a revival of the American shipping Interest, because sailiug-ehips are no longer adapted for conveying the trade and commerce of the world. The carrying freight of the world must be done in steamers, and when my friend talks of taxing steamers in favor of sailing-vessels, it would be like taxing railroads in favor of stage-coaches ; and as rail- roads have superseded the stage-coaches, so must steamships supersede sailing-ves- sels. The Chairman. Do not steamers employ more sailors than are employed by the mer- chant marine under sail ? Mr. Marshall. I think undoubtedly the steam marine of England is employing more men than was ever done in our palmiest days. The carrying trade of this world should be carried in vessels propelled by steam and made of iron, rather than in sailing-ves- sels, and there is very little difference between steam freights and sail freights. The greater dispatch, of course, is an object ; and, as a general rule, the steamers can afford to carry freights on almost the same terms that sailing-vessels do. Mr. Graham. Mr.'Aggrista has stated to me just the contrary of what that gentle- man, Mr. Marshall, has said. So I think instead of the government employing more men, they employ too many now. I think the less the government employs the better, because that perpetuates that government in whatever interest they happen to be employed in, and if they are prostituting their administrative powers by leaving such a large cabal under their control, they manage to control the masses ; therefore I think the less they employ the better. The Chairman (to Mr. Graham). You think the office-holders hold the balance of power in politics ? — A. They have an influence. Q. They have very large political influence? — A. Yes, sir. Q. Will yon give us the remedy for that ? I have met that difficulty at every turn since I have been in public life, and I am seeking a remedy for it. Would you deprive office-holders of the right of suffrage ? — A. No, sir ; nor any other man. Q. Would you deprive them of the right to go into primary meetings ? — A. Mr. Hayes has done that with poor success. I think the pledge of civil-service reform to the man holding office, according to his ability or otherwise, would be much affected. Q. If a man proved himself faithful in office, that he should remain there without regard to politics, and vies versa ? — A. Yes, sir. Q. How are we to deal with the political questions we have ? Should we make a law which prohibits removal from office, except upon trial? — A. Yes, sir. Q. You think that would do it ? — A. Yes, sir. Q. And in regard to appointment to office, would you have men examined without regard to politics ? — A. Yes, sir. Q. And appoint them on their merits? — A. Yes, sir. Q. You think that would be a good thing?— A. Yes, sir. Q. Is there any other suggestion you can make about it ? — A. Not on that subject. By Mr. Rice : Q. What are your views on the subject of governmental limitation of the hours of labor? — A. My belief is in eight hours. Q. You think that eight hours should be made the limit by law ?— A. Yes ; and in regard to the contract system, I think the government injures the workman and ben- efits the i)rivate employer by it. In case where the government has work done, they should do it by days' work at the same rate that is paid in the market, and governed and controlled by men that are capable. For instance, in the post-office there is a DEPRESSION IN LABOR AND BUSINESS. 93 railing that goes down the stairs. If you contracted that out to the best stair-huilder in New Yorlc you could not get It done better. Q. Would that not have the effect to increase the number of government employes and ofiacers instead of diminishing them, as you stated a moment ago ? — A. Whenever a contract is given out, there is a government employ^, or half a dozen, sent to super- intend that contractor and see that he fulfills his contract. If it is a job in carpenter- work, there is a practical carpenter sent to superintend the contractor and see that he does his work properly. I believe the government conld do this work and do away with those men. By the Chairman : Q. Would not all the workmen be government employes ?— A. They would have to be appointed on their ability. Q. Would not some one have to appoint them ? — A. Yes, sir. Q. Suppose I went as a member of Congress to the person having the power of ap- pointment, and said, "Won't you put on Mr. Smith or Mr. Jones, that voted for me in my district?" What would he do?— A. He ought not to do it. Under the present system he does. Q. Bat as human nature is constituted ? — A. That should be hedged in so that they conld not do it. By Mr. Rice : Q. Suppose there are 20,000 or 30,000 unemployed men in the city and suburbs of New York without business, and nnable to find business by which to earn their liviug ; have you any way to suggest how those 20,000 or 30,000 men should be relieved ? — A. You have got to furnish them employment, to employ them, of course, and there the government must step in ; but I don't believe in the government stepping in aud fur- nishing employment. Q. I ask you how would you have those men relieved ? You would not have them made objects of charity ? — A. No, sir. Q. How will you get bread for them ? How will you have them furnished with work by which they may earn a livelihood ? — A. I have advanced the same theory that has been advanced here, and indorse the same theory, anyhow — that is : by taking a large part of the floating mass of the city and letting them go to the prairies. Q. Yon think that would be a good idea, do you ? — A. That would be a good idea. Q. Do you think those unemployed people would be willing to go to the country if they were helped to go there ? — A. I don't know ; it would be "root hog or die." Q. You would not take them whether they would or not 1 — A. No, sir ; no coercion about it. I guess they would be willing enough. Take my own case for example. Q. You think if there was some way devised by which people could get on land to make a living that there would be enough willing to go to work hard and live poor to relieve the present pressure ? — A. I don't know whether enough would be willing to go, but some would go. By the Chairman : Q. Would yon have the government interfere to do that ? — A. There again comes in the centralization question. Q. What do you think about it ? Would yon have the government interfere to do it ? — A. I don't think the government could as at present constituted. Q. If the government would not, how would you get those people out on the prairies ?— A. It would have to be done through private enterprise. Q. Private charity ? — A. No, sir ; I say as the government could not interfere it would have to be done by private enterprise. Q. And not by charity ? — A. No, sir. Q. Who has got the private interest to do it ? What motive is there in any private individual, as a matter of enterprise, to do it ? — A. There is no man that I know of that has felt well enough toward the workingmen to do it ; if there was such a man he would deserve to be remembered. By Mr. Rice : Q. Could any association be established here in the city of New York by private action to give expression to this purpose which you speak of, and aid these unemployed men to go where they could earn their living?— A. Yes, sir; it could be done; but then a great many would look on it like charity again. Q. Yon say that is the best way to help these poor people to get along?— A. One of the ways. Q. You say you don't think the government has the power to do it?— A. I am afraid not. •, ... Q. If the government has not the power to do it, is there any one else can do it i — A. Let the government issue bonds for it if it has the power. 94 DEPRESSION IN LAiiOH ANU liUSlAJiSS. Q. But you say yu.i don't think it has the power.— A. I think another cause of our present prostration of lahor is the government bonds. • By Mr. Boyd : Q. Would you uot have still to issue more houds for the purpose of colonization?— A. Yes, sir; but not interest-hearing. By Mr. RiCK : Q. Who would lend the money on those honds ?— A. There are patriotic people. Q. It is a difficult question to deal with. Have you anything else you wish to add ? — A. No, sir; that is all I have to say about it. VIEWS OF MR. H. D. SHEPPARD. HoKATio D. Sheppaed appeared and made the following statement : By the Chairjian : Question. What body do you represent ? — Answer. The National Land-Reform Asso- ciation. It is an association some thirty years old. I have not a written document, but I was requested by the president and vice-president to come here to-day. Q. How large a body is it? — A. Well, there are more or less of them all over the world. They are not so very numerous, hut have been hard workers. Q. What you lack in numbers you make up in hard work ? — A. Yes, sir; some laws on the statute-book are perhaps the result of their labor. Q. Will you confine yourself to the bearings of your views on the causes of the de- pression of labor and the remedies ? Be good enough to be as concise as possible. You admit there is depression? — A. Yes, sir. Q. What remedies have you to suggest? — A. I would suggest such a remedy as was applied by Sir Robert Peel about thirty-five or thirty-sis years ago to the British nation when it was in a very similar condition to what our people are in now. It was this. The country was in a very similar condition — great multitudes out of employment and great depression and threatenings and mutterings of revolution. The then minister went out and Sir Robert Peel came in ; he brought in his budget, I think, in 1842, coming to the point at once, that the burdens upon productive industry were too great'; they could no longer go on ; that if the British nation was going to maintain her posi- tion as a first-class commercial and manufacturing nation, they must take a part of the load off industry and take it on themselves, meaning by " themselves " the aristocracy, of which he was one, a man of great wealth. Out of the twelve hundred articles on which there was a tax, he removed or slightly reduced the tax on seven hundred of them direct, those things considered material to manufacture, and turned around and put taxation upon wealth. The country almost immediately took a new lease of life, as it were, and has been with short intervals prosperous almost ever since, comparatively so. I would say, further, that I believe the depression is caused by the errors on the currency question ; that there has been entirely too much inflation in- stead of providing for the necessities of the country by taxation. I think the first mistake was made by Mr. Chase in undertaking to run a vast war upon a peace basis. He ran it for a year without one single doUar additional taxation from that which ex- isted when it went into war, and I think any country when it attempts to run such a gigantic war in such a way must go to something like bankruptcy and ruin. In rela- tion to the further remedies I would restore the income-tax, with such amendments as Congress might say were necessary from their experience with the old one. When the bill was before Congress for repealing that I wrote and procured to be printed a re- monstrance against it, setting forth that I thought it would produce desolation and ruin, and I believe the repeal of the income-tax has damaged the country to the extent of $1,000,000,000, from studying the question as well as I can. I studied it from the days of General Jackson to this time. Q. Do you remember the amount that was collected under the income-tax law ? — A. No, sir ; but I think the repeal which took place in 1872 took off about $100,000,000. Q. From incomes alone how much do you suppose? — A. Well, they removed taxes upon tea and coffee, which took off about twenty millions. Q. How was it with the income-tax; do you remember ? — A. I don't remember the exact figures, but I think the taxes removed were about $100,000,000 per annum. Q. You stated you thought the repeal of the income-tax law had produced damage to the amount of $1,000,000,000 in the country ?— A. I think so. Q. Do you remember the annual amount collected under the income-tax law ? Was it not about $20,000,000 ?— A. I think it was one hundred million ; I think it was very much more than that. Q. My recollection is that it was under $20,000,000 per annum, and that is the reason why I ask you the question how it oould damage the country to the extent of $1,000,000,000. — A. I have not the figures, but I think it was nearer one hundred mill- ions than twenty millions. DEPRESSION IN LABOR AXD BUSIXE.SS. 95 Q. I tUink you ^vill &nA it nudei- twouty millions. — A. There was a direct tax laid, to be collected by tlie States, to the amount of twenty millions. Q. The amount collected under the law at the time of its repeal amounted to less than twenty millions, by the General Government. — A. I know before they reijealed the tax they paid off the national debt from ten to twelve millions a month. , Q. You think taxation, if left alone, would have prevented the business depression? — A. Yes, sir. On account of the vast indebtedness of the country, I think we require those taxes, and I wrote about a year ago a memorial upon that very subject, and one of the members of our association gave the money to have it printed and there were some of them printed. The principles have once been embodied in the platforms of several of our parties. The National party, in their convention in Ohio, protested against the repeal of the income-tax, and demanded its retention. The committee that met at Syracuse a short time ago protested against its removal, and it seems that in that repeal Congress repealed pretty much all the taxes that bore upon wealth, and left those that bore on industry standing. Q. Y'ou think it repealed the wrong taxes? — A. Yes, sir. — A. As I gather from the writings of Jeft'erson, I believe for a nation in debt or at war it is necessary to lay on the taxes, and I believe that is what carried France through her late struggle with Germany. She put on her taxes good and strong, and when Napoleon fell, and the provisional government came in, the first act they did was to add 25 per cent, to the taxes and require it to be paid in ten days, and it was done. Further than that, the country was permeated with gold and silver coin, and the general distribution of the land, and she came out of there like throwing a cat out of the window and landing on her feet. She don't seem to be depressed. I notice the papers of yesterday said there was a great decrease of pauperism in a few years. Her coin currency and the distri- bution of her land and the taxation in war carried her through. Ours was the opposite of that, and the inflation policy from the start, which has thrown the coin out of our country in its reaction, which is inevitable in the paper system, has brought about all those revulsions. Q. Do you understand that France has of late years increased in the accumulation of capital ? — A. I understand she has increased rapidly in wealth. Q. And I understand you to say that pauperism has decreased ? — A. Yes, sir. Q. Then the accumulation of capital and the decrease of pauperism have gone on simultaneously in France ? — A. With being freed from this disorganization and anarchy of industry which we have in this country, by her going on the cash basis. I made a compendium of my own views, and went in to the editor of the French newspaper to see whether I was correct. He says they have a coin currency strictly at the present time ; that is, the paper they have afloat there has almost the representative of it, dollar for dollar, in the vaults of the Bank of France ; and that people have in their pockets and in other small ways about ten or eleven hundred million dollars in coin. Q. Can any country but a rich country have its currency in coin ? Must it not be a rich country'?— A. Ours is the richest country in the world in natural resources, in the amount of good and productive land. Q. Could a new country, rich in resources and undeveloped, have a sole currency of coin and be a prosperous country ? — A. I believe it would prosper a great deal faster, and more substantial money would abolish the whole paper system. Q. You would favor the abolishment of paper money? — A. I would admit, perhaps, 20 per cent, in Treasury notes or greenbacks, as they are called— not more than that, and without any other feature of redemption than being receivable in the payment of taxes. The experience in Mr. Van Buren's administration showed that a small amount of Treasury notes would float by no other feature of redemption than being received in taxes. I would commend a premium on gold. Q. Y'ou think redemption in taxation is as effectual as any other kind of redemption unless the amount is in excess of what is required for it ?— A. Yes, sir ; 20 or 25 per cent, would float their paper. I believe this bank paper redeemable m gold or silver is the worst currency that can be adopted. It is always subject to revulsions, and hence I believe this resumption act is an entire mistake— that the paper should be re- deemed by taxation, and that would come to equalize gold and silver— with no other feature of redemption than being received in taxes. Those are the points that have been the salvation of France. It is said that the number of landholders m France is almost equal to the number of heads of families. „ , . . j., O Y'ou think the underlying cause of the present depression of business is the ex- cessive issue of irredeemable paper money?— A. Yes, sir; and without adequate taxa- tion to redeem it. If Mr. Chase, instead of issuing his paper, had laid on a vigorous taxation,! believe the bonds would have sold for twice as much as they did, and we should not have had to pay the fabulous prices for supplies at the end of the war. The debt need not have been half what it was if he had put on a vigorous taxation at the beginning. That is, we want the lightest tax we can have ; but in a big war, and a big debt if you undertake to shirk taxation, the country goes to the bad inevitably. Q ' I understood you to recommend at the outset the removal of the tax from foreign 96 DEPRESSION IN LABOR AND BUSINESS. imports ; you quoted the example of Sir Robert Peel. — A. No ; it was interual excises. The taxes were upon twelve hundred articles, largely interual taxes but partly upon imports. He aimed to take it off where it bore upon injury and production, and put it upon wealth. Q. My olijoct is now to hiiA-e you explain, in order that it may be consistent, the re- conimeudatiim you flrst inado in regard to tlie removal of taxation in comparison with the one yon now recommend of T,-igorous taxation, and from ^^■llat articles would j'Oii remove taxation, and to what articles would you transfer it ? — A. I am not sufllciently familiar with the tax hill, but I believe the bill that re])ealed the taxes in l.-<72 re- pealed all that bore upon wealth ; and all that bore on industry it left on ; that, I believe, was the spirit of the bill. I would act on the reverse ; we want taxes upon wealth, and that which bears upon industry as far as possible to be removed. I don't say on the poor, but that which is obstructive of industry. Q. You do not remember the nalure of the tax which was reduced in 1872, except the inconie tax and the tea and coffee tax f — A. The income tax and the tax upon tea and coffee. Q. Do you not remember there was a very large increase of the free list at that time — of all materials entering into manufactures ? — A. I don't know the details of it. Q. I think about 600 articles were relieved at that time. — A. It aeems to have been a very fallacious relief, because industry began then to decline. Q. Not in 1872. — A. It began in 1873. As soon as the law began to act it took place. The revulsion took place in 1873. Q. Would you infer because it took place immediately afterward that it was the cause? — A. Yes, sir. I belie\-e if that one hundred millions had been paid in redemp- tion of the national debt, that one hundred millions, if paid every year, would have to go into some productive employment. Q. Would yon not have had to take it out of some productive employment in order to get it ? When you laid the, tax to get the one hundred millions to pay the one hun- dred millions, didn't yon take it out of industry to go into the hands of the capital- ist I — A. No, sir ; not an income tax. Q. You took it out of the pockets of the capitalists in that case and paid it to them ? — A. I think in removing this tax they damaged themselves and the whole country. Q. That, yon know, is .assertion. You have to show some good reason for that. As I understand, the income tax took out of those who had incomes of over |2,000 120,000,000 a year, and that money you would have taken off' and paid to the bond- holders ? — A. Yes, sir. Q. Would that not, then, have taken it fi'om one set of capitalists and paid it to an- other set of capitalists, and would it not have been out of employment in business ? — A. It didn't affect the capitahst unless he had an income, and it took so much from paid capital. That is, the holder of a bond that is on interest is not compelled to pursue any industry at all ; but pay him off his money, and he has to put his money into some kind of improvements. Q. He could have bought other government bonds, could he not ? — A. Yes, sir ; but paying off one hundred millions of them would siu'ely put some of the capital into active business. Q. You would have to take that capital from some place in order to pay them ? — A. It takes it from idle capital and puts it into activity. Q. After the reduction of the tax in 1872 went into effect, do you remember how much surplus revenue the government had ? — A. I only remember in general terms that the payment of the national debt was reduced from ten to twelve millions a month down to from two to three millions a month. Q. As a matter of fact, in the fiscal year following, the surplus was still one hundred millions available for the payment of debt or reduction of debt ?— A. The payment of that debt kept the money moving around, and would carry in into productive industry. Q. Does any one leave money lying idle for the sake of having it lying idle? — A. It is idle when it is in a bond. The holder of the bond is not required to pursue any active industry at all. > Q. Are you in favor of abolishing bondholders ? — A. By taxation, I am. Q. Are you in favor of abolishing other people who own money as well as bondhold- ers f — A. I am not in favor of repudiation. Q. But as long as capital exists it falls to some one? — A. Yes, sir. Q. And the man to whom it falls has a right to lend it ? — A. Yes, sir. Q. When he takes it out of government bonds, he will lend it stiU and get the rev- enue ? — A. Some of it would be likely to go into other pursuits. Q. Suppose there is a glut, what are you going to do then ? — A. I merely quote the difference between this country and France. France paid off by a \-igorous system of taxation. Her currency was only about twenty per cent, of paper to eighty per cent, of coin, and she pursued a vigorous system of taxation and escaped this trouble. Q. Was it not because France was a richer country than this in accumulated capital ? DEPRESSION IN LABOR AND BUSINESS. 97 Must it not iave been so to have all this money of which you speak ? — A. She has un- doubtedly accumulated more wealth ; but I believe this revulsion was entirely unnec- essary ; that it was from the maladmiuiHtrntion of the government. I don't especially indict Congress, because it went with tlie current of public opinion, but I believe it was a mistake. I believe that what it ought to do now would be this : It should restore the income tax and wind up the national banks, and, as far as we have paper, have the Treasury notes, or, commonly called, greenbacks. Both law and public opinion would co-operate to have our country permeated with coin as France is. Q. Then for any but about 20 per cent, of the currency you would have coin ? — A. Yes, sir. Q. Would you compel people to carry the coin about in their transactions or let them get paper ?— A. That is the question I asked the editor of the French Courier. Q. What did he answer ? — A. He said that aU small business of wages, the butcher, the baker, and retail dealer and laborer, is in coin. Q. How are the large amounts paid in large business ?— A. They use the paper of the bank. Q. How much is the paper of the Bank of France, do you remember?— A. The last account I read it was about five hundred millions in round numbers. Q. About 500 millions of dollars in bank? — A. Yes, sir; and about the same amount of coin in bank. Q. Would you allow the government or the banks to issue paper in this country, pro- vided coin was kept behind it ? — A. Not to circulate as money. Q. Then you would not adopt the plan adopted in France ?-^A. That limited amount. Q. Five hundred milUons is a large amount ? — ^A. It is scarcely one-quarter of the money in the country. They have about fifteen hundred millions in coin. Q. About 1,200 millions. — A. There were five hundred million in the bank at last ac- count and one thousand to one thousand two hundred million in the hands of the people. Q. You have confounded it. It was one thousand two hundred millions in the bank. — A. One economist says, of course that is iu the hands of the ijeople; they have got to have it ; it is in their pockets and tills and circulating about, and he thought it was over one thousand millions in the hands of the people. Q. You would limit, as I understand you, our circulation to a governmental circula- tion of about 20 per cent, of the total amount, leaving 80 per cent, to be had in coin. The money that does the business of this country is about seven hundred millions. Twenty per cent, of that would be about one hundred and forty millions in paper, and that is all you would allow ? — A. I think we ought to have one thousand millions in coin and two hundred millions in paper. Q. How would we get the 1,000 millions in coin ? — A. How did we get the silver in place of these stamps? Why, by abolishing the stamps. Q. No; we bought the silver and issued government bonds bearing 5 per cent, inter- est and paid for them, and the government is now being -taxed 5 per cent, for the bonds issued since for that silver; whereas before it had the stamps without interest. — A. I estimate that the only rational way is to abolish the stamps and let the coin flow in of itself. Q. Some one has to buy the coin and pay for it. The government obtained it for bonds, and issued them and paid for it ? — A. As soon as there is a demand they will flow in. Q. You will find the Government didn't put a dollar's worth of silver in a subsidiary coin ; it only put about 80 cents' worth. It would not flow in, because the government would not let it flow in. The government wanted to make the 20 per cent., and, therefore, it bought the silver and paid it out to the people, and made that money. It is paying interest on that purchase money now. If you want 1,000 millions more,, some oue has to buy it and pay for it ? — A. The products of our country would soon buy It. We have produced over 2,000 millions the last thirty years of gold and silver in our country, and we have very little of it now to help ourselves with. Q. You would have to buy it?— A. I would have no objection— the kind of paper the silver bill provided for — that the people may carry in their coin and take the paper representative. . . . « Q. Would you allow the coin to be deposited and then paper issued against it? — A. To be exchanged. Issue as much as is properly an exchange. That is, I believe, all the workingnien of this day— if every dollar went into one fund, and they were cer- tain of employment and this would bny the products, they would be a great deal better off. , . , ^ .^ j ■ x, ,n Q. Take the case of your 1,000 millions, .ind suppose it was deposited m the Treas- ury and paper issued against it ; would there not be 1,000 millions of capital lying iu the Treasurv idle ?— A. Not what you call idle. , .„ „ , Q The co'in is lying idle and the paper is doing its work, and if all the com would keep that paper at par, would there not be idle coin in the Treasury ?— A. I believe it 7 L 98 DEPEESSION IN LABOR AND BUSINESS. is necessary to have it more solidified. Under the present system jou arc certain to 1-ave tliese revulsions ; there is no remedy. Q. In (M)initries like France and England, -vrhere the coin is behind the paper, dol- lar for dollar, are they any more tree from commercial revulsions than the United States? — A. France is very mnch more free. Q. Has not France had a commercial crisis during the last thirty years? — A. They have had, prohably, from our American custoniM; when they sent gold to the United States, they have been in trouble and emban'assment. Q. Are you aware that a commission of the Chamber of Peers has been sitting for the last year upon the pending commercial crisis in France, to investigate the causes of the depression and suggest remedies, and that it has just made a report on that subject. — a committee charged with the precise duties of this committee? — A. No, sir; I am not. Q. That is the fact. The crisis has been so severe in France, and the difficulty of getting employment so great, that a committee has been sitting for a year past, and it has just made its report ; so that France, with its solid gold and silver basis, has not been exempt. Has England been exempt? — A. One word about France. It has been almost confined to the operation in United States customs cutting off the costs. Q. Is France, with its solid gold basis, any more exempt? — A. It has been compara- tively light. The Herald of yesterday stated that pauperism has been on the decrease in France. Q. And capital has been increasing, and there has been a commercial crisis, all going on together? — A. The difference between France and this country is that theirs is on a proper basis, and ours is on what is called faith, and it must play the devil with business. Q. Then it is the irredeemable fep.ture of our paper money that makes it worse here than there? — A. It should be made to equalize with coin; audi believe bank paper i-edeemablc with coin is the worst possible currency that can )je invented. A moder- ate amount of Treasury notes redeemable by being receivable in taxes would always float on a par with gold and silver. Q. Hits there ever been a safer currency in any country than our present currency, secured by national bonds deposited in the Treasury? — A. The mere safety of redemp- tion is a veiy small part of the future. I believe the whole revulsion is from a ruinous paper system. I gather that from trying to understand the subject and reading the writings of such men as Hume, and Adam Smith, and Thomas Jefferson, and Paine ; and my deliberate judgment is that our diseased paper money is at the foot of it all. Q. Then you are not in favor of turning the government bonds into greenbacks? — A. No, sir; not in any infiation manner. Q. Two thousand millions ? — A. No ; I believe that cry is something like a man with delirium tremens calling out for more rum. Q. Wouhl you buy the railroads and pay for them in greenbacks? — A. I think they should be run by a company ; but there I asked th« same question of the editor of the French Courier, and he said the government has ii set of commissioners that examine the railroads, and the public interest is much more guarded than it is here ; the rail- road company is not an in-esiionsible power, watering its stock and making extraor- , dinary di vi(lenlieve the constitution of the State of New York says all taxation shall be equal. How do the railroads escape taxation? — A. They do it by watering their stock. Q. The more yon water a stock, and it pays dividends and is worth par, as the Hud- DEPRESSION IN LABOR AND BUSINESS. 99 son EivpT stock is, will that make its value less to pay taxes ? — A. No ; lint they Ixave a way of covering np a tlividcufl of 30 or 40 per cent, by ilouhling the stock. Q. Whose fault is that f — A. It runs all through the'community, legislators and all. Q. Is it not the fault of the community itself? Is tlie community sufficiently honest itself to enforpe the laws and get justice *— A. The comuiunity has failed to attend to its business properly in the matter. Q. Then you think the community should do its duty better, and then its servants would do better ? — A. Yes, sir. Here is a memorial which I wrote and got printed about a year ago, and it has already found its way into the platform of some of the public parties : "Memorial for the removal of the causes of the terrible stagnation of industry and business. " To the Senate and House of Eejyresentatives : "The subscribers and citizens of the United States respectfully represent that the great indebtedness and the interest to be paid thereon is the incubus that is prostrating industry, trade, and conmierce in the dust and carrying the country rapidly to pov- erty, bankruptcy, and ruin. "The aggregate amount of this indebtedness, including national. State, municipal, railroad, bank, insurance, bond and mortgage debts, &c., as set forth in recent state- ments, is over rather than under ten billions of dollars. A large amount of this in- debtedness is held abroad. This is five or six times, and some estimate ten times, as oppressive as that held at home. With the latter, the interest is paid and apeut at home. "The aggregate of this interest is so great a load to carry that we believe it is not possible for industry and business to revive to much extent unless a large part of this diebt is swept away by bankrujjtcy and consequent repudiation (which now seems impending), or else paid off by a vigorous system of taxation upon the wealth and income of the country (exempting a moderate income as the recent law did). Such a system of taxation would, we fuUy believe, speedily revive industry in all its branches with trade and commerce, increase values aud incomes, so that all parties, including the payers of these taxes, would be much better off. All would, in the end, be amply paid, and more than paid, for the sacrifices they had made. "Nations indulging in the honors and luxuries of big wars and great national debts must pay big taxes or they will speedily go to industrial and commercial ruin. " When the late income-tax was collected and the national debt was being paid off at the rate of about one huudred and twenty millions of dollars per annum, industry, trade, and commerce was prosperous and good. When the income-tax was repealed, industry and business began from that very time to droop aud languish, and has grown worse and worse ever since, aud will continue to grow worse until this will be one of the worst countries to live in, excepting it be for the wealthy few and the holders of stocks, bonds, mortgages, & c. Already emigrants are leaving the country by the thousand. It is the thrifty and energetic that leave, leaving the lower grade of tramps, the paupers, and criminals behind. There is no hope for the country until a very large part of the indebtedness is swept away, either by bankruptcy or repudi- ation, or canceled by a vigorous system of taxation upon wealth. Your memorialists further reciuest that you will without unnecessary delay substitute the National Treasury notes for the notes of the national banks, and cancel national bonds to that amount, thus saving to the country some twenty millions of dollars per annum." VIEWS OF MR. A. JXBA'PS^SEE. , Tr/erPS-SE^ A. Strausseu appeared and made the following statement: By the Charmax : Question. What is your business ? — Answer. President of the Cigar-Makers' Union. Q. Are you an employer or a workingman ? — A. I am a workingman. Q. You employ nobody ? — A. No, sir. I am not an employer, but am working for wages every day. Mr. Chairman and members of the committee, I want to state the causes of the depression simply in the cigar-trade and not in any other trade. It is a singular fact that, although the making of cigars has continually increased, the num- ber of the unemployed has increased m the same ratio also, or about nearly in the same ratio. I will state here that iu 1868 there were .590,000,000 of cigars manufac- tured in the United States; in 1870, it increased to 1,143,000,000; in 187a, it increased to 1,500,000,000; in 1873, the year when the panic commenced, it increased to ■1,800,000,000 : in 1874, the time when the panic was raging, it increased to 1,800,068,000; in 187.5, it increased to 1,967,000,000 ; in 1876, it decreased 59,000,000. Q. So that in 1876 it was within 59,000,000 of the highest product iu 1875?— A. In 1876, it was 1,908,000,000. 100 DEPRESSION IN LIBOR AND BUSINESS. Q. Wliat was tlie largest, product at any time?— A. 1875. I don't know the sta- tistics of the last two yearn. Q. Do you think it has fallen off or increased since 1876 ?— A. I would like to ask one favor : allow me to make my statement in full. After I have finished my statement, I am ready to answer all questions. I think it is taking an unfair advantage of a man who has to work ten hours a day for his living to be asking him questions from three or four sides. I am ready to reply to everything after I get through with my statement, and to give the number employed in the various cities of the United States during six months, and to prove the oause of depression, and at the same time I propose to prove a practical remedy between the limits and between the laws of the United States. I will also state that during these times of depression the manufactirrers of Now York and NeAv Orleans started' to export cigars. Tliey are sending cigars now to England, Belgium, Canada, and the greatest portion is sent to Germany. So we are now in the condition of unilerKulling the so-called pauper lahor of Europe. I will give you here a few statistics about the unemployed in the various cities of the United States. For instance, Philadelphia has 3,000 cigar-makers. In the month of February there were 500 unemployed; in the month of March there were 600 unemployed; in the month of April, 600; in the month of May, 1,000; In the month of June, 3,00; in the mouth of July, 300. Take Utiea, having 100 cigar-makers : In the month of February there were 20 unemployed; in the month of March, 20; in the month of April, 20; Jiay, 30; ,Iune, 20; and July, 16. New Haven, having 65 cigar-makers, there were in tiie month of February unemployed, 22; March, 26; April, 26; May, 65; June, 58; and July 58. Here is the city of Brooklyn, having 500 cigar-makers: In the month of February' there were unemployed, 70 ; in the month of March, 90 ; April, 60 ; May, 60 ; June, 20; and July, 20. In Denver, Colo., there are 20 cigar-makers. In February there were three unemployed; March, 3; April, 3; May, 3; June, 5; and July, 6. Detroit has 600 cigar-makers. In February there were unemployed, 200 ; March, 200; April, 150; May, 125; June, 120 ; and July, 100. This is about the condition of e\ cry city of the United States. I see the monthly reports from every place where we have a local union, which is about in every city in the United States, and at the same time there are a great many tramping the country in search of employment. I could show you by the Cigar-Makers' Journal that every report says : "Tramps keep away ; there is no employment." Outside of these I will shoAv you how the cigar-makers have suiiered last year. In one month there were four suicides for the want of employment, and in this State, in about nine months, there were 27 suicides of cigar-makers, besides a gTeat many in outside States. I will show that about a few years ago they contemplated emigration to Europe. At least, it was discussed in our Journal. I will show that the number that emigrated to Europe was larger than those that came here. At that time when it was discussed, we received u, conmiuuication from the secretary of the cigar-makers' mutual association of London. He stated that during three years 40 men emigrated from England to Australia and America, and 97 returned from America. I have no official reports from other coun- tries, but it shows the condition of the cigar-makers of Europe must have been far better than that of the cigar-makers of America. There are two causes for it. I will also say something about the condition of the cigar-makers of Ohio. By the first report of the bureau of labor statistics made to the general assembly of Ohio for the year 1877, you can judge of the condition of the cigar-makers in America. "Cigar-mahing. " It is doubtful if the employds of any trade or calling in the State, or in the United States, have been reduced to greater extremities than have been the cigar-makers. "Previous to the year 1861, no class of employi?s were more absolutely indepeiulcnt of employers than were the cigar-makers ; large manufactories were the exception ; the retailer of cigars was, as a rule, the manufacturer. A journeyman cigar-maker, if dissatisfied with his wages or conditions of labor, required but a very small capital to become his own employer, and sold directly to the public without the intervention of middlemen. Every town and village with a consuming population large enough to consume the product of the labor of one cigar-maker had that cigar-maker in their midst. --'"Since 1861, however, the whole system has changed, not by the introduction of ^achiuery or a division of labor tliat has caused such radical changes in other (occupations, but tlie entire change has beeu brought about by the action of the general government in devising a system of taxation that drove the business into large manu- factories, and compelled the cigar-maker to become an emjiloyiS, working for wages, or a mere retailer without the privilege of making his own stock. Machinery has been iutroducod into the manufaoturi; of the commoner grades of cigars, but it is neither so expensive nor creates such a divisionof laboras to prevent the individual ciga.r-maker from purchasing and o])eratiug it, if the government restrictions were i-enmved, or modified. As it is, men and women are huddled together iu manufactories, under DEPRESSION IN LABOR AND BUSINESS. 101 cOTitlitioiis that toiid neither to health nor morality, and at wages that will barely keep starvation nway." That 18 the condition of tlie cigar-makers in Oliio. In 1872 a selector received |15 a week; in 1875, $18, iiud in 1-177 lie received |10. This is one of the better branches of the trade ; while the cigar-makers in the State are earning about between $5 and |8 a week, and they ha\o to support a family at the same time. Although the production has increased nearly double and treble, during the panic, still the condition of the cigar-maker became worae. It shows a bad condition in spite of all the theories of the political economist. Now, as to the causes. On one side there was introduced the coolie labor; 3,00(1 coolies are working in the city of San Francisco at the present moment at oigar-mak. ing, and in New York there is another evil cpiite as bad as the coolies in San Francisco, and that is the tenemeatjipuse cigar-making, a shame and a dark spot on our cigar- making, well known to every one in the cityi— I will say how many families have been employed in that way during our struggle : Ch Bardy, 112 ; Stratton & Storm, 192 ; Lichtenstein Bros., 150; Hirschboru, 120; Holzmau &, Deutschberger, 74; Kerbs & Spiess, 75; Sutro & Newmark, 52; Levy Bros., 52; George Bense, 72; Mendel Bros., 25 ; Dansky, 20 ; Waugler & Hahn, 10 ; Foster & Hilson, 32 ; Kohn & Kander, 12 ; Meyer, Feist, & Levy, 14 ; Heilbronner & Joseph, 40 ; Kaufman Bros., 8 ; Schwarz- kopf, 24 ; Adler & Laudoner, 9 ; Engel, 8 ; Lindheimer, 16 ; Solomon, Fortieth street, 16 ; Simon Bros. , 9 ; Bernhard Wittich, 17 ; Jansen, 8 ; Weiguer, 8 ; Jacoby, Ridge street, 50 ; Blasskopf, 24 ; Edward Smith, 18 ; Total, 1,268 families, of which about 1:^5 have been scabbing since the last four weeks. Now, I have been, myself, in these houses during our strike. I went into a room of a house or a so-called factory owned by the president of the Cigar Manufacturers' Association, Edward Smith, No. 11 Bow- ery. The furniture in that room was not worth, to my estimation, $5. It was on a Sunday morning ; the cbildreu ragged ; the man and wife looking as tramps, or worse looking than tramps — ^paupers. And these people are working day and night from 14 to 18 hours — children, man and wife — and Sundays included, and they are hardly able to make a li^-ing ; and they were so in the power of these capitalists that during our strike the so-called partners of capital and labor, the one side of the partnership, dis- missed 1,000 families; 1,000 familes were thj-owu out into the puVdic streets by the constable. This is a condition of things which should not be tolerated, and the govern- ment, I claim, has the power to remedy that evil. I will read to the committee a let- ter dated November 22, 1877 : "Treasury Dkpartment, " Office op Internal Revenue, " Wushingion, D. C, Novembei- 22, 1877. "J. H. Hale, Esq., Revenue Agent, Buffalo, N. Y. : " Sir : This ofifice is in receipt of your letter of the 19th instant, asking for its opinion as to what con.stitutes premises or apartments of a cigar maimfacturer. I reply that it cannot be anything less than an entire room separated from the other parts of the building by actual and permanent partitions. The law does not allow the sale of cigars at retail in quantities less than an entire unbroken box of 25, 50, 100, 250, or 500 cigars at the factory or place where they are made. This provision of the law cannot, with the sanction of this office, be rendered null and void by permitting a, manufacturer to use one-half of the room as his factory, and the other half as his sales- room or store, simply dividing or separating the two kinds of business, by an imagi- nary line, or liy a temporary railing or fence, or by any other like expedient. (See sec- tions 3387, 3392, and 3297, Revised Statutes of the United States ; also Form 36^, and Special Number 85, Revised, page 20, paragraphs 18 and 19.) "Yours, respectfully, " GREEN B. RAUM, Commiaaioner." On January 10, 1878, a communication, of which the annexed is a copy, was sent to the va-rious iiitemal-revenue collectors throughout the country : "Treasury Department, "Office of Internal Revenue, " Washington, D. C, January 10, 1878. " Sib : Referring to the letter from this office, under date of November 22, 1877, addressed to Revenue Agent Hale, and published in the Internal Revenue Record, December 10, 1877, in which it was held that the premises or apartments of a cigar manufacturer cannot In- anything less than an entire room, separated from all other parts of the building by actual and permanent partitions, I have to inform you that sipce the issue of that letter I am in receipt of numerous communications from col- lectors and others, going to show that, in the large cities at least, a very large propor- tioh of cigar manufacturers have only a temporary partition, in many oases a slight raijing, in some cases no dividing line whatever, except, perhaps, an imaginary one 102 DEPRESSION IN LABOR AND BUSINESS. Iietwcen the part of the room usocl for manufacturing and that part used as a store foi retailing; that many of those manufacturers have leased their present premises '^'^^^ a vie\y of carrying on the business in that way, these leases generally expiring on the lat of May, or at the end of the special-tax year. And, further, it has been represented that it would be, in many cases, a great hardship to require, at the present time, such a change to be maele as would be necessary in order to carry into effect the rule laid down in the letter of Revenue Agent Hale. "You are therefore instructed not to require in your district, at the present time, nor until the commencement of another s])ecial-tax year, the enforcement of tliatrule, except in cases where you have strong reason to believe that i'rauds are being com- mitted. " RGSTJGCtlllllA' GREEN B. RAUM, Commissioner." Afterward he was interviewed by the president of the Manufacturers' Association, and another member of that associaton, and he wrote this letter: "Treasury Depaktjiext, " Office of Internal Revenue, " Washington, 1). C, January 11, 1878. "Edward A. Smith, Esq., " Fiesident Xaiional Cigar Manufacturers' Association, 11 Bowery, Xav Yorl' : " Sir : Your letter of the 9th instant, with an article taken from the New York World, entitled ' Tenement Cigar Manufacturing,' has been received and dnly consid- ered, and in reply I have to state that the article in the World misrepresents the pur- port of the conversation I have had upon the subject of tenement-house cigar-making. 1 have stated that if this was a now question, I would be strongly inclined not to allow the bonding of a block of tenement houses as one factory ; but that under the rulings of this office allowing the system to be adopted, large interests had been built up, and I was not disposed to disturb existing an'angements [good fellow !]. The dif- ticulties of cigar manufacturers arc great enough already witliout being aggravated by the hasty m- harsh action of this office. " Very respectfully, "GREEN B. EAUM, Commissioner." Now, he simply writes a document stating it is a shame and a disgrace and un- 1 hralthy but at the same time he states that he has it in his power to disturb those V interests, but he is not inclined to do so. Another thing I would say, how the inter- ests of the manufacturers are guarded, and the interests of the cigar-maker are not considered at all. They are only existing as so many slaves. I will show that the Internal Revenue Department is protecting the interests of the employer, and notpro- ■tecting the interests of the workmen. Stratton, Storm & Sons sent some goods to London, some samples of toliacco. These samplesof tobacco were confiscated foi: some reason or other. Mr. Evarts and our minister to England have been acting as clerk.^ of that firm iu order to recover those few samples of tobacco. I claim that what is iloue in the interest of 40 or 50 cigar manufacturers should be done in the interest of the cigar-makers, to the interest of the workmen. I simply claim that those special interests of the cigar-makers should be considered just as well as the interests of tlie manufactui-ers. That is my claim. \ Now, Mr. Chairman and gentlemen of the committee, I stated here that the cause of the rain of the cigar-makers was the introducti(m of coolies into San Francisco on the one side, and the tenement-house system of New Y'ork on the other; but lean state that, not only the cigar-makers are opposed to the tenement-house K\stera of New York — I can state that all manufacturers outside of the city are opposed to the system, and I can prove it ; for I have a trunk full of hitters. Every cigar manufac- turer in the United States outside of the city is opposed to the system.\ The cigar manufacturers of Detroit have held several public meetings denotmcing that system, and not only that, but over half of the leading manufacturers of this cit>- ai-e also opposed to the system. They have published a communication in a number of the " Tobacco Leaf," stating that the government through that system is suifering a loss of revenue. How 1 Those cigar-makers are receiving such low wages. That is, they are not really working in the factory of the employer ; they are worlcing in their owii rooms. Although the Commissioner says one room should be a factory, ho says a whole block would be a factory, and they pay Uecnso for only one block in spite of his official communication. ^' — ■''' — -' ^ — ^-- ^ , , . tain amount ( and tliat 100 i . _ .. , „ , „ , and bakers and give cigars as payment for bread,"groceries, and meat. Such°i thm"'- uould not occur iu a factory. The factory is closed at six o'clock. No cigar-maJuS' DEPRESSION IN LABOR AND BUSINESS. 103 can take along 100 cigars; tliero is no show for it, and no clianco ; tlioy are under entire control. But tliere tliey are not under control, and I say the government loses millions by that. There are two sides. On one side the government loses revenue through that system, and on the other side all the cigar manufacturers of the Uuiled States outside of those twenty are opposed to it, and all these small manufacturers. In fact, not only cigar-makers are opposed, but the whole city of New York is opposed to that system, and has expressed It in our strike in the sympathy we have re- ceived from the community. The whole city is opposed to it, and I believe there . should be action on the part of Congress ; and how? What I propose as a remedy i^ainst that system is that after the 1st of May, 1879, no license shall be granted any — more to tenement-house factories. This will give a chance to employers to rent new factories, and their leases are running out by the 1st of May, so there will be no loss on either side. Another thing, it will give additional employment to those cigar- makers out of work. These people are now working from 14 to 18 hours a day. If you go there at 12 o'clock you will find them makiag cigars, and if you go there in the morning you will find them making cigars, Sundays included. T he cigars they are making would give employment, if the tenement-house system was abolished, to 500 cigar-makers. I showed you the industry has increased to such an enormous extent during the past that we are underselling pauper labor in Europe, and at the same time cigar-makers are unemployed through our system, because one does the work of five. I claim that the government should step in, and I say there is plenty of time to do it by the 1st of May, 1879; and by that way I believe prosperity will increase, and no cigar manufacturer will go bankrupt through tliis system, and will have a chance to start in trade again; and I think the cigar-mauufacturers in general would be more satisfied with their condition than they are now. I am ready now, Mr. Chairman and members of the committee, to reply to all questions you may have to ask me. By the Chairmax : ^. What is the authority for the statistics yon have giveu us of the number of cigar- makers employed and unemployed in the country "! — A. Local unions of the organiza- tion of cigar-makers. Q. I noticed, in giving figures, you almost always gave even numbers, rarely ever giving odd numbers. Are those the returns actually made to you ? — A. Yes, su-; they are returns received. Q. J ask you if those even numbers are the returns received ? — A. Yes, sir. Q. And of the number unemployed in the same way, I noticed very often they were 50 and 100, — A. Every month a blank is sent around to every local union : " State how many cigar-makers in your city; how many cigar-makers belong to your union; how many cigar-makers are out of employment ; what is the lowest pri ee for wh ich you work ; what is the highest price; and state all particulars in relation to the trade." Now, this blank is received monthly from all over the United States by mail. Q. . And they come back to you in the form of even numbers ? — A. I have stated in the neighborhood of the number. I don't say it may not be 301 or 290. That is the estimate, judging by those who have been discharged, and judging by those who be- long to the organization. I think we know our business in that line best, and I don't think any one is better able to give any information in regard to that than those en- gaged in' the trade as to how many are employed and unemployed. Q. You say the origin of your troubles is twofold ; first, the coolie system, and, set end, the tenement-house system 'I — A. Yes, sir. Q. Would you prohibit coolies from being employed in the manufacture of cigars ?— A. I am not opposed to the Chinaman, or any nationality ; but I am opposed that John Chinaman or any one else should be imported here as a coolie under contract. I dou t aoree that the Chinaman must go. I cannot agree with that, because you might as w^ll say that some one else must go. That is wrong ; I cannot agi-ee to that. I am not in favor of that ; but I am in favor not to tolerate the direct importation ot coolies by contract. , . , , „ ,, „, . q. Is there anything in the law in this country which prevents one ot these China- men from going where he will ?— A. I don't think there is. . , . .„ ^ ^ Q. Snpi>o.s(^ a .silk merchant wanted to get people to work m his silk factory, would you oppose his employing them under a contract for live, years ?— A. I would. O Yon think he should not be allowed to introduce skilled ojieratives into this coun- try f— A No ; I am in favor of that, Init opposed to their being brought here as slaves. Under a contract that lie will employ them for five years, and that the.y will work for five vears, and that he will-pav ihem a certain rate of wages during that time, ar- this room when it was built for him; but I complain of the fact that such expensive rooms are put up. Look at our custom-house aud all the houses put up by the government. Q. Was the custom-house built by the government ? — A. No, sir. Q. It was bought for very much less than it originally cost ? — A. Yes, sir. They are putting up in Albany a building which they have promised should cost only one million of dollars. Q. There is only one power that could promise it, and that is Congress, and in the law Congress limited it to .$250,000. — A. lint we find, practically, the building has cost one million of dollars, or is going to cost that sum. Q. I don't know what it will cost, but no one has made such a promise, and cannot make such apromise. — A. Look at the custom-house in Charleston, put up by the United States, if it is put up ; when I was there in 1860 it was not finished. Q. You object to govennnent buildings? — A. I object to the government doing busi- ness that other people could do. I say when they put up buildings, let them put up buildings such as a mercantile liouse would put up. Q. We will take the next point. — A. Those are the points I have to make. If I sliould say anything further on the point, it would be simply this. YVe can do nothing except we have economy. Limit the legislation of Congress to the smallest degree, and do nofhing further. Q. The minimum of legislation and the maximum of economy seems to be your tes- timony? — A. Yes, sir. The committee here took a recess. VIEWS OF MR. VALENTINE BECKER. Vai.kntini! Becker, the next person who appeared before the committee, said he desired to make a statement on behalf of the coopers of Brooklyn. By the Chairman : Question. What is your business ? — Answer. A cooper. Q. A manufacturing cooper, employer or employd ? — A. Employ^. Q. What do you say this committee can recommend for the benefit of the coopers ? I am interestiid in them. — A. There are more men out of employment than there has been these last six years; still that business lias increased; there are more barrels used in the last six years, more flour filled in barrels and more kerosene oil in barrels than ever before. Q. More barrels used than ever before ? — A. Yes, sir ; still there are more men out of employment than (^ver before. Q. Than ever before ? — A. Yes, sir. It was brought about in this way. In the first place, machinery was used ; in the next place, boys' labor took the place of men. Boys from eleven years of age, boys younger than eleven — I think eleven would bo the average of boys that were, employed in the trade to take the place of men. This -svas one of the causes why men are out of employment. I would like to see a remedy by a stricter apprentice law. Q. Would you have the United States make an apprentice law ? — ^A. I don't know DEPRESSION IN LABOR AND BUSINESS. 109 how, what power Congress has under the present Constitution. I wonld like to noo the Constitution so revised that the legislature would be enabled to pass laws for the benefit of the workingnian as well as thi^ capitalist. Q. Woiild it not moot your purpose just as well if the legislature of the State of New York passed an apprentice law ? — A. Yos, sir^ but I am not talking to the State of Now York, but to a Congressional committoo. Q. There is no authority for Congress to make such a law ; there is for the legisla- ture, and I ask you if the legislature would not eifect your purpose as well as Con- gress ? — A. It would, .sir. Q. Then why should that law he transferred to Congress? — A. Because I want it to be an absolute law in the United States, for the reason that the law should be passed for the benefit of the men throughout the United States. I wish the Constitution so revised that Congress can make laws for the benefit of the workman as well as the cap- italist. The next thing I want is free justice. Q. Free justice ? — A. I want to see the laboring man come into court and sue for his rights tree of charge, the same as the capitalist. At the present time a poor man can't get redress in courts unless he has a fortune at his back, and I have seen it the case that the most prominent men about here have lint their names in papers that if the men left the society of the union and came to them, they would jiay them wages for five years or more, as' the statement says, and they succeeded in breaking uj) the or- ganization, hut they did not pay them five years or five months, but reduced them irr five months, and generally pay them 60 per cent, less now. That is why I want free justice. I would have compulsory education to take these boys out of the factories that take the place of men, and educate them, so that they may know when they are imposed upon by employers and capitalists. I would have these hoys to become able- bodied men, so that they would take care of the republic in a later day. I should want these hoys to serve an apprenticeship of at least three years, so that in future the la- boring mechanic can go to work and do what is required in America. It is the boys, particularly, I speak of. I am not so well versed in the cause of the business de- pression, biit I think you should look at the state of things in good times, because if we had no had times we would not recognize good times, and if we had no good times we would not recognize bad times. If we had no black we would not recognize any white ; there would be no contrasts. As to the financial question, the national banks issued, I believe, to the amount of $4,300,000,000 ; this was given out among 45,000,000 of people ; at the war there wore 11,000,000 in rebellion that did not share in this amount of money. After the war these $4,300,000,000 were shared among about 35,000,000 of people. The share then became smaller ; the more there is to share in the lot the less there will be for each one. That they should withdraw the greenbacks — I don't know what they expect, but it has injured us and the community that they withdrew them to such an extent. I think there should not be any bonds' issued, but there should be gold and silver and the greenbacks stand out, and "the gold coin too. After I paid out all the gold, I would say, "Give me hack my greenbacks." There would be no resistance to the govern- ment to do so, and had the greenback been in circulation I think this bankruptcy would not have come about. But the bankruptcy did come about; they went into bank- ruptcv. As to the government making laws, I think the Constitution should be revised, as I said before, to give the power to legislate for all, not only for the bondholder. There are many ways in this State to pass laws for the benefit of the workingmen, had par- ties ever sought the good of the workingmen. We, went to different parties and asked them to do something for us. We put the eight-hour law before them, and they passed it in a kind of a way that did not do much for us. But there have been cases in which the State government employed men by the eight-hour law. There is no redress for the workingmen to go to court ; it costs too much money. I would not lose the time to prosecute an ofttcial and go to the trouble a man is put to ; what I mean is free justice should be given to everybody without spencUng money. Q. Can you point out anything in the Constitution of the United States which either directs or compels legislation in the interests of one class more than in the in- terest of another class ?— A. I can't, sir ; but I can point out where legislation has been given to the capitalists, and legislation has been disregarded for the laborer; I can point out that every railroad company, every insurance company, every one tbat has not got a public affair, can have legislation done, but there is none for the working- men and there is no power in the Constitution to legislate for the working people. Congress is under the impression it has legislated for the general good, and tries to do that and suppo.ses it has done so, and the remedy is when they do not legislate for the general good, to turn out the men that did not, and send other men.— A. That O Then' is not the remedy in the hands of the people, as it now stands?— A. Yes ; the remedy is in the hands of the people, and I hope they will take hold of it. Q Is not the appointment of a committee to sit during the recess to hear grievances 110 DEPRESSION IN L4.B0E AND BUSINESS. and to try to fintl out, so as to increase justice — is that not evidence to some extent of the desire on the part of the representatives to get at the facts, with a view to im- niediate legislation? — A. It is the first time the thing has heen done; what it will amonnt to we don't know. Q. Neither do we. What we want is the evidence. Get it before the people, get it hefore the Congress, and then you can send down representatives to Congress to get it done ; that is the remedy ? — A. Yes, sir. Q. Is there any other? — A. Yes ; hefore we can apply that remedy we must prevent employers from directly or indirectly influencing us to do as they say in voting.^ Q. i supi^ose you know there is a law on all the statute-hooks against the intimida- tion of voters ? — A. If I had free justice, I could bring men that tried to influence me. The Chairman. My colleague, Mr. Boyd, who is a lawyer, says it is an indictable offense. In indictable offenses means of obtaining justice are always furnished free, without charge to the individual. Lay it before the disti-ict attorney and the grand jury, and they will see to it. Mr. Boyd. There is no expense to bring to justice any person who is guilty of bribery; intimidation is a criminal offense. Mr. Becker. I had a man not long ago arrested for stealing my coat, and I had to pay 25 cents for a fee to get a warrant. Mr. EicE. Whom did you pay? Mr. Becker. The clerk of the court. Mr. EiCE. You should look for that clerk ; I don't believe he had any right to take it. By Mr. Boyd : Q. In case of a conviction, that fee would have been refunded to you? — ^A. It would not. Q. We don't convict men in this country without a trial, impartially. The presump- tions arc all in favor of a man's innocence, are they not, until he is convicted? That is right, is it not ? — A. That is right, if it is carried out right. VIEWS OF MR. ANDREW P. VAN TUYL. Andrew P. Vax Tu yl was the next person to appear before the committee, and was questioned as follows: By the Chairman: Question. Are you an employer or employiS? — A. I am superintendent of the New Y'ork Plaster Works, and have the entire control of that business. Q. Are you here as an individual or do you represent some organized body? — A. As an individual I express my views, but for the benefit of the concern. Q. Y'ou come here though for the concern you represent, not for any organized asso- ciation? — A. No, sir. Q. You know the purpose of this investigation is to ascertain the causes of business depression, and get at such remedies as we can, and if you will confine yourself as far as possible to matters within your own knowledge and expei-ieuce, and leave general matters out, we will be obliged. — A. If I should attempt to speak orally or extem- poraneously throughout, it would take me perhaps too long. If you will allow me I will read. Q. How long will it take you? — A. About ten minutes. The Chairman. Go on. Mr. Van Tuyl. I estimate that there are in the United States 10,000,000 of produc- ing laborers of both sexes, exclusive of clerks and salai'ied employes. About 2,000,000 of these have no regular or constant employment. Many of these are wandering through the country seeking remunerative work and are denominated tramps. The cause of this surplus of laborers is partly the fact that the late war withdrew from active producing employment for army and contingent purposes about 1,000,000 of men and made them non-producers and consumers, thus creating an additional de- maud for products with less facilities for producing. Maniifacturers to supply the defi- ciency constructed very largely of producing machinery to do the work which had formerly been done by hand labor. When the war terminated and the 1,000,000 of men were returned to the channels of production, they found every place occupied, and no need for additional labor. Then came the struggle of the "outs" to get in, and the "ins" to remain in their situations. The prices of labor gradually gave way until the whole subject became demoralized, and the hungry would work for anything ■ they could get. As a natural consequence, every kind of manufactured commodity shrunk in price, failure followed, real estate fell, and everybody lost. Bankruptcy became general. This is the present condition of things in this country, and the whole world has to some extent been affected by the result. Now the remedy. Q. Was there any period in the history of the United States within your recollec- tion more prosperous than the period that followed the war from 1869 to 1872 ? — A. No, sir. DEPRESSION IN LABOR AND BUSINESS. Ill Q. Then all this unemployed army had found employment ; labor was in req^nest at hifjh wages subsctxnent to the war ?— A. No, sir. Q. That was not the fact ?— A. No, sir. Q. Your testimony then is opposed to everybody else's testimony that has been be- fore the committee, and opposed to my own knowledge of tlie condition of things from 1869 to 1872. — A. Men at that time were having such extravagant wages that they were working only ]iartial time, and the result was there were as many idle then as now, living in the afternoon on what they made in the forenoon. Q. But there were high wages and plenty of labor dm-ing that time? — A. There wa« a demand for labor. Q. Was it not impossible to get labor at that time?— A. No, sir; labor was abund- ant. The Chairman. In my experience it was impossible to get labor at that period, and work ne\er was so abundant, and that is the testimony here. Mr. Vax Tuyl. The wages that mechanics had been receiving had made them very improvident, and they could live on partial labor. Q. Was it not a prosperous period ? Didn't you have an abundant demand for your products at that time ? — A. Yes, sir. Q. Didn't you get good prices ? — A. Yes, sir. Q. And paid your labor good prices ? — A. ifes, sir. Q. And thej' were set at work ? — ^A. Yes, sir. By Mr. EiCE : Q. Were there any more at work in your profession then than there are now ? — A. No, sir. By the Chairman : Q. Do you employ as many now as you did then ? — A. About the same number. The remedy I would propose is this, that government alone can apply the remedy. Trades- unions are good so far as they may go, but the Constitution and law stand between them and successful action. And, again, the trades-unions are in a, great measure controlled by leaders who have their own ambitious views to gratify, and often lead their deluded followers into excesses which bring reproach upon the organization as well as being disturbing elements in society. Q. What provision of the Constitution, what provision of law in the State of New Y'ork or under the general law prohibits trades-unions ? — A. Trades-unions can only control members of their own organizations. Q. What provision in the Constitution is there to prevent trades-unions from being formed and carried on ? — A. The Constitution will not allow an organization in this State to control the people of another State. Q. What ? — A. The Constitution of the United States will not allow the organiza- tion of one State to control the people of another State. Q. You want to put in the Constitution a provision by which trades-unions will not be allowed ? — A. I want the Constitution to make laws which are general and not local. Q. Is it not generally the case that the citizens of one State shall not control the citizens of another ? — ^A. If it is the law, it ought to be abolished and another made in its stead. Q. In other words, you want to centralize the government, the legislature and the government ? — A. I think that would be a very good word for it, sir. We have ex- plained that labor not only exceeds healthy demand, but also the wants of consumers, and hence I ask that the amount of labor must be lessened to suit the circumstances. If government should employ all this surplus labor in works of improvement or other- wise, then national debt, increased taxes, and ultimate bankruptcy would follow. I suggest rather that government shall exercise its power to lessen over-production liy abridging the hours of labor, instead of attempting to find employment for all the lab- orers. Make eight hours a full day's work, and impose such severe penalties on both the laborer and employer that punishment will be sure to reach its violators. Let this law apply to and be rigidly enforced in every part of the United States uni- formly, and to both sexes. This will require the labor of 10,000,000 of men and women to do what is now being done by 8,000,000. Let the law be positive and emphatic that no (me laborer shall under any circumstances work more than eight hours in one day of twenty-four hours. If more hours of work shall be required in any factory or shop, let it be compulsory on the part of the employer to employ other and additional men. Q. You want to reduce the productive power of labor in the aggregate by distribut- ing it over larger numbers ? — A. That is the idea. Q. Would not the destruction of machinery accomplish the same purpose? — A. No, sir. Q. Would not the destruction of a portion of the machinery now in existence pro- duce the same result ? — ^A. That might be, but it would not be wise. 112 DEPRESSION IN L,AiSUR AND BUSINESS. Q . Wliy would it l>e wiser to restrict the hours of labor than to destroy some of the ma chinory by law ? — A. At the present time in the business of my own (that of manufact- uring plaster of Paris) thit the fourteenth century. I think it practically commenced with the congregation of laborers in England within at least 100 years to all practical purposes. By the Chairman : Q. Do you mean that before 100 years wages were known as the reward of labor in England? — A. No, sir; it is difficult to find out when the wage system commenced. The first I know of it was, it was paid to armies in Rome, and afterwards paid to arti- sans; armies were employed at that time sometimes at productive industry; but for all practical purposes, for the purposes of this commission, it seems to me it is well enough to say it commenced with the introduction of labor-saving machines, or the congregation of laborers in England. Q. In other words, the wage system and the steam-engine were contemporaneous? — A. Yes, sir ; practically so. By Mr. Rice : Q. And thence dates the depression of labor ? — A. Thence dates the present form of the depression of labor. Labor was very much more depressed before steam came iu. The wage system is an advance on the old system. By the Chairman : - Q. Then the present system is an improvement on the old one ? — A. Very much. By Mr. Rice : Q. A stepping-stone to a better system? — A. A stepping-stone to a better system. Now, the present difficulty is consequent upon th^fact that machinery is discharging laborers faster than new employments are provided, or, in other words, the productive "^capacity has exceeded the power of consumption in the masses. I should like, know- ing the long list of persons who are to appear before you, to atop here, as far as the causes are concerned. By the Ch.urman : Q. You say that, owing to machinery, consumption cannot keep up with produc- "Hion ? — A. I don't like to state it that way, because it might appear I was opposed to machinery. Q. I wish to get your idea. — A. I should state it this way, that the power to con- simie has not kept pace with the power to produce. It is not the fault of the power of production ; it is a fault on the other side. Q. Was there any excess of production, in other words any glut of goods, in 1872? — A. That is asking for data that I have not with me. ■ Q. But as a general fact? — A. There is what is called a glut. Q. There was iu 1872 a glut?— A. There was about 1873 what is termed a glut. Q. A glut in 1872. In 1872 was the power of consumption so inferior to the power of production that there was a glut of manufactured articles iu the market ?— A. I could not answer that to-day. Q. Do you not know that the year 1872 was a year of great demand for manufac- tured articles, and that there was a deficiency of manufactured articles throughout the world? — A. I wish very much this commission could demonstrate that statement. I think our statistics are very faulty indeed. Q. When there is a glut, prices fall to a lower rate, don't they?— A. Yes, sir. Q. When the demand exceeds the supply there is no glut ; on the contrary, prices go up ?— A. That is your method of stating it. Q. Suppose there were six pocket-knives in this place, and every man iu the room DEPRESSION IN LABOR AND BUSINESS. 117 wanted a pockot-knife, would not tlie price of tbem go up in this room ? — A. Very likely ; that is, if the people hart the capacity to buy pocket-knives. Q. In 187d was there not a state of trade in which you had to wait to get orders filled in almost all staple branches of industry f In other words, didn't the demand exceed the immediate supply f— A. It may be so ; I have not got the data before me. I still make the assertion that the cause of this trouble is consequent upon the excess of the power of production over the power of consumption, and will demonstrate it, if the committee will give me an opportunity to do so. I make that assertion, and wiU only attempt to demonstrate it at another hearing, and not at the present hearing. Q. I want to know whether this has been a continued excess in the power of pro- duction over consumption, or whether it has been an iutermittent excess ; and, in order to arrive at that fact, I ask you what was notorioxisly the condition of businesij in 1872 ? — A. I should say it was an intermittent excess. Q. Then it proceeds not by a uniform law, but by an intermittent law ?— A. It is intermittent. Q. Do you not suppose there will be, some time or other, a period when the present excess (for it is admitted to be an excess) will disappear, and that there will be a demand, not only sufficient to absorb the present excess, but to make a deficiency, judging by the system of the past ? — A. It is probable the present system can continue on for some further time, and that the present difficulty may disappear, to be followed again very "^shortly by similar panics and distress. Q. Wliat you desire to do is to get rid of this intermittent period of excessive de- mand? — A. I wish to get rid of the system that causes the intermittent period. Q. You think the wage system causes this iutermittent period? — A. Yes, sir; it is very possible in 1872 there might not have been a wide divergence between the power of production and consumption, and still a panic occurred in 1873. It does not neces- sarily follow there might not have been the condition of tilings that you describe. It is simply the constant recurring of financial panics. Q. You thiuk this intermittent state of things is the result of the wage system? — A. I do. Q. Explain to the committee what that better system is. — A. I cannot explain to the committee now what that better system is, because I believe we have got to grow out of this system into that better system. I only wish to point your attention to the next step out of this system toward the better system. I will say here, in the opinion, also, of nearly all the organizations of labor, whether of the socialistic labor party, or nearly every other form of real labor organizations, one of the most imx)ortant steps is ^ a reduction of the hours of labor ; and I will say here that that demand, or the demand for that step, is not simply a national but an international demand. By Mr. Rice : Q. Do you think Congress has any power to legislate upon that question, so that there shall be a imiform legislative rule throughout the country ? — A. I do.- Q. Please explain how. — A. Yes, air. In the first place, I would have the present na- tional eight-hour law so amended as to be made to apply to all persons employed by the government, whether directly or indirectly, by contractors or otherwise. Q. No one employed in carrying out a contract should work over eight hours a day ? — A. Yes, sir ; that should be a condition of the contract so that, in furnishing the iron for this building, the iron-founders must work their employes under the eight-hour system. Q. Supposing a man contracted to build this building, could he control the iron- worker in his work? Would you have it go as far as that — the lumberman who saws the lumber in the mills of Michigan, or wherever it may be, or the wood-chopper who chops it? — A. I would have it go as far as possible and practicable. Q. Could you practically have it go any farther than to those who were directly employed by the government and to those who were directly employed by the con- tractor ? Would you not have difficulty even in going as far as the last ? — A. I think there would be no difficulty in having the system applied to all styles of contracts, to all Iron mills, and to all the other large manufactories where materials are furuished for the construction of public buildings. By the Chairman : Q. If we had a contract for a public building, would you compel us to go to the miners and say, "For the ore that goes into this job you must only work eight hours a day"?— A. Ifes, sir. Q. When any other iob came along, what would you do ? Would you compel us to do the same thing ? We could not do it. All the ore that is mined is mined in mines and put in heaps and transported to furnaces. How are we to keep separate the ore mined for the government contractors and the ore mined for other purposes ? And the ore is often mined two and three years ahead, in order to keep the workmen busy when there is no demand for the iron ; how could we meet that difficulty ?— A. We would go as far as practicable ; if it was demonstrated that it was impracticable I don't urge 118 DEPEESSION IN LABOR AND BUSINESS. it. The idea is to force you to employ men only eight hours all the time, and if it causes any difficulty we would rather have the difficulty come on you than ou the juiner. Q. Hut laws are of no use unless penalties are attached to them? — A. Yes, sir. Q. Would you put a penalty upon iron-makers who had the contract to furnish iron for a building the moment it was proved that any of the ore that went into that iron was worked more than eight hours a day ?— A. If it was practicable to do so. Q. Is it practicable to do so ?— A. That is for the future investigation of this ques- tion to settle. It is a question, and I will come by and by to the idea of the establish- mtnt of a national bureau of statistics of labor. Many things that appear impracti- cable to us may appear practicable when we have demonstrated by statistical inquiry the facts in the case. Q. Now, when we come to legislate we ought to consider those matters. In mak- ing iron, wo have to make wooden patterns in order to shape a form. In making wooden patterns, we have to buy glue to glue the wooden patterns together. Glue is made from waste material, but is very largely got from the butchers around great cities. Would you carry this proposition of yours to the point of investigating whether the men that butchered the meat for the consumption of the city of New York or any other city had given more than eight hours' labor to that task ? — ^A. Most certainly I would ; i want to carry this point to the lowest foundation. Q. Then, when a man took a government contract under a penalty, which you would have fixed, he must sit down and investigate whether any portion of the material that goes into the work has been produced by labor of more than eight hours a day, and if it is found anywhere that that has happened he is to be ijunished? — A. I say the bureau of statistics of labor, which we will petition for, will have presented the facts in the case, and he will not necessarily be forced to make an investigation into the matter, and we are going to go just as far as practicable. At first it may be only possible or practicable simply to say that in the construction of this building the iron foundry must work under eight hours a day, and not go back of that. It might say that the quarries should work eight hours, and not go back of that. That is a matter of detail which must necessarily be left to the legislators as to the question of the practicability of it. Q. Would not the men who owned the iron factories and stone quarries have reason to complain if the rule was not applied to every other contract in the building ? — A. Every other contract would be under the same consideration. I should say the man who furnished the gas-fixtures should employ the men who manufactured the gas- fixtures under the eiglit^hour system ; and the man who supplied the glass should man- ufacture it under the eight-hour system. Q. Gas-fixtures and glass are also manufactured in other countries than the United States? — A. Very true. Q. Suppose you restrict him to eight hours, and another contractor comes along iroin where there is no eight hour law, and he says: "I will furnish the glass for 20 per cent, less, and I will furnish the bronze work for 25 per cent, less ; would you pro- hibit a contract being made with him ? — A. That would depend largely on other mat- ters. I might be a protective man and say, "I want to encourage home industries, and so I will have the "as-fixtures that are manufactured here." I would give the preference to the man who manufactured under the eight-houi' system, whether it was 20 per cent, cheaper or dearer. Q. In other words, you would compel the government to take only goods manufac- tured under the eight-hour system, and buy no other goods in any department of the government ? — A. As far as possible. By Mr. EiCE : Q. How would the man that made the gas-fixtures for this building be able to confine his workmen to eight hours when it was government work without confining them to eight hours when making gas-fixtures for your house ? — ^A. The more difficulties we surround them with the better. Q. Would not the difficulties surround us ? — A. Some would surround him. You are called upon to legislate, and I say it necessarily follows that I should make an argu- ment to show that it is more important that our people should be employed under the eight-hour system than it is important whether the manufacturer of these things is .surrounded with difficulties, or whether we will pay 20 per cent, more or loss. That is the question Congress must settle — which is the most important factor. Q. You desire to efieot a limitation of the hours of labor to all laborers ? — A. That is what we desire. Q. It is not specially to those that work for the United States any more than it is to those who work for' Mr. Hewitt ? — A. Certainly not. Q. It is to all ? — A. Yes, sir. Q. If you are confined to those working for the government, and cannot get an inch beyond them, then you would not care to apply it to those and to no others ? If the BEPKESSION IN LABOE AND BUSINESS. 119 government could not alleviate the condition of tlie rest, yon would not want to make those who work for it the favored class, would you?— A. If you wait till I have con- cluded you will see I have reached practically nearly all the persons employed. We are all attempting to make an investigation into a difficult problem. We have had difaculties on our side, and the legislators on their side, and the manufacturers on theirs. We are trying to get over the difficulties. The next point in the eight-hour system is this, to have a law so framed that all patents granted by the United States Government should contain a clause that no person employed in the manufacture of thoae patents, or employed in producing commodities by the use of those patents in auy factory or workshop iu the United States, should worls; except under the eight-hour system. Q. In other words, the patent should involve the obligation to employ labor eight honrs, and no more? — A. Yes, sir. Q. And that should be the condition of the issue of a patent ?— A. Yes, sir. Q. Supposing two persons own the same machine — a sewing-machine for instance — would you not let me work eight hours on it and another eight hours during the same twenty-foiu- hours?— A. No, sir; I don't believe in the relay system, if that is what you mean. Q. That was not what I meant. I was merely suggesting the difficulty of keeping a sewing-machine from running more than eight hours during a day.— A. in a factory 1 Q. Anywhere ?— A. I stated in a factory or workshop. By the Chairman : Q. Take a rolling-mill, which has to run day and night. There are many patents on rollers. The moment there is a patent on rollers you would compel it to work eight hours a day, and stop it during the night ? — A. Yes, sir. Q. Then the mill could not run, because the cost of fire is so enormous they could not carry on the business. AVhat would you do ?— A. If it is impracticable, which i.s a, question of investigation — you know more about that than I do. Q. Take my word for that.— A. Whatever is practicable must be done. If a roll- ing-mill cannot be run on the eight-hour system, thou it cannot. Q. You can make three relays of men, and work eight hours each. As to a patent roller, you said you would not let a patent machine run more than eight hours out of the twenty-four. Now, there is a machine, and you would compel me to have three sets of machines instead of one, whereas one would do all the work. — A. I don't mean that. . Q. Would I have to stop 16 or 18 of those patented maohiues, and let the men stand there ?— A. I don't know ; I don't undertake to say that I know all the details of every business. Q. But you lay down a proposition for the information of this committee, and the committee confronts you at once with a practical difficulty, and I have no doubt every gentleman in this room can confront you with another difficulty in his line of busi- ness. — A. My point is this, that this machinery must run under the eight-hour system. Now, every different industry has certain details, certain definite things, which must, of course, be understood; difficuUies that come to it must be understood. Q. Suppose I should produce thousands of cases where the difficulty would arise ; now, I have to legislate about it — what would you have nie do as a legislator? — A. I would have you sit down carefully and calmly to consider this question, as to which is the most important interest set before you — the considerations that are placed be- fore you by those thousands of manufacturers, or the very stability of our government under which we live. Q. Now, I have got in my employ, say, a thousand men who are now not earning as much as they ought to, but are living in comfort. I can run them on the pres- ent system of using the patent machine through the day and the night. This law is passed, and I can no longer employ the men ; who sufters — the employer or the men who are tnmed out of work?— A. I stated early in this matter that I simply wished to make assertions, and to point out legislation. I do not desire to occupy the time of this committee to-day in the discussion of that question. I will promise this committee, if I live, to attempt to meet those difficulties. I will say here that I ■ have considered the difficulties that the gentleman states, and I believe they are all difficulties that can be overcome, and that they must be overcome. By Mr. Eicb : Q. You see they are not imaginary difficulties from the fact that you, with all your study, are not able to answer them at once?— A. I know they are real difficulties ; there is no one protends they are imaginary difficulties. They are real difficulties; but the trouble is that outside of the wajje labor our socialists, the educated classes, have not considered the other side of the difficulty in the case. Q. Have you read Mr. Thornton's book on labor ?■ — A. I have, Q. Is Mr. Thornton an educated man ? — A. Yes, sir. 120 DEPKESSION IN LABOE AND BUSINESS. Q. Have you seon anywhere or lieard anywhere a more earnest, thorough, calm, ahle discussion of the rights of the laboring classes than is given in that book? — A. I admire very much the spirit of the discussion ; I take exception to his conclusions. Q. You say the educated classes have not given themselves to the consideration of the laboring classes ? — A. Mr. Thorntou is the exception to the rule. Q. Take John Stuart Mill and Mr. Fawcett. Do you think Mr. Fawoett ha,s not given tlie most careful and elaborate discussion to this question of the condition of the laborer?— A. The political economists of our time, in our opinion, considered this question from the capitalistic side and not from the labor side. Q. Do all political 'economists consider it on that side! Have you heard of Fred- erick Allison ? — A. Yes, sir. . Q. Have you heard of Thomas Hume ? — A. Y'es, sir. Q. Are they gentlemen of education, culture, and refinement ; and what are their views in reference to the laboring classes ? — A. I suppose we could go on for some lime and pick out the exceptions to the rule. Q. You said Mr. Thornton was the only exception ? — A. No ; I didn't say that ; he is an exception. Among thousands and tens of thousands and hundreds of thousands of the capitalistic class, it would be very curious if you were not, in the nineteenth century, able to pick out 50 or 100 men who have shown themselves superior to the capitalistic influences of their class. Q. How many political economists do you think are living at the present time ? — A. Most c\ery member of this Congress, except this committee, believes himself a sort of political economist when he comes hack to his district to teach the laboring class what they ought to ask. Q. That, no doubt, is true, but when he goes back to Congress he always disclaims being a political economist, so we have none of them there. — A. They disclaim many things when they get back to Congress that they say before election. Now, our point is, lliat there is no written science of political economy. There is a German school of politic;il economists arising, which questions the Manchester and the other schools, and it is a considerable question as to which has the right of the argument. In fact, I would say that we believe that we have got the unwritten science of political econ- omy, and one of the reasons why every laboring man iu all these organizations conies before you to ask the establishment of a bureau of the statistics of labor is because they believe, if the rigHt man is placed there, we will be able to demonstrate that the (dd political economists were false, and we will evolve soon a social science that will give us light oji these questions. Q. Is it not the fact, so far as you can recollect, that you cannot point out any way by which this can be done by legislation, and is there any other way than the way you have now suggested, by some social arrangement by which there should be co-op- eration aiuojig the men — co-operation I mean among the employed and perhaps among the employers — and some agreement by which ultimately there may be a harmonious action between the two, and these desired changes and improvements be attained, rather than by any direct and arbitrary legislation? Is it not a matter of slow pro- cess, and only to be sought rather by social advances, social means, than by direct and arl )itrary legislation ? — A. I believe that the'difiS culties tliat are nearest to us appear the largest, and that the difficulties which our chairman has named are not near as large as they appear to him to be, and that investigation will develop the fact that the legislation that we propose, namely, the amendment of the eight-hour law applying to contracts, and to the jiatent law, is practicable — to a certain extent, of course, because there is a limit to all things; but to a very large extent it is practicable. For instance, take the cotton and woolen mills of New England. I claim that under the patent law eviiry one of the factories in our manufacture of textile goods can be operated under such an eight-hour law by the amendment of the patent law. That would, of itself, emancipate a va,st army of men, women, and children from the demoralizing influence of the times. Q. When the term expires of the patent on a certain class of machinery, what then ? — A. The government does not lose its control of a patent. II the best interests of the people demand the revoking of a patent, I suppose it is proper to revoke it. Q. At the end of seventeen years a patent is public property. You know that very much of the machinery of New England which has been patented, and which had a- very high price upon it on account of being patented, is now free from patents. That is the fact in regard to sewing-machines very largely. How are you going to remedy that ? — A. I suppose there is not a yard of textile goods irianufaotured in New England that is not the product of a machine that has not a patent on it. Q. Take the sewing-machine ? — A. The sewing-machine is the manufacturer of cloth into clothing. Mr. EiCE. Yon have given your first point, and that is the limitation of the hours of labor, and difficulties have sprung up upon one side or the other, and you can make such further inciuiries into the matter as you desire and state your views hereafter. DEPRESSION IN LABOR AND BUSINESS. 121 By the Chairman : Q. What is the thh'd suggestion you have tomjite? — A. That is all the suggestion I have to make this morning in that direction. I wish for a moment or two to call your attention to the result of the reduction of the hours of labor. I will not occupy more than five minutes in it. Now, then, this is our statement. We ask for a reduction of the hours of labor, not only because we believe the interests of humanity demand it, but for economic reasons ; namely, that the only way by which we can reach a better state by a better system of productive industry is by slow, gradual, and ordinary steps out of it. We do not believe we can bring the socialistic state or the co-operative state to America— as English people call it. We don't believe we can get the co-operative state by bringing it down from heaven. As Parker says, "Nature never takes any leaps." We don't believe we are going to take leaps. We are going to take steps. We think a reduction of the hours of labor will increase wages. It will decrease the producing power of a day's work. We claim this not simply as a theorv but as a fagL.. established by history, that there never was a reduction of the hoursoTTSIbofTiEat was not followed by a permanent increase of wages, and that that permanent increase of wages is the result of certain natural forces in operation, and you can no more resist the power of the reduction of the hours of labor in fixing the wages than you can fix the power of the law of gravitation. Certain laws that govern wages operate as surely as the law that governs gravitation, and that law which governs wages, which is acknowledged by nearly all the political economists o f all scliools in some way, is the power of habit or custom over wages. James Hall says, in his " Homes of the Work- ing Classes," that if you reduce the beef diet of an Englishman to a diet of potatoes, you reduce his wages at the same time. As Parker then says, the habits and customs of the people have considerable efiect ou wages, but they differ in the degree, and we claim that a reduction of the hours of labor will soonest affect the habits and customs of the people ; that it gives not only a temporary but a permanent result. For instance, we have, to-day, a certain productive capacity. We have a productive capacity of 100 per cent. We have a consumptive capacity of about that amount to-day. There is not much produced comparatively to what there ought to be, perhaps, and we will say that they are about united, about agreed, the productive and consumptive capacity. When I say "capacity," I don't say that we cannot prodxice more or cannot consume more, but I mean that the amount that is produced to-day finds ^ market. Now, then, reducing the hours of labor will reduce the productive amount, we will say, one-fifth. It won't be quite one-fifth, but we will call it one-fifth, Now, the demand is for 100 per cent., and they can only give 80 ; the consequence is that you call into operation nearly one-fifth more wage labor. In a million persons employed, that means that you are giving employment to 200,000 men. By the Chairmast : Q. It has been put in testimony here that eight honrs' labor would be as effective and productive as ten hours. You don't hold to that doctrine ? — A. No, sir ; if a given piece of machinery running by machinery is capable of producing a, certain amount per hour, it will produce more in twenty-four hours than it will in twenty-three. Q. If you reduce the amount of produption for a given amount of labor, will that not add to the cost of the article produced ? — A. It would appear to. Remember, we have found 200,000 unemployed in a million. What does that mean? It means that you have made 200,000 consumers of the product of other men's labor. You have re- duced the labor market, according to the old theory of the law of demand and supply — you have reduced the unemployed to that extent that wages must necessarily go up. Now, the price of an article is regulated more by the number of these articles pro- duced than anything else; if we can multiply the manufacture of gas-fixtures, for, instance, to manufacture that gas-fixture in China with cheap labor at 6 cents a day will cost infinitelv more in China than it will here at $5 a day labor, because there is a larger demand for the sale of gas-fixtures here, and there you would have only the royal family. I doubt whether the Emperor of China is able to have a common gas- fixture in his house such as we are able to have in our workingmen's houses. Q. You don't doubt the Chinese would be soon able to produce such gas-fixtures at 6 cents a day ?— A. No, sir ; the price of those is regulated, not by the price of labor on them, but by the number they manufacture. By Mr. Rice : Q. By the state of society ?— A. Yes, sir ; by the state of civilization. The Emperor of China cannot ride in a horse-car; it would cost him $100,000 to ride in a horse-car, and it would cost us only 5 cents. By the Chairman : Q. Show us how Congress can limit the hours of labor in a practical way.— A. I be- lieve it can be done by the legislation I propose. Q. We aU know very well, and we are hoping the time will come when laborers can 122 DEPRESSION IN LABOR AND BUSINESS. work lesa hours ublio or pri- vate duty, and I do it to the best of my ability. Mr. McNeil. There is one thing upon which this committee can nnite : it is that which all workingmen have united upon, even greenbackers — and let me say here that I wish this committee could have divorced the two questions — I wish in the future investigations they will allow the financial reformers to take a proper time if yhu are to discuss finance, but don't mix finance and industry together. We want them sepa- rated. We have nothing whatever to do with the greenback movement. It is not a question which properly comes before this committee in this investigation of the causes of this difficulty. What we all unite upon, even the greenbackers and the socialists and the trade-unionists, is investigation. We have knocked at the door of Congress for the last five years asking for the establishment of a national hureau of statistics of labor. We ask you to report to the next House in favor of the establishment of such a department, and, with this remark, Mr. Chairman, I am much obliged to you. Mr. Rick. There are those who believe that the currency has something to do with the question of labor, and it is our duty to hear from them. Mr. McNeil. Of course, they have the same right to their opinion that I have to mine, only I wish the hearing could be separated. The Chairman. But the matter confided to us is to investigate the causes of the de- pression of labor. A great many people think the cause is too much currency; some think it is too little ; and we cannot perform our duty without hearing those gentle- men. Mr. McNeil. I ask you to separate them, so that a hearing for labor be given on one day, and finance on another. The Chairman. The committee thought it was better to begin by giving every- body a hearing in the order in which they might come. Hereafter we may be better able to classify the hearings a little more closely. A. T. Peck appeared and made the following statement : By the Chairman : Question. Where do you live 1 — Answer. Danbury, Conn. Q. What is your business? — A. My business is comb manufacturer. Q. You are an employer of labor ? — A. Yes, sir. DEPRESSION IN LABOE AND BUSINESS. 123 Q. How mauy persons do yon employ ? — A. At present only one or two ; sometimes one hundred. Q. How long is it since yon employed a liundred ? — A. It is some five or six years since that. I sold the factory to a hatter, and I propose to huild another one next week. Q. You are not now engaged in any business ? — A. No, sir ; I am contracting for a factory to open the process of the manufacture of combs again, and buttons. Q. Are you engaged now in carrying on business ? — A. Not just at this moment. Q. How long since ? — A. It is about two months since. ' By Mr. Rice : Q. But you are making arrangements for future business ? — ^A. Yes, sir. By the CHAiRM.'Usr : Q. Have you given careful attention to the causes of the present depression in business aud in the remuneration of labor ? — A. One-half of my lifetime, which is sixty-three yeaxs. Q. Will you give to the committee a statement of what you hold to be the causes of the present depression ? — A. I was somewhat startled by my friend who preceded me and said he didn*t want to have anything to do about the currency of the country ; didn't want to mix. it up with labor. I was much gratified with my friend on your left who said he didn't see how he could get along without it. I am here to talk about the currency, and I want to call your attention to some laws passed by Congress some fifteen years ago, and their effect. Some fifteen years ago Congress enacted the na- tional banking act, and the effect of that is that the bankers get money from the gov- ernment free of interest. That is the effect of the national banking act. Over three hundred millions is got by the national banks from the United States Government free of interest. I don't find any fault with the law, for I see among all the improvements and all the inventions and discoveries during our lives, or the centuries that have gone before, nothing so far-reaching to lift up suffering humanity, the working-class, as that very law, if it is very slightly extended. Now, what does it prove f It proves that the government has lent the bankers three hundred millions of dollars without running the government in debt one cent ; it doesn't tax any one a cent : it does not injure a solitary soul. Now, take note of that great fact, that the Government of these United States, which is the government of the people, does lend money to the banking class of this country free of interest — absolutely free of interest — without running the government into debt one cent, or taxing a dollar to anybody, and not injuring a solitary soul. I want that to be understood. Your honors know that. Every one of you Congressmen know that to be the fact. Now, then, I don't find any fault with the law, for I say that if you can take a hundred thousand bankers of the United States and lend them money from the government free of interest, you can take one hundred thousand workingmen and do the same thing under the same condition. Now, about the word "money." We have considered in these days the government legal-tender notes as money ; they certainly buy everything. They built every inch of this building ; they paid'for every dollar of it ; they control the whole traffic of this immense country to-day ; and certainly they are money. And why are they money ? Because three hundred and fifty million of dollars of greenbacks are based upon over $10,000,000,000 of property, the whole value of the property of this country is llO, 000, 000, 000, and yet who says they are not based upon value, absolute value— con- sequently they are money. Now, then, a piece of paper, to be money, must have its base, and that base must be the solid.gold and silver of the country. It does not necessarily follow that every greenback must on demand be paid in gold and silver ; it is not necessary at all, because we scatter and use constantly throughout this coun- try in the year over four thousand millions of doUars in paper, and not one dollar m gold is used, and yet it is on the gold basis; everything is balanced by it. Why? Because our products go forward to the old country, and they are settled for on the gold : therefore, our trade is based on the gold basis, and when an importer buys his meat or grain or cotton, he bases it on the absolute solid foundation of gold and silver coin. It would not matter how many thousand millions there are if every dollar is based upon this property. I hold in my hand a petition to Congress, aud if that peti- tion should in the process of time bo granted, certain immense results will foUow, and I will read it to you, and then give it to your clerk. Now, suppose Congress should enact such a system as that ; there is not a voter m these United States anywhere, if he wanted a homestead or a house, if he could buy or get contractors to build it for him, but, as soon as the house was done, he would go and get his money and pav for it on those conditions, the result being that you place the workingman, the householder, in the same condition the banker is. He takes his money that he gets fi-om the government free of interest and loans it on interest ; but this man takes his house and lives in it. He-only pays 4 per cent, a year on the cost ot it and in twenty-five years he owns his house, and he has not paid any interest, and the result is the man owns his premises free and clear, and he owes the government 124 DEPRESSION IN LABOR AND BUSINESS. nothing. That is tho result. What do I do as a contractor? I go and contract for digging the cellar of a house. I go and ask the stono-wall m.in to lay the stone, aud the brick man to make the underpinning. Then I go to the carpenter and painter and get them to contract for the building, with the understanding that not one dollar is to be paid those men until the buildiiig is done. I have done that several times. Not one dollar did I pay until the whole building was done. I know hundreds that do the same thing, and in the city there are thousands that do it, and that is that they boi-- row money and pledge the building, paying 6 ])er cent, for the use of the moiiey, and pay all these things, and they have the use of the property, and get in some cases 25 per cent, interest. Suppose the government had one of these institutions m the place where I live; instead of paying a man 6 per cent. I could get the use of the money for nothing, just the same as my banking friend does. Now, the reason why the National Government can loan money to the banker free of interest is because they give security. When I go to a savings bank don't I give security ? What is that security ? Bond and mortgage. There is not a savings bank in this State that is not perfectly sound when it is conducted on the principles of strict savings-bank law ; there is not one of them that ever failed, or can fail ; the security is equal to any United States bond that ever was made, or ever can be made. Q. The remedy you suggest is to loan $5,000 to everybody that wants to borrow it to build a house '?— A. They are to build or to buy before they get the money ; that is the point. Right in there! want to make an observation. Q. Where is the government to get this money? — A. Print it. Q. If it printed enough to supj)ly every man that wants a house, will that money maintain its equality with gold, which you say is the fundamental condition ? — A. No ; it don't make any difference how much they print, provided the property is worth gold. Q. And the redemption of these notes is to be made in what? — A. If any one wants anything of the government the government gives them yalue for it. Q. The government is to redeem those notes by giving property?— A. Yes, sir. Q. Whoso property will they give them ?— A. Their own property. Q. The government property ? — ^A. Yes, sir. Q. This post-office, for example ?— A. No ; this is a public building for public pur- poses. Q. What property has the grovernment except its buildings ? — A. The mortgage- bonds of the property of the buildings they have given the money for ? Q. They will redeem the notes in mortgage bonds ? — A. Yes, sir. Q. And' the man who receives these bonds for anything, if he wants to get anything, must go to the government and get money for them? — A. Do they do that with the bank-notes? Answer that question. The Chairman. If you have made your statement of the cause of the depression and the remedies, the committee would like to call some other witness. MekkilIj Selleck appeared and made the following statement : By the Chairman : ■ Question. Where do you live ? — Answer. One hundred and forty-five East Twenty- first street. Q. Are you a delegate from any organized body ? — A. I am a member. Q. Are you sent here by any organized body ? — A. No ; I wish to express my free ideas. Q. What is your business ? — A. My business is to get business, now. Q. Are you a mechanic ? — A. No. Q. Are you an employer ? — ^A. No ; I have been doing something in the way of can- vassing. Q. Have you been studying the causes of the present business depression ? — A. I have. Q. Are you prepared to state them ? — A. I am. Q. State them, succinctly, please. — A. 1st. Abolish the United States Senate; 2d. Restrict the powers of the President, Vice-President, and House of Representatives ; 3d. Establish labor bureaus all over the country ; 4th. Destroy States sovereignty; 5th. Legislate for the purpose of creating a paper currency in settlement of debts, &c. , and for legal tender ; 6th. Abolish all money except the above mentioned ; Tth. Issue |58 per capita ; 8th. As the population increases so increase the amount of money, keeping it at §58 per capita ; 9th. Allow no persons outside of the labor bureau to employ others ; 10th. Elect labor-bureau directors for every trade, profession, or occupation, and pay all the same wages, from the President down ; llth. Allow no healthy person to remain idle after having received a proper education ; 12th. All healthy children should receive .in education, commencing at the age of six years and ending at sixteen ; 13th. The amount of time devoted to labor shall be six hours per day at present, though the improvements in machinery will soon render that length of time unnecessary, thus giving better facilities for mental development, recreation, &o., and equal chances and opportunities to all. Then there will be but one class of people, and that first class. DEPRESSION IN LABOK AND BUSINESS. 125 By Mr. ElCE : Q. One of the poiTits is to restrict the powers of Congress, is it not ? — A. Yes, sir. Q. Don't you think you wonld have to enlarge them to do all that ? — A. I would have the whole United States a Congress as far as I could. Q. You would have Congress enlarged?— A. In point of numhers. The Chairman. I have no questions to ask. Mr. Seleck. I thought you wouldn't have any. Henry Kemp appeared and niado the following statement: By Mr. Hewitt : Question. What is your business ?— Answer. I am a produce broker. Q. Are you here as a representative of an organized body? — A. No, sir. Q. As an individual ? — A. As an individual. Q. Have you studied the causes of the present business depression? — A. I have en- deavored to do so. Q. Have you arrived at a conclusion ? — A. Some conclusions. Q. Please state them briefly to the committee.— A. Mr. Chairman, I shall, in as few words as possible, explain the reason why a high protective tariff lowers the wages of labor, and why free trade raises it. It is a well known fact that in all new countries, where population is small compared to the extent of fertile land, the remuneration of labor is greater than in older and more densely populated countries. The proof of that is simple. This is clearly pointed out, and the reasons why, by Adam Smith over one hundred years ago. He clearly showed, when writing about this country when British colonies, that the cheapness of land was the principal cause of the high price of labor. Eicardo, fifty years ago, proved that when a people only required to culti- vate their best lands that the profits of capital and remuneration of labor were at their maximum; and hence I claim that this country, to be prosperous, its trade must be nearly free ; that is, that society must be able to sell their products. For over two hundred yeai's the history of this country, when colonies and since its independence, has clearly proven that cheapness of fertile land was the principal cause of labor being higher here than in Europe. Now, when the profits of agriculture are high, farmers to secure the services of blacksmiths and carpenters must pay them good wages, for, with very little capital, if they are not pleased with the profit and wages of their trades, they will turn farmers. The same holds good in the large cities. If young men, in ordinary times, are not satisfied they go west, and, if wages do not please them, they also drift to farming. Does the fact that wages are generally higher in America than in Europe not demonstrate to the dullest capacity that there must be some great leading cause for it? It cannot be owing to capital, for England has more thaij you. If it was on account of skill, you would not need a protective tariff, and, as Ameri- can goods are, in general, not so good as European, that cannrft be the reason. It can- not be on account of freedom, for the last trace of serfdom has been abolished in Europe. What, then, is it? It is the immense quantity of fertile land to the popula- tion as compared with Europe. That is the only solution of the question, and the solu- tion of it is to allow people to sell their goods freely, and allow them to buy. No man can buy unless he can sell. Other coantries prove the same thing. The immense quantity of land to the population in Canada, Australia, and the Cape of Good Hope proves also the same fact. It is no use to deny it. There are 60 per cent, of the popu- lation of this country composed of farmers, planters, and their families, and also 15 per cent, more of the population employed by them directly as mechanics or forward- ers of their produce to the seaboard, &c. I think I have proven my case, that even when this country was only a, colony labor was high, as Adam Smith says, entirely from the cheapness and abundance of fertile land, and, as Kicardo has proven, that when only the best lands are cultivated in a country, the profits of stock and wages must be at their maximum point. I think I may now say I have demonstrated my first position, why labor is high in the United States. I shall now endeavor to prove our protective tariff lowers the price of labor. The general understanding of a protectionist is that the protective tariff makes wages Sigh. Mine is directly the opposite. The cause of high wages in this country is the , abundance of fertile land, and the cause of low wages is that you cannot sell these products to advantage if they refuse to buy. I shall now endeavor to prove how a protective tariff lowers the price of labor. It is unnecessary to go into details after the able lectures by Professor Sumner on the history of the American tariff, showing the first tariff of 8 per cent., and which has been done so well that the subject is exhausted. It is evident when the first tariff was made, it only made 8 per cent. It is evident that the home manufacturers of any article that was charged with an import duty of 8 per cent, in the first tariff, if at any time they could barely compete with their foreign competitors, they would put on more duty. Now, when they got the duty ^oubled, what would be the conse- 126 DEPRESSION IN LABOR AND BUSINESS. qiience ? Having got 8 per cent, more duty, tliey would likely get 8 per cent, more profit ; they would gain additional capital and increase their production, a,nd other people seeing them prosper would transfer their capital into the business. Then they might go on increasing production, so as even to drive the foreign article out ot the market. There would still be more increase of production, until at last the production would exceed the consumption. We have protected the manufacturer to such an extent it has been like a premium to make people go into their own business. It has diverted capital and labor from other productive sources. It has failed from the be- ginning to the end. Then would come a glut of the home market by overproduction. Then would follow loss and ruin to the manufacturer. Now, what would be the fate of the mechanics and laborers ? At first they might get a share of the extra profits by the protective tariff in the shape of high wages ; but as soon as their employer could train extra hands, their wages would decline to the level of the wages of the rest of the community; and whenever the home markets were glutted with the protected commodities, and their employers were losing money, they would, if possible, make up the deficiency by reducing the wages of their employes. Then the same thing would have to be gone through again— the tariff made higher, an advance in prices and w ages for a short time, a transfer of more labor and capital into the protected trade, overproduction, glut of the home market, stagnation, lower wages, ruin and discon- tent. I pity the capitalist or mechanic that is engaged in a protected industry. The his- tory of commercial legislation proves this fact. The British farmer from 1815 to 1846 was protected with almost prohibitory laws, except when the ports were opened, when the price of foreign wheat was equal to |2.19 per busliel ; yet, in spite of these laws, in 182-2 there was a glutted market by the over home production of wheat, and the price fell, in spite of the law, to $1.20 per bushel. This was caused, first, by the people being obliged to live laore on potatoes than wheat, the former supporting the people at one-third the cost of wheat; second, from the wages of 'the manufacturing population falling in price, owing to the foreign wheat-producing countries not buying the same amount of manufactured goods as when England was buying their wheat; and, third, from the previous high price of wheat, extending the growth of wheat at a great expense to fifth-rate land that should have been kept in pasture, thus causing the overjiroduction of wheat, especially when the harvests were good. What was the result of this? Continued misery. The result was, a committee of the House of Commons sat on agricultural distress in 1822. This again took i)laoe in 1834, 1835, 1843, and 1844, when at all these periods, from similar causes, there were low prices and a home glut. By the Chairman : Q. The history of tariff legislation is a subject the committee has had to listen to many hours a day during the last session of Congress. Your idea is that one of the true causes of the present depression is the high protective tariff ? — A. Yes, sir. Q. And your idea of the remedy is that the protective tariff should be repealed and free trade suhstituted ? — A. Or a tariff for revenue only, and if you cannot get enough revenue from that source, make an income-tax, or some direct tax ; if you have not money enough then, put a tax on spirits or any other commodity. I would put a tax of the same amount on spirits. Q. Your remedy is in modification of the tariff? — A. I would eliminate the tariff system altogether. Q. That subject is one which is under very careful consideration by one of the com- mittees, the Committee of Ways and Means, and, while we have your suggestion, it is not worth while taking np the time of the committee in discussing that matter here. If you file that document we would be glad to have it. — A. I will file it and conclude with a few remarks : It may be said that it does not apply to exchanges effected in the home markets, but that reasoning does not alter the case at all, as "all commodi- ties buy commodities and ser\ices, money being only the medium of exchange." Im- ports from abroad are as much the fruits of American industry as if they had been produced in this country. All goods leave the country where they are not wanted to go to the country where they are wanted. In fact, all commerce is the exchange' of , the surplus of one individual for the surplus of another individual, whether that ex- change is effected in the country or with an individual in another country. Nations are like individuals ; they naturally follow the occupation that pays best, if each indi- vidual is left to his freedom in choosing his own pursuit in life. Some people say that labor being cheap in other countries, the mechanic and laboring man would be under- sold and ruined. Such nonsense ! When you can export an article, it is a proof that you produce it cheaper than the country you export it to ; and when you import an article, it is a moral certainty that the foreign country can produce it cheaper than you. Suppose, for instance, a certain amount of capital and the labor of 100 men pro- duce a given quantity of iron, would it not be better to produce, with the labor of 80 men and 20 per cent, less money, an amount of wheat that would go abroad and be DEPRESSION IN LABOR AND BUSINESS. 127 exchanged for and import tlie same quantity of iron ? Wliatevor amount of protection an article wants in the shape of an import duty to insure its being produced at home is just so much of an indirect tax on the rest of the community, and the production of that article should at once be stopped. A protective import duty should be, called a double tax on unprotected consumers, one tax for the benefit of the protected interest and another for the revenue of the tovernment. Some people say if men in eastern countries work for 6 to 12 cents per ay, how could our industrious classes compete with articles imported from these countries ? Do those people ever ask the question why labor is so cheap in these countries ? It may be from want of a settled government, from a lawless state of society preventing the increase of capital — for without safety capital and labor must be cheap nominally in these over-peopled eastern countries ; but their labor may be dearer at li centsper day than in this country at $2.50 per day, from deficient roads, no capital, insecurity of society, no skill or machinery. Let those people reflect for a moment on England. How is it that she is not ruined by these countries who have cheap labor ? She has perfect free trade ; her labor is the dearest in Europe ; Europe does not ruin her by their cheaper labor, and as for the Asiatic countries, she imports largely from them, but only luxuries and raw materials that she cannot produce her- self. Take this country : Where do we import largest from 1 England and her colonies, where, with the exception of her East India possessions, labor is higher than in any other country in the world except this. Now I am coming to machinery. I don't believe in restricting the hours of labor. I don't believe the world is too well fed or clothed. I believe the whole trouble is from the restriction on industry and capital. Q. Do you believe there is overproduction ? — A. Not in the world. Q. Do you believe an overproduction can take place as a regular thing?— A. No, sir. Suppose that any person was inventing a machine to do away with labor in some occupation ; would it not be absurd to call upon the governmentto prevent by law the introduction of that machine in case the people who used the old method of produc- tion would be thrown out of employment ? I never heard a person in this room state the fact that a new machine makes any article cheaper. It does nothing else but throw people out of employment at lower wages. I would like to know if it cheapens an article. Does not every man using that article get it for less money 1 It would create new industries. It is perfect nonsense to talk about doing away with machinery or preventing its improvement. The bettor way would be to let it be introduced, as it would set so much labor free for production and increase the total wealth of the com- munity. The more machines you have, and the more you make labor-saving machines, the total wealth of the world increases. Whenever we find an article canuot stand its ground ao-ainst a similar article imported, the sooner the home production of that ar- ticle is abandoned the better, and the labor and capital turned from it to a more profit- able pursuit. Nations are like individuals; they should produce nothing themselves that they can buy cheaper from others; that is, if they can exchange what cost the labor of three hours for what cost the labor of four hours of another par^y. Therefore, to force into existence, by a high protective import duty, au article that from cheaper labor, &c., can be produced abroad cheaper than in this country, is only BO much waste of productive forces ; for it must not be lost sight of for a moment that for the value of every article imported we must export a correspondent value, and even if at any time, any foreign country should drive out of the home market any article that they could sell cheaper than we can produce it, it would be ultimately a saving to the whole community to the extent of the reduction of its price. In fact, it would benefit the whole community to the extent of that reduction, and would act precisely the same as the lowering of the price of any commodity by the introduction ot a labor- saving machine. To be sure, some parties would suffer until their capital and labor was turned into a more profitable channel; but the country, as a whole, would be eainers. The same thing takes place with every new invention in the arts. How absurd, with our national resources, to suppose, in this thinly-settled country, with such an unlimited quantity of fertile lands, that labor cannot find under good laws, profitable occupation ! Look for a moment. Do we not send breadstuffs from Califor- nia and Oregon 12,000 miles by sea round Cape Horn to England and compete With the English farmers where labor is cheaper than m California? The reasons a,re simple. Our cheap lands more than offset our dear labor and lengthof voyage Who can undersell us in cotton, tobacco, wheat, Indian corn, and provisions? What a country we have ! Our prairies teeming in their seasons with golden grain ; our mines of coal, iron, copper, gold, and silver, and, in addition to all these minerals, the earth itself contains wells of oil. From such national resources we only want that our gov- ernment let us alone, so that every man shall exercise his own unahenable "ght of selUnff the fruits of his industry where and to whom he likes. Unless a man has this risrht vou may call your government what you like, a constitutional republic, &c., but the individual is not free. To be sure, each individual owes a debt to the govern- ment for the protection of his person and property, and for such should cheerfully pay 128 DEPEESSION IN LABOR AND BUSINESS. taxes; Ijut when the government, instead of acting as his protector, makes laws to make him subject to an indirect tax, not for its own benefit, but for the benefit of monopolists — iii fact, by force of law coiiipelling him to exchange the products of his industry for less than its equivalent — therefore I say to the extent that when a people submit to a protective tarifl', they just lose so much of their- rights; therefore, the sooner the protective part is taken out of their tariff laws, the more otrr government will be in accordance with the principles laid down by the Declaration of Indejjend- enee and the Constitution of the United States. I have already stated that 75 per cent, of the population are dependent on agricul- ture. Of the 25 per cent, engaged in trades, meehauical arts, professions, &c., there is not, according to the census of 1870, 7 per cent, of these engaged in the production of iron and textiles, which are the only industries that require ijrotection of any na- tional consequence. Is it not an act of folly, or worse, that the whole people should suffer for the benefit of a small minority? From the above reasons, is it any wonder that the whole country is suffering under such a depression of all industries that the present generation has never witnessed the like ? Now, what is the remedy ? First, by careful legislation, restore specie payment as soon as practicable. Second, reduce the expenses of the government. Third, materially reduce the tariff and make it a tariff' for revenue only, and increase the free list. Fourth, if you have not enough of revenue, put on an income-tax. Do this, and I am confident the country would in a very short time be restored to prosperity. I have already shown that the farmers, planters, and the laborers and mechanics they employ, also the people engaged in the forwarding of their produce to the seaboard, require no protection. Now, in our cities and towns those engaged in building do not require a protective tariff — bricklayers, masons, hod-carriers, carpenters, house-painters, glaziers, plumbers, plasterers, brick- makers, and certainly, also, our merchauts, grocers, bakers, and shopkeepers of every kind, do not, or those engaged in professional pursuits, such as physicians, lawyers, or clergymen, and all mechanics engaged in making our clothing — tailors, hatters, shoe- makers, &c. (excej)t, perhaps, some engaged in fancy work), require no protection. And in addition, all manufacturing industries, "where the principal cost of the article is in the raw material and in the machinery employed, and not in human labor, re- quire no protection. Is it not absurd that all these people should he taxed indirectly by a protective tariff for the supposed benefit of a few manufacturers of textiles and iron, not 7 per cent, of the poi)ulation ? Let the inhabitants of New York and Brooklyn reflect for a moment what commerce does for them. There is not a single barrel of flour that passes through these cities for shipment to Europe that does not leave 50 cents for profits and labor behind it, and every other produce of the soil does the like. Cotton, tobacco, petroleum, provisions, dairy produce, even gold and silver bullion, all must pay toll to New York and Brooklyn, and all our imports do the same. Trade to New York is the life-blood of her merchants, tradesmen, mechanics, and laborers. It is what has made her great, and will make her yet the emporium of the world. And she only wants free trade to secure soon the consummation of her great destiny. Now, I will conclude with a sununary. I have not been accustomed, like you gen- tlemen of Congress, to speak before a public audience. The causes of the present depression in trade and manufactui-ing industry, and want of full employment to the working classes, are : 1st. The waste and expense of war. 2d. The suspension of specie payments and the over-issue of irredeemable paper money. France issued irredeemable paper money, but the Bank of France managed it that it never was over 2i per cent, premium. It is a shame in the nineteenth century that our legislation and money have been so horribly bungled. 3d. The borrowing of depreciated money by the government and individuals, entail- . ing great sacrifices in repaying the debt in appreciated money. 4th. The losses of all creditors during the depreciation of the ciuTency, and of debt- ors during the appreciation of the currency. 5th. The losses of workingmen by goods rising sooner than their wages during the depreciation of money, and of his wages faUiug before that of goods during the appre- ciation of money. 6th. The extravagance engendered by the short-lived period of the expansion of the currency, resulting in ruin when contraction causes shrinking in values. 7th. But the greatest source of the present depressed state of the country is the high and protective tariff in obstructing trade, as no nation can sell its surplus production well that is prevented by an oppressive tariff from buying freely. Now, the remedies : Ist. The most rigid economy must be practiced by the government so that the taxes maj' he lightened ; also all taxes must be levied on all property wherever found, in- cluding government bonds. 2d. Specie payment must be consummated on January 1 next, or sooner, if possible, and the usury laws repealed so that capital will be imported as well as labor. 3d. Time has removed the evils 'of growing up to the currency, or what maybe DEPRESSION IN LABOR AND BUSINESS. 129 termed slow contraction, as it is evident from tlie paper money being nearly at par witli coin, and our foreign exchanges being favorable, that our currency is no longer redundant. In fact, specie payment will make onr circulation be supplied by the natui'al laws that Providence has clearly pointed diffuses to each nation its share of the precious metals which the distribu.tioa of its industry requires. The quantity of gold in the hands of the go^cmment in less than two years has increased about 140 millions, so that the restoring of specie payment means : Give us more circulation, with a mixture of gold and silver amony' it. 4th. All the evils connected with the depreciation of money will be at an end when, specie payments are resumed. 5th. The tire of extravagance has ceased for the ■want of fuel. 6th. Whenever the tarifl: is lowered, and the protective element eliminated or greatly lessened, all industries that have been misdirected will flow back to their natural chan- nels, and caintal and labor meet with tlieir natural and profitable reward, as was the case in general previous to the war. No country ever had the prosperity of this country until within the last few years. Go back to your principal cause. Go back to your fertile lands again. You have only 40,000,000 of people in this country ; you have land enough to support 200,000,000 of people. And nothing but the worst laws ■s\ould have caused the present state of affairs — laws fi-anied in direct opposition to our knowledge of political economy. Let no pretext for a moment delay the lowering of the tariff. If we have not enough of revenue to do so, let a graduated income-tax be at once levied. Let the imxJort duties, now averaging 41 per cent, on dutiable goods, be reduced to 19 per cent, as before the war. Gentlemen, I have finished. By the Chairmax : Q. Is, or is not, the balance of trade, the excess of exports over imports, an evidence of the prosperity of a country ?— A. I think it is no evidence whatever. I think the exports shonld be larger than imports, and I think these tables are only valuable as records of the amount of business. Q. Do nations not export those things which they can produce cheaper than other nations to which they export them?— A. And we import what other people can produce cheaper. Q. You are familiar with the enormous increase in the exports which has been gomg on for the last two years from this country ? — A. I am. Q. Is it a favorable or an unfavorable sign — this large increase in our exports ?— A. No ; it is a bad sign— no ; it is not a bad sign, the large export; but it is a very bad sign, the small import. . . t^ Q. Supposing we are paying a debt we contracted abroad?— A. It you are paying a debt, that is all very well : and I am not sure of its being much of a debt. Q Does not the large export lead to a corresponding demand for labor here to pro- duce the substance which we export ?— A. No, sir ; it would have been produced any way. It is the natural growth of agriculture. I think, perhaps, owing to the mliation of business, and every one frightened about going into business, not knowing what is to happen to-morrow, that there are a great many people not consuming things they are exporting. , ,. „ , ^ -u- i, Is not this increase iti exports due to the production of a surplus lor which we have no adequate use at home?— A. Certainly ; but it is of no use Suppose you ship 50,000,000 bushels of wheat to England this year, and you ship 100,000,000 next year, and you say to the mannfacturers there, " We put 40 to 70 per cent, upon the goods you send to us," you only reduce the duties 10 per cent. You buy more.lmen from the north of Ireland, and .iny man who has eaten potatoes or oaten meal would be eating good bacon. Your high tariff is the same as if you broke up the port of New York. Q. I am only asking you as to the fact of this export, and whether that is not a good and healthy sign for this country, that it is sending abroad its products and getting back solid money for it ?-A. It is well that this country has got a surplus to ship, but it wouhl be better if that surplus was well sold. I think your higher duties make you get one-third less for your goods than you would get. , „ , „ O And vou might get more for them if the tariff \vas lowered ?— A. Yes, sir. Q. But, nevertheless, the increase of agricultural productions— -A. Is a blessing. Q And it may be the result of the fact that labor, which heretofore found employ- ment in unprofitable occupation, is now turned to the soil?— A. :>:es sir. Q Is it a bad thing to turn from unprofitable to profitable occupation ?-A. I think it is a good thing ; but the protective tariff has been doing the reverse. Would agricultural produce increase as it has done unless it was now apparent that it is more profitable to raise agricultural produce than to produce manutactured goodsl-A^ I think it is more proStable to go into agn culture though it is not re - mimerative now, than to starve in the cities. I mean to say if the agncultural pro- diioc is exported, and then brings back 25 per cent, more than it is doing, the people m the country will be better off. 130 DEPRESSION IN LABOE AND BUSINESS. Q. I understand you to say that in a new country labor would be better remuner- ated by producing the things that would be produced cheaply, as they could be pro- duced on fertile land ; therefore agriculture in a new country like this is the normal position of the country ?— A. It is the normal position of the country to pay more attention to that than anything else ; but exchanging goods or importing goods is preventing them being sold. '"I Q. You thiuk this country should have chiefly devoted its industry to agriculture, and bought the manufactured goods abroad where they could be produced cheaper?— A. With this exception : there are some articles we can manufacture, perhaps, as cheap as foreign countries. The moment an article can be exported it proves we are right to produce it. That is all business. It is the exchange of the shoemaker's sur- 2>lu8 for the butcher's surplus. Every nation and individual should follow the busi- ness that nature points out to him. Q. Then the restrictions on the use of machinery and in the hours of labor, would such fact be restriction on our power to produce and sell to other countries ? — A. Most undoubtedly. Q. What would be the result of that on the wages of labor, in your judgment ?^A. I think the result of that would be that very likely people that would work ten hours in Australia would undersell us in wheat, and we might lose our business. Q. What would be the general effect on the industries of this country ? — A. I think very bad. I think the government ought not to interfere with the hours of labor. Q. What would become of the people that could not get employment by reason of the discontinuance of machinery ; what would happen to them ? — A. There are certain things the government can do. I always admired the old English law, the law laid down by that great lawyer — I forget his name — that man has a right to a certain por- tion of the earth. I think when an honest man cannot get employment, there should be some power that would help him for the 'time being. I think the working classes should so vote for representatives that there might be some improvement in the poor- laws. I would Jnot give them the name of poor-laws ; I would give them a better name. Q. Do you regard the present state of business as a reaction from a false system of legislation which directed so much labor in the direction of manufactures, and that system having broken down, the labor is now being forced back to the soil, where it would be only for that system ? — A. Yes, sir. Q. In other words, the cause of the present difficulty is the disclusion of labor aris- ing out of false legislation ? — A. Exactly. Q. And you thiuk natural causes and the repeal of this false legislation would give free trade to nature, and trade would relocate itself where it properly belongs ? — A. I think that is all Congress has to do ; to think, of all things, that governments are instituted among men for what ? Not to tell this man or that man what to do, but to I)rotect every man in his honest calling. Every man is entitled to pay his taxes, be- cause the government protects him in his calling ; but it has no right to say to this . man, " You shall raise two bushels of wheat and sell it to a man in New England for a yard of cloth," because that man could take his wheat to France and get two yards of cloth for it. I think the government is a protective institution. I believe the peo- ple in this country are in their present condition from laws diametrically opposite to that of the principal economist, whose maxims are the guidance of all nations, such as Germany and France. Q. You do not believe that legislation can, for any considerable period, successfully compete with the laws of nature ? — A. No, sir. Q. They will assert themselves * — A. Yes, sir. Q. And that this present state of things is an assertion by natm'c of laws that are superior to laws ijassed by Congress ? — A. You put it in good language. Q. Is that what you mean ? — A. Yes, sir. Henry V. Rothschild appeared and made the following statement : By the Chairman : Question. What is your occupation ?— Answer. I am a nianufactiirer of clothing. Q. Carrying on business in this city ?— Q. Carrying on business at wholesale. Q. In the city of New York ? — A. Yes, sir. Q. Do you employ people ?— A. Yes, sir ; we employ hands in the house aud outside of the house. Q. How many hands do you employ? — A. It is variable; sometimes 40 aud 50; some- times more and sometimes less. In very prosperous times we have employed still more. Q. How ma,uy are you employinjj at the present time ?— A. I could not .say now, ex- actly ; but this being the height ot the season, we employ outside 40 or 50 and inside 10 or 12, because one man in the hoxise can do enough for five or six outside of the house. Q. Is your business at present suffering from depression ? — A. My business is suffer- DEPRESSION IN LABOE AND BUSINESS. 131 Ing by tlie dimiuiahed profit — the percentage of profit not being as large as it used to be ; but as for demand, goods cau be sold, but at a very small margin above the cost. Q. But your business still pays some profit ? — A. O, yes ; we can always succeed by economy and strict attention to business, and by personal supervision over our work- iugmeii. This is a most significant point. Q. Assuming that you could not make any profit, would you discontinue your busi- ness f — A. Decidedly. Q. You would not go on unless you made a profit? — A. Certainly, we should have to discontinue, because all labor must remunerate us in some form ; otherwise we could not live. Q. You could not carry on business unless you got enough out of it to pay the expenses ?^A. Certainly. Q. Your expenses consist of what — first, the material, and second, the labor? — A. Yes, sir. I want to call your attention principally to this fact. Taking the laborer, as far as I could see him or serve him, if he is at the present time in a dei)ressed coi'di- tion, it is very nuich due to himself. Eight hours or ten hours a day liua ijothiug to do with it. For a short time, in the clothing trade, the cutters siTcceeded iu forcing us into eight hours ; but it was discovered that the difference between eight hours and ten hours was not properly passed for their personal impro\emeut, intellectually or morally, but they were seen roving about iu the hours until darkness came on, and in the morning until work began. It showed that by a reduction of the hours of labor more men would have to be employed to get the same amount of net product, but it did not benefit the laborer. I should be the first man to stand here and say, " Uive the laborer less hours of labor," if he would employ those hours of leisure for his own moral aiul intellectual advancement. Q. AVhat does he do with his time after ten hours ? T)oos he emjjloy that proq^)- erly ? — A. With ten hours' work they are so employed that evening about closes the day. Q. Your remedy is, for the moral improvement of the working classes, to keep them so busy that they caiuiot indulge in dissiiiation ? — A. That is a most significant jjoint, and it is the only form in which the workingman can be improved. I am sorry tliat my notice came so late yesterday evening. I do not want to detain' the committee with anything else but an oral statement, and I hope to file at some future day some- thing in the form of an essay, which I cau do in a more scientific way than I can now. There is one thing which I have not noticed, or any of the other speakers — one signi- ficant fact, which is the only thing I believe the legislature cannot properly do. I say the legislature has no right to encroach upon me as to whether I shall employ men eight hours, or ten, or fifteen hours. ' It is a matter of mutual agreement, and the legisla- ture has no right, according to the principles of our government, according to the principles of the Declaration of Independence, to impose upon me what hours of labor I shall have between myself and my employes. Q. Do you think the legislature has a right to establish a system of sanitary inspec- tion of houses in New York ? — A. That is the thing. Go into the lower wards of tlris city. Examine the houses of the poorer classes of the workingmen, those that are suffer- ing the direst poverty this moment, and see how they live. You will enter a room and a bedroom, and you will find a father and mother and six or seven children, grown up to maturity, and male and female within sight of each other forced to perform all acts of nature ; and through this all those higher instincts, which the educated mind has, of personal self-respect, are extinguished from the minds of these people. Q. But suppose it is given iu evidence before the competent authorities— and we are not the competent authorities ; it is the legislature of the States— nppose it is given in evidence that the employment of people for fifteen hours a day is demoralizing and destructive of the people's health, do you say the legislature cannot interfere to pre- vent such employiiiPut?— A. I think that is a different point. Political economy teaches us that tlie laborers and the capitalists are two different forms of society. The laborer must do all he can for himself. Q. I don't know anv such authority. There is another authority which says : "The laborer is worthy of his hire." I want to get at your view, whether you take the ground that it is wrong for the legislature to interfere as to the regulating of the hours of la- bor at all ?— A. Decidedly ; because the laborer and the man that employs him are two diff'erent parties, and the laborer should do as good as he can for himself, and the cap- italist should do as good as he cau for himself; it is a matter betwesu the laborer and the capitalist. . , , ;. , i,o . mi Q. You think the community have no interest lu that questmn at aU?— A. Ihey have an interest so far as if an unprincipled employer tyrannizes m some way over the laborer ; that is a diflereut thing. , . , . , „ . tj. ^ Q How would you interfere in that case— by legislation or not !—A. It a tyranny arises from which we are amply protected at the present day, the legislature can al- ways interfere, without a doubt. But this is no tyranny, if the contract arises be- tween a laborer and the emplover. The horse-oars of New York are employing their 132 DEPRESSION IN LABOR AND BUSINESS. hands 14 and 15 lionrs a day. They are all willing to work ; they are not bound to ac- cept tlie labor; it is a matter between themselves and their employers. Q. But do they want to work that length of time ? — A. All labor is irksome. Q. Suppose it turned out, as a matter of fact, by a report of the physicians, that horsc-iar drivers and conductors wlio worked sixteen hours a day only lived two and three years in that employment, working at that rate, would the community be justi- fied in iuterforing or not ? — A. If the community finds that it has a tyranny over the health or the development, morally or intellectually, it has a right to interfere. Q. Then you admit there are cireumstances under which the community should leg- islate f — A. Certainly ; there is nothing in the world in regard to which the legislature has no right to interfere. We have, for example, bone-boiling establishments, which is a legitimate trade, and the legislature interferes. Q. You set out in the beginning liy saying the legislature should not interfere be- tween the employer and the employed as to the number of hours he should work. I now understand you to say that if the legislature comes to the conclusion that the num- ber of hours of labor are too great, they may interfere ? — A. Yes, sir;and, even the first gentleman who spoke — ^he did not say anything about ill health arising out of ten TiO'irs of labor. He refeiTed to eight lioui's of labor for no other reason than that the laborers ^\ ould be more employed. It is not to be presumed that we can afford to pay the same |)ricc for tlie labor of eight hours that yon can for ten hours. Q. Do you employ people by the day or by the hour? — A. I employ a great number by the day. Q. Some by the piece ? — A. YVs, sir. Q. Will you give the committee a statement of the price which you pay for any par- ticular article, such as a vest or a pair of xiantaloons ? — A. There is an immense diver- gence in regard to that. Q. Give us a good average. — A. The skilled laborer to-day demands a good price and gets it, and we employ him in dull times in order to keep him. The uusidlled laborer is but briefly employed, and poorly paid. Q. Take vests, for example, such as are sold to the ordinary average person. Will you tell me what is the price paid now for making a vest ? — A. Vests are made in tins city for as low as 2.5 cents and 20 cents, and people are making money by it. Q. How many 25-ceut vests can they make in a day ? — A. All those who make vests have legular factories, and by the aid of sewing-machines they succeed sometimes in making 200 and 300 in a day. Q. With one person ? — ^A. That is by the employment of machines. I have sjioken to two yonn"' ladies that are working for us making vests,, who are, according to the char- acter of the work, making as many as eight vests at 25 cents a vest. Q. How many hours a day have they to work to make eight vests ? — A. Those are working home, in their rooms, and the hours of labor for them are not regulated as it is for those working in the house by the day. Q. I \ui\f asked other witnesses how they regulate the hours of labor in private houses, and I want to ask you how many hours they must work in order to produce ■eight vests in a day at 25 cents a vest ? — -A. It depends upon the speed and proficiency of the hands. Some people can work very fast and do the work as well, and others not so fast. Q. A fair average hand ? — A. Twelve to foni-teen hours a day. Q. And in that time they would earn f2? — A. Yes, sir. Q. Is that a fair statement of the earnings of the sewing-women of New Y^ork work- ing upon clothes f — A. That I will not say. Very few women are employed in our business ; occasionally on a vest. Most vests are made by manufacturers, who employ six, eight, ten, and sometimes twenty machines. Q. Who work the machines ? — A. Girls work the machines. These girls are employed by the week and work regular hours a day. Q. How much is paid to those haiids a week, and how many hours a day do they work ?— A. From $i to $10 and $12 a week. Q. How many hours a day ?^-A. I wish to impress this on you. There is a regular division of labor by all mantifacturers of that kind. Q. The girl is sitting at the machine ; she works there. How many hours does she work the machine, doing her part of the work? — A. Ten hom's a day, unless she vol- unteers to work over-hours, and then she is paid extra. Q. Are they allowed to work over-hours ? — A. In some cases. Q. How many houi-.s are they allowed to over-work 'I — A. If we are busy we will re- quest them to work maybe tAvo hours more, and they will get extra pay for that. Q. How many hours do they work? — A. They may work twelve or fourteen, accord- ing to theeiK'i'gy and industry and determination of the person working. Q. Up to their capacity of Avork 1 — A. Yes, sir; and at other times, there being a suf- ficiency of labor, they do not work so long. Q. Is there an abundant demand in New York for women who earn their living by sewing in this way ? — A. I am told by vest-manufacturers that they cannot, at the present time, find hands enough. DEPRESSION IN LABOR AND BUSINESS. 133 Q. There are not sufficient hands? — A. Not sufficient skilled hands. Q. Under that state of things are wages going up ? — A. They claim pretty good wages. A girl earning the wages I said is earning pretty good wages, and they otter premiums if one- vest man can take away the hands of another employer in order to procure them for themselves, if they are skilled hands, and unskilled hands are briefly employed at very small pay. Q. You think Ihere is not too large a supply ? — A. Not in that branch of business. Q. Among the sewing women of New York for that labor ? — A. In that particular industry. Q. I speak, generally, of the clothing trade. — A. That is a different thing — thecloth- ing trade. There is, perhaps, no business in this country that has so minutely a per- fect division of labor ; it is divided in every particular. The coat is taken out and cut; he has his operative for the sewing-machine, and the man that makes the lining, and his pressman ; he has a particular presser and a particular finisher, for certain parts of the garment. So it is a comjjlete division of labor. I wish, also, to impress upon your mind the great importance of machinery, and what machinery has done. It was no further back than this morning that I conversed with my father who was nothing more, forty years ago, than a mechanic, and he told me at that time overcoats were made by hanil for six shillings, and the same garment to-day at the same price would be considered a very excellent and a good price. For what reason ? The great divis- ion of labor, assisted by machinery. Q. Have the earnings of those people, men and women engaged in the manufacture of clothing, increased or diminished since the invention of sewing-machines ? — A. It has vastly incieased. Q. For how many months in the year ? Is there more steady employment now, or less steady employment than there was prior to the introduction of sewing machines 1 — A. The employment has been variable, according to the times. Q. It is more steady since the introduction of sewing-iuacliines than it was before the introduction of sewing-machines?— A. Well, I think, as far as I could judge at The present time, and according to the past time, the employment has been pretty steady in our line of business. Of course, it has been very variable ; the cloth busi- ness is fluctuating. Q. I am comparing the state of things before machinery was introduced and since machinery was introduced. You say they get higher wages ? — A. Ves, sir ; higher wages and better work. Q. And larger pay, and it has employed them as many hours in the course of a year as it did formerly ? — A. Not as many hours. Q. Their hours of labor are reduced ? — A. Yes, sir. Q. Is the employment as steady as it was before the introduction of machinery ?— A. I must here again make a division between skilled and unskilled labor. Skilled labor is actively in demand at the present day, and cannot be had for the asking of it ; but unskilled' labor can be had at low wages, and is but briefly employed. Of course, m certain seasons of the year, the work being not so large is not so well paid ; but, at the present time, I cannot to-day, for the skiUed labor that I am lookmg for receive a sufficiency of it. ,,^.111-1, Q. You cannot get enough of skilled labor ?— A. I can get a great deal ot labor which is not skilled, and to whom I can give the commonest work, but they cannot be em- ployed for any length of time, and it is with nervousness I give them a good gannent ; but for the skilled labor it is difficult for me to get them, and, if I have them, 1 must give them a sufficiency of employment at all times in order to keep them. Q. In other words, as lawyers say, there is plenty of room at the top of the ladder? A YG8 bit q! But not much at the bottom?— A. No, sir. I wish to call your attention to an- other thing which, perhaps, depresses the workingmen at this present time. 1 have conversed with a great many workingmen, and with many employed m rolling-mills, such as carpentersrand in every department of traffic, as far as I could find them ; Ihaye gone into their houses and saw how they lived, and conversed with them about their Sntecedents, what they thought their own future prospects were, and what they thought they could do with their children, and whether they were going to make me- chanics of their children, and I have upon this data many deductions which are for me quite suitable. Now, iu several cases the improvidence of workingmen is the ^T'^^^^^^^'^^-^- Y-, «- I -not saying a word against them ; I resi.ect them as highly as any other man, but I refer back to every man who has ad- vanced himself from nothing up, and he «as a good mechanic, and, after having started a little came forward G^ to any smalltown where large manufacturers are,. anTaithfmCrbiWssTs, and they will tell you it is dull; and why f. Because the workingmen iu the neighborhood have nothing to do. In a certain city m Central Pennsylvaifia I have convtreed with perhaps more woAmen thanin any other town I have been in the nail-factories an.l in the rolling-mills and I came in contact with 134 DEPRESSION IN LABOR AND BUSINESS. one who scciiicd to be an intelligeut man in everything except in rc}?aril to his own persouiil adviincemeut. I asked him what his wages were six years ago, and he said "From $125 to $150 a month, and to-day I do not earn over |60, and sometimes noth- ing, because the mill stops at times." Q. How is the ijnprovidenoe shown by the fact of their getting less wages ? — A. I will show yon : At the time when their wages were large they w<'re carelees ; they followed all sorts of luxuries, and often lost time by it. They did not care for the fu- ture, but spent their money carelessly ; and the party I speak of, I asked him, "Why didn't you save when you had plenty V He said, " If I was as wise then aij I am now, I would have saved, and I would not be in want," and I compared him to his neigh- bor who had saved |lO,COO, and he said he had saved when there was plenty. Q. In other words, economy and frugality on the part of men, whether laborers or employers, is essential to succeed in life ? — A. Certainly. Q. You, of course, are very familiar with the clothing trade. Do you think that a larger percentage-of the employers in the clothing trade have succeeded in life and avoided failing in business than there are among laboring men who have saved money and risen to a position of competence ? In other words, is there any difference between the perceutagi' of workingmen who rise iu life and make themselves comfortable and employers who are engaged in business and who succeed ? — A. That is a ditterent point and a ditterent question. Here we have in this city about 280 wholesale clothing-men, and picking out one after the other, I will assure you tliatthey have all been laboring mechanics at the beucb, and have saved, themselves. Q. That shows a large percentage who have got up and made themselves success- ful?— A. Yes, sir. Q. What proportion of the men engaged in the clothing trade sneeceil and retire with a competency '! — A. The largest number ol failures that have been in any trade since this trouble began, the clothing trade has suffered the least of any. Q. How is it with other trades? Do you know, from reading the statistics, the number of men that succeed as emjjloyers ? — A. Yes, sir. Q. What is the percentage ? — A. Between 2 and 3 per cent. Q. Is there not as large a number among the laborers who also succeed in achieving a competence, and, ^\•hen they die, li'ave something for their families '! I want to know whether, in a comparison between those who succeed as employers and those who succeed as laborers in saving a competency, whether there is a greater iiercentage of employers «'ho succeed thaij of workingmcn. In other ^^•ords, whether the margin of economy is not as large a percentage among working people as it is among em- ployers? — A. Ipresumcso; but the failure of an employer is, perhaps, due to many other causes than the poverty of a workingman. Q. Is it not largely due to spending more money than he can afford? — A. Yes, aii; abstinence is the first principle of success. Q. Do you mean that working iieoplc are more extravagant and less inclined to fru- gality than employers ? — A. Yes, sir; they are. Q. You say only 2 or 3 per cent, of employers engaged in business make a success of it ? — A. Their failures are due to other causes. Q. No matter what the causes are. Are there only 2 or 3 per cent, that actually come out at the end of their life with a competency ? — A. Yes, sir. Q. Don't you think there are 2 or 3 per cent, of the laboriu"' class that accomplish that result? — A. Yes, sir; but if they were more economical, knowing what they are going to receive every week, they would be better off. The CliAlKMAX. If I had any advice to give to workingmen, it would be, save when you can, be as frugal, and temperate, and industrious as possible, and it is almost certain that your lot iu life will at least be a respectable and successful one. But it would be very unjust to leave the impression that the fault is all on the side of the workingmen and none on the part of th« employers, in respect to economy and extrav- agance of living. Mr. Rothschild. But remember that some of the merchants that have failed have never been extravagant in all their lives, and there have been other causes which caused them to succumb. The CiiAiBMAN. I think if you will take any of the first merchants who have failed, you will discover a long period of expensive living antedating the failure. Mr. Rothschild. Not always. I am perfectly assured that the number of persons that have failed in this city have not failed because they have lived extravagantly, hut have failed because others failed who owed them money, and because there was such a greatly diminished value of their stock. When stock was taken on the 1st of January, when $100,000 worth of stock on hand was offered for sale and brought $75,000, or 75 per cent., that caused failures. Q. Errors of judgment? — A. Yes, sir. Q. Suppose the employer had saved, at every step, all he could, would he not have accumulatee8 were S;2.35 per day; average time worked seven months. In 1864 wages were settled at iji.i per day ; and, owing to an increased demand for labor and increase in price of livini;, wages rose to $3.50 per day, with full average time worked seven and a half to eight mcmths. In 186.5 the wages were $4 per day of nine houi's ; average time worked eight months. In 1866 wages were $4 per day, and rose in the fall to $4.50 per da>' of nine hours ; avcrane time worked eight mouths. In 1867 wages were $4.50 p. Who would pay him in the mean time ? He could not cultivate the farm, and therefore it would have to go to waste. — A. The point is if the laud were free ; on that principle he would hire Q. Suddenly pestUence comes to a man with a large family and takes them off; but yon hire nobody, according to your principle. His farm then must go to waste? — A. Not necessarily. Q. Well, there are things that would require to be attended to and kejit up. You would not allow that man to hire anybody, and if nobody comes along to hire it, it would'go to waste f — A. Necessarily, under those circumstances. Q. Would not the community be injured by having a productive farm go to waste? Would not there be less production ? — A. There would be less, necessarily. If there was any malaria to take off that family, who is to blame ? Q. It might be an explosion of gunpowder ? — A. Well, suppose it is a stroke of light- ning, what then ? Q. Well, I ask you what then? The farm would stay idle. — A. Necessarily, until somebody took possession of it. Q. And the production would cease ? — A. It necessarily would. Q. Go on again. — A. Tliat is all. What is your point ? Q. I want some information ; that is what I am after. — A. I don't see you have got any. I said, to begin with, I was victimized by usury and increase, and I have also enunciated a law which no one can successfully dispute. There is another law I wish to enunciate : it is that genius is non-transferablCj incommensurable with money, and therefore absolutely priceless, as much so as the air. That is another natural law. Q. What is the deduction from that ? — A. I will show you pretty soon. Another natural law is that culture is non-transferable, incommensurable with money, and therefore is as absolutely priceless as sunlight. The only thing, then, mankind can do is to exchange work for work. Another law I wish to enunciate : Suppose that all work is expenditure of vital force, whether it be through the medium of the brain DEPRESSION IN LABOR AND BUSINESS. 139 or muscle, it is tlu' same ■stuflf, and consequently an average hour's work of the head is equal to an average hour's work of the hand. Q. "Whose laws are these f — A. God's laws. Q. Are they recorded anywhere? — A. No, sir; I see them. Q. Were they revealed to you? — A. No, sir. Q. Then they are God's laws as you see them ? — A. Just as Moses saw them. The law of Moses was that the land shall not be sold to another. Q. Had Moses a right to say what God's laws were ? Mesas was the recognized in- terpreter of God's laws. — A. He is, hy the Christian. Q. Now, you say you are the interpreter of God's laws, as Moses was 1 — A. Certainly. Q. Are you then a recognized authority for the interpretation of God's laws f — A. Never have been recognized as yet, sir. Now, if you will prove that these are not natural laws, I will back out. The Chairman. I don't propose to prove anything. Jli'. Hansox. I will prove nothing ; I simply enunciate an axiom. Q. Then that is an axiom ? — A. I affirm, then, that genius and culture are non-traus-- ferable, and the only thing you can exchange in this world is work, whether of the head or hand. Q. Suppose people are willing to pay for work done Ity a genius, can you prohibit the gejiius from taking pay ? — A. No, sir ; he shall be paid the just price of his work. Q. How measured? — A. By work. Q. How?— A. By time. Q. Time is the standard of measure for everybody ? — A. Time is the average. Take one hundred bootmakers who are equally good workmen, and let them be required to make hoots for one week ; then let thein add up the sum total of the time, and divide the time by the sum total of the work, and you get the average cost of the boots. Q. That'is working by hand or machinery ? — A. It is immaterial. Then you get the average cost of a ])air of the boots. One man can make two pair in a week, another six. The man that makes six gets Q. Your proposition is that the man that makes six should get no more than he who makes two ? — A. He should be paid the average cost of six. Q. Then time is not the measure ? — A. Time is. Q. You mean time is the measure of value, but the quantity made in that time is to be measured according to value ' — A. Certainly. Then the hardest worker, the man that ha Q. There are lots in Brooklyn now at very low prices ?— A. Wlio has got lots to sell ? The Chairman-. I don't want to act as real-estate broker, but I do know of lots of land in Brooklyn at low brices. ,, , , , j., i Mr. Haxsox. I don't propo.se to buy it ; and I hold that because the men who are occupying them don't need them they are monopolists ; land is not worth a cent. Q. Then, if it is not, why do you want it ?— A. Because I want a spot ol land on which to erect my home. , . „ . t ^i. j. ^■^■^ Q. Then, if yon want it, it is worth somethnig ?— A. In the sense of utihty. Q. Utilitvis'ameasnreof value?— A. No, sir. , ^^ ^ , , ,, . , Wliv do I go and pay for a pair of boots ?— A. Not because you need them, but because you nst them. You pav for a pair of boots if you pay just the amount of labor impressed upon them. The utility of these boots is mcommensurable with money. 140 DEPEESSION IN LABOR AND BUSINESS. Q. If you flou't pay |6 or |8 you dou't get tliem ; that is the value ?— A. That is totally- arbitrary. Q. Suppose I tell the man it -was arbitrary to charge me .$6, and that I would only give him f3, -would he give theui ? — A. No. Q. That don't fix the price of boots '? — A. No ; but it ought. Q. By what law ? — A. The law of justice. Q. The natural law is supposed to be the law of juHtice? — A. There is no such tiling. Q. There is no justice? — A. No, sir. Q. Well, now you are opening my eyes; I thought there was some justice. — A. That is it, there is so much injustice I can't see where the justice conies in. What is jus- tice? Now, the whole question rests right in that very little word, what is justice. Well, any man can demonstrate it. Q. That is not a question before this committee, the definition of justice? — A. No, sir ; but it is a question I am perfectly interested in. Q. But this committee is to find out certain causes of business depression. If you will give us some practical suggestion by which we can relieve the present distress, we will be obliged to you. By going into these abstract questions you are excluding others, and I must ask yon to cut it short. — A. My object in stating the natural laAvs was simply to show we must obey them, and the laws of our government must be in harmony with natural law. The Chairman. Certainly. Mr. Haxson. Then we ought to repeal all the laws on the laud question. Then enact that e\-ery citizen of the United States shall ha\'e a spot of land for a home. Q. Do you not know that any citizen of the Uniti'd States may go and enter lliO acres for settling on it? — A. Of course I do; but within a radius of ten or twehe luiles of the Battery Park there is plenty of land' owned by monopolists, aird I don't want to go away. Q. And you want a spot of land in New York or Brooklyn? — A. Yes, sir. The Chaiuman. The govennnent can't do that. The lands inNew York and Brooklyn belong to the State of New York. We have got all the public lands, on the contrary, open to settlers, as you propose. — A. They are not as I propose. Q. Well, we have done as other people like you propose; you are in the minority. — A. Well, that does not help the case ; I am presenting to you the facts as they are, and showing you the state of myself and family. Q. Yes, hut your remedy Congress has no power to employ. — A. I beg your pardon. Q. How can Congress authorize you to enter upon a vacant lot in New York or Brooklyn? The Government of the United States can't do it. — A. The Government of the United States can repeal all laws. Q. Can the Government of the United States repeal aU land laws of the State of New York? — A. No, sir. Q. Then why present that to this committee? — A. Well, I was only giving you the cause of this distress. Q. But that cause of this distress is one that members of Congress are powerless to affect. Give me something practical to go to my fellow-members of Congress with. If I go and ask them to do something forbidden by the Constitution, they will laugh at me. — A. Well, I will give you one thing: you can ordain that we shall have money Avithout interest. Q. How? — A. Let it be a paper money; upon the face of that money stamp one dollar; make it a dollar absolutely, two dollars, five dollars, any multiple of one; then let the financial currency be any fraction of that unit ; then let it be issued to the people over government counters, at the simple cost of service, on ample security, and then let that money he returned over the government counters at the expiration of the time for which it was borrowed. The consequence will be, since rents are as the interest, the rents will tumble down very nearly to the price of money, necessa- rily, logically. That is what you can do; that is one suggestion; you can help the workingman in that way, by casting down the rents. Q. Only by the issue of this paper money ? — A. By the issue of that paper money, on ample security, as the merchant by his notes. Q. What would be the security ? — A. Anything that is proved to be good security. Q. Proved by whom ? — A. By the agent of the people who loans the money to the peojde. Q. Suppose the agent was a government officer ; suppose there should be a man in charge who is dishonest? — A. Then hang him. Q. Yes; that is what we would like to do. Who will convict him ? — A. The people that he has swindled. The Chairman. We can't do it now. Mr. Hanson. Simply because we have not justice. The Chaiuman. That is the great complaint in the city of New York, that for \-eai-s we have had oiilieials that don't do their duty. ' . DEPRESSION IN LABOR AND BUSINESS. 141 Mr. Haxscix. Then \vu will haxc to refer it by aiifl liy to mob law, as they did in California years ago. Q. Mob law is a good remedy you thiuk ?— A. Mob law is a good remedy when yon can't reaeli them by civil law. Q . What other remedy is there ?— A. I want to show you that by the profit system I am robbod of fifty per cent, of my wa^es by the profits ; that is to say, a part of my wages are taken from me every year, for which I receive no corresponding equivalent what- ever in any kind of work. That is why I am poor ; that is what is the matter with the worknigmen. Every merchant that trades with a merchant makes profits, because increase bears increase, but it is not so with the workingman ; even if he buy lager beer he is victimized 150 per cent. The trouble lies in this, that if I get as much work for my wages as I have given for my wages I would never be victimized. The hod- carrier that cai-ries the hod for |2 a day. If he got as much work for that ^2 as he gave wonld not be victimized, but the truth is I am compelled to give to my landlord sixty days' work for which I get uothipg, and I give more than twice sixty davs a year for which I get nothing. Mr. CiiAiRJiAX. That may be the case, but, as I have explained to you, the Congress of the United States is powerless to remedy this. Mr. Hajs^sox. I have given you one remedy. Q. TSat is to issue paper at security ? — A. 'Yes ; let the security be actual labor prof- its of some kind ; you may let it be bullion, if you like, or it may be a company of men for co-operative purposes ; take the bond of that association for the money they use to ■carry on their business, and then loan it ; let them have it without the interest ; the interest is the damning curse of this age, and we must get rid of it; and I, as a mem- ber of the labor party, will never stop until we do. Q. That is, the interest must be abolished? — A. The interest must be abolished absolutely and forever in the United States. Q. Yon say no man is to receive interest on the monej^ he lends ? — A. Not unless he gives an equivalent in labor for it. Q. I understand the interest is to be abolished f — A. Yes, sir. Q. Is that the last suggestion? — A. Well, I don't wish to occupy more time; I have given you one good suggestion. The Chaiemax. Yes ; we have had two, I understand. Henry Schraeder, the next i)erson who appeared before the committee, was ques- tioned as follows : By the Chairman : Question. I must confine witnesses from this time out, for the rest of the session, to the exact points of the investigation. Now, first, what is your business i — Answer. My business is that of a piano-maker. Q. Piano-maker; employer or employ^ ? — A. I used to be in the piano business ; lam now a teacher. Q. Are you prepared to state what you beUeve to be the causes of the present dis- tress ? — A. I think so, sir ; I have given this considerable thought. Q. Be good enough to state the causes simply. — A. The first gentleman I heard this morning I heard compliment Congress for sending this committee here, and I was of the same opinion, though I wonder at your patience ; I hope I will not try your patience. In reference to the causes of the depression and state of affairs, I consider it to be such as have been mentioned this day, and after a gigantic war as we had, it expending so much money, and all money mostly loaned, we could not expect at the end of it that anything else would follow but depression ; a million of soldiers almost out of employment were thrown upon the market of labor, and then all the industries which were then engaged helping to carry on the war also ceased. This produced a large amount of superfluous labor. I know this will not remedy the matter, but to come back to the cause of it: If Congress at that time had passed laws by which men oould have been employed, that would have prevented to some extent this depression. Q. We had all that stated by the witnesses yesterday, and it was found out that during the year 1872 and before that they all had employment, and that was corrected ; no matter how it was done. — A. I know we had here an account of the wages of the stone-masons which showed principally what I wanted, but we had a conflict with capital and labor which was the cause' of the depression somewhat. I come now to how to remedy it. I believe if we had postponed paying our national debt, as we have to pay the interest and the priilcipal, I think if we had postponed it twenty years or more, and fried to develop the industries of the nation, then we would not have had this depression. I believe this reduction, which came from the fact of the exist- ence of unemployed capital, was ruinous to real-estate owners; and, of course, they have suffered, and are now poor, as poor as the laborer. I consider the laborer and the capitalist are as poor as they well can be. My remedy would be this: it is necessary to have an immediate remedy, not a remedy that would be necessary to •change our government and abolish Congress almost. I just confine myself to what 142 DEPRESSION IN LABOR AND BUSINESS. ■would give an iinmediatc remedy, because while we are here men starve, and for that reason we want an immediate reii\edy, and for that reason I have some points to give. First, to establish a central labor bureau at Washington, which would have connect- ing branches in all such cities and places where required. Second, these branches could be conducted and superintended bv gentlemen from our Christian churches. Third, these branches to go to work at once and And out who wanted employment, to classifv the same as to occupation, age, sex, nationality, &c. As this is a humani- tarian'matter, I think plenty of gentlemen e(nild be found to do it quickly enough. I think we nmst look upon our people as one family, and our government as a paternal government ; and it would not be proper for a man while he has a family snftering to wait to see what he is to do. I claim that CongTcss should not be praised too higlily for sending this committee, but still we are thankful for it. Then the relief. I would suggest that those who can, be employed in the cities on public works or improvements. Then there should be industrial homes established for such as can't do heavy work and have no trade. Then I propose settlements for such as could be removed. Fandiies and single persons who may not be employed in the cities, to form them into colonies and let them be placed in the West or South, where States hold out certain inducements, to Ije provided with agricultural imple- ments, &c., like we do with the Indians. Their farms or other property would be a security to refund the government the money expended, say in ten annual installments. These colonies would, with care and judgment, become the means of establishing future towns, and would be beneficial for all. Q. Do you know there are bills pending in Congress to do what you say ? — A. Well ? Q. There are bills pending there. — A. Well, I have come to give my opinion. We must look to our government in the future more to be a paternal one, to harmonize the conflicting interests between cai)ital and labor, which seems now to be the trouble all over the civilized world. I propose, 1st. That a bureau at Washington, with the advice of delegates from trades-unions and employers, should establish fixed wages for all trades for one year or more, which could not be changed. 2d. That the time of labor should be lessened to eight hours, to gi^e the working classes an opportunity for intellectual improve- ment, and provide institutions for this purpose. We will have to do something in this direction to elevate the standard of the people if we wish our free government to con- tinue. We must have a social, political, and religious reformation, the Bible to be our text-book, and God in Christ Jesus our teacher. 3d. It is necessary that no children should be allowed to be employed under fourteen years of age. The central labor bureau at Washington to be informed by the branches of all superfluence or scarcity of laborers, and direct the same accordingly. A general supervision should be estab- lished, and all disputes settled through the bureau at Washington. I have to propose certain reforms : First, that all our bonds should be recalled, and greenbacks issued in their stead, or the bonds only be held in this country. Second, to produce all we can in our own land, and import as little as possible. As long as there ifi such diversity in point of social condition among nations we must have a pro- tective tariff to do this. Third, we must see that we own our own ships and do our own carrying. Fourth, then the j)roper education of the people being paramount to their happiness, nothing should be left undone to keep our children and youth constantly learning; therefore all our children should go to school and continue up to the t^ven- tieth yeai', even after that time. Men shomd have constant inducements and oppor- tunities for to obtain knowledge, for to cease learning is to die spiritually. I also wish to state here that we have had considerable to-day about the natural law ; the gentleman previous to me stated about it ; but there is one natural law, and that I believe is morality as we have it in the Bible ; and that I recommend to be used by every one. It is not a great deal that is necessary ; we must leave this matter con- siderably to itself, to rectify itself by such laws as we have seen oper.ate since the world began, but I think we must do something in directing them, and directing them properly. I also wish to state, in regard to a (juestion asked by one of the gentlemen, and that is in regard to the machines, in respect to the eight-hour law. We don't ^ x- pect to legislate for machines, we legislate for men ; and therefore where machines are used all the, time we would have a new gang of men to put on ; if the eight-hour law were passed, wo would have another gang of men to take the other's place. The Chairman. That was stated. Mr. ScHiiABDBR. Yes, sir. I have to make here a remark, if you will allow me, as to the remarks made about working on vests, Q. Are you a tailor ? — A. No, sir. The Chairman. Well, then, I must decline to let you go into that, or give your opin- ions about tailors' business. Mr. ScHRABDER. Well, excuse me, sir ; I carried on an industrial school last year. The Chairman. Well, practical things we want, but it is idle to go into other iieo]ile's business. DEPRESSION IN LABOE AND BUSINESS. 143 William Wittick was the next person to appear before tlie committee, and was questioued as follows : By the Ciiairjiax : Question. — What is your business? — Answer. I am connected with a publisliing- house in this city. Q. Are you a delegate from any body? — A. I am not, sir. Q. You come to give your individual opinion ? — A^ I do, sir. Q. Have you got any opinion on any point that has not been presented to-day ? — A. I think I have, sir. Q. Will you confine yourself to something new ? — A. I will promise to occupy not more than seven minutes of yonr time. First. We have enormous facilities for production, and only a limited outlet for dis- tribution. The introduction of self-acting machinery has been the prime cause of in- creased power of production, and the same agency is constantly contracting the field for distribution by lessening the demand for labor, which, under the law of sujiply and demand, constantly depreciates in value. Take, for instance, the manufacture of hair-cloth. The hand-loom, which was formerly used, required two operatives to tend it. The power-loom now used needs only one woman to ten looms. The invention of the power-loom, therefore, throws out of employ nineteen out of every twenty opera- tives. In oiu- iron-founderies, machine-shops, mills, factories, and in every branch of industry, the same infl-uences have been at work in a greater or less degree, One de- plorable result has been the substitution of female labor for male labor in occupations that, with my estimate of woman, I consider demoralizing to her and to the commu- nity at large, and a disgrace to mankind. Thus machinery,' which should be a bless- ing, is actually a cuise to laber. Now, what is the remedy ? I assert, partially, legis- lative action, and, partially, co-operation of the working classes. They must organ- ize in their respective vocations, shorten hours of lalxir proportionately with increased powers of production, and demand (what they never yet have had), a fair share of the fruits of their handiwork. Labor must no longer " l)nild houses for others to in- habit them, and plant vineyards for others to eat the fruit thereof." And if capital endeavors to run in cheap labor from China, or any other place, workingmen must by the ballot control the government and prohibit such action. We must not let labor be degraded to the European level, much less to that of the heathen Chinee. The relations of labor and capital to-day inevitably tend to such a degradation, and the ultimate will be, unless checked now, the Mongolian will drive out the Caucasian, or reduce him to his uuserable level. (I refer to an article in the North American Re- view, I think it was the issue before the last, which will indorse what I state. ) The mission of the American workingman is to lift up his brothers all over the world to h'S high estate, and not to descend to their low and servile condition. Second. The depression of labor has been caused also by the blundering financial policy of the government. During the late war the needs of the country called for foreign and domestic loans ; when the banks had run dry, and foreign capital was soared, the government issued its legal-tenders — greenback — and by doing so kept its Army in the field and won the day. This money was taken by our merchants, manu- facturers, soldiers, sailors, and everybody who could get it,, and used by them as a me- dium of exchange, a representative of value the same as the best money that ever was coined. It entered into the business of the country and appreciated values to a greenback standard. Now, when a man has put his money in real estate, in stock in trade, &c. , he cannot reconvert these collaterals at a moment's notice ; at the best he can only borrow on them. As we know, at certain seasons of the year the money of the country fiows to New York to be called for again when needed to move the crops and pay for the season's merchandise. The banks were false to the country, and used the money of the merchant and farmer to buy interest-bearing gold bonds. The mer- chant came East, bought large bills of merchandise, as usual, gave his sixty-day and four months' notes, and went home expecting a good fall trade. This was in 1873. When his notes fell due he applied to the country banks for money. They had none. New York banks had none to spare either, and, with ample collateral, the merchant was helpless. He renewed his notes, for which he was charged heavy interest (seven per cent, per annum), to find, in many instances, that when they again matured he was unable to remit. Meanwhile his real estate and other collaterals melted before his eyes, and the end was Ijankruptcy. This individual instance represents thousands of cases which, in the, aggregate, reacted upon and depressed labor. The remedies for the depression I would suggest are these : Realizing that the dam- age done by the ruinous contraction of the curfcucy is irreparable, any unsettlemeut of the volume of currency now would be injurious either to the debtor or creditor classes. We have emptied our quart into the pint measure, and met with a loss by so doing. Now, let us ease the burden of taxation by decreasing our bonded indebted- ness as fast as possible, and by honesty in national. State, and municipal aifairs, de- monetize gold and silver for domestic purposes, using paper money instt'ad, and so free ourselves from the owners of the gold of the world. Prosecute internal improve- 144 DEPEESSION IN LABOR AND BUSINESS. ments on a grand scale, thereby giving employment to labor at remunerative wages, and -widening the tield for the distribution of ciur products. By so doing we shall soon si^e our mills, factories, and workshops in full activity, and we shall start on another ejiell of apparent prosperity — apparent for the reasons I will now state. The Chairman. We have had all this over and over again. Yon have got it all writ- tin out. If you file it with the committee it will be considered with the other docu- ments. What is the object of a man standing up here simply for gloriiication to the <;rowd yh: WiTTicK. I think yon are unjust. Thf CuAiu^iAX. I am sorry if I am unjust; then I will take it back— that part I will take back ; but really I am tired, and what is the use ( if going on with things we have hrard so often ? Mr. Wittick then handed to the stenographer the remainder of his paper, which is us follows : " My remarks so far apply to the oondition of things as they actually exist ; but now 1 will say, thirdly and lastly, th.it our entire system of political economy is wrong. I7nder it panics, at certain intervals, are inevitable ; as is also the creation of a tyrannical money power to the degradation of labor. Labor creates capital, and capital taxes labor for its support. A man starts in business, and by his own and other men's labor aeeumnlates wealth, with which he increases his stock, adds to his business ca]iital, and, maybe, builds a marble store. On this stock, this capital, this liuilding, he claiins interest year by year from the very creators of his wealth. This system, in the aggregate, piles a burden on the back of labor, which soon becomes too h'eavy to be bonie, and then comes the inevitable panic. England taxes the whole world to \v,\y interest on its capital, and even now labor groans under the burden. AVitness the constantly recurring strikes and labor troubles in that country. Interest ill any form is usury, and usury is a crime. "Xow for the remedy : I claim there is one, and one only; that is a communistic, socialistic, co-operative system of doing business, under which all would work for the eood of all, and not, as now, in antagonism to each other. Then the cry of overpro- duction would not be heard until all were clothed, fed, and housed ; then the com in the West would not be left to rot while loaves were needed by the hungry ; then we should ship coal from the mines so long as there was a shivering human being needing warmth; then the merchant would not fear bankruptcy in his old age, after a life of industry ; and, generally, the constitutional permit for the pursuit of life, liberty, and happiness would be no longer a mockery to honest labor. And, visionary as I may be deemed, I believe the time will come when this system will be inaugurated by the civilized world." George Winter next appeared before the committee, and was questioned as fol- lows : By the Chairman : Question. What is your occupation ? — Answer. I am a cigar-maker. Q. Are you a delegate from any association '! — A. Yes, sir ; the German Working- men's Association of Williamsburg. Q. A different association from the one that has already been before the •ommit- tee ? — A. Some of the members of this society ha\'c already been before the commit- tee, but I will be very brief. Q. Are you a member of the same association who have already sent theii: president here and who has made their statement t — A. Yes, sir. The Chairman. Well, we can't recognize anybody but the president. He has been here and had full time ; they sent us a delegate, Mr. Strausser, who made his state- ment, and took an hour; then why should we go on with the same matter which has been gone over ? Mr. Winter. I will bring something new, and will not say anything that has been said. The Chairman. Well, I will have to stop yon if you do. That association has been Iieard, and there are others waiting, and it is not just. Alexander Jonas. Allow me to explain : Mr. Winter, on account of his deficiency ■of the English language, is not fully aware of everything you have asked him, and he is not a representative of the same body that Mr. Strausser was the other day. The Chaih:man. He said he was. Mr. Winter. I will be exceedingly brief, because I only come here in order to state my full concuri'ciKte with all that Avip said, or nearly- all that was said, b>- Mr. Douai the other day, and by Mr. McNeal this morning. We concur in their views with the causes of the present distress ; and, without dwelling on the causes, we recommend to you as the chiiif object of the workingmen the eight-hour law, and the establishment of a statistical bureau, and the prohibition of children under fourteen > ears of age from working. All other plans we leave to the future. We know if yim'give that to thi- workingmen, they will fight th(.-ir way through anyhow. I only differ with Mr. DEPRESSION IN LABOR AND BUSINESS. • 145 McNcal in this: He wanted to l>r exceedingly practical, and so he told you you might issue an eight-hour law only in government ottices and e\ erybody connected with it, as he stated this morning. Now, of course, only an amendment is necessary in order to hare that law made for the whole United States, for all the factories and for all the workshops ; and, ns an amendment to the Constitution was made for the abolition of black slavery, I think It is jnst as necessary to have the Constitution amended for the abolition of white sla\"ery. That is only what I have to suggest ; and perhaps I should explain to you how the eight-hour law is working. For in- stance, if there were one thousand workingmen engaged in one branch of trade, and by some cause, say liy the improvement of machinery, two hundred of these men are thrown out of employment, nfiw, what is it that leads the employer to bring down the prices of these laborers '! Those two Imndred men being out of employment ; nothing else. These wages are paid for a short time ; then the two hundred work- men thrown out of employment, after having eaten up their savings, come and offer their labor, the only capital they have, for lower wages. The boss, of course, goes to his workmen and states they will ha-^'e to work for less or go out ; they have to work for less. Now, if by that new law these two hundred hands are in employment, and there are no othi'r hands in the market, then the workingmen will take and regulate the price of their labor, and in this way they wiU pull through. Of course, the difli- cult thing will be if machinery should be again improved. Every employer who in this way has been tn^ated will think of new machinery to got rid of his workmen. Well, if the machinery should be again improved to throw bauds out on the market, then the working day will have to be reduced to seven hours ; because this is a saw that never cuts blunt; that is all I have to state. Jekejiiaii E. Thomas, a colored man, next appeared before tlie iiimmittco. and was questioned as follows: By the Chaikm.\x : Question. Where do you live ? — Answer. :i52 West Twenty-sixth street. Q. Ai-e you a delegate ? — A. No, sir, Q, "What is your busifiess ,' — A. Waiter and porter, Q. Have yo'n been studying the causes of the ])resi-nt distress ' — A, Since I ha\ e been out of employment I have had occasion to study it. Q. What is the difficulty in your branch of business? — A. The difficulty in my branch of business has been for the last three or four years that the cities liaxe been promising good wages, and a great many of my people have come to the city, and now we have come here wages liave got down, and we have not got money to get out ; and I want you to relieve the poor colored people and help them to do something ; and it is this^ give the men in the city of New York, or any other city, who are out of em- p'oj-ment, money, and let them go South or AVest, and provide for them for eight or twelve months. ' If you do that, I gnaiantee you will do a very great many of my race, our people, and myself, good ; and I will go any day that any man gives me the oppor- tunity to do so. That is what I ask, and no more. Q. You want the government to give more money to all people who are out of oni- pio.NTnent to go somewhere else ? — A. No, sir. Q, But you want it to he used in that way ? — A, Yes, sir. Q. Suppose government could not find any place where they could get employment ? — A. But, sir, there are. Q. Do they want waiters down South ?— A. Y'es, sir. I am not particular about waiters' work. I would rather ha\ e anything else that I could get. Q, Was there a demand when von went away f— A. Well, they were paying |4 or $.5 a month, while here thev were paying $15 or -416 ; but now they have no work. I thought I could have a farm, and live with a full stomach, and be as tree as anybody else, but I can't do it now. Willia:m Wagxer was the next perscm who appeared before the committee, and was questioned as follows : By the Chairman : Question. What is it you wish to off n The Chairman. Well, we have had a Mry full statement of the cigar-makcr's ills from two men. ,, , t ^ i.i • j-^- Mr. Wagner. Well, three heads are better than two ; I may have something dif- ferent. How do you know I am going to give the same ? TOT, 146 DEPRESSION IN LABOR AND BUSINESS. Q. What is yonr explanation'Of the distress ?— A. My idea of the causes of the dis- tress of society is the fundamental law underlying that society, and that is coraiJeti- tion. Q. Competition? — A. Yes, sir; the competitive system. Q. Well, now, for two days we have had the co-operative system recommended as the remedy for the competitive. Do you thinls; you can give any new ideas? and, he- sides, do you think Congress can abolish the competiti\'e system ? — A. No, sir. The Ch'aiejiax. Then I decline to hear you, unless you can make some such recom- mendation. Mr. Wagxer. Well, sir, I understand this comnuttoe was appointed to hear our distress. Q. Well, what law will you have us repeal ? — A. I would have no laws repealed ; I would have laws made. y. What laws would yfiu have made? — A. I would reduce the hours of labor. Q. We have had that ad nauseiim. What else ? — A. Compulsory edueatiou. Q. Well, we have had that. What else ? — A. I would liave a bureau of statistics. The Chairmax. Well, we have had that ; that will do ; stand aside. A. JIi:rwix next appeared before the committee, and was ipiestioned as follows : By the Chairman : Question. Wliat is your business ? — Answer. E.Kport business. y. Are you a representative of any organization, or only of yourself? — A. I represent myself and nobody else. In order to find out the causes of depression, we liave to find out the necessities for doing a good jirosperous trade. If there is anything lacking for the prosperity in trade which we had five or ten years ago, and which we doirt enjoy now, let us see. We have to-day, as at that time, a good soil, abundance of crops, the same amount of workmen, or even more, the same amount of capital, as many railroads, as many canals ; everything necessary for production the same. Wc liave as much capi- tal in the country as at tliat time ; in fact, we have more than at that time. Is there any other element necessary for the prosperity in trade ? I have asked two or three gentlemen on that point. They told me yes — confidence. I will not ejiter into tliat point here now about the question of confidence, because they liad to admit that was a secondary cause, not a primary cause ; not a cause, but a consequence. Do you know any other ? No ; I do not. Now, gentlemen, if I can point out an element which rides along with these others, like foreign trade, or anything like that, I believe I will have told you something new, I believe if I asked you do you know such an element, you would say, " I do not." It is parmmoHif. Parsimony is generally considered a virtue. Without parsimony on tlie part of some of our citizens, on the part of our fathers and forefathers, we would not have as much wealth now, which is enjoyed by those who own it. Parsimony ! I be- lieve that desire can be exaggerated. Suppose all people came to live in the same style as Chinese, a little potatoes and rice, one suit of cheap cotton clothing for the whole year, what would bo the consequence ? I say the industry of the whole nation would be reduced to the production of a few potatoes and a little salt, aud one suit of clothes for each man. If parsimony were carried on to such a degree, it would be an evil. There must be a limit between the two, where parsimony ceases to be a virtue, and where it begins to be an evil. The question with lis is, have we readied that limit .' Have we readied that stage where parsimony is no longer a blessing ; where it is the cause of our distress ? Q. Assuming that that is so, what is the remedy ? — A. Allow me to say I did not hear any one go into the cause of the evil to ofler proof for what he said was the cause. I have come here to give the cause of the evil, to confine myself to the cause only, and jjive you full and ample evidence that what I give as the cause is the cause. I don't want to give any remedy. Now, come to the point ; if you ask any business man about the stagnation — for instance, ' ' Why don't you go on with your business the same as you did five or ten years ago ? Why not go on with your stock of goods as before ?" What will he tell you ? "I can get the goods easy enough, but if I did buy I could not dispose of the goods." If you ask the manufacturer why he don't go oi'i with his business the same as formerly, he says, ''I can produce it; my workmen are anxious for work, but if I produce as much as I formerly did I could not dispose of my products, aud if my obligations were due I could not meet them." This is a plain fact. It cannot be dis- puted by anybody. I take up my points in order. No. 1. Our pri^sent stagnation in trade is caused by the fact that jiroducers and dealers cannot sufficiently divspose of their goods. The Chairmax. That is a fact. Mr. Mkrwin. Why can't they dispose of their goods? I propose to follow up ^his question. Q. Would not the workinguien spend the money if they had it ? — A. Th.at is just the point I .am coming to. DEPRESSION IN LABOR AND BUSINESS. 147 Q. Would not the workingiueu spend tlu' money if tlicy had it? — A. Yes, sir; they would. Q. Then tlie parsimony, as far as they are concerned, is forced upon them? — A. I don't know what you minin by tliat. Q. You say if they had the money they would spend it ? — A. Yes, sir. Q. Now, if they have not the money they can't spend it ? — A. The parsimony is (m the part of the men who have the money. Why can't they dispose of the goods ? Are they dearer than before ? No ; they are cheaper. They do everything they can to dispose of thein, but they can't dispose of them; the cause is not with the produc- ers and dealers ; it is with the people ; the people will not buy. I come to my point number two, that ovir producers and dealers cannot sufKeiently dispose of their goods because the people don't buy them to such an extent as before. Why don't people buy as much as before ? Because they don't earn as much as before. There are two j)oints. The third point is that people don't buy so mueli as before because they have not so much money to buy with as before. Now, we have one fact here, and we have another fact contradicting that fact, apparently. We have as much money in the country to-day as we had five or ten years ago ; in fact, more. If the currency is contracted a little the remaining currency will buy more ; it is worth more. Money is in the country. If you ask any workman if he has as miich money as he had five or ten year's ago, he will tell you no. If you ask a business man he will teU you no. Wliere is It, then ? With the cash capitalists. Let us make a distinc- tion between the capitalist and the people. It is the cash capitalist on the one hand and the great masses of the people on the other. The great fault is that the cash has the tendency to remain with the cash capitalists; it does not come out of their hands. Allow me to follow up this argument. What do we need for the revival of trade ? In order to relieve the stagnation in trade we need more disposal of commodities. Which is the first requirement in order to dispose of commodities f Demand for commodities. What do we need in order to have demand for commodities ? Buying on the part of the people. What do we need in order to make people buy ? Money in the hands of the people. What do we need in order to put money in the hands of the jjcople ? Earn- ings on the part of the people. What do we need in order to secure earnings to the people? Work for the people. Which is the first requirement in order to provide work for the people ? Demand for the products of work. This is ecjual to demand for commodities. What follows from that? The first point is identical with the second ; the second with the third ; the last one with the first one ; they are all identical. They all mean prosperity in trade. If you have established any one of these points you have established all of them. Jlr. Chairman, I v\ish you wouli contradict me if I am wrong. The Chairman. No ; there is good authority for what you say ; the first shall be last, and the last shall be first. Mr. Mjirwin. I don't see why it .should be laughed at. These points are like the spokes of a wheel ; if you put any one of them in activity, they are all in activity ; if you stop or impede any one of them, you impede all of them. Mr. Chairman, I have offered to produce to you "one element of prosperity which we had five or ten years ago which we have not now ; it is money in the hands of the people. Money in the hands of the people existed five or ten years ago. It is a fact that that element is wanting wherever a nation is in a starving condition. If you go through past history, go to Europe, you will find where the capitalist disposes readily of the money, there prosperity and trade exi.st. Why, in our case, don't the money come out of the hands of the people ? Why did it years ao-o? Because at that time we were building up railroads and properties to an enormous''extent. The needs of the people have not followed up to the same extent as the capital, and in consequence the money that is now going into the hands of the capitalist, it is not brought back. Suppose a man like Astor earns |5,000,000, and he needs for his commodities |1,000,000; the other $4,000,600 remains m his hands until there is a chance for investment; as long as there is a chance the cash will not be m the hands of the cash capitalist ; as soon as this chance is given the money will be in the hands of the people ; but if not it will be in the hands of the cash capitahst. You might say to-dav there is plenty of money in the hands of the capitalist. You might say there is $400,000,000 of capital; but suppose a man hke Astor keeps $1,000,000 out of investment, if he does employ it for luxuries or anything else he will buy from the people, and a million doUars' worth of goods are sold and the people have it m their hands again. Money is only good for circulating ; class A will take it and dispose of it to class B ; class B will dispose of it again ; and we can tell pretty nearly how far that will be repeated Say we have in our country about $70,000,000 to dispose of, and $700 000 000 of capital ; now these $70,000,000 of capital negotiate the total business, and 'we can see that every dollar does duty in the way of exchange ten times lor every individual, consequently every million that is kept out of employment will hurt the people to about ten times its own amount. 1 1 • „ + Q. As a matter of fact, do you know whether the production of the world is greater than in 1872 ?— A. It must be less. 148 DEPKESSIOX IN LABOE AND BUSINESS. Q. But the quaiitit\' of the production, tlio. voluiiii' of protl>iction '?— A. In the Uuited Stiitfes if there wiis more jirodnetion there would he more enjoyment ot produets, but who enjoys it nowadays? Does tlie capitaUst? No, ho don't. Does the working- man ? No, he don't. , . ,„, ^ t r Q. Ha\c; you studied the figures? have yon got thr figures ?— A. The figures I have given you I don't rel\' ou at all ; I have stated the principle. The Chairman. Well, you have stated the iirinciple ; if you have no facts to give, you had better stop. You want people to spend money ; every man in this room wants people to spend moiu-v. They liavc not got it. Mr. Mbkwin. And those who have it don't spend it; if they had it, they would. Q. Give us a mode that would be a remedy.— A. I will give you one. Q. Give us a practical suggestion to make them lay out money. What can Congress do to compel men to spend money ? — A. There is a way to do it. Q. What is it?— A. I am not prepared at present to tell it. Let Congress proceed in about this way: Try to find some institution, arrangement, or means tending to always make the holders of cash funds buy with their money as soon as possible after receiv- ing it, by buying commodities or services fiom the ])cople, either for luxuries, or for the purpose of accumulation, or for the purposes of reproductive investment. Observe as much as possible the following conditions : Don't disturb the laws of property. The proposed arrangement should not be of an inquisitive or obnoxious character. It should be easily controllable, and not open the door to fraud. It should not impede the freedom of individuals to carry on their business in such a way as they see proper. It should not increase the taxation of the people. It should interfere as Uttle as pos- sible with our present social organization. It should confine its bearing and tendency as much as possible to the object in view. If this object can he attained, then there would be a chance for remedying it. At present this matter is new ; it is new, and it is laughed at ; and if I gave something else it would be laughed at. Q. But ridicule is the test of truth, according to Lord Shaftsbury.^A. Well, it may be. I don't think you can contradict that. Mr. Clark next appeared before the committee, and was questioned as follows: By the Chairman : Que.stion. What is your business ? — Answer. An engineer. Q. Upon what point do you desire to speak to the committee? — A. On the point to remedy the patent laws of the State on all machinery. Q. You want to suggest a remedy for grievances arising out of the patent laws? — A. Yes, sir. Q. Please state it as briefly as you can. — A. Now, I suppose it is in your power to pass a law taxing all machinery; passing a law that all moneys thus recovered should go to the United States Treasury, and be redi8tributeas8 the bills now before it for the establishment of these assisted DEPRESSION IN LABOR AND BUSINESS. 151 comiimnitiin, wliicli nii<;lit be joined by all who wish. Those who do not wish to join need not. " \i-r\ respcctfullv, "WM. D. O'GEADY, " CapUiiii late Eighty-eighth Xcw York Volunteers, Journalist." Sir. S()i'iiEi!.\x. The jiicat point I wish to make is the fact that the cause of depres- sion is in a jjrcat nicasmi' owing to the fait that the people have not got a thorough appreciation of the laws that should govern them. Nothing but the densest ignorance prevails, and it will not bo counteracted until we have in this country, as in others, a minister of education, a secretary of education, if yon wish. In I"rance the minister of education is the minister of religion also, but here there is no necessity for that, unless we think with most of our advanced thinkers, that religion, all that is necessary in regard to the noble and the good, is education. Tliis miirister of education should work in conjunction with the Burean of Statistics, which should be as early as possible established, and should have boards of education throughout the entire country. Un- doubtedly the municipalities in many portions of the country do look out for education, but not as it slionld be done ; it is simply sporadic. Q. You think the United States should take charge of the national education's — A. Yes ; and, in order to meet that question and dispose of this dense ignorance, it will be necessary that members of Congress should do all in their power to authorize the centralization of the government, and the sovereign rights of the States shonid be abrogated as much as possible. That there are many evils that cannot be met, unless they are, cannot hv denied, as the great evils which exist in the marriage and divorce law. For instance, if the legislature of New York shonid pass a law making eight honrs a day's work, Massachusetts may refuse and so may other States, and unless it will be general it will not be efficacious or of any future benetit. Q. Are you aware that that subject was discussed almost exhaustively in the Feder- alist and other papers? — A. I'es, sir. Q. The difficulty is that you want to introduce a new system in our government ? — A. A new system as far as xiossible, and that is what has been introduced in other places, empiiieally ; such as one man, Mazzini, who endeavored to assist his own country and every cpuntry by introducing a better system of government. A system which has millions of starving and dying over the whole country must be a failure, and it mnst be disposed of if we desire to be a happy people. Q. Is that owing to the federal system ? — A. Not altogether. It is owing in a meas- ure to the federal system of monopolies that exist. The CiiAimiAX. That we can't abolish under the federal system; it can't be abol- ished except by some system that this committee can't deal with. Mr. SoTi IER.\N. ( ), we can , certainly. In order to have this centralized system as far as possible, 1 would have the government take charge of the railroads. I think you will find that the people of England have a system of gas where it is for the whole community. In France they have satisfactorily settled the question of tobacco. England and Fratice have Ijoth settled the question of telegraphy and savings-banks. That shows that it is possible to have a system that is for the benefit of the whole and not for a part of the people ; therefore, this centralized system of railroads in the hands of the government would be for the benefit of the people. It has been proved by Russia ; her uiilitary railroads now lielong, I think, to the government, and it shows that in this country the railroads can be taken from those to whom they improperly belong ; I say improperly because thev have been used improperly: men complain because there is land out West and they can't go to it ; if the government owned the raiboads they could go. » » ,-i Q. 'Would not the novemment have to pay for running the railroads ?— A. Certainly. Q. Couldn't they pay for those people they wanted to send out just as easily under the present systeui?— A. As a transitional measure they could, and it would be a very good thing to do it. ' „ , ^ ,tt j. » i xt • Q. It is not newssary to own the railroads to be transferred out West »— A. No, sir; but it will be in the future. The CiiAiRM.vN. AVe don't all propose, or •\\ant, to be sent out A\ est. Mr. S(>'iiri:i!Ay. If you go into Baxtei- street and others in the city, they would say that iicll wouhl be preferable to their present state. . . „ . -, . ^ Q. Is it not so in all great cities ?— A. Yes, sir; I have seen it m Pans and m En- ^ q!' There is centralized government in Europe, and they have not cured this evil there .'—A. No, sir. ^, , -^ Q. Has not France a centralized govomment ^— A. Yes, sir. Q. And has not England?— A. Yes, sir. -, , . t^ , I ask you, then, does centralized govemmoiit cure that evil ?— A. It docs. O Has it done so there ?— A. It has ameliorated many things ; it inadi^ the hours ot labor less In England thev have an eight-hour law ; the question of holidays was 152 DEPRESSION IN LABOR AND BUSINESS. satisfai-torily solved there; tlie sanitary msiieutiou by the government was satisfac- torily solved there. Q. Is there an eight-honr law in England ?— A. There is a short honr— nine-hour law, I believe; hut the honrs of labor are abridged ; men are not permitted to work there eighteen or seventeen hours a day, as these poor unfortunate cigar-makers are. Q. In private houses in England is there any limit to the number of hours they shall work '! — A. Tlxere is a factory act. Q. Is there in private houses auythingto limit the hours operatives shall work ? — A. No, sir ; the act simply applies to the factories ; but there ■\\-ould be no possibility of the evasion of the law." I think it would apply to this disgraceful working of the ten- ement system in the making of cigars. There the factories are bound to be kalsomined once a year, and the water-closets inspected, and there it was not considered a subject for laughter. The Chairmax. That was the point of many of the questions I put to the witnesses thismorning. Jlr. Lissean's book covers the largest list of remedial legislation any country has gone through, and a great deal of it ought to be imitated, but it is for the State, and not our general government. Mr. .SoTiiKRAX. I say this for the benefit of the committee, for several organizations of the people simply regard all of these as transitional measures, to arrive at a future definitive result. I think there should 1 le a secretary of industry to represent the burean of statistics, to meet the diflerent difficulties that may arise in consequence of the various environments that labor is placed under. And, furthermore, as this question of centralized government must come up, and as servants of the people should consider their positions places of great public trust, it is necessary — as China thousands of years ago, and as England within these last fifty years, has accomplished it — that competitive examinations shall be had for the work of the government ; no shyster politicians and hangerons of the politicians who may be sent to Albany or elsewhere .should have such positions. Further, I would also say in the matter of education, the people of this country have not had that careful consideration in the matter of culture they ought to have; had. Undoubtedly institutions such as the Cooper Union, and Astor Library, and the Lenox Library, are doing a great work toward educating the people to a higher culture, to which they never will advance until they apprehend the nature of their condition ; therefore, I contend that the government, instead of appro- priating money for the destructive arts of war, which are entirely antagonistic to society, should assist the education of the people by making grants for museums, for libraries, and also for the higher tdncation, which could be done in union with the minister of education. That is to say, that the education of the people, by the aid of works of art, should be under the supervision of the minister of education. Further- more, I should suggest that all the materials and books used in the public schools should be furnished free of charge, and even in the higher branches of education] such as music and jjainting. I believe the Conservatory of Music and the South Ken- sington Museum in England furnish them. Q. Furnish what '! — A. JI;iterials for the use of the students free of charge. ThcCitAiiiMAN. Vein are in error. They charge a small fee for admission. The En- glish system is ]3eculiar in that they do not believe in free education ; but in our public schools it is so. Mr. SoTHEiiAN. Not in the higher branches of education. The Cii.\iliMAX. In all the public schools of this city they get their books, &c., free. Mr. SoTHEiiAX. Only in the city, not in the agricultural districts. The Chaikmax. I think in Urn State of New York altogether it is free. Mr. SoTiiioitAX. As to the prohibition of children under fourteen years of age from working, the minister of labor should look after the punishment of the violators of those laws? — the x>arent if he is to blame and the employer if he is guilty. The Chairman. These are all details with which we can't even begin to deal, because we have not power to do it. You have got to amend the Constitution first. Mr. SoTHJOJt.vx. Then the Constitution will have to be amended, and if it is not, the people will take it into their own hands. The Chairmax. That is a foreign idea. The Constitution can be amended if the people want it. Now, violence upon the part of the minority against the majority is not an American idea. The power of the Coustitution is full and ample whenever a majority want a change. Mr. SuTiii:iiAX. Then there is another thing. In France they have what they call the jugeilepaif, who immediately, and without the long delays of the law here, settles questions between capital and laljor. Q. Does tbfjuge depaij- settle questions between capital and labor? — A. Yes, sir. Q. What does the consdl des jpriid'hommes do iu France f — A. I believe that is where appeals are taken. The Chair:man. Th.it is the question, as to whether the jurisdiction is with thejuge depaix or the coiiseil den pntd'honimcs. You are giving this committee information, and I would like you to be exact. DEPRESSION IN LABOR AND BUSINESS. 153 Mr. SOTIIER AX. Litigation lioro ciui only be, obtiiinetl at great expense and by the em- ployuient ot the legal class. Let the laws he simplified and classified into a system similar to the Code Napoleon— a code of the centralized government ; and if the gov- ernment has not that power, amend the Constitution, so that workmen can go and argue their own oases. Q. Do yon know that the constitnfcion of the State of New York anthoi-izes courts of ?'^' i?on "" '^"^^ '^'-'^' ^"" ' ^"* '^^''^* '^"'■'^ *^'^* ™"'^" """"^ * I liave a suit pending tor ^00 m court, and that case w;is entered in the court of common pleas some two years ago. Q. I ask you wheth<>r you know that the eoustitntion of the State of New York pro- vides for the establishment of courts of arbitration and conciliation. Now, if what you want is a place where men can go and argue their own cases, why don't these men send persons to the legislature who will establish courts of concihation ? That w a remedy existing now in the State of New York without any legislation.— A. 'Well, sir, the workiugmen don't know that. The CliAiRMAX. Well, I tell them, and it would be a fair thing if you gentlemen who come here would enlighten the workingmen through the press on such matters. Mr. SoTiusR.^. At the present moment there is about one-half the population de- prived from voting. Q. AVhere ?— A. In this country ; that is, w^omen. It is absolutely necessary that the voting power should bo given to women. They are not existing now as they did. They are m the factory, working day by day ; in the cigar tenement-houses, working day by day. I contend it is the duty ot' legislation to relieve these persons from the system under which they are suffering in not being represented in Washington. The Chairmax. The committee will adjourn to this day t\\o weeks. I have called the entire list ; finished every name. Thus far the testimony has been voluntary, but it will be different when we meet again. I have stated that the committee wanted to hear everybody who had a statement to make, but it must be apparent it would be impossible to go on with this system, because we would not have time to report. Hereafter any person who wants to give testimony can communicate with the com- mittee and indicate what he wants to state. If it is now, the committee will be glad to hear it ; if it is not, the committee will be compelled to decline. Adjourned to Wednesday, August 21, 1878, at 11 a. m. New York, August 21, 1878. The Ch.virjiax'. At the close of the last session of the committee it was announced that when its meetings were resumed witnesses would be called who had been re- quested by the committee to appear. It is proper to state that every volunteer wit- ness who had put his name on the list has been called. Most of them answered to their names and have given their testimony. Some few were absent. It may be as- sumed, therefore, that the volunteer testimony is now exhausted. Hereafter the com- mittee will, as far as possible, call only gentlemen who have special knowledge with reference to the subject about which they propose to testify. This inoming the com- mittee ■will call those gentlemen who have come here from a distance at the request of the committee, and m order that they may go home. The first on the list is Mr. William G. Moody, of Boston, who has entitled himself to be called before this com- mittee from the fact that before the Social Science Association at Cincinnati he read a paper which has been regarded by every one who has since read it as a valuable con- tribution to the subject of which he has made a special study ; nE^mely, the bearing and effects of machinery on the social condition of the working and employing classes. Mr. Moody is now present, and we will begin with his testimony. VIEWS OF MR. GOODWIN MOODY. By the Ciiaiumax: Question. Please state your residence '? — Answer. Boston, Mass. Q. What is yom- business f— A. I learned the art preservative of all arts, printing. Q. Are yon a printer at present ? — A. I am not. Q. State your present business. — I am one of the unfortunates who have been com- pelled to Micawberize — to wait for something to turn up. Q. In what business were you last engaged ? — A. Some two years since I was en- faged in the printing business. . I have beeen engaged in other businesses during my fe — in quite a variety of businesses ; mining and agriculture quite extensively. Q. Have you given special attention to the relations of capital and labor, either in general or in a particular'direction?— A. I have. Q. In what direction especially? — A. In the direction of their intimate connection 164 DEPRESSION IN LABOR AND BUSINESS. or their hidiasolublo connection. The question, as you put it, Mr. Chairman, is some- what general, and I should perhaps answer it more specilically. I have examined the question of the relations of capital to labor in the sense of showniR that capital is the fruit of labor ; is one of the great products, indeed the ultimate product ot labor. cap not find that there is any — ^ cover that there is necessarily any conflict between them, any more than I can beheve that there could be a conflict between the fruit which gi-ows upon a tree and the tree itself. ^ , Q. Do you find that, in fact, there is any conflict or hostility between the two ?— A. There is an artificial difficulty, growing entirely out of misconception, or perhaps out of ignorance, on the part of both classes to a greater or leas extent. The Chairman. You say "artificial." Be good enough to state the causes that bring about this artificial conflict. Mr. Moody. The causes are to be found entirely in the misconception of the rela- tions of capital to labor. The Chairman. Misconception by whom ? Mr. Moody. Probably by both classes. The Chairman. Misconception is a very general phrase. There are some causes, undoubtedly, which produce the artificial condition which yon have described — direct causes — and those are the ones which the committee are seeking to arrive at. Mr. Moody. The direct causes may be these: That the laboring classes, or the masses, discover that whereas they are undergoing a condition, at the present time, of extreme privation, or of personal distress, there is another class, generally known as capitalists, who are not suffering these personal privations. This creates in the minds of the masses an antagonism. They cannot understand why one class should be in comparative comfort while they are in absolute distress, and hence an antago- nism, or perhaps an enmity. The Chairman. Is the enmity on one side or on both sides. Mr. Moody. I think there is a little on both sides. The Chairman'. Do you think that those not snifering from distress (capitalists, I shall call them) have an enmity toward the working classes ? Mr. Moody. Not as a class by any means. I do not believe that, neither do I believe that there is any enmity toward the capitalist on the part of the masses of the operatives or laborers. There is an enmity among the few. We find it cropping out here and there ; we see and hear too much of it ; but it is confined to a very small fraction. The Chairman. Do yon thiuk that the grievance which you have described on the part of the workingmen, when they see some people who are not suffering from the want of food, or from the want of the necessaries of life, is a well-fonnded grievance ? Mr. Moody. I think that the answer which I have already given would cover that ground nearly. I think that the grievance is not well founded. The Chairman. How does it happen that some portions of the commimity are ex- empt from the sufferings of the other portions ? Is it due to accident, or is it due to the fact that the former have been provident and saving, and have put by, as we say, something against a rainy day ? Mr. Moody. I believe it is more owing to the accidents of trade, or to the accidents of life, than it is to that thing which we call providence. The Chairman. I said provident, not providence. I meant those who are saving and economical. Mr. Moody. I am using the term in that sense. This providence — that is, saving, husbanding, taking care of — is quite as observable (indeed, more so, perhaps) among those who are in the poorest circumstances as it is among the better classes, except that you find an extreme providence — that is, a saving and husbanding — in another class known as capitalists, but who are sometimes called misers. The miser can ex- hibit no greater amount of providence than we often find exhibited (indeed, neces- sarily so) by the poor. The poor husbands are provident, are careful, from necessity; the miser from pure cupidity. The cai)italist, from his abundance, lives liberally, many people say lavishly, which means simply another form for the term improvi- ■dently. The Chairman. To get a little more into the marrow of the subject. This hostility of which you speak, arising out of the fact that some suffer while others do not suffer, must be produced by some causes in the organization of society, and it is to those causes, so far as they can be remedied by legislation, that the committee wishes to direct its attention. Be good enough, therefore, to specify any causes which, in your judgment, bring about improperly this difference between the classes, resulting in hostility or enmity — any causes with which legislation can deal. Mr. Moody. I am given a very wide margin, and a large field for discussion, as yon have stated the proposition. Let me state that I have no sympathy, not the least, in DEPR-ESSION IN LABOR AND BUSINESS. 155 tliis hostility manifested toward capital. I do not l)elie.ve that there is any necessity for any antagonism between cai)ital and labor; there should not be; there should be the most intimate union between the two. Tliey are, to a certain extent, and, indeed, to a very large extent, dependent tlie one on the other. They must live in harmony, or there will result an injury to society. That is my idea. The Chairmax. Are they not living in harmony, in your judgment, so far as the great mass of operations in society is concerned f If youestiinate by percentages, for example, the amount of discord that there is between the two, would you not estimate that by far the largest percentage of capital and labm- is living in absolute harmony now ? Mr. Moody. I believe that in the mass they are living in all the harmony that can possibly exist under the present conditions of business. The Chair.man. Then give us the disturbing causes which you think prevent their living in absolute harmony. Mr. Moody. You will recollect, Mr. Chairman, that in the little volume which I handed you a short time since, I made that \ ery point with reference to harmony. I say in it that I do not believe that those industrial difificulties find their sources in the purposes or designs of any class or portion of our people. They grow out of the changes that have taken place in our industrial condition mainly during the present century. This is a fact which, although it may be known to a great many, has not entered as a factor into the consideration of this matter. All our methods of labor, all our modes and means of production, have radically changed during this present century. Where, at the beginning of this century, e\-erythin,u' was prodiieed by muscular force and action, now substantially everything is produced by the meclianical forces. The Chairman. Are we to understand you as regarding that as a beneficent state of things, or the reverse '! Mr. Moody. Properly used it is a beneficent state of things. I look upon machinery as having a mission; there is a gospel in it. It is this: A less amount of human toil for a mere existence, a greater abundance of comfort for all, and a higher develop- ment. But, if improperly used, it produces the very condition of things under which we are suifering, demoralizatiou and transition in all interests. The Chairman. Be good enough to specify what you regard as the improper use of machinery. Mr. Moody. The improper use of machinery is to use it in such a maimer as to re- quire the employment of only a ]iortion of the avaihtble muscular force, and tlirow- ing the other portion into idleness. The Chairman. Is not the first cifcct of the introduction of machinery always to put somebody into idk>ness ? Mr. Moody. The first effect and the ultimate effect of it is. The Chairman. But if tlie first effect of machinery is so, and if, as you say, ma- chinery should not be used so as to put an.\ portion of the community into idleness, how will yon ever get machinery introduced into the methods of society ? Mr. Moody". The term "ever," as you use it, nuiy be a short period or a very long period. ' The Chairman. I mean at any time. Yon say that machinery must not be allowed to displace the human muscle, "and I ask you whether the ititroduction of new ma- chinery has not alwaxs for its first effect tin' displacement of Imman muscle ? Mr. Moody. It has. The Chairman. Then how, on your principle, can machinery be introduced at all? Mr. Moody. We must adapt the use of machinery and the use of human muscle to each other. The Chairman. Would you limit the use of machinery ; is that your point ? Mr. Moody. I would not ; I would develop it to the utmost possible extent. The Chairman. How then would you provide for this unemployed muscle 'I Mr. Moody. I will have to answer that question by an illustration. If a dozen men (using that number as representing the mass) by the use of the unaided muscle pro- duce sufftcient for tlie dozen, and if, by the application of new motors or new forces, it is found that six of the dozen mav jirodnce an abundance for the twelve, then, necessarily the time of the use of that force must be shortened by one-half, so as to keep the whole twelve employed. It is a mere question of arithmetic. The Chairman. I know that it is a question of arithmetic, but I want to arrive at the practical way out of the difficulty. How would you meet the difficulty or pi-o- vide for the six unemployed ? Would you compel machinery to work less time so that the whole twelve could have full employment ? Mr. Moody. Precisely. I would do that very thing. The Chairman. Then you would limit tlie use of machinciy ? Mr. Moody. In that respect I would limit the use of machinery ; but, in another respect I should double the use of machinery, because, by that very thing double the amount of machinery would be required. . , . , x The Chairman. But what would be the object of expendmg capital m the construe- 156 DEPRESSION IN LABOR AND BUSINESS. tion of double the amount of uiaohinery wheu one-half of tlie machinery would he able to do the work ? Mr. Moody. The object would be this : the capital of the community is this fruit which I have been speaking of in the first part of my examination which comes out of labor, and these twelve (the whole number) must be kept employed in order that there may be fruit gathered from the whole twelve to form the body of capital. The Chairman. Let me get my point before you so that you can understand it. It would require twice as much capital, would it not, to duplicate the machinery as if you had only one-half the amount of machinery ? Mr. Moody. True. The CiiAiKMAN. Now, is capital a valuable tiring to the community, or is it not? Mr. Moody. Assuredly, it is valuable. The Chairman. Then it should be husbanded and economized, should it not ? Mr. Moody. What should I understand by your use of the term "husbanded and economized " ? The Chairman. That is to say, that it should not be expended in a wasteful man- ner, or for any useless purpose. Now, would it not be a wasteful and useless expend- iture of capital to build twice the quantity of machinery that is necessary to do a given amount of work ? Mr. Moody. No, sir. Capital is needed to be gathered and garnered, but not to re- main dormant. "When capital is used in that manner it becomes an injury. Capital is useful and is a blessing when it is active— when it is used and turned over — and the more frequently it is turned over in business the greater the benefit of it. And one means of this turning over of capital is in the construction and development of ma- chinery. The Chairman. But there is not too much capital, is there, for the wants of soci- ety ? We have not got more capital than we need? Mr. Moody. I have never discovered anybody who had. The Chairman. Neither have I. That being so, there must be practically an unlim- ited field for the use of capital. Now, if any portion of capital is absorbed in the building of machinerv, unnecessarily (because the existing machinery is sufficient to do all the necessary work), have you not withdrawn capital from some useful field and applied it to some useless purpose ? Mr. Moody. The construction of machinery or the construction of means by which men shall be employed caimot by any means be termed a useless investment. The Chairman. I am an iron manufacturer. I have got a blast-furnace. I ran run that blast-furnace with one steam-engine. That is all it wants. Then I find some idle people around me, and I say, " Here is capital, or I can borrow it; let me build another steam-engine to employ those idle laborers." I have then two steam-engines, one run- ning for twelve hours and the other for twelve hours. Now have I not put that amount of capital to a useless purpose ? Mr. Moody. Undoubtedly you have in the way yon put your question. But it must be kept in -view, all the time, that the mass of the people must be employed in order to have a market or demand for the production of your one or two engines. You find your market for everything that is produced solely in the people. Now when, by using your one engine solely, you deprive one or more persons of employment, to just exactly that extent do you destroy your own market. And that is exactly what is being done at the present time. Our markets are destroyed because half of the people are abso- lutely without the means of entering into the market to buy our products. Now if you have capital, you want to use it, not to bury it, as the man did his one talent. You want to put it to use so that you may get usance out of it. The only way that you can do so is by putting it into business ; the only way you can put it into business is by creating a market for your products ; the only way that you can create a market for your products is by giving to the mass of the people the means to buy ; and the only way that they can get the means to buy and consume your products is by obtain- ing work. The Chairman. Suppose that instead of expending my money in building an engine which I do not want, I had employed the same amount of capital in the production of something which I did want and could use, would I not have employed the labor just as well, and would it not have been a useful instead of an unnecessary and useless ex- penditure of capital ? Mr. Moody. Undoubtedly that would be the case — your question carrying with it the idea that that something else Avould require muscular force, would require the em- ployment of the people. It that something else can be found, or if you can put your capital into something else, we will have that result of course, and the same end will he attained. The Chairman. Then wh.at yon want is to see capital employed, and you agree that when it is employed for a useful inst(5ad of a useless purpose, it is the rightful applica- tion of capital? DEPEJESSION IN LABOR AND BUSINESS. 157 Mr. MooDV. Yon cannot call the employment of capital wlien it is usod in a way that will givi- employment a useless application of capital. The Chairman". \\'e are snpplietl in Now York (as yon are in Boston) witli water by means of aqueducts, steam-engines, Ac. That gives to every inhabitant of the city of New York the water he wants. Now suppose that we have nfty thousand or one hun- dred thousand idle people in the city of New York, and suppose that we employ a lino of buckets from Crotou Lake to the city of New York and put all this crowd of idle people to pass down the buckets. That would employ muscular labor and would dis- pense with the use of machinery and would accomplish all the purposes desired. It would employ labor, supply water, and the calamity which you have depicted in the non-employment of labor would have passed away. Mr. M(j(ii>Y. And yo»i would still have retained men where there can be no advance- ment ; you would still have kept them down to the point of continuous employment, uni-esting, without a chance for recuperation, without a chauce for rest, without a chance fur development. I think yoiir aqueduct illustration is not by any means a good one. If, on the other hand, instead of putting these unemployed persons to some- thing which is not necessary, you would shorten the hours of labor, you would still have kept all employed, yoiu' capital would be still invested, and your market would be protected. The Ch.^uoi-VX. But would not the result be exactly the same thing if I built ma- chinery tor which I had no earthly use, having an existing machinery that could do all the work necessary ? Is not that exactly a parallel case with the aqueduct ? You require me to build another set of machmery because it will employ men usefully. My answer is that it is unnecessary ; that it is an expenditure of capital which could be applied to S(nue better aud more useful purpose, and I do not see, with all due respect to you, that you have sohed that difficulty at all. I shoiild be glad to see capital eni])loyed usefully. If I needed another steam-engine I should build it ; but, certainly, there is no law, human or divine, thiit should ediupel me to buLld a steain- en-iine that I do not want. I am glutting that as an illustration. jlr. M(jOdy. I would like to see in what other way unemployed labor can be em- ployed. The CiiAiRSiAX. That is exactly the information which we understood you to be coming here to give us, and that is the information which the members of this com- mittee are very anxious to get. We do not knoAv how it is. A\'e are in a state of igno- rance on the subject. You tell us to stop a portion of the existing macliinerv, aud to build some more to do the woi-k which can be done by the existing machineiy. Mr. Moody. I do not tell you to stoj) a portion of the machinery. I say, keep all tlie machinery that we have employed. Here is half the comnuinity substantially idle. Half of our market is gone on account of that idleness. The capital w hich we have invested at the present time is useless. It is paying nothing on account of this idle- ness ; for it is a fact that the capital which is invested at the present time is being lost, and it is a fact that investments do not pay. It is a fact that our railroads, which have absorbed a greater amount of capital than any other species of investment in this country, are paying nothing. Much of our railroad property is becoming hopelessly incumbered, and that is but a fair illustration of all busiuess in this country. The Chairman. Tell us what means this committee can recommend to insure the employment of all this machinery and to keep it going all the time. The trouble now is that tiie people who have got machinery cannot sell their products if they keep their machinery going. What we want to find out is how they can keep their machinery going all the time without loss. At first I understood you to say stop the machinery ; now you say do not stop the machinery, but keep it going. It is kept going so much that the manufacturers cannot get rid of their products. That is the difficulty that has been testified to, aud, if it was not, I could testify to it myself, for I have personal experience of the fact. Mr. Moody. Then you are corroborating my statement. The Chairman. I do not know how manufacturers are to get rid of their products. The Witness. There must be some process devised (and it is a simple matter to be devised) by which a demand shall be created for the employment of every one. The Chairman. Tell us that very simple method. How are we to do it? Mr Moody. It is a simple question of arithmetic again. If one-half is producing enouo-h for the whole, then the other half is idle and the whole are suffering. This must°be turned right around and the whole must be kept at work half the time. The Chairman. Then you would stop the machinery for half the time ? Mr Moody. Let me explain that. I would run machinery as I would nm muscle. They are the forces of production. I would use the forces of production and use double the force that we have now. I would double the machinery and I would double the muscle, in order to produce the same quantity that is now produced, and to do it by ialfthe machinery and half the muscle. ,. . , ,, ,. , xt_ The Chairman. Would you double the machmery when you could accomplish the same result bv doubling simplv the number of hands that work it ? Suppose you run 158 DEPRESSION IN LABOR AND BUSINESS, machinery for eight hours and are producing more than you can sell, and there are in consequence a lot of people idle ; but suppose you work the people only four hours, would you not then have employed the idle portion of the people f Mr. Moody. Undoubtedly you would. I was going to remark that it could be accom- plished in one other way— by working in what is called shifts— a very common term among the English miners — a means by which two or three or four shifts of men are worked during the day. I think, howijver, that it would be discovered that there is no sound policy in that. The Chairman. What would be the sound policy ? That is what we want to get at. Mr. Moody. I have stated it. The Chairman. I did not understand yoti ; please to state it again. Mr. Moody. The sound policy is to develop our machinery, to develop the mechan- ical forces to such an extent as requires the employment of all the muscular force in the necessary production. The Chairman. Then you would run more machinery ? Mr. Moody. I should run more maeliinery. The Chairman. What would you do with the products if you would run more ma- chinery, when we cannot now get rid of our products ? Mr. Moody. I warticular question, and then you have escaped from it and have not gi^'eu us a practical answer. Mr. Hewitt took the article of ijig-iron as an illus- tration. You may take the article of food. I do not care whether it is pig-iron, or food, or what not. I want you to tell us how these people that are unemployed can be put to work — some way by which those who employ them can afford to pay them without exhausting their own capital. You have escaped from that proposition three or four times. I understood you to say that that is to be done by setting everybody at work, and that when evy forcing a man to labor only half the lime that he can labor without injury to himself? Mr. Moody. Society would gain by supplying eniploypient to the idle. There would be the gain to society. Mr. Thoju'sox. Then you would compel the producing classes of the country in all departments of lubm- to double the number of indi\ iduals who are engaged in pro- ducing a given quantity of goods simply because the labor of men who are now un- employed would then come into use ? Mr. Moody. I would not compel the productive industries of the country to double the quantity of production. Mr. Thojipsox. I did not say that, but you would compel them to double the num- ber of men engaged in production. . Mr. JIooDY. I would compel them to do it simply because their own salvation, their market, their interests, their everything depend upon the employment of the whole community. Mr. Tho.mpson. In short, I understand you to give as the prime cause of the de- pression in business that the productive capacity of the country is beyond the demands of the country ? Mr. Moody. Yes; I accept the proposition in that form. Mr. Thompson. And now you propose to remedy that evil, or that vice, by limiting the hours which individuals shall work. You would have no more work done, but you would have more men engaged in doing the same work that is now being done ? Mr. MoODY'. Y'es. Mr. Thompson. And you would thereby equalize to some extent the rights of those who are working ? Mr. Moody. It is not a question of rights. Mr. Thompson. Well, the hours of labor. That, you think, is the cause of the trouble, and that is your remedy for it ? Mr. Moody. That is my remedy for it. Mr. Thojipson. Under your sliding scale the time must come when, by the increased use of machinery, two hours a day would be sufficient to run the machinery and to produce all that the country can consume? Mr. MoODY'. I believe that it is within the line of Divine Providence that the time will come when a man, in place of working ten hours a day for his animal existence, may, by the use of his brain and by mechanical devices, if you please, be required to work only two hours. Mr. Thoivipson. You recollect the anecdote of the Irishman who was asked to buy a stove because it would consume only half the amount of fuel, and who said that, he would buy two stoves so as to consume no fuel at all. Now, if your principle be car- ried out, the time may come when it will be necessary to pei-form no labor at all, and when there will be nothing for man to do. Mr. MoODY'. Then, inasmuch as fire will destroy all structures, you might as well say that we shall have no fire; or, inasmuch as water will drown, you might as well say that we shall have no water. I conceive that illustrations of that kind, by anec- dotes, do not touch the point; they only serve to divert attention from the real ques- tion in discussion, and turn matters into ridicule. Mr. Thompson. Not at all, I beg your pardon. That was the logical sequence of your statement, that the hours of labor were being reduced, and that if necessary they would be in the future further reduced. Now, there is no limit to the capacity of machinery, and so, as they are in proportion to each other, there is no limit to the reduction of the hours of labor. Mr. Moody. The loom, for example, has been carried to very great perfection, and its operations are produced with a great deal of rapidity, but there never will come a period when some time will not be required in the process of weaving. Time, practi- cally, we say, is annihilated in production ; but, positively, it is not amiihilated. Posi- tive time will be requisite, and, whatever that positive time is or may be, we must adapt ourselves to it, or disasters will attend the want of such relation. The Chairm.\n. "What would be done with the idle time ? A man would have a great many hours on his hands; what would he do with them? Would it not be a <^eat hardship to prevent a man from using his muscle in some sort of useful maimer? Mr Moody. The prevention of the use of muscle, as I propose it, would not apply to those persons who use their own muscle simply. There should be no limitation or attempted limitation for you or for me in using our own muscle. The Chaikman. Because it is not hireil nniscle. ,,._,, Mr Moody. Exactly so; but the moment that you enter into the market with your muscle as a vendor, or as a purchaser, then it must come under the rule and condition of limitation. So, the farmer may use, by himself and his family, if you please, his means and his force for sixteen or twenty hours a day, as was done m old times ; but the moment he enters into the market as an employer he must employ labor on pre- 164 DEPRESSION IN LABOR AND BUSINESS. ciscly the same comlitiuiis that every other pcr.s(5ii employK it. If he chooses to employ two or throe or half a dozen shifts to do his wcjrk, he may do so; or if he deems it preferable to ha^-e half a dozen reapers at once he can do so. The Tribune formerly requii'ed all night to run its presses so as to get olf its cidition, but it has now got ini- pi-ovud presses so that it can go to press at three o'clock in the morning, and have its whole edition printed off by four o'clock. But the Tribune runs its macliinery in strict aecordanee to the powers of production. If the Tribune should insist on running its machinery for four, or six, or eight, or ten honrs a day, the result would be that it would ha\'e a mass of papers for which it ccnild find no market, audits whole business would be destroyed. The Ciiaiumax. Going back to the blast furnace, you could not stop the steam engine every six hours. If you do it chills up. Mr. JIoODY. There is where tlie shift comes in. The Chairman. You would haAe new shifts every hour or two. Mr. Moody. Just to meet tlie necessities of the existing conditions. I do not say now that the time of labor should be reduced either to eight, or to seven, or to six, or to any other number of hours ; but what I do insist upon is that this matter should be thoroughly examined. I have only commenced to examine it, as I stated distinctly in ]ny publication : but I have been stating facts or propositions here that require thorough examination, and I earnestly hope that that examination will be continued. The questiou of unemployed laborers is something which I wish to present to the com- mittee, and in respect tf) which I have some facts and figures. The Chairaiax. The committee will be glad to have them. Mr. Moody. I think that they are of vast importance. I have given this matter a good deal of study. In this little volume of mine I adopt the popular estimates merely for the piiri)ose of discussion, and I state that there are about three millions of people out of employment in this country. I stated distinctly in this publication that I had no means of verifying the estimates; that I had no data. Since that time I have ob- tained very important data on the subject. Massachusetts has a labor bureau which, most fortunately, has done the country some service, and which, with regard to statis- tics of labor, has done very important service. On the reports of this bureau I base my estimates entirely. In the report of 1875 you will find a table giving the reports of 55 of the main industries of that State. The number of persons employed in those 55 industries in 1865 was 225,979. Ten years after that (in 1875) the number employed in them A\'as 248,313, leaving an apparent increase of persons employed in those in- dustries of 22,334. This same report shows that the percentage of increase of popula- tion in that State was 30.38. That would give an increase in the population of the productive classes equal to 68,652. After the census of 1865 was taken there were disbanded from the forces engaged in the war of the rebellion 62,294 men in the State of Massachusetts. Add these two sums together and they show 130,946 persons added to the industrial classes and requiring employment. The increase in the persons em- ployed from 1865 to 1875 was only 22,334, thus leaving 108,612 persons out of employ- lueut, or unaccounted for. This would give to the whole United States (estimating Massachusetts as constituting one twenty-seventh part of the population of the country, which is very close by the figure) 2,932,524 persons unemployed or unaccounted for. The Chairman. You assume that all who are not accounted for are without em- ployment. Mr. Moody. They do not apxjear in the industries. The CiiAiKJiAN. They do not appear in the industries of Massachusetts. Does it follow that they do not appear in the industries of other States ? Mr. Rice. You have seen Mr. Wright's statement made by him within a few days ? Mr. JIooDY. I have. Mr. Rice. He states that the whole number of laborers in Massachusetts is 584,690. Mr. Moody. That was in 1875. Mr. Rice. Y'on have got the figures between two and three hundred thousand. Mr. Moody. Excuse me ; my figures are for those 55 industries. Mr. Rice. Then that shows that you have not got more than one-half of the indus- tries of Massachusetts included in your estimate. May not, therefore, the large por- tion of tho.se who, you say, are unemployed have gone into those other industries that are not included in your estimate ? Mr. Moody. I carry that thing through, I take the whole. Mr. Rice. You have taken industries which employ only about one-half of the laborers of Massachusetts, and on those industries you base your figures as to the num- ber of unemployed. Y'ou thereforehave a fallacy at the beginning which runs through your entire calculation. Mr. Moody. I take up that very point. I show that the total productive classes in 1865, in Massachusetts, were 425,000, and in 1875 were .^)80,000. The total increase in the whole inoductive classes was 122,795, while the total increase in the number of Xiorsons employed was only 45,000. Mr. Rice. Is that in all the industries ? DEPRESSION IN LABOR AND BUSINESS. 165 Mr. Moody. In all the industries of Massachusetts. Mr. Rice. Including agriculture ? Mr. Moody. Including agriculture and everything. You ask me what those indus- tries are. They are agricultural implements, arms and ammunition, artisans' tools, boots and shoes, &o., then running through all the textiles and through all the ii'on, wood, and leather manufactures. These are all included in the 55 industries. The other industries are of vnry minor importance, employing hut a very small compara- tive portion of the people. But the whole number of the productive classes in Mas- sachusetts in 1865 was 425,000, and the increase in 1875 amounted to 122,795, to which the number of discharged soldiers was added, making the whole number 185,089. Of that 185,000, only 45,000 found employment, leaving 140,000 without employment. The Chaikmajt. Where are they ? Mr. Moody. Echo answers. The Chairman'. Are they in Massachusetts ? Mr. Moody. We have no knowledge of any migration from Massachusetts. There is no claim of migration from there. Now where are they ? The Chairman. We see a great many Massachusetts men in New York. Jlr. Moody. I see one now. Mr. Rice. You do not believe that Mr. Wright's tables showing 28,000, or there- abouts, unemployed in Massachusetts are reliable ? Mr. Moody. In answer to that I can only say that the figures which I have given you are taken from Jlr. "Wright's reports. I am perfectly astonished that a man should disregard the I'eports of his own sworn agents who carefully canvassed the whole State, and that he should go to police ofiSoers and to boards of assessors, who know nothing of the subject, and ask them to impeach the report of his own agents. The ChairmAjST. But what evidence is there that Mr. Wright has neglected to take the evidence of his own agents ? Mr. Moody. His own figures. The Ch.urmax. His own iigui-es do not contain evidence that he has not taken the information which he has obtained from his agents. I understand that he has taken the census of the unemployed labor of JIassachusetts at the present time, and that it shows some 28,000 (males and females) out of employment. Mr. Moody. He does not pretend that he has taken the census. All that he pre- tends to have done is to have sent out a circular asking the police of the cities and towns, and the assessors in other parts of the State, to give their estimate of the num- ber of persons unemployed. Mr. Rice. Do you think that statistics obtained from the assessors of towns, and from the police authorities in cities, are less reliable than those obtained from agents sent around on the business of getting statistics ? Mr. Moody. These do not pretend to be statistics ; they are merely estimates obtained from those authorities. The Ciiairmax. This is the language of Mr. Wright: "We say the figures herein reported are reliable. We have given the croaker the benefit of every doubt. When the board of assessors of any town or the authorities of any city have differed among themseh-es as to the number of unemployed, we have without exception used the largest number. We have not been content even to halve the difi'erence. For instance, the chief of police of Salem and his men concurred in an estimate for that city ; after- ward the mayor wrote the biu-eau that he believed the number was much larger, and stated what he thought it should be. We therefore adopted the mayor's figures. We have done this invariably ; and whenever the assessor of any town or the authorities in any city have been miable or unwilling to make a report, representatives of the bureau have given the place a thorough canvass by interviewing all classes of people — overseers of the poor, employers of labor, road-men, and all in a position to give in- formation—and obtained a fair estimate. With rare exceptions the town and city oflcials have not only responded cheerfully to the request of the State, but have m most instances spent a good deal of time in obtaining the actual number of persons out of employment." . . „ i, . ea • i j. Mr Moody. The figures which I have been giving you are from this official report of Mr Wri"-ht, and those figures are obtained by estimates received from the parties to whom he" credits them. Here is the official report^ for 1^75. One or the other is The CliAlRMAX. He does not base the number out of employment in the year 1875 on the actual census, but he tells how he got the figures. , ■, „ ilr. Moody. But there has been no change of population amounting to hundreds ot thousands in Massachusetts. , , ., , , The CiiAiKMAN. I don't know about Massachusetts, but there lias been an enormous migration to the AVest during the last few years. ^. , . Mr Moody. Not out of Massachusetts. I do not place the smallest particle o± cour fldence in this statement of Mr. Wright's as against his owu figures here. ^ Mr Rice. Let me testify to one thing. My own city is one ot the cities lucutioned 166 DEPRESSION IN LABOE AND BUSINESS. in Mr. "Wriglit's report. I took paius to go and ask the clerk of our board of overseers of the poor, whom I consider to he a remarkably intelligent and efficient official, and he told me that the statement by Mr. Wright tallied with his own information. Mr. Moody. With reference to the poor ? Mr. EiCE. With reference to the nnemployed in the city, so that I have one straw of evidence that goes to corroborate Mr. Wright's statement. Mr. Moody. I have a straw in the other direction. A short time- since there wag a meeting held in the office of the mayor of the city of Boston, at the request of the Eev. Edward Everett Hale and a few others, to see what could be done for the unemployed laborers in that city. I was one of the parties present. As a preparation for that meeting I went around among the industries in the city of Boston and obtained reports from theju. They were the representative industries, including building organs, iron works, leather, &c. I went round and obtained the statistics as to the number of persons employed, and their wages as compared with three years ago. I got eleven reports. In spme cases where there had been employed between three and four thou- sand persons three years ago, they were employing at the same date this year only 44 per cent, of the usual number. I forget what the exact figures were, but there was a decrease of 56 per cent, in the number of persons employed. At that very meeting the overseers of the poor of the city of Boston reported that they had less apiilication for assistance than they had had previously in a term of years, while the superintendent , of streets reported that there wiis a larger number of applications for labor than he had ever kno\\'n before. Nevertheless, tlie fact still remains that Mr. Wright's report of 1875 shows 140,000 people out of employment, not accounted for in the industries of that State, who should be accounted for, and that would make for the whole United States (estimating the population of Massachusetts as one twenty-seventh of the whole) 3,7^^0,000 persons out of employment. Mr. Wright gives 28,000 for the total number reiiorted or estimati-d as unemi)lo}'ed in Massachusetts. That would give in the United States 759,716 persons out of emxiloyment (and Mr. Wright claims that Massachusetts fairly represents the Union in that respect). Mr. Wright stated in his report that there are on the average three dependents on each per.son in the pro- ductive .classes. Multiply 759,716 by 3 and there would be, according to Mr. Wright's showing, '2,'279,148 i>ersons in the Uuited States without means of subsistence. Tliese persons are living either as meuclyfpe. Certainly. Mr. Rice. Are not the cotton manufactui'ers exporters ? Mr. Radclyppe. Yes. Mr. Rice. Are tliey not increasing their exports ? Mr. Radclyffb. While we are exporting cotton goods at the rate of |10,000,000 a year we are importing cotton goods at the rate of |11,000,000 a year. We are buying 126,000,000 of woolen goods from abroad, and are not exporting a dollar's worth of woolen goods, while England sells 1115,000,000 worth. Now, I am after a portion of that 1115,000,000 and to stop buying |26,000,000 worth of woolen goods which we ought to make at home. The restricted market for our manufactured products is caus- ing a good deal of the depression in business. If we had a larger market abroad for our goods we should have a larger trade. Not only do we need a change in the tariff, but we also need commercial treaties which I know you, Mr. Chairman, have advocated with great ability. While you were representing this country in Paris at the Exposi- tion, 1 believe you saw the advanced condition of the industries of Europeaji coun- tries, and how important and desirable it was that our country should have a market in Europe. We need a commercial treaty with France, and we need commercial treaties with every country with which England has a commercial treaty to-day. England secures special advantages by its treaties, and we need to be on an equal footing with her by similar treaties. The Chaik:max. Specify any country except France with which England has a spe- cial commercial treaty. Mr. Radclyffe. I will not mention it a.s a fact, but I believe it to be a fact that Eng- land has a commercial treaty with Brazil. The Chairman. There you are mistaken. The people of Great Britain have been,, for many years, averse to making commercial treaties, with the exception of the Cob- deu treaty made with France in 1860 ; and that has been a subject of a good deal of discussion as bc-ing a violation of sound principle. And now that the Cobden treaty is about expiring it is extremely questionable whether it can be renewed. I am not arguing iinainst commercial treaties, but only mention tills as you refer to them. I am not aware of any country that has them except France, which has always had two taritl's; one the conventional tarift', and the other the commercial tariff. England made a commercial treaty, known as the Cobden treaty, with France, and it has been that kind of treaty "VA'liich I myself have been desirous of making with France, in order that we might get special benetits. Mr. Radclyffe. While England may not have commercial treaties, I think she has secured advantages from the tavitts of other countries. I was examining some time ago the Chilian tariff (or atleast the tariff of one of those South American countries), and I noticed that the goods imported from Great Britain were to pay such and such duty, while tlie same goods imported from other countries were to pay a higher rate of duty. The CirAiRjiAX. I think we have a treaty with Chili containing the "most favored nation clause," and a like treaty with every South American state, so that that dis- tinction would not apply to us. (Mr. Radclyffe having read a portion of his paper on the subject of taxation, the fol- lowing discussion took place :) Mr. Rice. Do you mean to say that real estate is subject to greater taxation than money invested in government bonds ? Mr. Radcly'Pfe. I certainly said so. Mr. RiCF. How so ? Mr. Radolyf1''e. Because real estate has to pay State and municipal taxation and insurance, and so much has to be allowcil for repairs. Jlr. Rick. Is not insurance a contingent on real estate that is entirely separate from taxation ? Mr. Radcly'fi'e. Cert.ainly. I was merely showing the advantages of government bonds as an investment in comparison with investment in other kinds of propex-ty. Mr. Rice. A great deal of the real estate in our State is mortgaged, is it not ? Mr. Radclyffe. So it is everywhere, I expect. Mr. Rice. Do you know any money that is loaned on property in Massachusetts at less than 6 per cent. ? Is not that the regular ruliug rate of interest on all money in- vested in mortgages in Massachusetts ? Mr. Radclyffe. I should take ic to be so. Mr. Rice. Now, the rate of municipal taxation in Massachusetts does not exceed li per cent., does it? Mr. Radclyffe. I do not think it does. Mr. Rice. Take the money invested in government bonds at 4 per cent., and is not the difference fully equal to the amount of taxation on real estate ? I mean, take a, government bond at 4 per cent, and a mortgage bond at 6 per cent., and allow 1| per cent, taxation on the mortgage bond, does not the holder of the government bond pay as much in the diminished rate of interest which he receives from the money invested in government bonds ? DEPRESSION IN LABOR AND BUSINESS. 171 Mr. Eadclyffe. From tlie way yoti put tlie questiou it appears so, but I was making tlie point that there were indncements offered by government bonds to make capital inactive, and I stated that if a man invested $10,000 in real estate he would have as an outgo to allow for insurance, taxes, and repairs. You admit that, do you not? Mr. Rice. Yon are familiar with what percentage real-estate owners in Boston think they ought to get on their investments. That is large enough to cover these extraordinary expenses of insurance and repairs. Mr. Radclytfe. It is just large enough lor them to receive 3 per cent, on the prop- erty. They do not get that interest on tlieir investment, because if they only get 3 per cent, on the property, they have to pay that out to meet the insurance, the repairs, and the taxation. Mr. Rice. Do you mean to say that property is rented at 3 per cent, ? Mr. Radclyffe. Some of it does not rent for even that much. Mr. Rice. I was not aware of any such rents. The Chaiumax. You say that the issue of the 4 iier cent, government bonds tends to make capital inactive. If a 6 per cent, bond is exchanged tor a 4 per cent, bond, how is any cajiital made inactive by that process ? Mr. Radclyffe. The money paid out by the Secretary of the Treasnry in redemp- tion of a 6 per cent, bond might be invested in active business, but the holder of the 6 per cent, bond will go and buy a 4 per cent. bond. The Chairmax. Where does the govormont get the money to take up the 6 per cent, bonds unless it sells 4 per cent, bonds ? Mr. Radcly'ffe. But, unfortunately, all the money that is put into 4 per cent, bonds is not received from 6 per cent, bonds. The Chairman. How is any capital made inactive l)y the exchange of 6 per cent. bonds for 4 per cent, bonds I Mr. Radclyffe. It is not done by the exchange of bonds. Do you mcuu to say that all the money that goes into the 4 per cent, bonds isrepresentcil by 6 per cent, bonds? The Chair:«ax. Every dollar. No 4 per cent, bond can be issued unless a corre- sponding 6 per cent, bond is retired. Mr. Radclyffe. I heard of two bank presidents in Boston who, a short time ago, held a conversation on the cars, in which they were referring to the fact that there was no money to bo made in the banking business, and they said that money was to be made in buying government bonds. I was going on to state that there are 660,000,000 of 6 per cents, which are now redeemal)le at the pleasure of the Secretary of the Treasury, and that, by tlieir being changed into 4 per cents., an annual saving of §13,200,000 in interest could be effected. I was going to 'state how desirable such a decrease of interest jiayment would be, in order that taxation may be reduced, and I thought that the sooner that could be brought about the better. The Chairmax. But if the goverumont bonds were taxed that could not be brought about. Mr. Radclyffe. I do not advocate taxing government bonds. I have already stated that the tariff should contain a duty on "tea and coffee. I would recomiuend also re-- lieving active capital from taxation, and' putting the tax on accumulated wealth — an income tax. The Chairman-. Is there a distinction between active capital and accumulated capital. Mr. Radclyffe. I said between active capital and accumulated wealth. 1 want an income tax, which would fall not ou what a man earns, but on what his estate shall be worth at the time of his death. The Chairman. Is it a succession tax that you mean ? Mr. Radclyffe. I mean anything that would be regarded as property at a man s death and from which he obtains an income. , , . ^ , • The Chairman. Suppose I have $100,000 actually engaged m the business ol making iron and that I am maldng an income out of it, would you have that taxed or not ? Mr Radclyffe. Wonld you consider that accumulated wealth ? The Chairman. Certainly. If I had $100,000, and put it into the manufacture of pig-iron, I would consider it accumulated wealth. ^ , , i. „ Sir Radclyffe. I think that if an income tax can be adjusted to tall upon accu- mulated wealth instead of on active capital, it would be a very desirable tax. Mr. Rice. Is it such an income tax as that that you recommend ? ,,,-,. Mr. Radclyffe. I say that an income tax that would give a revenue would be desir- able if it could be put on accumulated wealth. . , Mr. Rice. That is, on Mr. Hewitt's pig-iron or ou his income from pig-iron busi- ^Mr Radclyffe. I should consider that, if Mr. Hewitt had accumulated a large forr tune and placed it in the iron business, and if that was to be considered an estate at the time of his death, it should be taxed. Mr. Rice. Would you only tax it at the time of death / 172 DEPRESSION IN LABOR AND BUSINESS. Mr. Radclyffe. No. What I meiin to say is : Suppose a man earned $1,500 or |2,000 or 13,000 a year by his labor, I would not tax what was dependent entirely on the eflforts of the man, but I would tax that which was really property and which he could leave. Mr, Rice. You mean an annual income tax, not a legacy tax. Mr. Eadclyffk. I do not mean a legacy tax. The Chairman. I observe that you want to relieve active capital from taxation as far as possible, which is a very proper thing to do ; hence you draw the distinction. There are a great many rich men in active business and making a profit from their business, and I want to know whether you propose to tax their profits as part of their income ? Mr. Radclyffe. Yes, sir. Whatever is accumulated wealth should be taxed. I would avoid taxing as much as possible any dollar that is invested in the iron business or any other manufacturing business, but I would tax. accumulated wealth, whether it be represented by railroad bonds, insurance stock, national-bank stock, or the income from government bonds. The Chairman. Suppose that Mr. Rice is a very rich man in the iron business, that he owns all his own capital, that he does not owe a cent, and that he has got his mills and machiniTy all paid for ; and suppose that I am in the same kind of business, and am a poor man, having to boiToo- capital and to pay interest on it, and suppose Mr. Rice and I compete with caoli other ; would you tax Jlr. Rice and not tax me, or would you tax me and not Mr. Rice, or would you tax neither ? Mr. Radclyffe. I would tax neither. The Chairman. Then Mr. Rice's accumulated wealth is to go free of taxation, whereas the accumulated wealth of another man, which was loaned to me to caiTy on business in competition with Mr. Rice, is to be taxed ? Jlr. Radclyffe. Mr. Rice's accumulat<'d capital will be employed in his business. The Chairm.\.x. Yes; but he gets an income out of that business. Mr. Rice may farm out his whole iron manufaeturing business and capital, and may have an income of $100,000 a year from it. There is the money going into active business, and Mr. Rice gets .$100,000 a year income out of it ; but, as his capital is employed in that way, he is to be relieved from taxation, whereas another man, with the same amount of capital invested in houses or other property, is to be taxed. Is that the theory which yon wish to lay down ? Mr. RADcrA'FFK. I did not say anything about houses. The Chairman. But you said that yon would tax accumulated capital which would be called an estate at a man's death. Mr. Radclyffe. Certainly. The Chairman. Would not houses be called an estate? Mr. Radclyffe. Do I understand you to speak of the business of building houses ? The Chairman. No; I mean the case of a man who has his money invested in houses, and who rents them and derives an income from them. Is that mau to pay an income tax, -while Mr. Rice, who has his money invested in the iron business, shall not pay an income tax f Mr. Radclyffe. That would be for the persons who make the laws to say. The Chairman. But yon ad\'ise us to put on an income tax, and yon ask us to draw a distinction between accnmulat<'d capital and active capital, and I want to know what the distinction is. Mr. Radclyffe. I have made it as clear as I possibly can. The C!hair.m.\n. Then you may go on with your statement. ilr. Radclyffe. The difficulty is, Mr. Chairman, that you always bring forward as an illustration your investments in the iron business. The Chairman. But I put Mr. Rice in that bnsiness in order to avoid this criticism. Mr. Radclyffe. I know yon have got him in now ; I consider that the iron busi- ness represents active capital, and I would not tax that. And while I consider that house property may be accumulated wealth, I cau also see that it may not be accumu- lated wealth. The Chairman. Take Mr. Aster's estate, for example, an enormous estate in houses, w-hich he rents. There is no donlit about his accumulated wealth. He is about the richest man in New York in accumulated wealth. If any man is to be taxed, his is a case for taxation; yet you say you will tax him, and tliat you will not tax me if I put my money into the pig-iron business ; now, Mr. Astor ])erforms as useful functions in the world as I do. He snpi)lies houses for people to li\-e in, while I only supply pi" iron to make stoves, &c. I want to get at your distinction between these tw^o kind's of capital. Mr. Radclyffe. I have given it as best I can. I do not sny that such an income tax can be established; Imerelysay thatifit canbe, and if we could have the same reve- nue from it as we had in 1870 (some 25,000,000), that would come in very handv now and help to reduce taxation in other directions. The Chairman. It would not reduce taxation ; it would only change the incidence of it. DEPRESSION IN LABOR AND BUSINESS. 173 Mr. Radclypfe. When I spoko of bonds, you tlioiiglit to jiiu me clown :is if I liad stated that; bonds ought to bo taxed ; and so you strivu to piu mo down on this income tax proposition when I merely mako it as a sugnestion. Tlie Chaiumax. I do not try to piu anybody down. I am trying to get at tlie exact facts. ilr. Raiicl\tfe. Excuse me. I tliinlc tliat yon cross-examine very muoli as a lawyer would. The Chaiumax. But I am not a lawyer. I am an ordinary man of business. Mr. Raholyffe. I know that yon are a very able debater in Congress while I am an ordinary individual nsiug my pen. I am more aceustomed to giving suggestions in that Avay than to debate. I merely suggest that if the government can get 25,000,000 from a tax on accumulated property it would be an excellent thing to do. The Chairmax. I not only think it would be an excellent thing to do, but I am in favor of an income tax. I am the only Representative from the city of Ne^\' York who voted to instruct the Committee of Ways and Means to re]iort an income tax ; but I want to know how to apply it. It was the business of the Committee of Ways and Means to report a bill for an income tax ; but when the committee undertook to apply it, it could not do so. The thing that we want is not a suggestion to put on au income tax (for-everybody can make that suggestion), but we want to know how to put on an income tax so as to make it just. Mr. Radclyffe. I was about to submit a plan of % tariff and a tariff system, but you would not let me. The Chairmax. I stated that that subject belonged to tlie Committee of Ways and Means. Mr. Radcly'FFE. So does the subject of an income tax, and yet you ask me for a system. The Chairjiax". And that is the objection I am making to it now. Mr. Radclytfe. Then let us pass it by, as it belongs to the Committee of Ways and Means. (Mr. Eadclyffe then concluded the reading of his paper.) VIEWS OF MR. WILLIAM G. H. SMART. New York, Anf/ust 21, 18Td. Mr. WiLUAJi. G. H. S:maet appeared before the committee. By the Chairmax : .Que.st'iou. State yonr occupation and residence.— Answer. I am a stonecutter, resid- ing in Boston. Q. Are you now engaged in that business ?— A. Yes, sir ; when I have an oppor- tunitv. 1 . , Q. 'You mean when vou can get work ?— A. Yes ; when I can get work independently. Q. How do you mean ?— A. I mean without Avorking for an employer. Q. You mean when you can contract to work yoiu-self without the intervention of anemploverif — A. Yes. , , ,. i x j, Q. In other words, you employ yourself ?— A. Yes, but under the disadvantage of ha-s-ing no capital. , , , -j. i » a Q. You are a mechanic not willing to take wages, and you have no capital?— A. O Be " ood enough to sav how long it is since you had work ?— A. I have had work freouentiy for considerable' time on that basis, until the bad times came and the gen- eral depreciation in business, since which I have not of ooivrse hadstich good opportuni- ties I have been idle in the same wav as capitalists themselves have been idle, and have had to keep men idle. I have been more or less idle. But I have been gradually changing my occupation somewhat, so as to make it suit my peculiar econonucal creed * Q. Have you been giving attention to the labor question and to the causes of the general depression in business ?— A. I have bc<'u. O. Have you made up vonr mind what those causes are f—A. \es. Be trood enough to state them to the committee.-A. It the committee will per- mit me, I think I cSnnot make my statement in briefer terms or m a better way than T did in criticising the lecture delivered two years ago m Boston by Hon. David A. Wells • a lecture on the very subject that the committee is now investigating. The'CHAlKMAX. But vou do not expect to take np the time of this committee m readin>' to us a lecture 'of Mr. Wells, because Mr. Wells is an authority whom wo all read ^fhe thino- that we want to know from witnesses is the result of thoir own ex- perience in regard to the depression in labor and the remodies winch they would sug- ^"^Mr. SMART. I did not propose anything of the kind, but simply to read a letter of 174 DEPRESSION IN LABOR AND BUSINESS. miue wliich I puljlished in the AdvertisiT, criticising Mr. "Wells's lecture and giving my own views. Tlio Chairman. Certainly, that is right. Jlr. Smart. It is necessary for me to say first th.-it the first remark which Mr. Wells made in connection with tlie depression in hnsincss was its universality. He thought that universality was a marked feature of it, as it extended not only through the United States, but almost everywhere. Then he called attention also to gi.-ographical considerations, and suhse(juently, after asserting the marked absence of general causes in producing the general depression, he attempted to explain the depression by local causes chiefly. It was there where I took issue with him. He mentioned a great many causes, 1 lut it is not necessary for me now to particularize. He attributed to local causes the general business depression which, he said, existed all over the world, par- ticularly in the most advanced nations, and more especially in nations in which man- ufacturing industry had attained the greatest development. The Chairman. England, for example. Mr. Smart. England and Germany and America. The Chairmax. Do I understand you to say that the depression and bad times are worse in England than in Germany, which is much less developed ? Mr. Smart. No, sir ; I have no means of saying whether it is or not. I shonld say it is not so bad anywhere as it is in the United States, but I am not sure how the facts are in that respect. « The Chairman. While England is recognized as the, most active nation in manu- facturing industry and in mechanical power, and in the agencies of production, it is in that country, as I understand you, that the distress is greatest. Mr. Smart. It is where it should be greatest, if there were not some qualifying cir- cnmst.ances. In England there is a large accimiulation of wealth in proportion to busi- ness. The wealth is distributed among a great number of large capitalists. We have not so much capital invested in business enterprises here as England has there. The Chairjian. Is there not a contradiction in the very statement which you have made, that the distress ought to be greatest in countries where industry is most de- veloped ? Mr. Smart. I am perfectly willing to be examined by you, because I see that you wish simply to eliminate error. I do not think that that does conflict, because, every- thing else being equal, I think my statement is true, that we may expect to find, where there is the largest development of manufacturing power, the greatest disturbances arising fiom the development of the manufacturing power, through machinery taking the place of human labor. The Chairman. If you go to a country like England, where such develoiJment is greater than in any other part of the world, and find that the people there have suf- fered less than has been suffered anywhere else, is not that a direct contradiction to the principle which you have been laying down ? Mr. Smart. I think not, for this reason, that it takes a greater amount of time to bring about the same degree of disturbance in one country under different circum- stances. I say that England will suff'er more than any of the nations, but it will take a longer time to bring it about. The Chairman. In the London Times, which I received yesterday, is a statement that the general business of England is recovering perceptibly, and the London Economist, of last week, has a table in which the same thing is proven, showing that in England they are again on the upward course, that they are improving, and that the general demand for goods is increasing. If that is a fact, then, with all their development of machinery and their accumulation of capital (which is the- result of the development of machinery), they have passed through this crisis with much less suffering than we have. It is a fact that they have done so, because you will find by the poor-law re- ports that there is a steady decline of pauperism in England. That being the fact, how do yon reconcile it with your statement that business depression should be greater in England than anywhere else, and that it is due to the development of machinery ? Mr. Smart. If you say positively that that is a fact, I must admit that it entirely upsets my theory. The Chairman. In 1871 the number of paupers relieved throughout England was 1,081,000. In 1877 that figure had fallen to 728,000, and there was a steady decrease during the whole year. These facts seem to contradict the fundamental principle, with which you set out. Mr. Smart. Yes, they seem to, but there is another exjjlauation that may be a good one. It is, that England, having such an influence on the foreign markets of the world through her free-trade system, has driven her rivals out of the foreign markets, and has recovered her business at the expense of all the rest of the manufacturing nations. The United States finds itself now with the whole burden of the disturbance thi'own upon it, because England, being the great monopolist in manufaotuiing, has been able to overthrow the power of all rivals. The Chairman. That only proves, then, that the nation which can develop itself most DEPRESSION IN LABOR AND BUSINESS. 175 throiigli machinery, can best pass through a season of distress, ami therrfore the les- son would he, " accumulate machinery and capital as fast as you can." Mr. Smart. Yes ; hut wliat would it come to ultimately ? The Chairmax. I do not know ; bnt, in the case of England, it has been a benefit to her and she hiis {jot the inside track, as you sny, of the rest of the world. Will it not he natural for ns to do the same thing ? Mr. Smart. I want to place the theory a little more distinctly before you than I have done. My theory is that the industrial world is suffering from the rapid central- ization of wealth in the hands of a continually-decreasing number of capitalists ; that that centralization is a necessary consequence of the system by which the business of the world is tran.sacted ; that it has always been in operation, but that its action has been greatly accelerated by the moderate methods of industry and commerce, and that it has culminated (especially in this country) by the wasteful expenditure and other influences of war. The results of w ar in Europe and here have been one of the great agencies in bringing about a more rapid culmination than would have taken place otherwise, in the disturbance arising from the introduction of the new factors — fioni the new methods of industry and business. We have now reached, or are rapidly reaching, a condition of things wherein this process will cause the absorption of most of the national wealth by a very few capitaUsts, unless some machinery shall be found to reverse the process of centralization, and to affect a redistribution. The interest of all classes, capitalists as well as laborers, necessitates this, or stagnation must continue to increase. I claim that that is true, and that it results simply from the fact that we are allowing men to use their property in a way in which it ought not to be used, and in which it cannot continue to be used without leading to the breaking down of any sys- tem which is based upon such a principle. I mean that we are allowing men to use their wealth as a source of wealth — private wealth as a sojrrce of private wealth. The Chairmax. Do you mean to say that your objection is to allowing interest to be paid on capital ? Mr. Smart. Yes, sir. The Chairmax. You tliink that interest must be abohshed ? Mr. S:mart. I think that it must be ultimately abolished. The Chairman. With the abolition of profits on accumulated capital (or of inter- est) there would be such a revolution in affairs, you think, as to distribute property more equitably and more generally among the people ; is that your idea? Mr. Smart. Yes ; that is it precisely. The Chairman. If we do not do that you think that property- will accumulate in very few hands ? Mr. Smart. Y'es, sir. The Chairman. What would be the condition of propei-ty accumulated in a few hands in a country where there is universal suffrage ? Jlr. Smart. Why, it would be abolished. The Chairman. Then the remedy is in universal siiffrage ? Mr. S:mart. Yes. The Chaikman. But you think that suffrage is not sufficiently well instructed and enlightened to cure the evil yet ? Mr. Ssiart. It is not. The Chairmax. But you think it will be ? Mr. S>iart. I believe "it will be by the increase of the disturbance arising from these false relations. The relations between labor and capital aje, under the present sys- tem, hostile. They are iu direct antagonism. Labor is kept entirely dependent on capital. , , ,_ -1 The Chairman. And the remedy rests with the people when they have universal suffirage ? Mr. Smart. Yes, sir. , ■ ^i ■ The CH.ALRMAN. And the only reason why they do not apply the remedy is their con- dition of ignorance ? Mr. Smart. Yes, sir. ■, • ^ . j_ j. ^i, i > The Chairman. And the great thing that we ought to do is to instruct the people ? Mr. Smaet. Exactly. , , i, , ■ i The Chairman. Give them a knowledge of the truth, and then rely on universal suffrage ? Mr. Smart. Yes, sir. . xi j. • ^ The Chairman. I think that you and this committee are at one on that point. Mr. Smart. Are you at one with me in the statement that capitalists should not be allowed to receive interest on their wealth ? The Chaibman. I am not. ^ ^ , , -, , j. ■, Mr. Rice. What do you expect to live on when you get to be old and cannot work any more ? t i j. j. tt ^ Mr Smart. That question applies to my condition under the present system. Under what I believe to be a true system of society I should be provided for by the nation. 176 DEPRESSION IN LABOR AND BUSINESS. Mr. Rice. Tlint is, taken r-.ire of at the p.ublic expense? Mr. Smakt. No, sir; at my own expense. Mr. Eiri'. How? Mr. .SiMAKT. By a system oi' insurance to which c\ery man has to contribute out of his share of the joiut earuiiins of the people. He ought to contribute a sufficient sum to proviih- lur his old age, and also to insure his life for the benefit of his family, and to insure himself against sickness or accident ; so that there really ought not to be any necessity for individual sa^■ings or accumulations at all. Mr. Rick. ' And his family should be taken care of in the same way after his decease? Mr. Sjiakt. Yes; as long as his children are in the condition of minors, they and his widow should be taken care of undoubtedly in the same way. Mr. Rice. And every family would be taken care of just in the same way ; that is, all families would leceivethe same kind of car<' ? Jlr. Smart. It appears to me so. There is nothing paternal about it. It is simply ])ayiug in for nmtual benefit. I claim that governments should do what individuals do'who are provident in insuring their lives. I do not consider that, if I insure my life, and if the sum for which I am insured is given to my wife and family after I die, they are receiving charity fi'om the insurance company, or that they are in any way paupers. It is simply a wise provision. Mr. EiCE. Who would x)a>' that insurance ? Mr. S.'MART. It would be jiaid by the nation. Mr. KicE. But how would the money be raised? Mr. S:niai!t. I must go a little more in detail, I believe, in order to show that the nation cidlcctively must become the possessor of all the means of labor. Mr. Rice. That is, the nation should be the great capitalist ? Mr. Sjiart. Yes ; meaning of course by the nation the whole j)eoi)le colleotively. I SCO no reason why it should not be so. And when that comes to be so we shall cease to have to pay anything for the use of capital. Mr. Rice. Then, Mr. Hewitt, yourself, aud I would each receive the same insurance from the nation when we became superannuated or unable to work, or uuwilUng to work? ilr. SiiAJRT. No, sir ; my idea is that the superannuation allowance would beproj^or- tioned to wages. The Chairman. Who would be the employer ? Mr. Smart. The nation. The Chairman. Would the nation determine the wages of each man ? Mr. Sjiaet. Y'es. The Chairman. How ? By act of Congress ? Mr. Smarti No; you have got to conceive the system in operation in order to con- ceive the method by which Ihe distribution of wages will be effected. It is clear enough to my udnd. According to my ideal of the system, I think we shall have (just as we have the Post-Offiee Department) each one of ourindustrial and business inter- ests formed into a department. Mr. Rice. Do we not have a great many office-holders now ? Mr. Smart. We have a great many now. Jlr. Rice. We would have a great many more then? Mr. Smart. Y'es. Mr. Rice. How would you make them responsible ? Mr. Smart. If I work for a railroad company the officers who control me are not re- sponsible to me. Now, I want them made responsible to me ; I want any man who has control of my life or my labor to be responsible directly to me. The Chairman. It is complained now that members of Congress are very negligent and do not understand the interests of the community. That is, within the present narrow circle within which we move. Now, when the nation has to regulate every- thing, including the wages of e\'cry employ^, how do you think that members of Congress can be expected to have wisdom enough for all that? Mr. Sjiart. I do not want members of Congress to do it. The Chairman. Who is to do it 1 Mr. Smart. It would take too long a time to oxjilain. The Chairman. If you explain how that is to be done we will sit here till midnight. Mr. Smart. Then I will do my best. Our ]>resent government is not at all the gov- ernment to Avhich I look forward. We have got a government of meu who meet to legislate on private business at the public expense, and in the name of the public. It is nearly all i)rivate business that is done now in Congress, and in the State legisla- tures. How can we expect the government to be otherwise than corrupt? Is not the whole business of the country corrupt ? How can you expect the meu who represent the business interests of the country to form anything but a corrupt government? Thoy form a government for the express purpose of taking care of their own interests. There is no man willing to go to Congress or to the State legislatures from any regard for public interest. DEPRESSION IN LABOR AND BUSINESS. 17T The Chairman. Are they not elected by universal snffii'age ? Mr. Smakt. They are. The Chairman. Did you not say that universal suffrage was a check against the evils of a bad government ? Mr. Smart. Yes. The Chairman. Then why are they allowed to exist now ? Mt. Smart. Because the people through centuries have been so educated in a false idea with regard to property that they do not know where the wrong is. The Chairman. Then the difficulty is with the people not being well represented ? Mr. Smart. I do not find any fault with the representatives. They are doing pre- cisely what it is in human natiu'e to do. I find no fault with business men who take advantage of every opportunity to sell goods at two or three times as much as they cost them. They do it on business principles, and yet everybody must know that it is downright robbery. The Chairman. You would have officials under your system ? Mr. Smart. Yes. The Chairman. How would you choose them ? Mr. Smart. They would be cifiosen, I presume, by ballot. The Chairman. They are so chosen now. Mr. Smart. Yes ; but there is a great difference between people choosing their repre- sentatives to sit in Washington, and choosing representatives under the system which I advocate. Now very few of them know anything about the men who represent them. Mr. Rice. You would have no officials except those whom yon knew about ? Mr. Smart. I should have no opportunity to vote for any persons whom I did not know. Mr. Rice. How would you know, for instance, about the Representative from Ore- gon? Mr. Smart. I would have nothing to do with him. Suppose I was in the post-office department in New York City. My idea is that I should have to vote for the officers of the post-office department in New York. If I am a member of a community where there are schools I should have a vote in reference to the management of those schools. I should have a vote in everything in which I have an interest. Mr. Rice. That is, yon would choose your post-office officials just as you would choose your school officials ? Mr. Smart. Yes, sir. Mr. Rice. Are yoiir school officials perfect men now ? Mr. Smart. They are not. Mr. Rice. Are they any better than post-office officials? Mr. Smart. No ; I do not know that they are. But, supposing they are no better, I do not think that that affects the principle which I am advocatmg. What I want to show is, that a man ought not to be called upon to vote for a person as to whom he does not know whether he is fit for the position or not. I want men simply to vote for them who come immediately over them. Mr. Rice. But there must be somebody at the head of a department ? Mr. Smart. Yes, sir. Mr. Rice. And there must be some officials there connected with the general man- agement of the department ? Mr. Smart. Yes, sir. Mr. Rice. Should you know those ? Can you always know aU of these important officials ? Mr. Smart. I do not think that I should have to vote for any of them, excepting those with whem I come in direct contact. Mr. Rice. That is, a sort of aristocracy at the top would choose those principal offi- cers? Mr. Smart. No, sir. Take the post-office of New York for an example. I believe that the men who carry the letters from house to house and from store to store should elect the' person who has the management of that department, and that those who distribute letters should choose the persons to control their labor, and choose them from among their own number. Mr. Rice. Then you would inevitably come to an outer rin^ somewhere. Mr. Smart. Yes. Then these heads of minor departments m the post-offlce would elect the persons to whom they have to look for directions and instructions^ and must be responsible to them. And again those persons, the heads and superior officers in the New York post-office, would elect the man who presides over the New York post-office ; and so it would go on until postmasters throughout the country shall elect the head of the department in Washington. I will take the building department as an example. There is a head of that department, who finds^ when making up his estimates for the next year, that there is a deficiency in a certain class of workmen— that there are not as many stone-masons as are needed in his department, and that it is difficult to get 12 L 178 DEPEESSION IN LABOE AND BUSINESS. men to go into that business, because the work of stone-masons is very laborious and exhausting. He finds, on the other hand, that he has got too many carpenters, about as many plasterers as he needs, and about a fair average of painters. But he has got too many carpenters, and not enough stonecutters. What does he do ? He raises the -wages of his stonecutters and lowers the wages of the carpenters for the next year. The result is that, of course, there will be a greater tendency to go into the stonecut- ting department than into the carpentering department, because men would rather do a little more laborious work if they get more wages for it. The ChairMjVN. I understand that, according to your theory, this superintendent of the building department would be elected by the employes ? Mr. Smakt. Yes. The Chaiemau . Suppose that the carpenters very much outnumber the stonecutters, and that the superintendent proposes to put down the wages of the carpenters and to put up the wages of the stonecutters. How long do you think that man would be left as superintendent of that department? Mr. Smart. The man who is at the head of the department is not to be elected by the employes. The Chairman. Wlio puts him in? Mr. Smart. He is elected by the heads of the various departments — by the head of the carpenters' department, or head of the bricklayers' department, the head of the stonecutters' department, &c. They elect the man at the head of the building depart- ment. The Chairman. And the subs will have nothing to do with the regulation of wages ? Mr. Smart. No, sir. • The Chairman. By whom are the siibs to be elected? Mr. Smart. I am only speaking of two or three degrees. I suppose the subs would be elected by the men. The Chairman. Well, the men find that wages are going to be reduced in any one of these departments, and they will go around and say, "Look here, this is only the beginning of a general reduction ; they have picked us out first, but it will come to aU of you ; you must stand by us." Mr. Smart. But you leave out one important element in the question, which is, that no one can have an interest in reducing the wages. All are united in interest. The Chairman. Then it does not make any difference how much a man gets; and Avhat is the object of reducing or increasing wages? Mr. Smart. I moan to say that the person who presides over a department, having no interest in reducing the wages of men, will not reduce them. The Chairman. But the men who are working have an interest in the wages, and when this question of reduction comes up they will resist the reduction, and will go around and make combinations and say to the men in other departments, "Help us now, and when your turn comes we will help you." Mr. Smart. Of course, that is a thing to be thought about, and I will not pretend to say that I can explain it. Mr. EiCE. Would not this be the answer : what matters it to the carpenter whether his wages are smaller or larger ? He saves nothing ; he can accumulate nothing ! Mr. Smart. I think that a carpenter or any other man would be naturally desirous of earning as much as he can. Mr. EiCE. Why? He cannot get any interest on his capital? Mr. Smart. Undoubtedly he cannot, but he can save it. Mr. ElCB. What is it good for? Mr. Smart. He can spend it. Mr. EiCE. Why not spend it as he goes along? Mr. Smart. He may have an interest in saving. He may have the object of going to Europe next year; or he may have a sick boy, and he may say, "I want to relieve my boy from work altogether.'' He may want to pursue some study. He may wish to devote the first ten years of his life to labor, in order for the rest of his life to pjir- sue his favorite study. Now, I want to propose that we reach this condition of things without any violence. We have got to reach it, and I propose that we shalf try and devise some means by which we can effect a transition from now to then without too much disturbing the existing order of things, and without causing any injustice to anybody. That is what I come here for— to suggest a kind of legislation which I think will attain that object. The Chairman. Have you got that kind of legislation mapped out ? Mr. Smart. Only in my own mind. The Chairman. State it as concisely as you can. Mr. Smart. I will reduce it to writing and send it by mail. The Chairman. Please to do so. Mr. Smart. I will. I think that we want to redistribute and employ the people who are thrown out of employment, and who are going to be more and more thrown out of employment, and also to redistribute the capital which is (in the same proportion) DEPRESSION IN LABOR AND BUSINESS. 179 tlii-OTvn out of employment and is idle. We want to bring them togotliiT again in some way or another. I propose (what has been proposed by others, but in a differ- ent way) that colonies shall be established in the territories of the nation, and that Congress shall consider some way of recommending to the States, so that the States can organize colonies, borrowing from capitalists the capital necessary to start those colonies in operation. I do not mean a loan of money to the people, but to place them in co-operative societies. Co-operative State colonies are my remedy for the present evils, with the idea that the co-operative colonies in charge oif the sister States will become co-operative States out in the West, and wiU come into the Union on the co-operative basis— the very basis that I and my friends, and our associate democrats in Germany, are trying to get the government of the nation established on. By drafting out our idle people and capital in that way we make them active ; and, at all events, we are trying a tentative experiment — ^to employ capital profitably to capitalists, and to employ labor. These colonies will be very soon self-supporting, and will be able to pay the interest of the debt which the State has guaranteed on their behalf. The State should have control of its colonies until they are in a self-supporting condition, and, when they will be able to pay off their debt, then they can start on their own hook with their own wealth, and they will no longer have to pay anything to capitalists for the use of their capital. They wiU be themselves the capitalists. That is my proposition briefly stated. And now I ask another thing : that some means shall be adopted, either by the nation or in some other way, for the appointment of a commission, not consisting of politicians (although I should like to see some of the gentlemen of this committee on such a commission), not consisting of statesmen simply, but consisting of representa- tive men in every department of public industry, so that all the interests of society shall be represented upon it by the ablest men. That commission should sit perma- nently and take the whole subject of the social question into consideration,. The Chairman. This commission, of course, will study all the facts and try to arrive at the truth ? Mr. Smart. Yes. The Chairman. You admit that this whole subject is in a very chaotic condition and is very little understood ? Mr. Smart. Yes. The Chairman. In every country in the world there are very enlightened men in all ranks of society investigating this very subject. The results are being considered in a series of books very remarkable in their character and effecting an entire change in the literature of the day. I refer to the books written by Mr. Fawcett, Professors Caims, Schultze Delitsch, and the new school of German economists, and of French economists. They are examining the whole field of manufactures and of co-operative associations themselves. Is there any commission that you can imagine that can be appointed in this country that could compare for one moment with these men, and with the accumulation of experience that is going on throughout the civilized globe on this very subject ? Mr. Smart. I think that it would be a valuable aid, and that such a commission would be better competent to deal with the subject than those men who, under the name of political economists, have been making it their special study. The Chairman. Take Schultze Delitsch, who has spent his life doing this very thing which you have been describing, and who has worked out the problem in Germany, and has secured the passage of a law (itself a marvel of legislation) under which co- operation societies in Germany are working. If yon are familiar with the results of his experience you must know that he has run against very serious difficulties. For example, breaches of trust have occurred In the last two or three years among the co- operative associations in a way that has caused great discord among them. He can- not get honest men in these associations. Now, when the world is groping in the dark, with men who are terribly in earnest trying to solve this social problem, how can you hope to accomplish in a day with a le^slative commission more than this accumulated experience has been able to accomplish ? Mr. Smart. I think I can hope so, because this commission which I propose would be composed of persons of practical experience and knowledge in all the necessary branches. They would be co-ordinate by being brought in contact with each other. John Stuart MUl himself, with all his actual experience in those matters, when he came to deal with the relation between capital and labor, what did he know about them? , . , , The Chairman. But he was one of the very earliest of men who arrived at the con- clusion that if there ever was to be a solution of the difficulties between capital and labor it must be through co-operative agencies. Mr. S.MART. I grant that. We recognize the same thing, but we say that it cannot be done locally— that local co-operation is only a joint stoek co-operation— that the Eochdale co-operation, for instance, is only a partnership. We say that it must be national, and that it must include all other co-operative societies. 180 DEPRESSION IN LABOR AND BUSINESS. The Chairman. But you must admit that the growth of such a state of things must be very slow. Mr. Smakt. Not at all ; slavery was overthrown at a jump. The Chaieman. It was overthrown with a convulsion that has brought evils almost as great as slavery itself. Mr. Smart. I do not think that the price which the nation paid for redeeming itself from that vile wrong was any too great. I do not think that it could have been too great if we had had to pay one hundred times as much. The Chairman. But it would have been better to have paid for it in bonds and obligations instead of blood. At the same time, if it had been paid for in that way (judging by the opposition that we have had here to bondholders) the holders of those bonds would not have had a very good security. Mr. Smart. No, sir; and, therefore, I beheve that it is better for us to commence the work of effecting this transition so that the people may be, without confusion, able to adapt themselves to the new condition of things. The Chairman. Here we have universal sulirage — for nobody proposes any restric- tion of it. The moment you can educate the community up to that state of things the majority will rise and establish it. But, until you have educated the community up to it, you caunot get the majority to do it. Take a farmer who, after thirty or forty years of hard labor, owns his own farm and is satisfied with its ownership, and if you propose to have him put that farm into the common stock along with some man beside him whose farm is unimproved he will tell you that he will not do it. What I say iu this matter is that you have got to educate the community up to your standpoint ; and when you have educated it up to that point, then you can accomplish the resiilt through universal suffrage. Mr. Smart. I grant that. That is exactly what interests me in this improvement. But this is a process of education, is it not? My being here is one element in it, and the work of this committee is one element in it. I say that the fact of the greenback movement having originated among the farmers out West is a proof that they are be- ing educated very fast. When they understand that their farms are certainly passing out of their possession, do you not think that that is educating them to accept our ideas that the farms belong to the nation ? The Chairman. I am afraid that if you go to the West and propound that question you will find that they are not ready for it. Mr. Smart. But they will be ready for it. I see that the capitalists are moving iu the direction of co-operative colonies. The capitalists will go out West and establish large farms and take control of the agricultural interest in the same way as they have taken control of other interests. They will take hold of agriculture, and then what will become of the independent farmers ? The Chairman. You are only stating the tendency of all modern industry, which is concentration into few hands and under one management. The question in which we are interested is not in regard to management, because you propose a national man- agement, but in regard to the distribution of the proceeds. Now, if by consolidation and by concentrated management the individual can get a larger share of the proceeds of industry than he can under the ijreseut isolated management, he is better off, is he not? Mr. Smabt. Yes. The Chairman. Is the great mass of society getting a larger share of the proceeds of industry in this age than it got iu previous ages ? If that is sho-vvn to be the fact, the process of consohdation must be beneficial, and you may be right iu saying that the consolidation of all interests in the hands of the government would be better yet. Mr. Smart. Yes, sir. The Chairman. But you have been objecting to the conceutration of capital, and yet you want to concentrate it further. Mr. Smart. I have not proposed that. The Chairman. Some other witnesses have. Mr. Smart. I am in favor of developing the monopolists. I have stated.so pub- licly, and I have acted on that principle. I buy my groceries at the big stores. I want to destroy the middle classes. Let us destroy the middle classes, and the labor question will be solved. The Chairman. But what if the middle classes are in the majority and will not be destroyed ? Mr. Smart. The destruction of the middle classes will take the lower classes out'of their trouble. The Chairman. But if the middle classes are iu a majority, how will you get rid of them ? Will you level them down, or level the others up ? Mr. Smart. Level them down. The Chairman. Then you must level all classes down. Mr. Smart. I want to reduce the number of monopolists. DEPRESSION IN LABOR AND BUSINESS. 181 The Chairmax. I thought that you said just now that you wanted to develop monopolists ? Mr. Smart. Yes ; but I want to decrease their number. Developing the principle of monopoly is decreasing the number of monopolists. The Chairmax. Is that not the old idea of the Turkish and Russian Governments — that the head of the nation is the master of the life of everybody in the nation?' Is not that exactly the development that you are aiming at 1 Mr. Smart. No, sir; far from it. There will be no paternal character to the govern- ment that we propose. Every man's industry wiU be under his own control ; and the person who directs him will be responsible to him. Under that system every man wiU have his wages and his share of that to which he is fairly entitled of the earnings of the year, and there will be no accumulation of capital by the nation, except what is necessary to pay off any indebtedness incurred in making the change, and except what is necessary to pay the social expenses. The Chairman. Then you must deiine capital to be something different from what I have supposed it to be. I suxroosed capital to be accumulated wealth. Mr. Smart. I am using the definition of some political economist, whose name I can- not mention now. But this is my definition of capital: All wealth applied product- ively, used for the purpose of production and distribution. The Chairman. Then a house once built is no longer capital ? Mr. Smart. Supposing the man to have bviilt a house for himself to live in, it is no longer capital. But if he wants to make use of it as merchandise, and to rent it to another man and take rent for it, then it is capital. The Chairman. Under your system would you be allowed to take your accumu- lated earnings and build a house ? Mr. Smart. Under our system I cannot imagine a man owning a house. He cannot own a house without owning the land, and I do not behcve in the right of any man to ■own land. The Chaikman. If a man builds a house for himself would you allow him to rent it? Mr. Smart. No, sir. The Chairman. But if he does not occupy it himself, then it would stand idle? Mr. Smart. The house would undoubtedly stand idle. Tlie moment you allow a person to make use of any wealth that he possesses (even if it be the savings of a workman), that moment the man conimences to be a predatory individual. The Chairman. I think I understand your position. You have made it very clear. Is there anything that wish you to add 'I Mr. Smart. No, sir. VIEWS OF PROF. W. G. SUMNER, OF NEW HAVEN. New York, Auguxt. 22, 1878. Mr. Sumner appeared before the committee by invitation. By the Chairman : Question. Please to state your occupation. — Answer. I am professor of political and social science in Yale College. Q. How long have you held that position ? — A. I have been in that chair for six years. Q. Of course, you have made the relations of capital and labor a study in the per- formance of your regular duties ?— A. Yes, sir ; that is my professional duty. Q. Have you given any special attention to the condition of labor and of business generally at the present' time in the United States?— A. That is within the range of my professional studies. I have studied it and given all the attention I could to it, and I have availed myself of all the means that I know of for forming ideas about it. I should like to say that the means of forming ideas about it on the part of professional economists are very meager and unsatisfactory. It is exceedingly difdcnlt for any person, however well trained he may be, to embrace this whole subject of the causes of the present depression in the United States ; and he would be a very bold man in- deed who should claim that he had sounded the whole question. I am certainly not in that position before this committee. I should think that that question ought to be carefully considered in two different points of view. There has been very great in- dustrial reaction over the whole world during the last five or six years, and the United States have, of course, participated in the general state of industry and commerce over the whole world. They have had their share of it. There have been other local and peculiar circumstances 'in the United States which should be considered by themselves as combining with and intensifying here the effects produced by general causes the world over. Now, I do not know any one in the world who has undertaken to study the whole question of the present commercial crisis over the world in all its bearings, or who has ventured to publish his opinion as to what the cause of this general de- pression may be, because I am sure that any professional economist would regard that 182 DEPRESSION IN LABOR AND BUSINESS. as a su\)ject of eiiomious magnitude, and would be very timid about any of bis con- clusions in regard to it. I do not care to enter into tbat. Tbe Chairman. If a general underlying cause or set of causes can be determined, I understand you to say that tbeir effect would be modified in the respective countries by local causes ? Mr. SuM>rER. Yes, sir; I have tried to study and see what some of the general causes of this industrial reaction over the whole world may be. I will mention one or two of them in a very broad way in order to show what one's ideas of them would be. WithiQ the last ten or fifteen years there has been a wonderful change in transporta- tion and communication over the world. The Suez Canal and the Pacific Railroad, and the extension of telegraph cables all over the world, have produced nothing less than a revolution in commerce and industry. Large stocks of goods are no longer necessary to be kept on hand in any country when you can telegraph for new sup- plies from the other side of the world, and can get them within a short period — ^not as formerly when communications were slower and transportation much more difficult. That, I suppose, is one reason for the phenomenon which a great many people call over-production. The Chairman. Your idea is that the world is now able to draw upon the accumu- lated stocks which it had before the introduction of the new agencies of transjiorta- tion and communication. Mr. Sumner. Not exactly. For instance, when it was necessary to send a shiji to Brazil with a letter to order some coffee, and when it was necessary to wait for the ship to come back with its supply of coffee, and you could not have the coffee in less than a month, it required a mouth's supply of coffee to be kept in the United States ; but now anybody can communicate with Brazil in an indefiuitely short space of time, and it requires but two weeks for a new stock of coffee to be brought forward, so that it is not necessary to keep on hand in this country more than two weeks' stock of cof- fee. So, too, in regard to the commerce between Great Britain and India. The open- ing of the Suez Canal and the laying down of telegraphic cables have made a com- plete revolution in the commerce between India and England ; and the supplies of goods which were formerly warehoused (and the capital invested in them lying idle ^for the time being) do not need now to be nearly so large as formerly. That is an im- mense improvement, of course, because it is a saving in interest on a large amount of capital. The Chairman. Would that account also for the glut of capital ? Mr. Sumner. Yes ; for the time being there may be a proportionate glut of capital on the market. That is just one idea as to what forces have been at work, partic- ularly within the last ten years, starting trade through new currents, and bringing about new methods of business, the temporary consequences of which must, of course, be irksome until people have adjiisted themselves to the new order of things. The Chairman. What is your idea as to the duration of the causes you have just named ? Mr. Sumner. It will adjust itself in a very few years ; and the nation whose people are the most energetic and quickest in catching new ideas and developing them will load off in .obtaiuing the advantage. The English have profited by it veiy largely al- ready, and we ought to. The Chairman. I suppose that the time for adjustment would be affected by the fact that the first effect of a glut of capital or goods is to stop production, and the machinery is not set in motion until the demand begins to exceed the supply ; that determines the time. Mr. SuMKER. Quite so. There was an illustration of that in the matter of the Suez Canal. People were very much astonished to remark, after the Suez Canal was opened a short time, that it did not have anything like the business which it had at first. They were very much disappointed, and thought that it was going to be a failure ; but there was some reason for that. Suppose that the stock of Indian goods on the European market was such as had been customary up to the time the canal was opened ; now, the moment the canal is opened, people begin to bring goods from India which come right upon the top of the old stock which was on the market, and for the time being there is a glut and a crisis in the whole trade, so much so as to check and stop the new supply from coming through the canal. It did check business through the canal until these stocks were worked off and the thing began over again on a new basis, and with a regularity which is adjusted to the new times and to the new facil- ities for getting supplies from India. The Chairman. As a matter of fact, has the business of the Suez Canal recovered itself since then and gone on increasing ? Mr. Sumner. Quite so. Mr. Rice. After the adjustment is reached, what then is the effect? Mr. Sumner. A great improvement in wealth and prosperity. Mr. Rice. The new demands create a large field of supply?' Mr. Sumner. Yes. DEPEESSIOK IN LABOE ANT^ BUSINESS. 183 Mr. Rice. So ttat the depression is temporary ? Mr. Sumner, Quite so ; purely temporary. Shall J mefntion another suggestion in that same connectitm ? ! The Chairman. We wish you would do so, and do not feel at all constrained in re- gard to time. Our object is to go over the whole ground very thoroughly with you, in order to save the necessity of calling other witnesses on the same points. Mr. SuMNEK. I wish you would call the others. Some of them know more about it than I do. The Chairman. Having got you, we propose to make the most of you. Mr. Sumner. There is one other point which is very interesting indeed — ^in regard to machinery. If you introduce machinery into any business, the first eifeot of it is to destroy capital always, and to displace labor, and to look up circulating capital. That is the first effect of any single machine. It is the inevitable penalty which the human race has to pay for all the improvements that it makes. If anybody invents a new loom for weaving cotton cloth, a man who has old-fashioned looms which do not work as well and cannot compete with it has to sacrifice them. If a new railroad is built, the canals and stage-coach lines are ruined. That is what we have got to pay for our gains all the way along. Within the last quarter of a century there has been an im- mense introduction of machinery in all departments, chiefly in manufacturing. But machinery has reached into all sorts of other things besides. If you take the accumu- lated effects of the introduction of machinery in all the different departments of indus- try, you will find that all of them involve temporary loss and injury, as men reckon it ; and I have been inclined to regard that as another possible factor in this world-wide reaction — a temporary set-back that comes from the accumulated effect of these ma- chines, all of them invading different, industries. Before any one of them has had time to exhaust its effects and to pass away, another one comes on top of that, and then another one crosses the track of it, and so on in endless combinations and accu- mulations. The effect of this again would be that the world would have to undergo its period of reaction and reverses, but it will follow (if the idea is correct) that the analogy would hold also farther on, and that the world was about to enter on a period of expanded wealth and prosperity and of increased comfort, of which probably we ■• have no conception at this time. Mr. Rice. Will that reach the manual laborers of the present time ? Mr. Sumner. Yes ; it will reach them and reach everybody, for the ultimate effect of machinery is to cheapen hixuries. That is all that it amounts to. Mr. Rice. Does the poor man ha^e more of those luxuries now than he had twenty- five years ago ? Mr. SuMNEK. Unquestionably. Compare the condition of an agricultural laborer in any country now with what it was a century ago, or that of a man belonging to the operative classes. If you went into his house a century ago, you found that he lived in one or two rooms in a small, ill-ventilated, and unhealthy house^ with no sanitary comforts or conveniences, no abundance of fuel, no good means of lighting the house, no good means of cooking his meals. But if you go into the house of a man of the same class to-day, you find that he has larger apartments, a larger number of rooms j that he has good and convenient furniture ; has some supply of reading-matter ; he has good clothes for himself, his wife, and children ; his house at night is well lighted; his ftiel cheap and abundant. And so on with all the comforts of Ufe. And that is the only thing you can ever measure prosperity by — ^the good things that a man has to enjoy. The effect of all the machinery invented during the last century has been simply to cheapen these luxuries and to bring them within the reach of the poorest classes of people. Mr. Rice. What is the effect of machinery on those laborers whom for the time being it turns out of employment ? Mr. Sumner. For the time being they suffer, of course, a loss of income and a loss of comfort. There are plenty of people in the United States to-day whose fathers were displaced from their labor in some of the old countries by the introduction of machinery, and who suffered very great poverty, and who were forced to emigrate to this country by the pressure of necessity, poverty, and famine. When they came to this country they entered on a new soil and a new system of industry, and their chil- dren to-day may look' back on the temporary distress through which their parents went as a great family blesssing. Mr. Rice. But the fathers had to suffer from it f Mr. Sumner. They had to suffer from it. Mr. Rice. Is there any way to help it? > Mr. Sumner. Not at all. There is no way on this earth to help it. The only way is to meet it briCvely, go ahead, make the best of circumstances: and if yoii cannot go on in the way you were going, try another way, and still another, until you woikj yourself out as an individual. The Chairman. 'Your idea is that the introduction of machinery has improved the condition of a groat many people, although individuals have had hard times in the transition? 184 DEFBESiHI^KLABOR AND BUSINESS. Mr. SuMNEK. Individua]|Wj»ieliW»8 have had to go througli it. What is the rea- son anybody ever came to*ffli«>(Mi«^ginally ? A few came because they had some religious ideas which they wanted to carry out, but they were an insignificant part of the migration to America. The people who came to America came because they were uncomfortable in the old countries, because there was distress and pressure upon them, because they were mostly at the bottom and worst off, and the chance for them was to get to a new soil where it would be easier to get a living and to struggle for- ward. That is what they all came to this country for. They never abandoned their old homes because they liked to do so. They disliked it very much. Mr. EiCB. Then the pressure of necessity is one of the prime elements in the prog- ress and civilization of mankind ? Mr. Sumner. Yes ; we have been forced to progress, and that is the reason why we have made it. Mr. EiCE. The poor laborers of America who came from Ireland ; how did it happen that they came here, and what has been the result ? Mr. SUMKEK. They never came until they were starving at home. The population of Ireland in 1840 was about eight miBious. They were told often enough by people who wrote books that they were going to have a great famine in Ireland, that they were depending upon the potato food, and that if the potato food ever failed them (it being cheaper than wheat food) they would not be able to buy wheat food, and that they would have a great famine and would perish. In 1846-47 the famine came, and it was then, after thousands of people had perished a most miserable death, that others began to go away, and the population of Ireland fell to about five or six millions. Mr. Rice. Is the condition of the poorest who came here from Ireland better than it was there ? Mr. Sumner. Yes ; there is no comparison to be made at all on that point. I think you can safely ask the first Irishman you meet how the fact is in his case, and he will tell you so. The Chairman. And how did the emigration affect Ireland itself as to leaving it in a better or worse condition ? Mr. Sumner. It affected it for the better. Ireland to-day is in a prosperous condi- tion. They have been forced, of course, also to undertake new development of in- dustry, cattle-raising, for instance, dairy farming, &c., instead of having the whole island divided up into little potato patches. The result of it has been the introduc- tion of the best industrial system, and, of course, with the reduction of population, those who are left have been able to do better. All the information that I get in English documents goes to show that Ireland is vastly improved in its economic con- dition. The Chairman. Besides the famine, has there not been an improved legislation in reference to land tenure in Ireland ? Mr. SOMNER. Yes. The Chairman. And that, of coiu'se, has had its effect. Mr. Sumner. The famine, of course, forced attention to the bad condition of legis- lation. The Chairman. To the unscientific condition of land-holding there ; and Parlia- ment took it in hand and modified the land tenure ? Mr. Sumner. Yes, sir ; the English legislation has been apparently controlled by the desire to do right, and to remove grievances where they existed. The Chairman. In that new legislation the old idea of vested rights in the land (due to the past legislation) was disregarded, and new elements were introduced. The government took the land and dealt with it as it thought best for the interests of the people. Mr. Sumner. I should not say that. The Chairman. How far did ParUament go in that direction ? Mr. Sumner. Simply so far as to guarantee the tenant the return of all the cap- ital which he had invested in the land. The Chairman. But how far did the incumbered-estates bill touch the question of title? Mr. Sumner. The incumbered-estates bill simply allowed people who had entailed estates which were covered with mortgages, which estates they could not sell, and were merely the nominal owners of, to liquidate and wind up their estates. The Chairman. It cut off the entail absolutely ? Mr. Sumner. Yes, sir. The Chairman. In other words, Parliament took it in hand and cut off what had grown to be an abuse ? Mr. Sumner. The owners of estates that were under entail were the most bene- fited by the law. The men who were the nominal owners of great estates, but which were mortgaged for their full value, were the men most benefited by the law which enabled them to get rid of the entail, and to sell their estates. The Chairman. In your judgment there may be evils which are due to bad le-" Mr. Sumner. Certainly ; but that has nothing to do with the establishment ot fac- tories near his barn. . , , , j_ -u ., The Chairman. The Secretary of the Treasury is required by law to purchase silver. The product of American silver' (in Nevada) has been heretofore sent to Europe and sold there. The bullion owners here, therefore, receive the price of the silver in Lon- don, less the cost of transportation from Nevada to London. Now, the Secretary goes into the market to buy the silver here, and the bullion owner demands the price of silver in London, pins the cost of transportation, instead of minus. And the Secretary has had that matter under disc ussi on . Now take the same thing and apply it to wheat. If there is a demand at home for more wheat than is raised, would not the price at this point be the price in Liverpool (which is the great market for wheat) plus the trans- portation between Liverpool and this point, or would it be minus the cost of transpor- tation ? Mr. Sumner. Minus of course. The Chairman. You mean to say that if I want to buy more wheat than I can get here, and have to send to Liverpool for it, I can get it at the cost in Liverpool mirma the transportation 1 Mr. Sumner. Certainly. The London (not the Liverpool) market gives the control- Uug quotations for wheat, and wheat nowadays goes into the world's market. You have your London quotations, and of coui-kc the transportation is so much added. The Chairman. But suppose that I am in Milwaukee. The price of wheat in Mil- waukee is the price in London minus the cost of transportation, is it not? Mr. Sumner. Yes. Tlie Chairman. Suppose that, instead of there being a surplus in Milwaukee I had to bring wheat there from London, would I not have to pay the price at London-^Jits the transportation f Mr. Sumnek. It would not make a particle of difference. The Chaiuman. That is to say, if we did not export a dollar's worth of wheat from this country, 1 )ut imported it as we did in 1836-'37, the price of wheat here would be the price in London minws'rae transportation, oiplus the transportation? Mr. Sumner. Then it would he plus the transportation ? The Chairman. What is true of this country must be true of any locality? Mr. Su:mner. Certainly. The Chairmajst. Then we agree ? Mr. Sumner. Quite so. The Chairman. You said that the price must be, under all circumstances, the cost in London minus the cost of transportation ? Mr. Sumner. You put the case of a possible importation into the United States which I had dropped out of the account as not being .within the range of hypothesis. The Chairman. What is true of the country at large, would be true of any locality that had to import wheat? Mr. Sumner. Yes, sir. The Chairman. They would have to pay the market-price in the cheapest market plus the cost of transportation ? Mr. Sumner. Precisely. (To Mr. Rice.) I thought that you were putting that old story about setting down a factory next door to a barn. Mr. Rice. Take a rural county in New York, or in Ohio, or Massachusetts — an agTicultural county. Is that county benefited any by establishing within it a manu- facturing city of 50,000 inhabitants, thereby furnishing a home market for the agricul- tural products of the county? Mr. Sumner. I first waut to know whether this city is supposed to come and build itself up on account of natural facilities. I will answer your question according to the answer you gave me. If there is an agricultural county in the State of New York, and there is a large water-power in it which attracts manufacturing industry there, and if a gentleman takes his capital and goes and builds a factory there (supposing him left entirely to his individual risks aud speculation), and if somebody else comes and builds another, and then somebody else builds another, and so they build up another Lowell, then, of course, that is a very great advantajje to the county. But that is only to say that a county that is well off is well off, or that a county which has great natural advantages has f;ri'at natural advantages. Mr. Rice. If a protective tariff stimulates the building of these factories, you think that is not a gain but a loss, and would be a disadvantage on the whole to the county? Mr. Sumner. I should say so. Mr. Rice. And you would rather not have water-power facilities than have thBm stimulated by protection. Is tliat your position? DEPEESSION IN LABOE AND BUSINESS. 197 Mr. SuMXEU. Yes; and you oa.imot abvixys say tliat, even with great water-power, factories should be established. Water-power has seduced a great many men to their rum in this country. It might be a very unfortunate thing to go into Saint Lawrence County, tar away from tide-watc^r, and ivstablisU a factory because there is water-power there. A man must be very carci'ul about going into such a business; and it is forthe man going mto it to consider all the points bearing on the question, and to take his own chances. If he makes nmney ho is very fortunate, and his neighbors ought to be glad ; but if he loses mouey he is unfortunate, and his neighbors ought to be sorry. Mr. Rice. Do you think that manufactnvcs can grow up in a new country in com- petition with old countries, unless they are protected? Mr. SuMXER. Why notif They have grown up in Ohio, and they are growing up in IlUnois, and in the far West, iu competition with Rhode Island, Massachusetts, Con- necticut, New Jersey, aud Penusylvania. Mr. Rice. Is not ihat owing to the fact that they are near the market in those places where these factories are established? Are they not nearer the market than the fac- tories of Rhode Island and Massachusetts are ? Mi. Sumxer. That may be an advantage; and, of course, if it is, they are entitled to it; but so we are nearer the market here than the manufactories on the other side of the water are. Mr. Bice. Would Massachusetts or Rhode Island have been able to establish their manufactories if they had never been protected against foreign competition? Mr. SUMNEK. Certainly; why not? They ha\-e had 3,000 miles of transportation to protect them all the time, a great deal more protection than Illinois or Ohio ever got against Massachusetts or Rhode Island. Take, for instance, the boot and shoe industry in competition with Boston. I am told that that industry in the West is growing to be a very large and independent industry iu several of the Western States. Mr. Rice. How do you account for the fact that the Massachusetts boot and shoe manufacturers have their leather tanned in IlUnois aud transported to Massachusetts, and that they make the boots and shoes in Massachusetts, and send them back to Illi- nois, and sell them. Mr. ScJixER. Do you state that as a fact? Mr. Rice. Unquestionably. Mr. Sumner. I have no difficulty in understanding how it may be, although I do not know the fact. While the people of the Western States have this com and wheat land around them to work upon, and to raise hogs and cattle on, and to pursue indus- tries of that kind, it does not pay them to make shoes in competition with the people around Boston Tvho live on a very poor soil, and who have no other scope, and where there is a very dense population. I think it a conceivable thing, indeed, that it may pay to transport leather from the Western States to Massachusetts, there to make it into boots and shoes, ani to send them back again to the West. Mr. Rice. There is nothing more common than for the boot manufacturers in Massa- chusetts to have tanneries in the West, and to move their leather to Massachusetts and send it back in a manufactured fonn. Mr. Sdmner. I am not surprised at all. It is just like bringing cotton from the Southern States to Massachusetts and manufacturing it and sending back cotton cloth. to the South. The Chairman. I understood you to say that where trade is controlled and not ob- structed by tariffs there cannot be disproportionate production? Mr. Sumner. Yes. The Chairman. In England trade is practically free, is it not ? Mr. Sumner. Yes. The Chairman. Take two branches of business which I haj)pen to know something about, the cotton business and the iron business. Do you mean to say that there are not times in British industry when there is an overproduction, a commercial glut of cotton goods and pig-iron ? Mr. ScMNEE. No ; I do not mean to say that. The Chairman. How does it happen to occur there just as much as it does here ? Mr. Sumner. We understand that, in the fluctuations of trade, the balance wiU go over now a little on one side aud now a little on the other side. You cannot possibly guard against such fluctuations. But, under a free system, and with the play of na- tural forces only, it is impossible that any industry can go on in an exaggerated direc- tion to a degree producing convulsion and crisis and reaction. Of course you must have a turning over. to one side or a turning over to the other. The history of busi- ness consists in that. Business never goes forward on a straight line. I5ut these things correct themselves by natural forces withi"n the shortest time. The Chairman. I do not see that they are corrected, in fact, any more readily in Great Britain, where they have free trade, than in the United States, where we have a protective system. For instance, I have known the stock of pig-iron to go on stead- ily increasing in England for five consecutive years on a falling market, and I have known the stock to get up to twelve hundred thousand tons in the warehouses of Glas- 198 DEPRESSION IN LABOE AND BUSINESS. gow alone. I have kiaown fbe stock of cotton goods to go on increasing in Manches- ter steadily for a period of three years on a falling market, and at last the thing has corrected itself. It is correcting itself at this present moment. But I find that that era is quite as long, and, in fact, a little longer on the other side of the water than on this side, because there is more capital there. Mr. SUMJTER. Which nation is getting out of its troubles in the iron business quick- est? The Chaikman. So far as my knowledge goes, neither of us is getting out of it. Mr. Sdmnbr. I was under the impression that the late reports from England showed considerable improvement in the iron business. The Chairman. The stock of iron is not being reduced, though perhaps it is not going up. There is a slightly-increasing demand there, and we all know that there ig a slightly-increasing demand here. Last year, 1877, we produced about 200,000 tons of iron more than that produced in 1876, and we reduced the stock on hand about 50,000 tons, showing that there was an increased consumption in 1877. That increased consumption has begun to show itself now in Great Britain. But I speak of the con- dition of the iron-masters there. I do not think they are getting out of trouble any more rapidly than we are. Yon laid down the doctrine that this disproportionate pro- duction would be less liable to occur in a country where there was free play in trade, and that it would come to an end more rapidly than in a country that had the protect- ive syslem. The facts, as I understand them, in these two branches of business, do not seem to confirm your statement. Mr. STiMNER. You quote me correctly. I stand by that form of statement, although I believe I stated it from a little different standpoint ; that was, that the efiect of pro- tection is to produce disproportionate production, because it stimulates and pushes forward certain industries, not because the market naturally stimulates them, but ■ because legislation has decided that it is a good thing to have them started and car- ried on. The first efiect of your tarifis, of course, is that a great many people think that when you have got a high tarift' on iron it must be profitable to go to work and make iron. A great many rush into the business, get the plant, &c., and push it for- ward until a crisis comes and a reaction. That has been the history of every protective industry. Just the same state of things occurs, of cimrse, in any country under the free system, by fluctuations and changes in the market. Such, for instance, has been that which occurred in our own country, and in England before 1873, when the great advance in the price of iron caused the opening of new factories ; and, when the reac- tion came, it produced a glut in the market. The Chairman. I agree that excessive demand brings about, in the end, excessive production. I do not see, however, that whether there is a duty on the article or not has any influence on the result. We had a protective system here ; we had a specula- tive era, and there was a rush into the iron business, because it was profitable. Ex- actly the same rush occurred in the iron business in England ; and the fact that there was free trade in the one case and not in the other did not ajli'ect the result, for it was common to both. Mr. Sumner. That is true, and very fairly stated ; but the idea is that where there ■ is protection, you are, artificially and by the action of legislation, continually en- couraging and bringing about that same state of things. It may occur under a fre e system temporarily and within narrow limits, but under a system of government en- couragement, you leave it without the necessary limitations and corrections of natural forces. The Chairman. Without diifciiug from you as to the propriety or expediency of a tariff, let me say this : the tarifi' exists here and free trade exists in England, and I find the same experience in both cases. I therefore dissent from the proposition that disproportionate production is the result of a protective system. Mr. Sumner. I say that it is a result of the protective system, and that the protect- ive system naturally leads forward to that state of things; but I will not deny that you can bring ine plenty of cases of similar phenomena produced under other circum- stances, in other countries where there is no protective system. The CiiAiiarAN. But, with regard to iron, there is depression in Eugland, and de- pi-ession here ; there is a glut there, and there is a glut here,; there are low i)riees there, and there arc low prices here ; one country is under one system and one country under anothiT system ; it is thereibre but fair to assume that some other cau.se must lie found than the one which you lay down. Mr. SuMXER. 1 will not say that the case in point can be conclusively and exclu- sively put under that head. That would not be a reasonable interpretation of my assertion. The CiiAiuniAN. It does seem to me that the question of a glut in the market must be independent of either of t hose causes and must be due to other causes. Mr. Sumner. It may be, but I must insist on my proposition that the tendency and law of protection is always to push forward and to stimulate unduly all protected in- dustries. DEPRESSION IN LABOR AND BUSINESS. 199 Tlio Chaikmajst. Not unless tliere is an active demand for the product. Mr. Sumner. Certainly not ; but if you give a man a wide margin of profit, tlirough your interference, he -will go on and produce without the checks and limitations that ought to come upon him, as in yovu- ii-on business. The Chairman. He has no wider margin of profit than in any other business. Mr. SuJiNER. O, yes. The Chaikman. No ; for'the moment there is a wide margin of profit, everybody goes into that business, and that is the law of all business. Mr. SniNER. They try to do it, but in protected industries you never see the law act in that way. The Chairman. "We are now able in this covmtry to make twice as much iron as there is any demand for. Our capacity to make iron is 4,500,000 tons, and the demand for it has never yet been 3,000,000 of tons in this country. Mr. Sumner. You have got too much machinery for making iron now, a large part of which is standing idle, and the tarifl^ is largely to blame for it. The Chairman. But in England the same state of things exists. The capacity to make-iron in England amounts to 8,000,000 tons a year, but the actual production is about 5,000,000 tons. Mr. Sumner. Certainly you have the iron industry in a very peculiar crisis. The Chairman. Take cotton. There is a demand for all the cotton products of the country, whereas in England there is an annual excess in the production of cotton for which they cannot find a market. They have had free play, and we have not. I do not say that it is not desirable to have free play. I will go as far in that direction as you will, but you have attributed to protection results which do not appear to have followed protection when you contrast the two countries. Mr. Sumner. I do not think that that is a correct mode of arguing about it. You put this other case in which, of course, similar phenomena have occurred. That is not denied. But they do not at all meet or contradict the proposition that the tendency of protection is always to force protected industries into distorted and excessive devel- opment because they have not the natural check upon them. That proposition does not deny that the same phenomena may be produced in other countries and other cir- cumstances. The proposition is that the character of protection is always to stimulate and bring about this state of things, and to intensify it. The Chairman. This is a point which we may as well settle here, because it will mislead either you or me or the public. Suppose that a wall were put around this country and that nothing was allowed to come in from abroad. Would there be any greater production in the normal and regular course of things than the community would consume ? Mr. Sumner. No. The Chairman. Now, in Great Britain, which is absolutely free, and where there is no such wall, has there not been an overproduction ; that is to say, a much larger quantity of production than can find a market ? Mr. Sumner. Just the same as in a country surrounded by a wall. The Chairman. Then the putting up of the wall, or the absence of the wall, is not the determining cause of that result? Mr. Sumner. That is, oa the idea that a tariff is nothing but a wall to keep foreign goods out. That is not the character of a tariff by any means at all. The Chairman. There is no iron coming into this country at present. Mr. Sumner. I know that. The Chairman. The tariff keeps it out; for, without a tariff, iron would come m, and the price of iron in this country would fall as low as the price of iron m England j^lus freight. Mr. Sumner. And ^Zms the tariff. . The Chairman. No. Take the tariff off, and the market would be supphed with English iron, because it can be landed here from England cheaper than nron can be produced here. . „ . , , ,, ... Mr. Sumner. I suppose so, but you have had the price of iron here lower than it is The Chairman. No, sir; never. Now we are at the very bottom. We are at the lowest prices ever known in the history of the iron trade. Mr. Sumner. What are the quotations? ,^,,„i. , rn,„+ The Chairman. It commonly rules on the other side at £4 10 for common bars. That would bring it down here to aibout $v!5, with transportation ; and our present Ameri- can rate foi"that sort of iron is |34, so that it is the duty which keeps out the English iron Mr Sumner. I do not see that we are making any headway on this point. The Chairman. I want to arrive at an understanding about disproportionate pro- ^Mr^SuMNER. It is merely a dialectical difference between you and me, nothinj else. We cannot apparently reach each other's mind. I was speaking about the taritl con- 200 DEPRESSION IN LABOR AND BUSINESS. gesting population in certain places where population would not have gone naturally' That I want to connect with the itlcns which I expressed about paper money, i'aper money alwiivM has the effect, also, of drawing population out of production into what are called tl'ie occupations of the middle men. That is a matter which has attracted a great deal of attention within the last few years. It is the natural tendency ot paper money to have that effect because the profits are made under a paper money system, not by the producers, but by the middle men who handle the goods between the pro- ducer and consumer, and who handle the money by means of which the transactions are completed. It is universally known that the last census showed distinctly the ef- fect on the distribution of popuiiition of some forces that had been at work during the last decade. Another way of putting it is : the effect of pajier money is to draw pop- ulation into the cities, because those industries that have been mentioned are those carried on in the cities (not to mention any other reason). They stimulate city busi- ness — I mean the occupations carried on in the city— such as merchants, bankers, brokers, transporters, and middle men of every description. Now I should say that the population of the United States had been distributed under these forces in the way described during the last ten or fifteen years, and that the factor in the, situation lies naturally in the redistributing of the pojiulation into the normal and natural in- dustries of the country. That was the question which you asked me awhile ago, and which I said I would come back to. I think that, under the moral dictates of their own common sense and right reason, the population has been redistributing itself. It has been getting out on the land ever since the hard times began. It has been taking its own course, its own natural impulse, towards the state of things necessary for re- cuperation. The population of the Eastein States has largely m<)\-ed westward onto the new land. Everybody kndws that there has been an immense immigration there from the Eastern States within a short period. I suppose ■\\-heu we hear about armies of tramps in those Western States (as we have heard sometimes) that it may be that a great many people who iire too poor to pay th<'ir way are tramping on foot. They are moving westward toward the new land, which is really their true escape. They are taking their proper course and the one which will lead to a remedy for them and to a remedy for the nation. I think that the tariff and the jiaper money have botli tended to a false distribution of population — to bring it together — especially in the iron and mining districts of Pennsylvania, and the manufacturing districts of the East and in the large cities — and that it has been necessary for the population to distribute itself in the manner that it has done and is doing. Every individual following his own impulse is going straightforward on the right course. Mr. RiCB. Do you not believe that a great many tramps do not come under the head of those who are seeking work on western lands, but are merely tramping from thrift- lessness and from loye of such a life ? Mr. Sdmnisr. Yes ; hereabouts, and perhaps in the West. But what I said was that when I read of armies of tramjis out there, I could not help thinking that, probably, they were persons who could not afford to ride, and who intended ultimately to get to work. Around here, so far as my acquaintance with tramps goes, they are not look- ing for any work, nor wUling to have any. The Chairman. Out West, bands of them are said to have broken up machinery and seized railroad trains in Iowa, and that they also seized a railroad train in Massa- chusetts or Connecticut. Mr. Sumner. Those were not tramps. The Chairman. Were they a class lower than tramps ? Mr. Sumner. No ; they were a class above tramps. The Chairman. How would you describe them? Mr. Sumner. They were people who misbehaved themselves, and made an out- break. The Chairman. In Iowa it is said that it was a regularly organized band of tramps who seized the railroad train. The point that I wanted to arrive at was this : you stated that this process of redistribution of population was going on under a natural law. Suggestions have been made here that Congress ought to take measures for col- onizing people who desire to quit the centers of population where population is sparse, and giving them land to found homes. The question is, how far you think Congress might interfere in that direction without doing more injury than good. Mr. Sumner. I do not think that Congress can interfere at all without doing more injury than good. The Chairman. You are aware that the towns of Massachusetts were originally settled by colonizing arrangements carried on by the goyernment f Mr. Rice. Bjr colonizing — going out from the headquarters. The towns were estab- lished by colonies sent out, or protected and aided, by the government of the colony on the shore, when Massac'husetts was first settled. Mr. SUjMNK]!. But they wen; not aided with money. Mr. Rice. Perhaps not. They were aided otherwise ; the government had surveyors who went out and set off the land and divided it, and supervised entries and biiild. DEPRESSION IN LABOR AND BUSINESS. 201 mgs, and gave to tte colonists certain facilities and certain advantages. Tlie colo- nists went out under the protection and organization of the colonial government at the first center. Mr. Sumner. The United States Government does all that, and more, for anybody who wants now to go upon new land. Sir. Rice. That was Mr. Hewitt's question to you — whether the government should do anything of that kind. The Chairman. The proposition is made that the government shall, through its oflicers, organize colonies, take colonists out and settle them, attend to the aifairg of the organization, see that the settlers get through a season or two, take a lien upon the property, try to get the money back ; and proceed on that system until the sur- plus laborers in the towns are got rid of. What do you think as to that proposition ? Mr. Sumner. 1 should think that such a thing as that, on the part of the govern- ment of the United States, was very ill suited to the citizens of the United States. I do not think that the citizens of the United States desire or need any such care as that on the part of the government ; and I do not think that such a course would re- sult favorably at all. I should say that the consequence would probably be that the government colonists would be collected from worthless persons who would be glad enough to get anybodyto support, them for a year or two ; and that when the govern- ment stopped supporting them the colonies would go to decay. I have no faith in any such proposition. Mr. Rice. You recollect the case of Kansas. Kansas was settled in the outset by emigrant aid societies. The first settlers were sent out and their fare paid! by emigrant aid societies. The sites for settlements were selected and the land purchased. All these steps were taken by emigrant aid societies. Were the settlers who went there under those auspices a worthless class ? Mr. Sumner. No, sir; and if any emigrant aid society, organized by private indi- viduals, either for business purj)oses or out of public spirit, chose to assist and to do the business for colonists in a similar way, there is no objection in the world to their doing so. But government interference is a very different thing. Mr. Rice. Very likely, you and I agree there ; but I understood you to say that the people who would take advantage of such assistance would be a worthless class. Mr. Sumner. If you sent out any government agents to get colonies together, I should expect the colonies to be worthless. Mr. Rice. You think they would be a diiferent class from the Kansas colonists ? Mr. Sumner. Yes ; that is my opinion. Mr. Rice. But you would not object to emigrant aid societies ? Mr. Sumner. I would not disapprove of them if they go into it, and if they make the work go. I should be very glad if they succeeded in this or any other benevolent enterprise. The Chairman. Take the settlement of the Australian colonies — Tasmania and Queensland, for instance — which were settled with the aid of the English Gov- ernment. Those are now prosperous colonies. Do you think that there is something inherent in our system which prevents us carrying on colonization as well as any other government ? Mr. Sumner. It is done still by the English Government. The reports in regard to those assisted by the English Government, as far as I have seen, are not encouraging. There has been a good deal of aid given to colonists — free passage, and all that sort of thing — and in some cases land has been divided up among them. With the home- stead law here, with the land surveyed by the government at government expense, and with the security of law and order established by the Federal Government over all our territories, I do not see anything proper or requisite to be done beyond that ; and I would leave the people alone to go there if they choose, and to work out their own good. The Chairman. The difHoulty presented to the committee is this : that there are respectable families in New York and other places, that sincerely desire to get out on the land. They are not paupers or beggars. They never got so low as to get relief; but they are so poor that they cannot pay their passage out there, and support them- selves for the necessary interval. And they ask for some assistance by which they can get to, and be kept on the land. The government, as you say, has done a great deal. Can it do anything more than it has done ? Can it provide for the transporta. tion of the people who wish to go out west ; and can it provide them the means for living there for a year ? Mr. Sumner. I do not see how any such thing is practicable at all. Mr. Rice. You referred a little while ago to Ireland ; you spoke of the thousands that perished there by famine Ixrfbre the emigration set in ; would it have been any advantage to that people if the government had assisted them to emigrate ? Mi-. Sumner. They coiUd not emigrate, because they were overtaken by the famine and died. Mr. Rice. Would it have been any advantage to them or to their country if the 202 DEPEESSION IN LABOR AND BUSINESS. British Government had helped them to emigrate to some conntry where the land was fertile, and where they could find new homes and get a living ? Mr. Sumner. Probably in a case like that, where there was such a mass ot over- population, that might be the case. Mr. EiCE. Here, in the city of New York, we are told that there are 30,000 men out of work, who with their families are suffering for the necessaries of life. Would it aid those 30,000 men and their families if the government should help them to get on to the land where thev could get their living from the soil ? -T-e Mr. SUMNEK. If you could pick them out, and, by personal acquaintance identify the persons who were to go out under the necessary supervision, I by no means say "no." I should see a grand chance for private charity in such an enterprise, but I cannot see any practical means for the United States Government to do it. Mr. EiCB. You admit that it would be a benefit, but you think that the government is incompetent to furnish that benefit ? Mr. Sumner. It is incompetent and unfit — so much so that I do not see how the en- terprise could be undertaken at all. Of course, there may be cases where persons are so utterly poor, and where all theii- relations and their connections are so utterly poor, that they cannot get money to enable them to go from here to the land, but they are very few I should think. Mr. EiCE. In Pennsylvania there is a great glut of production. Thousands of men who have been producing iron aiud coal are thrown out of employment, and there is no immediate prospect of furnishing employment to them there. Would it not be advantageous to those men if they were helped to migrate where they could raise a living from the land ? Mr. Sumner. It would be a great advantage to them to go out on the land. Mr. EiCE. Would it not be an advantage to the government to help them ? Mr. SuMNBK. I do not think that that is a proper thing for the government to do, and I do not see any practical way whatever for the government to do it. These per- sons in Pennsylvania have been in the receipt of very good wages indeed during the ten years before the panic. They are not paupers ; or, if they are, it must be entirely their own fault. Neither are they a helpless class of people, so unintelligent as not to be able to take care of themselves. There is no such class of persons in this country that I know of. The true course for them, unquestionably, is to get on the land, and if there be need of executive or administrative care in carrying out the movement, that seems a matter for the undertaking of private societies. Mr. EiCE. But private societies do not seem to be started. Nobody seems to consider them. Everybody seems to think that it is as much as he can do to take care of him- self, and the poor are left. As you stated awhile ago, it is not their fault that they are thrown out of labor, but it is the result of fluctuations and mutations in business. Should the government leave them there if nobody else goes to their aid ? Mr. Sumner. You say that there is not a private society in existence that comes to their aid. I never heard of one. And that is the very surest sign to me that the case in the hypothesis does not exist. If there were 30,000 people in the city of New York suffer- ing for anything whatever, the benevolent, charitable, public-spirited people of the city of New York have shown themselves, in any number of cases, perfectly ready and competent to meet the requirement, and to do everything necessary in regard to it. There are societies in New York for almost every conceivable charitable purpose, and if you show one hundred persons iu the city of New York who need assistance, they will get it, and societies will be found to give it to them. Mr. EiCE. I thought that I was a pretty advanced optimist myself, but I am glad to find one who goes further in that direction than I do. . Mr. SuMNEK. I am not much of an optimist. ' The Chairman. There is a society iu the city of New York^ — the Children's Aid So- ciety. That society is the result of a demand for that sort of thing. But there is no society for sending out able-bodied people to the West. In confirmation, however, of what you have said, I wish to state what has come within my knowledge in regard to a manufacturing establishment in a village in the State of Pennsylvania. This estab- lishment has been kept in operation through all the bad times. As a matter of course, the population increases normally. About two months ago the ])opnlatiou was too much for all to find employment, and twelve young men who had grown up there and were old enough started for the West, with no help from the public but the help of the small population in that village. They have gone West, and have found employ- ment for themselves, and they will ultimately, no doubt, become citizens and raise families there. That natural process is going on undonbtcdly. The younger people go away and the older ones are left, which is rather unfortunate for the people who employ them to have all the older ones left on their liimils. Mr. Sumner. Undoubtedly the most cfiicient and best are those who take care of themselves and go. Mr. EroE. The only question is wlietlier there is not an extraordinary necessity which needs remedy by extraordinary government interference. DEPRESSION IN LABOR AND BUSINESS. 203 Mr. Sumner. If there is an extraordinary necessity, the public will provide the ex-^ traordinary machinery to take cure of it. The government can do nothing about it one way or the other except mischief. You speak of the emigrant aid societies to J Kansas. Why were those emigrant aid societies to Kansas started? I never knew one to he started in any other direction. There was some sort of need for emigrant aid societies to Kansas. I believe that in that case there was a good deal of political, or sectional, or religious, or emotional impulse involved ; and the people were found ready enough to organise societies and to send out colonists. Mr. Rice. I cited that case merely in reply to a remark of yours, that those who took advantage of such aid would be worthless persons. Mr. Sumner. Those who would take advantage of such aid from the government would he. The Chairman. Do I understand your objection to he founded on the principle that the government ought not to interfere with matters of that sort, and that it is better for the community and everybody else that that should be left to private enterprise? Mr. SrJnsTER. Yes; that is the principle. But I am not a theory-rider myself; I am willing to take the cases that arise and to judge of them. In politics and statesman- ship, tliat is what you have got to do. The Chairman. When the same state of things occurred in England, in 1819, Nassau William Senior (an economist ranked among the highest of his day) wrote a celebrated essay, in which he recommended government colonies as the relief for the state of things then ; and unless there is something in our local condition which would make some other course better, perhaps that would not be objectionable as a last resort. Mr. Sumner. I think that the English experience is against it, in spite of the authority of Mr. Senior in proposing it. The experience of the English colonies, I think, has been decidedly against it. At the same time I have only a general impression on the subject, picked up in the covirse of my reading. The Chairjian. There are a great many examples of the kind. Russia has been carr>-ing it out in Siberia, Germany in the Cape Colouies, and there has been a society for favoring emigration from Poland to this country. Mr. Sumner. Yes. There are also several cases of that kind in the Old Testament, where Nebuchadnezzar and Salmanazar and tlie rest of them undertook to move people much in the same way that the Rvissian Government peopled the Caucasus. I do not think the illustration much in point, for Russia peopled the Caucasus in order to con- quer it. I suppose that the only other question which you want to ask me is the one which you did ask; that is, about the remedies. Of course, I have not any remedy to oiier for such a state of things as this. The only answer I can gi^■e to a question like that would be the application of simple sound doctrine and sound principles to the case in point. I do not know of anything that the government can do that is at all specific to assist labor— to assist non-capitalists. The only things that the government can do are general things, such as are in the province of a government. The general things that a government can do to assist the non-capitalist in the accumulation of capital (for that is what he wants) are two things. The first thing is to give him the greatest possible measure of liberty in the directing of his own energies for his own develop- ment, and the second is to'give him the greatest possible security in the possession and use of the products of his own industry. I do not see anything more than that that a government can do in the premises. The Chairman. You are opposed to any legislation that interferes with the applica- tion of his energies on the part of any citizen of the United States ? Mr. Sumner. It seems to me that in the United States we have made the thing just as fair and open as it possibly can be. The only restriction is that which comes feom the tariff interference. . . j, j., i. -jx J.^ The Chairman. You think that, by removing the restrictions ot the taritt, the in- dividual would be left free to follow the bent of his inclination? ,,..-, ^ Mr. Sumner. That would leave him free to profit by the results of his industry. Every man is free to select his occupation, to go at it in the way that he thinks uhe most profitable, and to manage it in the way that he likes best. I do not know any restriction except the mere necessary police restraints for pubhc order, public health, &c. I do not know anything that Congress can do in thut direction. The Chairman. Can Congress do anything that would tend to have a more equita- ble distribution of the proceeds of industry ? Mr. Sumner. No, sir. j. .-. j. The Chairman. Is there anything in the taxation of the country that presses more hardly on one class than on other classes? ., ,. , Mr' Sumner. All this tariff legislation presses unfairly on the non-capitalists. The Chairman. Therefore, by removing duties, we should relieve the non-capitalist class from un unfair proportion of the burdens of society ? Mr. Sumner. I think so. ' . i, , ■, * ■ + « -ran^ioi. The Chairman. On what principle would you impose the burdens of society ? Which 204 DEPEESSION IN LABOR AND BUSINESS. would you try to make it reacli, the fruits of labor and Industry or accuniulafced capital ? Mr. Sumner. Taxes have got to came out of income ; out of produce. If I own a * house and the tax on it is so much, I cannot take some bricks out of the side of the house to pay any iiurtion of the tax ; I have got to pay the tax out of what the renting of the house produces. The Chaiuuan. Suppose you rent the house to someljody ; who pays the taxes ? Mr. SuJiN'EK. He pays the taxes if I can make him. Sometimes I can and sometimes I cannot. Tlie Chaieman. I am glad to hear you say so, for the proposition has been laid down so often that the tenant always 'pays the taxes, that I am glad to hear your statement in contradiction. Mr. Sumner. In flush times, when there are a good many tenants running after landlords for their houses, the tenants pay the taxes ; but in dull times, when there are a great many houses standing empty and there are few tenants, the landlord pays the taxes ? The CHAiRirAN. At the present time, when there is an excess of houses seeking ten- ants, the taxes come out of the landlord ? Mr. Sumner. I should say that the landlord is paying the taxes now in most of the Eastern cities. The Chair:\ian. But in good times the tenant pays the taxes ? Mr. SUJINER. Yes ; iniirosperous cities, where the demand for houses is great. The Ciiair.man. Therefore we could not make any improvement in taxation by the imposition of-it directly on the landlord"? Mr. iSuJiNER. That would not alter the incidence of it at all. The Chairjian. You cannot change the incidence of taxation. Mr. Sumner. I do not think you cau. The Chairman. There is a great d<'al of discontent because, as is alleged, the laborer does not ijet a fair share of the proceeds of industry. It is said that production is the result of capital and labor combined, and that labor is not getting its fair share. Can you suggest any method ditt'crent from the existing method by which govermnent or legislation can appropriate a larger share to the laborer than now accrues to him. Mr. SuMXER. I do not know of any way at all. I do not know what anybody means by a fair share. I do not see what the criterion of it is. I do not get a fair share. "^I have a grievance too; I think that the worst trouble in the United States is that "Niollege professors do not- get large enough salaries. I never have said this before. I have not got up any society to have this matter reformed, but if things are going to be fixed comfortably for everybody, I would like to have my grievance attended to. I say that simply to illustrate that I do not know what a fair distribution is. The fairest distribution that I can get is the biggest that I can get. If I knew how to get any more, I should get it now. If the trustees know any way to reduce my salary, I presume they will reduce it. If I cannot help myself, I will put up with it ; but if I can help myself, I will not i^ut up with it. The Chairman. There is a certain fund at Yale College, I presume, applicable to the payment of professors. Mr. Sumner. No. That case will not serve your purpose. The Chairman. Then I will assume it to be so (that there is such a fund), and I want to know if the reduction of the number of professors will not keep the rest of you. Mr. Sumner. I do not know. If you reduce the number of professors, perhaps the college would not get so many students and would not get so much money, and there would not be so m)ich to divide. You are speakijag under the impression that we have an endowment in Yale College. The Chairman. If there was more to divide among you by the reduction of the number of professors, each professor that was left would get more ? Mr. Sumner. Yes. The Chairman. But the effect of it would be to impair the usefulness of the college t Mr. Sumner. Yes. The Chairman. Take the case of machinery (a corresponding case) ; it has been pro- posed to limit the use of machinery, to stop its operation for a portion of the time, in order that human muscle may be more employed; what is your judgment as to the ef- fect of that, not merely on society at large, but on the laboring classes themselves ? Have you given that thing any consideration ? Mr. Sumner. It would reduce .the comforts and enjoyments of life, that are now open to them, very nmeh indeed. To reduce the operation of machinery one-half would reduce the comforts of life one-half. The Chairman. Who would be the principal sufferers in that case, the poorer or the richer classes ? Which would be diminished most largely in what are now regarded as much necessities as comforts ? Mr. Sumner. I cannot say. There were one or two of your questions before which DEPRESSION \IN LABOR AND BUSINESS. 205 suggested a tiling tliat I did not like, tliat is, that the classes are separate in interest in this matter. I do not think so.j I speak always of the population of the country. The population of the country w<)uld have its comforts and its wealth diminished by the reduction of machinery. The Chairman. I have only nSed the term "classes" because, in the evidence here- tofore given, the term has been used and we have had a large number of witnesses professing to represent particular classes. They say that they do not get a fair share of the products of industry, and they give various reasons for it, among the most promi- nent of which is that there is too much machinery, or that machinery is operated too much, and that it throws labor out of employment. Of course your attention has necessarily been given to that matter, and the committee wants the benefit of any judgment that you have on the subject. Mr. SuMXER. I understood that in using the word "classes" you were quoting others, but at the same time I thought tliat I would like to be understood as denying that you can make this distinction. These social and industrial forces reach all through society. We are all in together and cannot separate ourselves if we wanted to. If we shut down machinery we shut down the production of wealth and there would be less wealth in the community, and all of us would feel it in our comforts and our posses- sions. The Chaikmajst. Objection is made that the wealth of the community is not properly distributed. Is there any way in which legislation can intervene to remedy the dis- tribution ? Mr. Sumner. None whatever. When you use the word "properly distributed," yon mean, of course, fairly distributed. I can only say again that I cannot see any sense to those terms at all. Some people are a great deal richer than other people; that is very true. If the social condition is free and the movement of population perfectly free, and if all individuals are left to seek their own industries, then I do not see any result except that every man gets just what comes to him according to his industry, his efficiency, his skill, his education, and his self-denial. And therefore I do not see any definition of a proper distribution except just that distribution which everybody gets on a perfectly free system. If you had a system of guilds or close corporations of any kind, that were interfering with men and preventing them from going into some line of employment, barring them out in order to make employment for somebody in- side, there, of course, you would be interfering with the natural and fair and proper distribution. But I do not see any definition of a fair distribution except that which every man gets by his own industry and energy and skill. The. Chairman. The grievance complained of is that, in the operations of society, certain persons, who are just as deserving as others, find it impossible to get any em- ployment at all. They say that society owes them a living; that, if they cannot get work at private hands, the public should intervene for the time being and provide some place where their labor could be employed, and where they could get a liveli- hood. They claim that they are just as industrious and meritorious as other citizens; and the proposition is for government to intervene and provide them with employment. What have you got to say to that? Can that be done? Mr. StTMNER. That cannot be done ; no, sir. The moment that government pro- vided work for one, it would have to provide work for all, and there would be no end ' whatever possible. Society does not owe any man a living. In all the cases that I have ever known of young men who claimed that society owed them a living, it has turned out that society paid them — in the State prison. I do not see any other result. So- : ciety does not owe any man a living. The fact that a man is here is no demand uponi other people that they shall keep him alive and sustain him. He has got to fight the battle with nature as every other man has ; and if he fights it with the same energy and enterprise and skill and industry as any other man, I cannot imagine his failing — that is, misfortune apart. The Chairman. You do not recognize that view of the constitution of government, that it is in any way bound to provide for the existence of its members ? Mr. SuMNEB. Not at all ; and the reason why, is that if it did so, it would have a larger and larger accumulation of paupers on its hands all the time, until all the peo- ple were paupers. Take it ia this way : suppose that I am twenty-one years of age, and that I say that the government owes me a living, and that it is bound to furnish me work. If the government is bound to furnish me work, how much work ? I do not really want work myself, but I want things to enjoy. Work is disagreeable; there is too much of it in the world. I have enough work generally every day to occupy me for three days if I could keep agoing ; I cannot catch up with my work at all. I do not want work. What< I want is, instead of work, good things to enjoy— that is, wages. Now, if the government is obliged to furnish me with wages— that is, to furnish me with existence (the working, element is a mere incident), is it bound to furnish my wife with existence ? because I want to get married. If I am twenty-one years of age, of course I would like to get married. Now is the government bound to furnish sup- port to the lady too, or fui-nish me enough to support us both ? Suppose you say yes, 206 DEPRESSION IN LABOE AND BUSINESS. because it is necessary to keep the population going and to keep up the community. Very -well. If the government furnishes work for rae and support for myself and my wife, how many children is it bound to support? For, if I can depend upon the gov- ernment to furnish me and my children with existenpe, I need not stop to deliberate whether I can afford to get married or not; and, of course, I get married immediately. I have no reason to be anxious about the care of my family (and in the natural course of things I should have a very large one). All the other people would go into the married state at an equally early age, and with as little need to be anxious about the future ; and they would be all rearing very large families of children ; and, as each grows up, he would come upon the government with a demand exactly the same as I had in the first instance ; and so you would go on until you would have the whole community paupers, all living upon something — I do not know what. For it is obvious that, at the same time that the number of mouths to bo filled is increasing by a grand system of encouragement, the amount of capital to be consumed by those mouths would be, on the other hand, diminished ; because those who had any capital would be either hiding it away or carrying it off to some other country which did not go on that principle; or else they would enjoy it as they went along, and not save anything to give to other people. That is the rednctio ad aliaurdum of the proposition you quote. The Chaieman. The proi^osition has been several times made to organize the gov- ernment on a communistic or socialistic system, viz, that government should employ all the labor and should give everybody a living. I understand you to say that, in your judgment, the result of such a system as that would be a rapid increase of popu- lation — more rapid than the means of subsistence — until the whole community would be reduced to poverty ? Mr. Sumner. Yes ; there would be an increase of population and a reduction of capi- tal — a loss on both sides. I suppose everybody would see that in saving his capital he was merely saving it to give to other people to consume. Saving would soon stop, and everybody would look out for himself and not provide for others. That is the real stumbhng-block of all schemes to make everybody happy — that, if you make them happy, they will increase the population until the means of subsistence will not sup- port it. The Chaieman. It has been suggested that we might relieve the industry of the country by the imposition of new taxes '; that is, that we might raise all or a consid- erable portion of the revenues of the government by a tax on income. I should like very much to ask whether you have given your attention to that question, and whether you think that it would result in relief to the industry of the country and enable cap- ital to give large employment to labor. Mr. SuMNBR. I am in favor of an income tax as a matter of public finance. If we had an income tax and could do away with tariff taxes, the result, I think, would be very beneficial to the whole community. The non-capitalist classes, those who depend upon their labor and who have no income or profits from capital, are the consumers and pay this consumers' tax, which is laid directly by the tariff. There would be a relief to them in that respect. But I am particularly in favor of an income tax as a measure of public finance. I think that it belongs to any good system of finance, and that it ought to be in every governmental system. The Chairman. In that case the property and not the consuming power of the coun- try pays the taxes ? Mr. Sdmnee. Then the production of the country would pay the taxes. The Chairman. And not the consumjitiou of the country? Mr. Sumner. The production, of course, is all consumed in the same year. ' The Chairman. Then the tax A\ould be on the annual accumulation of capital ? Mr. Sumner. No ; the income tax would be on the annual net income. I am almost afraid to say that I am in favor of an income tax. The Chaiejian. I said so yesterday. Mr. Sumner. I mean, not that I am afraid of my opinion, but that I am afraid of being raisnnderstood, because there has been so much stuff talked about income tax and such absurd propositions suggested for an income tax. I should like to say that I would not tolerate the suggestion of an income tax except on two or three very stringent con ou are goi ng to give up the whole system of competitive private management and turn o\ er the railroads to the government, I am utterly uuable to see how yon can take away with advantage this incentive of private gain. The Chaiisman. If the New York Central Railroad Company had not developed itself rapidly enough to do the business, another line would have been built. Mr. Adams. And you would have had to pay the interest on the capital invested iu that line. The Chairman. But the result would be that the New York Central Railroad would cease to be prolitable. Mr. Adams, ffo ; I think it would still have earned enough to pay the legal dividends on its capital stock. The Chairman. But we wonld have two lines coming in competition with each other and doing the business at the lowest possible rate, whereas the New York Central now secures rates that enable it to pay dividends ou its watered stock. Mr. Adams. You have tbe Erie Railroad running right alongside of it. ^ The Chairman. O, no ; not alongside of it. There is no gieat ditterence ; but the Erie haa many high grades, whereas the Central has but few grades, and those not of any great magnitude. The business people in the city of New York think that they have a right to complain in this matter. They want all the advantages of their posi- tion, and they want the city to grow by those advatages. They say that, owing to the fact that the New York Central Railroad Company has watered its stock and is pay- ing divideud.s ou that watered stuck, they have not had the benefit of the development of business, but that it has been made a source of profit to private capitalists. Mr. Adams. I think that the argument is based upon a fallacy. The Chairman. Suppose that, owing to the great natural advantages of this city, freight can be carried here at half the cost that it is carried to Baltimore, would not that be an adviiutage to the men carrying on business iu New York? Mr. Adams. Undoubtedly. The Chairman. That is the fact alleged, that if it had not been for the necessity of making rates that would produce a dividend of 8 percent, on the whole watered stock of the New York Central, the advantages would have gone to the city of New York ; we would have had freights cheai)er, and New York would be doing more business, and thus the laboring people would all have employment. Mr. Adams. I agree to that if you substitute the word " could " for " would," and if you say it could be so. But I maintain that the thing that makes the New York Cen- tral carry freight at half a mill a tou per mile is the fact that whatever the company gets in the development of its business belongs to its stockholders. If you are going to upset all this, and do business uot for gain but out of public spirit, depend upon it you must go a great way further and make the State the owner of the railroad. The Chairman. Is it not a fact that the railroad companies, having exercised the right of public domain, and hajving had sovereign franchises conferred upon them, are, to a certain extent, trustees for the State as well as for the private owners? Mr.' Adams. That is true in theory. What I mean is this: that the great incentive to the development of the New York Central is the fact that tbe company knows that the development is to be to its own profit. If you say to Mr. Vanderbilt, " It is your duty to benefit the city of New York by developing your railroad," I think you will find that that is one tiling. "But if you say to Mr. Vanderbilt that in benefiting the city of New York he benefits himself and his company, I think you will find that prac- tically.that is another thing. I have no objection whatever (if people wish to try it) to State management of the railroads ; but, if you are to have private management, I do not think it is practicable, unless the gain of the management shall belong to the men who manage. The Chairman. The allegation on the one side is, that when Mr. Vanderbilt came into possession of that property he said to himself, "I can develop this business and make it double." He issued certificates of additional stock to the amount of $22,000,000, and as he could make the road pay dividends ou that twenty-two millions of dollars, he made twenty-two millions of actual wealth for himself. Now, the allegation on the other side is, that Mr. Vanderbilt was holding a franchise from the State of New York, and that, as the holder of such franchise, he was a trustee, and that he was bound, instead of watering the stock, to reduce the rates of transportation and to give the public the benefit of the business, because he was already getting an adequate remuneration for bis capital (because the charter limited the rates of dividend on the various branches of the road to a certain amount), and that, therefore, in evading that provision of the law and watering the stock, he was violating his duty to the State. These are the allegations. Mr. Adams. They are all theoretically true. 214 DEPRESSION IN LABOR AND BUSINESS. The Chairman. Then, if they are all true, has not the coramunity a right to step in and restore it to the condition in which it would have been placed if the duties of the trustee had been properly performed? Mr. ADAM8. They have a right if they can accomplish that result. But the question in uiy mind is purely a practical question. It is this: Will Mr. Vanderbilt or any other man carry more freight at low rates if there is no advantage to come to himself by so doing? The result of all the stock-watering has not been to increase rates. It has, on the contrary, made them lower. My answer, therefore, would be that as a practical result, the develo,iment, through which that money is earned by the New York Central, would not have been made unless there was an incentive for making it. Mr. Vanderbilt would not have built four tracks if he had been confined simply to his profit on the old two. He would say, " The road is a good property now. It earns all that the law allows us the privilege of dividing. We will let well enough alone. We will not develop, we will not increase our business. We will go on doing a comfort- able business.", The Chairman. Has not the State the right, by intelligent supervision, to say to Mr. Vanderbilt, ''The time has come when you ought to lay down more tracks and to do more business. Here is the great city of New York, with a population one-tliird of that of the entire State, at the end of your roiid. It needs this business, and you must do it." If there had been three commissioners, for example, such as you have in Massachusetts, to examine the thing, and to say that it must be done, could Mr. Van- derbilt have resisted public opinion ? Mr. Adams. I think that Mr. Vanderbilt would have said in answer to that that he differed in opinion with the commissioners ; that ho did not think it could be done; that he was a trustee for the stockholders; that he held the property for them; that he thought the development demanded was simply wild ; thatit would bankrupt his company ; that the road was doing extremely well now ; and that his duty as trus- tee would prevent his going into such a wild scheme. The tendency of my mind is piiactical. I think that the commnnity gets its beneficial results from the fact that Mr. Vanderbilt laid down the new tracks, and he laid them down because he thoueht he saw his way to getting money out of them. If you had said to Mr. Vanderbilt, "Lay down your two extra tracks and you will have the consciousness of having deserved well of the republic," I think he would say, " I prefer my dividend which I am now able to earn ; and the development proposed is a dangerous thing." But, if you -say to him, "Lay down your two extra tracks; and instead of getting a dividend of 10 per cent, you will be able to earn a dividend of 20 per cent.," Mr. Vanderbilt would be very apt to say, I think, that he would lay down the two extra tracks. It is very much the same, Mr. Chairman, as in the cabe of your iron works. You will develop them if you think you can make profit by doing so, and not otherwise. The Chairman. There is a difference in this sense. I am not a trustee for the pnb- lic in any way ; but these railway corporations are, to a certain extent, agents of the public, and they are amenable to th" supervision of the public. Now, the question is, how far can that supervision be brought to bear npon them to advantage, so that they will not get excessive profits? Mr. Adams. The whole railroad system of the country is a sort of rough system of equalization. And if you said to Mr. Vanderbilt that his capital represented S22,0y0.000 of stock which never went into the railroad, he would say, "Here are $40,000,000 of capital that did go into railroad building, and that has not paid anything. Now, is the country paying anything more for its railroad system than a fair price ? Undoubt- edly it is not." The Chairman. But the city of New York does not see that. It sees that if it could have the business done at a rate which would allow Mr. Vanderbilt 8 per cent, on the actual capital invested in the railroad, on the actual cost of the property, it coufdhave its business doneat one-half the present rate of transportation, audit would have twice the amount of business, and there would be no empty houses and no unemployed la- borers in the city. Mr. Adams. The answer is that if you depended upon that public spirit to have this development made, it never would have been made. Itwas the incentive to gain that lead to the development. The Chairman. And yon think that the city of New York is better off than if it had undertaken to make it an offense to water the stock ? Mr. Adams. I think that if there had not been any means of conveying the increased earning from that road into the pockets of its pri\ ate owners there never would have been any increased earnings. I decline to be put into the po8iti(m in which your question would put me. I do not think that the property of the New York Central Railroad Company would have been developed as it has been develo|ied except under the incentive of private g£.in, which is the most powerful incentive that can be applied to human beings. The Chairman. To come back to Federal supei vision, I understood you to say that DEPRESSION IN LABOR AND BUSINESS. 215 you tliink the time has arrived when Federal supervision over railroads miglit be very cautiously begun ? Mr. Adams. Yes; I think it would result in great good. The Chairman. And you thiulc that the publicity secured and the right of repre- seutation on the part of aggrieved citizens would in the end correct the abuses? Mr. Adams. I think that through an intelligent discussion of the railroad question, and with the legislation which would bo sure to follow it, the abuses would be cor- rected, so far as they can be corrected. The Chairman. Do you see any danger to the people in the consolidation of these railroad properties under the control of a few pei-sons? Mr. Adams. I do not. The Chairman. You think that the political power which they might exercise would be neutralized by their jealousy of each other? Mr. Adajis. Yes ; I think that with consolidation comes the weight of resporsibility. And in this country particularly the power of directing public feeling against large corporations more than neutralizes any power that can come from consolidation. In saying that I wish to say also thatsuch has been the experience of other countries. It is only seven or eight years since Sir Henry Tyler, in one of his reports in England, ex- pressed the idea that the time is rapidly coming when tbe government would own the railroads or the railrbiids would run the government ; yet the commission of the Mar- quis of Salisbury, to which I before referred, very drily remarked, in reference to that apothegm, that consolidation of railroads had not been found to bring with it the political dangers which had been anticipated. The fact is that 'thi-y have entirely abandoned that idea in England, and there the railroads are allowed to develop in their own way and to consolidate just as fast as they please. With consolidation C(mie8 such an increased responsibility, such an increased power of having public opinion brought to bear, that it is found that they are more amenable to control in the gross than they are in detail. The Chairman. Do you think that the power of the railroad magnates over legis- lation has been diminished or increased in this country within the last few years? Mr. Adams. We are in a very chaotic state in regard to this whole subject. We are in a state of change. I should, howeyer, incline to the opinion that if any change has taken place within the last few years, it has been in the direction of a diminntion of that power. I think you had some experience of it in Congress recently. I think that the Representative's fear of his constituents in regard to railroad corporations has very much reduced that power from what it was in the days when the Credit Mo- bilier was in operation. The Chairman. I may say there that the railroad magnates seemed in the last Con- gress to be entirely powerless both in the Senale and in the House; for whatever they desired they did not get, and a great many things that they did not want were done, and yet they were notoriously active. Mr. Adams. And their operations were reported as having been directed by men who had no scruples about employing any means in their power to influence results. The Chairman. I was on the Pacific Railroad Committee last session, and so was Mr. Rice ; and I was shown a letter in which the writer said that one of the gentlemen interested in a railway which had an application pending before Congress had been beard to say that he could control my position, as I had an interest along the line of his road which he could make worthless. That letter was brought and shown to me. I only mention it to show that the influences that you speak of were at work. Do you think that tliis committee should report that it would be advantageous to the general business of the country that the government should begin by the establish- ing of a commission at least to supervise and to report upon, and to investigate, and to act as a kind of board of arbitration in regard to inter-State railways? Mr. Adams. I am not prepared to do so. As I understand, this is a committee to pass upon the question as to what relief should be given to labor. I am not prepared produce any 1 . _ say. I do not see any reason to believe that it would. ... The Chairman. But, if it relieved business in the end from discriminations that are now injurious to it. it would be a beneficial thing in the long run? Mr. Adams. Yes, in the long run ; that is all that I meant to suggest. The Chairman. Can the general government do anything that will prohibit these railway companies from making special contracts with private individuals, and giving them advantages which are not given to the public at large? ^ , „ .^ Mr Adams. Yes ; it can do something. But in order to do something eftectually, it must' proceed as a result of investigation into those evils and their causes ; the leg- islation must follow, not precede, investigation. The first thing that we have got to do ill this matter of inter-State commerce of railroads is to make a thorough and ample investigation of the trouble, and to find out where the root of it is. The diffi- 216 DEPRESSION IN LABOE AND iBUSIf^ESS. oulty with all our legislation is that of endeavoring to rleal with a disease before hav- ing studied its causes. That suliject is one which ija* not been studied. The Chaikman. You prefer the English system of careful investigation by com- uiissions V Mr. Adams. Yes ; by oommissious. Tlie literature of the Parliamentary committees in England on the subject of railroads is measured by the ton ; and I do not think that they ever did any good to any one until this last commission came, a few years ago, which swept the w hole old system aside, left theories alone and came down to concrele cases imd to the practical investigation of cimcrete ojises. There is where we have got to look. The whole theory of Granger registration (of a committee framing a bill to settle the matter) has got to be abandoned. The Chairman. You want to apply the inductive method to railroads. Mr. Adams. That is it exactly. Mr. Kick. If Congress should undertake to enact a law that freights between inter- mediate and terminal points ou a railroad should not exceed freights between the terminal points, or that one mile of railroad should not charge a greater amount of freight than any other mile, what do you think would be the effect ? Mr. Adams. It would be impracticable. That has been tried in all civilized countrief. Mr. EiCE. Are such provisions as that among those that you say have been aban- doned in England? Mr. Adams. Yes; they have been entirely abandoned. They have been discussed by board after board to the point of weariness. Mr. EiCE. I am asking a question which Mr. Thompson would have asked you if he were here. The people of Western Pennsylvania complain that, between pointson the railroads leading to Philadelphia and New York they have to pay higher freights than have to be paid to Philadelphia and New York from points farther west; and they desire, therefore, that Congress shall enact a law with some such provision as that which I liave suggested. You do not see that that would be practicable. Mr. Adams. I can only giveour own experience in Massachusetts, which you are famil- iar with. That system was treid by the railroad companies in Massacliusetts and has been abandoned by them in the face of public opinion, and owing to a better under- standing of their own interests. One of my first experiences on the board of railway commi.ssiontrs was this: I had a complaint fromthe western portion of the State, antl I went up to the locality with that complaint in my hand, and saw the superintendent of the road. The road ran north and south. Goods coming from Chicago entered the road o)i its northern point, and went through to its southern point. Ten miles from the northern point the superintendent was called upcm to deliver produce from Chicago. Under the system of through billing that produce was to go through to the southern end of the road, passing by the door of the factory where it had to be deliv- ered. The manager of that factory said to the superintendent; "Deliver the goods to me here and save yourself the trouble of dragging them nearly ninety miles farther." The superintendent said : " Y'l-s ; but if I take the car off here, I shall have to charge you $25 more for not hauling it the whole length of the line. Or, I will haul it down to the point to which it is billed, and I will bring it back for you at local rates." I suggested to the superintendent the ahsurdity of such a course. I said: " The result of it will be, that you will drive everybody off the line of your road to the terminal points, and local business cannot live on your line." The man was utterly unable to take in the proposition. He said : " Of course, I am not going to allow every one ou the line of my road the benetit of competing points; I am not a fool." I simply told him that he was a fool if he did not, because ultimately he would have no one on the line of his road except at competing points. I mention that merely to illustrate the state of things that then existed. All that I can say is that now, in Massachusetts, the practice you refer to does not exist; and it has ceased, not from any force o£ law against it (although we have had such a law passed, and endeavored to put it in oiieratiou with very ill success), but because the subject has been thoroughly and pub- licly discussed and the principle abandoned. Mr. KiCE. But, suppose that it had not been abandoned ? Mr. Adams. Then we should have kept on framing laws against it until we suc- ceeded in framing one which met the case. " Mr. Rice. But you say that in nine cases out of ten publicity does the work? Mr. Adams. Yes ; in nine cases out of ten. Mr. Rice. And that publicity can only be obtained by examination? Mr. Adams. By examination by experts. These questions are very complicated, and require long study and careful observation in order to understand them. The diffi- culty is that our legislative committees, as a rule, cannot believe that tTie whole thing cannot be solved in five minutes, and the result is that laws are passed intending to solve the difficulty, which laws cannot hold water. Mr. Kick. Are there not some oases where the rule does not hold good ; that shorter distances shall not pay more than longer distances? Mr. Adams. Certainly. DEPRESSION IN LABOR AND BUSINESS. 217 Mr. Rice. Are there not some oases of freiglit being carried from competitive X>oint8 to uompetitive points at rates at which the road could not afford to carry freight geuerally ? Mr. Adams. Certainly. The question may he asked what does it cost a railroad fcompauy to carry a ton of freight a mile ? You might as well ask a farmer how much it. costs him to raise a potato. He will tell you that ic depends npou how many potatoes ho raises ; that, to raise a bushel of potatoes would be a very expensive affair, but that a thousand bushels can be raised at a comparatively small cost per bushel. Mr. RiCB. Take the heavy freight from San Francisco to New York, which can be brought by water as well as by rail. Must not a railroad carry that freight (rather than lose it) at a less rate per ton than it can afford to carry all freight for ? Mr. Adams. Undoubtedly it must ; but now we are approaching a question which requires a great deal of discussion and much investigation. Mr. Rice. Something has been said before this committee as to the government purchasing the railroads, or possessing them in some way. I understood you to say something about it in the course of your statement. Do you think that it would be piacticable and profitable for the government to buy, or in any way to become possessed of the railroads and to operate them ? Mr. Adams. No, sir ; I do not. Tbe question of State ownership of railroads is one that has been tried, and has been discussed ; and it is a perfectly feasible thing. lu certain countries whi re tliey have what you may call bureaucratic government, and where the political temper ruus in that direction, it is a possible and feasible thing. In Bavaria, for instance, the government owns every mile of railroad, and the rail- ri>ads are well managed. Prussia commenced the thing, but has rather withdrawn from it. Belgium owns the railroads in that country, and they are well managed. But these are countries where the temper and the political genius of the people lead tbem in that direction. In America, however, the tendency of our people is to indi- vidual enterprise and not towards doing things by the government ; and, therefore, I have concluded (lor I, myself, was a good deal bitten at one time with the idea of State ownership) as the best and most matnred result of my mind that such a propo- sition is opposed to what is so vaguely called the political genius of our people. They do not run to doing things tbiough executive machinery, and what they do through that machinery is apt not to be very' well done. The Chaiemajs'. What do you think about the management of the post-ofiSce? Mr. Adams. I never have been a commissioner iu post-of&ce matters, and I would rather not venture an opinion. Tlie Chairman. If the government shonld undertake the operation of railroads, of course there, would be a large increase of government officials ; and I suppose your attention has been directed to the fact that government officials are too often used tor political purposes ; and you would not consider it desirable to have a rapid increase iu their number. Mr. Adams. I will limit myself to the answer which I have already given, that I do not think the proposition is in accordance with the politicall genius of our people. Mr. Rice. A good deal has been said also in regard to the pooling arrangement between railroads. That arrangement is a fact, I suppose. Mr. Adams. Yes, sir ; a common-purse arrangement. They pool through rates. Mr. Rice. Supposing there are several roads between competing points, it is a pop- ular idea that tbe public gain by the competition, and that if the managers of those roads get together and, instead of competing with each other, pool the proceeds of their business, by some agreement between themselves, the public would suffer by such an arrangement. What is the result of your observation on that point? Mr. Adams. That is one of those cases that exactly come under what I said before; namely, that I am not at all clear how it is going to come out. "Pooling," as it is called seems to be a form of growth and part of the process of developujent. It is merely a phase of consolidation. Now, the result of consolidation, as hitherto earned on, has been that the community has been better served, and cheaper serverl, and more conveniently served than it had been served by disconnected lines. I am watch- ino- the operation with a great deal of interest, but I do not feel called upon, at pres- eul, to form any opinion about it. I want to see what that phase of growth is going to develop into. , ^ ,, ,, . ., , i. • Mr Rice. You think that there is ground for the argument, then, that the public is served better and more cheaply by such an arrangement, under propergovernment su- pervision, than it is by fluctuating competition ? , . ^, ^ ,. ,. T4. ■ " Mr Adams. Undoubtedly. Mv mind tends strongly in that direction. It is a mere question between the evils that are incident to competition (such as violent fluctua- tion &c ) and the dangers incident to a too great concentration of power. It would require some one much shrewder than I am to be able to express an absolute opinion one way or the other at this time ; but the tendency of my mind is strongly in the direction I have indicated. I would allow this consolidation to go freely on, subject always to the public supervision and to all the publicity which can be thrown on it. 218 DEPRESSION IN LABOR AND BUSINESS. Mr. Rice. The Tjusiness gain in the transportation of freight on the New York Cen- tral Railroad has been immense, and it has been suggested that that business was there to be done at all events ; that so much wheat was to be moved from the West to New Tork, and that that business would have necessitated the improvements that have been made, and which, you say, were made because Mr. Vanderbilt desired to get additional dividends from them. It is said, on the other hand, however, that the business was there and would have necessitated those improvements at aill events, and that, there- fore, the public is really entitled to the additional Income resulting Irom the business lather than the owners of the road. Did the business develop the road, or.did th'e road develop the business ? Mr. Adams. That I am not prepared to answer. "The business would have found other 6bauiiels, either by the Erie Canal, the Erie Railroad, or otherwise. Mr. Van- j derbilt has -cut under canal rates and has taken away the business from that and other/ channels. I do not doubt that Mr. Vanderbilt's road has been an extremely prolitabJe' property. But he might have said, " On the whole this through business is not worth doing ; I will live on my local business. Tlie Erie Railroad may ruin itself by doing the through business if it likes, but I will not." There have been roads that have acted on that principle ; I have known some of them in Massachusetts. I do not know that Mr. Vanderbilt might not have said, " I am not called upon to ruin myself forthe sake of the city of New York. I have a sure, sound, local business that will always 8upj)ort my road, and enable me to pay all the dividends that the law allows me to pay, and I do not propose to run the risk of ruining myself if I cannot make anything by it." I am glad to have you recur to this question of stock-watering, for it is a difficult question, and I do not want to appear as defending it or as having, anything to say about moral, legal, or other objections to it. 1 merely say that it was tlirough the process known as " stock-watering " that the great incentive of private gain found its way to the development of the New York Central Railroad, and it is scarcely an open question in my mind whether, without that incentive, the development would ever have taken place. I do not think that the question about stock- watering is by any means so clear as it is commonly supposed to be, in the discnssions which take place about it in the newspapers. Mr. Rice. If the capital of the road had been limited to $40,000,000, and if he could get 8 per cent, on the local business of the road, you do not think it likely that Mr. Vanderbilt would have developed the road as he has done ? Mr. Adams. I think it far more likely that he would have said, "I will take my dividend of 8 per cent, and do only what is necessary to earn it. The Erie Railroad may do the through business. It is not worth uiy while doing it when I have all the local business tha>t I want at good paying rates." I am inclined to think that the community would have found that the line of reasoning which the owners of the New York Central would have followed. STATEMENT OF ME. CHARLES FREDERICK ADAMS. Mr. Charles Frederick Adams appeared before the committee. He stated in answer to the chairman that he was a lawyer by profession ; that he had been an enthusiastic student om the subject of the relaiions of capital and Uibor, and of the causes of the present depression in business ; and that one remedy which he proposed to the com- mittee was the establishment of a general system of Tontine associations. He stated to the committee his views on that subject in detail ; and subsequently promised to reduce them to writing and furnish them to the committee. STATEMENT OF MR. CHARLES F. WINGATE. Mr. Charles F. Wiogate appeared before the committee. He stated that he is en- gaged in the editorial business in New York ; that for the last twelve years he has been connected with the {)res8 ; and that, during that time, he has given special attention to the subject of the condition of the workingmen, and was now specially engaged in the matters relating to the condition of workingmen's homes. He was perfectly satis- lied, from inquiry which he had made into the subject, that the statements as to the amount of destitution in this city and elsewhere were grossly exaggerated and were simply fabulous. He said that about May and December every year the newspapers sent reporters to the different charitable institutions, and that the result always was tremendous statements as to the awful amount of destitution. He had frequently seen the statement that this winter there were 100,000 people out of employment ; hut he thought it safe to say that there never had been more than 25,000 persons relieved in New York in any one year. The exaggeration arose from the fact that tihe same in- dividual receiving assistance from various associations was counted by each of them, so that the number of really destitute was multiplied over and over again. Mr. Rice. Do yon mean to say that you do not think that there are 25,000; individuals an the city of New York who are at present in need of relief ? ! DEPRESSION IN LABOR AND BUSINESS. 219 Mr. WlxCrATE. I mean to say that at certain periods (in the worst season) there may he asniiiiiy as 50,000 people receiving help in this city, but the amountof help received by each is very small. It does not amount to two weeks each. The Chairman. That is not my own personal experience. I am literally beset every day by persons out of employment. Mt. WiNGATE. How do you know that they are not impostors ? The Chairman. I know some of them not to be impostors. Some of them are very deserving cases indeed. I thought that you had got some figures to furnish the com- mittee by which you could give us some definite iuformatiou on this point. Conject- ures do not amount to anything. Mr. WiNGATE. The shortness of the time at my disposal prevented my preparing a tabulated stateuient, which I will prepare and submit in writing. There is another fact which I desire to mention, namely, that a number of persons who are applicants for relief are frauds. A prominent gentleman has said that he has been overrun with applications for relief, and that, having taken the precaution to have the cases iuves- ^ligated, he found that seven out of ten of them were frauds. TThe Chairman. That concurs somewhat with my own experience. I acted in the bureau of charity for a long time where visitors were employed, and, while they did not find the proportion of frauds that you state, they did find a very large number of them. Mr. WiNGATE. As to the question of the cause of the prepent destitution, I have some specific information. I think that sickness is the main cause of destitution. The English authorities are agreed that 70 per cent, of the panperism there is due to sick- ness. I am satisfied that the sickness in this city is very largely due to the unsanitary condition of the dwellings of the poor ; and one of the pracstical remedies that I would suggest is an enforced better arrangement of the dwellings of the p I yoii make it absolutely so abundant that everybody can have it and enjoy it, then there can be no improper dis- trlliution of it. In other words, is not the tendency to a proper distribution exactly proporfionnte to the cheapness with which commodities are produced? Mr. Thurbkr. I do not think it is. The Chaihman. Can Mr. Astor, for example, consume by any possibility more than a certani amount of these commodities ? When he has clothed hiiuself, housed himself, and fed himself in the most expensive manner possible, can he make any personal inroad, to any extent, on this great mass of wealth produced by machinery ? Would there not be still outside of him. an unlimited mass for the public? How would Mr. Astor con- trol that surplus, and' what would he do with it ? Would he lock it up ? Mr. THUiiBBR. He might distiibute it more or less fairly, and might lock up a large part of it. He might distribute it in a manner satisfactory and so as to confer a benefift on the community. The Chairman. Would it not be an intolerable nuisance to Mr. Astor to make a great warehouse of himself, and does he, in fact, do any such thing? The moment he gets something, does he not try to get somebody to take it off his hands, and to pay him for it either in rent or in purchase-money? Must he not strive to get rid of these very things that are the products of lalior and machinery? Mr. Thurbkr. I do not think that the tendency of human nature is to distribute. The general tendency is to acquire and to lock up. The Chairman. Mr. Astor is the owner of some hundred houses in New York City. Suppose he locked up the front doors of those houses and did not let anybody in, as a matter of course, they would be of no good to him. The distribution that he makes of them is to get tenants for them. So with every other kind of produce. What a man cannot consume himself he immediately tries to distribute, and the coramnnity gets its share of it. Mr. Thurbkr. I think that it- is the same with real estate as with merchandise, and that it is the desire of everybody to dispose of it with profit. The Chairman. Suppose that the houses accumulate in New York to such an ex- tent, owing to the perfection of machinery, that Mr. Astor could not find tenants for liis houses, would not the result be that everybody would be able to have a houso with- out paying rent for it ? Mr. Thurbeb. In the event of such a supposition being realized, that would be the result. The Chairman. Then the more you appro.nch to that state of things by the increase of the wealth of society, the lower will be the rate at which produce will reach the hands of the consumer and the more perfect will be the distribution. If things become^ valueless and you can have no revenue from them, as a matter of course everybody can take possession of them. Therefore the increase of wealth to which you have objected (by saying that machinery may do'so much that there will be too much of everything, and that there will be no labor employed) is the very best thing to insure distribution through all the classes of the community, because it reduces the valne of the commodity, and, therefore, reduces the inducement to take care of it. Mr. Thurber. I do ui.t think that that follows necessarily. The Chairman. Is not that the tendency of the increase of wealth? You say that the condition of the workingmen at the present day is much better than it was fifty years ago. How has that happened? Has it not come out of this increase of wealth ? Mr. Thurber. It has; but you misapprehend me. I do not think that there is so much danger in the increase of wealth as there is in the way of its being evenly dis- tributed. The Chairman. But, as it becomes of less value (for the more of it there is, the cheaper it is), as it becomes more abundant and, therefore, cheaper, is not the tendency to a better and more equitable distribution than it was before, when it was dearer and less abundant? Is not that the inevitable result of cheapening commodities? Mr. Thurbkr. That may be true as an abstract principle, but it does not follow that it will meet the qnestion which I raise as to whether the working classes have shared iu the general abundance that has been conferred by the great powers of steam, elec- tricity, and labor-saving machinery, in an equitable degree. The Chairman. If you find that their condition is getting steadily better during one, two, three, or four hundred years ; and if, in every age, you find the average •con- dition of the workingman belter than it was in the previous age, is he not getting some share of those advantages ? Mr. Thurber. He is, undoubtedly ; and it depends upon the relative share which he is getting whether it is sufficient or not. The Chairman. The share which he gets proceeds either from natural or artificial causes. Of course yon do not want to interfere with the natural causes. Now, cap yon point out to the committee any artificial causes that prevent the laborer from get- ting his fair share of the results ? 22 1 DEPRESSION IN LABOE AND BUSINESS. Mr. TiiURBER. Yes; I tbink one cause is this: You have spoken of Mr. Astor as a man repreeeuting large wealth in one department of life. You might speak of Mr. Vanderbilt as a man representing large wealth in another department of life. Mr. Astor has acquired wealth in one way, and Mr. Vanderbilt in another. I think that you might take the Vanderbilt estate to-day as a type of agreat many estates through- out the United States that represent the general facts in a lesser degree. When Mr. Vanderbilt gave up his steamship business and began the railroading buKiness he was a comparatively poor man, his estate being estimated, as I have heard, at from five to ten millions. The Chairman. Is that the standard, in the groi ery trade, of poverty and wealth ? Mr. Thukber. We are talking about all these things comparatively. In fifteen years after that, at the time of his death, his estate was estimated at from eighty to a hundred millions. Now, I contend that that is more than a natural or legitimate in- crease. I contend that it was accumulated by an abuse of the transportation system a.s it now exists. It was accumulated by taking from the pocket of every man in the comiimnity a certain amount of tax in the shape of increased freight, beyond the sum which would have yielded a fair return on the capital of his railroad. The Chairman. Next to your place of bnsiness is a corner grocery, and the man who is there may have been cariying on business for twenty or twenty-five years. At the end of that time he finds that he has accumulated nothing. He sees you move into his neighborhood, build a great establishment, and carry on business, selling the same products that he sells ; and he finds that, in the course of a few years, Mr. Thurber has amassed a million of dollars. He says : " Now, look here ; Mr. Thurber has put a tax on food products, the very basis on which society rests, on the things we eat; while I have been here carrying on business and got nothing. Mr. Thurber has taken out of this community a million of dollars, which is a great deal more than he had a right to do." Mr. Thurber. Ithink that, on thatsupposition, the chairman makes a mistake, which is a very common one. In the first place there is a substantial difference between pri- vate enterprise and corporate enterprise. Corporations are granted certain privileges which private individuals have not, among them the right of eminent domain, the right to compel everybody to dispose of the property which the corporation wants at a cer- tain valuation, even against his will. You give to a corporation certain privileges and impose certain duties. Again, the law of supply and demand works more legitimately in small business than in sucha large business asproviding facilities for transportation. A railroad is by nature a monopoly, to a certain extent. You cannot rely to the same extent upon the law ot supply and demand to regulate the charges of transportation, and opposition to it is not so readily provided. It requires the gathering together of a large capital ; and when you gather it and build an opposition line of railroad, the territory through which it runs will not perhaps be able to support two railroads. So that the same rule of supply and demand does not apply in the same degree in the one case as it does in the other. In the one ca^e you can legitimately say that if one indi- vidual had tried as hard as the other individual, he might have accomplished the same result. I do not think that you can say that as applying to a railroad, or to any great organization of that character. I think that the general tendency of the times is toward large organizations. You may take it in the grocery business or any other line of busi- ness. The economies accomplished by great organizations have a bearing to a certain extent. The Chairman. In every business the cheaper you can do it, the better for the community ? Mr. Thurber. Yes. But that principle cannot be held to rule in the same degree with private enterprise and with great transportation corporations. The Chairman. Take the case of the New York Central Railroad Company. Is not that company to-day, and has it not been for the last two years, taking and delivering freights at a rate very much less than it was doing before Mr. Vanderbilt took hold of the line? Mr. Thurber. Yes, undoubtedly. The Chairman Thereby cheapening the cost to the community. Have the people of the city ot New York lost by this cheapening of the cost of transportation ? Mr. Thurber. Ithink that when yon compare the relative cost of transportation with other things, and when the case is' brought to bear upon it, you will find that it has not been cheapened to the same degree as other things have been cheapened ; and you will find that the possibilities of transporting goods cheaply have been so much greater that it afforded an infinitely greater scope for the reduction of charges in that direction than has been ofl'ered for the reduction of prices in food products, or in many other products. The question of how cheaply goods can be transported has been re- ceiving new light constantly from the time of the first invention of railroads down to the present day. This applying of steam to transportation gave such a tremendous margin of profit in the firtt place, that you can constantly keep reducing the margin DEPRESSION m LABOR AND BUSINESS. 225 in a very large ratio and still leave more profit for the persons who control transporta- tion facilities than you can in any other branch of business. The Chairman. The original grant to the New York Central Railroad Company was made under a certain state of society which did not then possess the present great improvements in machinery. Mr. Vanderbilt was not the constructor of that road. He simply came in and boiight it, just as you and I might have bought a piece of real estate. These improvements in machinery came along, and Mr. Vanderbilt took ad- vantageof them. Theresultwas avery large profittohim; because it isnotorious that the road has been more profitable in his hands than it was in the hands of the original owners. He has used that profit and has cheapened the cost of transportation to the community. I can transport goods now on Mr. Vanderbilt's road for less than one- half of what I bad to pay five years ago, and at less than one-fourth of the rate which I had to pay fifteen years ago. Mr. Vanderbilt has made money by these improve- ments jast as anybody might have made money, by buying a piece of land near to which some public improvement has been unexpectedly made. In that case the man bought his piece of property under one set of circumstances, and he sells it under an- other set of circumstances, and thus makes a large profit. Mr. Vanderbilt in that sense has done no more than any private individual would do. While he does hold a fiduciary capacity to the community and is exercisiug a public franchise, the question is, whether he is using that franchise contrary to the organic law or contrary to the interests of the comnuinity. If he is using it contrary to the law, then it is the fault of every citizen who tolerates it. If he is using it contrary to the interests of the com- munity, then it is necessary to show that the profits produced by the progress of things have not been fairly divided with the community and that he has not been perform- ing the labor as cheaply as he ought to be performing it. As a matter of fact there has been competition, a steady competition, between railroads. Tbat competition has been so great as practically to have made all the other lines unprofitable except Mr. Vanderbilt's, his profit being in the peculiar local position of his railroad, which he had the sense to see, just as you had the sense to see the value of your location when you put up your great establishment. Is Mr. Vanderbilt to be blamed or punished for that foresight ? Mr. Thdbber. Did you allude more especially to the through rates or to the local rates of railroad transportation ? The Chaikmax. I alluded to all classes of rates. His local rates were largely re- duced by reason of other roads being established which competed with him; for instance, that unhappy Midland railroad, which has been unable to more than live itself, unable to earn a dollar for anybody. That road still is a check upon Mr. Van- derbilt. And so with his through rates. His through rates have been kept down by the opposition of the Pennsylvania line, the Baltimore and Ohio line, and the Erie line. Mr. Thurber. These remarks apply more fairly to the through rates than to the local rates. Local rates have not been so largely reduced as one-half or one-fourth. The Chairman. I think they have; bat the point is this: You think this corpora- tion has got rights which it is abusing? Mr. Thurber. Yes ; I think it is the abuse, and not the exercise, of rights which the community has to complain of. You speak of Mr. Vanderbilt having acquired this property below its value. One of the excuses given for the watering of the stock has been that the property was worth more than it was capitalized for. The Chairman. Suppose you should buy a cargo of tea to-day, and that, suddenly, owing to some unexpected event in China, it went up 100 per cent., you would water it — so to speak — that is, you would double the price of it in your shop ? Mr. Thurbkr. Are you not asking that question on the same principle as that in which you compared an ordinary transaction in merchandise with a railroad transac- tion ? Now I claim that a railroad is entitled to a liberal return on the capital in- vested. I think that the maximum rate established in Massachusetts, and theoretically, I believe, in New York, of 10 per cent, is a fair one. I did not think it fair for Mr. Vanderbilt, in 1867 or 1868, to add to the capital stock of his road $47,000,000 to be dis- tributed among the stockholders ; and the dividends on which additional stock paid within the last ten years amount, with compound interest, to $52,000,000. The Chairman. The amount stated yesterday as the amount of the watered stock was twenty-two millions. , j. • j? j.t, j. j Mr. Thurber. I think I can send you the history of the stock-watering ot that road, which shows that in two years, 1867 and 1868, about forty-seven millions of watered stock was put into the New York Central and Hudson River Railroad. The Chairman. If you saw fit to mark up your goods would it be anybody's concern but your own ? ,„,,.,,,.. Mr. Thurber. In the first place, the reason that Mr. Vanderbilt gave for increasing the capital stock of his road was that the value of the road was increased ; that its mileage had been increased ; that its depots and rolling-stock had been increased. How had they been increased ? They had been increased by the use of the surplus 226 DEPRESSION IN LABOR AND BUSINESS. earnings. And I claim that when a road is improved and made safe and convenient for the public by the use of its surplus earnings (earnings taken from the people), the rates should be reduced to a point which would only yield a reasonable return on the capital actually invested, instead of the capital being increased to a point to absorb all the profits. The Chairman. Yesterday I was taking the other side of the question with Mr. Adams ; I mean I was taking the side that you are now taking. To-day I am taking Mr. Adams's side. Mr. Adams's aide was that Mr. Vanderbilt would have had no andace- ment to enlarge the facilities of his railroad for business under that state of things ; that he would not have laid down four tracks ; that there was plenty of local business to pay the 8 per cent, to which his profits were limited ; that the community had gained more by this enlargement and development of the road in the reduction of the rates of transportation than it would have gained if the stock had not been watered; that the community had the benefit of it ; that the State of New York had the benefit of it in one sense ; and that we all had gained by it. Whereas, if your view were taken, that Mr. Vanderbilt had to limit himself to the dividend allowed by law, he wonld not have done anything to develop the road, but would have sat down and said, " This is my property ; I am satisfied with it as it is." Mr. Thubber. I think that if Mr. Adams should say that the transportation facili- ties were unsatisfactory, and that it was very desirable for the city of New York and for the State of New York that they should be increased, there might be a certain amount of truth in what he says. But the general opinion among railroad men is that the addition of this watered stock to the capital of the New York Central Rail- road Company has not conferred any additional benefits on the community; that the doubling of the tracks has been entirely in excess of the wants of traffic ; that the new tracks have not been employed to any great extent ; and that, instead of Its being a beneficial move of Mr. Vanderbilt's in the way of increasing cheap facilities to the public, it arose from his desire to increase his capital stock so that he could pocket this fifty-six million dollars which the dividends on the watered stock have amounted to, with compound interest, in the short time of ten years. The Chaieman. Grant that that was his motive. The question is: Has the com- munity suffered by it ? Has not the community gotten more facilities than it had before, and at lower rates than before ? Mr. Thubbee. Suppose that Mr. Vanderbilt, instead of watering his stock, had reduced transportation rates to a point that would pay him 10 per cent, on his then existing capital, would not that have been a benefit to the community to a much greater extent ? The Chairman. No doubt, and the benefits to the community would be enormous if Mr. Vanderbilt was content to take 2^ per cent, instead of 10 per cent. Bnt Mr. Vanderbilt was the owner of this property, and he said : " I propose to put that prop- erty in my pocket. All that the public has a right to ask is that I do its business and do it as cheap as anybody else will." Mr. Thurber. That may be true. But in the first place I claim that railroad man- agers do exercise, to a certain extent, a public trust ; that they have no right to fix rates at points which will yield them a large surplus revenue, which surplus they invest in improvements of their road, and then issue stock to represent those improve- ments. It is just the same as if I had the power to take from the public a certain amount of capital and then afterwards to charge the public with interest on that capital. I claim that it is only a question of degree. A merchant may be as selfish as a railroad manager, and under the same circumstances might act in the same way ; but I claim that the public is entitled to certain protection from the workings of human nature, which, in the one case, can be made to operate to their detriment, and in the other case cannot be made to work to their detriment, owing to the fact that the law of supply and demand prevents their doing so. The Chairman. We are sitting here representing the nation. Assuming that the advantages of Mr. Vanderbilt's road are so great that he can carry goods cheaper than any other railroad in the country between the West and New York, and suppose that you require him to do that sort of thing, and that it is done, must not the inevitable effect of it be to ruin the value of all the other property that is engaged in transport- ation between the East and the West ? If he can do the work cheaper than they can, and is compelled to do it cheaper, and to give the public the benefit of it instead of putting it in the pockets of the stockholders, would not the other roads be deprived of their business and ruined ? Mr. Thdebbr. Not necessarily. The State of New York, of course, yields a very large locai profit to Mr. Vanderbilt. He makes most of his profits from local traffic, The rates for local traffic are entirely out of proportion to those for throngh traffic That is generally admitted by railroad men. Now I claim that there should be a fair proportion existing between them ; and I do not think that a fair proportion exists at the present time. I think that the people of the State of New York ought to have the benefit of those local rates to a just degree, from the fact that they furnish an euora DEPRESSION IN LABOR AND BUSINESS. 227 nions traffic to this railroad, -wLich no other road in any other part of the United States has. I think that a road in a sparsely settled country would be entitled to charge rates of transportation that -would yield it 10 per cent., but I think that the people of the State of New York should have the benefit of their furnishing a large traffic to the New York Central, and not have the benefit of it to go into the pockets of Mr. Vauderbilt and his stockholders. The Chairman. When I nudertook the Investigation of this question, I was met in this way: " You ask us why we do not put down local rates to through rates? Our answer is that we would lose money by it ; that it would simply ruin us." (And the evidence is conclusive that they cannot do local and through business at the same rates.) I said, "Well, why not give up the through business and devote yourself to the local business and do that as cheaply as you can ?" The answer was, "If we throw up the through business we cannot do the local business at as low rates as wo now do it, because the low rates are in a measure due to the volume of trade, and wo now get such a volume as enables us to keep onr four tracks engaged at a profit, and enables us to do the local business at lower rates than if we had not the through busi- ness." And investigation led me to the conclusion that that was correct. Mr. Thurber. I think that there is great truth in that argument, but I think that ■whenever strong points can be made in favor of the railroads, they have the ablest men in the United States to make those strong points and to bring them out, whereas the public are at a disadvantage, there being but few people who have the time or the opportunity or the interest to take up the question in the popular interest. The Chairman. I took it up five or six years ago as a member of the chamber of commerce, and I confess that I never found an answer to this suggestion of the rail- road company, and I do not find an answer to it now. In other words, if the through business were taken from the Central and Erie roads, they would have to charge higher rates for the local business in order to keep their roads running; and, seeing that state of things, I cannot see that we are justified In demanding that the local rates and the other rates shall be uniform. And when we abandon the principle of uniform rates, we must leave it to the judgment of somebody as to what the rates shall be, and it has been left to the managers of the railroads and to the restraining influence of general competition. Mr. Thurber. The fault I find is this : that there has been no investigation of the facts. The cost of transportation is a thing unknown to the public ; it is unkuown perhaps to a great many railroad managers. Mr. Adams frankly states that it is an unknown quantity. Now I venture to assert here that Mr. Adams knows more to-day about the cost of transportation in the State of Massachusetts than he did before the Massachusetts railroad commission was established. What I claim is that this is a subject for investigation ; that there is somewhere a golden mean — a basis that will come near to being substantially just to both the public and the railroads. I have no inclination to treat a railroad company any differently than I would be treated my- self, provided our duties were the same ; but I think that they are slightly different. I claim that we need light on this subject. We have been trying to get it for four years and have not been able to get it. Every attempt to get it has been smothered in the legislature. The merchants of New York, through their various associations, asked last winter an investigation of certain matters by the legislature. The ques- tion was taken up by the chamber of commerce and by other commercial organiza- tions and by the municipal authorities and the mayor; but the legislature refused (through railroad intluence) to give us the common right of investigation of grievances. And I say: If there is nothing wrong, why does railroadinfluence stifle investigation? If they are all right, why do they not give us investigation ? It;is to their advantage to let the light shine. If there is not something wrong, they ought not to shut out the light. I claim that the interest of the people is so great in this question that there ought to be a supervision of it in the interest of the public. The banking interest has had a certain supervision placed over it (not a close enough one), and here is an inter- est which, in its magnitude, overshadows the whole of them, and which has absolutely no supervision. The tendency seems in that direction ; but the railroads fight it oft'. In the Railroad Gazette of last February was published a circular commuuicatiou headed " Anti-supervision." It was sent to Mr. W. P. Shinn, one of the best railroad experts in this country, and he took up the question and sent a communication to the Railroad Gazette, giving his views as to why it was in the interest of the railroads and of the public that the light should be admitted. But, in every instance where it has been asked, it has been evaded by the railroad companies. I claim that we ought to have a competent national board of railroad commissioners with an auxiliary board iu each State. I claim that there is no phase of taxation to-day so important, and bear- ing so hardly upon the industries of the people, as that of the railroads. Look at the exhibit of what the railroads in the State of New of York receive annually ; and take it, if you choose, that they are only charging one-fourth more than they ought to charge, still that is double what the entire expenses of the State government are. In the investigation of this question of transportation, the further we have got into it 228 DEPRESSION IN LABOE AND BUSINESS. the more and more convinced we are of the great necessity of letting the light shine npou it. The great revenue of the railroad managers comes from ontside auxiliary or- ganizations, organized (as the chamber of commerce expressed it) and designed to deplete the revenues of the railroad companies before they reach their stockholders. I have no enmity to Mr. Vanderbilt, but it has been asserted over and over again that the Albany bridges are not a component part of the New York Central road; that every ton of freight that passes over those bridges pays fifty cents to the bridge com- pany and every passenger ten cents ; and that the revenue from those two bridges amounts annually to more than their entire cost. A resolution was introduced in the legislature last session asking a statement of its receipts from the bridge company for a past term of years ; and that resolution was smothered. It is now resting in the handsof the attorney-general. A member of the legislature from the city of New York had the greatest difficulty in getting it to a vote. Take another instance. Take the [Merchants' Despatch fast freight line, the only non-co-operative fast freight line existing at the present time. I mean by non-co-operative what is not made up of cars owned by the different roads, according to their mileage. These cars are not owned by the New York Central Railroad Company, or, if they are owned by it, they are rented to the little ring that runs them. That I suppose to be one of tlie institutions that bring down the revenues of the New York Central so that it only pays 8 per cent, to the stockholders. So, again, take the Wagner Drawing-Eoom Car Company, the stock-yard companies, the lighterage companies, and the elevator com- panies, and all of them have this bearing. There are a dozen of branch lines (like this Spuyten Duyvil road) that have been put in at three times their cost and leased to the New York Central organization at a permanent rate of 8 per cent, on a perpetual lease. I claim that all these are abuses, and that they go to make up a case to show that the public have a legitimate cause for complaint. I say that these things should be investigated, that light should be thrown upon them ; and if the railroad company has nothing to conceal, public opinion will see that it shall not be unfairly treated. I do not believe in any granger movements against railroads. I think that some of the granger movements in the West have been unwise and unfair. At the same time there was a substantial basis of complaint for these men, and public opinion has, to a great extent, remedied much of the evil. The Chairman. Then you have come to the same conclusion that Mr. Adams came to yesterday : that it would be very wise to have a national supervision of the rail- roads ? Mr. TnuRBER. Yes. Mr. Adams believes that there should he a consolidation of railroad interests in order to regulate and make more uniform the transportation of the country, and he believes that that is one solution of it. Uniformity and stability of charges of transportation are very desirable things, hut, in my opinion, they can he obtained at too high a cost ; and I think that too high a cost would be the legaliz- ing of the present inflated basis of our transportation system. I think that if you were to legalize combinations between the railroad companies on their present basis, it would require the establishment of rates of transportation at higher points than they ought to be, and higher than what is fair and right. I am in favor of waiting a while before we do that, so as to let railroad business down to the same hard-pan basis on which all other kinds of business are at present. I believe that we should estab- lish a uniform basis which should be binding on the community; but I think that rates ought not to be established upon a basis that will yield 8 per cent, on the pres- ent capitalization of the New York Central Railroad Company, taken in connection with all of the other organiz.ations which I have mentioned, and which are designed to deplete its revenues. I think it would be a public misfortune to do that. I have no doubt that the general tendency of our transportation system is toward consolidation. We can see it typified in the recent developments of Mr. Vanderbilt's road in acquiring Western connections and constantly extending them. I think it very probable that the future will see this country as it were portioned out between a few great organi- zations that will be almost supreme within their respective territories, the same as now exists in France and to a considerable extent in England. I should not like to see the apportionment made too quickly. I think the transportation should get down to the hard-pan basis before we can fix rates that would be just to the public. The Chairman. Do you think that those railroads can resist an enlightened public opinion ? Do you not think that the chief corrective will be to get knowledge of the facts 1 Mr. Thukbbr. I do. I think there will he very little legislation required. Throw the matter open so that public opinion can have a free scope, and there will be little need of legislation. The Chairman. In England that has been the tinal conclusion. There they have ceased to legislate about railroads ; but they require the utmost publicity. Mr. Thurber. I am aware of it. Mr. Adams forgot to mention that the English board of railroad commissioners have very wide and full powers ; and they are exer- cising them in the interest of the public. Every time that a complaint is brought before them they investigate it. DEPRESSION IN LABOR AND BUSINESS. 229 The Chairman. But they have no power to i-egulate rates ? Mr. Thurber. Yes, they have, in many instances. The Chairman. Where differential rates are made can they require the company to give the same rates to one man as to any other man, or can they lix the rates at which business is to be done ? Mr. Thukbek. The law gave them that power, but I do not think that they have ever attempted to exercise it. Mr. Rice. If one road should say, "We will do this business at such a rate,'' and another road should eay, "We will do it at such a rate" (higher or lower), the rail- road commissioners in England cau say which rate shall be adopted by both com- panies. That is your idea, is it not ? Mr. Thurber. Yes ; there ought to be no differential rates or discriminatious. The Chairman. They are forbidden by the law iu England, and you think they ought to be forbidden here ? Mr. Thurber. I think so. Mr. Rice. The power given to the English railroad commissioners is greater, per- haps, than would be tolerated iu this country, because there the government assumes that it owns the railroads ; that it has absolute power over them, not even restricted by the constitutional limits as to the right of confiscation. That right is almost over- ridden in England in regard to the railroads; and the commissioners there have extreme powers ; powers more extreme, I think, than would be tolerated, or would be necessary, or would be advisable in this country. Mr. Thurber. They have been working gradually up to it there — a process of evo- lution to a point which we may arrive at. Mr. Rice. The railroad board there is really a judicial tribunal ; it is a court ; it hears cases; it has volumes of reportsof decisions, just as we have reports of the decisions of courts in this country ; and the powers exercised by that board are very extreme. They really extend practically to the fixing of rates, although I do not think that they do it in form. Mr. Thukber. I have trespassed too long on the time of the committee, and unless you have some additional questions to put, I will retire. The Chairman. I had other questions, which were, after all, only speculative, in regard to some positions laid down by you. But similar poiuts have been made in the testi- mony of other witnesses. I do not know whether I undei-stood you as saying that yoii would have a limit put to the accumulation of property in individual hands, especially in the hands of corporations. Mr. Thurbbr. I would not like to express myself squarely on that proposition. I think that the tendency of the times is in that direction, and that, if that tendency continues for the next quarter of a century as it has for the last quarter, unless the statesmen of to-day can gradually ameliorate the condition of things, we may reach that point. The Chairman. Suppose that Mr. Aster's property should increase in time so that he became owner of the entire city of New York, do you think that his position would be an enviable one ? Mr. Thurber. I do not think it would. The Chairman. Then I think the evil will correct itself. When wealth comes to a point where it is troublesome to the owner, he will take some means of distribut- ing it. Mr. Thurber. I think that there are two extremes— the extreme of riches and pos- sessions and the opposite extreme of poverty ; and I have no doubt that the wisdom of the committee will reach some conclusion on that point. The Chairman. But when you lay down the proposition that there is to be a limit to the accession of wealth, it raises up this whole question of communism at once. If it be true as to one amount, it is true as to any amount. Mr. Thurber. I saw in a newspaper article the other day a calculation as to what Mr. Vanderbilt's estate would amount to in twenty-iive years at the present estimated rate of increase (which I think is about five millions from the regular interest on the capital and about five millions more from the subordinate corporations which Mr. Vanderbilt controls), and that calculation made it foot up to nine hundred and twenty four millions in twenty-five years. Now, suppose this thing goes on indelinitely, per- haps the people will say, " Here, we will tax certain things in a certain way so as to prohibit this enormous increase of wealth." It may be reached in that way. I do not say that legislation should say that a man shall not have over a certain amount of property, but I think the people will be very apt to find some legislation that will keep down such accumulations. j.t i t. ii. j. j t. tt The Chairman. Suppose we pass alaw to-morrow enacting that Rutherford a. Hayes is hereby declared to be the owner of all the property in the United States. There he is invested with the whole thousands and thousands of millions of dollars of the country. How would the relations of auybody to Mr. Hayes or of Mr. Hayes to any- body else be altered by that fact ? Would we not be living just as we are living in 230 DEPEESSION IN LABOR AND BUSINESS, our houses, and would Mr. Hayes get anything more than his residence at the White House aud his bread and butter? Mr. Thurbrr. I think that that is very true. The Chair JIAN. That answers such a proposition as you lay down as to any rich man. Mr. TiiUEBBR. I am not clear on that point. The Chairman. I am carrying out your idea to the ultimate limit ; and that decides the thing. Aud, after all, I doubt whether Mr. Vanderbilt has such a very good time with all this great wealth of his. He is absolutely overrun with business. He can scarcely get a minute to call his own. He lives the life of a slave. He administers the business of a great property which employs thousands of people who are tolerably well off. Aud Mr. Vanderbilt has what ? A good house, a fast pair of horses to drive when he has the time to devote to driving. I doubt whether he enjoys his dinner half as much as anybody in this room does, although I have no doubt that he has a great deal liner dinner than anybody here can have. Yet there is the fact, that he is the servant of everybody who uses the New York Central Railroad. Mr. Thurber. That is very true, and I fancy that you and myself and others, who have got beyond the point of any fear as to our eating and drinking, are very fond of stating that that is all that we have got in the world, but at the same time we are not willing to give up the surplus. The Chairman. Society has to have these different places, and somebody has to fill them, and until somebody can point out a better mode to secure the general welfare than the present mode, we cannot proceed to legislate. If anybody can point out specific acts of legislation that bear harshly on one class, and that give special priv- ileges to other classes, these are the things which we want to sweep from the statute- book. No man who has his head up wants to go down, nor do the people who are down want him to go down ; but they want to get up themselves ; and we all see that for hundreds of years past society has gone on improving and becoming better and better. Mr. Thurber. I believe that that is quite correct, aud I believe that men who would pull down before they see what they are going to put in the place of what is pulled down, are not the men who will command the support of the intelligent work- ingmen of this country. I think that some of the doctrines enunciated by the extreme radicals are such that they will not commend themselves to the good judgment of the average working men. I know many workingnien who perhaps work as hard and as long as anybody, and I have talked with them, and I must say that they take these things for pretty nearly what they are worth. You will not find that the laboring classes are going to be led off on a wild-goose chase to break up the present condition of society before they have another one to put in its place. Mr. White spoke yesterday of the great evils of speculation in business. I agri^e with him, so far as the evils of speculation are concerned, and I think that it is something which mi^ht be well con- sidered by this committee, for the reason that it has a very material bearing on the kibor troubles aud on the commercial troubles. In fact the labor troubles are the result of commercial troubles. The speculation referred to is the selling of more than is pro- duced; the selling of what is never expected to be delivered. Within the last few years the country has undergone great changes, and in no respect perhaps greater than in the selling of goods without ever expecting to deliver them. That speculation has gone from stocks into all articles of merchandise. Take the item of cotton alone, aud there is ten times as much cotton sold as is produced. The Chairman. Would you prohibit a man from selling what he does not own? Mr. Thurber. I would prohibit the selling of what is not to be delivered. The Chairman. How can anybody determine that question? , Suppose I sell you 100 bales of cotton, how can anybody tell whether it is going to be delivered or not ? If you come to me and say, " Mr. Hewitt, I want to be let off from that contract, aud I win give you $1,000"; what is there immoral in that? Mr. Thurber. It is precisely on the same principle as gambling. Tbe Chairman. No. Will you prohibit the selling of that which a man does not own ? That is the test. If you buy from me to-morrow 100 tons of pig-iron which you want to use in September, and if you afterwards come to me and say, " Mr. Hewitt, I am very sorry, but my enterprise has collapsed aud I do not want that 100 tons of pig- iron ; will you not let me oft'? " What is there wrong in that ? Mr. Thurber. Suppose I buy 100 tons of pig-iron from you deliverable at a cert.aiu date, and that it is against the law for you and me to settle a difference without the actual transaction having been consummated ; then there is nothing wrong in it ? The Chairman. Suppose you were going to build a store with an iron front, and that you want pig-iron, and I sell it to you In good faith, and that afterward you find that you cannot go on with your building, and you come back to me and say, " I do not want that one hundred tons of pig-iron," and I am willing to let you off, ouo-ht the law to compel me to deliver that one hundred tons of pig-iron to you and compel you to pay me for it? Mr. Thurber. I think that, if it were necessary to make a law that an actual delivery should take place in every commercial transaction, in order to avoid the great DEPRESSION IN LABOE AND BUSINESS. 231 evils that have been aooumnlating and are accumulating on ns in this way, I would go so far as to say that you should deliver me that one hundred tons of pig-iron, and that I should take it from you even if I should sell it again at a loss. The Chairman. But what is to prevent us going through this operation — my com- plying with the law and then you turning and saying to me, " Mr. Hewitt, will you buy this back from me ? " I say, " Certainly," and I buy it back. Mr. Thdrder. That might be. The Chairman. I only want to show you that laws of that sort cannot be executed against the will of the parties concerned. Mr. Thurber. But suppose you make a law that no such transaction shall be col- lectible in law, or can be enforced under the law any more than a gambling debt can be enforced legally, would not that remedy this extreme speculation in all the great staples, and which results in simply gambling operations ? The Chairman. I have got iron-works and I supply my people with pork and flour. If I go and make a contract with you for a year, and the prices of those things go up after the contract is made, and you come up to me and say, " This is a time contract and I will not deliver the pork aud flour," what do you say as to the propriety of that? Mr. Thurbbr. Is not that to be got around again? The Chairman. Yes ; you can get around things of that sort, and that is the diffi- culty with all that kind of legislation. Mr. Thorber. I believe that it is within the scope of human ingenuity to form a law that will not interfere with the making of contracts for future delivery of goods where actual delivery is to take place, and that will discriminate against excessive speculation in products that are never intended to be delivered. The Chairman. Who is to decide whether they are going to be delivered ? Mr. Thorber. I do not know, unless statesmen can. Mr. EiCE. Cards are played sometimes in gambling and sometimes for social recre- ation. Mr. Thurber. Yes. Mr. Rice. There are laws against gambling, Mr. Thurber. Yes. Mr. Rice. Do you think that there is any difficulty in having a man brought before a jury and having the jury to decide whether he was gambling or not when playing cards, if the public officers will do their duty? Mr. Thurber. I think you might sometimes run across a man who would perjure himself. Mr. Rice. Do you not think that if a prosecuting officer did his duty, and a com- plaint were made to him that a room is kept for the purpose of gambling, a jury might not pass upon that question and say whether the card-playing was carried on for f ambling or for social recreation and enjoyment? Do you not think the jury would nd that out ? Mr. Thurber. Yes ; and I think it would be a check against gambling. Mr. Rice. Do you not think that if a law were made making it a statutory crime to go into those transactions that you have been speaking of, selling and never delivering ( which, as you say, is a kind of gambling), and if the district attorney was required to prosecute those who went into it, that would not put a stop to it in the process of time? Mr. Thurber. I think that it would have that tendency. Mr. Rice. Do you not think that a jury would find out whether the sale was made for the purpose of delivery or whether it was a mere stock-jobbing operation ? Mr. Thurber. I think it would in most instances, and I think that public opinion, in that as in other cases which we have spoken about (when full light is thrown upon it and focalized), would do a great deal toward remedying it. Mr. Rice. Would you not, by such legislation, feiach the root of the evil and cure it ? Mr. Thurber. I thiut so, to a great extent. The Chairman. One of the objects of inviting you before this committee waste get from you a statement relative to the prices of food products such as are consumed by families— the retail and the wholesale prices. The committee has not yet been able to get such a statement. Will you be good enough to take the trouble to prepare such a statement covering the periods mentioned in our circular, from 1862 till the present time, so that that statement may be given to the public ? Mr. Thurber. I will do so with pleasure. The Chairman. We are much obliged to you. Mr. Thurber. The obligation is mutual. VIEWS OF MR. SILAS E. KENYON. Mr. Silas R. Kenyon, of Newark, N. J., appeared before the committee and stated, in answer to questions by the chairman, that he was an inventor and a practical mechanic— one of the hard-fisted sons of toil, and that one of the greatest causes of 232 DEPEESSION IN LABOE AND BUSINESS the present depression in business was the ■want of coniidenee. The time had ^®^''> he said, when manufacturers would manufacture largely, and when their goods would be taken by the jobbers in large amounts; that hence a market for goods was made, but that that was not the case to-day to any extent, in consequence of the lack of confidence. The collection of the revenue was also very faulty ; the American mer- chant having to pay for his goods and take them, while the foreign importer allowed tbem to go into bond and to remain there without paying duties ou them until he was able to sell them. He was most strenuously opposed to a free trade. He thought that the producers of this country had a right to expect legislative protection ; they could not protect themselves. He admitted that mechanics did not do their duty as electors. It was their duty to say who the law-makers shall be and what kind of laws they should make. This was the duty of the laboring men of the country, for they were by far the most numerous. The remedy was in the ballot in this country. Another difficulty was that there were too many men in the cities. The introduction of ma- chinery and of improved implements had reduced labor to a great extent, or at least to some extent. As an instance of that he mentioned that ten years ago Massachu- setts had thirty thousand more laborers employed in making boots and shoes than she has to-day, while she was now producing $72,000,000 worth more of boots and shoes than she did then. The CHAiKMAJsr. Is not that a good thing for all the millions of people in this coan- try who are not engaged in making boots and shoes? Mr. Kentox. Certainly. That is right. Now, I propose a remedy for these thirty thousand people thrown out of employment in the boot and shoe business and for other thousands of people thrown out of employment in other lines of business. It is that they go upon the public lands of the country. I propose that the government shall furnish them the means of going there. That will make the public lauds useful and will improve business, and the government will lose nothing by it. The institu- tion of savings banks has been referred to. I am in favor of the government being the savings bank of the people ; that is, I am in favor of the establishment of a savings bank in every post-office in the country, where the laboter can go and deposit his earnings and receive a small interest — 3.t)5 perhaps. That will encourage the laborer and hold out inducements to him to save his earnings. In regard to the tariff, the people of this nation and of all ether nations of the. world, I think, are willing to have a foreign market for their products. We can expect no market for our manu- factures except a market that we make at home, and we shall be obliged to make our own market. The laborers in the United States are a very different class of men from those that I have seen in Europe. You cannot bring the American laborer down to the level of the European laborer, and I am glad of it. Hence we cannot compete with Europe unless we subject the laborer of America to the starving prices of the Old World. The State of Massachusetts to-day has agents in every town in England trying to get up trade. The Fall Eiver manufacturers have been pressing their goods, and have had their agents in London and other English cities. Mr. EiCE. And they are selling a great many goods there. Mr. Kenyon. Yes ; but at so low a rate that the Fall Eiver manufacturer cannot produce them with any proiit to himself. Some of the mills in Fall River are closed and idle to-day. Mr. EiCE. That is owing to fraud and dishonest practices. It has been said, how- ever, that Fall Eiver manufacturers are able to make their cotton fabrics and sell them in London and make a slight profit on them ; and the same thing is claimed by the manufacturers of other fabrics here. Mr. Kenyon. We had in 1870 ten million spindles in the United States and forty mill- ion people. The increase of the inhabitants has kept pace, perhaps, with the increase of spindles. Now Fall Eiver manufactures three-fourths of all the print goods man- ufactured in the United States. The estimate is that one-third of the cost of these goods is labor, and, in order to sell these goods in a market where labor Is less expen- sive than here, our labor must be reduced in cost. It cannot be otherwise. I think that these evils can be all corrected and the thing be made satisfactory by settling the western lands with a portion of our inhabitants. I think that it is practicable to encourage these unemployed men to go out there. When the crisis of 1873 came they had the means of going out, but they staid here waiting for better times, until they have exhausted all that they had, and now they have no means of getting away. The Chairman. I understand your remedy to be an improvement of the savings- bank system, a colonization system by the transfer of surplus labor to the West, and a protective tariff. I did not understand you to say whether you wanted more pro- tection than we have now or not. Do you desire more protection than we have at present ? Mr. Kenyon. I desire a tariff sufficient for revenue, and I desire that the laborers of this country shall be protected in their rights and in their labor from the introduction of articles and goods from other countries where labor is in a very different condition to what it is here. DEPEESSION IN LABOR AND BUSINESS. 233 The Chairjfan. Practically you -wish the prohibition of foreign products ? Mr. Kenyon. No ; I do not nieau that. The Chairman. We have got a tariif now that is supposed to be tolerably protect- ive. Do yon think that it should be higher or lower? Mr. Kenyon. The tariff on some things is perhaps sufiScient now. All that we can produce at home should receive a sufiScient protection so as to guarantee to our pro- ducers here that they will not be undersold by foreign competition. I come here to convey to you the feelings of the people of this country, and those feelings are that the government should be more economical; that it is too expensive; that it costs the tax-payer too much to run the government. The people are obliged to economize, and they believe that the government should economize also. I hope that the people will hold their servants to a strict accountability and to economy in the affairs of the government. Mr. EiCE. A great part of the revenue of the government is collected from duties on foreign articles (which you are in favor of), and from imposts on tobacco and whisky, which we are told people onght not to use. Mr. Kenyon. We collect about $160,000,000 of revenue. Now I pledge my honor as a mechanic that the mechanics and producers of this country would by far prefer to allow their productions to be taxed for the support of the government and for paying interest on the national debt rather than to have the government supported and the interest paid by importing goods that are produced by low-paid labor, while our laborers here have nothing to do. The Chairman. Do you not know that every time that the Democrats in Congress have tried to introduce any measure of economy it was resisted by my Kepublican friends there, and that we could get no economical measure through ? Mr. EiCB. We found that when the river and harbor bill came up, making appro- priations for every Democratic district in the country, every Democratic member voted for it. The Chairman. It was a bill appropriating $7,000,000 to be expended in employing the idle labor of the country in works of internal improvement ; but I must say that I voted against the bill. Mr. Kenyon. We laborers are no longer to toe the line of any particular party. The Chairman. I am glad to hear you say so, for I was a little afraid that my party was not going to support me ; and now perhaps I shall get somebody else to do it. Mr. Kenyon. Another remark which I would like to make is, that there is too much bad literature printed in this country and too much of it read ; and I am sorry to say that my friends the mechanics read and pay for three-fourths of it. The Chairman. What do you think about the evidence taken before this committee ; is that of a bad nature to be read ? Mr. Kenyon. I am sorry to say that some of it will never hatch. Much of it I am inclined to believe we shall not receive any benefit from. The Chairman. Do you think that this committee ought to have printed a good deal of what has been said here ? Mr. Kenyon. I do not want anything that I have said printed. What I have said is free, " without money and without price." I have great hope and confidence (as my brethren throughout the State have) in this committee. I have more hope in it than in any committee that has ever been appointed by Congress in my day. The Chairman. Do you think that, as Mr. Thompson got up this committee, the New York Herald should hold me responsible for it ? Mr. Kenyon. The New York Herald very often holds folks responsible for what it ought not to. Adjourned until Monday, the 26th. New York, August 26, 1878. The Chairman stated that he had received this morning from Baltimore a postal card as follows : " Mr. Hewitt : Cannot you use your talents to a better purpose than to ridicule the laboring man ? You have made it a point to gather up all the crazy men of New York and show them up as a sample of American mechanics, but we see through your con- temptible game. You are a fraud, a bad counterfeit, and every intelligent man can see your game. "JOHN PETERS." He said : My object in reading that card is merely to relieve a false impression which seems to have got some currency in the newspapers. The individuals who have testi- fied here during the first session of the committee were not selected by the committee. They were volunteers. The committee had met then for the first time. It had not 234 DEPRESSION IN LABOE AND BUSINESS. organized previously, and had no means of summoning witnesses, so that the witnesses who appeared before it were volunteers. Every man who chose to he heard had his name set down on a list, and they were all called. Therefore they were not brought here by the committee.. They came of their own accord. If they made any exhibition of themselves that is not agreeable to American mechanics generally, that certainly was not the fault of the committee. The committee has tried to get workingmen who are actually engaged in business to come here and testify, but, thus far, the commit- tee has not succeeded as well as it could have wished. And the committee wishes it understood that, if any working mechanic who actually earns his living by daily labor desires to present any views to the committee, either personally or in writing, the committee will be extremely glad to get them. The committee wants the views of such persons. During the last week the gentlemen who testified here came at the re- quest of the committee. They were gentlemen eminent in their respective depart- ments of business ; the object of the committee being to get information in regard to all departments of business. The committee has no theory at all. Of course its mem- bers have some ideas of their own, probably differing from each other. But the object of the committee here is to get facts from whatever quarters they can be obtained. We have had many letters from workingmen who could not come personally. These letters have been all duly iiled, and will appear, so far as possible, in the evidence to be published by the committee, as part of the work of the committee. These letters generally have only one tone, which will be shown when they are in print. That is, that while the workingmen have suffered from the depression in business, yet those who have been, as a rule, industrious, temperate, and careful, have sufficient work for the support of their families. There is very great complaint in all these letters that the workingmen are misrepresented by some of the statements made to the commit- tee. They say that while they would be glad to see employment more abundant and wages higher, as a matter of fact, they are not discontented. That is the burden of a large number of these letters. The committee expects to sit until Wednesday next, within which time it hopes to be able to take the evidence of all who have been in- vited up to this time. The committee then proposes to have a session at Pittsburgh and another at Chicago. And the committee ventures to express the hope that em- ployers and laborers will prepare themselves to give definite information to the com- mittee. What the committee wants is not theories, but facts. We have, I suspect, exhausted every known theory for the organization of society. We have had these theories presented in every possible form ; and now, what the committee would like to get at is definite suggestions from people engaged in business as to legislation of a practical nature. It is not part of the work of the committee to reform society, and we do not expect to accomplish it. Perhaps the next Congress may do something to remove the evils complained of. If witnesses will keep this in mind, they will add very materially to the stock of information which the committee desires to get. VIEWS OF ME. CHAELES H. MARSHALL. Mr. Charles H. Marshall appeared by invitation of the committee. The Chairman. Please to state the business in which you are engaged. Mr. Marshall. I am engaged in the shipping and commission business in the city of New York. The Chairman. The house with which you are connected, and of which you are the head, has been in existence a great many years, has it not ? Mr. Marshall. Yes; between forty and fifty years. The line that I represent has been in existence ever since 1817 — about sixty years. It was the first line that was formed immediately after the close of the war in 1815, although my family was not then in it. My father was not one of the organizers of the line, although he subsequently assumed control of it. It was called the Black Ball Line. At present it is no longer a regular line, as all the regular packet-ships have disappeared. They have been superseded by steamers. The Black Ball Line was formed in 1817, and consisted originally of four vessels, which were, I think, the Amity, Pacific, Courier, and James Cropper, which sailed on the 1st of every month from New York and Liverpool. This copy of an advertisement from the Globe, dated October 30, 1824, shows that line was increased to eight vessels, and that the sailing days were on the 1st and 16th of each month. They continued to sail thus regularly till about 1860, between forty and fifty years from the date of establishment. It was the first and the last regular sailing-packet service in the country. " OLD LINE OP LIVERPOOL PACKETS. " TO SAIL ON THE FIRST AND SIXTEENTH OF EVERY MONTH. "The Liverpool packets having met with general approbation and support, t e owners of them have concluded to add to the number of vessels employed in that estab- DEPRESSION IN LABOR AND BUSINESS. 235 lishment; and they now intend that the following ships shall sail hetween New York 5°Ii ^/^'"■P°ol' iQ regular succession, twice in ' each mouth from each port, leaving both New Yorli and Liverpool on the 1st aud 16th of every month throujjhout the year, viz : " " Ship New York, George Maxwell, master. " Ship Columbia, James Rodgers, master. " Ship Orbit, Joseph Tinkham, master. " Ship Wm. Thompson, R. R. Crocker, master. " Ship Pacific, S. Maxwell, master. " Ship Jas. Cropper, C. H. Marshall, master. " Ship Canada, Seth G. Macy, master. " Ship Nestor, William Lee, jr., master. "These ships were built in New York, of the best materials, and are coppered and copper-±ast«ued. They are very fast sailers, their accommodations for passengers are uncommonly extensive and commodious, and they are commanded by men of great experience. The price of passage to England in the cabin is now fixed at thirty guineas, for which sum passengers will be furnished with beds, bedding, wine, and stores of all kinds. For further particulars apply to '•■ ISAAC WRIGHT & SON, " FRANCIS THOMPSON, '■ BENJAMIN MARSHALL, or „^ . u o« ,„, „ "JEREMIAH THOMPSON. " October 30, 1824." Published in the Glohe, by John Mortimer, 74 South Second street, Philadelphia. The Chairman. Then your connection has been mainly with sailing-vessels ? Mr. Marshall. Mainly with sailing-vessels, and with steam-vessels so far as foreign consignments are concerned. But I have no steam-vessels of my own, nor have I any interest in any. The Chairman. The branch of the business with which you have been so long con- nected is not prosperous f Mr. Marshall. No, sir; it is almost in a state of death. The Chairman. Very many statements have been made to the committee about the misfortune of having the shipping interest of the United States go into decay, and various suggestions have been made for the restoration of sailing-vessels. You were present one day when that suggestion was made, and you replied to it at the time. If, in your own way, you will explain the position of the shipping business in this country, and of foreign commerce, and make such suggestions as you think will tend to the general benefit, the committee will be glad to hear you. Mr. Marshall. Before making any remark, Mr. Chairman, and before answering any questions that you may be pleased to ask me, I desire to say that I am not a large ship-owner. I have had connection with the commerce of the country ever since I went into business, fifteen years ago. My father, prior to his death, was engaged in carrying on business of that kind for something like thirty years. I am happy to say that I am not a large ship-owner, because the more shipping interest a man owns now- adays the poorer he certainly is. Nor am I a large capitalist in any sense of the word. I acknowledge that I am one of the "bloated" bondholders; but as the bloat is not external, it must be mainly internal. I certainly am not ashamed to own some of the obligations of my country, and I have too much confidence in the faith and integrity of the government ever to imagine that it will repudiate, or seek to evade, the pay- ment of a dollar of its just liabilities. I would like to remark, in passing, that 1 am not one of those who look upon the efforts of this committee as being nugatory and futile ; nor am I one of those who sneer at the evidence given before the committee by those whose views differ very widely from my own. I have noticed that some of the newspapers have characterized some of the evidence given before this committee as the evidence of a set of lunatics. Now, I do not think that such is the case. I think that the evidence given before this committee is the enunciation of the distress that pervades this country — a distress which is very much exaggerated, no doubt, but which is certainly real and pressing. I have no doubt that the laboring man is more pinched in regard to his ability to obtain a living now than he was ten years ago ; and I think it is tlie duty of every man who has an interest in society not to turn a deaf ear to the utterances of the workingmen, even though they may be imperfect; but, on the contrary, to listen to them attentively, and, if possible, to suggest some remedy by which the distress may be alleviated. The Chairman. You think that these complaints may be " the voice of one crying in the wilderness" to express a distress which they do not know how to account for or remedy ? Mr. Marshall. I think it is. It is the voice of the people, who know that they want a remedy, but who do not know where to find it; and if they are obliged to listen to the counsel of leaders whose projects would only succeed in involving them 236 DEPRESSION IN LABOR AND BUSINESS. in distress infinitely more miseraWe than that which they now suffer from, of oonrse their condition will never be improved. And they will listen to that counsel unless other counsel is given to them, and unless other leaders come forward and suggest some tangible mode by which to escape from the present prostration iu business. I there- fore think that the work of this committee will be eminently useful, notwithstanding a great deal is said before it in which I cannot concur. Still, certainly its outgrowth will tend to good ; and although I have not had occasion to praise Congress very much for what it has done, I think that, in appointing this committee, it has acted wisely and rightly. I do not know whether you wish me to confine my views entirely to the qaestion of the shipping business, to the decadence into which it has fallen, and to the remedies which I consider necessary for its revival ; or whether you wish me to answer questions in relation to the general depression in business. The Chairman. As you are recognized as an expert in the shipping business I think that if you would, at the outset, explain your views in regard to the shipping business of the country, it would be best. And after that, we ^may take up some of the col- lateral points. Mr. MarshalIj. I suppose it is well known to almost every one in this room that the United States, prior to the war of 1861, was one of the foremost commercial nations on the globe. Its maritime tonnage engaged in foreign trade was only exceeded by that of Great Britain, and was very slightly exceeded by that of Great Britain, and it promised in a few years to rival if not to surpass the tonnage of its great competitor. There were reasons why the United States made such rapid strides in commerce, and those reasons may be briefly summed up in a few words. We possessed at that time the material out of which vessels were constructed, which was wood. The forests of this country furnished all the material necessary for the construction of vessels. American ingenuity and American invention were most important factors at that time in the development of the country's greatness, and they took part in that particular branch of industry. Add to all this the fact that the tendency and tastes of the people were in the direction of a sea-faring life, and it is no wonder that this country, having the material close at hand from which it could build ships better than any other na- tion, and having this progressive tendency iu a commercial direction, was able not only to hold its own, but to rapidly increase its tonnage, and to hold out the promise (which would have been fulfilled had it not been for the events of the war) that that tonnage would surpass the tonnage of any nation of the globe. We went on construct- ing wooden ships for a series of years. We could furnish fast ships. We carried the products of this country to the East and brought back those from China. Our clippers covered the Pacific and the Eastern oceans, and between England and America went lines of packet-ships that were celebrated iu their day, and that absorbed not only the cream of trade, but carried the mails, until the inauguration of steam. This state of things went on so long as we possessed this cheap material for building ships, but a transition took place about 1850 to 1855, when it was demonstrated that iron could profit- ably be used as a material for ship-building. At that time this country had no large de- velopment of iron industry, but England, on the contrary,had a very large development of iron industry ; and when this discovery was made, the English, profiting by it, of course commenced to construct ships of this new material. The United States, on the contrary, went on constructing vessels of wood ; and, although the impetus which we had gathered by our previous commercial progress still continued to carry it on until one or two years after the war began, still the elements of onr commercial decadence were then existing, and the result was certain, so far as England being able to supplant our wooden ships by iron ships of an improved construction. Then the war broke out and the ocean was covered with privateers ; or, if not covered with privateers, certainly there were enough of them to make ship-owning interest very hazardous property. Capi- tal refused to embark any longer in shipping enterprises, and the amount of our ton- nage engaged in foreign trade sensibly diminished. After the war England had gained so far upon us in the construction of iron ships and steamers that it was very difficult for us to regain the ground which we had lost. During the war (after 1860) there was another cause which was operating to prevent us recovering our lost ground. The tarift', which was passed shortly after the secession of the Southern States from the Union, largely augmented the duties on all articles entering into commerce and on all articles used iu the construction of ships and steamers. Therefore, the cost of constructing wooden vessels being very much enhanced, and the navigation laws (which dated from 1789) forbidding American citizens to purchase ships abroad and to register them under the American flag, we were placed between the two horns of a dilemma. On the one side we could not construct ships, as they cost too dear ; and, on the other side, we were forbidden to take advantage of the progress which England had made in marine archi- tecture, and to buy our vessels in the English market. The decadence of American commerce was the sure result, and it needed no prophet to foretell what it would ulti- mately come to. That condition of things has gone on ever since 1860, during which time our tonnage has very sensibly decreased. In 1860 we had 2,379,396 tons of regis- tered vessels (that is, vessels engaged in foreign trade), and 2,599,373 tons engaged in DEPRESSION IN LABOR AND BUSINESS. 237 tbej!oastwiso trade, making ah aggregate of very nearly 5,000,000 tons of shipping. In 1877 tlie tonnage of our resistered yessels had fallen to 1,570,599 tons, and of our coast- wise vessels to 2,488,189 tons. The Chairman. The coastwise business has fallen off, too. Mr. Marshall. It has fallen off as well, although not in the proportion of the foreign tonnage. The registered steam tonnage at present engaged in foreign trade is only 190,133 tons, and these are steamers that ply mainly on the Pacific. It includes, of course, the Philadelphia line to Liverpool, which is the only line of American steamers plying between this country and Europe under the American flag. The remainder is made up of vessels trading to the West Indies, &c. The American foreign tonnage entered at the port of New York (that is, tonnage entered at the custom-house, the same that comes and goes and is entered over again, but at the same time shows the relative growth and advance of tonnage) was, in 1860, 5,921,285 tons, and of foreign tonnage 2,352,911 tons ; so that there was an excess of American tonnage over foreign tonnage of 3,567,374 tons. That continued (although gradually decreasing until 1863), when we had an excess of American tonnage entered in this way of 1,974,320. Then the tide turned. Then the foreign tonnage began to be largely in excess of the American tonnage, until in 1867 the foreign tonnage exceeded the American tonnage by nearly two million tons ; and in 1876 the difference in favor of the foreign tonnage was 5,237,876 tons. That shows the decadence of the American shipping interest and the advance of foreign tonnage so far as England is concerned. The Chairman. Are we the only commercial country that prohibits the purchase of ships and steamers in foreign countries? Mr. Marshall. We are the only one. All countries, even Japan, have repealed all restrictions in that respect. I think that we are the only government that prohibits its citizens from buying steamers and ships abroad, where they cau procure them cheapest, and running them under the flag of their own nation. I think, Mr. Chair- man, that the example of other countries in that respect is eminently useful to us, although there is a tendency among us rather to decry and look down upon the ex- perience of other countries in their commercial relations. An eminent Senator recently expressed himself to this effect : " What has this country to do with foreign countries ? " Now, on the contrary, I am clearly of opinion that this country has a great deal to do with foreign countries. The same laws must obtain here, so far as the regulation of trade and commerce is concerned, that obtain in other countries. There are lessons to be derived from the experience of other countries to show us the proper path to pursue. The progress of English shipping is very extraordinary. You are aware that prior to 1849 the same restrictions obtained in England iu regard to the purchase and registry of vessels that obtain here at the present day. The old navigation laws, which were the embodiment of stupidity and ignorance, were a direct impediment to the progress of commerce in England ; but in 1849 those laws were entirely swept away ; and at the present moment the cai-rying trade iu England is as free as any other department of industry. An American citizen can go to England and embark in the coasting trade there if he likes, or he can purchase a ship wherever he chooses and register it under the English flag. In fact, the carrying trade in England is open to the citizens of foreign countries on the same terms as it is to its own subjects. The Chairman. Do you propose to discuss the advantage or the disadvantage of that policy ? Mr. Marshall. I merely go on to show you that since the removal of these naviga- tion laws the tonnage of England has increased. The Chairman. What do you bring forward as the chief argument in favor of abol- ishing all navigation laws and opening transportion (coastwise and ocean wise) to all the world ? What advantage is it to a people to have that state of things ? Mr. Marshall. The primary advantage to a people in abolishing all restrictions (I mean so far as the foreign trade is concerned, where competition is general) is that it enables citizens to obtain its tools, its implements of industry, where they can get them cheapest. For instance, at present it costs to build an American ship of wood (and I believe there never has been but one iron sailing ship built in the country, the " Iron Age," although there have been iron steamers built) is about $50 to $55 a ton. It might be done somewhat cheaper, but the work would be inferior. To build a first-class American wooden ship, capable of engaging iuthe North Atlantic trade, will now cost 150 to |55 a ton ; and that is very much cheaper than the same ship could have been built for ten years ago. Ten years ago it would cost from $80 to $90 a ton. I built a ship a few years ago which must have cost me from $80 to $85 a ton ; but I am told that a first-class ship can be constructed here now of wood for $50 a ton. Now, on the Clyde you can construct a first-class iron ship with an East Indian outfit complete for from £12 to £13 per ton, which is somewhat more, it is true, than the cost of a first- class wooden ship here. But the iron ship possesses immense advantages over the wooden ship. In the first place, it receives a class in the Bureau Veritas (the first un- derwriting agency in the world) of twenty years; that is, she has a life, so to speak, before her of twenty years, during which time she is not subject to any examination 238 DEPRESSION m LABOR AND BUSINESS. except iu case of accident. Now, a wooden ship can only receive from the same classi- fication a life of nine years, during which time she is not subject to any examination— less than one-half of the life of an iron ship. An iron ship is practically indestracti- ble if she is kept off the rocks and is not allowed to tonch bottom. An iron stiip is taken out of water once a year, her bottom covered with paint, and she is put into the water again. Her lower yards are constructed of iron, her rigging is constriicted of iron; and there are eo repairs to be made on an iron ship unless she runs ashore. But a wooden ship, on the contrary, is all the time deteriorating. It requires repairs constantly. And the repairs on a wooden ship are an immense outlay, and a large de- duction from the returns made on the capital invested in it. Now, we build no iron ships iu this country. We build a few steamers for the coasting trade and for the for- eign trade, the largest of -^hich are in the line running from Philadelphia to Liver- pool. But, practically speaking, we have no iron ship-building industry in this coun- try. The Chairman. Have yon any knowledge as to the cost at which iron steamships can be built here at present? Mr. Maeshall. I have no positive information in regard to that ; but I have been told by Mr. Gaus, the vice-president of the Harlan and Hollingsworth Company, at Wilmington, that an iron ship can be built in this country almost as cheap, if not as cheap, as she can be built on the other side. While I do not mean to dispute his asser- tion, my own impression is that there is a difference in the cost, and that an iron ship cannot be built iu this country as cheaply as on the other side ; but she can be built very much cheaper than she could be built a few years ago. The Chairman. If an iron ship can be built in this country as cheaply as she can he built abroad, would there be any impediment in our engaging in ocean navigation iu competition with Great Britain so far as the cost of the ship is concerned? Mr. Marshall. If iron ships can be built as cheaply here as on the other side, there is no practical impediment to an American ship-owner supplying himself with iron vessels ; but I am very much in doubt whether iron ships can be built here as cheaply. The Chairman. I have seen the same statement as that made to you, and I confess that I also doubted its correctness, and it was for that reason that I asked the ques- tion. If any of these iron ship-builders will come before this committee and give evi- dence on this subject, their evidence will be received with great satisfaction ; and if they cannot be got in any other way, we will subpoena an iron ship-builder in order to ascertain that fact, for it has an important bearing on the subject. Mr. Rick. What is the comparative character of the work on an iron ship built in this country and on an iron ship built abroad? Mr. Marshall. I am told that the work here is exceedingly good. Mr. Rice. I have been told that the work abroad was inferior to it. ' Mr. Marshall. I have not any definite knowledge on that point; but it is claimed by constructors of iron steamships that they can turn out a class of vessels equal to any built upon the Clyde. Whether they can do so or not I am not able to say. The Chairman. There can be no reason in the world (I mean no reason in nature) why an American-built iron ship should not be as good as any other iron ship built abroad. It must be gross carelessness if she is not. Mr. Marshall. No ; I do not think there is any reason why iu time there should not be an equalization of construction, and why we should not construct iron ships in this country as well and perhaps as cheap as they can be constructed on the other side. Another advantage which an iron ship possesses over a wooden one is that the car- rying capacity of an iron ship is very much larger — I mean its carrying capacity so far as dead weight is concerned. That, of course, is another form of remuneration for the iron ship-owner which the wooden ship-owner docs not possess. Iron ships now have, all over the world, a preference, so far as rates of freight are concerned. In California an iron ship will command from two and six pence to five shillings a ton for grain more than its American wooden competitor. So, taking all these things to- gether — the primary cost, the larger carrying capacity, indestructibility, and the du- ration of life (so to speak) which the iron ship possesses — and adding to them the fact that an iron ship obtains preference in the rate of freight, all this constitutes an im- mense element in favor of the foreign iron ship-owner. And although to-day ship- ping interests all over the world are very much depressed, yet wo see on the Clyde a considerable activity in iron ship building. Iron ships can now be constructed so cheap and the abundance of capital in England is so great, that persons of small means are putting some of their money into the building of iron ships, in the hope that the trade of the world will improve and that they will profit by their investment. The Chairman. I have seen it stated that there are thirteen hundred steamers lying idle in England waiting for bidders. Have you any knowledge about that ? Mr. Marshall. I fancy that there are a good many. There is, of course, a great deal of unemployed tonnage in England. Many of the steamers, no doubt, that .ire not being run by their owners are of a more primitive kind, so far as economy of fuel is concerned and so far as the expenses of running are concerned, than the steamers DEPRESSION IN LABOR AND BUSINESS. 239 ■which are being constructed at present. The whole tendency on the other side has been in the direction of economy in running and enlargement in space allowed for cargo. Small consumption of coal and large space for cargo are the two elements which are most eagerly sought for by the Clyde ship-builders. The Chairman. Now for the point whioli I asked you about originally : What object has a nation (iudependently of owning ships) in making its commerce absolutly free to all customers t Does it cheapen commodities ? Does the consumer get tliem any cheaper by bringing all ship-owners to the same level and having no exclusive legis- lation f Mr. Mabshali,. Undoubtedly he does. The Chairman. Have our navigation laws interfered (in view of the general de- pression in the shipping business) with getting our business done more cheaply than it would have been done without them ? I mean the ocean carrying trade. Mr. Marshall. I think that the navigation laws have not interfered very exten- sively, so far as cheapening the transportation of commodities is concerned; because the field that would have been occupied by American ships has been filled by foreign ships ; and, therefore, while the amount of tonnage of the world is largely increased, and while the amount of tonnage is about proportioned to the amount of commodities transported by it, still the great detriment that has ensued to the country has been in the decadence of its shipping interest, and in there being thus thrown out of employ- ment a large number of people dependent upon commerce as a means of livelihood, and the freight given to foreign competitors. Mr. EiCB. Up to the time of the introduction of iron ships, and up to the time of our war, notwithstanding the navigation laws, our shipping was prosperous. Mr. Marshall. Yes; and I accounted for that by saying that the material out of which we constructed ships was close at our doors, and that we possessed advantages in that respect over England, who had no material of easy access. England had to construct her wooden vessels at a disadvantage, just as we had to do in constructing iron vessels. Mr. EiCE. It was the introduction of iron, then, that, to a great extent, has made the change ? Mr. Marshall. Yes; I ascribe it to the introduction of iron as a materia lin the build- ing of vessels, together with other causes. The Chairman. Assuming that we had had no navigation laws, would not the English have still done this business for us more cheaply than we could do it for our- selves ? Mr. Marshall. I think that, if we had no navigation laws, we should have gone abroad and purchased iron vessels on the Clyde, and in that way we would have had a merchant marine constructed of iron and not of wood. The Chairman. Would not the war have equally taken that merchant marine from the ocean ? Mr. Maeshall. Yes ; the war would have been an equal adverse element in both cases. The Chairman. Then we have to take the state of things after the war. In that state of things, could the American capitalist, paying a higher price for capital, and higher wages to all whom he employs in business, compete in the open market with the English ship-owner ? , ■, » t ii • i u Mr. Marshall. You mean if the navigation laws had been repealed ? I thmk he would still have been at a disadvantage. The Chairman. Take the navigation laws out of the way, and suppose that, at the close of the war, we had no navigation laws at all. Our capital, on the average, was worth 7 per cent., while English capital is usually worth only 4 or 5 per cent, at the outside ; and then the cost of supplies and other necessary materials being dearer here than there, could we have competed with the English for the carrying trade of the Mr Marshall. We could have competed to a certain extent. We have competed since that time to a certain extent. We have bnilt ships since the conclusion of the war. We have gone on competing with England, but at a great disadvantage. We would have had the same disadvantages if we had been permitted to go to the other side and pur- chase ships, which vou have enumerated, so far as the high rates of capital and the difference in expenses in running vessels are concerned. But we would have had one great advantage in a cheaper fleet and in a more economical class of vessels. The Chairman. Would not that class of vessels be displaced at this time through the great improvements that have since been made, and would we not have had on hand a useless stock of vessels ? ,. t. j tt i, v „m:™„.i Mr. Marshall. No more than the English ship-owner has had. He has been obliged to accommodate himself to the improvements made in steamships, a,nd his American competitor would have been obliged to accommodate himself to 1 hem in the same way. The Chairman. But we have not sustained the loss which the English ship-owner has sustained in having to replace his vessels. 240 DEPRESSION IN LABOR AND BUSINESS. Mr. Marshall. Yes, hut neither have we made the gains. , . The Chairman. Could not the English have, all the time, underworked ns in point of transportation ? Would not the preponderance of economy be in favor of English transportation, just as it is in every form of manufacture which they make in compe- tition with us, except in those things where we have special natural advantages j Mr. Marshall. I think, of course, that we are placed at a disadvantage so tar as high rate of interest on capital is concerned, and also so far as the working expenses of vessels are concerned, hut, in spite of that, American ship-owners would have been able, if they had had an opportunity of purchasing their vessels cheaply and on the same terms'as their English rivals, to compete with the English on better terms than they have had in consequence of the navigation laws, which forbade the purchase of ships abroad. The Chairman. But would the American ship-owner have been on snch terms of equality as that he could have made any material impression on the ability of the English ship-owner to do business cheaper than the American can do it for ? Mr. Marshall. I think that we might not have advanced as rapidly as we would have if all those conditions had been equalized, but I believe that wo should have shown a sensible advance in any event if the navigation laws had been repealed. The Chairman. Suppose that the coast-trade had been open at the same time, would not the English have displaced from our coasting-trade a very much larger amount of tonnage than we could have gained from them on the ocean ? Mr. Marshall. I should like to say, in regard to the coast-trade, that this trade has been a monopoly ever since the fonndation of this government ; and that even a voyage from here to San Francisco (15,000 miles) is regarded as part of the coast- ing-trade. I would not be in favor of immediately throwing open the coasting-trade to foreign competitors, because it is a very large interest. It is an interest that has been built up by protection and monopoly, so to speak, and I am not in favor of immediately throwing down the barriers which surround that monopoly. I would wait until we make more advance iu iron-ship building, and until the business of our commercial marine is firmer, before throwing open the coasting-trade to the competi- tion of foreign nations. I think, as a matter of principle, that it should be free, and that it ultimately will be ; but I am not in favor of having it opened to all at the present time. The Chairman. Do not the laws in regard to the coasting-trade make it more expensive to transportation ; and, to that extent, is not the consumer damaged ? Mr. Marshall. Undoubtedly. It is like all protected interests. They must be pro- tected at the expense of somebody ; and the coasting-trade is undoubtedly protected at the expense of the transporters of merchandise. They have to pay higher freight than they would pay if that trade was open to all competitors. The Chairman. Of course in these modern days captal is mobilized. It goes where it pays best. If you repeal the navigation laws and give free trade in ships, would not the English capital, which is more abundant and cheaper than capital here, absorb that business as against American competition because our capital is not so abundant and not so cheap ? You do not, for instance, put your money (which you can employ in some other way at 7 per cent.) into ships where you could only get 5 per cent, for it. You would not, for the mere sake of owning a ship, put your money in it unless you could get sufficient returns for it. Mr. Marshall. No, indeed, sir. I have done it many times, and I have had sufficient experience of it. The Chairman. Can you alter these great underlying laws which give the business to the man who can do it cheapest ? Mr. Marshall. Certainly not. You cannot go in the face of those laws, and you cannot expect to have competition on an equal plan until all conditions are equalized. But there is a certain amount of ship-building going on in this country for the foreign trade. These ships, however, are built of wood. If the navigation laws were repealed those ships would be built of iron, the wooden vessels would be replaced by iron ves- sels, and my impression is that wooden-ship building in this country will come to an end certainly within the next one or two years. No more wooden ships of consequence will be built for the foreign trade, because a wooden ship is at a great disadvantage with its iron competitor. I do not mean to say that the American ship-owner, even when his ships are of iron, will be on a parity with his foreign competitor, because, as you say, the English and the German and the French ship-owners have cheap capital which is content with smaller remuneration, and they also have the advantage of being able to run their ships cheaper than we can run ours. But before 1860, although the wages which we paid to our crews, and the supplies which we provided for our ships, and the salaries which we paid to our officers were infinitely better than those paid by England, and the expenses of running our ships were larger, still we steadily progressed in a maritime point of view, and we went on increasing our tonnage. We had the same disadvantages then as to capital, wages, and supplies as we have now, if not greater ones. DEPRESSION IK LABOR AND BUSINESS. 241 The Chairman. But did we not have an enormous advantage in the fact that we had a monopoly in the coasting trade, so that when the great mass of transient ships found that they could not get employment on the ocean, they could pick up a coastwise trade ? Mr. Marshall. No ; I think that the class of vessels built for the foreign trade was a class jper se. The Chairman. Take that class of packets that used to trade between New York and New Orleans, New York and Savannah, and New York and Mobile ; did they not also make ocean trips ? Mr. Marshall. They may have done so in some instances ; but still the classes of ocean ships and coastwise vessels were clearly defined. The Chairman. I know that I crossed the Atlantic twice in just such vessels, but unfortunately one of them went to the bottom. These vessels were very often trans- ferred from one trade to the other. Mr. Marshall. It may have been so in some instances. The Chairman. Is it not an advantage to the American producer of food products who wants to sell his products abroad to have them carried abroad at the cheapest possible rate ? Is the net result not better for him ? Mr. Marshall. Certainly. The Chairman. And is it not of advantage to the American consumer of foreign products to have them brought over here at the cheapest possible rate ? Mr. Marshall. Certainly. The Chairman. Then transportation on the osean is a tax as well upon the Ameri- can consumer as upon the American producer. It is a tax pi-o tanto. Mr. Marshall. It is the freight added to the primary cost of the article. The Chairman. Is not the lesson from that, to let the business be done by whoever will do it the cheapest ? Mr. Marshall. Yes ; on equal terms. The Chairman. We gain by having it done at the cheapest rate. Mr. Marshall. Yes ; after removing all restrictive legislation. The Chairman. In that case, will not American capital seek the occupation that will pay it best ? Mr. Marshall. It will. The Chairman. And if it finds that ocean transportation will not pay it as well as manufactures or some other branch of industry, it will abandon the ocean business to other countries ? Mr. Marshall. It will. The Chairman. Would there be any disadvantage to this country in that direction f Would we not gain by it ? Would it not be a positive advantage if somebody would do that business at a lower rate than we can do it ourselves t Mr. Marshall. Undoubtedly it would. But what I complain of, so far as our com- petition is concerned, is that we are not allowed to follow the natural channel into which capital would have found its way, but that we have been restricted by legisla- tion from placing ourselves on a parity with foreign nations. The Chairman. Have you not had a corresponding advantage in the monopoly of the coast trade, which absorbs the larger portion of our tonnage ? Mr. Marshall. No, sir ; the coast trade can only absorb a certain amount of tonnage profitably. .... The Chairman. Has it not always absorbed a large proportion of American ton- nage? Mr. Marshall. Larger than has been engaged in the foreign trade, but not so very much larger. In 1855 the tonnage engaged in foreign trade was $2,348,358, and in the coast trade only $2,491,000. -, . x ,. i * -n ,. The Chairman. Is it not an enormous advantage to have a monopoly of oO per cent, of the entire ship business of the country ? , ■ j., j.-, ■ Mr Marshall. It is an enormous advantage to the people engaged in that business, I grant vou. The class of vessels engaged in the coast trade is entirely different from the vessels engaged in the foreign trade. There may be exceptional cases, as in the instance of that ship in which you crossed the ocean and which came to such an untimely end ; but the class of vessels is different, so far as the coast trade is concerned, except in tie trade from here to San Francisco. Mr. Rice. The reason which you give in favor of free ships would apply equally m favor of free trade in regard to all manufactured products. Mr Marshall. Certainly, sir. I am a free-trader ; that is, 1 am m favor of a tariff for revenue. I believe that the restrictive tariff is one cause which has operated against the development of our commercial marine as well as against all our other Mr Rice Free ships would tend to reduction of interest upon capital and to a re- duction of wages of labor, and would bring labor to the same level that it is in Eng- Mr. Marshall. I think it would tend to equalize these conditions. 242 DEPRESSION IN LABOE AND BUSINESS. Mr. Ekje. How was it in England when she was building up her ships and her great superiority on the sea to other nations ? Did she have these navigation laws at that time? Mr. Marshall She did have navigation laws till 1849. In 1854 the restrictions on the coasting trade were removed. Mr. EiCE. Were they as strict or stricter than any navigation laws which we have ? Mr. Maesiiall. They were certainly as strict; and the ship-owners of England pre- dicted ruin and disaster to all their interests in consequence of the repeal of those re- strictions. Mr. KiCE. They were repealed, but not until England had acquired superiority on the sea. Mr. Marshall. She had acquired superiority, or had the superiority relatively up to a certain period, when she began to lose her superiority. Mr. EiCB. Is it your opinion that the navigation laws, under which she operated, tended to give her that superiority while she was building up her trade. Mr. Marshall. No ; I think not. Mr. Rice. You think that if she started without navigation laws, that her ultimate condition would have been as good as it is now ? Mr. Marshall. I certainly do. Mr. Rice. So that you do not think navigation laws would aid us in building up our marine now that it is in this depressed condition ? Mr. Marshall. I do not think they would aid us in building up our merchant ma- rine. On the contrary, I think that they are a direct disadvantage to us. Whatever vitality there is in that industry is crushed out by the restrictive legislation which now hampers it ; and, in that legislation, I would instance the tariff as well as the navigation laws. I think that the tariff is an impediment to trade generally, and is taiiio quanto an impediment to our commercial marine. Mr. Rice. Do you think that the tariff is an impediment to our manufactures? Mr. Marshall. Yes ; I think so. Mr. Rice. Do you think that we should produce as much or more without it than ■we do with it ? Mr. Marshall. I think that we should have produced more of articles which it is to our profit to produce, under free trade or under a revenue tariff, than we have pro- duced with all the restrictions to which we have been compelled to submit. Mr. Rice. You do not believe in seeking to confine to our own country any kind of manufactures in which we cannot freely compete with other countries without a pro- tective tariff? Mr. Marshall. No, sir. The primary effect of protective legislation may be to bene- fit the people engaged in those industries ; but the ultimate effect will be disaster and loss. We have a strong instance of that in the present condition of the protected in- dustries of this country. The Chairman. Do you attribute the depression in the general manufacturing in- dustries of the country to the fact that they have been protected to death ? Mr. Marshall. Not wholly ; but protection, so called, is responsible for a large share of it. The Chairman. Well, protected to their injury? Mr. Marshall. It is not wholly due to restrictive legislation, but I regard protec- tion as one of the influences which have tended to bring about the depression in busi- mess. The Chairman. How do you account for the depression in all similar branches of iudastry in England, which is under the free-trade system ? There the depression is equally as great as it is here in every staple branch of manufacture. Mr. Marshall. The chairman will recollect that the industrial depression of the ■world is now very great, and that England shares in that industrial depression equally with other countries. The United States having been one of the largest consumers of English products is no longer a consumer to any great extent. We import no iron or ■coal or cottons from England at present. There are many other articles which Eng- •laud produces, and for which she has now no demand in this country. England, there- fore, has shared in the general depression ; but, in spite of that, she shows a degree of jprosperity which is very remarkable under those circumstances. Pauperism has de- creased since last year in England, according to the statistics. The Chairman. Do you think that the depression has affected England less seriously than it has affected this%;ountry ? Mr. Marshall. I think it has. The Chairman. Do you think that pauperism has increased here and diminished there ? Mr. Marshall. Pauperism has decidedly increased here, and it has diminished there. The Chairman. Do you know anything about the volume of business there — whether it is as great as ever, or whether it has been reduced ? I mean the imports and exports. Mr. Marshall. The volume of exports and imports 1 think is greater now than it was. BEPEESSION IN LABOR AND BUSINESS. 243 The Chairman. The volume of last year shows it to be really iu excess. How is the volume of exports and imports in the United States for the last year ? Does it not also exhibit a great increase ? Mr. Marshall. Yes ; the volume of imports and exports does exhibit an increase in the United States, although whether or not that increase is relatively as large as that of Great Britain I am not able to say. The Chairman. In Great Britain the value of imports and exports is less, but the volume is greater ; but in the United States both value and volume are greater. Mr. Majrshall. And we have undoubtedly increased our export business. The Chairman. Is not that healthy ? Mr. Marshall. Certainly. The Chairman. If we brought back as much as we sent out, it would be better still ? Mr. Marshall. Yes. The Chairman. That is to say, we would have a greater quantity of goods which the country needs than we now have. What is the reason that we are not buying as much aa we did ? Mr. Marshall. Because we are engaged in paying our debts. ^ We are liquidating. There is no doubt about that. Mr. ElCE. That is a healthy thing to do. Mr. Marshall. Yes ; it is a healthy thing to do, but it [is not a comfortable thing to do. The Chairman. And hence we have this very remarkable fact— enormous increase of exports ; great balance of trade in our favor ; and a very great depression here — all at the same time; because we are paying for something which we have heretofore consumed and destroyed. Mr. Marshall. Exactly. We are working, as the sailors say, for a dead horse. The Chairman. Is some of that due to the expenditures of the war? Mr. Marshall. Undoubtedly. The large amount of depression is due to that cause. The Chairman. Is some of it due to the era of speculation that succeeded the war ? Mr. Marshall. Yes ; and to the over-building of railroads and various other specu- lative enterprises in which people have lost their money. The Chairman. Can yoa give us an idea of what caused that speculative era ; whether anything has been done by legislation to bring it about, or whether anything can be done by legislation to prevent its recurrence f Mr. Marshall. With all due deference to the body of which you, Mr. Chairman, are a member, I must say that most of the evils to society result from legislation. The Chairmajj. You need not be at all delicate in hitting the body of which we are members. We are generally doing that ourselves ; and, when we are not, the newspa- pers are doing it for us. Mr. Marshall. I think that wise legislation is true philanthropy undojubtedly, but I think that the absence of legislation is almost better. And there are a great many «vils which affect this country at present that have flowed from the disastrous conse- quences attendant upon imperfect legislation — legislation not based upon science and experience, or on the fundamental principles which control society. And here let me say that I think that these gentlemen who represented the workiugmen who appeared before this committee, prior to the appearance of the persons who have been invited to come here, make a great mistake in appealing to the government for more legisla- tion. I should rather appeal to the government for the legislation; I should rather appeal to the government for more freedom than ask it to curtail that freedom. I was rather amused the other day by the testimony of Mr. Graham before this committee, in which he laid it down as a fundamental principle that the best government is the government that governs least; and then went on to advocate all sorts of interference on the part of the government, which was, to say the least, inconsistent with the theory which he had laid down. The Chairman. We have been legislating since 1789 ; and this speculation which came in 1873 may have been the culmination of all that legislation, or it may have been due to some more immediate and special legislation. What I want to know is, whether there has been anything done by legislation within a recent period tending to produce the speculation which culminated in the crisis of 1873 ? Mr. Marshall. The special legislation which has brought about the speculation and its attendant consequences to which you refer is the legislation consequent on the events of the war. We embarked in 1861 in a war of gigantic magnitude, in which the government was obliged to issue (or did either rightf ally or wrongfully issue) a currency of its own, which currency steadily depreciated so that prices of commodities went up very much in value, and a speculative era was inaugurated daring the war and for some time after the war. The Chairman. We are told that the country was very prosperous during that time ; that everybody made money; that both capital and labor reaped ample returns, and that that was an era of such great prosperity that we should get it back again as quick 244 DEPRESSION IN LABOR AND BUSINESS. Mr. Marshall. Yes, so it is said ; but the prosperity was certainly hollow and un- substantial. It was a prosperity which was paid for by the people at large. Inother words, it was paid for by the government. The government was issuing its obliga- tions and was spending money ; and that money produced an appearance of prosperity which we had in every industiy, but which in the long run was sure disaster. The Chairman. But they say that we could have kept on spending money; and we are invited now to inaugurate great public enterprises and to pay for them in legal- tender notes ; and we are told that the prosperity which we had before only came to an end because the government ceased to issue this paper money. They say that up to that time everything was lovely, and now that everything is become gloomy and that ruin has overtaken the country. Mr. Marshall. A man can keep himself in a state of intoxication for a certain period, but he cannot keep drunk always. The day must come when he will be obliged to become sober, and to resort to the remedies that bring about a normal state of health. Mr. Rice. Unless he prefers to have delirium tremens. The Chairman. And these gentlemen deny that there was any intoxication. They insist that it was a healthy and salubrious state of affairs in every way; and they say that all that is necessary now is to pay off the debt in legal-tender money — $2,000,000,- 000 — and that bondholders who receive that money will take it and employ it in busi- ness which wiU. give occupation and abundant wages for labor. You are a bond- holder. Suppose you were compelled to take legal-tender notes for your bonds ; what would you do with the money ? Mr. Marshall. I think I should take my legal tenders and convert them into gold at the current rate, and take the next steamer for Europe, where I should remain. The Chairman. Suppose everybody tried to do that at the same time, what would be the consequence? Where would gold go to ? Mr. Marshall. I am not prepared to say what point it would reach. The Chairman. But it would advance in price very rapidly. Mr. Marshall. Certainly. The Chairman. And it would have to leave the country. Mr. Marshall. Undoubtedly. The Chairman. And then we should have here only paper for currency. Mr. Marshall. Yes. The Chairman. The proposition is that money is simply the fruit of legislation ; that the government has only to decree that a piece of paper is a dollar, and it is so for all purposes ; that it will pay debts, buy property, and perform all the functions of society, simply because the government has put its stamp upon it. Suppose that is done ; would people who have property, farms, houses, manufactories, be likely to part either with their property, or the fruit of it, for these pieces of paper, if they were in unlimited quantity, or to the amount of $2,000,000,000 ? What would they do with their property f Mr. Marshall. I think they would require a great deal of paper in exchange for it, if they wanted to sell. The Chairman. Would they be inclined to hold on to their property ? Mr. Marshall. Certainly. The Chairman. And to stop business ? Mr. Marshall. They would stop business, certainly. The Chairman. And that would produce a paralysis in society and business transac- tions 1 Mr. Marshall. It would produce a paralysis in society and business transactions. The Chairman. And the result would be that the whole work of issuing paper by the government would have to be undone ? Mr. Marshall. Yes, sooner or later. The Chairman. And that gold would have to be brought back from abroad ? Mr. Marshall. Gold would have to be brought back. The Chairman. How would we get it back ? Would we not have to go to work and produce things which would bring back that gold ? Mr. Marshall. Certainly. The Chairman. Have you found that the fluctuations in the currency (I mean the value of paper redeemable in gold) have been a sore impediment to the regular con- duct of business and employment of labor ? — -— '-^ Mr. Marshall. Undoubtedly. It has been one of the most serious impediments to the proper course of business. The Chairman. Have you found it difficult or dangerous, or doubtful, in regard to giving credits often to solvent purchasers ? Mr. Marshall. Yes, sir ; and every man must be in doubt if he has to deal with a fluctuating currency. He must always charge to cover those fluctuations to the utmost extent. The Chairman. Has it tended to make business speculative in its very nature? Mr. Marshall. It has ; and business has undergone a complete revolution in this DEPRESSION IN LABOR AND BUSINESS. 245 country since 1860, so far as the manner of conducting it is concerned. Business to- day is infinitely more speculative than it used to be. The Chairman. As I understand, one of the immediate effects of paper money is to produce a speculative feeling ; and that speculative feeling brings about a speculative era ; and that speculative era brings about a collapse ; and the collapse brings about an efa of depression. Mr. Marshall. That is my view. Depression may be brought about by any such course being previously pursued ; and we are now suffering from that course. The Chairman. What would you have Congress do in the matter ? Mr. Marshall. I believe that the most important question before the government at present is the question of currency. To my mind it is more important than the question of tariff, and more important than any question that now looms up before the public. Although I have been a laborer in the free trade cause for ten years, and have spent a good deal of time and money in trying to ameliorate the condition of the workingman, so far as removing from him the restrictions of the tariff, still I put that question aside as a secondary consideration compared with the question of the currency, which I regard as the most important to be considered by any public man. My firmest views and opinions are that, until we get back to specie payment, or to a currency based ou gold, we shall be subject to those alternate periods of undue specula- tion and undue depression ; and that the laboring men, as constituting the largest element of the population of this country, must suffer comparatively. The Chairman. The countries where specie payments prevail, and where they have not been suspended for a great many years, have had the same commercial revulsion that we have had here, and the same depression in business. Mr. Marshall. That is very true ; humanity is not exempt from evils in any part of the world. But I think that it is undoubted that countries possessing a stable cur- rency are better suited to bear those revulsions than countries that possess a fluctuat- ing currency. The Chairman. In other words, you think that depression there is not accompanied with such general distress as it is where there is an irredeemable paper money ? Mr. Marshall. No, sir ; and it is infinitely easier to recover Jrom it in countries where there is a stable currency than it is in a country that has to deal with irre- deemable money. The Chairman. What is there to prevent us doubling all the gold in the Treasury by simply stamping every dollar as two dollars, and every five dollars as ten dollars ; would you then have twice as much gold, or would you have only the same quantity T Mr. Marshall. You would only have the same quantity. The Chairman. Can the stamp of the government make any difference in the value of that commodity ? Mr. Marshall. None whatever. The value of the commodity is regulated by the number of grains of pure metal which it contains. The Chairman. If the stamp of the government is powerless to do that, has it any more power to stamp a piece of paper and to give it value ? Mr. Marshall. None whatever. And I think that the great error of the govern- ment has been in issuing the greenbacks. I sincerely hope that they will be redeemed and that we will have no more of them. The Chairman. Suppose this large amount of irredeemable paper money was issued, you say that it would result in increasing the price of everything, and that a man would want a great deal of paper money for his property. Would the workman's wages pur- chase for him, under that system, any more or less than they would under the gold basis? Mr. Marshall. Certainly they would not purchase any more. The Chairman. The workingmau would not be any better off? Mr. Marshall. He would not be any better off, but probably worse off. His wages might be nominally increased, but their purchasing power would be comparatively diminished. The Chairman. And the workingman could not gain by that process ? Mr. Marshall. Impossible. The Chairman. What class of people in the community could gain by it? Mr. Marshall. Only speculators and the middle-men who deal in currency. The Chairman. How about the class that is in debt ; would they not gain by it ? Mr. Marshall. They would gain by it so far as paying off their debts in depre- ciated currency goes. The Chairman. But that happened before, and did the debtor class avail itself of that opportunity to get out of debt, or did they immediately get more into debt ? Mr. Marshall. They proceeded to get more into debt. The Chairman. Then they did not gain by it ? Mr. Marshall. No, not in the end. The Chairman. And in fact it is the collapse of that state of things which has pro- ^luced the present depression in business ? 246 DEPRESSION IN LABOR AND BUSINESS. Mr. Maeshall. Undoubtedly. x j » The Chairman. I understood you to say that you are an enthusiastic free-trader r Mr. Marshall. Yes, I am. The Chairman. And that you have spent time and money to that end ? Mr. Marshall. Yes. By free trade I mean a tariff for revenue ; I do not mean absolute free trade. . j .^ The Chairman. But you would like very well to have absolute free trade if we could get rid of all taxes ? Mr. Marshall. Yes, if that were possible I should be delighted. /» The Chairman. In the course of your efforts I have heard it charged that you gen- tlemen who belong to the free-trade organization have been using British gold in this country to carry out your doctrines and opinions, and that you have been engaged in using money received from the other side to break down American manufactures. Have yon ever received (you need not answer the question unless you want to) any contribution of money from the other side to propagate free-trade doctrines ? Mr. Marshall. Yes ; I received on one occasion from a gentleman in England £5. That is the only contribution of British gold that I ever received. The Chairman. Did you ever hear of any other contribution for the purpose f Mr. Marshall. Never. The Chairman. Did you ever hear of any organized fund on the other side devoted to that purpose ? Mr. Marshaix. I never did. The Chairman. Do you know the Cobden Club ? Mr. Marshall. I am a member of it. The Chairman. Has the Cobden Club sent any money to this country for that pur- pose? Mr. Marshall. I never have received any. The Chairman. Would you be likely to know it if it had t Mr. Marshall. I would be likely to know it, as I have been the treasurer of the American Free-Trade League in this country ever since its inception. Mr. Rice. Have you any doubt that free trade in this country would be an advan- tage to British manufacturers ? Mr. Marshall. I am of the opinion it would be perhaps a temporary advantage to British manufacturers, and perhaps a permanent one ; but I think that the ultimate advantage would largely accrue to us. When I announced myself as a free-trader, or as an advocate of a revenue tariff (that is, a tariff composed of the fewest articles possible, and on which a rate should be collected to meet the necessities of the govern- ment), I do not mean to say that, as a free-trader, I would advocate any sweeping changes in the present fiscal system of this country, so far as the tariff is concerned. I think that an immense number of industries have grown up in the country that have been created by the protective influences, and that it would be wrong and unjust to sweep away, for the present at least, all the advantages which those industries receive from protection. I would be glad to see any correction of the tariff made gradually until our house is set in order. The Chairman. You would deal with them as with the coasting trade — not all at once? Mr. Marshall. Yes, I would deal with them gradually, and that is the only states- manlike method of doing it. The Chairman. Be good enough to indicate the direction in which it ought to be- gin. Mr. Marshall. I think we ought to begin with eliminating from the tariff all arti- cles which do not pay the cost of collection — in other words, to make a large increase to the free list. We have now eighteen hundred or two thousand aiticles paying duties which might certainly be reduced to the number of five or six hundred without detriment to the revenue or to the manufacturing interests of the country. Then I think we should certainly impose a tax on tea and coffee. The duties on tea and cof- fee which formerly produced about |20,000,000 a year were abolished through the protective influences in Congress in order to maintain protective duties on other arti- cles. But the duty on tea and coffee is an eminently just one, because it is purely a revenue one. Every dollar collected from it goes into the Treasury, and every man who drinks tea or coffee pays in proportion to the amount he consumes. Therefore it is eminently a just tax. The Chairman. Would it not bear rather harder on the poor man than on the rich man? Mr. Rice. That is, if he drinks as much tea and coffee. The Chairman. You know that coffee forms a very large article of consumption among the workingraen ; and that workingwomen very largely indulge in tea. You and I like coffee and tea also ; but can we coutrive to get rid of any more of it in the course of a day than a workingman can ? Mr. Marshall. No, sir. DEPRESSION IN LABOR AND BUSINESS. 247 The Chairman. Then would it not be rather an unequal tax in its operations ? Mr. Marshall. It would be an equal tax so far as the amount of consumption Is concerned. Every man would pay in proportion to his consumption. Ihe Chairman. But not in proportion to his means. Mr. Marshall. Not in proportion to his means ; but that would give an opportu- nity to lighten the burden of taxation on these very individuals in regard to otheif The Chairman. Would you not put taxation on accumulated wealth rather than on consumption ? Do you not think that people ought to pay taxes in proportion to their means rather than on any other standard * Mr. Marshall. I think that taxes on accumulated wealth are legitimate ; but this 18 a question of tariff taxation. The Chairman. But suppose we can take the duty off tea and coffee, which poor men and women use, and transfer it to the incomes of gentlemen like vourself and Mr. Rice ? <= .; Mr. Marshall. I am not entirely opposed to an income tax under certain condi- tions. The Chairman. Would it not be a sound statesmanlike view of taxation rather to impose taxation on wealth than on poverty ? Mr. Marshall. I do not think it possible to impose any tax in which the poor man will not have a share. You may impose taxation on accumulated wealth, if you like, or you may impose taxation on all production or consumption, but in the end the poor man has got to bear his proportion of it. The Chairman. Suppose we raised the entire revenue of the United States— 1150,000,000 a year— by an income tax imposed on incomes over $1,000, and that absolute free trade is established ; by what process could the burden of that tax be transferred from the men who pay it to the men who work for them ? Mr. Marshall. It could be transferred by reduced wages or by adding the tax to the cost of the products. It would increase the cost of the product to the extent of the tax levied. Suppose a man is engaged in the manufacture of iron and that he has to pay an income tax, would not that tax enter into the iron product as an element of its cost ? The Chairman. How would that affect the wages of the laborer? They are deter- mined by the law of demand and supply, and the demand and supply would remain unaltered. He cannot put any portion of the tax on labor. If there are more labor- ers seeking employment than there is a demand for, wages will go down. Otherwise they will go up. The fact that I pay an income tax on my profits does not affect that question at all. That is the whole point in the case — whether it is not possible to transfer the whole burden of taxation to profits and net income, and thus to relieve the labor of the coun- try from the part of the taxation which it now pays. Mr. Marshall. I still think that the income tax (although it might be levied di rectly on the net profits) would enter as an element into the cost of production and be ultimately borne by the consumer. The Chairman. If it made capital less productive in this country than in other countries by reason of that tax, then it would tend to drive capital out of this coun- try, and that would restrict the area of employment and the demand for labor, and wages would consequently fall. Mr. Marshall. There would undoubtedly be less capital to give employment to labor, and there would be less remuneration for capital and labor in the country. The Chairman. And if it would tend to drive capital out of the country, of course it would tend to reduce wages. I have asked these questions in order to bring out the inseparable connection between the existence of capital and the wages paid to labor, and to show that if you increase capital you increase the demand for labor, and that if you reduce capital you reduce the demand for labor, and wages must go down. Mr. Marshall. I agree with you entirely on that point. The Chairman. Do you think that the income tax might be made so onerous that it would tend to drive capital out of the country ? Mr. Marshall. I do, undoubtedly. An income tax has to be imposed with caution. But the income tax is, in principle, a just tax. In this country it was extremely odious on account of the system which prevailed in its collection ; and it certainly bore hard on individuals. But I think that the principle of an income tax is just. The Chairman. Would yon recommend us to report to Congress that it is expedient to impose an income tax ? Mr. Marshall. I would not. You would have to put in operation a new set of ma- chinery for the purpose of collecting a tax which never yielded more than from seven- teen to twenty million dollars a year in the best times, and which would yield very much less at the present time (besides affording so many opportunities for fraud and evasion). It would be extremely unpopular, I think, to recommend the imposition of such a tax. 248 DEPRESSION IN LABOE AND BUSINESS. The Chairman. If we want to raise $20,000,000 additional revenue, and if we have the choice between a tax on tea and coffee and an income tax, ought we rather to put the tax on tea and coffee T Mr. Marshall. I think it would be hotter to tax tea and coffee rather than impose an income tax. The collection of an income tax is extremely difficult. It tends to put capital at a disadvantage, and, therefore, to lower the remuneration of labor ; and it is, besides, odious to the American people. The Chairman. On the other hand, if you put a tax on tea and coffee, you add so much to the price of those articles ; and that is very odious to the poor men and women. Mr. Marshall. I think that, so far as the increase of price is concerned, it is almost imperceptible. It would be borne with great facility by the countiy. The Chairman. Can you give us any facts to show the effect on prices of the removal of the tax on tea and coffee? Mr. Marshall. I think that the removal of the tax on tea made no particular change in the prices. The Chairman. It is in evidence that, as to coffee, the only effect of the removal of the tax was to put up the price in Brazil in proportion to the amount of duty. In other words, that it is the producer of coffee that pays the tax, and not the consumer. Mr. Marshall. Yes ; and I believe it was the same in regard to tea in China. That is because the production of tea and coffee is a monopoly so far as those countries are concerned, and the market price is to be settled to a certain extent by the producers of tea and coffee. If they cannot market their products at a certain price they will mar- ket them at another price. If there is a demand for tea and coffee at one price, and if tl^e tax be removed, they only put it on at the other end. The Chairman. Then, in the imposition of tariff duties, it may be that this country does not pay the tax, and that some other country does ? Mr. Marshall. I took care to make the exception in the case of tea and coffee, be- cause they are comparatively monopolies, so far as production is concerned; whereas the commodities in which the world deals generally are not monopolies, and there is an immense general competition for the trade. There the producers of those articles have not the facilities for transferring the tax to the articles at the other end that the producers of tea and coffee have. I £iow that that is a favorite argument of the pro- tectionist — that the manufacturers on the other side pay the taxes. The Chairman. It is a favorite argument of those who have studied political econ- omy that sometimes the consumer pays the tax, and sometimes the producer — depending on the condition of international trade at a particular time. That is the favorite state- ment of those who are after truth. Those who are really scientific put it so; that sometimes the producer pays the tax, and sometimes the consumer; that it depends upon the local conditions of consumption and production at the time ; and that if there is an over-stock of iron in England the English will send out and sell it in foreign countries for less than they sell it in England in order to get rid of it. And so I am told that in New England now they are sending out cotton goods and selling them in foreign markets at less than they sell them for at home. Mr. Marshall. I believe so ; for they have sent cotton goods to Manchester and sold them there at a loss. The Chairman. That may happen in regard to almost any article. Mr. Marshall. Only in exceptional cases. It will not happen where trade is steady and when the purchaser can get a proper market for his product. I think that the tariff has another blighting influence on the manufacturing industries of the country in the way of precluding them from obtaining the foreign outlet. What we need most particularly now is a market for our manufactures. That market, it appears to me, the tariff has prevented us from obtaining, as we would have obtained it if the restrictive influences of the tariff had not been operative. Take South America, for instance. South America is, so to speak, at our doors. It is within comparatively easy access of us, and the amount of products that that country consumes is very con- siderable, and more particularly of cotton goods. Now, it is well known that the cot- ton goods manufactured in this country have attained a high degree of popularity. To-day we make goods in this country better than England makes. Our cotton goods have a preference over English goods in all the markets of the world. When I was in England the last time there was a large house with connections in Chili, a member of which approached me on that subject. He said that they were in the habit of ship- ping very large quantities of Manchester goods to Chili, and that they had made some experiments with American goods, and found that the favor with which American goods were received in South America was so great that they wanted to ascertain if they could not make connections in this country by which American goods could be sent to Chili and pay a profit. That is one symptom of a tendency to get a foreign market for our manufactured products. The Chairman. If they took our poducts how could we get them to the South Amer- ican market as economically as the English can in the absence of any shipping ? Mr. Marshall. Undoubtedly that practical difficulty would exist if we had no steam DEPRESSION IN LABOR AND BUSINESS. 249 'commuuication with South America ; but if you establish the couditions of profitable trade between countries, transportation will spring up and accommodate the trade. The Chairman. But, in advance of that, would you have the government do any- thing to stimulate it ? Mr. Marshall. No, sir ; I am entirely opposed to subsidies to lines of steamers ; I think that the effect of them is to build up a commercial marine at the expense of the country at large ; and not only that, but to stifle all competition. The Chairman. Take the case between here and Eio. Was there any foreign line of steamers running from New York to Eio prior to the establishment of the American line? Mr. Marshall. I think there was ; but I am not certain. The Chairman. If we were to give a subsidy to the American line now running, of course it would carry goods cheaper than the foreign line, from the fact that it has a subsidy and the foreign line has not. Mr. Marshall. Yes. The Chairman. Would not that drive the foreign line off and prevent competition in that trade ? Mr. Marshall. Yes ; it might. The Chairman. And would it not enable the American line to put up its prices T Mr. Marshall. Yes, it would give the American line a practical monopoly. The Chairman. And that would be against the interest of the consumer here and of the producer there ? Mr. Marshall. Yes. The only safety is in an unlimited competition in the trade. Then the transportation is conducted on the best possible terms. The Chairman. You would object to a subsidy being given to yourself to establish a steamship line from here to England ? Mr. Marshall. Certainly ; I should think it most unfair and most unjust. If you give me a subsidy for a particular line of steamers it does away with any chance for private competition outside ; private competition is handicapped to the extent of the subsidy. If I am receiving a subsidy and you are receiving none, you certainly are put to a disadvantage. The Chairman. But it is necessary to have the mail service performed promptly. Now, suppose that we have not got a line of steamers to Rio, but have to send our mail to England, and from England to Rio. Has not the English merchant, in that case, the advantage over the American merchant ? Mr. Marshall. Undoubtedly. The Chairman. Would you do anything to facilitate postal communication between this country and South America ? Mr. Marshall. I think it is proper for the government to pay anything reasonable that is necessary for the transportation of the mails. The Chairman. Suppose it is necessary to give |20,000 a trip in order to have direct mail transportation from here to Eio, where there is a business of §40,000,000 a year, woald you do it ? Mr. Marshall. I think that, if there was a line of steamers in existence, and if it were necessary to transport the mails to a given point, and if the government can only obtain that transportation on certain terms that are not unreasonable, the gov- ernment would be justified in paying those terms — not in the nature of a subsidy, but for service performed. The government might be obliged to pay exorbitantly in the absence of competition. The Chairman. Say that it had to pay a dollar a letter? Mr. Marshall. There is a limit beyond whicli the government would not be justified in paying for the transmission of postal matter for the benefit of the comparatively iew who participate in the trade. The Chairman. As a matter of fact have not the English, the French, and the Ger- Tuana enormously increased their foreign commerce, and given great facilities to their manufacturers by that very process of paying large subsidies for the transportation of the mails ? Has it not built up their great commercial marine ? Mr. Marshall. It has built up portions of it. Undoubtedly England does pay large amounts for subsidizing her lines of steamers. The Chairman. Take the line between England and Brazil and other South Ameri- can lines where subsidies are paid. How can our American manufacturers expect to compete with English manufacturers when the English Government pays subsidies to steamships, which are thus enabled to carry British products at low rates and with great rapidity from England to those markets ? How are we to get on under that state of things ? Mr. Marshall. We cannot compete with them so long as England pays the subsi- dies. The Chairman. Is it a wrong system on her part ? Mr. Marshall. I think it is. 250 DEPRESSION IN LABOR AND BUSINESS. The Chairman. But has not England grown in wealth and business and got the commerce of the world into her hands by that process 1 i r. i Mr. Marshall. No, not by that process. That process may have opened onannels to English manufacturers, but it is not my opinion that the commerce and wealth and greatness of Great Britain have been built up on that process. The Chairman. Is there any doubt that it has contributed very much to the expan- sion and development of English commerce ? Mr. Marshall. I think that the expansion and development of English commerce have been built up to a certain extent by the system of subsidizing steamers ; but you must remember that England has a peculiar commerce. The Chairman. So peculiar that we find it very hard to compete with her. Mr. Marshall. England has an outlying system of colonies all over the world, and she has fostered communication with those colonies for political causes. The Chairman. But England has grown rich, has she not ? Mr. Marshall. England has grown rich, but she has not grown rich from that policy alone. That may have been one of the elements of her greatness, but I do not admit that her greatness is due to that exclusively, or even to a very great extent. The Chairman. Can we hope to get on in competition against that very rich country which has pursued this system, and is pursuing it to-day, unless we adopt a similar system ? If we cannot, what force is there in the argument that we must get a foreign market for our manufactured goods 1 How are we to get it unless we go a step farther, and not only take off tariff duties, but give subsidies to somebody te establish lines of communication ? Mr. Marshall. If the conditions of trade existed between this country and the South American states transportation would be furnished by some nation or another. It might come from an American source or might come from an English source, but that it would come is certain. The Chairman. But it has to begin. There is not enough trade at present to freight a steamship. Mr. Marshall. As soon as the point is arrived at where there is trade enough to begin a line of steamers the line will come. The Chairman. But that point will never be reached if the English can supply the South American market as cheaply as we can and if they have a subsidized line of ships carrying goods to Brazil. Mr. Marshall. We can avail ourselves, of course, of the mode of transportation which the English provide for us. The Chairman. We would have to send our goods over there in order to get them transBprted to Rio. Mr. Marshall. If there was an English line of steamers between here and Brazil, and if there was a volume of trade suflScient to justify that line, it would go on and exist. The Chairman. I understand the conditions of trade with Brazil to be that return cargoes have been brought to New York and reshipped on British vessels to go to Eng- land. Mr. Marshall. That is so, because duties are so high in this country on the products of their country that they do not come to us. The Chairman. But you argue in favor of imposing a duty on coffee, the chief prod- uct of Brazil. Mr. Marshall. Coffee is not its only product. The Chairman. Coffee and hides. Mr. Marshall. Hides are free to-day. The Chairman. We get large shipments of nitrate and copper from the South American States. Mr. Marshall. Not from Brazil. The Chairman. Not from Brazil, but from Chili. My object in putting these ques- tions is to have the whole field thrown open, and to show that whatever way we go we are met with difiaculties of this sort, and that the nearer we get to the bottom the greater the difficulty seems to be. One conclusion to which we are all driven is, that we had better let it alone if we do not understand it. Mr. Marshall. But it will not be let alone. It will never be let alone until it is placed on some permanent basis, and that basis must be a scientific one, and founded on experience. The Chairman. You would get rid of the duties on raw material as soon as possi- ble f ^ Mr. Marshall. Certainly, sir. Anything that enters as a component part into man- ufacture I would free from duty as soon as possible. The Chairman. There we are met again with the question, what is raw material t Is pig-iron raw material ? Mr. Marshall. It is and it is not. It is a finished product in a certain respect and it is a raw material in other respects. But, if we start with the idea that all tax- DEPEESSIOK IN LABOR AND BUSINESS. 251 ation is not a benefit to a community, but is, on the contrary, an impediment to a community, we shall certainly begin in the right direction. The theory which has obtained in this country, so far as tariff taxation is concerned, is that the taxation of certain articles is a benefit to the country. That I do not think. I think that taxa- tion is always a detriment to a community, and that, so far as you can adjust the bur- dens of taxation to the shoulders of the people, so far you are having a proper fiscal system. Therefore I have always argued that the limitation of duties to a few articles is infinitely better than spreading the taxation over a large number of articles. In the first place, from its simplification, it costs very much less to collect them. The Chairman. That brings np this question about trades-unions. The trades- nnions believe that by restrictive regulations between themselves they can get the benefit of better wages ; and certainly in ^ood times they are able to do it, but in bad times they are not able to do it. Now it is very hard to persuade the working- men that trades-unions are not for their benefit, and it is very hard to persuade very intelligent men outside of trades-unions, such as Frederick Harrison, Mr. Thornton, and others of his stamp. Mr. Howell's recent work, which is a very powerful defense of trades-unions, raises that whole question, whether it is possible for any one class of the community to benefit itself as against all other classes of the community, or for any community to benefit itself as against other communities. The men of the trades-unions only care for themselves — trying to see how they can get better wages. So, the nation may say we can compel England to pay more for her cotton. We can raise a smaller quantity of cotton and England will have to pay more for it. Mr. Marshall. The nation at large does not say that it will get a better price for that product and other products, and that therefore it will put a protective duty on imports. It is only a small part of the nation that says so. The Chairman. We cannot pass any law except by the voice of the majority. Mr. Marshall. But the voxpopuU is not always the vox Dei by any means. The Chairman. The majority in this country must believe in the doctrine of the tariff or else we would not have a tariff. Mr. Marshall. For instance, the number of planters, farmers, and laborers in this country may be estimated (with their families) at twenty-four millions, and the num- ber of trades people employed by them perhaps at six millions. There are only about two millions of adults employed in the protected manufactures in this country, and^ with their families, they would amount to about ten millions. Now, there are ten mill- ions of people dependent either directly or indirectly on protected industries in this country, while there are something like thirty millions of people in the country who are not interested in any way in protected industries. On the contrary, they are a portion of the people who pay for the benefit of these ten millions. The Chairman. That is one statement of it, but it may be disputed. Mr. Marshall. The capital employed in protected industries in this country is only about five hundred and fifty millions, whereas the property in unprotected industries amounts to about ten thousand million dollars. The people who depend upon protected industries are only abont one-fourth of the population of the country. You say that the trades-unions attempt to regulate the wages of labor so far as their particular trade is concerned. They may be justified in doing that, because they are not looking at the interest of the nation at large, but only at their own interests. But any man who rep- resents the interests of the entire community is justified only in imposing taxes that are not calculated to injure the large portion of the community. The Chairman. Suppose that I represent a district in which there are a great many manufacturers ; am I to go against the interest of my own people that send me to Congress to do a particular thing ? Mr, Marshall. Then you are nominally at the head of a large trades-union. The Chairman. Take our Congressional districts. They are supposed to elect men to represent their views and interests. Suppose Mr. Rice's district sends him to Con- gress; is he to vote against the wishes and interests of his constituents or not ? Mr. Marshall. I presume that Mr. Rice would vote in the interest of his constitu- ents ; but, with all due deference to Mr. Rice's action in the matter, I should not con- ceive it to be in the interest of the nation at large. The Chairman. But he is not sent to Congress to look after the interest of the nation at large, but after the interest of his own district. Senators are in Congress to look after the interest of their States. Who there is there to look after the interests of the people at large I have never been able to find out. Mr. Marshall. In other words, the forty millions of people are not represented ? The Chairman. There are a few gentlemen in Congress who try to be statesmen, but they get so unpopular in their own districts that they cannot be sent back to Con- gress. I merely state this to show you the practical difficulties in the way. Mr. Rice. It will depend upon which way most of the districts go. Mr. Marshall. It seems to me that under our present system it would turn on that result. 252 DEPKESSION IN LABOR AND BUSINESS. The Chairman. Do you think that a protected industry tends to raise the wages of labor employed in it ? Mr. Marshall. I think it may for a time. The Chairman. It has had that effect in this country ? Mr. Marshall. Yes ; temporarily. The Chairman. If that is so do you think that there can he higher rates of wages in a country, as a permanent thing, in one branch of industry than there can be in any other branch ? Do not wages, like water, get to a level ? Mr. Marshall. I think so. The Chairman. Then how can it be that the persons engaged in non-protected Industries would get less compensation for their labor than those engaged in protected industries, if wages equalize themselves ? Why do the higher rates of wages not extend to the persons employed in the non- protected industries ? And if they do, how do these persons support those engaged in protected industries at a cost to themselves ! Mr. Marshall. They support the others in paying the enhanced price of the pro- ducts of protected industries. The Chairman. But they get more wages themselves, and the purchasing power of their wages is not changed. Mr. Marshall. The non-protected elements of the community pay a correspond- ingly higher price for the products of protected industries in consequence of that pro- tection. The Chairman. But they get a correspondingly higher rate of wages themselves. Mr. Marshall. Who do ? The Chairman. Those in the non-protected industries. Do they not get the same rates of wages as those in the protected industries ? Mr. Marshall. They do not. The Chairman. Then you have a state of things by which some people in the com- munity get permanently better wages than others ? Mr. Marshall. I do not say permanently, because the tendency of wages is , to equalize themselves unless that tendency is obstructed by artificial means. The Chairman. Suppose the wages paid to workers in iron and cotton factories are greater than the wages paid on farms ; do not the men on farms rush to the towns and seek employment at the factories ; and, in that way, do not wages come on a uniform level ? Mr. Marshall. They will ultimately; but, if you put a protective duty on articles and thereby increase their price, that tends to the production of those articles in large quantities, because capital will always flow into the most remunerative channel; and that will employ labor ; and that state of things will continue so long as the protec- tive influence goes on. The Chairman. It must raise the rate of wages uniformly if it raises them at all, because the men who go into the protected industries come out of the ranks of those engaged in the non-protected industries ; and therefore, there being this diminution of the supply of labor in the non-protected industries, the laborers who are left in them get a higher rate of wages. You cannot have two rates of wages prevailing for the same class of labor for any length of time. Mr. Marshall. But this is a different kind of labor. There is protected and non- protected labor. The Chairman. Laboring men on farms and laboring men in factories interchange all the time. Mr. Marshall. I think you are mistaken in that. I think that the tendency of pro- tected industries is to increase the cost of the article, and to induce more capital to go into the production of that article, and thereby to increase for the time the wagos of labor. The Chairman. But, after a time, they will become equalized. Mr. Marshall. Undoubtedly ; and ultimately wages will go down to the general level. But the difficulty in this country is that the protected industries, having re- ceived an undue amount of support, and the home market at one time being a very large one, they were enabled to obtain profitable employment for labor and capital in those particular industries. But now the home market is poor, and there is no foreign market to look to ; and, therefore, the wages of labor have gone down and capital has suffered disaster. The Chairman. The same thing has happened in England, which is under a free- trade system. Mr. Marshall. Undoubtedly. There are commercial disasters all over the world. I do not mean to say that the tariff is the only cause of commercial depression ; but I do mean to say that the country which has the least restrictive legislation is the coun- try which has the most recuperative power. Mr. ElCB. If we can protect some industries in this country, the product of which is furnished to us now by foreign manufacturers, and if we can thereby set at work those who are now unemployed in the country, would not that raise the wages of all laborers? BEPKESSION IN LABOR AND BUSINESS. 253 Mr. Marshall, If it did, it would be by an indirect taxation on the people. Mr. HiCE. Would it not produce employment for all kinds of labor and raise the wages of those working along on low pay now ? Mr. Marshall. That would depend entirely on the demand for those products that exist here. Mr. EiGE. Take the products which we need here and which we now import from abroad. If they could be manufactured here (although the laborers who are now em- ployed had to pay a larger amount for those products than they have to pay now when they are brought from England), would it not be better for them and better for all T Mr. Marshall. No, sir ; I think that, while it might nominally increase the scale of wages, it would proportionately increase the scale of prices, and that the laborer would find that the purchasing power of wages was diminished. He would get more in money but he would get less in commodities. After all it is not of very much dif- ference whether the rate of wages is high or low ; but the real question is how much the wages will buy. I would silso remark that it is the tendency of all capital to seek the most remunerative outlet, to seek the greatest return ; and that, if there are n» restrictions as to the employment of capital, capital will naturally seek the most re- munerative channel in which to employ itself. Now if you institute a protective sys- tem you divert capital from channels that are normally profitable into those which become abnormally profitable in consequence of the protective system. That is, you take capital and labor from industries in which they are at present employed, and you transfer them to other industries at which they may be employed at a larger remunera- tion. The Chairman. Take a country like Australia (and every young country), whose natural products are those from agriculture, sheep-raising, gold and silver mining,. &c. It has no manufactures. Being a British colony, its people have all been brought up under the free-trade system, and they believed in free trade when they went there ; but they have established a protective system. How could they have got any start at all in business, with Great Britain as a competitor, unless they had some means of acquiring the necessary skill (which takes time) to carry on works ? Take iron- works, for example, and it will require a new beginner from five to ten years to acquire the necessary amount of skill. Mr. Marshall. Why should they do it f The Chairman. Because they find that they cannot employ all their labor in other ways. They produced so much wool that the price of wool fell. They had no ade- quate market for their agricultural products. There was a limit, of course, to the production of gold and silver. And the colonies got down to the point that they had to diversify their industry. Mr. Marshall. Then they paid the cost of it. It is a diversion of labor from one channel to another, for which the country at large pays. The Chairman. But is not a diversification of industry valuable to a country ? Mr. Marshall. I think it is ; but 1 do not think that a diversification of industry should be brought about except by natural laws. The Chairman. Bat suppose that, five years hence, they can compete with other countries under a free-trade system, are they to pay nothing for that advantage even by way of a bonus t Mr. Marshall. I should not do it. I shovild be entirely opposed to paying a bonus, either directly or indirectly, because the people at large have to pay it and have to pay it for the benefit of a few. The Chairman. You may be right. Nevertheless the greatest statesmen in all times have pursued the opposite course. Mr. Marshall. Not of late years. The Chairman. The tendency now is in your . direction. But Napoleon Banaparte was one of the greatest men who ever lived ; and Bismarck is a great man ; and they looked at this question with a statesman-like eye, and took measures to establish diversified industries. . , ^ ^ -u u Mr. Marshall. Napoleon Bonaparte was a great conqueror. He wished to build up his own personal ambition. I do not think he has been cited as a great political economist. • , . , . . ^ ^ j, ^t- The Chairman. But he is cited as one of the greatest administrators of pubho affairs. , , . , , , . . , Mr. Marshall. So he was. But his views of trade and commerce might be entirely wrong. Now, the third Napoleon The Chairman. Yes. He arrived at a day when he took another course. Mr. Marshall. He instituted free trade between France and England. The Chairman. Do you call it free trade ? „ ^, j, :, j. j. -u ^ Mr Marshall. I do not call it absolute free trade. But he formed a treaty between France and England which greatly reduced the duties on articles entering into France from England, and made a corresponding reduction on articles entering into England from FrMice. In 1860 the imports into England (I am sorry that I cannot give you. the figures for France) 254 DEPEESSION IN LABOR AND BUSINESS. The Chairman. They are very advantageons to your position. The English imports increased enormously ; but the French imports have not increased to a corresponding degree ; and the English people think that France got the best of the bargain. Mr. Marshall. You mean that England did. The Chairman. No, that France did. The imports into England increased enor- mously. That is, England bought immensely more from France under the Cobden treaty than France bought from England. Mr. Marshall. That was a good thing for France. The Chairman. Yes. But the way she arranged it was that she (France) kept her duties up on many articles and did not buy English products. Mr. Marshall. The English showed their capacity to take advantage of that treaty by their increased importations. The Chairman. And the French were very glad to sell. Of course it was a mutual benefit. Mr. Marshall. It is so with every commercial transaction. But, in order to show the progress of trade as brought about by that treaty, so far as England is concerned, I will state the figures. The imports for the fifteen years before the treaty were £210,530,873, and for the fifteen years ending in 1875 were £373,935,737, showing an increase of over £136,000,000. [See foot-note 1.] Before and after Peel's tariff reforms. Imports. Exports. Total. In 1840 £62,004,000 152,329,053 £110, 128, 716 115, 821, 092 £172 132 716 In 1850 268, 210, 145 90, 335, 053 5, 692, 376 96, 077, 429 Before am after French < ommermal tree My. Imports. Exports. Total. In I860 £210, 530, 873 373, 939, 577 £164,521,351 281, 612, 323 £375,052,224 655,551,900 In 1875 163, 408, 704 117, 090, 972 280, 499, 676 Trade with Fran ce alone. 1855. 1860. 1865. 1870. Imports £9,246,418 10, 421, 881 £17, 774, 037 12, 701, 372 £31, 625, 355 25. 355, 072 £37, 607, 514 Total 19,668,299 30, 475, 409 56, 980, 303 59, 590, 513 1873. 1874. 1875. Imports £43, 339, 234 30, 196, 168 £46,518,571 29,369,241 £46, 720, 101 27,292,455 Total 73, 535, 402 75, 907, 812 74, Oia, 556 The Chairman. Do yon mean the foreign trade of England ? Mr. Marshall. No ; I mean trade with France alone. The Chairman. Not in a year f Mr. Marshall. No ; from 1860 to 1875— fifteen years. Now, the volume of exports for the fifteen years before the treaty was £164,521,000, and for the fifteen years end- 'Here I -wisli to amend my testimony. The figures I have eiven apply to the general increase of -trade of England with foreign countries before and after the French commercial treaty and are not those which refer to the Anglo-French trade alone. I subjoin the tables showing how the trade of England, both m imports and exports, increased after Peel's tariff reforms, and after the establishment of the French treaty ; and I add, in order to illustrate my argument in its application to the trade with S^ranoe alone, the imports and exports in 1855, 1860, 1865, 1870, 1873, 1874 1875 • DEPRESSION IN LABOR AND BUSINESS. 255 ing in 1875 £281,000,000, showing an increase of £117,000,000. These were the exports. I read the imports first. The total volume of exports and imports was, for the fifteen years ending in 1860, £375,000,000, and for the fifteen years ending in 1875 £655,000,- 000, being an increase of £280,000,000. [See foot-note 2.] The Chairman. Have you investigated the fact as to whether the trade of Great Britain with other countries did not increase in exactly the same proportion in the same time t Mr. Marshall. Undoubtedly it did increase ; but I think that there was a marked increase immediately after the establishment of that commercial treaty. The Chairman. Mainly because French wines could be imported into England free ef duty. Mr. Marshall. And silks also ? The Chairman. And silks also. But I think that the increase of business between France and England was not greater than that between France and other countries at the same time. I agree with you, however, that the removal of restrictions tends very largely to the increase of business. Mr. Marshall. I think that this country would be benefited by a similar treaty with France. The Chairman. I suppose you know that the difficulty with France is that these commercial treaties are very disadvantageous to the United States. We have no pro- hibition as to France, but we are not on equal terms with France. They actually prohibit the importation of many of our products, while they let those of England in free, or at low rates. Mr. Marshall. I know that. France deals with foreign nations on the principle of commercial treaties. The Chairman. Yes, and on the principle of taking care of France every time. Ton cannot cite France as an example of a nation that is progressing in the direction of free trade. Mr. Marshall. I think I can. The average rate of duties under the French tariff is only 15 per cent., while the average rate of duties under our tariff is something like 40 per cent. The Chairman. But the rates of labor are cheaper in France than they are in England. Therefore the French can compete as to every article (except where England has special advantages) on terms of equality, and therefore it is not necessary for France to have protective duties on those articles. Now, take the matter of iron. The duties on iron were not reduced by the Cobden treaty. Napoleon would not sacrifice the iron business in France ; and the French iron business has steadily grown under the Cobden treaty, and the importations have not grown. Mr. Marshall. I have not the figures of French importations, so that I cannot speak positively on that point. But now, to come to the question of the wages of workingmen. I am not an employer of labor directly, but I am indirectly. You are aware that all work on ships is done by a middle-man. That is, you make a contract for your work with a stevedore at a certain tariff of rates, and then he employs^ the men at the existing rates and pays them on the schedule of rates obtaining at the time. Thejwages of 'longshoremen in this city appear to have kept up very well. I believe that in the circular which you sent out you asked for some information of that kind. The Chairman. Yes, we want it very much. Mr. Marshall. Of course there are some questions in that circular to which I can- not reply, such as in regard to the rents of houses, the prices of commodities, &c. But I •did ascertain the wages of 'longshore-men from 1860 to 1877. The wages of the labor- ers (as they call them) were forty cents an hour. 'Longshore-men are not paid by the ■day for any specified time, but are only paid for the actual time during which they are employed. They go to work, and when their work is finished, they knock off their work, and then they go to work again. The Chairman. When were the wages 40 cents an hour ? Mr. Marshall. From 1860 to 1877. The Chairman. And they were never changed in that time ? Mr. Marshall. No, sir; they were never changed. They received 40 cents an hour for day-work, and for night-work their wages were just double. Then, as to the rig- gers. They got 45 cents an hour by day, and for night-work they got 80 cents per hour. The foremen, the heads of gangs, got 50 cents an hour for day-work, and 80 cents an hour for night-work. That scale of wages obtained from 1860 to 1877. From 1877 down to the present time laborers get 30 cents an hour by day, and only 45 cents an hour for night-work. Foremen get 45 cents an hour for night-work. Mr. Marshall. There are certain classes of laborers among the longshoremen who are employed to stow cotton, tobacco, and oil, and who receive ten cents more, forty • Mv Doint is that the removal of restriction tends to increase trade to the advantage of both oountriep. A proof of this is the enormous general increase of exports and imports in England s trade after the traiff reform of Peel, and the establishment of the Cobden treaty ; also, as shown in particular in the growth of trade between England and France. 256 DEPRESSION IN LABOR AND BUSINESS. cents instead of thirty cents, because the labor is presumed to be more arduous. I asked my stevedore what a steady man of this class, employed regularly from 1860 to 1876, could gain, on an average, a weeli, and he told me about |16. That is, a man in pretty steady employment ana sought for as a good man in this desultory sort of work (because it is not a regular occupation) would make about $16 a week from 1860 to 1876. It appears that now our best men average about $18 a week, a reduction of $4 a week on'jthe best men. I then asked him what the best years were for remuneration and steady employment of that class of labor, and he mentioned the years 1871, 1873, and 1874. In those years the men found the most steady employment, and he ascribed it to the Franco-German war, which created great activity in shipments in the begin- ning of this period. "What the causes were later, I do not know. He stated that at times during the period a good man would make as much as $20 a week. The Chairman. Is that a special business requiring unusual strength or skill t Be- cause the wages seem out of proportion to the pay of common laborers. Mr. Marshali,. The business requires a good deal of strength and it also requires some skill, especially in the stowing of cotton ; the bales have to be selected with care in order to get as many as possible into a given space. The Chairman. Does your informant say that there is abundant employment now for these men ? Mr. Makshail. I asked him whether there was any particular distress among them at present, and he said he thought not; that though they did not earn as much as they used to, still they are able to maintain themselves and their families, because the prices of commodities are much less than when their business was more active. The Chairman. Is the volume of employment as great as usual ? Mr. Marshall. There is not so steady employment as there was in the three years I have mentioned. The Chairman. You say they are getting $12 a week now instead of $16, a reduc- tion of one-quarter, but that that is because wages have fallen 25 per cent. That would indicate as much employment as usual. Mr. Marshall. The reduction may be due to a combination of both causes. The probability is that the men are not getting so large wages, and also that they are not employed so constantly as they were. Probably the volume of work and the remu- neration are both less than they were in the period 1 have mentioned. Now take the wages of carpenters and calkers, people employed in the construc- tion and repair of vessels. That used to be a very large industry here, but there have been hardly any ships built in this city since 1862 or 1863. There may have been one or two built besides one that I built, but shipping, as an industry, has disappeared. The Chairman. Did trades-unions have anything to do with driving away the busi- ness of ship-building and ship-repairing from New York 1 Mr. Marshall. That I cannot say. I only know that all the great yards have been compelled to close up and are doing nothing. From 1855 to 1869 — shall I go back as far as 1855 1 The Chairman. Go back as far as you are prepared to go. The information will be very valuable to us. Mr. Marshall. From 1850 to 1855 the wages of a carpenter were $2 to $2.25 a day. From 1855 to 1860 there was no change. From 1860 to 1862 the wages went up slightly to $2.25 and $2.50 a day. Then in 1863 they went up to $2.50, $2.75, and $3 in many cases. In 1864 they went up to $3.75 and to $4, and even as high as $4.50. In 1865 and 1 866 the wages were $1 and $4.50 a day — very high wages. In 1867 they came down, and were from $3.50 to $4, and sometimes $4.50 in exceptional cases. In 1868 they were $.3, $3.50, and, in exceptional cases, $4, and in 1869 they were $3, $3.50, and sometimes $4. These were the wages of carpenters. The wages of calkers did not differ materially from these rates, though they were about twenty-five or fifty cents a day higher at times, as. stated in this schedule. Calking is always well paid. The Chairman. Do you think wages have fallen in those branches of business as much as the necessaries of life ? Mr. Marshall. I think not. The Chairman. You think, then, that the purchasing power of the pay of these men is greater to-day than it was in the years you have given ? Mr. Marshall. I think that in this particular class of labor the purchasing power of the wages is greater than it was at that time. The Chairman. Greater than in 1860 ? Mr. Marshall. I don't know about 1860, but greater than when the wages reached their highest point. The Chairman. Of course it is greater than it was at that time. Mr. Marshall. Carpenters and calkers got in 1877 $3.50 a day, and they get now |3. A blacksmith in 1877 and the early part of 1878 got $3 a day, now he gets $2.75. Ordinary laborers in 1877 got $2 a day, now they get $1.75. The Chairman. With those rates of wages prevailing, wouldn't it be pretty hard for DEPEESSION IN LABOR AND BUSINESS. 257 an American shipping merchant to compete with a British merchant who repaired his ships in British ports at the rates that prevail there ? Mr. Marshall. Yes, sir. I had an instance of that not long ago myself. I had oc- casion to re-metal here a ship wtiicli bears the name of my father, Charles H. Mar- shall, and shortly afterwards I had to have another ship re-metaled in Liverpool, which bears the name of Hamilton Fish, lately Secretary of State. I took occasion to contrast the relative cost of repairing those two vessels. They were abont the same size and tonnage, having about the same area to be covered in each case. I took the number of ponnds in both cases and compared them, and the diiferenoe in favor of the Liverpool work was something like $1,000. The Chairman. About what percentage ? Mr. Marshall. The total work in the case of the vessel repaired here cost abont $2,800, the one repaired in Liverpool cost about $1,800. That is after giving credit for the return of old metal. The Chairman. A difference of very nearly 50 per cent.? Mr. Marshall. Yes. Mr. Thompson. What time was that work done 1 Mr. Marshall. Within a few weeks. I asked one of the ship-builders here, Mr. Poillon, who Imilt the yacht Sappho, to tell me about how large a class the carpenters and calkers are at present, but he has not given me any answer yet. I also asked him whether there is much distress among that class, and he says that, in his opinion, there is very considerable distress among them. I asked him also whether they were pretty fully employed, and his reply is that only about one-third of them have steady employment ; I presume not the same one-third all the time, but that the em- ployment is distributed among them, and that on an average one-third of them are employed. Of course, the only way I can get this information is by appealing to a number of persons interested practically in this sort of business. The Chairman. We are very much obliged to you for taking the trouble, because it has been very difficult for us to get the information. Mr. Marshall. In speaking of the difference in the cost of repairing these two vessels that I have mentioned, which is a very large difference, I must say that the work in Liverpool was done very cheaply indeed. We have very little money to spend on ships nowadays, you know. In fact, all the ships tliat I represent now are running pretty much for the benefit of the labor employed ; certainly not for the benefit of the capitalist. The Chairman. I was going to ask you whether the capital employed in your busi- ness of running ships yields a profit, or whether the ships are run for the employment of the laborer ? Mr. Marshall. Entirely for the employment of the laborer. I will give all the profits that I make out of my shipping interest for one-half of 1 per cent, per annum. The Chairman. So it appears thatin the shipping business, as was testified the other day by Mr. Dodge in respect to his business, the laborer has the benefit of a large capital without paying anything for it. , ^ .^ . ■ .. Mr. Marshall. Entirely so, so far as my experience goes ; and I suppose that is the general experience. There is no return from the capital employed in running ships now, but of course that business gives large employment to labor, and the laborer ben- efits by it, while the capitalist gets nothing. The Chairman. Still, the capitalist tries to keep it going in the hope of a change TOT* 'i'rift ilft't'^PT' Mr. Marshall. In the hope of a better time. A ship-owner is like the man who had hold of the timer's tail : if he let go he would be sure to be killed, and it was death to hold on. If you lay up your ships they will deteriorate more than if you run them. The Chairman. Therefore there is a profit in the business in the sense that the ships would deteriorate more if they were laid up than when they are kept running. Mr. Marshall. Yes, sir. The Chairman. That is, the profit is a minus quantity. _ Mr Marshall. Yes. Now, of course, every man has his own opinion as to *he rem- edy required to bring about a difl^'erent condition of things. Eepresentatives of the workingmen have come before you and testified that in their judgment unlimited issues of greenbacks, or transportation to the prairies at government expense and other such measures, are the true solution of the difficulty; hut my opinion is that all those schemes would be utterly nugatory and would only react upon the very classes for whose benefit they are intended, and leave them iu a worse condition than before. I do not say this on account of any want of sympathy with the woiliingman, because I have an intense sympathy with the laboring class in this community, but I deny that those measures which are advocated in the interests of that class ot our people would be effectual, and I am firmly convinced that they would simply operate to the injury of workingien. I think, in the first place, that a reformation in our currency is the vital thing— to get it back to a sound basis, which will give stability to comineroial transactions. Then let us have the fiscal legislation which is required to raise the load of taxation and adjust it properly to the shoulders of the people. I do sincerely 258 DEPRESSION IN LABOR AND BUSINESS. believe that we must have a revision of our tariff and the ultimate reduction of it to a revenue basis before we can have anything like stable, tangible prosperity m this country. Then, in addition to these measures, giving us a revenue tantt and a sound currency, I would abrogate our navigation laws, which are of no use even for the protection of the very class that they pretend to protect. I say to those people who claim that ships can be built as cheaply in this country as on the other side, that if this is so, there is no harm in abrogating the navigation laws, because ship- owners will be sure to go where they can get ships built cheapest and best ; and, on the other hand, if ships cannot be built here as cheaply as on the other side, then the American ship-owner should be allowed to get his work done where he can get it cheapest, or else he is placed at a disadvantage. Then, in addition to these reforms, we require economy in the administration of our governments, both national and local, but especially local. Just think of it ! the municipal debts alone of this country are a thousand millions of dollars. The chairman of this committee knows very well how largely municipal debt was increased in this country within the past few years and how enormously it has outrun the growth of population and wealth. The Chairmajj. Yes, the growth of our debt has been much more rapid than the growth of our population. Mr. Marshall. That, I think, is one of the greatest difficulties that we have to con- tend with in attempting to ameliorate the condition of the workingmen. We must have the reforms that I have indicated, and I firmly believe that if the workingman will help to bring about these reforms, and will at the same time practice sobriety, patience, and honest industry, he will find in this direction the true solution of his difficulties, and he cannot find it in any other way. He cannot find it from public charity, which is the intervention of government, nor from private charity, which is the intervention of individuals. He must depend upon himself and upon leaders who will put him in the right path and help him to bring about legislation which will inure to his advantage as well as to the advantage of all classes. This committee have thrown open their doors and invited representatives of every class to come and ex- press their views, and I cannot but think that much good will come of it. Of course, a vast amount of nonsense has been talked in this room, but I do not think it will do any harm. If what I have said or anybody else has said here has truth or substance in it, it will have its effect; if not, it will have no weight. I thank the committee for the patient hearing they have given me. The accompanying table shows the amount of American tonnage engaged in the foreign and coasting trade, from 1820 to 1860, by periods of five years, and from 1860 to 1877, by single years, and which may be useful as illustrating the rise and progress and subsequent decay of our shipping interests. Tears. Eegistered vessels. Enrolled ves- sels coast- wise. 1820 Tons. 583, 657 667, 408 537, 563 788, 173 762, 838 904, 476 1, 439, 694 2, 348, 358 2, 379, 396 2, 496, 894 2, 173, 537 1, 926, 886 1, 486, 749 1, 518, 350 1, 387, 756 1, 515, 648 1, 494, 389 1, 496, 220 1, 448, 846 1, 363, 652 1, 359, 040 1, 348, 535 1, 389, 815 1, 515, 598 1, 353, 708 1, 570, 599 Tons. 539,080 587, 273 496, 240 746, 116 1 144 664 1825 J 1835 1840 1845 1, 190, 898 1,755,798 2, 491, 108 2,599,313 , 2,657,293 2, 578, 546 2, 918, 614 3, 204, 227 3, 353, 637 2, 689, 153 2, 627, 151 2,6.58,404 2, 470, 928 2,5!I5,328 2,722,372 S, 883, 906 3, 116, 373 3,243,656 3,169,687 2, 547, 490 2, 488, 189 1850 1855 1860 1861 1862 1863 1864 1865* 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 . .. . 1876 1877 *N6w measuremeut from 1865. The above includes Bteamahipa as well. DEPRESSION IN LABOR AND BUSINESS. 259 The registered steam tonnage was as follows : Tears. Tons. 1830 1,419 1?40 4,155 1850 44,429 I860 97,296 18n4 106,519 1868 221,939 1870 192,544 ENGAGED IN FOREIGN TKADE. Tears. Tons. 1871 180,914 1872 177,666 1873 193,424 1874 195,245 WS 181,689 1876 198,227 1877 190,133 From address of Charles H. Marshall, February 19, 1878/ The following table, taken from a little book called " Oar Merchant Marine," writ- ten by Mr. Charles S. Hill in the advocacy of subsidies, and in the interest of certain ship-building yards in this country, shows the comparative estimate of American and foreign tonnage entered at ports in the United States from foreign countries since 1830 : American and foreign tonnage entered at ports of the United States from foreign countries in the follouiing years, viz : fFrom official figures.] Fiscal years. American ton- nage. Foreign ton- nage. American in ex- excess of for- eign tonnage. Foreign in ex- cess of Amer- ican tonnage. 1830 967, 237 1, 576, 946 2,57,3,016 5, 921, 285 5, 023, 917 5,117,685 4, 614, 698 3, 066, 434 2, 943, 661 3. 372, 060 3, 455, 052 3, 5.50, 5.50 3, 402, 668 4, 711, 949 131, 900 712,363 1, 775, 623 2, 353, 911 2. 217, 554 2, 245, 278 2, 640, 378 3,471,219 3,216,967 4,410,424 4,318,673 4, 495, 465 5, 347, 694 12,218,305 823, 327 864, 583 797, 393 3, .567, 374 2, 806, 363 2, 872. 407 1, 974, 320 1840 1850 1860 1861 1862 1863 1864 404, 765 273, .306 1, 038, 364 863, 621 944,915 1,945,026 *7, 506, 416 1865 1866 1867 1868 1869 1876 ■ * This is a startling increase of foreign tonnage in the last seven years, viz, 126 per cent., and gives em - - ployment to over 350,000 foreign sailors, consequently leaving that number of our own seameu unem- ployed. On examination of the o£Scial report of the Chief of the Bureau of Statistics on Commerce and Navigation, I find that the writer of " Our Merchant Marine" has erred in his figures for 1876. The amount of American tonnage entered at ports of the United States from foreign countries for that year was 3,611,436 tons ; of foreign tonnage, 8,899,312 tons. The difference, therefore, in favor of the latter, is 5,287,876 tons. This, though not as startling as the figures given above, is snfficient evidence of the steady diminution of American tonnage engaged in foreign trade, as contrasted with that of other nations. — [Extract from address of Charles JS. Marshall, February 19, 1878. PROGRESS OF BRITISH SHIPPING. In 1849 the protective navigation laws were in full force ; they were repealed by an act passed June MG, 1849, which came into operation on the 1st of January, 1850. The following is an account of the total number of British vessels engaged in the home and foreign trade (exclusive of river steamers), registered at the two periods and_ subsequently, with the number of men employed, exclusive of masters. The total number of vessels, including river steamers, registered as belonging to the United Kngdom and the Channel Islands in 1875, was 25,461, and the tonnage 6,152,467. Number sailing ves- sels. Tonnage. Men era- ployed. 1649 17, 807 17,664 19, 288 19, 709 18, 785 17, 926 17, 221 2, 988, 021 3, 215, 665 3,918,511 4, 24.5, 904 4, 067, 144 4, 037, 564 4, 044, 504 144, 165 1851 131, 277 1861 144, 949 1872 137,101 1873 130, 877 1874 - 128, 733 1875 126, 240 260 DEPRESSION IN LABOE AND BUSINESS. Kumber steamers. Tonnage. Men em- ployed. 414 520 997 2,845 2,796 2,946 2,970 108, 321 144, 741 441. 184 1, 515, 704 1, 680, 953 1, 827, 624 1, 847, 188 8,446 1P51 10, 660 27, OSS 1872 66,619 71,362 3fi74 . 74,873 73,427 Totals. Nnraber vessels. Tonnage. Men. 18, 221 18, 184 20,285 22, 554 21,581 20, 872 20, 191 3, 096, 342 3, 360, 935 4, 359, 695 5, 761, 608 5, 748, 097 5, 864, 588 .5 891. 692 152,611 1351 141, 937 171,957 1872 203, 720 1873 , 1. 202. 239 203, 603 1875 199,667 Hence it appears that in 1875 there was an increase of 1,970 vessels (2,556 of them steamers capable of performing two or three voyages for one of sailing vessels) as com- pared with 1849 ; of 2,795,350 tons in their capacity, and of 47,057 in the number of men employed. The following is an account of the tonnage of British and foreign vessels, sailing and steam, entering and clearing, with cargoes and in ballast, at ports in the United Kingdom from and to foreign countries and British possessions : Tonnage of vessels entered and cleared. British. Foreign. Total. Excess of Britisli tonnage. 1840 6, 490, 485 10, 744, 849 15,420,532 28, 034, 748 28, 719, 090 29, 647, 344 30, 089, 663 30, 944, 744 2, 949, 182 7, 924, 238 11, KS, 109 13,513,130 13, 781, 935 14, 792, 642 15,339,274 15, 332, 094 9, 439, 667 18, 669, 087 26, 595, 641 41, 547, 878 42,501,025 44, 439, 986 45, 428, 957 46, 276, 838 3, 541, 303 2,820,611 4,245,423 14,521 14, 937, 155 14, 750, 409 14,904,702 15,612,650 1854 1861 1871 ie72 ... 187J 1874 1875 The cost of a ship of 1,000 tons register, with sea equipments, not including provi- sions, equal in strength of fastening and quality of material to a first-class ship, may he stated thus : Labor Timber, planking, and sucb material Iron and copper bolts Copper sheathing Painting, tar, pitch, &c Sails Eigging Anchor and chains Cabin andfumitnre Boats In 1860. ?23,000 16, 000 9,500 2,600 900 3,600 7,150 1,300 1,300 650 65, 000 In 1869. 131, 000 22,500 14, OGO 4,000 1.500 4,000 9,000 2, 000 1,800 1,000 90, 800 DEPRESSION IN LABOK AND BUSINESS. Wages of ship-carpenters and calkersfrom 1850 to 1869. 261 Carpenters. On new work. On old work. Calkera. 1850tol855 $2 00 2 00 2 25 2 50 to 2 75 2 75 to 4 00 4 CO 3 50 to 4 00 3 00 to 3 50 3 CD to 3 50 ?2 25 2 50 2 60 2 50 to 3 00 3 00 to 4 .50 4 SO 4 00 to 4 50 4 00 4 00 $2 25 2 50 1835tol8fi0 1860 to 1863 2 50 1863 1864 1865 and 1866 4 50 1867 , 4 50 18fi8 ' 4 00 1869 4 00 Present rate of wages on American ships, August, 1878. First officer on merchant ships, per month . . Second officer on merchant ships, per month Third officer on merchant ships, per month . . Boatswain on merchant ships, per month Cook on merchant ships, per month Steward on merchant ships, per month Carpenter on merchant ships, per month Sailors on merchant ships, per month Boys on merchant ships, per montii. pS 00 40 00 30 00 25 00 35 00 40 00 40 00 20 00 12 00 East Indies. $55 00 35 00 25 00 25 00 30 00 35 00 35 00 16 00 Present rate of xoages on British ships, August, 1878. Per month. First officer £8 Second officer, large ships 6 Third officer, small ships 5 Stewards and cooks 5 Boatswain, large ships 5 Carpenter 6 10«. Sailors' wages to Liverpool, with advance 3 10s. Sailors' wages to East, with advance 2 15s. 10 able seamen as a rule, 18 seamen, 2 ordinary, 6 boys, and 13 apprentices to East. Present rates of wages paid on 'board British steamers and ships. Steamers, 1,000 tons and over : Per month. Captain £25 per month and J per cent, on the gross freight, less foreign dis- bursement. First officer £11 Second officers ■ ' Third officer 6 Chief steward ' Second steward * Cook 6 Second Cook ^ Carpenters « in " Boatswain iu First engineer 1° Second engineer 1^ Third engineer 10 Fourth engineer ° Stokers and trimmers ^ Sailors ^ 262 DEPRESSION IN LABOE AND BUSINESS. Sailing-sliips, 1,000 tons and over : „ ° ^ ' ' Per month. Captain, £300 a year. First officer £7 and £8 Second officer - 5 Ttiird officer and boatswain £4 and £4 10s. Steward 5 Cook £4 to £4 108 Sailors , 3 to 3 10«' We have no law now regarding apprentices; formerly each vessel was bound to carry a certain number, say from four to six according to tonnage ; most of the ship-owners, however, do carry them (from two to four per ship); they are bound for five years, and generally receiV^e about £30 for the above term. Formerly in some of the London ships (Green's, for instance) apprentices used to pay a premium. Liverpool, September 23j 1878. Pauperism in England and, Wales. Population, all classes. Paupers, 1849 17, 564, 656 20, 590, 356 20, 834, 496 2i, 760, 359 23, 067, 835 23,3.56,414 23, 648, 609 23, 944, 459 24, 244, 010 934, 419 1, 142, 624 1863* 1864* 1, 009, 289 1871 1, 089, 926 1S72 977, 664 830, 373 1873 1874 829, 281 1875 81.5, 587 1876 749, 593 •American "war and cotton famine. Thus pauperism has steadily decreased since 1872, and vfith a much larger popula tion there are in 1876 185,000 less paupers than in 1849. Imports and exports of England. Total imports and exports. 1855 £259,655,602 1860 375,052,224 1865 489,903,861 1870 547,338,070 1873 -. 682,292,137 1874 667,733,165 1875 655,551,800 I have not the figures for 1876, 1877. Mr. Marshall subsequently furnished the following memorandum : Memorandum of wages paid longshoremen from 1860 to 1877. Per hour, day -work. Laborers 40 cents. Riggers , 45 cents. Foremen 50 cents. Per hour, night work. 80 cents- 80 cents- 80 cents- Wages paid from January, 1877, to present time. Per hour, Per hour, day work, night work. Laborers 30 cents. 45 cents. Eiggers 40 cents. 45 cents. Foremen 45 cents. 45 cents. With the exception of cotton, tobacco, and oil gangs, who still receive forty cents per honr. The average wages of the steady men employed from 1860 to 1877 was $16 per week. At present our best men average about $12 per week. The best years during above time were 1871, 1873, 18?4, when steady men averaged $20 per week. DEPRESSION IN LABOR AND BUSINESS. 27(6 wages paid in Neno York. 263 I860. 1869. 1877. 1878, Sbip- carpenters Shipwi'ights (repairing) Calkers Sawyers Fasteners Blaoksmltlis Blacksmith helpers Ship-joiners Ship-painters Laborers , $2 00 S 50 2 50 1 75 S 00 2 00 1 25 2 00 2 25 1 00 $3 00 4 00 4 00 3 00 3 50 2 75 1 62i 3 50' 4 00 1 6^ $3 50 $3 00 3 50 3 00 2 75 1 75 Live-oak timber, cost per cubic foot Oak timber for frames, cost per cubic foot Tellow-pine timber, per cubic foot Tellow-pine plank, per thousand "White- pine timber, per cubic foot "White-pine deck plank, per thousand "White-oak plank, per thousand Oak knees, per inch Hackmatack knees, per inch Iron bolts, per ton Copper bolte, per pound Copper for sheathing, per pound Tellow metal, per pound Xellow metal for bolts, per pound $0 95 ei 25 50 70 35 50 28 50 36 00 20 30 37 50 50 00 40 00 65 00 1 00 1 75 64 85 52 00 96 00 30 33 27 33 20 27 25 30 Mr. Marshall subsequently furnished the following paper : I desire to amend my testimony before the committee so far as my statements in regard to the cost of wooden and iron "vessels are concerned. I stated that the cost of wooden vessels was at present from $60 to $65 a ton. This figure is too high. "Wooden ships can be built "down East" to-day at |50 per ton. An inferior ship can be built for less ; but a first-class vessel, capable of the highest classification, would cost even now at least |50 a ton, ready for sea, with what is called an " East India outfit ;" but the above price would hardly include the cost of metaling. There is very little activity in ship-building at the present time, and the yards of the country are comparatively idle. Ship-builders, therefore, are willing "to accept a contract for a ship at almost the cost of construction, in order to use up their material on hand and to give employment to their workmen. Messrs. Chapman & Flint, of Bath, told me they would build a ship for no profit at all, simply to give wages to their -workmen, superintendent, &c. As materials are also very cheap, it is no won- der that the cost of building wooden ships is very reasonable, and the price I have given ($50) is one created by abnormal circumstances, and is hardly a criterion as applied to ordinary times. • i. i j. t I have written to several ship-builders for information on the above points, but 1 regret to say that I have received but few responses ; but from these replies, and from conversations with those who possess a knowledge of the subject, I have no hesitation in saying that what I have stated is substantially correct. To build a first-class ship in all respects, and give her an East India outfit, would, in my opinion, cost, without copper, |50 a ton. I subjoin a list of vessels launched and in process of building during the year 1877, which may be of use in its bearings on this subject. After the delivery of my testimony before the committee I wrote to England for information as to the cost of iron ships and steamers, and I now submit to the com- mittee the results of that correspondence. From a gentleman connected with the board of trade, and who has competent sources of information, I have received the following : ^ j. ■■ . "A first-class iron ship with 'East India outfit' could, I believe, be contracted for to-day at £12 128. per register ton, and a good steamer, suitable for ordinary trades, at £10 to £11 per ton on her dead- weight capacity. The East India outfit for the ship includes all stores ready for sea except provisions, and tbe value of it would be about £3 per ton over the values of hull, masts, and spars ; but, as I have said above, the total cost would, I believe, be to-day £12 128. per ton. "As to the capacity, consumption of coal, speed, &c., of a steamer, everything de pends upon the work she is registered for, and apart from this any opinion given It you would not be worth having. 264 DEPRESSION IN LABOR AND BUSINESS. "There is a fair amount of activity in ship-building on the Clyde, but nothing ex- traordinary, and, aa far as my information goes, I should say there is an indisposition on the part of capitalists, large and small, to invest in shipping property, except in the case of those already embarked in the trade, who are obliged to provide for their requirements and to obtain from time to time vessels of modern constrnotion and -with modern improvements. " Steamships in this country, in my opinion, are fairly employed, but that is all. I do not know that many steamships are laid up now, except steamers, which are, as your question suggests, obsolete and unable to compete with those of modern construction. " The term ' floating coffin ' is one I fail to understand. If it is supposed to de- , scribe a class of ships peculiar to British ownership, it is, to those well acquainted with shipping affairs, absurd. "In England, as in other countries, there are badly-built, badly-sailed, and badly- laden vessels to be met with ; but these are the exceptions and not the rule, and I am not aware that the exceptions in England are more numerous than elsewhere. " Mr. Plimsoll's efforts were mainly against overloading and to secure a recognized and approved load-line. I have not heard of any efforts being made by ship-owners or ship-builders to obtain a change of the navigation laws of America, and I do not" feel qualified to offer an opinion as to the bearing of these on the English shipping interest." From another correspondent I have the following : "The current price per ton of an iron sailing ship of, say, 1,550 tons gross register, with highest class in English Lloyds Liverpool registry for iron vessels, Germanic Lloyds, or in the Bureau Veritas, with a tirst-class outiit, well finished in all respects and ready for sea (except provisions), built by builders of repute, would be £13 to £13 lOs. per ton. This vessel would carry 2,250 tons of dead-weight or even more. "All modern iron ships in this country are built so that they can take the highest class in one or the other of the above books. " In some instances the general finish of fittings about the decks and in the cabins is inferior, and the outfit less ample and of not so good a quality. By this I mean rig- ging, running-gear, hawsers, sails, and a short supply of smaller gear ; also a suit and a half of sails. In such cases we should consider a vessel inferior, and her cost would be from 5 per cent, to 10 per cent, a ton less than the price quoted above. " The term ' East India outfit' is now almost obsolete. It was in vogue when the conveying of cargo and passengers was done by wooden vessels sailing from London to India. It has gradually died out, as iron sailing-vessels and steamers have taken their place. At the same time, what is now known as a first-class outfit is quite equal if not superior in many respects to an ' East India outfit.' Provisions are not included in the outfit. " Steamers are seldom contracted for by the ton, as they vary so much in proportion and grades of strength and class that to give the price per ton would be misleading. The current price for a steamer, to take the highest class in either of the registers, would be, with accommodation for, say, 25 cabin passengers, length 360 to 370 feet, 40 feet beam by 32feet depth, with a speed of from 10 to 11 knots an hour, £62,000 to £65,000. Consumption of coal, 26 tons a day of 24 hours. Carrying capacity, including coal, on a draught of 23 feet, 3,500 tons dead-weight. "I believe the cost of the ' Germanic ' White Star Line was about £190,000. I think such a steamer could now be built for £120,000 to £130,000. " Ship-building on the Clyde, Mersey, Thames, is not very brisk. On the east coast, there is more doing, principally steamers for short voyages, such as the Baltic, Medi- terranean, and coasting trade. " There are not many iron sailing-vessels building at present. " Ship-owners are giving their attention to steamers, and I am of the opinion that they are right, if they are only fortunate enough to get steamers properly proportioned for their requirements, which in too many instances has not been the case. This is one of the drawbacks that steam has had to contend with. " A great proportion of the sailing and steam shipping of tbeUnited Kingdom is owned by co-owners in one ship. I do not think there are many vessels building now in antici- pation of better times. Probably this was the case some twelve or eighteen months back. The long continuation of low freights has to a great extent put a stop to that. "There is a considerable amount of steam-tonnage unemployed in the United King- dom, but not nearly so much as there was eighteen months back. Many of those still unemployed are of such construction in hull and machinery that it is questionable if they would pay even in good times. Some of these are being reoonstrncted, and the cost of doing this is in some cases almost equal to that of a new vessel. " There are a good many sailing-ships laid up, but the greater proportion of them are wooden ships unfit for service or which require extensive repairs. "Plimsoll's crusade was against anything likely to endanger the lives of sailors, whether overloading worn-out and unsound vessels or defective construction. " The commercial marine of England is composed of English, colonial, and States-built DEPRESSION IN LABOE AND BUSINESS. 265 ■wooden ships, and English iron-built ships. Iron ships, barring accidents, and if kept clean and properly cared for, are exceedingly durable. In fact, it is not practicable to fix their duration. Several large iron vessels are now being built for the timber trade, and if they can be made to pay, they will operate against the employment of wooden vessels, and make these of little value in that trade. " I am not aware of any effort being made by English ship-builders or ship-owners to have the United States navigation laws changed, but in my opinion the sooner the United States make this change the better it will be for them if they wish to hold any position as a maritime nation. England is fast absorbing the trade of the world with her iron ships and steamers, and until the States are able to compete with this country in iron ship-building, I think their interests would be served by coming to this country for their vessels. " I have no doubt that ship-owners in this country would like to sell their ships and steamers that are lying up, but I never heard of any influence being exerted on legis- lation in the United States to bring about any change which would enable them to do this. " It makes no difference to ship-builders who they build for, and it matters not to the world at large by -whom the carrying trade is done. Those -who can do it the cheapest must be the successful ones. I am of the opinion that the United States navigation laws operate against them severely in fettering them in their competition with us in the carrying trade of the world. "The advantages of iron vessels over -wood are many. In the first place, they are more durable. An iron vessel of the same size and classification as a wooden one is stronger, a better earner of dead weight, has larger capacity, and is less expensive in maintenance. " The size of iron vessels has increased so rapidly, and in my opinion -will continue to do so, that It will be almost impossible to construct large wooden vessels of equal strength and capacity without literally loading them with wood, so that in time a nation which sticks to wooden vessels must certainly be overmatched by those who have adopted ships constructed of iron or steel. " Iron ships get a pieference over wooden ships in most foreign ports, and I believe an invariably higher rate of freight, say 2s. Gd. per ton." The above information comes from data furnished by several well-known ship- building firms on the Clyde and in Liverpool ; also from a firm of marine engineers of high position in the latter city. The source, then, can be considered as absolutely trustworthy. My correspondent is a person of experience, well versed in commercial and shipping matters, a merchant in Liverpool in a house doing a business with this country, and is one who has a thorough understanding of the subject under discussion. We see, then, as a result of our inquiries, that vessels constructed of wood must be- come obsolete within a short time, even if they are not now so, and that a country must build or buy iron vessels of the most recent and improved construction in order to obtain a share of the carrying-trade of the -world. WOODEN SAILING-SHIPS. They cost, in the present depressed times, without copper, some $.50 a ton. Their clas- sification is for nine years. Their carrying capacity is less than that of iron vessels. Iron ships can carry on an average at least 10 per cent, more than wooden ones. Their maintenance is more expensive, and a -wooden ship is always in need of repairs, from which iron vessels are freed. IRON SAILING--V^SSELS. » Their cost at present is, on the Clyde and in other ship-yards in Scotland and England built in a first-class manner, as shown in the letters quoted, £13 12 to £13 10, say $60 to $67.50 per ton. Advantages.— GreateT durability; practically indestructible, in fact. A well-built iron ship should last one hundred years. The Great Britain, now nearly forty years old, is still running as a sailer, I believe. The classification of an iron ship is for twenty years, as against nine for a wooden one. Larger carrying capacity— at least 10 per cent, more, on an average; an enormous advantage. Less expense of raaintenance— no repairs needed ; no copper every three years, only cleaning and painting of bottom, a very inexpensive item. Caxry cargoes better, and get thus a preference over wooden vessels in the markets of the world, and higher freights. Steamers can only be built of iron, as the necessary strength cannot be given to wooden screws to make them safe. Wooden steamers must go out of existence. Such being the advantages of iron over wooden vessels, and it being absolutely indis- pensable that this country must compete, if it compete at all, on equal or nearly eVjual terms with commercial nations, if it expects to obtain a share of the carrying-trade ; and furthermore, Mr. Koach having acknowledged that iron ships cannot yet be built 266 DEPRESSION IN LABOR AND BUSINESS. here as cheaply as on the Clyde, the question arises: Are we to go -withont iron vessels, and thus lose all the carrying-trade, or shall we seek them where they can be procured on the same terms as they are obtained by our competitors ? Are the navigation laws to be perpetuated for. the purpose of building up a sickly industry, which has never produced but one iron ship (the Iron Age,) and, in the mean time, are we to see the Englishman and Frenchman and German taking the place which our own citizens would, with equal facilities, occupy? Such stupidity is unworthy of our legislators, as it is disastrous to the best interests of the country. CHARLES H. MARSHALL. New York, October 23, 1878. Vessels launched and in process of huilding, 1877. Eig. Steamers 21 Ships 30 Barks 38 Barkantine 1 Brigs 3 Brigautine - - 1 Schooners 68 Steam schooner 1 Sloop 3 Steam lighter 1 Steam gunboat 1 Propeller barge „ 1 Ferry-boat 3 Fishing vessel 2 Boat 1 Yacht 5 Steam yacht 2 Steamboat 1 Steam propeller 1 184 VIEWS OF MR. ROBERT F. AUSTIN. New York, August 26, 1878. Mr. Robert F. AuSTiisr appeared before the committee at its invitation. The Chairmah^. Please state your business, Mr. Austin. Mr. Austin. I am a wholesale grocer. The Chairman. I understand that you have some views to present to the committee in regard to the bad eifects produced by the connection of corporations with business ordinarily carried on by private individuals. Mr. Austin. I have. The Chairman. Be good enough to state them. Mr. Austin. It is a well-known fact, I suppose, to the people of this country that within the last twenty years the functions of government have been very strongly moved in the direction of legislation in the interest of capital. When I speak of capital I do not speak of it in a hostile sense at all. I simply speak of capital as a thing necessary to move property and to give employment to labor, just as necessary as any other commodity that produces a desired result. But when legislation takes a form that gives capital an advantage over labor, a form inimical to the rights and interests of the individual as part and parcel of the community, then I hold that capital is trenching upon the rights of individuals, and that the State has no business to step in and give capital that vantage-ground as against individuals. For illustra- tion, go back twenty-five years and you find that the manufacturing of railroad- cars, locomotives, and almost everything connected with the railroad interest in this country was done at private shops, by copartners in business, or by individuals in their individual capacity ; but a change has taken place, and I wish to lay down the propoeition here, that when the governments of the States granted charters to rail- road corporations to carry freight and passengers from one point to another, they did not thereby confer upon them the right to keep hotels, to enter into the manufacture of irbn or wood, or in any way to trench upon the rights of individuals who, as part and parcel of the body politic, must live as well as the corporations. Railroads no doubt come in for a large share of abuse which they do, not deserve. I am no enemy DEPRESSION IN LABOR AND BUSINESS. 267 to railroads, no enemy to any corporation that keeps within the boundaries provided for it when it is organized ; but when a corporation, having a concentration of capital ■with which individuals cannot hope to compete, undertakes to invade and overrun other industries, then I do protest with all my heart and soul. Further, I think that this expansion, beyond their legitimate sphere, has been injurious to the railroad com- panies themselves. I speak with diffidence, but, in a broad sense. I do not think it has done the railroads any good, and I am sure that it has injured the community. Go from New York to Chicago, and you cannot find a single railroad company that has not, within twenty years, spread out beyond its charter-powers and undertaken to manufiicture everything that it needs. They have undertaken to manufacture their own brick, and their own oars and locomotives ; they have undertaken to keep the hotels along their lines, and to-day you cannot buy a piece of pie or a cup of tea on any fast train without paying tribute to a railroad corporation. Now, have we any right to allow the State to organize a concentrated capitalist in the form of a corpora- tion, and give it privileges which no individual can possess in his private capacity? For what is a railroad corporation organized ? To build a railroad iDetween New York and Buffalo, or between Buffalo and Chicago, to carry Ireight and passengers. That is the object that is placed before the public, and the people seeing that such an artery of commerce would be very valuable to them, grant the privilege. When the corporation starts, it is content to go to Mr. Wasaon, of Springfield, or to Eaton & Gilbert, of Troy (whose cars I used to see in old times on all the railroads, but I do not see them any more), to buy its rolling-stock; but as the corporation accumulates money a^ll this changes; and now when you ride in one of their cars you see upon it an inscription stating that it is made in the car-shops of the railroad company. The result, of course, is that these private Industries are dried up, and mechanical labor is being run in grooves under the control of a few men ; so that if Mr. Vanderbilt should make up his mind to-morrow that he did not want to build any more locomotives be- tween here and Chicago, he could shut up nearly all the locomotive works at once. This concentration of such control over the industries of the country in the hands of a few men is dangerous ; and it is an intrenchment upon the interests and rights of the people which was never contemplated when the railroad companies were organized. We say that we have in this country a democratic government. If we have, we must take into account the right of the individual to live just as much as the right of a cor- poration to do a great work. It is no part of the business of a democratic government to ignore any individual who will make an effort for himself. I am as much opposed to the government's giving aid to a man who will make no effort for himself as any- body in the world can be ; but I insist that capital must not go into our legislatures, and into the halls of Congress, and ask the people of the United States to give them millions of acres of the public land or to grant them charters conveying special priv- ileges, and then, when the time comes, by concentrating an amount of capital which puts it beyond the power of individuals ,to compete with them, by speculation, by foolishness (for they are no wiser than other men), carry on speculations until they explode, as they did in 1873, and not only go down themselves but carry all the other industries of the country down with them. I am a friend to railroads, but I do not believe that it is the business of a railroad to make locomotives, to make cars, to mine coal, to keep a hotel. I think those are businesses that belong to the people of this country in their individual capacity, and I do not think the people have delegated any such powers or privileges to these corporations. It is a mere usurpation and abuse of the privileges ctjnferred by the charters of these corporations. What we want is a fair division of labor. You had a man here who told you that he believed there was a mal-division or mal-distribution of labor. He was as near right as a man can be. The trouble is that our corporations have obtained great charters from the fovemment, and then when the poor man comes along and says, "I think Uncle am ought to give me a farm, and fSOO to start it with," a great outcry is raised, " O, we must not have a paternal government." I do not believe in a paternal govern- ment; but I don't want the government, while it refuses these favors to the poor man, to give it to a rich man or a number of rich men imder the form of a corporation. The Chairman. When a railroad company builds its own locomotives does it em- ploy any less number of men than an individual would employ in building the same locomotives ? Mr. Austin. I don't know whether they do or not. I don't want to stop at this point. The Chairman. I do not wish to interrupt you, but I want to find out the grievance of which you complain. You think there is a mal-distribution of labor ; but if a rail- road company in building its own locomotives employs as many men as the individ- ual would employ, where is the grievance 1 Mr. Austin. Mr. Chairman, every man in this country does not want to stand always in the position of a laborer. I do not want Mr. Vanderbilt or Mr, Scott to take my work out of my hands and reduce me to the position of a laborer. It may be that I would be as well off if I never aspired to anything higher, but that is not human na- 268 DEPRESSION IN LABOE AND BUSINESS. ture ; yet if you let this corporate encroaoliment upon the rights of the people go on unchecked, the mass of our people never can aspire higher. The Chairman. How does it differ from the case of Mr. A. T. Stewart, who ab- sorbed any number of middle-men into his business ? Mr. Austin. I believe that Mr. A. T. Stewart was a representative merchant, with a gi-eat deal of brains in his head. You never saw Mr. Stewart go into any legis- lative hall in his life to ask for anything. There is no record that he ever went to Congress or a State legislature in his life. Now, when the Almighty puts into a man that organization of brain and capacity by which he can achieve great results, he is not to blame for using his talents. The Chairman. Was Mr. Stewart a benefactor or an injury to society ? Mr. Austin. He was a benefactor to society. The Chairman. Then the concentration of business in a few hands is not an in- jury to society ? Mr. Austin. Mr. Stewart was simply a striking illustration of what a man by well- directed effort could attain without State aid. Mr. Stewart was the brightest exam- ple of a private individual business man that we have had in this country for one hundred years, for the reason that he amassed the whole of his fifty or sixty or one hundred millions, whatever it was, by his own unaided talent and industry, and he did it all and maintained the reputation of giving sixteen ounces to the pound and thirty-six inches to the yard. Mr. Stewart was a rich man, but I am willing to give him all that he is entitled to, as I am to every man. I want to answer your question a little more fully. Suppose it to be true that the railroad companies will pay a man who serves at their counters as much as any hotel-keeper in any other locality will pay, at the same time they concentrate the business of hotel-keeping in the hands of a few corporatons, and the man who serves at the counter must always continue in that position, whatever may be his capacity. It is this concentration of business in the hands of a few that the people will not stand. They will insist that when a cor- poration goes to the legislature and obtains a charter to do a certain thing, it shall be limited to the objects defined in the charter, and shall not use the advantage it derives from its special privileges to encroach upon the private industries of the peo- ple and take away their business. Take the panic of 1873. Thoughtful men saw before that panic that this centraliza- tion of labor and employment in a few great channels must end in an explosion. And why must it end in an explosion? Ambition grows by what it feeds on. Take almost any man in the world and put him in a place where he wields great power, with new opportunities opening up before him all the time, and he must be a great deal above the average of men u he does not commit excesses. From 1863 and 1864 to 1873 we had capital, concentrated in a few great corporations, running to the legislatures and to CongTess to obtain advantages which individuals did not ask and could not get, and what is the result? It is that we see a man in this country who about twelve years ago started in the railroad business with a capital of only fifteen millions of dollars, and who, when he died a year or two ago, could sell his securities in the market for one hundred millions of dollars and more, I am told ; and remember that during half of the period when this one man made such accumulations the general business of the country was on the down grade. The great mass of the people were growing poorer when this man with his twelve or fifteen millions to start upon grew rich so fast that he died worth one hundred millions. Now, if that man accumulated his money in the same manner that Mr. Stewart did, without gating aid from the govern- ment, and by treating the community fairly, he was entitled to it. But if he did it by perverting the powers of a great corporation and abusing the privileges granted by the people, in ways which were tyrannical and oppressive to the people, then the privileges should be taken away. The Chairman. Did Mr. Vanderbilt establish any locomotive factories? Mr. Austin. He has got locomotive factories and repair-shops. The Chairman. He has repair-shops on his line to keep his locomotives in order, and when he has no repairing for them to do they have undoubtedly built some loco- motives, but those shops have not supplied the New York Central Railroad with loco- motives generally. Again, has Mr. Vanderbilt gone into the business of mining coal? That is one of the grievances that you complain of, and yet this particular corpora- tion, where this great amount of money was made, is free from the very objections which you have urged ; in other words, state in what particular Mr. Vanderbilt has gone outside of his charter. Mr. Austin. I read on his cars "Manufactured at the car-shops of the New York Central Railroad at Schenectady," "Manufactured at the car-shops of the New York Central Railroad Company at Albany." I do not single out that road offensively. I simply say that wherever any of these corporations goes outside of its regular busi- ness to usurp the place and the function of the private manufacturer, it ought to be prevented. I believe that one of the principal reasons why the charters were granted so freely to these corporations was the general belief of the people that, while rail- DEPEESSION IN LABOR AND BUSINESS. 269 roads were the most scientific and effective mode of moving property and passengers from point to point, the companies at the same time would he great patrons of the general industries of the country ; and I say that when the companies use the capital they have accumulated by the favor of the people to manufacture the very things that those people want to sell them, it is wrong. If they have a right to do that I want to know why they might not after awhile come into tliis street and drive out all the merchants. The Chairman. Was it wrong for Mr. Stewart to engage, late in life, in manufac- turing the goods that he sold? Mr. Austin. No, sir; it was not. The Chairman. He originally confined himself to huying and selling, hut later he went to manufacturing the goods that he sold. Mr. ArsTiN. That was all right. The Chairman. Where is the difference between him and a railroad company in that respect? Mr. Austin. The difference is this: Mr. Stewart, when he wanted to go into the manufacture of any line of goods, did not go to Albany and obtain a special privilege which other individuals could not obtain. The Chairman. Neither did Mr. Vanderbilt. He simply bought stock of the New York Central and Hudson Eiver Eaikoad, which was in existence long before he had anything to do with it. Mr. Austin. How did he use it? The Chairman. In what respect has he violated his franchise? If you will point that out, the attorney-general of the State of New York is bound by his oath of office to go into court and try to vacate the charter. Mr. Austin. That is what ought to be done. The Chairman. Then your remedy is not in this committee-room. Go straight to the office of the attorney-general and point out where Mr. Vanderbilt is violating the law, and it will be the duty ortant functions, it certainly is not likely to come up to the prices of commodities in 1879 or 1880, after the debt is paid olf. In other words, we shall be again in the position of producing things for which foreigners compete with us in our own country at such a high cost that the foreigner can undersell us in our own markets, selling his goods at our high currency prices, buying his gold at a low price, paying any tariff that we choose to impose and still making a profit. The tariff will be no longer any protection, and the condition of things will be just what it was before we began to approach specie payments. When did the first export of American commodities since the war begin f It was only within the last two or three years, since gold came within ten points of paper or paper within ten points of gold, since gold fell below 110. We can export cotton goods, we can export iron, wo can export breadstnft's now, but if we had gold at 150, which would be a very small price to be produced by an inflated currency such as is now called for, we could not export anything. The Chairman. Wouldn't it follow inevitably that, as we could not manufacture, our surplus labor would be driven to the soil ; the products of the soil would be thereby increased and would have to be sold abroad, as the producers could not find a local market for them ; the sale of those products would bring in gold, and so reduce its price still further ? Is not this the case: first, that you check industry, and, second, DEPRESSION IN LABOR AND BUSINESS. 279 that you increase the production of raw foods ; and would not that cause the reduction in the price of gold by a law higher than any law of Congress ? Mr. Walker. Undoubtedly. When I was in Washington two years ago Western men were demanding a continuance of the suspension of specie payments. I said to them, ' Why do you Western men continue to oppose resumption ? You have already resumed specie payments." "How so ?" they asked. Said I, "You have come down to gold prices for your products; " and the same was true with regard to cotton. The Chairman. Suppose we went through this same process, wouldn't we in the course of time be driven into a state of things by which our manufactures being sus- pended and our laborers driven on to the soil, there would be an influx of gold which would still further reduce its price in the market and drive this paper money into idleness, so that gold would take its place ? Mr. Walker. The extent to which that would occur I would not undertake to say, but it has always happened to nations using a greatly depreciated paper money that all their foreign trade, and, in the end, much of their domestic trade, also comes to be carried on on a gold basis. The Chairman. Would not people be driven to dealing in gold 1 Mr. AValkek. They would, so far as regards articles which are sold in gold markets. Whether that would extend to products sold in the domestic market I do not know, though I think thatwould be the case. I am told it was the case in Charleston and some other Southern cities during the war after the Confederate money became worthless. I have said that the prices of exportable commodities are fixed by the price of the part of them which is exported. That has been the general opinion. I do not know why tlie prices of cotton goods should not be determined in the same way. The Chairman. Why wouldn't it be the same as with flour? It is perfectly true that a barrel of flour is now worth |5, but if you had to pay for it in depreciated money it would be worth $20. Mr. Walker. Yes ; that difficulty exists in all the South American countries now wherever they have gold and paper together. In the Argentine Republic the price of the paper money is not fixed for an hour at a time. You cannot buy a pair of gloves there without having the merchant send out to find the price of gold (that is, the value of currency as compared with gold) at that particular time. The Chairman. Can you imagine a people trained as we are, with our commercial habits and instincts, submitting to such a system ? Mr. Walker. I don't believe our people would stand it for a day. Now, what is the effect of all this disturbance and expansion and variability upon the relations of capital and labor ? There is no sort of question as to the historical fact that the great fortunes of the world have been made in periods of political and monetary disturbance. The great fortunes in England were founded very largely between 1797 and 1815, when there was a practical suspension of specie payment by the Bank of England. The great fortunes lately made in the United States date from the time of the passage of the legal-tender act up to 1873, and they were made not only because of the govern- ment demand for products, which was one cause undoubtedly, but also because of the rapid advance of property in the hands of its holders, growing out of the increase of paper money. How did the laboring man get the benefit of it ? I undertake to say that he never was for one moment benefited by it, and for this obvious reason, that the things he lived on advanced more rapidly than the things he lived by. He lived by his wages, his labor. He lived on his house, his clothes, his food. Now, statistics show that at one time the average increase of prices of commodities was over one hundred per cent., while the most carefully obtained returns as to the advance in the price of labor at a corresponding date, procured by the special commission of revenue of which Mr. Wells was chairman, showed that it did not exceed seventy-five or eighty per cent. There was twenty or twenty-five per cent, against the laborer all the time. In other words, he was twenty or twenty-five per cent, worse off than before the rise. It does not need to be argued that in the rapid change of values the capi- talist has a great advantage over the laborer. The prices of commodities change every time they are sold, but the prices of labor do not change with such rapidity. They necessarily remain stationary for very long periods, and it is entirely out of the power of the laborer to prevent this. He cannot insist upon a change in his wages every time his employer sells a bill of goods. He is employed by the month generafly, or, if he is an agricultural laborer, by the year or the season. He has no time to de- vote to the question whether prices are rising or not. Very often he is entirely igno- rant of the fact, and if he is not it is beyond his power to take advantage of it. So that if to-day everything that is asked for by the most ambitious agitator were granted, the condition of labor would be just so much worse than it is now as the currency was increased. There is another question ; that is, as to the actual condition of the laboring classes at the present time. If a retui-n were taken to-day throughout the United States ' at one particular moment of time, it would be found that the suffering— and that there is suffering is, I rfegret to say, a painful fact— it will be found that the suffering ex- 280 DEPRESSION IN LABOE AND BUSINESS. i'sts chiefly in large towns. I do not leam that there is in the agricultural districts of the United States any want of the necessaries of life. I should be glad to know whether any testimony has been presented before this committee that there is suffer- ing in the agricultural districts. The Chairman. No. Such testimony as we have had has been to the contrary effect; that there is abundant employment in the agricultural sections of the country, and that the lack of it is confined to the large cities. Mr. Walkbk. Yes ; it is mainly in the large cities. What brought ab6ut this aggre- gation of population in the large cities ? I know as a fact that in my native State of New Hampshire, and also in Vermont and Massachusetts (I have lived in both States), there has been a depletion of the agricultural population, and it has resulted from two causes. The depletion came, iirst, in the direction of the cheaper and more productive land of the West; and, second, from the centralizing influence of the large towns. Men and women left the ooantry for the cities because they heard that great fortunes were made there, and fancied that they could have a share of those fortunes. There was, for a time, a great demand for laborers and also for a grade of employment above that of manual labor — for middlemen. The exchanging function was exaggerated. It is always exaggerated when production is o verstimulated. The population so gath- ered in the to wns remains, and to it is added a large mass of immigrants. It is a very painful and difficult thing to export or transfer the surplus population of cities. A woman came to me two or three days ago who had been a pensioner of the New En- gland Society, of which I was a director. She was the wife of a very respectable man who had been a traveling salesman in the paper business. He got stranded in New York two or three years ago. He lost his employment. He could not get anything else to do, and he literally got stranded ; and there has not been a day since when that man has had money enough to take his wife and children and himself out of town. There are plenty of people who were brought here by false lights who would gladly get away if they were able. The Chairman. What would you have the government do ? It has been urged upon us to report in favor of some colonization scheme which would transfer the surplus labor. What do you think of that ? Mr. Walker. It seems to me that the government should be called on to interpose in these cases as rarely as possible, and that nothing short of an overwhelming calamity, the prevalence of a great epidemic, or some such case, where the interests of the whole eommmiity were concerned, would justify its interference. It does not seem to me to fall within the functions of government to become the almoner of the tax-payer's money. But I think the conditiou of things I have described does appeal very strongly to the private purses of citizens, even though I do not see that it can be properly made a tax on the public purse. So far as relates to redvicing the prices of the public lands, and so far as such legislation as the homestead law is concerned, these, I think, are within the legitimate sphere of the legislative power, because the citizens of the United States in their aggregate capacity own the public lands and may make such disposition of them as in the wisdom of their representatives is deemed best for the public good. But the use of the public money for the purpose of providing employ- ment is an expedient of very doubtful propriety. It was one of the communistic ideas of the Parisian government during the last commune and during the communistic period of the republic of 1848. The Chairman. Did the attemjjt in 1848 to supply employment for labor succeed f Mr. Walker. The illustration only struck me at the moment I spoke of it, but, so far as my memory serves me, those public workshops which the French Government established were au entire failure. They induced dependence upon the government and took away from the workiugmen the healthy effect of personal exertion and per- sonal responsibility. Am I right in sayiug that they were a failui-e ? The Chairman. Yes : they all failed. Mr. Walker. They failed to benefit the public service in any way, and I doubt whether they benefited the individuals employed. Now, as to the excess of population in cities, I doubt whether it is easily or instantly to be got rid of. I think it must be got rid of gradually. It is being got rid of gradually every day, and if you can only stop the inflow which is always going on, it will not be a great while before the cities will, to use a favorite expression of our paper-money friends, "grow up" to the popula- tion that is within them ; and though some may die of want, as they do die not only in these times, but at all times in great cities, the suffering from being stranded in the cities will grow less and less and will disappear, so far as it is possible for it to disappear where there are great aggregations of people. As to distress outside of the cities, it is not evident to me that it exists to any great degree. Take the laborers of Massachusetts (Mr. Rice is more familiar than I am with that subject, for my knowl- edge is merely that which I have obtained from the newspapers). According to a re- cent report of the labor bureau, there are 8,000 skilled males, 13,000 unskilled males, and about 7,000 females, making altogether 28,000 persons oiit of employment. DEPRESSION IN LABOR AND BUSINESS. 281 The Chairman. And it is stated of the slilUed laborers that they -will not work for the wages which are offered them ? Mr. Walker. A good many of them have been on strilte. Some who were not on strike were thrown ont by one of those events which occur at all times and places ; I refer to the instances of flagrant dishonesty in corporate management which have prostrated the industries at Fall River. Mr. Rice. The city which had grown more rapidly than any other in the State dur- ing the last decade. Mr. Walker. Yes ; and its trouble is purely exceptional. It is stated that if a re- turn had been taken in Massachusetts on the 1st of August not half the number shown in June would have been found out of employment ; but taking 28,000 as the number, that is only 5 per cent, of the population of five or six hundred thousand laboring men and women in Massachusetts, and if the number was reduced one-half on the 1st of August, then the percentage of unemployed there is only 2i per cent., which corre- sponds pretty nearly with the chairman's statement of the number of persons who have failed to meet their obligations to his firm — two per cent., I believe he said. So far as the future is concerned, with a return to sound money, we shall have an equable state of things, which to the laborer is of very much greater consequence than to the capi- talist. The capitalist makes money when things are not equal. The laborer lays up his small savings out of steady employment at a steady rate of wages. It is the em- ployment that is irregular, sometimes high and sometimes low and sometimes noth- ing, that ruins the laboring man. It is steady employment, at moderate wages, with low prices for the things he lives on, that enables the laborer to make his savings. Now, however much we may differ with regard to the benefits of a diffused currency, there can bo no doubt whatever that a currency which is regulated by the laws of trade, and which is moderate in amount, brings about a more stable condition of prices both of labor and of commodities, and that is what benefits the laboring class. The Chairman. Who gets the first proceeds of labor, the laborer or the capitalist ? Mr. Walker. The laborer. The Chairman. Labor gets the first, and capital comes in afterwards and takes its chance. Mr. Walker. Labor gets the whole in some instances. The Chairman. In bad times, how does it stand ? Mr. Walker. In bad times the capitalist can better afford to go on losing money for a series of years than to stop. That is well understood, especially in England. Now what does that imply to the laborer ? It implies steady wages, possibly somewhat reduced, but still living wages, I think, in every case. There may be some exceptions. Possibly the agricultural laborer in England and the iron worker in Belgium are exceptions, but the great mass of labor employed in the world to-day is employed under conditions of sustaining life in tolerable comfort, and even though the times be bad and unprofitable for the manufacturer, still, so long as he is not utterly prostrated and compelled to stop his works, labor is kept employed. The Chairman. In bad times the laborer is furnished with capital without cost, is he not ? , . , 1 T, ■ Mr. Walker. Yes ; and without capital to furnish the objects on which labor is expended and vrith which work is done there could be no labor. The Chairman. And in good times, when capital is remunerated, the laborer is well paid. Mr. Walker. He gets his share of the remuneration, and though he may not always get as large a share as he thinks he is entitled to, and may feel aggrieved that when his employer is making a great deal of money his wages do not rise m proportion, he forgets that last year or the year before his employer lost a great deal of money, while his wages did not fall in proportion. Labor cannot follow the fluctuations of trade, and it would be very undesirable that it should. .... .... The Chairman. What inducements would capital have to remain m business i± it were not allowed to recover its losses made in bad times 1 .^ , j i Mr. Walker. Of course it could not remain in business, because it would be destroyed — eaten up. , j, < -u The Chairman. And the result would be the non-employment ot labor. Mr Walker. Yes. Now, with regard to the prospects of this country m the future, the iudgment of our most intelUgent rivals is of great consequence. I have been a constant reader of the London Economist for twenty years, and I watch everything it contains that relates to America, and within the last fortnight it had contained an article in regard to American competition, from which I would like to read one or two ^^"In^theUnit^f States the conditions of industrial production have undergone such a considerable change in the last five years that possibly that country is about to become our most formidable rival. * * * It seems not unlikely that Amencan competition will be especially felt in our two leading industries, cotton and iron. 282 DEPRESSION IN LABOE AND BUSINESS. "Tlie profitaWeness or otherwise of agriculture in the Mississippi Valleyis the final arbiter of wages in the United States, and this never promised better than at present. There is an clement which enters into the qLuestion in America which does not enter into it anywhere else. There is no other country in the world which, when it has a surplus of labor in established industries, is able to drain off that surplus mto an agricultural field of constant and almost limitless production. It is not even neces- sary that there should be any market for agricultural products, so far as it bears upon this question of surplus labor, because what the laborer demands is a living, and it is always possible, by paying the transportation of a laborer to the West, to give him a living there upon the land, either his own or the land of somebody else. This, I say, is an element which does not enter into the problem in any other country, and it is an element of great safety. Another point of interest to the American laborer is the important fact that the very unwisdom of capitalists in putting into railroads such a disproportionate amount of the capital which existed in the country has proved to be of the greatest advantage to the agricultural class. By the general multiplication of railroads, even though many of them are of no value whatever to their owners, the States west of the Missis- sippi have been brought as near to the seaboard as Ohio was in I860, and, I am in- clined to think, even as near as Western New York was. What is the meaning of that ? It is that wheat can bo sold by the farmers at a very much lower price now than in 1860 and give the same profit. The Western frontier has been brought so much nearer the seaboard, that it enables us to compete with other countries in the world's market. Whereas it was impossible in 1860, with wheat at a certain price, to send wheat from west of the Mississippi, and even from Illinois, to England in competition with the countries bordering on the Baltic and the Black Sea. Now, in consequence of the multi- plication of railroads, our Western States are in a position to compete with a very much larger area of European wheat-growing countries than before. There is a habit of overinvestment in the United States which is not confined to periods of crises. I think that anybody whose business experience runs back fortwenty- five years, back beyond the crisis of 1857, for instance, must have been impressed with the fact that there is in this country, more than in any other, a disposition to spend capital faster than we have it to spend. Corporations for manufacturing and mining purposes spring up without any working capital. In England it is not considered good business to start a factory without a certain proportion, which is a large propor- tion, of quick capital with which to run it, but in this country, in many instances, factories are started not only without any quick capita], but even the jjZa«t is mort- gaged to pay for itself. How, possibly, can a company so situated do a business which requires a very large amount of ready capital ? The Chairman. Do you think that legislation should be applied to regulate the organization of such companies ? Mr. Walker. I discussed that subject in an article which I wrote a year ago for the Bankers' Magazine, entitled "Reform of corporations." Every corporation exists by virtue of some power given to it by the government. The mere power of existing, with limited liability, is a privilege of very great value, and something should be given by the corporation in exchange for it. I think there should be some sort of su- pervision even with regard to manufacturing corporations, so that they should not be allowed to go into business until they had an ascertained and certified capital, paid in, or secured to be paid in, and adequate to the business they have in view ; because the failure of a corporation of that character is detrimental not only to the owners of it, but to the community at large. I am a great believer in government supervision of all corporations. I think that where a corporation receives a charter from the State the people part with something valuable with the understanding th.it it is to be used for the public benefit, and in order to know that it is beneficially used they should have some power of supervision. The Chairman. Do you think there is anything about its aifairs that a railroad cor- poration, for example, is justified in concealing from the public? Mr. Walker. I hold that a railroad corporation is bound to disclose the whole of its business, its earnings, its expenditures — everything ; and I hold that it is the duty of the State to see that that information is given to the public. The Chairman. And you think that a great deal of the prejudice against corpora- tions would disappear if all their affairs were made public? Mr. Walker. I do. I took that ground in the article .ilready mentioned; the ground, namely, that it is the right of the people to have this information, and the duty of the government to see that it is given. As to how it shall be done, that is a different question. I know that in Massachusetts the supervision maintained over the banks of the State for twenty-five years before the national banking system went into oper- ation had the effect of making the currency of Massachusetts banks perfectly sound, and very small losses indeed were made by the owners of bank stock. That was simply because the State, having granted the franchise, followed that franchise to see that it was dealt with properly. I know that this doctrine is contrary to the principle DEPRESSION IN LABOR AND BUSINESS. 283 of non-interference, or laisser faire, so generally advocated by EngUsli economists, but I believe in it. Tbe Chairman. In England they exercise the strictest government supervision. Mr. Walker. I know that they do so in certain cases, but not in all; but it is a violation of the principle of laisser faire, which is the favorite dogma of the Manches- ter school. The Chairman. Yes ; but that is one of the peculiarities of English statesmanship that it does not mind violating an abstract principle when it can get good for the public out of the violation. Mr. Walker. I have recently examined the new Italian banking-law, and I find that a bank-return in Italy to-day contains something like seventy items of informa- tion, while there are only about thirty-six given by the Bank of France, and thirteen, I think, by the Bank of England. The Chairman. Do you think it would be an improvement to extend government supervipinn to railroads ? Mr. Walker. It is a question about which I should not care to hazard an opinion as to methods ; but I do think there ought to be some sort of supervision, and aa rail- roads and telegraphs have no State boundaries, but consolidate and extend their lines in the interest of economy (for these consolidations and extensions are in the interest of economy), and as there is no State which can send its officers over its own line into another State to see that the functions of the corporation are properly performed, it appears to me to be within the province of the general government to exorcise this supervision, and I think it would be for the benefit of the people that it should be done. There need be no interference with any of the rights or legitimate functions of the corporation. Mr. Rice. It is not to interfere with the rights of the corporation, but to protect the rights of the people. Mr. Walker. No interference with the rights of the corporations ; only a prohibi- tion on the part of the public to prevent the corporations from doing that which thoy profess not to do, but which in fact they very often do do. The Chairman. As I understand you your practical conclusion is, that beyond the supervision of corporations, which you think is a wise thing, and the maintenance of the policy of the government leading to specie payments, there is very little that we can do by legislation to improve the condition of business at the present time. Mr. Walker. That is my view, Mr. Chairman. The Chairman. You have not touched upon the question whether there should not be an amelioration of our tariff legislation. Mr. Walker. That is an important question, and I am willing to say that having been brought up in the Whig party of Massachusetts, I was, therefore, a protectionist and a bank man, and about the first change I made was when I became a hard-money man, which was then a Democratic doctrine — not as against the banks, however, for I believe in paper money which represents intrinsic value in coin. I believe in protec- tion so far as it is necessary to inaugurate and establish the industries of a new country and to carry them forward to the point where they can be left to care for themselves. I hold that it is a question of fact in each case, not a mere abstract question. The prin- ciples of free trade are perfectly sound and could be practically applied everywhere, provided the whole world were but one country with homogeneous institutions and common laws ; but where there are different countries and different conditions and different laws, such as exist in the world to-day, I think it is very proper for each countiy to regulate its legislation in these matters with reference to its own condition and not in blind subserviencv to any abstract principle or formula. The Chairman. You said that in this country we had now arrived at that point m the development of our industries where we are able to produce a surplus of all con- sumable products. Mr. Walker. Yes. The Chairman. Can protection help us any further, then ? Mr. Walker. My opinion has been for the last fifteen years that the legislation of Congress on this subject should be tentative downwards. I believe that all financial legislation is tentative. I do not make up theories and then attempt to conform the facts to them. I draw my theories from the facts. I think that all financial legisla- tion should be tentative and all tariff legislation in this country tentative downwards, that is, trying aU the time to go in the direction of reduction instead of increase of duties. I am perfectly satisfied that there are protected industries in this country now that could support themselves with less protection than they receive, and some that could support themselves without any. Mr. Rice. We are told that whenever we protect an industry which would not go alone in this conntry, we thereby draw away labor from some other industiy in which it could be more profitably employed ; thereby causing an injury to the whole body- Mr. Walker. I do not admit that proposition I remember an article in the Lon- 284 DEPRESSION IN LABOR AND BUSINESS. don EoonomiBt some fifteen years ago bearing exactly upon that point. The question ■was with regard to the protectionist tendencies of Australia. Australia was very much disposed, as are Canada and most of the English colonies, to establish a protectionist policy. The Economist said in substance : " The doctrines of free trade are hard doc- trines for colonists, because they take no account whatever of anything except the ac- cumulation of wealth. Undoubtedly it would be better financially for the Australians if they would confine themselves to raising wool and cattle, and digging gold, but it would not be necessarily better for the Australian children that are growing up to be bred altogether as shepherds and herdsmen and gold-diggers ; there would be an ab- sence of education and civilization." So the Economist was compelledto admit that while for mere money-making purposes it might be best for the Australians to confine themselves to herding and gold-mining, the occupations which flourished there natu- rally, yet that it might be better in the interests of civilization to develop diversified industries by artificial means. The Chairman. That is the point that I put to Mr. Marshall, but his answer was entirely from the money-making point of view. Mr. Walker. Yes; but how to make money is a very small part of the social ques- tion. The getting of money is only a means to an end. I suppose Mr. Marshall would deny — most of the free-traders do deny, but there is no doubt of it — that there is a re- action taking place to-day in regard to the doctrines of free trade ; that the doctrines of the historical school, which are substantially such as I have stated, namely, that the condition of each country ought to modify and control the application of the princi- ples of political economy, are coming to prevail largely in Germany, to some extent in Belgium and in France, and to an appreciable extent in England. The Chairman. In other words, make sure of the bird in hand instead of looking after the two in the bush. Is that the sum of the historical doctrine ? Mr. WALliBR. The historical doctrine is that you must take the condition of your people as a whole, comparing it with the condition of foreign countries, and then you must here and there try different processes of legislation, having only one end in view, the improvement of the condition of your people. AU legislation with which political ecoaomy has to do deals with the masses aud not with the exceptional few. Here the committee adjourned until August 27, 1878. VIEWS OF MR. CARROLL D. WRIGHT. New York, August 27, 1878. Mr. Carroll D. Weight ajipeared before the committee by invitation. The Chairman. Please to state your residence aud occupation. Mr. Wright. I reside at Reading, Mass. ; I am at present chief of the bureau of statistics of Massachusetts. The Chairman. Prior to your appointment to your position, were you engaged in business of any kind ? Mr. Wright. I was engaged in the practice of patent law. The Chairman. In your position as superintendent or chief of the Massachusetts bureau of statistics, have you had occasion to investigate the condition of labor in the State of Massachusetts and elsewhere ? Mr. Wmght. I have. The Chairman. Are you the author of a recent report giving the number of per- sons out of employment in Massachusetts, which has appeared in the newspapers, and has been otherwise printed? Mr. Wright. I am. The Chairman. I have a copy of it in my hand which has been sent for the use of the committee. These statistics have been commented upon before the committee, and particularly by one witness (Mr. Moody), who has controverted the accuracy of the statistics, and has furnished to the committee a statement of the particulars in which he thinks that this report is inaccurate. These statistics were the result of the census of 1875, which seems to be the basis on which Mr. Moody's figures are founded. He says that they do not conform with the figures which you have got in your report of 1875. What is your conclusion in regard to that ? Do you iind any discrepancy 1 Mr. Wright. I do not. On the other hand the figures in this last report are en- tirely in conformity with the report of the census of 1875. The Chairman. Is the number of persons out of employment in Massachusetts at this time (according to present figures) greater or less than in 1875? Mr. Wright. I think about the same. I do not think, there are any more people out of employment in Massachusetts to-day than there were in 1872, although the cen- sus of that year did not take into consideration actually the people out of employ- ment. There is a column in the census of Massachusetts for 1875 of unemployed ; biit that embraces all those people in the State who never have any employment ; retired men, sons and daughters of families living at home, and all the various people in the DEPRESSION IN LABOE AND BUSINESS. 285 State who never have any employment. If the gentleman has taken that column as his basis, then he took an entirely false basis for his conclusions. The Chairman. Did your figures take into account in both cases the number of persons m the almshouses who were receiving public relief? Mr. Wright. No, sir ; they did not. The Chairman. In both cases you excluded them ? Mr. Wright. In both cases I excluded them. The Chairman. May there not be at present a large number of persons who, if em- ployment was more abundant, would be out of the poor-house and would be in the walks of industry ? Mr. Wright. That would increase the number reported by our bureau, but not very much— very slightly. It would not add 4,000 to the number. The Chairman. In other words, do I understand y«u as saying that the number of persons receiving parochial relief in Massachusetts is only 4,000 greiiter than in 1875? Mr. Wright. No; that figure would include every person receiving parochial assist- ance in both years. The Chairman. Do you mean to say that there are not over 4,000 persons in the State of Massachusetts receiving parochial relief? Mr. WIUGHT. There are not more than that receiving permanent aid in the entire State; but perhaps I might as well be accurate about that. The Chairman. Yes; for that is a very remarkable statement contrasted with other countries. Mr. Wright. That does not include those receiving temporary aid from day to day, hut permanent aid (after referring to a book). The whole number of indoor paupers in Massachusetts in 1875 was 4,340. The Chairman. How many were receiving relief outside? Mr. Wright. That cannot be determined and never has been determined accurately in any State or country. The Chairman. I mean receiving relief from public sources. In England it is determined every month. Mr. Wright. Every year differs with the next year, and every writer on the subject differs with every other writer. The Chairman-. The statistical statement published every month in England gives the returns for every parish in England, is summed up into the four great divisions of England, and is then averaged for the year. That report is supposed to be perfectly accurate. Mr. Wright. I am familiar with that report ; but the trouble with it is that it takes the paupers who are relieved temporarily every year, and does not take the number on any one day, so that it is never an accurate statement of the actual number relieved throughout the year. That is the trouble in our own country. We never get at it. An attempt is being made this year to take the census of those receiving temporary relief on special days at four different periods of the year. That will give an approxi- mation of the actual number receiving assistance. At present it is like the tramp question, where one active tramp counts for 365 tramps throughout the year. The Chairman. But that is not the case in the English system. There the names are taken down and the persons receiving relief are only counted once in the month, and the return is made for every month, so that you can actually get the names of the paupers relieved in any given month in the year. They are only accounted for once. This English return is made for the express purpose of accomplishing what you say they are at present trying to do in Massachusetts — arriving at the number of individual persons relieved. Mr. Wright. I understand that they have brought it to greater perfection there than we have here, and that is one reason why gentlemen come and say that pauper- ism is decreasing in England and is increasing in this country. When they get at the real facts they will find that the reverse is true. The Chairman. Do you mean to say that pauperism is on the increase in England ? Mr. Wright. I do not mean to say that it is on the increase, but I mean to say that it is not decreasing there and increasing here in the proportions alleged. It is decreas- ing there and it is decreasing here. The Chairman. Do you mean that, since the panic of 1873, there has been a decrease in the number of paupers in the United States ? Mr. Wright. Temporarily, after the panic of 1873, there was an increase in the number of individuals relieved at the public expense. That number is now decreasing, and the overseers of the poor everywhere in Massachusetts (in cities as well as in towns) report a decrease in the nurnber of those demanding aid from the public. The expense of pauperism in Massachusetts for the year ending March, 1878, will, when the report is made, show a decrease as compared with former years. The Chairman. May not that decrease be due to the diminished price of commodities supplied to the paupers ? 286 DEPEESSION IN LABOR AND BUSINESS. Mr. Weight. It might, if it were not for the fact that it will show a decrease in the numbers also. „ i ^ -j- The Chairman. Have you looked at the statistics for the city of New York to see it that is also true here ? Mr. Wright. I have not. The CHAiRMAJf. I think that they will show tliat the number of applicants for re- lief last winter was greater than at any previous period in the city of New York. Mr. Weight. That may have been so at some particular time. The Chairman. Have you gone outside of the State of Massachusetts to see whether the same conclusion is true in other States ? Mr. Weight. I have made very extensive inquiry in regard to the condition of labor in the United States, and I have not found a single locality yet that reports any such state of affairs as we have been led to believe existed. The Chairman. Have you investigated the condition of labor in the coal-mining regions of Pennsylvania ? Mr. Wright. Not thoroughly. The coal-mining work is subject to so many varia- tions that it is difficult to judge of its condition at any time. The Chairman. You have seen, of course, a statement, made during the spring of the year, of the condition of miners at Scrantou and in the neighborhood of Scranton ? Mr. Weight. Yes. The Chaieman. Showing the absolute destitution which was said to prevail in that region? Mr. Weight. Y'es ; I have no doubt it did prevail, but I believe that it is better now. The Chairman. How does it get better ? Mr. Wright. I cannot tell you any more than I can tell you how an apple grows. The Chairman. You might, still, irom observation, tell how an apple grows, and so about pauperism. It may be that there is more employment now, or that some por- tion of the unemployed labor there has been forced away into other fields of occupa- tion. Mr. Wright. When a large quantity of coal is sold on the market for the sake of influencing the market, it ajfects the condition of the miners. I find as much diffi- culty in getting at the causes of prosperity as I have in getting at the causes of de- pression. The Chairman. I am speaking now of the fact whether, under your observation, any portion of the labor that was unemployed and suffering has been compelled to quit the regions where there was too much of it and to go to other regions — driven to the West, for instance. Mr. Weight. Not to any great extent, although emigration is constantly going for- ward to the West from all the Eastern States. The Chairman. Do you think that Massachusetts has been relieved of any portion of her pauperism in that way ? Mr. Weight. I think so. I do not believe that the population of Massachusetts has very much increased daring the last three years. I do not think that that has relieved the State of Massachusetts, for I do not believe that you can create a condition of pros- perity by depopulating a State. The Chairman. No ; hut you can relieve the suffering in a State where people are out of employment by getting rid of the surplus population for the time being. Mr. Weight. Certainly ; through the natural redistribution of population. The Chairman. May it not be done by artificial means? Cannot the State say that there are more people in the State than can be employed ; and can it not take the money which would have to be expended in feeding the unemployed and use it in putting them somewhere else ? Mr. Wright. That might work very well for a little time ; but it would soon become a disaster to the nation. I do not think that you can force a redistribution of population any more than you can force a readjustment of values. Certainly a government can- not force prosperity. The Chairman. But suppose there is here a deficiency of employment, and suppose that a thousand miles to the west of us there is a demand for labor, cannot the State intervene and transfer the unemployed labor from here to the region where there is em- ployment for it ? It is not a matter of forcing prosperity, but a mere matter of putting the labor where it is wanted. Cannot the same money which would be used to feed these people be used to transport them to some other place where their labor will be remunerative ? Mr. Weight. Yes ; if you had an opportunity to select the right men. The Chairman. Then the difficulty would be in the selection? Mr, Weight. I think the trouble would be this (it is the same in all Northern States as in the Southern States— only with different kinds of population) : There is in every large city a class of men who, if you should give them a farm in the West, stock DEPRESSION IN LABOR AND BUSINESS. 287 it, aud put it in first-rate running order, on tlie condition that they should live on it and till the soil, -would not go there. Such men prefer what they call society. They wUl have it. It is certainly impossible to get these men out of a city under any in- ducement ■whatever. It is just the same with colored people in some of the Southern States. The colored man likes society ; his society to him is important. A water- melon on the sunny side of the house is worth more to him than any labor remunera- tion for his family. And it is just the same with a certain class of men North. For many years we have been trying in Boston to get population out of the city into coun- try homes ; and I am not aware yet that any of those endeavors have met with suc- cess. The Chairman. You thiut, then, that any interference with the natural law which leads peoi>le where their inclination requires them to live would be unwise on the part of the government 1 Mr. Weight. Not only unwise, but it would lead to absolute disaster. The Chairjian. Do yovi think that, if we were to appropriate the proceeds of the sale of the public lands to the work of moving population from the cities to the Western lands, it would result in failure ? Mr. Weight. I think so. I should judge that a better way would be to give them the laud. The Chaibman. That we do now under the homestead law. But the complaint is (it has been brought before the committee and has been very much discussed) that there is not money available to transport the idle people out there, and that there are a number of people who would like to live on farms who cannot get there. Mr. Weight. Why not offer some of them money to go out ? The Chaieman. That is exactly the question I put to you — whether it is expedient for Congress to pay for the transportation of any portions of this unemployed popula- tion that is willing to go to the West. Mr. Weight. I do not think that the government has any right to do that, and I do not think that it would be a wise measure. The Chairman. As to the question of right, you recognize the obligation of every civilized community to take care of its poor, do you not f Mr. Weight. I do. The Chaieman. If it can feed them in a workhouse and take care of them there, and if the same money that that would cost would put them where they could take care of themselves, would there be any violation of principle in that? Mr. Weight. No ; if you call these people paupers. The Chaieman. They come in the attitude of paupers — in fm-ma pauperis — and say, "We cannot get to these lands ; pay our fares for us and we will go there." Mr. Weight. Exactly, and the government has a perfect right to pay their fares there and to settle theni there and to keep them there as paupers. The Chaieman. If you put a man iu the poorlionse and keep him there as a pauper, would you not let him go some time ? Mr. Weight. Certainly. The Chaieman. One of the richest families of the United States has sprung from such a beginning. It is said that the founder of thati family came over to America under a contract by which he had to refund the cost of transportation ; and certainly there is nothing inconsistent in paying a man's passage to the West and enabling him to settle on a farm. Mr. Weight. No, sir ; if you only do it under natural laws ; but I doubt if you wiU get men to go there as paupers. The Chairman. That is to say, they will not accept money to pay their fare ? Mr. Weight. No sir „ , ^ t^ ■ j. .-j The Chaieman. Mr. Eioe says that he was secretary of the Kansas Jimigrant Aid Society, and that that society paid the fare to Kansas of a large number of persons. These persons did accept it, and have since turned out very respectable citizens. Mr. Weight. They were another class of men. That is entirely a different matter. The Chaieman. Do you mean to say that they went out on some other idea besides settling in the West ? Mr. Weight. Exactly. It is a mere question of ideas. The Chaieman. Is there any idea more powerful than the desire of a man to secure a home for himself and family ? Mr. Weight. Not generally. . .■^. ,■-, , The Chairman. Can you conceive of a man going out there on a political idea and refusing to go on that other idea? ^ j., ■ ■, ■. u x x ;, -^ Mr Wrkhit. I think he would go, but I do not think he would turn out a good cit- izen The people whom Mr. Eice speaks of were men who wanted to go, and whom the society wanted to go ; but the idea which you advance is that these people shall go at the expense of the government. ■,. 4. . -nv 1 xi. The Chairman. No ; my idea is this. I have a letter written to me from Elizabeth, 288 DEPRESSION IN LABOR AND BUSINESS. N. J., sayiug lliat a body of twelve yoimg men, heretofore employed in various aroca- tious, are now without employment, and have made up their mind to go West ; and that, if they cannot get there in any other way, they are going to walk there. But the suggestion is made that, if transportation were provided by the government, it would be a very great help to them, and would relieve them of much of the difliculties in their way. That is the sort of case I want to put to you. Mr. Weight. I should hope that somebody would pay their fare there. The Chairman. But the question is whether the government should undertake to do it out of the proceeds of the sale of public lands, the government being trustee of the public lands for the whole community. Mr. Wkight. No, sir. The Chaieman. Would there be anything wrong, objectionable, or unjust in doing it? Mr. Wright. It would be an experiment. It might be well worth trying. So far as legality is concerned, I do not know that there is any question about it any more than about giving aid to other enterprises. The Chairman. Assuming it to b^ legal, would it be a wise measure of public policy ? Mr. Wright. I do not think it would be, but I should like to see it tried. The Chairman. In regard to the progress of employment in Massachusetts since 1873, are you satisfied now that the labor of Massachusetts is in any better state of employment now than it has been at any time during the last three years ? Mr. Wright. I am thoroughly satisfied about that. The Chairman. Things are on the mend there ? Mr. Weight. There is no question about it. The Chairman. That, of course, must be true of all other centers of industry. Mr. Weight. I believe it is so. I have been unable to develop the reverse. The Chairman. Have you examined to find whether in other places there was a different state of things in that respect from that which there is in Massachusetts ? Mr. Wright. I have. The Chairman. And you have not found it to be so. Mr. Wright. I do not find but that there is a decided improvement in all branches of industry, with the exception, perhaps, of the iron trade. That is particularly an exception just now, perhaps. I am not familiar with that business. The Chairman. I am very familiar with it, and I know that the difficulties in the iron trade seem to be increasing. Although the demand for iron last year was greater in tons than in any year since 1873, yet the fall in prices has been so great that I know of no concern in that business that can be run at a profit. Most of them must be run- ning at a loss, and I think that every owner of a blast furnace must be considering the question whether he can keep it on any longer or not. Mr. Weight. That is true, I imagine, of the iron trade ; but I find that in the cotton business and in the shoe business (the two leading industries of our State) there is not only a decided improvement, but there are many efforts being made to increase the capacity of works. The Chairman. Do you think that that results from our having secured a foreign market for any of those products? Has that had any material influence ? Mr. Weight. It has had a slight influence, but not to any great extent. Of course there has been a swing of the pendulum of industry and it must go back. The over- production of which we hear so much must have taken place since the depression. Overproduction is rather the result of depression than depression the result of over- production. There has been an attempt on the part of everybody to consume as little as possible ; and the result of that attempt is being felt now by the industry of the country. Manufacturers report to me that in many instances they are unable to fill their orders. I know it as a fact that many mills and works in Massachusetts are start- ing up. I know, furthermore, th at the number of those which close is growing less and less. And if that is true, and if manufacturers are building additions to their mills (as they are at Manchester, N. H., where the Amoskeag works are adding 900 Cromp- ton looms to their machinery), that is a sign of great prosperity. The Amoskeag works are a successful corporation, and the managers would not add to their means of produc- tion if they did not find use for it. The Chairman. May they not be adding 900 looms of an improved style and displac- ing 1,800 looms of an inferior kind ? Mr. Weight. It might he so, but it is not. The Chairman. Of course, when improved machinery comes into use, it is generally substituted for less effective machinery. Mr. Weight. Certainly. The Chaieman. And one corporation may be increasing its machinery when another corporation is closing up its works. Mr. Weight. That is very true. That brings us to the whole subject of machinery. Mr. Rice. Do you know anything as to the business of the manufacturer of Crompton DEPRESSION IN LABOR AND BUSINESS. 289 ooms at this time; ■whether he has not all that he can do in manufaoturing them? Has he not more business now than he has had for many years ? Mr. Wright. I have been so informed. Mr. Rice. It is so. The Chairman. I should like yon to look at this statement (handing a copy of the Graphic to the witness) of Mr. Moody's figures and say what you think about it. Mr. Wright (after examining the paper). I had not seen this before. The Chairman. You observe that his figures seem to be made up on a selection of industries. He selects a certain number, and on the basis of that certain number he deduces conclusions which he says are at variance with the conclusions in your report of 1878. Mr. Wright. He selects certain figures that are correct, and on these correct figures he makes a false assumption and builds up his conclusions. The Chairman. What is the false assumption ? Mr. Wright. The false assumption is that the increase in these industries has been exactly in the same ratio as the increase in popvilation ; and from that he builds up the whole statement. I have noticed his statements in other matters, and, if carried to their logical conclusion, they would show that 100 per cent, of all classes of laboring people have been displaced. Therefore, if we had ten millions employed in this country in protective industries, according to Mr. Moody's assumption they have bepn all dis- placed. The Chairman. That is to say, that machinery is doing the whole work ? Mr. Wright. Yes ; that is the logical conclusion which we come to on Mr. Moody's figures. The Chairman. His figures would bring us to that happy condition of things when the laboring population would be ablo to have the prodtiots of machinery for nothing. Mr. Wright. I do not see why they would not. The Chairman. Do we progress sensibly towards that state of things ? Mr. Wright. We do. Anticipating that very question, I yesterday caused some fig- ures to be made in regard to the working time in various industries, the actual work- ing time on a basis of 308 days per year, and I find that in the boot and shoe trade in Massachusetts in 1875 the operatives did not work over eight hours a day on the basis of extending their whole labor over 308 days in the year. They worked from 240 to 250 days out of the whole 308 working days, and were idle the rest of the tmie. It that labor could have been extended over the 308 days, then they did not work on an average more than eight hours a day. And it was so with the whole industries of the State. The yearly working time in 1875 was 243, which is about eight hours a day, it extended over the whole year. In the cotton trade in the city of Lowell, out of 308 days the operatives worked 306 days. That was 9^^ hours on the average. But m Fall River they worked only 272 ft days, making an average of nine hours a day. In Lawrence they worked 291 days, or an average of 9 A% hours per day. But in Adams, in the western part of the State, they worked only 280} days out of the whole year, or an average of nine hours per day. In the trade of carpentry and joinery the opera- tives in the State worked 272 days out of 308 days, or an average of about nine hours a day In the manufacture of agricultural implements the operatives worked nine hours per day. So that actually, so far as real working time during the year is con- cerned, the operatives of Massachusetts, if their whole work was extended over the year, worked but a little over eight hours per day. I furnish a table of the figures : 19 L 290 DEPRESSION IN LABOR AND BUSINESS. Boots and shoes (about 30,000 employed). Cities and towns. Actual yearly working time, in days, on ba- sis of ten hours each day. Daily working time, in hours, on basis of 308 working days. 'N'nrth Brookfield . . .'. 243.4 241. 272. 240.3 217.7 272.5 229.4 247.4 264.9 237.2 268.3 262.4 221.8 763.8 306. 272.8 291. 280.5 272. 7.9 Milford 7.82 8.83 7.8 Stoneham . .. ...... ...... .. . ....... .... ...... ...... 7. 9. L vnn ......--.. .... ...... ...... .... .... .... .... .... .... . .... 7.44 8. 8.6 7.7 HudsoTi _. - ...... .... ...... ........... ...... ...... .. 8.71 HoDkinton .-. .... .... .... ...... .... ...... ...... ...... ...... .. 8.5 Marbleliead. ...... ...... ..... .... .... .... .... ...... ... ...... .... 7.2 Beverlv .... .... .... .... .... ...... .... .... .... ...... .... .... ... 8.56 COTTON GOODS. Lowell ...... ...... ........ ...... .... ............ .......... .... 9.93 Fall River 9. 7.44 Adams ...... ...... ...... .... ...... .... .... .... ...... ...... ... 9. 9- Agricultural implements, 1,176 employes. Average on 308-day basis, 9 hours. Average of 77,000 employes : males 8 hours, females 8 hours 50 minutes. The Chairman. But it is alleged to be a grievance that when they do work they are compelled to work too long hours, and then that there is a good deal of time wheii they have no employment ; and one of the points urged upon the committee is that some legislation should be provided by which at no time should they work more than eight hours a day, and that thus the labor would be evenly diffused throughout the whole year. Mr. Wright. It is a very serious question whether, by legislation, you ought to compel a manufacturer to work in a season of the year when he has no sale for his goods on the average of eight hours per day ; or whether you will give him an oppor- tunity of working for nine or ten hours a day during the busy season and running a shorter time during the dull season. The Chairman. Is not that the very function of capital, that it is a fly-wheel, which carries labor over dull times and furnishes employment? Capital accumulates stock and is compensated by profits. Mr. Wright. I should think that that was a fair statement. We were speaking of the progress of machinery toward more luxury, which, I believe, is the province of ma- chinery. The actual result of labor-saving machinery (which is, by the way, a mis- nomer, as it does not save labor but makes labor) is to give men better wages and more time. That is, to make them better qualified for a higher civilization. Now, the fact is (I quote from Mr. George Howell, of England) that the rise in wages dming the last 30 years in London (in the clothing trades) amounted to nine and foui'pence per week, equal to 30^ per cent, on the 30 shillings a week paid previous to 1847. And that does not take into account the reduction of hours of labor. That is also true of this coun- try. DEPRESSION IN LABOR AND BUSINESS. 291 The Chairman. You are quoting from Mr. Howell's recent publication on capital and labor f if i^ Mr. Wright. Yes ; his last work. In regard to this country, there is a sworn state- ment, made up by a committee appointed by a court in Connecticut, and the statement is that in 1859 carpenters received |1.75 per day. There was an actual increase until 1868, when they received |3.50 a day ; and then there was a decrease to 1876, when they received |2.50 a day. Now, for jobbing work carpenters receive in our State $2 a day, which is higher than the wages received by them in 1859, with all the depres- sion. The Chairman. Is the purchasing power of |2 at present equal to the purchasing power of 11.75 in 1859 ? Mr. Wright. Not fully, although it is approaching it. I am preparing at present a complete statement of the wages of all kinds of mechanics in 1860 and 1878, with com- parative columns, giving the prices of all provisions and necessaries of life for the same periods. The Chairman. It is precisely that information which the committee sought to get in the questions which it put out, and which the committee has not yet succeeded in getting. Mr. Wright. You shall have it in full for Massachusetts. The Chairman. Then your statement is that machinery has not injured the demand for labor in this or any other country ; but that, taken as a whole and on the average, it has increased the demand for labor ? Mr. Wright. I believe that to be true. Of course, temporarily, on the introduc- tion of improved machinery there is an apparent displacement and an actual displace- ment of muscular labor ; but the result has been, in every instance where sufacient time has been given for an intelligent judgment, that employment (which I distin- guish from muscular labor) has actually increased, and that that increased employ- ment has increased the time which the workingman has to himself and the amount of wages which he has to furnish his family with subsistence. The Chairman. If it can be shown that the material condition of the working classes has steadily improved since the introduction of machinery, do you know any other cause than machinery which could have brought about that result ? Is there any other cause ? Mr. Wright. I do not know any other cause to bring about a better condition of the workingmen. I do not know any more potent cause than that, because nothing can improve the workingman's condition except that which will give him better re- sults for his work. The Chairman. In investigating the condition of the wage-earning class, is the weight of evidence in favor of the fact that their condition has stesidily improved during the last hundred years f Mr. Wright. Certainly ; I know of no evidence to the contrary. The Chairman. Do you find that disputed ? Mr. Wright. I find it disputed, but never in books, because men who write books know better. But I find it disputed on the street. I find it disputed in my office by the men, who claim that machinery has been derogatory to the condition of the labor- ing man ; but I never have found the man who could stand up and carry out his argu- ment to its logical conclusion. The Chairman. It is a curious fact that, in the evidence before this committee, not a single witness has taken the ground that the condition of the working classes has been made worse by machinery ; but, as a matter of fact, all have conceded that the progress has been always toward a better condition of things. J&. Wright. I should suppose they would. It is utterly impossible to take the other side. . The Chairman. In this work of Howell's (the best work that has appeared m the defence of trades-unions and the rights of labor), what view does he take on that sub- ject ? Does he consider that the condition of the laboring classes has improved ? Mr. Wright. Certainly ; all English writers who deal with the subject believe in that. . , ,. ,, , The Chairman. Have you investigated what amount of population would be re- quired in the State of Massachusetts to do the work now done there by muscular labor and machinery, provided the machinery were abolished ? Mr. Wright. I have. . , . ,, , ^j. j. ^ „ j.. The Chairman. What population would be required in Massachusetts to do aU the work ? Mr Wright. To do the work which we now do in Massachusetts would require a population, on'the present means of subsistence, of about nine millions. The Chairman. What is the present population ? Mr. Wright. One million six hundred and fifty thousand. The Chairman. Then the necessaries and the luxuries of life now earned by and 292 DEPEESSION IN LABOR AND BUSINESS. distributed among one million six hundred and fifty thousand people would have to he earned by and distributed among about nine millions of people ? Mr. Whight. Yes ; that would bo the result if we did not have machinery. The Chairman. I need not, therefore, ask you for the conclusion that the nine mill- ions of people would have very short commons. I do not suppose that you have such a surplus offood in Massachusetts that you could take care of seven millions more people ? Mr. Wright. No, sir. If you take the accumulated wealth of any State, and if all the industries of that State be stopped, the accumulated wealth will not support the people more than two and a half years. The Chairman. Then, in one year the entire accumulated wealth of Massachusetts would disappear if you were required to do by muscular labor the work that is now done there by muscular labor and machinery ? Mr. Wright. Yes. Mr. Rice. The condition of affairs there would be as bad as in China or India? Mr. Wright. It would be worse. The Chairman. How would it be worse ? I supposed that China and India had reached the limit of the population that could live ou what they have got to live on. Mr. Wright. I think the people of Massachusetts would reach a condition of star- vation very rapidly. The Chairman. Within a year, I suppose ? Mr. Wright. Yes; within le.ss time. The Chairman. How are the figures arrived at ; is it a matter of careful calcula- tion? Mr. Wright. It has been a matter of arithmetical calculation, not based on any esti- mates whatever, but the result of figures made by various parties — engineers and intelli- gent men — from actual facts. There is no guess-work about it ; we do not deal with that in our work. You cannot get along with statistics if you admit a single assump- tion. Mr. Thompson. In that calculation of yours, do you take into consideration the transportation of the country carried ou by railroads ? Mr. Wight. Yes, sir; it includes the railroads. Without railroads it would be about seven millions. To do the work that is now done by the railroads in Massachusetts would require four hundred thousand men and a million and a half of horses, and would cost four hundred million dollars a year, instead of the twenty millions a year that it costs now. Mr. Thompson. In your calculation, what relative number do you fix as between a horse and a man in power ? Mr. Wright. As far as the roalroads were concerned, that figure was arrived at by the grades. We took into consideration the grades and the load which horses can draw over grade and over level roads. We did not use the ordinary horse-power of the philosophers at all. The Chairman. Who made the calculation in regard to railways ? Mr. Wright. The honorable Edward Appleton, formerly one of our railroad commis- flioners, a scientific, careful civil engineer. Mr. Rice. He was the engineer of the board, was he not ? Mr. Wright. Y'es. The Chairman. You can furnish the committee with those figures, I suppose, as you have them in an article read by you before the American Science Convention ? Mr. Wright. Yes ; I shall furnish the whole calculations. The Chairman. If that paper of yours is in print it would be a very valuable docu- ment to be appended to the report of the committee. Mr. Wright. I shall see that the committee has it. The Chairman. The practical result of this calculation is that by the use of ma- chinery every man in Massachusetts has made himself equivalent to about five per- sons, while only one is to be paid. Mr. Wright. Emphatically, yes. The Chairman. Then, in youi judgment, machinery has enabled a larger population to subsist upon a given area than would have been otherwise possible ? Mr. Wright. Yes ; that is the practical result. The Chairman. CaiTy that out to its logical consequence. Is it not the tendency of population in every country to go on increasing until the limits of subsistence are reached ? Mr. Wright. That is a pretty deep question. I should like to consult a higher power about it. The Chairman. Population does increase ? Mr. Wright. Yes ; but whether it would increase or not to that extent which you foreshadow, or whether there would be a blow up, I cannot say. The Chairman. Has not the population so increased in India and China? Mr. Wright. Yes. Countries oscillate in their conditions. of prosperity. We find DEPKESSION IN LABOR AND BUSINESS. 293 people in one part of the earth living in one condition, and people in another part of the earth living in another condition. We iind one man weighing 350 pounds and another man weighing only 125 pounds. The Chairman. Iu a civilized country, where machinery is in operation, the stand- ard of life is higher than in countries like China and India, where machinery has not been introdnced to any great extent t Mr. Wright. There is no doubt about that.. The Chairman. Can you imagine that a race accustomed to the refinements of civ- iUzation would be willing to come down to the coudition of the people of China and India under the pressure of increasing population ? Mr. WiUGHT. I believe that the province and the work of machinery is to enable all the population which the Almighty sees fit to place upon this earth to subsist upon this earth, and I believe that machinery will carry the people constantly forward in a higher and higher condition of civilization so that they can subsist by less work; and I know that mtelligenoe grows as machinery advances. That seems to me to be a solution of the problem which you have submitted. The Chairman. England is a country abounding in machinery ; Belgium is a conn-, try abounding in machinery. Belgium is much more densely populated than England, having something like four hundred persons to the square mile. England has but about half that number. Now, machinery of the most improved forms has been intro- duced into Belgium in every conceivable place. Is the condition of labor in Belgium more favorable to the laboring class than it is in England, or is it rice versa f Mr. Wright. If you class all the labor together in your question, it would be a very difficult question to answer. I do not think it would be possible for the large mass of people to subsist comfortably in either Belgium or England were it not for the influ- ence of machinery. Whether the one or the other is in a happier state would be a very serious question to undertake to answer. The Chairman. I now press the question which I put to you originally, and which you said you would not like to answer ; that is, whether the tendency, even with ma- chinery, is not to go on and increase in population until practically the limits would be reached of humanity existing on the smallest possible amount that would keep it iu being ; and whether, as between England and Belgium, that is not about the present condition of Belgium ? Mr. Wright. Whether the population of the world will become so dense that it can- not have subsistence is not a question for mortals to consider. The Chairman. It is conjectural to some extent, but it has a bearing on this ques- tion — whether it is within the power of man to devise. any remedy that will postpone the day when the population will become so large that the limit of subsistence will be reached, and that all will have to subsist in comparative poverty, almost want, as do the people in China and India ? Mr. Wright. I do not believe that that time will ever arrive f and if the population become so dense that it cannot subsist with the present means of production, some other means will be given — whether through machinery or not, I cannot say ; but faith iu the Almighty teaches me to believe that He will get the world out of the trouble in some way. The Chairman. But why doesn't the Almighty get Cliina and India out of their trouble ? Mr. Wright. I cannot tell yon. The Chairman. You must not suppose that I can answer the question better than yon can. Mr. Wright. I am enjoying your position just as much as you are enjoying mine. The Chairman. The bearing of the question on the condition of this country is sim- ply this : Of course, in this country there is no present danger of our reaching any such limitation ; but the question becomes important iu this sense, that in other countries where the limit has been reached, as in Belgium, and, comparatively, in England (be- cause England imports large quantities of food), competition is produced with our people ; and if England and Belgium can get labor for a less supply of the necessaries of hfe than we can, and can undersell us, they can drive us out of all the foreign mar- kets and compete with us in our own markets for our own domestic manufactures. Have you considered the subject in that view at all ? Mr. Wright. That would involve the question of the tariff, which I understood this committee to say is a matter for the Committee of Ways and Means. The Chairman. In Belgium labor is paid at the rate of two francs a day, and labor in this country is paid at the rate of five francs a day. Now what is to prevent this Belgian competition firom bringing down our labor to the same rate of compensation as the foreign labor ? Mr. Wright. That is a matter which, as one of the causes of the present depression, enters largely into the question. We are suffering just now from a disproportionate arrangement of values, resulting from rapid transportation, &c., and a reacyustment must take place. Now everything undergoing a readjustment has to suffer always, 294 DEPRESSION IN LABOE AND BUSINESS. under all circumatanoes, until the readjustment is perfected. We are trying to equal- ize -wages ; or, rather, the result of things is to equalize wages all over the world. The markets of the world are becoming nearer and nearer, as transportation grows more and more rapid. We are gradually approaching a condition almost entirely cos- mopolitan in its character. Every man knows his foreign neighbor now better than he did. If goods are to be sold iii New York to-day at a certain price, that price is quoted in Canton, in Hong-Kong, and in Liverpool ; and whenever that class of goods finds a market and a price here (if they are goods that are produced here), that price immediately controls them there. Now we have to adjust ourselves to that state of affairs; and, during the adjustment, many men have to suffer. But I believe that every legitimate failure which has taken place is a step towards that readjustment in distributing assets, in sharing liabiUties, and in bringing people to a common equal- ized basis. When that occurs (and it is occurring rapidly) the country will step out on a, period of prosperity, and not until then. The Chaikman. Then one of the results of the introduction of machinery and of the readjustment of things has been to bring about a state approaching towards the equalization of wages in the great manufacturing and producing countries ? Mr. Weight. Yes, and the capacity to satisfy wants. The Chairman. Will that equalization take place in the fall of the higher rate of wages to the lower level, or will it be in a rise from the lower to the higher; or will it be by a joint action toward a common level? Mr. Wright. It wiU be by a joint action, because wages and salaries and all remu- neration sometimes swing too far out of balance ; while, on the other hand, the lower grades do not come up rapidly enough. Labor never receives adequate remuneration ibr the efforts expended. That is a state of affairs that has always existed, and which nobody can explain. Perhaps it is just there that the question of profits comes in. But I am satisfied that the workingman never yet has been paid, and is not now paid, a remuneration adequate to the effort he expends. The Chairman. Do you mean to say that too large a proportion is taken by cap- ital? Mr. Wright. I would not say that, because I do not know it to be a fact, but I say that in individual cases that may occur. We have no right, however, to discuss ques- tions on individual cases but on general principles. The Chairman. As to the profits of manufacturing capital in New England. Has capital in the average of years in Massachusetts had a larger remuneration than seems to you just ? Take the average of years, good and bad, has capital had such high rates of dividends as would seem to be an undue remuneration for it? Mr. Wright. I do not believe it has. I believe that the reward of capital has been no greater than was perhaps necessary to keep the wheels of industry going. The Chairman. Then how can you say that labor has had too little ? Mr. Wright. For instance, the Lowell mills last year worked 306 days out of the 308 working days of the year ; and on that they paid a smaller dividend to their stock- liolders than previously in continuous years. To prove that I refer you to the ninth annual report of my bureau, where that whole subject of profits of corporations and all private establishments is thoroughly displayed, and where it is shown that the stockholders receive a less amount of profit than the individual proprietors of private establishments. Now, if, in these Lowell mills, which ran 306 days out of 308, they should work less time and pay the same wages, you can see at once the disastrous ef- fects that would follow. The Chairman. Certainly I do see that. Mr. Wright. On the other hand, when I say that workingmen do not receive an ad- equate amount for their labor, that remark is based upon the fact that the majority of workingmen do not save anything. I do not now refer to the workingmen who ex- pand their wages prodigally, but to men who are careful and economical. They do not save anything, and are obliged to rely in a large manner on the wages of the children of the family. That to me is the worst phase of the labor question — the em- ployment of young children and young persons in our mills. And every time that a child goes into a mill to work he interferes with the wages of an adult. The Chairman. How would you meet the competition with Belgium ? Supposing that the State of Massachusetts prohibited the working of women and children in factories in the way that you describe, and that in Belgium there was no such prohi- bition, and that the people were allowed to be overworked, how is competition with Belgium to be kept up in the State of Massachusetts — ^putting out of the way all ques- tions of tariff? Mr. Wright. I do not believe that that competition can be forcibly adjusted. It would have to adjust itself on the wants of the people. If wages are brought too low for a man to subsist upon them, that man suffers. There is no doubt about that. You cannot dodge that conclusion. And he must suffer until a different state of aft'airs helps him out of his suffering ; and the only way out of it is the same royal road out of every difficulty — hard work, I know of none other. DEPRESSION IN LABOR AND BUSINESS. 295 The Chaikman. In 1859, when I -went patiently through all the foreign iron-works to get at the condition of industry, I found that practically they were getting in Bel- gium the labor of a whole family, man, wife, and children, for the same sum exactly as we paid to the man alone in this country. Then the question which was presented forcibly to my mind was, " How can industry grow up in America in competition with such a state of things as that, unless we adopt the same method here ?" And I have nevei*been able to answer that question to myself. Mr. Wright. I am in just the same condition as you in that matter. The only way that you can meet a lowering of prices in one thing is by the lowering of prices in another thing. If wages become so low that men cannot live on them at the present price of the necessaries of life, the prices of those necessaries must come down. Either that, or else we must turn ourselves into a general pauper-relieving establishment. That is the only way out of it. The Chairman. No ; another way is the way adopted in Belgium, where a man and his wife and children go into the factory, and in the aggregate they earn enough to support the fainUy in a certain condition of comfort. But you propose to prohibit the employment of children and women in occupations unsuitable to them. Mr. Wright. You say I propose it. I do not say so. I said that it was the worst phase of the labor question. The Chairman. You would like to get rid of it ? Mr. Wright. Certainly ; but I did not propose to prohibit it. The Chairman. That brings us to the difficulty which we are here to consider; whether, by legislation of Congress, we can do anything to make the condition of the wage-earning class more tolerable, more comfortable, and more prosperous than it now is. Mr. Wright. I believe that it is of vastly more importance and vital interest to the workiugmen of the country that all the affairs of the government, legislative and executive, shall be administeTed economically than all the ten-hour laws or any spe- cial relief that can be enacted. The whole question of taxation comes to that. I think that the workingman to-day is suffering from taxation. All the constitutions of the country provide that the people shall be justly and equitably taxed. That reads very well, but it is not the fact in any case. Nor do I know how the people can be relieved by special enactment until the legislatures of the country (including the national legislature) shall devise some means of just and equitable taxation. In Massachusetts we have enacted many laws for the benefit, directly or indirectly, of the workingman, but the direct laws are rarely of any benefit to him. Take, for instance, the ten-hour law. The ten-hour law in England did not go into operation by the force of law, but by the force of circumstances, because it was for the interest not only of the employer but of the employed that ten hours should constitute a full day's work. So in Massachusetts. If we should pass there, the next session (as many want), a nine-hour law, it would be of no effect. The nine-hour law is in existence now practically. It would only force a distribution of time and make things arbi- trary where they should not be arbitrary. I do not see that the workingman of Mas- sachusetts would be better by an absolute enactment of a nine-hour law than he now is. It is all these indirect methods of legislation that actually benefit the working- man, and the one of taxation is one that is vital to him. .- The Chairmajj. Then you think that the functions of legislation to alfect labor are limited by the taxing power? Mr. Wright. No; but I say the taxing power is one of the most vital powers. The Chairman. Do yon know any other method by which Congress can do anything for the improvement of the condition of the wage-earning class, except through the agency of taxation ? Mr. Weight. It might, perhaps, if it would adjourn. The Chairman. Are you aware that adjournment does not reduce expenditure? Mr. Wright. I am ; but I am also aware that if the Congressmen were paid $25,000 each to stay at home, instead of $5,000 to go to Washington, it might be a benefit to the workingmen of the country. The Chairman. But it is not a good thing for the reputation of Congress that, in the judgment of an intelligent man, we had better dispense with a representative form of government. Mr. Wright. Of course you will excuse me for the pleasantry ; but it all comes to this : The welfare of a nation, it seems to me, depends upon the virtue of the indi- vidual members of the nation. After all, the whole question is an individual one. The moment that you undertake to make remedies that are to be forcible and absolute in their operation, I am reminded of the boot-strap school of political economy. The workingman is on one side of a wall, and he wants very much to get on the other side; and the political economist of the boot-strap school says: "My dear sir, will yon be good enough to get on the other side" ? and he hops away. Now, the working- man on the other side finds that by tugging at his boot-straps he does not get over ; but if he goes to work with his hands no may build steps with which he can get over 296 DEPEESSION IN LABOR AND BUSINESS. it. It is an inclividnal question ; and when the individuals of the nation get their pri- vate affairs adjusted to the new order of things, we will hear no more of the difficulties of laboring men. And it is the same with Congress. Of course all this thing is re- flected in Congress. I believe that Congress tries to do what it can, by legislation, to assist generally the business of the country. I am not one of those who believe that the government and business are en fcirely dissociated. I believe that the influence of government on business is not only great but of vital importance to all the indus- tries of the nation. And, in that respect, I do not see why the laws should not be passed, why all the trusts of State and national legislatures should not be exercised, carefully and faithfully, with an eye to the business of the country. The Chairman. Is there any other method by which Congress can proceed, except through the taxing power, in regard to the relations between capital and labor? As- suming that there is equality before the law and justice in the courts, is there any other direction by whicli we can approach the question ? Mr. Wright. It is the duty of the government to maintain its coin and currency at par with the gold standard of the world. I believe that the currency which does that is the best friend of the workingman. The Chairman. Then you are in favor of persevering in the legislation for the res- toration of specie payment ? Mr. Wright. Yes ; Congress should show an honest and upright adherence to that legislation, and show that it is in earnest in it. The Chairman. In the imposition of taxation in any way (an income tax, for in- stance), can Congress leave a larger return to the laborer than he now gets ? Mr. Wright. Theoretically I am entirely in favor of the fairness of an income tax ; but I know and appreciate the obstacles in the way of carrying it out. If Congress can remove those obstacles, and provide a means by which an income tax can be equi- tably enforced, it seems to me the fairest form of tax, because it relieves the man of small income from taxation and imposes it on the man of large income. The Chairman. Is it not the interest of the workingmen to have the accumulation of capital in the country encouraged ? Mr. Wright. Without accumulated capital no great work can be carried out. The Chairman. Would not an income tax be an impediment pro tanto to the accu- mulation of capital? That is, if yon impose a progressive income tax, would there not be a point where capital would be taken out of the country to some other place ? Mr. Wright. I say that the imposition of an income tax is attended with such ob- stacles that I do not know that it is practicable. The Chairman. Then, an income tax may produce greater evils than it is proposed to remove ? Mr. Wright. It may. The subject is worthy of very great consideration by Con- gress. Mr. Thompson. The State of Massachusetts sustains a popiilation, you say, of 1,650,000 ; and you say that were it not for machinery it would require a population of nine millions to produce what is now produced in that State ? Mr. Wright. Yes. Mr. Thompson. Do you mean by that that the introduction and use of machinery increases the population's producing capacity of a State ? Mr. Wright. I believe it does. It not only increases the population's producing capacity, but it also increases the wants of the people. Mr. Thompson. But does it actually increase the capacity to maintain population? Mr. Wright. I believe it does. Mr. Thompson. Suppose you had a wall built around Massachusetts, and suppose the capacity of the State to maintain jjopulation is equal to a million and a half of people without machinery ; if you introduce all the machinery that you have and keep the State isolated, will the State maintain any more to the square mile ? Mr. Wright. That is not a tenable supposition. That is a supposition that I can- not contemplate, because Massachusetts is not an agricultural locality at all. Mr. Thompson. That is the point. Now, if Massachusetts were absolutely isolated would machinery enable her to maintain a larger population ? Mr. Wright. Only agricultural machinery. Mr. Thompson. Exactly; but would spinning-jennies enable her to maintain a larger population ? Mr. Wright. Of course the manufacture of cotton goods would be of no use to Mas- sachusetts if she were shut in. Mr. Thompson. Therefore, the logical seqtience is that while machinery enables men in Massachusetts to manufacture more goods, and to be a larger factor in the world's commerce than she would be without machinery, no more population can be sustained to the square mile in Massachusetts with machinery than without it? Mr. Wright. But Massachusetts is in the world, and you cannot consider Massa- chusetts to be out of it ; that is impossible. Mr. Thompson. Could more people live, to the square mile, in Massachusetts with machinery in the world than without machinery ? DEPRESSION IN LABOR AND BUSINESS. 297 Mr. Wkigiit. I shall have to deoline to put myself out of this sphere in contemplat- ing these questions. I cannot see how anv man can consider what Massachusetts would be if there was not any "rest of world." Mr. Thompson. The impression left on my mind by your statement was that the more machinery is in use the greater the capacity to maintain population, and that Massachusetts would maintain more population with machinery than without it. Mr. Wkight. I do not recollect making any such statement. I said that machinery improves the capacity for enjoyment of the people, and in the work of civilizatiou that it gives them more leisure and more opportunity to gratify their wants. Mr. Thompson. In other words, machinery creates new wants and supplies them. Mr. Wkight. Yes. Mr. Thompson. But machinery does not increase the capacity of mere existence? Mr. Wright. I begin to see what you are driving at. Mere existence can be kept up without any machinery at all. Mr. Thompson. Can it not be kept up to as great an extent without machinery as with machinery * Mr. Wright. You can feed a hog on swill. A horse requires something else. A man requires more than a horse ; and a high grade of man requires more than a low trade of man. A high grade of man can be better sustained in a community that has eveloped its inventions than in a community that has not developed its inventions. You can feed a hog equally well in both. Mr. Thompson. In other words, a high state of civilization cannot be maintained without machinery ? Mr. Wright. No, sir ; it cannot be. The Chairman. Nor the present number of population ? Mr. Wright. No, sir. Mr. Thompson. Why not the present number of population ? Mr. Wright. Simply because without machinery we could not produce enough to sustain it. Mr. Thompson. How does machinery produce, or assist in producing, the merest absolute necessities of existence ? Mr. Wright. Merely because it enables men to till ten times as much ground as they could without it. You cannot raise more per acre, perhaps, but you can till more acres. The Chairman. Cannot a man produce more per acre, also, by the use of agricultural machinery ? In England they produce seventy bushels of wheat to the acre, as against our product of twenty bushels. Mr. Wright. Admitting that he cannot raise any more per acre, he can till more acres. The secretary of the board of agriculture in Ohio contends that he cannot raise any more per acre. Mr. Thompson. Still you cannot embrace within the definition of machinery the rude implements of husbandry. You are speaking of machinery in the higher sense. Reaping-machines do not make any more grain grow. The Chairman. No ; but they save more. Mr. Wright. A reaping-machine enables a man to reap ten times as much as he would without it. Mr. Thompson. But isnot the same amount of grain raised there? Mr. Wright. That is hardly worth talking about. Mr. Thompson. That is the complaint, that one of these reaping-machines does the labor of ten men. Mr. Wright. If a reaper does the work of ten men, then you are harvesting more than you would if you had not the reaper. Then you raise more food and sustain a greater population. Mr. Rice. You say that the tendency of machinery, and of these vast improvements in the facility of intercommunication, is to eqnaUze wages throughout the world. Your inference, therefore, is that the tendency of events now is to reduce the wages of American laborers? Mr. Wright. It has had that tendency already. Mr. Rice. Is there any way by which that tendency can be cheeked profitably and advantageously to labor? Mr. Wright. Not forcibly that I am aware of. Mr. Rice. Suppose that all the means of subsistence for laborers are afforded in this country to an unlimited extent, and suppose that the manufacturers in this coimtry are protected by a tariff against foreign importation, so that everything that can be made here is made here, and the farmers furnish the manufacturers with their subsist- ence from the soil, would not that keep the wages of the American laborers up aa against the wages of the laborer of Belgium and England? Mr. Wright. I have seen no facts that would allow us to give a just conclusion to that supposition, because facts are so thoroughly quoted on both sides of the proposi- tion that I have seen nothing conclusive. 298 DEPRESSION IN LABOK AND BUSINESS. Mr. ElCB. You do not believe that a protective tariff would tend to prevent the decline in the wages in this country f Mr. Wright. We have a protective tariff, and yet our wages have decUned. Mr. KiCE. We will not take the protective tariff which we now have. I suppose nobody will defend it. Mr. Wright. I suppose not. Mr. EiCE. But suppose a protective tariff that is really protecting the manufactur- ing interests of the country ? The Chairman. Yon mean prohibitory ? Mr. Rice. I mean largely prohibitory. Mr. Wright. I believe that, in this country, an industry in its inception should be protected, and that of that protection the workingman shares the benefit. But, when the industry can stand alone, when it can compete with the world (as the paper indus- try of this country can do to-day), then the only tariff that should be on that line of goods should be a tariff for revenue. I believe that, if that principle were carried out in regard to all the industries of this country (protecting them where they should be protected, and making it a tariff for revenue purposes where the industry will admit of that) the workingman would be benefited and a further decrease of wages would be, to a large extent, guarded against. The Chairman. For how long would that last f Mr. Wright. I cannot tell you. The Chairman. But even that would come to an end ? Mr. Wright. Well ; let it come. If it comes to an end, all very well ; if it does not come to an end for fifty years you will have that fifty years to enjoy the benefit of it. Mr. Rice. Would it do any harm until the end came around ? Mr. Wright. I do not think it would. I think (speaking from the standpoint of the workingmen) that the need of this country to-day is that the tariff should be adjust- ed so as to protect those industries which require protection, and admit world-wide competition in those articles where our industries are able to meet with world-wide competition. Mr. Rice. That is substantially a protective tariff. Mr. Wright. Yes ; but modified. Mr. Rice. If the iron industry were carried on under such circumstances I suppose that the price of iron would not be affected at all by foreign importation. The foreign production would have no influence at all on its price here. But when it comes to a point that it can stand on its own basis then it will not need any protection, and it will go on without it. On the contrary, the woolen business does need protec- tion, and, if it were not for protection, the foreign manufactures would be imported and sold here in place of our own manufactures. Now, if we protect the woolen business we have a protective tariff", which you say is not dangerous. Mr. Wkight. Yes ; in principle. Mr. Rice. And you accomplish the end which you desire, which is nothing else than the employment of our labor, and the keeping up of the price of labor. Mr. Wright. Yes ; I think that the workingmeu of this country, if they thought that the highest kind of a protective tariff (almost a prohibitory tariff) would better their condition, would be in favor of one ; but I do not think they think so. You spoke of the woolen business. Mr. Rice. Yes ; I took it up at haphazard. Now, you may take the cotton busi- ness, for instance. It needs no protection because raw cotton is produced here so that no other country in the world can compete with us in producing cotton ; we have that advantage to begin with. I was assuming that we were to protect those industries which would not go alone vrithout protection. Mr. Wright. The tariff in favor of the wool-grower and the tariff on the manu- factured goods clash, as you know. Now, tliere is a case where you have either got to allow the free importation of wool for the benefit of the manufacturer, or to tax the raw material for the benefit of the wool-grower. Mr. Rice. That is the difficulty in adjusting a tariff properly ? Mr. Wright. Yes. The Chairman. Are we not as well suited for agricultural products as any country in the world ? Mr. Wright. I do not know why not. The CHAIR.MAN. Then why impose this duty on wool ; what sense is there in it ? Mr. Wright. I never could see much. The Chairman. Then that is one direction in which the committee may make a report. Mr. Wright. I think that the workingman to-day, who works in a woolen manu- factory, is suffering in wages on account of the tariff on the raw material — on wool. The Chairman. Is he not suffering in the same way when he buys his clothes ? Mr. Wright. He suffers in every way from the tariff on wool ; and nobody gains by it except the wool-grower, and I do not think that he gains much by it, for he DEPKESSION IN LABOR AND BUSINESS. 299 ■would sell more wool if there was not a tariff on the foreign product. The native wool-grower does not find so good a market for his product as he would if the foreign raw material was admitted, because that material is necessary in various manufac- tures of woolen cloths. I believe that to be the case so far as that one article is con- cerned, and that the workingmeu suffer from the tariff on wool. Mr. ElCE. You would protect the labor, but you would not protect the soil. The Chaikman. Have you any other suggestion to offer the committee ? Mr. Wright. I do not believe that any man can claim to have so thoroughly studied the labor question as to be able to present a crystallized cause for the present state of affairs, or to formulate remedies for it. All the causes come in. I have carefully watched the proceedings before this committee, and have read the testimony given before it. If all the causes should be crystallized the result would not be a conglomerate cause ; it would be an effect. Everything that has been stated has tended to bring this about : and it does seem to me that the way out of it is an individixal one, con- sisting of hard work, aided by the encouragement of our government in every way that it can be given, directly or indirectly. And I wish to say that I believe that the result of the work of this committee will be of great benefit to the laboring men of the country, because the committee has given them an opportunity to come here. And even if they do have what the papers call " wild schemes," that is all the better. I learn as much from wild schemes as I do from sensible schemes ; and I do not know but that the committee can take from them all something of good. The Chaibman. In other words, the progress of society is made up of small incre- ments. Mr. Weight. Yes. Every man who comes up here (whether believing in socialism or the reverse) cannot but produce something toward the general progress of society and civilization ; and in that respect the work of this committee will make a contri- bution. The Chairman. The committee is very much obliged to you for having taken the trouble to come here. The following papers were subsequently supplied by Mr. Wright: LOCOMOTIVES COMPARED WITH HORSES— RESULTS IN MASSACHUSETTS. [A paper read before the Boston Society of CivU Engineers, March 20, 1878, by Edward Appleton, C. E. ] A few weeks ago a question was asked me which I was not ready to answer at once, but which I could answer, I thought, after a few days' research. The inquiry became interesting to me as I followed it, and perhaps it may interest some of the members of the society also. The question asked me was : " How many horses would be required to perform work equivalent to that done by the locomotives in use on the railroads of Massachusetts f " A nominal horse-power is that necessary to raise 33,000 pounds one foot high per minute, an estimate first made by Boulton & Watt in selling their steam-engines. Trautwine says that this assumption can really be carried out by a strong horse day after day for eight or ten hours, but as an engine can work day and night without stopping, while a horse cannot, a one-horse engine can do much more work than any one such horse. Boulton & Watt meant that their one-horse engine could al any moment perform the work of a very strong horse. , ., li. x i, Trautwine estimates that a good, average trained horse, w eighing about half a ton, well fed and treated, can walk 10 hours per day at the rate of 2i milesper hour on a good level road, and exert a continuous pull or tractive force of 100 pounds. On a level pieoe of good road, he estimates the traction at 60 pounds per ton of load and carriage, so that the 100 pounds of tractive force exerted by the average horse enables him to pull a load of If tons at the rate of 2J miles per hour for 10 hours per day on a good level "^"Trantwine gives the weight of a train, exclusive of engine and tender, which a good locomotive, weighing 27 tons or 60,430 pounds, all on the drivers, can haul on a level railroad, at a moderate speed, say 8 to 12 miles per hour, as 1,458 tons, an estimate corresponding very nearly with the amount of work which the Baldwin Company guarantee thSir locomotives of similar size to perform. This locomotive then will haul I load as heavy as 878 horses could pull at the rate of speed assumed above for them on good common roads, but as it hauls this load at an average speed of four times that of fforses, it is doing the work of 3,512 horses, and is capable of doing it, not merely for 10 hours per dayT but for nearly the whole 34. If the horses, however, were haul- ing upon a level ra'ih-oad instead of a common road, it would not require so many of them to do the same work. Haswell gives a table of the comparative useful effect of the power of an average horse on a turnpike, a raiboad, and a canal. He rates the tractive force of the horse at 83.3 pounds, and says that a horse, traveling at the rate of 2i miles per hour for 11^ hours per day, will exert a useful effect equal to 14 tons drawn one mile on a turnpike, 115 tons on a railroad, and 530 tons on a canal. 300 DEPEESSION IN LABOR AND BUSINESS. Making the liours of work and the tractive force agree with those of Trantwine, the average horse would draw 110 tons one mile on the railroad, or for his whole distance of 25 miles in 10 hours he would draw 4 A tons. The locomotive above described then draws as many tons as 331^- horses could pull on the same railroad, and as it draws them at four times the speed of the horses, it does as much work in the same time as 1,325 horses. t_ u. ., The total miles of railroad included in the returns made to the Massachusetts rail- road commissioners for 1877, adding the double track but not the sidings, is 3,124, of which 2,295 are iu Massachusetts. The whole number of locomotives used by the cor- porations reporting as above is 1,031 ; and the proportion due to the miles in Massa- chusetts is 757. The average weight of the locomotives is not given in the report for last year ; for the previous year it is given, sometimes in tons, sometimes in pounds. Supposing the tons to meau 2,000 pounds each, 886 locomotives reported averaged 58,839 pounds each. But we do not know how much of this was carried by the drivers, which shows the effective power of the engine. Some of the engines were tank-switch- ing engines, carrying all the weight on the drivers ; some were heavy freight engines with 6, 8, or 10 drivers, and having eight or nine-tenths of their whole weight effect- ive ; but probably all the passenger engines and many of the freight engines were of the common style, carrying from -ft to fia of their whole weight on the drivers. For the purpose of this calculation, we will take the average weight of the engines, 58,839 pounds, and consider f^ of it effective, i. e., 38,245 pounds. An engine having this weight on the drivers should be able to haul, at an average speed of 10 miles per hour on a level road, 925 gross tons, exclusive of engine and tender. To haul this load on a good common road, at the rate of 2J miles per hour, would require 557 horses ; to haul it at the same rate of speed the locomotive does would take four times as many, or 2,228. To haul it on a level railroad by horse-power at the rate of the locomotive would re- qurie 840 horses. It is not necessary here to consider curves or grades. The engine is capable of doing that amount of work on a straight and level road, and, exerting its full power, will do what is equivalent to that on the curves and grades, though it may be with a smaller load or at less speed ; and it would require the number of horses above given to do the same work which the locomotive is capable of doing. It is not to be forgotten, also, that while the horses can do this work for only 10 hours per day, the locomotive can do it for nearly the whole 24, deducting only the time necessary to take in fuel and water. We found the number of engines proportionate to the miles in Massachusetts^was 757. Of this whole number, of course, a part are in the shops for repair, and another part may be iu the stalls waiting orders. I will deduct 10 per cent, of the whole number on these accounts, which will leave 682 engines constantly at work, without doubt averaging as many hours per day as was allowed for the horses ; and I think it prob- able fliey average more. Now, as it would require 840 horses to do the work of an average locomotive on a level railroad, to equal these 682 engines in effective power on the railroad would require 572,880 horses ; and to accomplish the same effect on a good common road would require 1,519,496 horses. It is also to be borne in mind that this calculation applies merely to the amount of freight and cars which could be hauled at a moderate rate of speed ; and that it would be simply impossible for any number of horses to haul the heavy passenger trains at the rate of 40 or 50 miles per hour, which some of our locomotives are constantly doing. The above calculation shows the number of horses required to do the amount of work which our locomotives are capable of doing. Let us now examine the returns to see how much they actually performed. The number of tons of freight hauled one mile by the roads reporting to the Massa- chusetts commissioners for the year ending September 30, 1877, was 684,810,604 ; and the average dead-weight hauled one mile as per commissioners' table was B^ij'tj'ti tons for each ton of paying freight, making the total weight hauled one mile 2,837,855,143 tons (of 2,000 pounds each, I suppose). In proportion to the miles of railroad in the State, the amount would be 2,084,784,748 tons. The rate of speed of freight trains is not given in the last report ; in that of the previous year it varied on the different roads from 7 to 22 miles per hour, and averaged very nearly 13 miles per hour ; we will suppose it the same for the last year. As 25 miles per day is the distance for which the average horse can haul his load, the number of tons, freight and oars hauled one mile will be equal to 83,391,390 tons hauled 25 miles. Assuming 350 days as the average number of working days in the year for freight trains, we shall have 238,261 tons to be moved 25 miles each day. And as the load of the average horse was put at 4^ tons on a level railroad, it would require 54,150 horses to haul this load at their rate of speed of 3J miles per hour. As the locomotives haul the same load at an average of five times the speed of the horses, it would requirelfive times as many, or 270,570 noises, to equal the effective force which the locomotives have exerted the past year in trans- porting freight on our railroads ; and this estimate is on the supposition that the rail- roads were level for their whole length. To accomplish the same amount of work on good level common roads^ 717,655 horses would be required. DEPEESSION IN LABOR AND BUSINESS. 301 It would be desirable to know how much to add to the numbers of horses above given on account of grades and curves. But the reports since 1870 have given no retiuTis whatever on these subjects, and those previously made were so imperfect that they could not be used as a basis for computation. Let us see now what the locomotives on our railroads accomplished in carrying pas- sengers the last year. The number of passengers carried one mile by the roads report- ing last year was 103,278,126. Estimating their average weight at 150 pounds, we have 7,745,859 tons (of 2,000 pounds each) of passengers hauled one mile. Add to this 2,091 tons of dead-weight for each passenger, as per commissioners' tables, we have a a total of 319,232,687 tons of passengers and cars hauled one mile. The proportion of this for the length of roads in the State is 234,519,531 tons. These passengers were carried at rates of speed varying from 15 to 38 miles per hour, including stops, averag- ing very nearly 25 miles per hour. In old stage times, a rate of 10 miles per hour on a good smooth road was full as much as the stage lines expected to average, and to do this it was necessary to chaiig« horses every 10 miles. Haswell says that a horse can only travel 13 miles a day, at the rate of 10 miles per hour, drawing a load ; but probably this means a continuous pull. To be sure that we credit the horses with all that they can do, we will suppose that they have one or more rests, and thus accomplish 15 miles per day, at the rate of 10 miles per hour, drawing a load. The horse's tractive power diminishes as his speed increases, and at the rate of speed proposed would not exceed 25 pounds, enabling him to pull but j^ of a ton on a good level common road ; and calculating, as before, in regard to freight, he would be able to pull on a level railroad Ij^ tons at the rate of 10 miles per hour for li^ hours per day, and this would be his whole day's work. Fifteen miles per day being the distance allowed for each horse in the passenger service, the number of tons of passengers and cars hauled one mile will be equal to 15,634,635 hauled 15 miles. Divide this by 365, as there is hardly a day in the year on which some passenger trains do not run, and we have 42,834 tons per day. At Ij^ tons per horse it would require 32,949 horses to keep this weight moving at the rate of 10 miles per hour on a level railroad. As the locomotives move the same weight at an average rate of speed 2i times as great, it would require 82,372 horses to do the same amount of work in the same time. The actual work in kind and quality done by the locomotives could not possibly be done by the horses. I only estimate the equivalent of it to be done by the horses in some manner within their power. To perform an equivalent amount of work on goodcommou roads would require 261,182 horses. Adding together the results ascertained in the freight and passenger service as actually done by the locomotives, it would require 352,962 horses to do an equivalent amount of work on the railroads of the State, provided they were all straight and level. I have no means of ascertaining the additional number required on account of grades and curves ; every one must estimate this for himself. My own opinion- would be that an addition of one-third would not be too much. And supposing an amount of work to be done by horses on good level common roads equivalent to that which has been done by the locomotives on the railroads, 978,837 horses would be required. That is the result of calculation. Now taking into consideration the average quality and condition of the common roads of the State, and the great amount of ascents to be overcome upon them, it seems to me it would not be setting the number too high to say that it would require 1,500,000 horses to do work upon the existing common roads of' the State equivalent to that which has been done the past year upon our railroads by the locomotives. VIEWS OF MR. J. H. WALKER. New York, Awguai 27, 1878. Mr J. H. Walker appeared before the committee by invitation. He stated in reply tothe chairman that he resided in Worcester, Mass., that he was a manufacturer of boots and shoes in Worcester, and a manufacturer of leather in Chicago ; that the volume of his business in Worcester was a little over half a million dollars a year ; and in Chicago about a million and a half; and that he employs 497 persons. Mr Rice. Have you yourself been a workingman in the boot and shoe business ? Mr. Walker. I have been. I have never worked at anything else. Mr! Rice. Did yon begin at the bench ? Mr. Walker. I did. ■, j, ^i -u ■ i^» Mr Rice Have you worked in all the branches of the business yourself? Mr! Walker. I have not worked as a journeyman in all branches of it, although I havedone work in nearly all parts of it. i ,, • Mr, Rice. Did you inherit any capital or business, or have you made your busmcss '"m^Valker. I had $4,500 when I was 32 years old, which I had saved. Mr' Rick What have you to say as to the importance of the boot and Shoe business compared with other businesses T State its magnitude, the amount invested in it, and the number of persons employed in it. 302 DEPRESSION IN LABOR AND BUSINESS. Mr. Walker. The statement is made in various quarters that, next to agriculture, the boot and shoe business is, in its volume and in the number of persons employed in it, the largest in the country ; and it is conceded to be such. Mr. Rick. Do you mean to say that that is a fact as to the country at large, or as to the State of Massachusetts only ? Mr. Walkkr. I mean to say as to the whole United States. The reason why I put it in that way is, that that includes all branches of the business from the taking off the hides to the delivering of the shoe to the wearer. Whether if the cotton business or the woolen business were computed in the same way it would leave the boot and shoe interest the largest, I am not able to say ; but the statement made by writers on the industries of the country is, that the boot and shoe industry is the second largest in the United States. Mr. Rice. It is sufficient that it is one of the very large interests, and that you are familiar with it in all its branches. Yon make your leather in Chicago, transport it to Worcester, manufacture it there, and sell your products wherever you can find a market ? Mr. Walker. I use, myself, only a small portion of the leather which I make ; but it is true of what I do use. Mr. Rice. The committee would like to know some things in regard to the condition of the leather and shoe business now, as compared with its condition in the past, say from 1850 to 1860— whether it has depreciated since then, and, if so, to what extent ; whether there are as many persons employed in it ; or whether those who have been accustomed to bo employed in it now find employment in it. If it is depressed, state what are the causes of that depression, so that we may have an idea of the condition of the business as compared with those periods in the past. Mr. Walker. I have before me the statistics of the shipments of cases of boots and shoes and rubbers from Boston, which is a fair indication of the business in all the country. In 1872 there were shipped from Boston 1,452,000 cases. In 1873 the num- ber of cases had fallen off 11.5,000. In 1874 they had increased 54,000 cases over 1873 ; in 1875 they had increased 59,000 over 1874 ; in 1876, they had increased 72,000 cases over 1875 ; in 1877 they had increased 237,000 cases over 1876. These shipments rep- resent a very large proportion of all the goods made in New England. Mr. Rice. So that there has been an increase in the volume of business to that extent ? Mr. Walker. Yes. Up to this time in 1878 there has been a decrease of 157,400 cases over shipments up to the same period in 1877 ; but that decrease is accounted for by the fact that the sales of rubbers have not taken place as usual, and by the fact that, this year, the jobbers are not buying goods in anticipation of the wants of the consumers, but are buying only as they need them from the manufacturers. It is the universal opinion of the trade that the manufacture of boots and shoes this year throughout the country will be larger than it was last year. Mr. Rice. So that, on the whole, the volume of business has increased steadily for some years past ; and yon do not admit that it has fallen off during the past year ? Mr. Walker. It certainly has not. Mr. Rice. Now, in regard to the prices, or the profits, of this manufacture, what would you say about them? Have they increased or have they fallen off? Mr. Walker. I think that, on the whole, there has been no money made in the manufacture of boots, shoes, and leather since 1873. In other words, I think the manufacturers have shod the people since 1873 to a great loss to themselves. Their distribution of capital from October, 1875, to October, 1876, to their workmen and the consumers was between four and six millions of dollars on sole-leather alone. Mr. Rice. Owing to what ? Mr. Walker. Owing to the depression of prices. It was owing to exceptional cir- cumstances ; but, on the whole, from 1873 to the present time, it is possible that that loss may cover the whole. Possibly $6,000,000 of capital would cover the whole loss to the manufacturer for that period. The capital employed in the sole-leather busi- ness alone has been decreased $6,000,000 by losses — by shrinkage. Mr. Rice. That does not include any real estate or plant, but merely loss in the manufactured stock ? Mr. Walker. That is my estimate from the best sources I can reach. I think that there has been an equal loss of capital by the manufacture of upper-leather. Mr. Rice. Has the boot business during that time been carried on for the benefit of the capital employed in it, or for the benefit of the workingmen who have been fur- nished employment by the business being carried on, and who have thereby been able to obtain means of subsistence (I mean smce 1873)? Mr. Walker. It has been carried on for the benefit of the workingmen. There has been a hope of gain which has not been realized, in any profit to the capitalist ; on the other hand there has been a loss. Mr. Rice. Is machinery used in the manufacture of leather as extensively as it is in the manufacture of other raw fabrics f DEPRESSIOljr IN LABOR AND BUSINESS. 303 Mr. Walkek. No, sir; it is not. Thie machinery used in cotton and woolen gooda exceeds that used in leather. Still machinery is used extensiyely. It has been intro- duced almost wholly within the last thirty years. Mr. Rick. What has been the effect of the use of machinery in making boots and shoes, on the persons who have been employed in the busiaess — on their wages, their condition, their modes of living, and the labor employed ? Mr. Walker. Their wages and condition have steadily improved. In 1840 the wages of journeymen were slightly over a dollar for thirteen hours' work. That ia, workmen were expected to go to the factories in the morning before breakfast. They went home to breakfast, dinner, and supper, and worked as long as they could see, just as farmers work. That was in the summer. In the winter the shops were lighted in the evenings. Wages gradually increased up to 1860, when they were about double what they had been in 1840. During the war the highest rate of wages was about fifty per cent, more than in 1860 ; and at the present time wages are a small percentage higher than they were in 1860. Mr. Rice. And how many hours do laborers work now ? Mr. Walker. I know of no factories that run over ten hours. Occasionally they run twelve or thirteen hours, with extra pay ; but ten hours is the rale. Mr. Rice. You heard the testimony of Mr. Wright — ^that there are some seasons when the factories are closed? Mr. Walker. The factories are closed on the average for two months in the year. Mr. Rice. When the wages have been as you have stated, what have been the fluctua- tions, if any, in the prices of the necessaries of life for the workmen ? Mr. Walker. I have not those statistics ; I depended on their being collected by somebody else. Mr. Rice. Is it your idea that the purchasing power of the wages of labor is as great now as it was in 1860 ? Mr. Walker. I do not think it varies materially. I think it is a slight percentage higher now — ^no more, however, than the wages are higher than they were in 1860. Mr. Rice. Some have said here that the effect of the introduction of machinery is to take away the work from the manual laborer; and it tends to overproduction. What have you to say on this point, in your particular line of business ? Mr. Walker. I think that, on the whole, the exact opposite is the fact. Mr. Rice. Give your views on that subject in your own words; Mr. Walker. In making the boots and shoes there is a great deal more work put into them now than there was formally. It would be impossible to make boots and shoes in their present form by hand. And so, to a greater or less extent, with all other things produced by the aid of machinery. The number of pairs of boots which can be produced by a man per annum, as they are sold to-day, has increased about 12^ per cent., and of shoes about 20 per cent., by the use of machinery, and of leather probably 15 per cent. Mr. Rice. So that one hundred men in a factory, working with machinery, now will produce about that rate more of boots and shoes than could be produced by the same number in old times, before the introduction of machinery. Mr. Walker. There are not nearly as many women and children employed now in the busiuess as there were formerly. The present number employed in boots and shoes more nearly represents adult labor. Mr. Rice. I understand you to say that the effect of machinery has been to render one man's labor on boots to be 15 per cent, greater than it would be without machinery. Mr. Walker. If they were made in precisely the same form as formerly, it would very greatly increase one man's power; but in the foi-m in which they are made the average of increase is as I have stated. A very much larger proportion of the people wear boots and shoes all the year round than formerly. There is now a larger propor- tion of the people engaged in producing them than in 1840. Mr. Rice. But they are made now in an improved form. Mr. Walkee. Yes. Before the introduction of machinery, women wore low shoes, without heels, coming to their ankle; but now they wear shoes, some of them, eight inches high, with heels, and with a good deal of stitching and other workupon them. Mr. Rice. Do these shoes cost her any more now than the old kind she used to wearf Mr. Walker. I think they do. On the other hand, ladies' feet are protected by the present style of shoe, but in the old time they were not. The Chairman. Is there a demand for a better class of goods now than there wag formerly ? Mr. Walker. Decidedly. The Chairman. Do you think that the power of the community to pay for better clothes and goods has made any advance since 1860 ? Mr. Walker. Certainly. Mr. Rice. What is the result of your observation as to the effect of the introduction of machinery on the condition of society ? 304 DEPRESSION IN LABOE AND BUSINESS. Mr. Walker. It holds the same place which higher education holds to society. Yon canuot increase mental strength and culture without its physical aecompammentsj The one is necessary to the other. The people to-day are, in my judgment, 50 per cent, better off than they were in 1840 in regard to the comforts which they enjoy. Mr. Rice. And in regard to their ability to procure them, of course ? Mr. Walker. Certainly. Mr. Rice. You heard the interesting discussion between the chairman and Mr. Wright as to the effect of machinery in ultimately over-populating the world, as illus- trated in the cases of Belgium and England, and as having attained the limit, per- haps, in China and India. Have you anything to say about that ? Mr. Walker. I never supposed machinery assisted in over-populatin g China or India. Mr. Rice. I should not imagine that either ; but how in regard to Belgium ? Mr. Walker. The absolute necessaries of a man never increase. His relative necessaries and luxuries of course increase. I believe that more can be produced from the soil with the careful culture of the spade and hand than by any other contrivance, and that machinery will never add any power to the productiveness of the land to make it support an increased population to the square mile. But machinery enables the earth to produce (so to speak) and to support a greater and very much higher order of men and women. The Chairman. You think that a larger population can be maintained in the world by spade culture and hand culture ? Mr. Walker. Yes ; if simple physical existence is the criterion. Certainly there can be. There is no question about that. This is so well understood that in some countries of Europe, where labor is excessively cheap, no plows are used, nothing but the spade. In Northern Italy I have seen twenty men in a field and as many women spading np the ground, just as it was done a century ago. The Chairman. What is the condition of the people who have to adopt that mode of culture ? Is it equal to the condition of the people of England, where machinery is used more extensively ? Mr. Walker. The condition of the people of Central and Southern Europe is such and wages are so low that existence can only be maintained by the work of men and women and children, all having to work. The women frequently have loads with don- keys and universally working in the field. The Chairman. You have seen women hauling loads with animals ? Mr. Walker. Yes ; even the dogs are made to work all through Germany. In fact, everything is made to work. The horse is put to work there at two years old. He must earn his living. The Chairman. Then your conclusion would be that, if our people were driven by necessity to be as industrious and economical as the people of Central Europe, there would be no distress at present in this country ? Mr. Walker. I do not think there would be any physical distress ; but there would be a condition of life which no lover of his country wants to see. The Chairman. But at the same time there would be no such thing as starvation in the country, if its present resources were even approximately used as the resources of the people of Central Europe are used ? Mr. Walker. The same condition of the population would produce the same results as there. The Chairman. But with our immense resources, and with the great breadth of country that we have, no portion of the population would be reduced to anything like the poor condition of the people of Central Europe. If our people who are clamoring for employment would resort to the same mode of living, and would go upon the land with spade and hoe, would there be any trouble in sustaining the population of the country ? Mr. Walker. Not the slightest. The question to-day is the question of the, kind of work and the amount of wages rather than the want of work or the inability to secure it. People who are unemployed demand to be employed in a specific kind of work at a particular rate of wages and in a particular place. That is the cause of the contin- uance of our trouble a hundred-fold more than the absolute want of work. The Chairman. You do not think (from what you have seen abroad) that the capa- city of this country to support its population is anything like exhausted ? Mr. Walker. I do not think it is. The Chairman. Suppose the pressure in Massachusetts was very great, could a very much larger population be supported there off the soil than is now supported off the soil ? Mr. Walker. I believe that the soil of Massachusetts is better than the soil of Switzerland, and it is certainly better than the soil of Germany ; and I believe that a population can be sup]3orted from the soil of Massachusetts larger in proportion to its area than most countries of Europe can support. The ChaiEman. As a matter of fact, the want of progress in the agriculture of DEPRESSION IN LABOR AND BUSINESS. 305 Massacliusetts ia due to the fact that the people can get what they want cheaper in some other way than by agriculture ? Mr. Walker. They can. The Chairmajj. What influence has railroad transportation had ? Has it cheapened the cost of living ? Mr. Walker. I think it has, and I think it has not. The measure of the cost of living to a man is what he receives, with rare exceptions, and these rare exceptions are, by the saving of some of their income, made capitalists. The people of Massachu- setts receive more than they ever did before ; and, as a matter of course, they spend more. They spend it in making themselves more comfortable. The absolute neces- saries of life cost less in Maasachusetts to-day than they ever did before ; and it is the same in the countrv at large. The Chairman. 'With your large observation of workingmen, you must have seen many merge from the ranks of labor and become foremen, employers, and even capital- ists. Is there any more difficulty at present for a man who has capacity and brain and industry and frugality to get into a comfortable position than there has been heretofore f Mr. Walker. There were in Worcester in 1840 four firms engaged in boot and shoe manufacturing. They comprised seven individuals, and the annual production of boots was about 12,500 cases. The total number of hands employed, including men, women, and children, was about 225, and the value of the annual product was about $200,000. The average wages of journeymen for 13 hours' work, were about $1. Only one of the seven died in comfortable circumstances, in advanced age. Two of them were at work for me as journeymen when prostrated with their final sickness. With the exception of a son of one of them who is now a porter in my leather store, thero isn't a single descendant of one of these men engaged, in any way, in connection with boots, shoes, or leather; nor (with one exception) have any of their descendants any property except household effects, or at least very little. In 1850 there were in Wor- cester 21 firms manufacturing boots and shoes, comprising 24 members. All but four of these failed in business, and only two retired with any capital. Not one of the 24 is now engaged in the leather or shoe business there, or anywhere else ; and of their sons only two. The value of the boot and shoe manufactures of Worcester in that year was about |750,000. The number of cases produced about 40,000, and the number of' persons employed about 650, at about |1.50 per day. In 1860 there were 23 firms en-- gaged in the boot and shoe business in Worcester, comprising 30 individuals, only two. of whom were manufacturing in 1850. Of those 23 firms, 12 have failed ; and of the- individuals who composed the firms only 8 are now manufacturing, and only two have gone out of the business with any capital. Mr. Rice. State whether, as a general thing, those men were men who catme up. from the ranks of operators to become employers. Mr. Walker. I do not now remember one of them who was the son of a earpitalist ; that is, of a man who would now be called a capitalist. Some of their fathers may have had some property, may have owned fanns. Every one of these men was a jour- neyman. The Chairmax. They belonged to the order of men called self-made men? Mr. Walker. Yes, sir. Mr. Rice. And every one of them was a journeyman in the business ^efttre he went up? Mr. Walker. Every one of them but two. I remember that on© of them was a bookkeeper who came to work in Worcester at $100 a year. He was not properly a mechanic. The other one began as boy in a retail shoe store. The wages of journey- men in 1860 were about $2 a day. The amount of goods manufectured was about $1,500,000, and the number of cases of goods about 70,000. To-day the number of firms manufacturing boots and shoes in Worcester is 21, comprising 40 men. The annual product is about 150,000 cases. The total number of hands employed, includ- ing men, women, and children, is about 2,200. The value of tfte annual production is^ about 15,000,000, and the average wages of journeymen for tea hours' work about |a to 12.15. Of those 40 men comprising these 21 firms, only five are sons of manufact- urers, and only one is the son of a shoemaker, and I know ot only one who has not been a journeyman worker. . i» , j. j t^ ^ . The Chairman. Then all who are to-daj employers m the boot and shoe business m Worcester have come up from the ranks of labor ? Mr. Walker. I think that every one of them has; and I have been over four or five of the largest shoe towns in Massachusetts, and these statements of the history of the boot and shoe business in Worcester very nearly represent the facts as to the personneT. and as to the conditions on which thev have succeeded, and represent the history of the trade generally. I do not believe that there ever was a time when a prudent, industrious mechanic, with fair ideas of the relations of facts to each other, could suc- ceed in taking the position of an employer in our business so easily as he can to-day. The Chairman. Take society generally as it passes undei your eye.. Does it seoia 306 DEPRESSION IN LABOR AND BUSINESS. more difficult now than at any previous period for' a man of capacity and industry, and -wlio takes the trouble to fit himself for useful employment, to work into a success- ful business career ? Mr. Walker. I think it is easier. I feel Tory sure that it is. In confirmation of which I may say that there are quite a number of firms starting under my eye (jour- neymen out of manufactories) who have continued in business successfully during the last three years with scarcely any capital. Indeed I do not know that they had any to speak of. The C^AIP,MA>^ You have to grant credits in selling leather to these people ? Mr. Walker. Certainly. The Chairmak. As a matter of fact, do not capitalists prefer to grant credits to men who have risen out of the ranks (providing they have a good character) than to any other class ; are they not considered the best subjects of credit in business ? Mr. Walker. We put character first. We put ?uch a thorough knowledge of the business as can only be gained by journeymen working themselves up, second. We put capital last. That is our rule in all the credits that we grant ; and it is the rule in all kinds of business. I am selling goods to-day to a man, the limit of whose credit to me is |20,000, and I do not believe the man is worth $5,000. The Chairman. But you have faith in his business ? Mr. Walker. I have perfect faith in him ; and I know that if he fails I will get a fair dividend ; he wiU not steal the iiasets. The Chairman. Be good enough to state about what percentage of your customers has actually failed through these disastrous times. Mr. Walker. Very few of my customers have failed. Our trade is peculiarly con- ducted — ^not like the cotton trade or the woolen industries — -and failures among the men who handle the goods (among men known as jobbers) are not numerous. The failures that have taken place have been, almost without exception, those of men who, sup- posing that they had capital to conduct other business besides their legitimate busi- ness, have invested money ' ' outside," and then, in attempting to protect it with the capital of their legitimate business, have failed. During the whole of these disastrous times, so far as my observation goes, the more justly that people in our trade could be called capitalists, the more likely they have been to fail; that is, men who had a sur- jilus of capital more than was necessary for the conduct of their legitimate business have almost invariably failed. The Chairman. Do you know anything of the actual facts in regard to the savings of the workingmeu since 1873 ; whether the frugal and economical and industrious have been able to save money ? Mr. Walker. My relation to the workingmen ( that is, my knowing them personally) is not such as it was previous to 1860. I know of quite a number of workingmeu who are saving and who have saved ; but I know that previous to 1860 a majority of the workingmen in our employment were saving, and particularly those who lived in the country. Nearly two-thirds of the men employed by us who lived in the country owned their own houses, and some of them owned two or three houses, and from a few square rods of laud to 15 or 20 acres. The Chaisjeman. Would you say that as large a proportion of the workingmen who choose to be economical and saving come to the end of their career in a condition of competency as of their employers ? Mr. WAtKEB. I think that a very much larger proportion of them come to a condi- tion of coii|ipete5iey ; that means being rich in proportion to their wants. A man's wealth must be measured by his habits and tastes in life and by what he is accustomed to. A man who hfts been used to habits of liberal expenditure for himself and family is in misery if he is deprived of the means of indulging those habits, whereas the man who is gradually ''getting on," and who is increasing the comforts of his children, is a wealthy and a happy man. The CuAUtMAN. ft has been a.lleged before this.comraittee as a grievance that some men commonly known as (^apitalist8 or employers seem to have a very large propor- tion of the luxuries and oenftforts of life, while other men who desire to work have not even the necessaries of life. JFith your knowledge of men, have you (I do not mean in the city.pf New York, but iii a rural region) found in the enjoyment of a reasonably comfortable and happy life, the disproportion to be Largely in favor of capitalists and of the employing classes ? Where do you think that, as' a general thing, the misfor- tunes and calamities of life have fsileu most severely ? Mr. Walker. I think that they iiave fallen most severely upon the more skilled workipfieii, manufacturers, business ipQa, and capitalists. The men in Worcester who have received the highest wages and who are unwilling to work for any less and are atri-viiBg to find some congenial empleyment, some position, as easy and lucrative as tOiat which they were compelled to give up, have been the men who, in my judgment, have suffered most. The mass of the workmen, when there is anything to be done, have the best chance of employment because they do the work cheapest ; and the highest .class of workmen, unless they have laid up something, have had nothing to DEPRESSION IN LABOR AND BUSINESS. 307 rely upon except their relatives who may have had something which they could divide with them. The Chairman. Suppose that a condition of society could he introduced by which all men would be provided with the necessaries of life, and by which the proceeds of industry would bo divided so that everybody would be on a dead level. Do you think that that woiUd ameliorate the condition of society to any extent ? I ask this ques- tion because you have seen every phase of this life, and have passed through it your- self, and you therefore are an interesting witness for this committee. Mr. Walker. I do not know, and I never knew, a man who would be called an in- dustrious, frugal, temperatemau (unless some calamity or sickness befell him) who was not in comfortable circumstances. I do not believe that there is any class of the community that works so hard and incessantly as capitalists, so called. When the laboring man sees them riding in carriages or cars, or enjoying themselves at some watering-place, it does not occur to him that it is almost impossible for them not to continue the grinding thought and anxiety which will wear them out, or that their present condition may last but for a day. Furthermore, it is impossible to employ all men unless capitalists spend freely for luxuries, or that civilization should progress unless large amounts of capital are under the control of and handled by one man. I question whether the capital which Mr. Vanderbilt has handled could possibly, by any devise, have been managed by any other man so much to the advantage of 'the com- munity, as a whole, as by him. We all enjoy it every time we ride upon his railroads. No man can have capital and keep all other men from enjoying it. When a man de- votes his capital to building railroads, it releases that amount of capital of some other men to be employed in some other way. Every man to his taste in the legitimate use of capital. It is not conceivable for capital to be held by a man for his own use alone. Everybody uses it or else it is not capital. I do not believe it possible for men to be useful citizens unless they desire to acquire wealth — unless they are determined to improve their condition. I can conceive of no condition in which man can be placed where any progress in human affairs can be made, excepting on this basis of every man working to "get on," by himself individually ; and I believe that the government should go to the utmost verge of its power in enacting laws to protect the weak in their efforts. The strong will take care of themselves. I believe, furthermore, that if you show the manufacturers and capitalists in Massachusetts (I speak of Massa- chusetts because I must take some community as an illustration) any way by which the masses of the people can be benefited by a law (even if it makes the accumula- tion of capital less to them by any percentage), it will not be an hour before they will ask to have the law passed. We have laws on our statute-books to-day which we desire to enforce as to the rights of labor, and as to inspection of factories and tenements, and which we do enforce just so far as we can without driving capital out of Massachusetts. That is the view of all intelligent men, I believe — that the ma- jority of capitalist classes, as such, are ready to do anything that it is practical to do for the men who belong to the w age class. All they ask is to be shown how it can be done. Mr. Rice. When I first knew you you were working at the bench. Yon are now running several factories and are employing 500 men. When did you work the hardest ? Mr. Walker. I do not wish to give up the habits that I have formed ; but, so far as work is concerned, I would pay a very handsome sum if I could be released with only ten hours' work, and if I could do the same work as formerly, with the same free- dom from care. I do not know any man in Worcester who is temperate, industrious, and frugal who does not enjoy all things as much as I do. Mr. Rice. Have you made any experiment to have operatives share in the profits of your business ; and, if so, what was the result ? Mr. Walker. There was a very severe and protracted contest, lasting ft-om the 23d of October, 1868, to March, 1869 (I think), between the employers and the employ(5s in Worcester. After that contest closed I made a very determined and persistent effort to induce men in my employment to leave their savings (everything that they could save) on their accounts, and at the end of the year (without counting any interest on the capital or any salary to any member of the firm) the profits (if any were made) should be distributed in proportion to the capital— counting their savings as a portion of the capital. Mr. Rice. Did you include the plant in the capital ? Mr. Walker. No, sir ; throwing out the plant entirely— I meant the live capital. I failed to induce a single man to do it. They preferred to manage their own savings in their own way. I did, however, through a great deal of persuasion, induce two or three foremen to do it, and it has continued with these two or three up to the present time. This year one of these men came to me, having If 1,600 in the business, and said that he wished to buy a house, and that he wanted to take out $800. I said, ' ' Certainly, but you will lose your profits on that sum." He said, "I know it, but I want the house." He was unwilUng to go any farther in his abstinence, and he took out this 308 DEPRESSION IN LABOR AND BUSINESS. money and put it into tlie house. Shortly afterward he wanted $300 radre to buy a piano, 80 that his daughter might take music lessons. That left only $500 remaining. He chose to have his money in these things rather than in husiness. Possibly he is not naturally accumulative, and possibly I am. Now, I do not propose to criticise that man. He wanted to educate his children and to have the conscious independence of living in his own house ; and he preferred that, rather than to have his money in busi- ness. I do not say that it was not natural, and the wisest course to pursue for him, but I only say that if such men will not accumulate, somebody else must, or society will retrograde. That is all. The Chairman. You were speaking of the necessity for progress and civilization. You did not mean to exclude the element of thought — men who choose never to make any money at all, but who study society and philosophy, and sit down and write books, and develop new laws, adding to the sum of knowledge, and who say, "We prefer to do this work ; it is more agreeable" — clergymen, for instance, who choose to devote themselves to the work of religion, and all that class of men. You do not mean to say that their work is not a gain to society ? Mr. Walker. All that class of men — the Agassizs, the Sumners, the Websters — go very properly on the assumption that the property of their friends is theirs to the extent of a fair support, that all may be benefited by their labors, and it is not re- garded honorable by men of means to allow such men to want for support or means to pursue their labors. It is for that reason that men of business and capitalists have endowed colleges, seminaries, and places of learning. That is one of the beneficial uses of capital, and is so regarded by every decent man. If there is any man in the community who is not willing to contribute his share to such work, we regard him as shirking the duties and responsibilities of his position. The Chairman. Then one of the results of accumulated capital is that other classes of the community may be able to devote themselves to other work than producing mere material objects ? Mr. Walker. Certainly ; and we have never seen the two extremes of society nearer together than they are to-day — workingmen enjoying the wealth of all other men. It is difficult to know to-day where any man will be to-morrow. There is corruption, and there are rascals in office ; but these are the sores and excrescences on the body politic. So far as the system is concerned, I do not know how there could be any im- provement in it. The Chairman, Does your experience in business lead you to believe that the stand- ard of honesty and integrity in business is lower now than it has been heretofore ? Mr. Walker. I have no question but that it is higher than ever before, although it may be apparently lower. The revelations of corruption in recent times may make it appear to be lower, but I do not think that there ever has been a time when men, as a whole, were any more honest and self-sacrificing than they are to-day. I believe there are ebbs and flows in morals, as in everything else ; but I think that the country touched bottom when you had Tweed here in New York. He represented an element of corruption. It must be recollected that wo live in a time when, as it were, a cal- cium-light is thrown on every man's life. The Chairman. The great increase of corporations, which has opened places of trust to individuals, has, of course, opened new opportunities to betray trust. Experience has shown how to put in safeguards which we had learned to put in for other things. Take the savings-banks, for instance, where great frauds have been committed, and where great losses have been sustained by the poor. Ought not legislation to provide a safeguard, such, for instance, as a guarantee by the government of the savings de- posited ; or ought not the government itself to become the depository of savings, as it is in Gre*t Britain, or institute the system of life-annuities ? Can the government safely proceed in that direction, to protect the weak (as you said awhile ago) against the operations of the strong and unscrupulous ? Can we go in that direction with any safety? Mr. Walker. I think the government can go a great way in the direction of throw- ing safeguards around savings-banks and life insurance companies, and all chartered institutions of that kind. There should be a uniform system of bookkeeping, and thorough inspection, such as is now made by United States bank examiners. But I ques- tion very much the wisdom or policy of the government attempting, itself, the busi- ness of a savings-bank. I think that the government should discontinue the whole system of bonds ; that every trust estate should be put into the hands of companies of large capital, who should guarantee the trust ; and that there shoiUd be no individual trustees. You know, in the city of New York, and I know everywhere, of trusts being most shamefully managed. And I think the community ought to be protected against such mismanagement. I think, also, that the guaranteeing of public officers, and of everything else, should be done by companies rather than by individuals. I know of persons who have been beggared through having become security on a bond, twenty years old, by having, after that lapse of time, been held responsible. Such things pould be very securely and easily managed with proper supervision. DEPRESSION IN LABOR AND BUSINESS, 309 The Chairman. We have had such guarantee associations, but, unfortunately, they were badly managed too. Are any of your products exported ? Mr, Walker No, sir. The Chairman. You have no foreign market ? Mr. Walker. No, sir ; not directly. Every man in any trade has a foreign market indirectly, if anything in the trade is exported. The Chairman. Is there any protective duty imposed in your line of business ? Mr. Walker. Yes, sir. The Chairman. What is the duty on imported leather ? Mr. Walker. It is thirty-five per cent, on boots and shoes, twenty per cent, on morocco, twenty-iive per cent, on calf-skins, and fifteen per cent, on sole-leather. The Chairman. Is there any duty on hides 1 Mr. Walker. Not now ; hides come in free. The Chairman. Do yt)u know whether we are getting a large foreign trade in leather ? Mr. Walker. We are, in sole-leather. The Chairman, There is, therefore, no necessity for protection in regard to sole- leather, if we can export it ? Mr. Walker. No, sir; not for the time being. The Chairman. You think that there might be ? Mr. Walker. Circumstances might arise which would make it necessary. The Chairman. Are we exporting boots and shoes from this country? Mr. Walker. Very few. The Chairman. Did we formerly export them ? Mr. Walker. We did to a limited extent. The Chairman. Why have we lost that trade ? Mr. Walker. Because from 1860 to 1873 we had all that we coiild do to take care of our own people. The whole energy of the business a)id manufacturing community was devoted to the development of our own country up to that time. The Chairman. How is it now ? Is there a surplus now that would be available for export ? Mr. Walker. There is a surplus of everything for the time being. The Chairman. Are we availing ourselves of that surplus, and are we exporting boots and shoes to any extent ? Mr. Walker. We are exporting sole-leathers, and upper-leathers in some forms ; but we are exporting very few boots and shoes. The Chairman. Why can we not compete with other countries which do export boots and shoes to market ? Mr. Walker. Because other countries work men, women, and childen for half the wages that are paid here. The Chairman. That is the only reason? Mr. Walker. That is the only reason. The Chairman. Then, before we can hope to have a foreign market for the products of your line of business, there must be a degradation in the wages of labor and in the condition of the laboring classes? Mr, Walker. That, I believe, is what writers on political economy think and say when they are frank enough to do so, and that is the fact. Of the employfe in a factory in England, 80 per cent, more are women than in a like factory in this country, and about 8 per cent, more are boys. The wages of women in England are less than one- lialf of what they are here; the wages of boys about two-fifths, and the wages of men a little over one-half. Therefore a factory can be run iu England for about forty-five per cent, less (that is, with a given number of hands) than it can be run here. And it is almost literally true that there is not a machine used in Europe in the manufacture of boots and shoes and leather that is not made in America, or is not a duplicate of a machine made here, excepting a very few recently made there. If we had had in this country the laws of England of seventy-five years ago about exporting machinery and skilled mechanics, we could now be making every boot and shoe that is made iu Europe, and export them there. The Chairman. But you could not have kept the secret. Mr. Walker. I know we could not; and I should not desire to do so; but I mean if such laws had been effective ; in other words, if the results of the intense mechanical ingenuity of this country could not have been used in countries of cheaper labor. We must have something to protect the wage class in America from that cheap labor. Mr. Rice. What is there to prevent the product of their cheap factories coming here and competing with us ? Mr. Walker. Nothing but the tariff. The tariff operates just the same in benefit- ing the condition of our workmen as would higher wages or the shortening of the hours of labor there. The Chairm.\n. Then, if the duty wore taker off the English would supply this market with boots and shoes? 310 DEPRESSION IN LABOE AND BUSINESS. Mr. Walkek. Yes; unless the cost of production hero went down immediately they would sell their hoots and shoes under the noses of our own workmen. The Chairman. The huyer of hoots and shoes would get his supplies cheaper lu either case. Mr. Walker. He would nominally get some of his supplies cheaper. The Chairman. What is the proportionate value of the raw material and of the lahor in a pair of shoes ? Mr. Walker. In a thick upper-leather hoot the lahor and expense account is ahout 28 per cent. (The expense account is about half in Enropo, the same as the labor.) Of course, if the English factory-hand works for one-half the wages of an American, we must have a duty of 14 per cent, to make us even. The rule holds good here as elsewhere that the nearer to the consumer a thing is manufactured the more honestly it is made. That is one reason why our goods are exported and taken in many of the foreign markets in preference to English goods, although, their selling price may be higher. Then, again, thejieople here buying these English shoes would not buy shoes that were so well adapted to them ; and it is a fact that the masses of the people are protected in anything which they consume by having it manufactiu-ed in a manner especially adapted to their use. The goods that are ill adapted to a people are not cheap to them. The Chairman. Would not that adjust itself without a tariff? — Men would very soon learn that you provided them with hoots that would wear longer than English boots ; and would they not pay the extra 14 per cent, to get your hoots without the intervention of a tariff? Mr. Waxkee. In buying the goods made at home a man would get more for his money than in buying foreign-made goods. The Chairman. And he would pay more for them. Mr. Walker. A few wise and very shrewd persons would do so, but the masses would not. I only mention this as one way of protecting those who are unskilled and injudicious. The Chairman. I thourfit you supposed it dangerous for the government to inter- fere with the savings-baiHis to protect people against their own ignorance and their own want of order. Mr. Walker. I said th.it the government should protect them, hut should not do savings-bank business directly. So I say in regard to this question of tarift'; that the goverment should not make goods directly, but that the government should so arrange its revenue laws as to protect the unskillfnl and also to develop the industries of our own country. The Chairman. The question is this : Whether the individual will not find his self- interest sufQciently strong to make him pay for that which is best, and wMch suits him. Is not that a more cogent and powerful reason than anything the government can do? Mr. Walker. As an abstract principle, that is true ; and it is true practically with those who have skill enough rightly to decide. The Chairman. Would you have us recommend legislation as to the business of life (buying and selling) for the protection of the ignorant and the unskilled against the shrewder ones ? . Because if you do, in the ordinary transactions of life, you come to the communistic theory that says you must protect the poor against the rich. Mr. Walker. I thought that the protection of the weak or ignorant from the strong and unscrupulous was the theory of all laws. I thought that that was what you were in Congress for: to protect the weak against the strong. The strong can take care of themselves. The question is, how far ^all you go ? That is a question of degree ; not a question of abstract science; not a question of principle; but a question of practice. The Chairman. You would stop with the tariff; hut when it goes beyond that — when it goes to the case of the mock-auction store, would you allow the policeman to put up a placard^"This is a mock auction"; or would you stop short of that? Mr. Walker. Do you not think that the policeman ought to be required by regula- tions to put up that sign, every where that it is required? The Chairman. Where there is a fraud, I agree with you that the public should be warned ot it. Mr. Walker. That is what I want the government to do. The Chairman. Then you think that the great object of the tariff is to warn the consumer that the foreign i)roduct is not so good as the domestic product? Mr. Walker. I never said, so ; and I do not think that it is a logical conclusion from anything I did say. I said that the practical effect of having free trade would be that those who are less skilled and the least able to decide upon the quality were the people who would suffer most by having goods in the market that were not so well adapted to their wear as the hom(;-made goods., This point is only incidental to the question, and but a small part of the office of a tariff. The Chairman. Wouhl you adopt the same princijjle in every branch of industry aa well as in the boot and shoe line? DEPRESSION IN LABOR AND BUSINESS. 311 Mr. Walker. I would caonry it througli everything wliioli our climate and soil are adapted to produce. The Chairman. And everything that we can produce with as little expenditure of labor as in England would be your standard? Mr. Walker. That is it, exactly — everything that we can produce with as little ex- penditure of what may be called skilled labor in producing. This is not purely a ques- tion of dollars and cents as to coats or boots and shoes. If I understand it, this country is for making men and women. It is for the progress of its citizens, their development, their education, the making of better men and women. Now, if you put this on the question of trade only, it is Immaterial whether a man gets four francs [80 cents] a day here or in Belgium, so far as the whole mass of humanity is concerned. But every man's duty is first to himself, his family, his State, his country; and that is the way in which all progress is made. It is for the interest of this country to benefit her citi- zens, and it is necessary, in order to do that, that every man should have an opportu- nity to work at that for which he was born; and he cannot do it unless everjiihlng is done where he is. The Chairman. Yon said just now that the tariff made boots and shoes cost more to the consumers. Now, if it makes the commodity cost me more, what good do the high'er wages do me ? Mr. Walker. Of course I knew that you were coming to that. It is only a portion of the boots and shoes that would cost much more to the consumer — only a few kinds, not all kinds. I do not know that the common split boot would cost much, if any, more, because I do not think the tariff affects those goods. Now, as to wages : If a man gets $2 a day you ask me how much better is he oif than if he gets only a dollar. The Chairman. Provided that the $2 a day is expended in buj-ing the same quan- tity of goods as could be bought with a dollar under other circumstances. Mr. Walker. Then he is not any better off. Do you want your original question answered ? The Chairman. O, of course. Mr. Wj\xker. In the first place, there is scarcely anything consumed by the mass of the people which cannot be obtained in this country as cheaply to-day as it can be ob- tained anywhere. And things were made cheap in this country precisely as they were made cheap in England and other countries. They were made cheap in England by a tariff. In England they went so far, in order to get freight for their ships, as to abso- lutely destroy the ships of Holland, blowing them out of the water — sinking them. The navigation-laws of England have been as stringent as navigation-laws could be made, and this fairly illustrates her course in building up all her industries. We are. subject to the same conditions ; and the fact that we liad the tariff, and that our in- dustries were developed, gave us not only the agricultural machinery of this countrj^, but of the world. Agricultural machinery is an American invention — the same as shoo machinery is— and the tariff has given us all our shoe machinery, absolutely every bit of it. There was not a piece of machinery connected with boots and shoes used any- where in the world that was not a Yankee invention up to very recently. That is the effect of the tariff everywhere. And your |2 wages now will certainly buy 50 per cent, more — and I think nearly 90 per cent, more — of what the mass of men consume than the wages which you have mentioned in England will buy there. Now, if the $2 wages received here will buy only one-half more than the wages paid in England, our work- men are certainly 50 per cent, better off than the English workmen. The Chairman. Yes ; if the facts are true, but they are not true of all business. Mr. Walker. The fact is true of cutlery, it is true of cotton goods, it is true of everything but woolen goods. It is true of the boots and shoes which the masses of the people wear or very nearly so. It is true of agricultural products, and what is there left of the necessities of man ? The Chairman. I am a maker of pig-iron. Pig-iron pays a duty of $7 per ton. The manufacturers of agricultural machinery are largely buyers of pig-iron. They are exporting agricultural machinery to all parts of the world; but they are met by com- petition from Great Britain, and they say, " If you give us pig-iron free, we can produce agricultural machinery at less cost and can drive the English competitors out of the market." , _l _,, Mr. Walker. That is undoubtedly true in certain cases ; but they are a very small percentage of the industries of the country. We cannot do anything to benefit our- selves in one direction without some slight injury in some other. It is with the tariff as with everything else. You cannot make any law without incommoding somebody. We never can be a manufacturing and exporting country such as England is. It is impossible. Remove all tariff', and still it cannot be. The Chairman. If food here were as cheap as there, could it not be? Mr. Walker. I will come to that in a moment. The institutions of England, from- the beginning to the end— not only her laws, customs, and business habits, but every- thing else— are 80 formed that not another man can live there by agriculture; and the increase of population there is therefore driven into manufacturing centers. If wo 312 DEPRESSION IN LABOR AND BUSINESS. should undersell her in manufactures her operatives would starve, bid under "^> ?' emigrate ; and, therefore, let us manufacture as cheaply as we may, England must still undersell us. Now, can we ever succeed in competing with a nation so situated ? Then, again, her population is so situated that the workmen in factories have not orie- fourth the space to work in that our laborers have. It is just the same with the houses, and just the same with the land. If the English operative's wages were in- creased 25 per cent., he has no special use for it. In our country every man wants to educate his children a little better, dress them a little better, and live in a better house. The gradations in society here are as nothing. Not so in England. An Eng- lish workman cannot spend his earnings like the workman that I have alluded to, in buying a house, or a piano to teach his daughter music. He would have no place in his tenement in which to put a piano. The Chairman. I think you cannot be aware of the enormous progress that has been made in Great Britain within the last thirty years. I think if you had read Jones's and Ludlow's work of the progress of the working classes in England you would probably change your opinion on that subject. In the first place, the government takes the savings of the workmen and keeps them for them. In the next place, the improve- ment in the dwellings of the working classes in Great Britain has been something wonderful withii^the last twenty-five years, and is growing with very great rapidity. A most material and decided improvement has taken place in the position of English workmen, for which I am profoundly glad, because that makes the conditions of the competition with this country more equal. I hail with delight every step, on the other side, by which the workingmen are brought up in the scale of society. And the result of my observations for the last thirty years is that the English workingman is making enormous jjrogress. The wages are steadily rising, and he is learning to spend them much more wisely than formerly. Mr. Walker. There is no question about that. The improvements you mention were sadly needed, and I also rejoice in them ; but this thing still remains, that the doing it in tlie way it must necessarily be done there, the dead uniformity in the doing it, is not desirable, and is not conducive to human progress. There should be more diversity in the houses in which tlicy live. If you see a factory village in one of their manufacturing centers, it is one dead level. There is nothing in it to stimulate the minds of the people to a desire and determination to " get on " in the world. If every family lives in a tenement that is exactly like every other (and he cannot live in any other tenement until he becomes substantially rich), what inducement is there for a man to rise, or what place for a small beginning ? The Chairman. There is no country where the progress of the workmen has been so great as in England of late years. The whole of the English legislation in that respect is so admirable, that I want to get as much of it here as I can. The diihculties which they had to contend against never existed here. Now, the point is this : Can we, by any process of legislation, keep our people on a permanently higher plane of civilization than our English competitors t Is it possible to do that ? Mr. Walker. No, sir ; we can simply keep our people where they are until the En- glish people come up to them ; but by no means let us degrade our people down to their level for the purpose of getting an advantage of England in trade. That is my point. I want to save everything that we have. I want to outgrow our tariff. There is no thinking man who does not know that it is an abnormal condition of things that requires a tariff. In fact everything is abnormal, or else there would be no necessity for law or its machinerj', no room for progress. The Chairman. Do you think that the higher amount of wages paid in this country is due to the tariff, or is it due to the superior natural advantages which enables the workingman to produce more and thus to get a better reward for his labor ? Mr. Walker. It is due entirely to using the superior natural advantages which the tariff has made available to him. The Chairman. Bo you mean to say that without the tariff he could not use these advantages? Mr. Walker. Not a bit more than a child can grow until after it is born. The Chairman. But a child grows before it is bom. Mr. Walkek. If you choose to go any further back in its history, you wiU excuse me from following you. The Chairman. It is alleged that the laborers of no country can get more remuner- ation than the productions of the soil of the country — ^in other words, what its natural advantages will produce, to be divided among them. It is said that we are limited by the soil and the labor devoted to it, and that that determines the reward of labor, meas- ured by the common standard of the world — which is gold. You seem to have an idea that that can be increased by legislation. If that is true, it would be a most desirable ■ aid to our natural wealth. Mr. Walkek. I am exceedingly sorry that I seemed to have that idea ; for certainly I have it not. You have beard of the professor from the college of Utopia, or of the DEPRESSION IN LABOR AND BUSINESS. 313 pick and sliovol, I have forgotten which, who said that if he could purchase a stove that would save half the fuel, ho would purchase two stoves and save all the fuel. The Chaikman. Yes ; we have had that case put here. Mr. Walker. That logic is aU sound, is it not 1 The Chairman. I have never been able to understand it myself. Mr. Walker. It is sound logic to the free-trader. All countries have been developed l}y protecting their infant industries, and always will be. Oux people export goods abroad to-day because of the protective tariff. Every bushel of wheat and every bushel of corn that is exported is due to the tariff. The means by which the com and wheat are produced for exportation have grown out of the tariff, by the tariff protect- ing our industries, and creating a competition among mechanics here, which has given ua machinery by wliich our corn and wheat are produced. Our present expoi-tation of agricultural products is as good an illustration of the beneficent effect of protection as anything that the country can show. The very reaper would not have been here, in all human probability, were it not wrought out of the brains of our mechanics, who could not have been mechanics if it had not been for the protective tariff. If it is better for us to be simply and solely an agricultural people, let us go back to that condition. And that is the condition in which we would have been had it not been for the tariff. If you remove the tariff, I have no question but that many of our industries will leave here. Some of them wOl not. But why change a policy which has produced such great results ? Why not adhere to it and outgrow it ? Then, again, I want to say that our tariff has given us, in all probability, nearly twenty-five per cent., if not more, of our present population. One-fourth of the people that inhabit this country were bom abroad, or their parents were. Shall we ship our agricultural products three thou- sand miles to a market, rather than continue the policy that makes a market at the doors of our farms and factories ? The Chairman. But the most important fact before this committee is that we have in this country a large amount of unemployed labor. Mr. Walker. A man might just as well hang himself because he had a boil, as to talk about changing our laws or institutions because the country has a local ache just now. The Chairman. What remedy are we to take for this surplus population ? Mr. Walker. Let them alone ; that is the remedy. The Chairman. You think they will take care of themselves ? Mr. Walker. Let them alone. ' " The man who will not work shall not eat." The Chairman. Men say that they cannot get work to do. Mr. Walker. They He, and they tell the truth— both. That is true of individuals. It always has been ; it always will be. It is a melancholy fact, a fact to touch the heart of any living being, to see a man with his wife and children depending upon him, honestly asking for work, and unable to get it. Mr. Eice. Are there not some in that condition now ? Mr. Walker. There are thousands of people in that condition to-day. Mr. Rice. What should we do with them ? Mr. Walker. Tliey must be cared for now, as they have been in the past for a very brief period. We are nearly over this thing. We are decidedly on the other side of the trouble. lu twelve months' time, in my judgment, you will not see a man who uses any discretion in seeking it, who wiU not have work enough to support himself and family. But the government, as a government, can do nothing by any additional laws. ^ ^ ^ ii x ^ The Chairman. Is not the first object of a protective system to afford an outlet lor labor? Mr. Walker, It has done it most wonderfully. The Chairman. You say that the government can do nothing ; but it has done some- M^' Walker. Certainly; I firmly believe that in this August, 1878, there are not so many people seeking employment as there were in any August between 1840 and The Chairman. I think I can confirm that statement. My recollection is tlia,t there was great difaculty in getting employment during that tinie and yet we had what was then the highest protective tariff we ever had, the tariff ot 184ro.hibit Chinese immigration? Mr. Elliott. I should restrain it. I should restrain all immigration. When we have got already a surplus of labor, it seems to me that we had better not encourage . further immigration ; and, if so, had we better not restrain it ? The Chairman. We give no beunties to immigrants. Mr. Elliott. But we give them free lands. The Chairman. Is not the large increase in the manufacturing products of the coun- try within the last five years mainly due to the immigrants from abroad who have gone out on the lauds? Mr. Elliott. No doubt of it. The Chairman. Is not that beneficial to the country ? Mr. Elliott. I doubt it. The Chairman. Do you think we would be better off if we had not produced this ; surplus of agricultural products, and paid our debt with it ? Mr. Elliott. We have not paid our debt. The Chairman. That is a question of fact ; and you will allow me to correct yon. ' It is estimated that at least $600,000,000 of the government debt alone has come back from Europe within the last few years, and has been paid for by American capital, and is now in the country. That has been paid for by the surplus products of those who have come hero to settle on the public lands. Now, Is it a good thing to pay our debt ? DEPRESSION IN LABOR AND BUSINESS. 339 Mr. Elltott. It is a {jood thing nntloubtedlv, but it would 1)r better for us not to have the debt. The Chairman. But we had it ; aud these foreigners have come here, and, by their labor, have enabled the government to reduce its debt to the amount of $600,000,000 of what was held abroad. Mr. Thompson. How would yon restrain immigration 1 Mr. Elijott. Am I a law-n\aker ; am I here to draft laws 1 Mr. Thompson. You arc here to advise what is to be done. Mr. ELUOTr. I make suggestions to you, which, in your wisdom, you will consider. We have got at Washinn;ton the assembled wisdom of the United States concentrated in some 300 men ; and wc look to them to do this thing for us. Tliat is what I am here for — to try and convince you that you in your wisdom can do something, and ought to do something. Mr. Thompson. But we want to be advised what to do. Would you restrain immi- gration from China more than from Germany or Ireland ; or would' you discrirainaV"' against individuals, or against countries ? Mr. Elliott. I would restrain all pauper immigration; I would restrain all criminal immigration. Beyond that it becomes a question. Can you do anything to restrain it beyond those two things if the public good requires it ? Most certainly you can. We are not bound to take all the surplus population produced in Germany, Ireland, China, and everywhere else. What is the fact in France, where they have had no call for cheap labor ? They have got none. The average of families is less than three to afamily. But in China there is no restraint, and in J^ngland there is no restraint ; aud the average of families there is much higher ; and therefore they have surplus labor. The Chairman. Did you say that there was no cheap labor in Frauce ? Mr. Elliott. Comparatively none. The Chairman. Do yon know the relative rates of wages in France aud England ? Mr. Elliott. I know that wages are low enough there. The Chairman. Do you know what the wages of a laboring man in France are com- pared with the same class of labor in England ? Mr. Elliott. I do not. The Chairman. The average is about two and a half francs for a common laborer in France, and in England it is from is. 6d. to 3s. Therefore labor is cheaper in France than it is in England. Mr. Elliott. But the average of families is larger in England than three. The Chairman. The average of families is another matter. In France they have found out some method by which they keep the laborers from suffering from excessive population. Mr. Elliott. They have found out that they have no need for more population, aud they do not produce it. But if you ask cheap labor to comi here, England, Germany, Ireland, and China will produce it for you. The Chairman. Is there in this country room for more population ? Mr. Elliott. There is room for more. The Chairman. Is there not room for any quantity of population ? Mr. Elliott. Yes. The Chairman. The population which we have already is very small in co-nparison with the capacity of the country ? Mr. Elliott. There is much room here, certainly. The Ch.urman. Thsn it cannot be that thi.-i distress is prolu'jjd by the country hrs- ing over-populated. There must be some other cause for it. Mr. Elliott. Shall I go on with my paper ? The Chairman. Certainly. On the subject of government control of the railroads, the following discussion took place : The Chairman. Suppose the government had control of the railroads, wouH not the government have the appointment of all the railroad officials ? ilr. Elliott. Yes The Chairman. And the administration would exercise the same control over them that the railroad authorities now exercise. Would it be possible under those circum- stances to change an administration ? Mr. Elliott. I am not prepared to say. Mr. Elliott then proceeded with and completed the reading of his paper, VIEWS OF MR. JOHN ROACH. Jlr. John Roach, iron-ship builder, of New York and Chester, Pa., ap])earod before the committee by invitation. He said : This committee is gathering facts which will be of great importance, and I feel pleased at having an opportunity to contribute what I may to the general result. 340 DEPRESSION IN LABOR AND BUSINESS. I appear before the committee this morning as a workingman of forty years' experi- ence in this city. For fifteen years I labored as a journeyman. A fair average pay for those days was $1.60, and the hours of labor for the greater part of the time were from the rising to the setting of the sun. At that time workingmen had not improved machinery. We toiled with muscle and sinew. Therefore, as a workingman, I have kept a close eye upon the gTcat improvements that have been made within the last half century. ' The more we advance in the improvement of machinery, the condition of the workingman advances equally in the same proportion. When machinery is first introduced, it may displace labor, but it increases the production, makes a larger demand for consumption, and by the reduction of cost it enables the workingman to live cheaper and better. Out of the savings of fifteen years' work as a journeyman, at an average rate of wages of $l.eO a day (and a portion of the time without work at all), I saved enough to commence business in a small way. If you go into my old workshop to-day you will see a million dollars' worth of machinery and property as silent as the grave, with workmen standing around idle. When I was working at the Allaire Works at $1. 60 a day, I did not even get my wages in cash. When Friday came the time-keeper would come around and say, "Roach, what do you want to-morrow?" I would say, "I want money." The time-keeper would say, " You cannot have it all in money," and I would receive so much money and so much by an order on trades-people. In the house of Brooks Bros, may be found to-day an order from the Allaire Company to John Roach for a pair of pantaloons. That is the way we were paid. I have seen working- men rise and continue to rise to a better condition of things every day. I do not blame the workingmen for their extravagance during the last 15 years. They have been brought up in a very extravagant school. Their fathers, who earned twelve shillings a day, learned habits of industry and frugality ; but when the war came on and wages rose to |3, |4, and $5 a day, the young men who were then growing up learned habits of extravagance. I commenced by employing four men. I never owned a dollar's worth of stock out- side of my own business. I never engaged in any business outside of my legitimate business, but I have gradually grown up from the employment of four men to the em- ployment of 2,500 men. For the last five years there have been no less than 2,000 em- ployed in my works ; but it requires an effort to keep them there. I have been very intimately acquainted with the condition of workingmen, and I would divide them into three classes. A man belonging to the first class will come and say to me, "Mr. Roach, will you advance me next week's wages ?" My reply is, " Yes, but how are you going to pay me?" " O, (he will say), I will save so much a week and pay you." But he neglected to save when he could have done so. The men of another class are those who only live from day to day. In the third class is the saving, thrifty, enterprising man, who makes efforts to become an employer himself, or who straggles to acquire a home for himself and family. This morning one of my working- men came to me with two law-papers in his hand ; one was a suit served to dispossess his widowed mother ; the other was a summons to foreclose a mortgage on his own house. His was a case of one of those men who, when property was all up beyond its value, purchased a house ; paid half the price upon it ; gave a mortgage for the other half; the hard times came and the margin was blotted out. Those men who had made sacrifices to acquire a home are to-day indigent ; and yet there is not a murmur of complaint fcom them. They only say that they were unfortunate. There are thousands of workingmen to-day suffering in that manner ; other workingmen again have lost all their savings in savings -banks ; so that there is suffering abroad. Immediately on the commencement of the war there was an enormous amount of money in circulation to meet the requirements of the government. At that time men who had little property got rich with hardly an effort on their part. A large number of men were drawn away from the fields of industry, and that left a great scarcity in all th« industries of the country. The price of everything went up in consequence of wages going up ; and we were, to a great extent, producing for the purpose of destroy- ing one another. Prices went up and wages went up also. We were scarcely able to supply our own wants. This condition of things continued until the time came when we had to come back to the original condition of things. Then things began to shrink and wages began to go down. A man who had a house cleared off before the war saw it increase so much in value that he gave a mortgage on it and bought another house, on which he also gave a mortgage ; and then when the crisis came, his margin was swept away and he lost both houses. Then, in the cities, we were extravagant in opening streets and making other public improvements. Every dollar spent in those days was doubled, and we bonded the whole nation for almost double what we received. When the shrinkage came the debts did not shrink, but they remained the same and everybody went into bankruptcy. After the war ended we commenced to engage very largely in railroad enterprises. Between 1865 and 1870 we built 48,000 miles of railroad at a cost of over |350,000,000. Most of this $350,000,000 was in circu- lation,. It was paid out to workmen in every branch of industry, from the mines of DEPRESSION IN LABOR AND BUSINESS. 341 Pennsylvania to the cotton factories of New England. All at once, in 1870, these railroad enterprises ceased. That source of employment was dried up. The miners began to fall off; the blast furnaces began to fall off; the rolling mills began to fall off ; the machine shops began to fall oir ; and when all those ceased to pay out money, the cotton factories and other industries felt the effect, and we came down to a crisis. At this time one of our greatest calamities is that the enterprising men, not the cap- italists, but the men who borrow the capital and who take the risks of trade, the men who invent, the men of genius, find their margin gone and their resources crippled. The three great industries on which labor depends for employment in this country are agriculture, manufactures, and commerce. During the war, when we had to keep an army in the field, and to supply the wants of our own people, we found a market at home and we neglected exporting our goods to any foreign market. The agricul- tural interest is to-day predominant. It is a great mistake that we make in this country that when any class becomes the greater in power, we try to legislate for it because that class is in a majority. We ought to recollect the minorities. To-day the agricultural interest is in a majority. It is in a flourishing condition ; but even it is beginning to feel the effects of the pressure as well as the manufacturing interest. It is beginning to feel the wants of a market unless it transports its products 3,500 miles (and the cost of that transportation comes from the producer). I have been a farmer in my time and I remember that, before reaping machines and thrashing ma- chines and mowing machines were invented, farm laborers got scarcely $8 a month. To-day, that the mowing machines, the reaping machines, and the plowing machines are in operation, the farm laborer receives more than double what he did then ; so that, with the introduction of machinery, the prosperity of the working men went side by side. Now, should we to-day break the mowing machine ? Should we say that we will not have any more machines, and should we thus reduce our ability to com- pete with Russia in producing wheat ? Certainly not. The best evidence of the great value of machinery to the human race and to the American people is the position which Great Britain occupies to-day (because improved machinery has made her the great nation of the world). The British Islands are no larger than the States of Penn- sylvania, New York, and New Jersey, and have no greater mineral resources and no greater wheat producing capacity and no greater commercial advantages. And yet that nation to-day maintains a couple of millions of men at work, and (taking into consideration her resources) her people are in a much better condition than ours are. And why? Because she has been practical. While the soil of Great Britain belonged (as it still does) to the lords and dukes, they had their protection on com. They did not aUow a grain of corn to come in from abroad without paying duty. But, when they found that they had brought their land up to that perfection, then they began to look at their mineral resources. They never passed a corn law until the necessity for it became palpable. What was the necessity for the passage of the com laws ? The necessity was that England was likely to be thrown out of the markets of the world for her manufactured goods unless she got cheap bread. It was essential for her to have cheap bread in order to compete with other manufacturing nations. Then the com laws were passed ; and thus, by cheap bread. Great Britain was able to keep up competition with other nations. England maiiitained her navigation laws until she was convinced that she herself could build ships cheaper than other people could, and then she repealed her navigation laws in order that she might say to other na- tions, "Why not follow our example ? Sindb wo have repealed our navigation laws we have become a great commercial nation." Now I have come down to that one of the three interests in which I am immediately concerned. I appear before this committee to-day with a larger interest connected with the ownership of ships than with the building of ships, although I am generally attacked in the newspapers as a protectionist of ship-building. My interest as a ship- owner is, I say, larger than my interest as a ship-builder. With due deference to Mr. Marshall, and to the world-wide reputation of the commercial house of Charles H. Marshall & Co., I dissent from the opinions expressed by that gentleman here on Monday. I find that he has built but one sailing vessel since 1860, and that he is at present the part owner of six sailing ships with an aggregate tonnage of 9,173 tons. These ships, I find, were built in 1851, 1854, 1856, 1860, and 1869. This fact leads me to believe that Mr. Marshall has not been closely investigating the cost of ships in this country recently, or else the great blunder which he has made he would not have made. I find that he stated here the cost of a wooden ship built in this country to be about |60 a ton, and the cost of an iron ship built in Great Britain to be about the same Now, wooden ships to-day are cheaper in this country than they ever have been and the highest price that' I have known to be paid recently for a first-class East'lndiaman, with double sets of saiLs, has been ,f 40 a ton, and the price has gone down as low as $37 a ton, which is 40 per cent, less than Mr. Marshall's statement. These are facts uncontradicted. The greatest difficulty which we find in building up American commerce is, that the class of men who built ships 40 years ago did not care about keeping pace with the new condition of things. 342 DEPRESSION IN LABOR AND BUSINESS. I agree willi Mr. Marshall in regard to our navigation laws up to a certain point. II' we go back to the end of oui Revolutionary war and look at the condition in which ^^■e then were, we will find that we had no working caxntal; that the currency of the nation was what was then known as continental money ; and when a man wanted to describe a thing as utterly Avorthless, he was accustomed to say, " It is not worth a conUnental." That was our condition at the close of the Revolutionary war. We were a bankrupt nation. We had nothing but a wilderness before us. But the wise men of that day came together and began to create laws for the government of this new country. The government was looked upon then as only an experiment, but it is a strange thing that the law -makers of that day passed the navigation laws and made them so prohibitory that no ship could receive the American ilag unless she was built here. That was a daring position to take. But let us see whether the men who passed that law were not prophets in theii- day. We had no railroads, no turnpikes, no com- munication except by water, and we needed ships. We had no skilled labor and we had not the capital to build ships ; and when the first ship was built, probably the car- penter was paid his wages in bushels of grain. Under aU those disadvantages what did we do? We grew uj) under those navigation laws, until 1812 came. What was the cause of the war of 1812? It was a war made by England against the rising com- merce of this young nation. What would have been the result of that war if we had uot taken the precaution to have within ourselves and under our own control the means to build ships and the men to equip them ? It was because we had these means and these men that we made the bold and gallant fight we did make, and we then taught Great Britain a lesson which she has profited by ever since. Now let us look at the progress of this country in ship -building. From 1814 up to 1830 we exported (by the records of the Treasury Department) forty-seven million dollars' worth of ships. Before we brought any money into this country from the resources of agriculture, or from manufactures, we had brought into the country from ship-building the sum of S47,000,000. We steadily went on in that way until the war came. England made great efforts to counteract our movement in ship-building. When the coast was clear aud when the prize of the ocean was due to the men who could build the hestship and sail her with the best crew, we were rapidly gaining upon Great Britain and we al- most took control of the ocean. There was scarcely a point in the world where any commerce existed that the American ship, the American captain, and the American capitalist could not be found. The American ship-owner got a preference over any other ship-owner in the world from the fact that he did his work best. Thus we went on gradually growing to a point where we were not only building our own ships, but were bringing in the gold of foreign governments by the sale of the ships that we built. The ship-yards on Manhattan Island here were employed in building ships for all the nations of the world ; but to-day all these great shipping-yards are closed. One of them is used as a hospital, another is used for the storage of lumber, another is converted into a saw-miU, aud others are converted to various purposes ; and I have been charged as a monopolist because I have one solitary workshop that is still alive on the east side of the city. Now how did we lose this ship-building trade ? I agree with Mr. Marshall on one poiut. He tells you that between the years 1865 and 1870 we had lost about two mil- lion tons of shipping. But there he stops, aud he impresses you with the idea that that was lost because the American people were not competent to sustain their com- merce under that condition of things. When the war broke oiit we had an immense coast to guard with a small na^-y. We had to protect it from English blockade run- ners, and the Navy Department purchased for that purpose 215,000 tons of our best steam tonnage; while the War Department chartered 301,311 tons. The Alabama de- stroyed 104,605 tons, and the sum total of tonnage taken out of our commerce in less than one year at that crisis was 1,879,505 tons. The vacancy was left ; and England, without a struggle, supplied the place ; so that we lost that commerce, not from the want of enterprise on the part of American merchants, not from the want of genius on the part of American mechanics, uot from the want of daring on the part of Amer- ican sailors, but this tonnage was taken away from us in order to save the nation's life, and was replaced by English tonnage. i Then came the next great difficulty that we had to encounter. A good deal is said about iron ships, and when the word iron ship is mentioned, it is supposed that if we only had iron ships, aud if we could only buy iron ships abroad, we would be all right. But if you refer back to our fleet on the North Atlantic seven or ten years ago, and look in the files of one of the old newpapers of that day over the names of the ves- sels, you will find that they wore all iron steamers ; and you cannot find one of them there to-day. They were as much of a failure as our wooden ships were. I have known some of those vessels to cost $500,000 or $600,000, and to be perfectly sound ; bnt their machinery was very defective, aud they were sold at about 10 per cent, of Hieir original cost. The whole fleet has been renewed within the last seven years. It was at that time that I went before a Congressional committee and showed that 80 jier cent, of all the capital invested in the north Atlantic fleet would be lost before 1880. DEPRESSION IN LABOR AND BUSINESS. 343 Then we had an opportunity to do something to establish this iron ship-huildiug in- terest. While our great war was going on there was a comparatively great revolution effected in the ship-building interest. The iron ship took the place of the wooden ship ; the propeller took the place of the side-wheel ; and the compound engine took the place of the ordinary engine. This revolution was going on while we were no much absorbed in the struggle for our national existence, and in the excitement which came after it ; so that we wore not able to avail ourselves of any of these advantages. When the war ceased the practical mechanics and ship-builders of the United States called a meeting in this city, and it was proposed to the old wooden-ship builders to put an amount of money together to establish an iron-ship yard at Green Point in order to prove to the world that we could build iron ships. Nothing, however, wat< done. Whenever you go to work to interfere with English interests, England silently and quietly strikes you where yon do not expect. She will go to work and even at- tack you through the piilpit and through the press ; but she will take good care not to let it appear that those attacks come from England. Now a wooden-ship j^ard is one thing and an iron-ship yard is quite another thing. For a wooden-ship yard a man only requires a piece of gTouud on the bank of a river as a workshop. No ma- chinery is required. The carpenter goes into the yard in the morning with his rule and ax and performs his day's work. It is quite different with an irou-ship yard. There an immense amount of machinery has to be established and a very large capital invested. When that effort was being made to establish an iron-ship yard, a bill was introduced before Congress for the admission of foreign ships free, and it was discussed in the newspapers. Any man who opposed that bill was considered a monoj)olist. It may be interesting here to know what was the first encouragement we had to estab- lish an iron-ship yard. This question was kept up before Congress, year after year. There was a demand for free ships; while at the same time the copper, the iron, and everything else that entered into the construction of ships, were taxed. Finally, dur- the Franco-Prussian war, such a pressure was brought to bear upon Congress in favor of the bill to allow fi-ee ships, that the President of the United States asked Congress, in a special message, to give two days to the discussion of the question. The question came up and I was there. I was then not a monopolist. I had no ship-yard, but I loved the ship-buUding interest, and I saw what was going on. I wrote on a piece of paper an amendment to be offered to the bill, and when one member made a speech in the Senate about the glorious chance oftered to the American merchant to buy those splendid German ships, when they could be got for half their cost, I had this amend- ment offered, proposing that if American capitalists were going to get these ships at half cost, they should be required at least to pay half the duty on the materials. The friends of the measure would not allow the bill to be passed with that amend- ment, and it was defeated. After that bill was defeated, I met in this city u gentleman who was then holding a very high position under the government, and who favored that measure. I made it my business to come to his hotel, and I got him into a carriage and took him around the ship-building section of the city, and showed him the desolation that existed there. Then I took him to Green Point and showed him where the little Monitor was built, which saved Washington at the commencement of the rebellio]i, and I showed him the man who had more, to do with the Monitor than any other person, working as con- ductor on a street-railroad car. When I next went to Washington I met him, and he said that the President ought to know this. I went and saw President Graut and explained the whole thing to him. He told me that that measure would not go through. I then came back, made thorough Investigation of the whole business, sat- isfied myself that we had all the great natural resources for iron-ship building supe- rior to any other nation in the world, and that the time had come when we could build iron ships' under as favorable conditions as any other country. I then purchased a site on the Delaware, and went to work to bnild iron ships. From 1871 to the present time I have built thirty-seven steamships, of an aggregate tonnage of 84,000 tons (equal to 250,000 tons of sailing-vessels). Of that amount 20,510 tons were built for the foreign trade. There is a gi-eat variety of interests connected with ship-buildmg. The fitting out of one of the large steamers built by me cost, in Mr. Stewart's store, very nearly $40,000. It includes cutlery, glassware, bedding, carpeting, oil-cloths, &c. ; and when the ship-building interest is in a flourishing condition, a great variety of men have a chance to find employment in their various industries. The ships that I built within those five years cost sixtc(!n million dollars, and of that amount at least fifteen millions was paid out for labor. The building of the iron steamship commences with the taking out of the ore from the mine. The village blacksmith has somethmg to do with it. You can readily conceive the great variety of trades into which this fifteen millions of dollars went. We have now come to a point m American iron-ship building when wo can carry on the business. ,,,..,, ^ In 1870 there was scasoely a ship-yard in the country that could build a two thou- sand-ton ship, and there wasn't enough of skilled labor in the country to more than run one iron-ship yard. To-day there are five large establishments m the country, each ot 344 DEPRESSION IN LABOR AND BUSINESS. tli«m almost eqnal in capacity to my own; and there are all the skilled workmen that we want. England thought that the absence of skilled workmen here was one of the great elements of her strength, and that it would take us half a century to educate skilled workmen up to the point of competing with her in the iron-ship building busi- ness. But the American workman learns his business very soon ; and to-day there is no scarcity of labor in that line. I have here a letter from Glasgow dated the ISth of June, 1877, stating that the writer has learned with interest that I am carrying on a successful competition in iron-ship building as compared with the builders on the Clyde, and saying, that if I could build an iron steamer to compete with the rates charged on the Clyde, which were from £14 to £14.108. per ton, for a ship of from 1,500 to 1,800 tons, he would send me an order ; and I wrote to him a letter in reply .iccepting the proposition. The business here is in its infancy, which is not so on the other side. There are two hundred millions of capital invested in it there, and there are probably live millions of capital invested in it here. If our navigation laws are repealed, the English will bring their ships down in price until they force us out of the business. Mr. Roach went on to relate the efforts which he had made in establishing a Bra- zilian line of steamships, and the means to which English ship-owners had resorted to prevent his doing so successfully. Said he : I got up the plans of two ships and took them to the Brazilian minister at Washington, and said I would like to try the experiment and see what his country was going to do toward establishing a line of vessels of that class. Two ships were built quietly three years ago and fitted up for that trade. They were built without an order, iuthe hope that something would be done in that direction. I found that the English contract was going to expire the next year. I said to my agent, ' ' Offer those ships and take the contract if you can get it; ours are better ships than the English." The con- tract was to be renewed for ten years. We got a favorable reception, and I think we would have got the contract, but the moment it was known that we were prepared to take it the whole English press of Brazil poured out their wrath on the American representative, and a caricature appeared in one of the English papers where 1 was 7-e presented as a Yankee subsidy-beggar, and the Secretary of the Treasury appeared with a bag of corn under his arm distributing it to me and my agent. Influences were brought to bear, and before the chambers had tune to confirm the contract the same English company offered to perform the service for nothing, and I lost the con- tract. One of the ships was then sold to the Russian Government for a war ship, and the other was put on to run between New York and Havana. The agent came back and told me that the English had offered to perform the service for nothing and were doing it. I said to him, "Go back, and if it takes ten years I will pay you a salary and keep you there to keep them doing it for nothing." He went back and watched his opportunity. During the summer and fall numbers of Brazilian merchants were traveling in this country, but in order to get here they had to go to Liverpool. I dealt with such of them as I met, as I deal with other rejjresentative men, tookthem on board the steamers and showed them everything that we had here, and when they went home they called a meeting and demanded of the Brazilian Government that the English Government should furnish better ships and pay something for the privilege. The question was reopened and discussed. A commission was appointed by the Brazilian Government, and I sent an agent to find out what ships this company had under their control. I found that their vessels had only just so much speed, so much tonnage, so much accom- modations, and I telegraphed to my agent to make a proposition to furnish, instead of '2,000-ton ships (the largest that the English company had), 3,500-ton ships, with accom- modations equal to any in the world ; such ships as that when the Brazilian merchants wanted to come to New York they could come here more comfortably than they could go to London or Paris. On that proposition being made the contract was awarded again, limiting me to six months' time for the construction of the ships. That was crowded into the contract by English influence, because they thought I could not com- ply with it. Well, the ships were started, and so far I don't know how we shall come out, but I will show you what convinced me that there was room for a line of steamers from here to Brazil. I have not asked any money from the government to help to biuld my ships ; I have not asked the government to indorse my bonds ; I have asked for no favors ; but there is an old law on the statute-book under which my ship cannot be cleared unless I take (he United States mails on board. Therefore, as a compulsory matter, I do that ser- vice and get that money ; and it should be remembered that before those ships went on, the letter-postage to Brazil was twenty-two cents by the English line. Now, as to the general difliculties under which we labor, it seems to be conceded that they are caused, to a large extent, by the extravagance of our own people and the enormous amount of railroads which ^las been built, beyond the natural requirements of the country, forcing large amounts of money into circulation to supply the unnatural demand created. In that way more factories and machine-shops than were needed DEPEESSION IN LABOR AND BUSINESS. 345 wero forced into existence ; theso causes indnoed immigrafciou from other countries, and we reached the point of producing more than we could consume. But I have never for a moment thought that it is a case of real over-production. It would be a very easy matter, if we chose, to get rid of our surplus products by having the governmeiit appropriate a fund to buy them up and dump them into the rivera, and set the people at work agam ; but the trouble would be that in a very short time the surplus would be reproduced, and unless you can find some sound way of getting rid of your surplus pr.-)duction, you will have to go to work to get rid of your surplus people. Now, how are you going to get rid of them? It in very easy to say, "Let them go west." Go west what to do? To farm ? You will soon have the same result there— over-prodnc- tion. And if you take a man educated up to the point where he is a first-class engineer or master mechanic, having spent five years of his life in learning a trade which is paid at the rate of |2 a day, and having become in the true sense of the word a profes- sional man, it will never do to tell him to break up his habits and surroundings and go west to dig ditches. That is very easy advice to give, but it is not practical. What, then, shall be done? What would Great Britain have doue with all her factories and machinery if, when she had got them established and had built her railroads to the water s edge, she had stopped there ? She would have been a frightful example of over-production. But that is not what Great Britain has done ; she has adopted a very different policy ; and whether it was necessary to carry out that policy by subsidies or at the cannon's mouth, she has adhered to it and carried it out. Her motto has been, ■'A market at all hazards!" and the strength of Great Britain to-day depends on the control of her markets. The other day when she appeared to be battling for the Turks, she was really battling for a market. Now, I have no hope that we can accom- plish much by building ships to cross the North Atlantic and find a market for our goods there. There is but little encouragement in that xlir(^ctiou. But there is a vast extent of territory in South America that is yet uncontrolled to any considerable ex- tent by any other foreign nation. Brazil is nearer to us than to Europe, and there are no two nations in the world that can more profitably exchange products than Brazil and the United States. With all our vast and varied agricultural products Brazil grows one great crop that we have not and that we must have, an article that is in more common use than anything else except bread; I mean coffee. Brazil, on the other hand, r > « Australia proper has a protective tariff. N^w Zealand and Tasmania are free ports. The chief export from Australia is, wool of unrivaled fineness and length of fiber. If the duty was removed and Awtralift wool admitted iiito this country free, It -yyould contribute largely t6ww4s securing to us the trade of t^a* country, and as there is no similarity to the wool groyin iji the United States, its introduction would not injme the wool-growers of this country ; s|«d in orider to do this, we sjipuld remove the duty on yoqI a»d copper, which would greatly stimulate our trade with Peru, Chili, and the Argentine Republic, as well as with Australia. There ahonld be a revision of tlje treaties existing between the United States and many of the cpuntries I have named. The duties now levied by some of them are not reciprocal. Cv,ba, to whom we paid in five years up to 1876, $3fi5,000,000, while ^he bought of us only 177,000,000, leaving a balance of trade against us of $879,000,000, imposes a duty on Amjerican products as follows, viz : Flour, |4.40 per bbl. ; com, 64^ cts.^ter 100 lbs.; laid, 4.48 per owt.; hams, 3.84 per cwt,, and on other articles in same proportion — 25 per cent, additional for war tax. Our government should, if possible, secure a more favorable tariff pn bur prp^ucts to Spanish pprts. Every man connected with the Gevernmeut pf England, frpm Lpid Beaoonsfield to the smallest officer of the country, is a pathfinder for British commerce. They have spent hundreds of millions in aifUng their cpmmerce, and through that policy now haye steamship liiies to more than two hundred foreign ports. With some of the South American cpuntries and Mexicp we have steamship liijes. established and sustained by subsidies granted by the respective countries, but not one dollar from our own country, except the ordinary letter postage. The result pf the experiment with these lines shows that wherever we have steamship Unes the trade ef this country is in proportion to the steamship tonnage we famish. This fact can be illustrated by a comparison with In 1870 we imported from Venezuela $2,037,322, and sold them $1,307,833, a total trade of $3,345,145. Through the influence of a subsidy granted by that government, we now have a steamship Une frpm New Yprk to Venezuela, and in 1876 we impprted frpm them $5,875,715, and exported $3,424,278, a tofcil trade of $9,299,993, an increase of 260 per cent, over the trade of 1870. jp 1870 the American shipping engaged in trade with Venezuela was 15 vessels of 2,^1 tons capacity, employing 109 hands. In 1876 the American ships was 134, with 43,459 tons, employing 1,255 hands. Of our imports, $4,581,475 in 1876 was coffee, and our expprts, $788,696 were breadsfenffs, $463,280 prpvisipns, and $110,825 cotton ^oods. The Mexican Government pays for having a mail line of American steainships supported between Vera Cruz and New Yprk, and anpther line between Vera Cruz and New Orleans ; alsp between Acapulco and pther Pacific Mexican pprts and New Yerk, via the Isthmus of Panama, and from those ports to San Francisco. We are therefore on a par with England as respects postal facilities, and the result is we divided the trade of Mexico last year almost eijual with England, and will probably exceed her this year. Central America has connection with England by two lines of mail steamers, and with the United States by one line. Out of $15,000,000 last year, we supplied $5,000,000, and England $10,000,000. Is it not perfectly apparent that if we had had two lines and England only one, we would have sold $10,000,000, and England only $5,000,000? To the United States of Colombia we have two lines pf steamers running, and En- gland has two. Of $8,000,000 of goods imported last year, we furnished $4,000, 000, and England $4,000,000. Take the west coast of South America, independent of the United States of Co- lombia, and out of $23,000,000 we sold $3,000,000, and England $20,000,000. Our $3,000,000 was largely made up of lumber, petroleiim, and provisions. We are de- pendent for our communication with the west coast south of Panama upon a heavily 356 DEPRESSION IN LABOR AND BUSINESS. subsulized English line, whose interest it is to take every thing to and bring it from ETigland. To the .ast coast of South America we furnished |1.5,000,000, and England 165,0(10,000 ; with tlie fast coast we have no steam communication. With China and ,Tapan dur communication by steam is abont one-third that of En- gland, and we sold to those countries last year about $10,000,000, while England sold 130,000,000. We have a steam line to Sydney, and are gradually obtaining control of the Austra- lian trade. We exported to them last year |6j000,000, and imported |1,500,000. Thus it will be seen that wherever we have mail communication by steamers with any port of South America, China, or Japan, we are building up a trade which shows that we can compete in the markets of the world with our manufactured goods be- cause of their superiority. Our cotton fabrics are better, while our agricultural im- plements and hardware is superior to that of any other country. The demand for our products in those countries will increase. Railroads are being constructed through them, and civilization will rapidly increase the demand for our goods. Nearly all the trade we enjoy with those countries is through the support granted by the foreign countries with which we have steam communication. Our govemmeut is doing noth- ing, while England, France, and other foreign countries support magnificent steam- ship lines, which furnish mail facilities through which the business is built up. We can never hope to secure any considerable part of that trade until we furnish steamers as good and as fast as those running to England and Frahce. Our government should grant liberal mail contracts to at least two lines from New York and New Orleans to Brazil, and other contracts to other important countries with which it is desirable to trade. These mail lines are necessary to enable the merchant of that country to visit our market and to facilitate the exchanges and settlements, and when we establish the fast mail-line it will be followed by a freight-line, and a business will be built up which will require the departure of a ship every day from some port of the United States. We have spent |5,000,000,000 in constructing railroads to get our products to the seaboard, and there we have stopped, and but for the enterprise of John Roach and the generosity of foreign governments we should be without mail facilities, because the government of the United States does not spend a dollar to secure foreign markets and thus justify the construction of our railroads. I believe that the very best in- vestment that OUT government could make to-day would be to spend $1,000,000 an- nually in mail compensation to steamships to run to foreign countries south of us. If you look at the map you will see that China, Japan, Australia, New Zealand, all those countries, lie nearer to us than to Europe ; the nearest route to China and Japan to-day from Great Britain is through New York and San Francisco, yet we are wilfing to let Great Britain send her products around Cape Horn 9,000 miles to conutries that lie within 3,000 or 4,000 miles of our own coast. We produce raw cotton, and we can beat the world on hardware, and the time is coming when we shall beat it on every- thing else, unless it be boots and shoes. I believe that we shall be able to compete with any part of the world in anything, unless our laboring people insist on living in fine houses with velvet carpets and pianos. I know that we can get as much out of the muscle of this country as can be got out of that of any other country. We did it on the battle-field, and I believe we can do it in the commercial field. The Chairman. Don't you think that workingmen who enjoy music should have pianos ? Mr. BussEY. Yes ; and I think they will all have them in time. I believe that this country will justify it. I have thegreatest confidence in our future. This is a won- derful country. The Almighty in His wisdom has made it to order. The idea used to be that there was a vast extent of country west of a certain line which was worthless, and which was spoken of as the Great American Desert, but it is found when the plow is put into that soil that there is really no end to the agricul- tural resources even of that part of the country. The fact is that every laboring man here can, if he wishes, go to some part of the country and get land enough to culti- vate and make himself independent. Not a solitary individu.il have I ever encountered who was engaged in business or trade who did not believe that a judicious expenditure of money in maintaining postal service betweeu this and foreign countries would help all our business interests. One year ago there assembled at Old Point Comfort delegates from all the South, three hundred as intelligent men as I have ever seen, and they unanimously passed a resolution on this subject, and Senator Hill in the Senate of the Uliited States said that he took the declaration of that body of men, knowing their character and intelli- gence, as ail instruction to him. The Chairman. You say you do not know of any business man who is not in favor of such a measure. Mr. Marshall, who testified here the other day, one of the largest business men in New York, said he was opposed to subsidies and that the result of them would he to create a monopoly in the hands of the persons getting them, and Ihat is the argument generally adduced on that side of the question. DEPRESSION IN LABOR AND BUSINESS. 357 ^I'^v,'^"^'''*^^'- ■^^^^^ is nothing in tliat argument. Wliat we want, as Mr. Eoaoli gaid here a while ago, is increased foreign postal service. We were met by a delega- tion of gentlemen from Baltimore, engaged in the coffee trade, with this declaration, that there is no necessity for increased postal facilities with Brazil because we have a telegraph line, by which you can send a message at |5 a word. I would like to know if that is not a monopoly. Mr. Marshall, I suppose, is interested in a few wooden vessels, and every man who has got a wooden ship is afraid of the iron steamers f but must the interests of 40,000,000 of people be subsidiary to the interest of a few men who own a few old wooden ships? The Chairman. You do Mr. Marshall injustice. He stated here in the most frank way that he did not think that anything could be done to save the wooden vessels ; that they were doomed ; that their day had gone by ; that there was no longer any profit in them, and that the sooner they were out of the way the better. Mr. BussEY. Well, if that be true, why not do something practical to get back the business that we once had ? In 1820, eighty-eight per cent, of the commerce between this and aU foreign countries was carried in American vessels, and in 1826, ninety-two per cent., but the percentage ran down, and when our foreign commerce amounted to 11,100,000,000 we carried but twenty-six per cent, of it. The Chairman. The reason is that some one else has been willing to do the work for the producers and consumers of this country cheaper than we were able to do it. Mr. BusSEY. The reason is that when in a great national emergency the vessels of this country were taken for another purpose. Great Britain came in and got this com- merce from us. The Chairman. I suppose there is no fact better known than that the same causes were at work prior to 1860 substituting iron for wooden vessels. Great Britain was able to produce and run iron steamers at less cost than we could do it, and the revolution which was already begun simply completed itself a little more quickly by reason of the war. Mr. BusSEY. And we have now reached the time (and it is the only time that has presented itself unless it be for a year past) when we are able to enter upon competi- tion with Great Britain. The first great duty of this country was to return to specie payment. Having done that, we can enter into competition in transportation facili- ties, for the reason that the great mass of the tonnage now on the water is not so well adapted as the new tonnage is to the carrying trade. That is w hy our first Brazilian line did not succeed, because the vessels were not large enough. The Chairman. If we can compete in the cost of producing comuiodities which we want to sell abroad why can't we compete in the prodiiction of the vessels which shall carry those commodities '! Mr. Brs.SEY. For the reason that labor in this country demands better pay than the English workmen receive. I cannot imagine that any man would put |1, 000, 000 into a line of vessels and undertake to develop a trade between New York and South America, or between New York and China and Australia, or between the mouth of the Mississipiii River and South America, in the face of the fact that there are subsidized lines ruuniug from Great Britain to those countries, and in view of the fact that those vessels from those countries, being bound to come this way anyhow, can therefore carry freight at very low prices ; but, if the government would say to the citizen who proposed to establish an American line, "Put on your ships and we will do with you just what we do at home for every railroad corporation ; we will give yon a reasonable compensation for carrying the mails," then we could compete with foreigners. Mr. Thompson. Yoiir idea is that you want the waters open to everybody, giving all an equal chance, but you hold that when England subsidizes her steamship lines this government ought to subsidize ours, in order to give them an equal chance ? Mr. BussEY. I do think so. Mr. Thompson. Then it is because England has interfered with the natural order of trade that it is necessary for us to do the same ? Mr. BussEY. Yes, sir; and I say that the natural superiority of our products is such that we will then have a monopoly of a great many lines of trade. Before I left; New Orleans a gentleman came from the United States of Colombia ; he desired to trade in this countrv, and he had been waitiug for months to get to it, but there was no reg- ular line of steamers, and so he had worked his way on schooners to Panama and J!ame from there to New Orleans. . The Chairman. The United States of Colombia is somewhat of an unknown region, hut we have recently appointed a minister there, and he had no trouble in getting to his post. He took a steamer to Panama, and then another steamer to Carthagena ^ Mr. BussEY [interrupting]. That would have been all right for this gentleman if he had wanted to come to New York, but he didn't ; he wanted to come to New Orleans. ■ The Chairman. I might want to go to Livei-pool from the port of Barnegat, and might insist that I would not come to New York, but would that be a reason for estab- lishing a steamship line between Barnegat and Liverpool ? Mr. BussEY. Just look on the map at the location of the United States of Colombia 358 DEPRESSION IN LABOR AND BUSINESS. ■with rcfero]\ce to Npw Orleans and you will see why lie wanted to come thero. What is the us© of a man traveling 7,000 miles *hen he can get to his destination by tra v- eliug 2,000 ? The Chairman. But the channels of commerce are regulated and fixed by commer- cial considerations, and they cannot be changed in the way you suggest. Mr. BusSEY. That ought not to be. New Orleans is the second exporting city in this country. The Chairman. Then all that the people of New Orleans have to do is to establish steamship lines for themselves. Lines are running now from this city Mr. BussEY. By the grace of some foreign country. The Chairman. That makes no difference. If some foreign country will do it cheaper fbr ua than we can do it ontselves, let them do it. Mr. BussEY. But the question is, is there anything that we can do that will break u^ the causes that ha'Ve bi-Ought the people of this country to such a condition that they canfiot cblnpete with' foreigners ? I say there is, and that it is in the power of the Con- ftess of the United States to remove at least one of those causes. The gentleman that have mentioned came from the United States of Colombia to New Orleans with 140,000 in United States bonds, with the intention of paying out the money for merchandise, and almost the first thing he had to do Was to go and buy a schooner to transport his foodig; and then he went into the market and paid out liiS money for almost evei^^ ind of goods that a*e manufactured in this country. That man's visit was a benefit to every class of the people, and he says that if we had regular communication between the two countries we could command millions of trade, not only from his country, but froHi Maatiinique, Trinidad, and all that region^-t^ade that -«ve do not get now because the people are forced to go where they have facilities for going. Now, 1 do not believe that the people of this country are opposed to the judicious expenditure of their money for such a pul^pose as I have indicated. I find men standing up in Congress and ask- ing an appropriation of three or four hundred thousand dollars to put a roof on a cus- tom-housl. Wtat difference does it make if we do not have a fine custom-house? It does not affect the trade of the country at all. But when we ask something for the benefit of commerce, we are denounced as being in favor of subsidies, wanting to take money out of the pockets of the people and give it to a class who ought not to have it^ and so on. We cannot have pirosperity in this country until we find markets that will absorb our surplus products, because we are going to continue to produce enormously, and the hardships of our people are not yet at an end. Thousands of people in tms counti'y are still living off the money that they made during the war and in the fliish times, and are not doing any business because they have not yet seen the proper chan- nels in which to invest. I speak to-day not so much for the present ; I advocate th6 cause of the future, and to avert the increasing accumulations of evils which will be- fall the country unless we do something to enlarge our markets, carry ofSf our surplus products, and relieve the distress. If we are ever to have any foreign trade with South America, now is the time to cnt loose fi-om the old wooden ships and undertake to build it up. Mr. Roach has put forty per cent, more money into his ships than is necessary to carry flou^ and all the flour to load those ships comes from Saint Louis and pays 6© cents a barrel transportation, when the regular rate down the Mississippi is 20 cents; and this additional freight comes out of the producer. These are roundabout channels of trade that ought to be and can be broken up. Let us begin by establishiiig regular postal and pasaehger communication, and after a time you will probably see lines of steamships carrying freight alone, perhaps leaving every day, and the ports of Charles- ton, Baltimore, and every other city on the coast will be benefited. At pteSent we take everything from those South American countries and sell them nothing; afid we are sending out of the country 1200,000,000 or |300,000,000 in money to pay for their products, when we ought to pay them not in coin, but in every kind of manufactured goods. We sell England much more than we buy from her, while from theSe other countries we buy five times as much as we sell them. Now, if we are able to sell so much of our products to England, why not to these other countries also? The Chairman. We sell England the cotton, and the food upon which the workmen who work upon the cotton Uve. The product of their industry is sent to Brazil. The money that we get from England for our cotton and food we turn over to Brazil in payment for her coffee. If we trade directly with Brazil, England will not take the food because she will have lost the business, and she will not take the cotton because She will have no demand for it. Therefore, while you will have changed the chaimels you will not have changed the volume of trade. Mr. BusSEY. I am perfectly willing to accept that proposition. We will have saved whatever amount of money is required for transportation to Liverpool, and for its manufacture, which is a large sum. Every cent of money that goes into the freight from here to Liverpool is so much taken out of the pocket of the producer. The Chairman. That may come out of one side or the other. It is only an incident. As a matter of fact, it is in evidence that when we repealed the duty upon coffee the DEPRESSION IN LABOR AND BUSINESS. 359 amoiint was merely put upon the cost in the foreign market ; but the fact is that you caimot sell ihe cotton and the food to England and also to Brazil. Mr. BussnY. Not long since I met a member of Congress and introduced this subject in conversation. I told him of the immense vohmie of trade that we might have with South America, and that it was not good policy for us to be running off Our raw marte- rial when we ought to manufacture these goods and sell manufactured articles instead of the material in its raw state. He pondered over the subject for a while and then said : "If this is the great country that you say it is, we would build Up such a de- mand that it would raise the prices on our own people!" I am sorry to say that that man represents a cotton State, and is one of the men who make our laws. I know that every dollar's worth we can manufacture out of our raw material is a positive advantage to the people of this country. The UHAiItMAN. If your doctrine is" true, that we ought to manufacture the ra,w materials at any hazard, and if yon would give a bonus to a steainshi'p line in order to enable it to carry our products to foreign markets, why not also give a bonus to the manufacturer in order to enable him to produce his goodfe at a profit'? Mr. BussET. We have done it through the tariff in a great many instances. The Chairman. But why not tax the people at large to encourage our manufactures, so that every particle of the demand of those countries Shall be supplied irom the United States? Mr. BussEY. That does not follow at all. That is a different case. We protect the iron interests of Pennsylvania. In 1874 there was a duty (you may call it a tax if you please) of $30 a ton upon foreign steel rails. The Chairman. There is the same duty now. It has not been reduced. Mr. BusSEY. No ; but you might reduce it now and it would make no difference. Why ? Because you have protected that interest until yo)i have built up an organi- zation that will compete with the foreign manufacturer. Our manufacturers make 560,000 tons per year, while Great Britain manufactures only about 700,000 tons, and you can buy the finest steel rails here for less than $50 a ton. The Chairman. But how much can they be bought for in Great Britain T >Ir. BussEY. I don't know. The Chairman. Less than |40 a ton. Mr. BussEY. Including the freight, duty, 0,000 in gold, ''-'^-rJL'^T^t\ft&r^^^^ ^^ estimates the quantity of gold at more than double what it was at that time. Mr. Potter. John Stuart Mill is my authority. Mr. Kemp. Jevons is mine. Mr Potter. How much did you say it was? Mr! I^MP. From 80 to 100 millions in gold circulate m England. Mr Potter And how much paper circulation? M^: Ke"p Ab °ut forty-six millions. It was not over thirteen millions twenty years *^Mr. Potter. Well, call it forty-six. It does not make any difference. I think I know what I am talking about. The Chairman. I see that you do. 3(54 DEPRESSION IN LABOR AND BUSINESS. Mr. Potter. You know, Mr. Chairman, that by virtue of the act of 1844, the circu- lation of the private and joint-stock banks in England was gradually being retired. The Chairman. Certainly ; I think this gentleman's statement of the Scotch circu- lation is right, but whatever it is we know that the paper cLrculatiou of Great Britain is not increasing in the same proportion that her business is increasing. Mr. Kemp. The reason why the bank-note circulation does not increase is because checks come in for a five-pound note but they cannot come in for a sovereign, but the prosperity of England makes her circulation of sovereigns increase, and no economist puts it at less than seventy or eighty millions. Mr. POTTBR. I say that no human being knows how much gold coin there is in cir- culation in Great Britain, and you cannot find it out unless you seize every man at a certain hour on a particular day and search his pockets, and even then you could only approximate it. The British sovereign is in circulation all the way to the Indies. I have passed it myself in Gibraltar, Malta, Alexandria, Cairo, Suez, Aden, Galle, Penang, Singapore, Java, and China ; it circulates all over the globe. The Chairman. Yes; I have passed it myself all over the continent. Mr. Potter. Certainly, it circulates everywhere. No human being can know just how much of that coin there is in circulation in or out of England, and therefore there is no use in talking about it. Let us talk about what we know ; that is a big enough thing for us to handle. I wish to say that I am discussing a question of principle rather than of fact to show that the volume of circulation does not and need not in- crease in a country whose civilization is advancing. On the contrary, it may be act- ually diminishing while consumption, production, and exchange, and population also, are at the same moment increasing, owing to refinements in the mechanism of exchange. Mill says, " The bank-note circulation of Great Britain and Ireland seldom exceeds forty millions, and the increase in speculative periods at most two or three." * Jevons in 1875 put the issues of private and joint stock banks of England at about £6,460,000, Scotch banks, £2,750,000; Irish banks, £6,350,000 ; making in all about 30^ millions ; to which must be added about 14i millions issued by the Bank of England upon the security of government stock — total about £45,000,0GO.t But although the combined issues of the United Kingdom at that time reached this amount, it by no means follows that the circulation exceeded or even touched £40,000,000. The re- serve of notes held by the numerous newly created private banks, and the conservative action of the Bank of England in recent years with reference to her reserve of notes, and the fact that Bank of England notes circulate to a considerable extent on the continent, and may be found in difl'erent parts of the world as well as in New York, shows that the oirculation of Great Britain might be less than £40,000,000, though the issues reached even £50,000,000. All estimates as to the amount of coin in circulation in Great Britain are illusory and vain. If the actual circulation increased materially it would become depreciated at once. It should be understood that there has been a universal monetary disturbance during the last fifteen years. There is another law to be considered in reference to circulation. Adam Smith laid it down, and it is a most remarkable fact that no writer, so far as I have been able to discover, has ever noticed it excepting Professor Rogers in his edition of the Wealth of Nations. Even Mr. Mill did not understand this principle. The law is, that the circulation in every country is divided into two great branches, namely, the circulation between the dealers themselves (i. e., checks) and the circulation between the dealers and the con- sumers (i. e. , notes and coin), and Adam Smith says, what is very obvious, that the value (price) of the goods circulated between the dealers cannot exceed the value (price) of the goods circulated between the dealers and the consumers. The wholesale prices of merchandise cannot permanently rise above the retail prices of merchandise, and the retail prices are governed by the quantity and activity of the circulation. So that the limitation finally comes upon the money. The mechanism of exchange is modifying this to a certain extent, so far as checks are passed in retail payments, but we cannot ignore the great and important fact that the currency of a country is divided into two distinct branches moving in two distinct circuits. John Law started an abstract currency, a currency without any specific standard, based on confidence, based on an idea ; you could issue what Montesquieu called " ideal money" ad infinitum if you had confidence ; but the trouble is you cannot keep house on con- fidence, and confidence has to give way at a certain point to the cry of sawve qui pmt; you must have the concrete money somewhere, the hard fact, metal, which ia the money of the world, and the money of God, too. The Chairman. I asked a previous witness what authority he had to speak for the Almighty, and I think I shall have to ask you what evidence you have that gold and silver alone are God's money. Mr. Potter. Evidence that God created gold and silver for money? juat the same •evidence of it as that he created the atmosphere to breathe and water to drink, and Wheat as material for the food of civilized man. * J. S. Mill's Principles, edition 1867, Book III, Cliapter XII, section 5. t Money a.uA the Mechanism of Exchange, by jevona. Appleton's edition, p. 313. DEPEESSION IN LABOR AND BUSINESS. B65 The Chairman. Your reason is because those irntals have been used for that pur- pose T Mr. Potter. Because from time immemorial the money of the world has been gold and silveiv-gold and silver, and the harmony of the social universe cannot be main- tained without both. The Chairman. But you said a little while ago that a certain amount of paper would circulate without depreciation. Mr. Potter. Undoubtedly. The Chairman. Then why is not that money, to the extent that it will circulate? Mr. PoiTER. So it is, by virtue of its being used as the great wheel of circulation. You can make the wheel of circulation out of paper, but it must be adjusted with ref- erence to the precious metals. The Chairman. In short, you assume that it is a divine ordinance that money shall consist of gold and silver, because it always has been so. Before railroads were in- vented, the principal and the best method of transporting goods was by wat«r. Mr. Potter. Yes, sir. The Chairman. Now, might not a man at that time have been justified on your principle in saying it is the ordinance of God that the proper mode of transportiition and travel is by water and in no other way? Mr. Potter. I think not. The world got along without railroa<:h3, but not without gold and silver for money. It is true that Lycurgus issued iron money, but his object was to repress commerce, and he succeeded. The Chairman. It seems to me so. Mr. Potter. Mr. Chairman, there are propositions of natural law which are true, and yet all we know about them is that they are so. There are certain things in the universe which are mysterious, but which exist, and all we have to do is to accept them. We cannot explain them; we cannot explain God. Aristotle tried to find him out, but did not succeed. I suppose there is some power outside of and superior to the government which prescribes to us the use of the precious metals as money, or aa a standard by a reference to which we must adjust our circulation if it consists of paper. I do not know of any external and superior power but God, who is the author of the social universe. The precious metals "became universal money," said Turgot, "not because of any arbitrary agreement among men, or of the intervention of any law, but by the nature and force of things." The Chairman. I will not go into that discussion, because it would not help us at present. Mr. Potter. Now we have 650 millions of paper in circuliition. We find that the law of distribution of the precious metals has limited us to 200 millions, and our gov- ernment has been selling down gold to par and trying to resume specie payments, but the attempt wUl not succeed; it will break down. Isay it on the authority of law, it wiU break down, and perhaps amid disaster. Of course when you increase the metal- lic equivalent of the circulation, you have a depreciated currency. Mr. McCuUoch sold gold down on an undiminished paper circulation, and I went to Washington in the winter of 1867-'68 to tell him of this law, and had several interviews with him, trying to make some hea^lway with him, but he did not seem to understand it and I gave up the attempt. It is an axiom that, given the volume of inconvertible currency, the de- preciation is in inverse proportion to the agio. The Chairman. Inasmuch as the volume of paper has not been materially dimin- ished since then, how do you account for its gradual approximation to the value of gold? Mr. Potter. By the increased sluggishness of the circulation. The value of money depends on its quantity multiplied by the rapidity of the circulation — by its momentum, and we have a sluggish circulation. That is what is the matter. That is what ex- plains it. We have a sluggish circulation, and so we have prices and wages and gold down, notwithstanding our six or seven hundred millions of paper monetary units, but if the country were in a prosperous state, as it would be under good states- manship, then with such a volume of circulation as we have, prices would be up and gold would be np. The Chairman. Gold would rise then ? Mr. Potter. Yes; gold would rise; gold ought to rise; and we ought to have legis- ation to put it up. The Chairman. Then, according to your view, when prosperity comes we shall have the old premium on gold? Mr. Potter. Yes; that is what I want. Old things are good after all. The Chairman. Do you think it desirable that we should have a paper cuirency in circulation which is not convertible into gold ? Mr. Potter. I think we cannot help it. By convertibility I understand you to mean convertible at its face denomination into coin of present standard. The Chairman. Cant we retire it ? 366 DEPRKSSION IN LABOR AND BUSINESS. Mr. Potter. No, sir; there is uo ittstance iu human experience where such a cmranoy has heen retired. It cannot be done. TJje Chairman. Why not? In France, recently, they have been under suspension and they have been reducing the aniQUut of notes steadily until they have got back to resumption. Mr. Potter. I stated a while ago what they did in France, and Victor Bonnet has stated that it was a complete vindication of the economic law. Franco supplanted her metal with paper, and then supplanted her paper with metal, but at no time was she above her natural volume. The Chairman. But we did retire twenty-eight millions in 1874. Mr. Potter. Yes ; but we put silver in its place. The Chairman. But your proposition is that we can go one way, but not the other; that we can enlarge, but we cannot contract. Mr. Potter. Yes ; that is my proposition ; the descent to hell is easy, but we can- not get back. The Chairman. Thus far I have been able to follow you with great satisfaction, but I really cannot see why this govenunent cannot sell one or two millionB of its bondB for greenbacks and take the proceeds and tear them up. Mr. Potter, the moment you begin to sell bonds and retire paper you raise tiu» value of paper, because tjiat is the object of retiring paper, and you begin to produce such a state of things as we had in 1873. You raise the value of paper, amd coose- quently precipitate bankruptcies, and cause a run on the savings-banks; you create a panic, and you have to reissue more than you have taken in. You cannot get money in circulation without lowering the rate of interest, and you cannot take it out of circulation without ra4sing the rate of interest, and when you raise the rate of inter- est you stop the sale of bpnds. The Chairman. Is there not a fluctuation in the amount of paper ia circulationil Mr. Potter. Of course there is a fluctuation. There is a flux and reflux at tjw money center, according to natural law, and this phenomenon is very marked in a country of such territonal extent and vast agricultural product as ours. And if you take paper out of circulation during the flux, you interfere with natural law, ^event the reflux, and produce a social convulsion which can only be relieved by a reissue of more paper than you took in. The Chairman. Can't we make steady progress down towards a lower voluine of paper circulation? Mr. Potter. You cannot. The Chairman. Didn't Mr. McCuUoch do it ? Mr. Potter. No, sir ; he did it until the people put their heel on him, and very prop- erly, and not a moment too soon. The Chairman. But he went down at the rate of four millions a month, and he got to a point where specie payment might have been resumed, I suppose. Mr. Potter. No, sir ; the people stopped bim because he was throwing them into bankruptcy and destroying the public revenue. The Chairman. Yes ; but he did it until the people stopped him. Mr. Potter. Then how are you going to do it if the people prevent you t Th» people, said Mr. Webster, " are so well schooled in the great doctrine of fi'ee gosem- ment that they are competent to teach first principles even to their rulers, if unhap- pily such teaching should become necessary." The Chairman. Is it not possible for a government which owes a demand debt, which you admit a greenback is Mr. Potter. No, sir ; I do not admit that. The Chairman. Look at it. It says on its face that the United States will pay one dollar. Mr. Potter. Yes; but when? The greenback is what is known to the Constitution as a bill of credit, issjred in lieu of a tax, and the difference between what it was issued at and what it was finally redeemed at falls as a tax on the people who other- wise would have paid taxes in the first instance. The Chairman. But we have fixed the time. Mr. Potter. You cannot pay it at its face denomination in coin. "Man proposes, but God disposes." The Chairman. Can't you take the $150,000,000 now lying in the Treasury and exchange them for $150,000,000 of these greenback notes and put the notes in the ftref Mr. Potter. Yes, without affirming it, I suppose you can ; and then your gold will sooner or later go out of the country or into hoards or into the banks, and you will have to issue paper again. The Chairman. But is it not possible to do that, and so to reduce the amount of our paper circulation ? Mr. Potter. No, sir. The Chairman. Then you state this proposition : that when a nation reaches our present condition there is no help for it ; it must stay there forever and ever. DEPRESSION IN LABOR AND BUSINESS. 367 Mr. Potter. I say that we have got to do as all nations have doue, an oiu- fathers did, as they did in Austria, as they have had to do in all couutrios wherever they have had to deal with inconvertible paper issued to meet the unpi'oductive consuittptioii of war. There are only two ways. One way is to pay it at what it is worth by the nat- ural law of trade. If it is worth 30 cents on the dollar, let gold go up jjud resume specie payment on that boisis. In every instance where papt:r has been issupd for war expenses and paid, it has been paid iu that way. There has never been a contrary instance in the history of the world. The Cjiaikman. But tliere may be an instance. The resources and the honesty of this nation may be such that we shall be able to set the world an example of that kind. Mr. POTTjsR. It is not a question of honesty. It is a question of natural law, and must not be judged by moral law or civil law or political law. You cannot do it any more than you can lift youiself by pulliaig on the straps of your boots. Wlien you undertake to sell bonds what do you do ? You ofler a thing that is going to be cheap in e^ph^ge for a thing that is going to be dear. People are not going to trade "wHh you on those terms. This government p3.per money is altogether different from a bank circulation. In the first place, even if this were a bank circulation and this mpijey had been all issued and diffused and settled, and oui- economies adjusted to that sys- tem, this volume would be just as necessary to us now as 200,000,000 or less were b«£(>re the war. The Chairman. As a matter of fact, have we not reduced the volume of paper money ? Mr. Potter. I think not. The Chairman. Then you deny tlie Treasury returns. Mr. PoTTSK. I take silver into account. The Chairman. But I am speaking of the paper. Mr. Potter. Yes, the paper has been reduced ; but by the act of June 20, 1374, the national banks were released from the obligation of maintaining a legal-tender re- serve against their circulation, and this amount has been added to the circulation. The Chairman. And if we have done it ojice, can't we do it again ! Mr. Potter. But you are putting out silver. The Chairman. But we have got rid of so much paper. Mr. Potter. Yes, but you have thrown thousands of people o)it of employment and brought bankruptcy and ruin upon thousands of others, and you have not advanced one inch toward the restoration of the specie standard ; we have sunk to our chin in bankruptcy, and taking paper and silver together have not reduced the cii-oulation a dollar. The Chairman. That may be ; but don't you admit that ve have got rid ot the paper in that way ? . Mr. Potter. No, sir ; I deny it. I say that you have reduced paper to a certain amount, but, including trade-dollars and old silver coinage, a dollar of silver has come into circulation for every paper dollar you have taken out. The Chairman. Where is the silver? It is not in circulation. We have taken in a certain amount of fractional currency, and we have taken in many milligns of green- backs, forty or fifty milUans, and there is no silver put out in place of them. Mr. Potter. Yes, sir. The Chairman. Where is it f , ^^„„ . „ ,. , -, Mr Potter. A friend of mine had paid to him tlie other day $200 m traotiopal silver coin all old coinage that ha« come into the circulation from hoards, and the man who paid it to him said that he had been paid $1,000 pf the same sort in the same way. The Chairman. But there have been coined less that ten millions ot sUver, and ot that 70 or 80 per cent, is lying in the Treasmy, and the Secretary has issued a circular askingthepublictotake'it and they won't doit. Mr Potter. I do not say that you cannot reduce your paper ten or fifteen milUons, but I do say that if you succeed in doing that you wiU probably have to reissue t^veaty millions to repair the damage resulting therefrom. The Chairman. That is your assertion. ^ a ^.^. ■ ^ Mr Potter. It is a law of political economy. I say you cannot reduce the circula- tion to that extent, or to any other considerable extent. There has been complaint about contraction, but there has been no contraction; there has been an increase m the sluKKishness of the circulation which has the same effect as contraction, and if vou uulertake now to aggravate that by reducing the volume of circulation you pre- ^pitate a crisis upon uf at once, and imperil the existence of social order The Chairman If we reduced the volume one-half and made it circulate twice as fast, would not it perform the same function? What difference would it make to the *^M?^'poTrER It would not make any difference ; but how are you going to circulate ^^'The^HAiRMAN. The business of the country being on the basis of this sluggish oir- 368 DEPRESSION IN LABOR AND BUSINESS. cnlation, if you let the business alone and at the same time reduce the amount of the currency, it will of itself circulate more rapidly, will it not 1 Mr. Potter. All I can say is, try it. The Chairman. We are trying it. Mr. Potter. When banks withdrew their circulating notes what did they do? Did they sell the securities ? No; they curtailed their loans and discounts, they applied force to their debtors, and they precipitated wholesale prices, and coin came from abroad and the circulation flowed back by natural law. The banks forced their debt- ors ; but in this case the government attempts to apply force to its own creditors ; can anything be more absurd f The distinction is radical and complete. There is no analogy between a bank issue and government paper issued for commodities that are destroyed and gone forever. When the enrrenoy depends upon the movements of banks of issue and discount, the increase of deposits precedes the increase of circulation, and the stock market and wholesale prices of commodities first feel the influence of an inflation ; but when the currency depends upon the xiolitical action of a government is issuing bills of credit, the increase of circulation precedes the increase of deposits, and retail prices of commodities first feel the influence of an inflation. The Chairman. I find that in 1865 the total paper circulation was $983,318,686; in 1878 it was |688,597,275. The difference between the two is very nearly $300,000,000, and to that extent we have succeeded in reducing our paper money. Mr. POTTBR. A good part of that nine hundred and eighty-three millions was com- pound interest notes. The Chairman. But I find this remarkable thing, that, reducing this circulation to a gold value, it is almost entirely uniform from 1865 ; in other words, I find that the purchasing power of the currency at that time, when measured in gold, was $692,000,000, and now our paper circulation measured in gold would buy $694,000,000 worth, show- ing a difference of only $8,000,000 between the two periods. Mr. Potter. I do not believe all the statistics I see in the newspapers. The Chairman. This is taken from the official report of the Secretary of the Treasury. Mr. Potter. Well, I do not believe that. I know that when Mr. McCuUoch under- took to contract and the people stopped him, there were three hundred and fifty-six millions of legal tenders out, and they remained out until the panic of 1873, and there were about three hundred millions of bank-notes in circulation. The Chairman. That was in 1868, was it not? Mr. Potter. Yes. The Chairman. The iimount was three hundred and fifty-six millions and it re- mained without any change whatever until 1871, and the national bank-note circulation that time was also pretty nearly unaltered. There was almost a uniform amount during of paper out for that whole period. Mr. POTTiBR. Yes. The Chairman. And the purchasing power of it also was almost the same. Mr. Potter. I am almost afraid that I misunderstood you, Mr. Chairman. Did yon include bank-note circulation? The Chairman. Certainly ; bank-note and legal-tenders. Mr. Potter. What do you say it was ? The Chairman. In 1865 it was nine hundred and eighty-three millions, and now, at the time of the Secretary's report, it was six hundred and eighty-eight millions, in round numbers. The conclusion from these figures is that, measured by gold, no mat- ter what amount of paper you have out, the result is practically the same in a country like ours, doing a large commercial business. Mr. Potter. Yes, if the gold is in a state of freedom, and the government does not tamper with it. The Chairman. I find some fluctuations due to government interference with gold, but the Treasury has not sold any gold for about a year. Mr. Potter. No ; the Treasury Department sold gold and bought bonds, which it should not have done, and now it is buying gold and selling bonds, which it should not do. It must always be doing something ontside of its legitimate business of col- lecting and disbursing. There was an inflation in 1865, and there is now. In 1864 gold went up to 285, but when the Germans began to take our bonds gold began to drop. When you issue paper money to supplant gold, the first effect is a natural drop in the price of gold itself, and this is what constitutes depreciation. It does not keep up. Why ? Because it is demonetized. It falls of its own weight, naturally. So it was here. But when the Germans began to take our bonds, it went down still more on that account. Then the government began to sell, and finally hammered gold down nearly to par on six hundred and odd million dollars of paper, thus greatly aggra- vating the difficulty. That is the explanation of the depressed condition of the country. The Chairman. It is true that we are depressed, and that may be the cause. But there is deyire'sion in England, Ftance, and Germany. Is that the cause of their de- pression also ? DEPRESSION IN LABOR AND BUSINESS 369 Mr. Potter. It is, in England, to a great extent ; but the German depression was caused, as I have stated, by metallic Inflation, which is just about as bad as paper in- flation, except that metallic inflation remedies itself in time. The Chairman. But you say that France kept her currency at the normal amount all the time ? Mr. Potter. Yes. The Chairman. Yet they have depression in France. Mr. Potter. Sympathetically they have. The whole commercial world suffers from a violation of political economy in any one nation. The other day you had a winess here^ Mr. Horace White, of Chicago, and when you asked him about the cause of the depression he said it was owing to a reaction from an era of speculation ; one of ;i series of crises which have taken place in all countries except France. You asked him why, and he said it was because the people of France were not of a sanguine temperament ! They were sufficiently sanguine in John Law's day, I thought. I will tell you why France has not had crises. It is because she has the double metallic standard, and substantially a metallic circulation ; she has the best currency in the world. That is the grand secret. The Chairman. But you say that we cannot get back to a metallic circulation. Mr. Potter. I say we can only get back to it by advancing the price of gold on whatever paper we have ; the moment you advance the price of gold you increase the rapidity of circulation. A rapid circulation means much more than the rapid exchange of money; it means rapid consumption, production, and exchange; an increase in the division of labor, greater cohesion of the parts of the social body, and many other results, which may be summed up in one word, prosperity. The Chairman. But how would you put up gold ? Mr. Potter. Buy it. Let the government undo what they have done and buy gold, if necessary, in order to raise the price. The Chairman. Would you put out more paper now ? Mr. Potter. No ; unless to pay for gold purchased. The Chairman. You would merely put up gold. Mr. Potter. Yes, sir. The Chairman. WeU, let this government offer 150 in greenbacks for gold to- morrow Mr. Potter [interrupting]. That is what they ought to do. You must advance the price of gold or reduce the volume of paper. If you can reduce the paper, all right ; but can you ? The Chairmabt. I agree with you that reducing the paper will produce the effect,. but you insist that we must go back and pass through all this trouble over again. Mr. Potter. No, not through trouble, through happiness. The trouble is in attempt- ing to resume upon our present volume of paper. You cannot do it, and Mr. Sherman, does not wish to do it unless he is a fool, which I have not supposed was the fact.. Of course, when gold began to go down on an undiminished volume of paper, that in- creased the metallic equivalent of the circulation, and before the motion of the cir- culation became sluggish, metallic prices rose here very rapidly as the price of gold went down. Is that clear ? The Chairman. No ; I understand you to say that currency prices rose as gold weniF down. • Mr. Potter. No, sir; to illustrate, suppose a barrel of flour is worth $20 in cur- rency ; vrith gold at 200, it would be worth §10 in gold. Now, if gold goes down to> 150, that increases the gold price of that flour to more than $13, does it not? The Chairman. I think not ; I think it is worth just $10 in gold as before. Mr. Potter. No ; the currency price remained nearly the same. It did not go down as fast as the gold. The Chairman. That is a question of fact. Mr. Potter. It is a fact. And that is the explanation of our excessive imports. I wish to explain that when the paper price of gold goes down, the paper prices of commodities do not follow until increased sluggishness of the circulation drags them down ; and until paper prices are dragged down the result of the decline of the paper price of gold is an advance in the metalUo price of commodities. When you sell down the price of gold on an undiminished volume of paper you produce a metallic expansion, and this is precisely what Mr. McCulloch did when he was at the same time urging contraction. , . ^ , ,...,, The Chairman. But as gold has fallen m value our imports have diminished and our exports have increased. , „ „ , , . , , , Mr. Potter. That is because the circulation has finally become sluggish under the excessive imports of past years. ,, ^ .., . The Chairman. But gold has fallen m value, and you say that the imports would increase in that state of things, but in fact they have diminished. You say also that the exports would diminish, but they have increased. Mr Potter. I said that the imports increased up to a certain time, when the slug- 370 DEPEESSION IN LABOE AND BUSINESS. gishness of the circulation became so great that gold went down, and currency prices did not and could not go down pa/ri passu, and then of course the result was an advance in metallic prices. Is not that correct ? The Chairman. You only state a fact, that if the price falls in currency and does not fall in gold relatively, the ratio is changed. Mr. POTTEK. That is what I mean. Now the currency prices have gone down on a level with gold on an undiminished volume of paper ; but if the country were as pros- perous as before the war and the circulation rapid, that ou^htnot to be and would not be, if average paper prices depend on the quantity and activity of the paper circula- tion and not on the price of gold. The Chairman. But now that they are down to a gold basis, wouldn't it be a good thing to keep them down by retiring the paper ? Mr. Potter. If you can, without reference to the public and private indebtedness and to the maintenance of social order. As a scientific experiment it would be very interesting. The Chairman. We can, by retiring paper. Mr. Potter. And putting gold in the place of paper. Then you have got a metallic inflation. The Chairman. Well, if we could go on with that process to where we had nothing but metallic inflation until there was a surplus of gold, you say it would go out to other countries. Mr. Potter. Yes ; but not, probably, till the circulation began to grow active, and then you would have to reissue your paper in order to supply the vacuum created by the exit of gold. I do not wish to speak authoritatively on this point. "Political economy, to be scientific, must be constantly inductive." No such experiment has ■ever been made, and I cannot, therefore, confidently affirm exactly what would take place. I suppose one of two things would happen. Either the gold would remain in circulation or it would not remain in circulation. In the former case we should have a ^permanent depreciation, created at great cost, and involving thedestruction of society. Ill the latter case we should have an involuntary contraction of the volume of circula- tion, which would have to be met by a reissue of paper. In any case the excess of metal would eventually disappear, but how or under what circumstances we can tell better after the event. The Chairman. Why ? When you say we have already more paper than enough to maintain itself. Mr. Potter. Because our economies are adjusted on a circulation of 600,000,000 or more of monetary units. The Chairman. I think our economies are adjusted to gold values, because I can sell anything I have to sell in paper and go and buy gold with the paper at less than a half per cent, and brokerage. Mr. Potter. That is the cause of the depression — perhaps I should say it is the evi- dence of our sad condition ; it is a most lamentable and serious fact. The Chairman. Proceed with your statement. Mr. Potter. I was going to say that imports did come in, and they came in because there was an advance in metallic prices, and we sent out our bonds, and that was the secret of our great foreign indebtedness. Then the circulation became sluggish. Of course when intports came in we could not employ circulating capital here in compe- tition with foreign commodities at a profit, and so men began to build up these rail- roads. The circulating capital hid itself in railroads and houses, because raili'oads and houses could not be imported, otherwise it would have been consumed. Thus there was au excessive conversion of circulating into fixed capital. We could not produce commodities here in competition with Europe with our enormous metallic equivalent ■of paper in circulation, and circulating capital sought safety in building houses and railroads, in investment in corner-lots, aud so on ; and Mr. Boutwell aggravated that by gathering up the products of industry through excessive taxation and putting them into Wall street, thus reducing the rate of interest and making a market for railroad bonds. I pointed all that out in the Evening Post at the time when it was going on. I stated that the government was doing just what a bank of discount and deposit would do if it loaned its resources on the security of fixed capital ; that if a bank of deposit did that, it would be wound up as the nation is being wound up. That is the trouble with the savings-banks now. Their assets are in fixed capit^al (real estate) and their liabilities in circulating capital (money). The average of currency prices has come down on a substantially undiminished volume of paper. There is the difficulty. There is the phenomenon. If we bad only |200,000,000 of paper out, this condition of prices would be all right. Taxation has been maintained not quite so high in money value, although municipal taxes have been heavy. But as commodities and wages went down, of course taxation increased, and that is one of the causes of our trouble. This so-called balance of traile in our favor is disastrous, because it is so much more capital going out than is coming in, when there is already a deficiency of circulating capital, and the country is growing worse and worse all the time. The circulating DEPRESSION IN LABOR AND BUSINESS. 371 capital of the coiintry is being consumed ; the business failures show this. This is not mere theory. The fact that the prices of real estate have constantly declined, and are continually declining, isaproof ttiat the disparity between circulating and fixed capi- tal is increased. The circulating capital is growing less, and what is left of it is, by the power of interest and by the unequal distribution resulting from class legislation, being concentrated in the hands of a few. If the net product of industry is only 3 per cent., then the power of interest at 7 per cent. wiU in time gather all the circulat- ing capital and much of the fixed capital of the country into the hands of the moneyed class, and then you have got to issue more paper money to redistribute the circulat- ing capital again, and that is the secret of this cry for more paper money. Now, the remedy is to increase the rapidity of the circulation at once, or as soon as it can be done. We must not experiment longer with this currency question ; these experiments are interesting to the student of political economy, but they are death to the nation. Mr. McCuUoch had his experiment, Mr. Boutwell his, Mr. Richard- son his, and Mr. Sherman has his, and society, in the mean time, is like a dog that is being experimented upon and poisoned to death with the poisonous drugs of finan- cial quacks. They have refunded a portion of the public debt at 4 per cent., and they have brought about a condition of things in which it is hjirder for us to pay 4 per cent, than it was to pay six. They have injured both the tax -payer and the bondholder. The remedy for this condition of the social body is the same that has alwa5's been applied. There is not a solitary instance in history where a paper circula- tion issued by a government to excess for the unproductive consumption of war has ever been paid at its nominal face value in coin or withdrawn from circulation by the volition of society. It has always been disposed of at a certain rate in gold, or the issues have been increased from time to time until the whole fabric has been de- stroyed. That is the law of the matter and that is the only way out ; that is the in- variable experience of mankind, and " we cannot argue the seal off the bond." The Chaieman. I wish to say, Mr. Potter, that I have your book, which I shall ex- amiue very carefully and which I think contains a great deal of what you have stated here to-day. Your views are very instructive, but I think you have failed to exx)lain how you would increase the rapidity of circulation. Ml'. Potter. It will increase itself the moment you advance gold. The Chairman. But who shall put up gold ? Mr. Potter. The government ; the government put it down, let them put it up again and let it alone. As Mr. Mill says: "An inconvertible paper currency regulated by the price of bullion will conform in its variations to a metallic currency." He was speak- ing of " a fraudulent tampering with the price of biillion for the sake of acting on the currency." He did not believe that any government in open day could do such a thing. It was reserved for us to show that it could. Mr. H. C. Robinson, an auditor, by the permission of the chairman and of Mr. Pot- ter, put to the latter the following question : When the government shall have put up the price of gold, on your theory, how will the government pay off its greenback debt? Mr. Potter. At the rate of three and a half to one. Mr. Robinson. Would you pay it off right away, or by the government's advertis- ing to buy a certain amount of greenbacks at the market rate and pay for them in gold. Mr. PoiTER. No ; we have got to adjust it on this ratio first, and then we may re- sume specie payment, and we can retire greenbacks then, because the gold will come into circulation and stay there. We may supplant the paper with coin at the rate of 3J to 1 or in certificates of redemption payable in coin on demand. Mr. Robinson. But on the principle of exchange of equivalents, I don't see how you can fix the value of greenbacks in gold except by the fact that persons who have green- backs are willing to exchange them for gold at a certain rate. Mr. Potter. I would have government gradually buy gold, put it up, and when- ever gold got up to 350, or whatever the figure might be, I would make three and one- half of greenbacks legal tender for one of gold. I would have the government say, "We will convert at the Treasurv on that basis; we will buy at 345 and seU at 350." By the act of 1844, the Bank of England is obliged to buy all gold bullion offered at a ^ Mr Robinson. You said a while ago that if Mr. Sherman should take iu 11,000,000 in greenbacks and issue an equal amount of gold dollars the transaction would pro- duce such a change in the values of exchange as to send that |1,000,000 out of the country. How is an exehange of equivalents going to produce the effect to send tliat out of the country? . , „ . ^^ ^ j. j. x- ^.i • i Mr Potter. I did not say that with reference to the present state of the circula- tion ' I have said that our economies are adjusted to this volume of paper. We have «600' 000 000 of paper, and if you put gold out instead of paper, then you have n letallic inflaJtion, and the circulation is so sluggish that we will have to adjust it to that state of things. 372 DEPRESSION IN LABOR AND BUSINESS. Mr. Robinson. I do not understand it so. I am a merchant, and I import goods, and I find tliat Freucli and EngUsli goods can be placed in the New York market at a half per cent, difference. Now I cannot see how those prices are based on an excessive paper circulation, and if yon exchange your paper circulation for gold I cannot see ■where you have increased the price of commodities. Mr. Potter. We haven't done anything in that case. Mr. Robinson. Then it produces iio effect on the price of commodities ? Mr. Potter. Not at all ; so long as the circulation remains sluggish. Mr. Robinson. You said that from 1865 to 187d we had a period of apparent pros- perity ? Mr! Potter. If I said that I didn't mean it. Mr. Robinson. You said that there -was a rapid circulation. Mr. Potter. Yes; hut it was. declining all the time. Mr. Robinson. And the evidence of it, you said, was in the excess of importation from foreign countries, thus thro-ndng the balance of trade against us. Mr. Potter. Yes. Mr. Robinson. Now, was not that excessive importation paid for by the creation of a bonded debt on the part of the government to the extent of $2,500,000,000, and on the part of municipal corporations, counties, and States to the amount of $2,500,000,000, and was it not by the creation of that debt that we were enabled to purchase foreign commodities at excessive prices, and are we not now simply trying to pay off our mortgage ? Mr. Potter. Of course ; we exchanged bonds for foreign commodities at excessive prices. As to whether we are taking back bonds now at excessive prices I do not know. Mr. Robinson. To simplify the question, was not the creation of the bonded debt on the part of States and municipal corporations, and on the part of individuals by mortgage-i on their property, the secret of the apparent prosperity daring the period of high prices from 1835 to 187i ? I hold that that was the cause, and not the rapid- ity of circulation. Jlr. Potter. The things that you enumerate were the results of the excessive cu-cu- lation. Mr. Robinson. The primary cause was onr putting debt on our people in the shape of mortgages, and living without producing. Mr. Potter. The primary cause was the metallic inflation of money, which pre- vented our producing commodities in this country as cheaply as they could be pur- chased abroad, and that is why they were imported. We had a good market to sell in, but a poor one to buy in, and foreigners took bonds instead of commodities in ex- change. The equation of the average of international metallic prices is the law of international trade. In order to establish this equation, we had to export gold, thereby raising the price of gold .ind lowering metallic prices here ; or we had to export bonds, and continue excessive imports until we beat down metallic prices by sheer exhaustion of onr consuming power, thus creating a .sluggish circulation and establishing the in- evitable equation in that way. And it is this latter alternative which has been forced upon UB by those who have had charge of the administration of public finance in this country. Mr. Robinson. We could not do it. When we mortgaged our property and went to living on the proceeds we could import much cheaper than we could produce, and con- sequently we bought excessively abroad, and now we are trying to pay off our debts. The chairman annouticed that the committee would hold future sessions at Pittsburg and at Chicago, and, later, another session in New York, and expressed the hope that the heads and representative men of industrial organizations throughout the country would appear and state their views freely, as the committee were particnlarljy anxious to hear from that class of the community. The committee then adjourned sine die. SCRANTON, Pa., November 13, 1878. The committee met at 10 a. m. Present, Mr, Hewitt, the chairman, and Messrs. Thompson and Rice. The Chairman. It is proper to explain to the gentlemen present that this committee is organized under a resolution adoped at the last session of Congress, for the purposa of inquiring into the depressed condition of business in this country, and the conse- queiit inadequate reward for labor, and to ascertain whether any moans can be de- vised to improve the condition of business generally, and remove the difficulties which now stand in tlie way of the laboring classes. The committee have held several sessions in the city of Now York, and, at the request of Mr. Chisholm, they have decided to DEPRESSION IN LABOR AND BUSINESS. 373 liold a meeting in Scrantou. They were induced to come here because this region had been the center of great industrial disturbances. There ha,d been outbreaks here, and very grievous complaints of the sufferings enduredjijjijlie working^pfiflgte tli'^o^^gl^'ili^ the coal VegKn, and Jlr. 'Chishohn, in lus letter of im-itation to the committee,'8ug- gested tEatScran ton was a ce iitrail point. The committee do not desire to summon witnesses. TTieyTiav6comehere~fo' receive information, and they wish all gentlemen who are interested, both employers and employed, to come before them and state what their grievances are, and to suggest whatever remedies they can. I will therefore ask Mr. Chisholm what witnesses lie proposes to present before the committee. VIEWS OF MR. CORNELIUS SMITH. The first witness who appeared at the suggestion of Mr. Chisholm was Mr. Cor- nelius Smith, a lawyer of Scranton. He expressed the opinion that the industrial troubles throughout the country were due mainly to the great contraction of the cur- rency, and stated, incidentally, his belief that there were many miners in the anthra- cite-coal region who were not earning $100 a year. VIEWS OF MR. JAMES B. HICKEY. Mr. Jambs B. Hickey (one of the auditors in the committee-room, who stated that he had been formerly a practical miuer) said : I think Mr. Smith's statement is cor- rect. You understand that there are what are known as miners and miners' laborers. I would include in my statement all who work in and about the mines. There are miners working in what are known as gangways who earn more than that ; but tak- ing the men who work at general work and the men who work coiupany work, such as laying track, timbering, and the like, and averaging them one with another, their earnings do not average over twelve or fifteen dollars a mouth. The Chairman. Twelve dollars a month would be I? 144 a year, and $15 a month would be $180 a year. Mr. Hickey. Their earnings won't average that; for I have known a number of those men to work, for three or four months in succession, for $7 a month, and even for six or six and a half. The Chairman. Is the smaUness of the amount earned owing to lack of emjiloy- ment, or to the lowness of the rate of wages ? Mr. Hickey. Both. The Chairman. Wouldn't they earn more than that if they had steady employment ? Mr. Hickey. They work about one half the time at the present rate of wages. The Chairman. That is to say, working half time, they earn how many doUars a month? Mr. Hickey. Probably about ten dollars a month. The Chairman. Then the radical difficulty is the w^t of steady employment? Mr. Hickey. That is one of the difficulties. The Chairman. If the men were fully employed they would earn twice as much ? Mr. Hickey. Yes. The Chairman. Then want of full employment is the great difficulty. Now, will some gentleman tell us why there is not more employment here ? Were the workmen ever mlly employed in this region '? Mr. Hickey. O, yes. The Chairman. What is the cause of the present lack of employment? Mr. Hickey. Some of you wise men in Congress say it is because we produce too much coal. Other men, who are shivering around cold hearths, say it is because coal is too high. The Chairman. Is the price of coal any higher now than it was at its lowest period? Mr. Hickey. It is higher by comparison. A man who has coal to buy now finds it practically higher than he did when the price was double what it is now, for then he had money to pay for it ; I mean that it will take a greater percentage of the man's monthly earnings in New York or Philadelphia at present to buy a ton of coal than it would have taken in 1870, '71, and '72. The Chairman. What was the price of a day's labor m 1870, '71, and '72? Mr. Hickey. In 1870 the price of mining a diamond ear of coal was |il.31 in the dia- mond vein. At that same time, the price of mining a diamond oar, supposed to hold one ton and a half of clean coal, in the big vein, or G vein, was $1.52. The Chairman. How much did a man make a day at that time ? Mr. Hickey. He mined six of those cars for a full day's work in the big vein, at $1 60 per car ; making $9.60. He paid men who loaded the coal into the mine car one- third of that. He paid for mining-supplies nearly the same price as now, with the exception of powder, which has been reduced 50 cents per keg, the price now being 374 DEPEESSION IN LABOR AND BUSINESS. $2.50 instead of %3. At that time a miner working an average number of days felt that if he. did not make from $100 to $125 a month he had made a poor month's wages. The Chairman. What did his laborer make ? Mr. HiCKEY. I was loading coal at that time, and my wages during the summer and fall of 1870 would average about $70 to $75 a month. We usually worked twenty- two, twenty -four, and, in some instances, twenty-six days in a month, and the wages were about |3, .$3.10, $3.25, and as high as $3.50 a day. The Chairman What was the price of coal at that time ? Mr. HiCKEY. The price of coal was something about $5 or $5.50 a ton in New York. The Chairman. That is to say, in 1870 the price was about 60 per cent, higher than it is now ? Mr. HiOKEY. On the 30th of November, 1870, there was a reduction ordered in this Lackawanna and Wyoming coal-field. The price o± mining a diamond car in the di- amond vein was reduced from $1.31 to 86 cents. On that reduction being ordered the men suspended work, and the suspension continued until the latter part of May, 1871, when they resumed work at 93^ cents per diamond oar of diamond vein coal. The price of mining a car of big vein coal (the car being the same size but filled from a different vein) was $1.15|. That rate of wages continued until the 31st of December, 1874, when there was a reduction of 10 per cent, ordered. The Chairman. During the intervening period, before that reduction, how much did a miner make and how much a laborer ? Mr. HiCKEY. From May, 1871 — that is, from the first time of the men going to work in 1871 down to the panic in 1873 — the average wages of a laborer was about $50 per month. I speak now of a laborer who worked when there was work to be had ; for yon understand that in this mine-work it is very easy to lose time. A car thrown off the track will delay a man so that he will lose one-sixth or one-third or, in some in- stances, half of his day's work. If a fall of roof occurs in any part of the mine it may throw one half of the men employed in th at mine idle, by blocking the way and pre- venting the taking out of the coal. The Chairman. That is why I ask you how much a laborer earned per month. Mr. HiCKEY. Well, I say that from May, 1871, until the panic of 1873 the average wages of miners' laborers in this region was $50 per month. I think that is a fair a\erage. I know that I worked steiidily at that time, and that was about my average. The Chairman. What did a miner make per month during the same period? Mr. HiCKEY. He made from $70 to $75 a month, and in some instances more than that; but that, I think, was about a fair average. The Chairjian. What is a miner's average earning now? Mr. HiCKEY. It has got down now so that if a miner works steadily he will make about $40 a month. He really works about one-half time, and makes less than half wages. Bear in mind that anything above twenty days in a month is counted full time for a miner, for the reasons I have given. A laborer now who works twenty days in a month, at $1.50 a day, makes $30, and is regarded as making an extraordinary nionth's wages. The Chairman. Are the laborers paid by the day ? Mr. HiCKEY. They are paid by piece-work. Six cars in one vein and seven in another is considered a day's work. The Chairman. Then if the miners and laborers had full work, the distress which exists here would be to a very large extent remedied, because they would earn a great deal more money. In other words, the radical trouble at present is lack of employ- ment, i.s it not ? Mr. HiCKEY. That is one of the troubles ; but I contend that even with full work, these miners and laborers employed at full time, at the present rates of wages, would not earn enough to give them a living. The Chairman. In order that they should get more, wouldn't it be necessary that the price of coal should go up ? In other words, would not the present price of coal warrant the payment of higher wages? Mr. HiCKEY. I think so. The Chairman. Are the coal companies making any money ? Mr. HiCKEY. They evidently are, or they would not continue to mine. The CiiAiKMAi^. That does not follow: there are plenty of people who carry ou business at a loss. I may state incidentally that I have carried on a coal mine near Pottsville at a loss every year since 1873, hoping for better times. That may be the case with the companies here, and I want to find out what the fact is, whether they are really making any money at the present rates. Mr. HiCKEY. Well, I think they are, or they would not continue to mine. I know that they are all anxious to work, and I believe that one reason why our mines are idle here is that three great railroad corporations control all our coal works so that the small operators are really nothing more or less than time-keepers in their own works, having nothing to say as to the price to be paid for the coal in the mine or in the market. DEPRESSION IN LABOE AND BUSINESS. 375 Tlie Chairman. What is the price of coal ileterminocl by I Is it by demaud and supply ? Mr. HiCKEY. No ; it is determined by tbe combination. You have only to read the newspapers to see their announcements that from and after such a day coal will ad- vance to such a price ; that it will be held at that price for such a length of time, and will then be advanced to another figure. The Chaihman. I am familiar with the facts of the case. I am asking these ques- tions simply for the purpose of drawing out your answers. Now, you say that the companies fix the price of coal ? Mr. HiCKEY. Yes. The Chairman. Do they also fix the quantity ? Mr. HiCKEY. Yes. If you call any of the leading private coal operators interested in collieries here, they will tell you that they would work their collieries every day if they could get cars. The combination fixes both the quantity and the price of coal. That is my belief. Of course I am not in the coal ring, and am not prepared to give you any specific information. The Chairman. Who regulates the price of transportation from the mines to the market ? Mr. HiCKEY. The railroad companies. The Chairman. Then if the companies fix the price in the market and fix the price of transportation, has the individual coal operator in this region a chance to live ex- cept by their consent ? Mr. HiCKEY. None. They can squelch any private operator, and they have done it in nearly every instance. The Chairman. Suppose the mines were worked by individuals, and the railroad companies were confined to the business of transportation, do you suppose there would be any more coal sold than there is now ? Mr. HiCKBY. Yes; because there would be competition. For instance, Mr. Germou owns two mines ; now, suppose that instead of being interested in a colliery in Schuyl- kill County you had a like amount of capital invested in some manufactory which would consume a given quantity of coal, Mr. Germon and every other private operator would be anxious/to supply you with coal, and they would compete with each other, and so the price would be reduced, and there would be more coal sold ; but as it stands at present the private operators have nothing to say as to whether they shall sell you coal or not. They simply go to the combination and get their figures. The agents ot the combination buy all the coal from the private operators, unless it is sold within a given distance, ten miles in some instances. A manufacturer came to this town some time ago and asked an operator what he would sell him coal for. The operator named his price. The manufacturer said, ' ' That is much better than I can do with the coal company that I am buying coal from now, and I will take so many tons a month from you and pay you cash." Said the operator, " I do not believe it is any use for you to try to make a bargain with me, because we cannot get the coal shipped ; the company regulate that." "Well," said the manufacturer, "I will step around and see the ofei- cers of the railroad company and try to arrange it." "All right, if you can arrange it," said the operator. That manufacturer has not come back yet. He has not succeeded yet in making it all right with the railroad company. The Chairman. Is not all the coal that the country will consume supplied at pres- ent t Is there not actually a surplus on hand that, cannot find a market ? Mr. HiCKEY. All the coal is supplied that the country will consume at the combina- tion's rates ; but if the coal were sold or transported cheaper, there would he a larger consumption. The Chairman. In the history of the coal trade, has coal ever been sold cheaper than it has been sold this year ? Mr. HiCKEY. Not since war time. The Chairman. Was it ever sold cheaper previous to the war time? Mr. HiCKEY. I do not know how it was previous to war time. The Chairman. I think that coal has been sold this year as low as it has ever been sold at any time. Now, you say that the workmen are making no money, the opera- tors are all sutfering, the coal companies and the railroad companies are making no dividends ; therefore the business seems to have got down to a point where it is un- profitable to everybody concerned. Now can you suggest any remedy ? Mr. HiCKEY. I do not believe that your statements are correct, Mr. Chairman. I believe that the railroad companies are making money ; or if they are not, it is because it has been stolen from them. You have only to look around you here to see instances of that. A railroad ofBcial is elevated to the position of director or superintendent. He is absolutely poor. He works in that position for a salary of from five to ten thou- sand dollars a year. He lives in a style that would cost you or me the whole amount of his salary, and yet in ten years that man is a millionaire. Mr. Thompson. You say that the members of this combination have power to put up the iwice of coal as they please ? 376 DEPEESSION IN LABOR AND BUSINESS. Mr. HiCKEY. Certainly. Mr. Thompson. Is the object of the combination to make money ? Is that what they are mining and shipping coal for, or is it merely to give employment to laborers ? Mr. HiCKEY. Their first object is to make money for tliemselves; they are not phi- lanthropists. Mr. Thompson. Then if they can fix tlie price arbitrarily, why do they not fix it high enough to enable them to make twice as much money as they do make ? Mr. HiGKEY. You have heard of fixing the price so high as to destroy the demand. Mr. Thompson. But they don't do that ; because you say that coal is lower now than it was some years ago. Mr. HiCKEY. No ; not really lower. It is lower in dollars and cents, but higher in proportion to earnings. Mr. Thompson. But if this combination have the power to fix the price of coal without regard to supply and demand, why don't they fix it high enough to enable them to make more money, and at the same time to pay their laborers higher wages? Mr. HiCKEY. I am not in the combination, and I cannot answer that. Mr. Thompson. Is there anything in the way to prevent them from doing it? Mr. HiCKEY. There is this to prevent it : If the price of coal were raised to twice what it is now, those who are using coal would be compelled to substitute some other fuel for it. The Chairman. Or else to stop working. Mr. HiCKEY. Yes. Mr. Thompson. Well, wouldn't it be better for the company to sell half as much coal and make twice as much money ? Mr. HiCKEY. No ; I do not see that it would be better. Many of the mines here are run on leases and some of them under peculiar contracts. The agreement is in many cases like this: "We will give you so much for every ton of coal that we take out of this mine, but at all events we will give you so much, or we will bind ourselves to take out so much." Mr. Thompson. What would you suggest as a remedy for these troubles ? Mr. HiCKEY. I would suggest this : Let the State legislature first appoint a com- mittee of men competent and disposed to inquire into this whole matter diligently so as to find out the actual cost of building and equipping a railroad, keeping it in run- ning order, paying the men who run the trains and the officials an honest rate of wages for an honest day's work, and pay a fair dividend on the money invested ; and then say to the railroad company, "Gentlemen, you must carry this coal and all other freight without any unjust discrimination ; you must take it promptly, carry it care- fully, and deliver it promptly in a business-like way." A very good illustration of this was given during the strike of the miners in the Schuylkill region in 1871. At that time, in that region, there were a great many small operators. Their miners were on a strike. The operators said to their men, "We are willing to go to work and pay you the price you demand"; but the Reading Railroad Company stepped in and said, "No ; you shan't do that unless you pay us double the present freights." A committee of the coal operators and miners called the attention of the senate of Ponusylvauia to the grievance, and a committee was appointed to investigate the question. The miners and operators went before the committee and stated that the men were ready to go to work and the operators were ready to set them at work, but that Mr. Gowen anjl the Reading Railroad Company had raised the freights upon them so that it cost them more to ship a ton of coal to tide-water than the coal would bring when it got there. Mr. Gowen in behalf of the company stood up before the committee and said, " Gentlemen, we have so much money invested in the Reading Railroad Company ; it costs so much to equip it ; we have to keep so many telegraph operators, and about the same numbcsr of track-men, as if we were carrying 25,000 tons a week, which is the capacity of the road, but we are now shipping only five or ten thousand tons a week ; the road is there, the round-houses are all built, the interest on the money invested in the road and in the rolling-stock goes right on ; my salary and the salaries of all the other officials of the company go right on, and there- fore we must have as much money for shipping those five or ten thousand tons as if the road were working to its full capacity. The only difference in the expense is that the wages of the train-men are less." Mr. Gowen even claimed that the roUing-stook would wear out about as fast standing idle as if it were in use. The result was that the railroad company gobbled up the large majority of the mines in Schuylkill Coimty at their own price, and drove nearly all the small operators out of the business. Another instance of the same kind was in Pittston last summer, when the Lehigh Val- ley Railroad Company took a similar position. The Chairman. Then your remedy would be to have the legislature regulate the rates of freight on railroads ? Mr. HiCKBY. Yes ; the legislature, where the railroad lies wholly within one State, and the Congress of the United States where the railroad extends through different States. DEPRESSION IN LABOR AND BUSINESS. 377 The Chairman. Would you have one definite rate fixed, or would you have some regulating power which might change the rates from time to time ? Mr. HiCKEY. I would not have one rate fixed. You know they have a law now in Illinois, which is known as the granger's railioad law. A law somewhat like that would probably answer the purpose, although there is a good deal of complaint made that they have been overdoing the thing, and have driven the railroads into bank- ruptcy, and all that sort of thing. The matter is one that would have to be inquired into very diligently, so as to get at the real cost of constructing and maintaining the ^railroads. The Chairman. You would not confiscate the railroads, then ? Mr. HiCKEY. No, sir. The Chairman. No more than you would confiscate the coal-mines ? Mr. HiCKEY. No. The Chairman. Now, suppose it should be shown that the price of coal in the market would not warrant the companies in paying higher rates for mining, and that the railroads could not afford to carry the coal for lower rates of transportation, so that the practical result would be to stop the roads from running, what would you do about it then? No matter about the interest on the capital invested ; that can stop, and does stop very often. Mr. HiCKEY. The interest never stops. The Chairman. O, yes. There are several railroads now in the hands of receivers. I am the receiver on a road 400 miles in length. I suppose you know that about 75 per cent, of all the railroads in the United States have gone into the hands of receivers or become bankrupt from some cause or other, and are not now able to pay anybodj''. Now in that state of things, how could you have Congress or a State legislature inter- vene with advantage to anybody ? Mr. HiCKEY. I do not believe that those railroads have gone into bankruptcy for the cause you assign. I believe it has come about in a large majority of cases through the dishonesty of their oflioials. The Chairman. In a very large number of cases the raih-oads went into the hands of receivers because they could not earn enough to pay their running expenses. That was the case of the New York and Oswego Midland Railroad, of which I am the receiver. It was earning |2,000 a day less tiian expenses, and now it earns just about enough to keep it alive. There are other raih-oads in the United States in the same situation. Mr. HiCKBY. Well, take that very New York and Oswego Midland Road. I hap- pened to be acquainted with a couple of contractors who were engaged in the building of that road ; they had the building of twenty miles of it, I think, and I know that they and their friends reported that they made ^100,000 clear profit out of that job in one summer. Now, why could not the company have built thexoad and got the benefit of that profit instead of the contractors ? The Chairman. That is not the point. Here is a road completed, no matter now at what cost, and, after the work is done and the road is in running order, it does not earn enough to pay the expense of operating it. Mr. HiCKEY. This profit that I speak of that these contractors made was simply rob- bery of the company. The Chairman. But that does not affect the question of the power of the road after it is built to egffn its running expenses. Mr. HiCKEY. I know of a coal mine in this State which was formerly the property of an individual operator. He sold it for ^95,000, and the parties who bought it im- mediately afterward issued $500,000 worth of stock based upon it. Now, it is not to be wondered at that that coal mine should not pay dividends on stock to the amount of more than five times its real value. , j. , The Chairman. But that would not have anything to do with the cost o± keeping the mine in operation. Mr HiCKEY. But the stock would be unprofitable to the stockholders. The Chairman. Granted ; but couldn't the mine produce just as much net money's worth as it produced before? Mr. HiCKEY. But the stockholders would be swindled. The Chairman. That is not the question here. The question here is, whether coal can be cheapened to the purchaser so as to enlarge the demand for it, and so to increase the demand and the compensation for the labor employed here m its production. Now, whether you call the capital of a mine five hundred thousand or five millions, it does not affect that question. i ^ i, Mr HiCKEY. It affects it in this way: Yon three gentlemen go to work and buy a coal mine for |100,000, and immediately afterward you get a company incorporated and issue stock to the amount of half a million, and sell that stock at its face value to whoever has the money to pay for it. You, Mr. Chairman, are president of the comnanv at a large salary. Each of these gentlemen beside you is a director at a similar salary. The stockholder who buys that stock at its face value of course does 378 DEPRESSION IN LABOR AND BUSINESS. not make any money, but it is a good thing for you gentlemen. The stockholder, making no money, naturally desires to increase the price of coal and reduce the wages of the miners so that he may get dividends. He will say, "I paid for this stock at par, but it has not paid mo any dividend; so we must reduce wages to enable me to make some money." Take the case of the Midland Koad that you have mentioned ; the contractors made money out of the road, while the stockholders have juade none. The Chairman. The men who built the road no doubt made money out of it, but that does not affect this question of transportation when the road actually does not earn money enough to pay its current expenses. Mr. HiCKEY. well, the money paid those two contractors I told you about, had to be borrowed, and bonds were issued to raise it. The Chaikmajst. Certainly ; but not a dollar of interest was paid upon those bonds. Now, I want you to come to the practical question, whether any legislation could be recommended to provide a remedy for the difficulty in a case where the road does not earn enough to pay its onrrent expenses. Your idea seems to be that the State legis- lature, or Congress, should regulate the price to be charged for transportation. Mr. HiCKEY. Yes. Mr. Thompson. Do you mean that they should regulate the actual tariff, or simply to provide that they should be uniform rates ? Mr. HiCKEY. I want the rates made uniform, so much per ton per car per mile, so that there may be no favoritism. The Chaieman. Do you think there is favoritism now? Mr. HiCKBY. Yes. The Chairman. You think that some people have better terms for transportation than other people ? Mr. HiCKBY. Yes; else why these " special rates " ? The Chairman. And jon think that there are some operators in this region who get better rates for transportation than other operators do ? Mr. HiCKBY. The great majority of the operators here have no rates at all. They cannot ship. They have to sell their coal to the railroad companies. Mr. EiOB. Are there any operators who do not have to sell their coal to railroad companies ? Mr. HiOKEY. Those fellows .it Pittston ship their coal, as I understand. Mr. Rice. At special rates ? Mr. HiCKEY. At rates agreed upon between themselves and the company ; but I do not know of a coal operator in this Lackawanna field who is at liberty to ship his coal at all. The Chairman. But you know the operators are at liberty to ship their coal in the Schuylkill region ? Mr. HiCKBY. Yes ; at the railroad companies' rates. The Chairman. But the rate is the same to everybody, I suppose? Mr. HiOKEY. Some operators in that region charge that it is not. The Chairman. I have not heard of late years that there was that difficulty there. The difficulty is that the rate is so high. Mr. Thompson. Do you mean to say, Mr. Hickey, that the operators hero cannot ship their coal at all ? Mr. HiCKEY. I mean that, and nothing else. Mr. Thompson. That the railroad companies publicly and persistently refuse to carry coal for private operators ? Mr. Hickey. O, no; they don't do that. They say, "We have not got cars," or "we cannot ship it;" or something to that effect. Mr. Thompson. Has any person here attempted to compel them to ship ? Mr. HiCKEY. No. Mr. Thompson. Why don't they do so ? Mr. HiCKEY. Simply because they dare not. Mr. Thompson. Why not ? Mr. HiCKEY. Because the company would crush the life out of them. I have asked coal operators here to go down to the legislature, but they were afraid. Mr. Thompson. Why don't they go to the courts ? Mr. HiCKEY. Going to the courts is an expensive affair when the plaintiff in the case has all his means invested in one coal breaker worth, perhaps, |100,000 altogether, and against him is pitted a raih'oad compauywith capital running into the millions. Mr. Thompson. But it is not necessarily expensive to test the question whether a common carrier is not compelled to discharge his duties. Mr. HiCKEY. I have urged that very view on operators here, and they have invari- ably told me that it would be the death of them ; that the railroad company would crush them out. Mr. Thompson. But the very purpose of the law is to prevent the companies from discriminating against them or injuring them. Why, then, don't they attempt to have the law enforced ? DEPRESSION IN LABOR AND BUSINESS. 379 Mr. HiCKEY. O, they daren't do it. Mr. Thompson. But I do not understand tlie reason. Mr. HiCKEY. Well, I don't want to be impertinent to you, but the ordinary driving boy here understands it. Mr. Thompson. Here is a railroad company incorporated by the laws of Pennsyl- vania ; it has certain public duties to perform as a common carrier, and among them is to transport the coal or any other commodity that any patron chooses to offer for transportation. Now, do you say that such a railroad company, incorporated Tinder the laws of this State, dares to say to a patron who offers it coal for transportation : "No, sir ; we are not shipping for operators ; we will buy. your coal, but we won't ship coal for anybody?" o i , :i j , i The CHAlRMAiiT. The wituess's point is, that they do not refuse to ship, but that they ship only at a price which makes a loss to the operator. Mr. HiCKEY. I say that coal operators tell me that they cannot ship coal, and I do not see what difference it makes whether the refusal is direct or is put in the form of charging so high that it won't pay to ship. Mr. Thompson. The law is that the railroad company, as a common carrier, is com- pelled to ship for every person who offers it freight for transportation, and to do it at equal rates without discrimination. Now, if that is not done, is it not the fault of the men themselves, who permit the railroad companies to impose upon them ? The law is explicit enough and strong enough to compel the railroad companies to obey it if the men who are aggrieved would only invoke its aid. Mr. HiCKEY. The law is not strong enough. One of our railroad magnates in this State has been known to boast that he could drive a railroad locomotive through any law on our statute-book. Mr. Thompson. I know that the poorest man in this valley can compel the strongest railroad company in this State to do its duty if he will only invoke the aid of the law and insist upon its enforcement. Mr. HiCKEY. He cannot do anything of the kind. Are you an attorney ? Mr. Thompson. Yes, I am. And let me tell you now that in the oil region, where there has been far worse discrimination than in your coal region, the oil-line com- panies and the railroad companies are now in court on this very question. Mr. HiCKEY. But you would want a large fee to go into court with a case of that kind, and a man on the verge of bankruptcy here would not have the money to pay you, and so he would rather "endure the ills he knows than fly to others he knows not of." Mr. Thompson. But this discrimination has been continued for years, I understand ? Mr. HiCKEY. Yes; and I have urged upon operators to go into court, but they have said that they could not do it. Mr. Thompson. Then what is the use of passing more laws on the subject if those which are now on the statute-book cannot be enforced? Mr. HiCKEY. I want the State to enforce the law which I want passed. Mr. Thompson. But you say the State does not enforce the existing law? Mr. HiCKEY. It is the duty of the State to protect every one of its citizens. Mr. Thompson. Yes ; but the citizen who wants the protection of the law must help himself first. If I fall in the streets of Scranton and break my leg, owing to negligence on the part of the corporation, the law gives me remedy against the city, but it does not commence a suit for me. Just so in the case of a common carrier. The State makes the law giving protection to all, but it does not bring a suit for the aggrieved operator whose coal is refused by the railroad company. It makes the law and opens the doors of the courts, and if the operator does not go there for relief it is his own fault. Now, if the operator will not do this, and if the laws which already exist are permitted to be disregarded as you say, then I ask what is the use of passing more laws for the same purpose ? Mr. HiCKBY. You say that every man has a right to have his goods, whether coal or anything else, shipped by a railroad company at equal rates with anybody else? Mr. Thompson. That is the law. Mr. HiCKBY. Well, here is a combination of merchants known as the board of trade, and a merchant belonging to the board gets his goods transported cheaper than auotlier merchant who does not belong to the board of trade gets his. Mr. Thompson. Then why does not the merchant who is discriminated against bring a suit ? Mr. HiCKBY. He is not able. Mr. Thompson. Then how can you make hira able by passing more laws ? Mr. HiCKEY. I want to have the State enforce its own laws. Mr. Thompson. But the State does not enforce its own laws. That is not the sys- tem of government under which we live. Mr. Rice. Suppose the State appointed a board to look after the railroads ; to re- ceive and consider the complaints of merchants and shippers ; the board to be author- ized, in case a complaint proved to be well founded, to bring, iu the name of the State, 380 DEPRESSION IN LABOR AND BUSINESS. some sort of information or suit against the railroad oomijany to compel it to do right, that would accomplish the ohject you have in view, would it not 1 Mr. HiCKBY. I do not care whether it is done by a board or by the attorney-general. Mr. Rice. But the attorney-general will not take hold of the matter unless someone brings it to his attention. Mr. HiCKEY. "Well, I take it that it is the attorney-general, or somebody acting for him, that will have to do it. Mr. Rice. Of course it is the attorney-general who brings the suit after the facts are brought to his knowledge. He acts for the State. Mr. HiCKBY. Mr. Thompson says there is nothing to prevent me or anybody from enforcing the law against a railroad company ; now you [addressing Mr. Thompson] know well enough, as an attorney, that a railroad company having a suit of that kind brought against it would summon the best counsel in the State, or in the coun- try, regardless of expense, and not only would the company directly concerned as de- fendants do that, but all the other companies would aid them and share the expense. Mr. Thompson. I grant all that. Mr. HiCKBY. Then you would have arrayed against this one man the whole railroad capital of the United States, and the case would be carried from one court to anotber and delayed and dragged along, and in the mean time the i)laintiff would be driven into bankruptcy. Mr. Thompson. Do you know that if you go to Harrisburg to-day and make a complaint in writing, under oath, to the attorney-general, stating what you have stated here, and asking him to commence proceedings against the offending railroad com- pany, he will do it before night — that it is his sworn duty to do it. Mr. HiCKEY. I do not know what he would do, but I do know that in this very house, over a j'ear ago, I called the attention of Governor Hartranft to the very same state of affairs and asked him to suggest in his annual message some law to correct it, but instead of that he recommended a constabulary force. Mr. Thompson. Don't you know that you and I as citizens of Pennsylvania have just as much to do with that question as Governor Hartranft? I take some interest in this point not only as a member of this committee but because you have arraigned the laws of our State. Now, if the laws already on the statute-book are disregarded by the railroad companies, and not enforced by people who are injured, how do you propose to remedy the difficulty by enacting more laws of the same character ? Mr. HiCKEY. I have stated that I propose to make the State bear the expense instead of the citizen who is aggrieved; just as if you knock me down on the street the State prosecutes you at its own expense. The Chairman. I understand the complaint to be that the railroad companies trans- port their own coal without charging any rate of transportation, and when the oper- ator comes along and asks them to transport Ms coal, they ask a rate so high that it is prohibitory. Mr. HicicBY. Yes. The law ought to fix the rate of toll. If the rate is left discre- tionary with the company there is no power on earth that can stop this discrimination. Mr. Thompson. I beg your pardon. If the law does not fix the rate that a railroad company shall charge for passengers, can the company therefore charge you three cents a mile and me 30 cents a mile ? Mr. HicKEY. Yes ; if there is no rate fixed they can charge any rate they please. Mr. Thompson. Can a railroad company, which is a common-carrier, charge you one rate and me another when we both travel in the same car ? Mr. HiCKBY. It can fix its rate at five cents a mile or ten cents a mile, and then it can give you a rebate so as to reduce the charge for you to throe cents a mile. Mr. Thompson. You say that a railroad company can do that legally? Mr. HiCKBY. I say they can do it, and you cannot prevent it legally. There is no law to prevent them from doing it. Mr. Thompson. Well, I say to you that the attorney-general can forfeit the charter of any railroad comx^any which does that, and all the lawyers in Christendom cannot prevent it. Mr. HiCKEY. That is not the attorney-general's opinion in these very oases that have been referred to here. Mr. Thompson. I beg pardon. But that is the ground on which those cases are brought. Mr. HiCKEY. No, it is on the ground of conspiracy. Mr. Thompson. It is not a criminal proceeding ? Mr. HiCKBY. No, but it is a proceeding in equity. Now, as to going into court, the railroad companies have a plan of "black-listing" individuals, and it is utterly impos- sible for a man who is " black-listed" to get work again. Now, you may ask, " Why don't you remedy this, the courts are open?" But yon caimot doit. There is not an individual in the State who is 'able to fight one of these companies, and the State itself fails to protect the citizen in his rights. If I go out in the street and malign your character you can reach me and punish mo under the law of libel or slander, but DEPRESSION IN LABOB AND BUSINESS. 381 if I am a coal operator or miner, and yon are "working for me, and I discharge you for any reason, and Mr. Smith is another employer, and I say to him that you, John Thompson or .John Jones, were employed by me and discharged, and say to him not to give you any work, that you are a dangerous man, that ends it, and you do not get any more -work so far as my influence goes, and you have no redress. Mr. Thompson. Do you mean to say that the man discharged has no remedy in a case of that kind, whether the ground on which he is discharged is well founded or not? Mr. HlCKEY. He has not ; for the simple reason that the men who are treated in that way are too poor to bring the employers to justice. And the same reason applies to the coal-operator. He is as poor compared with a railroad company as your work- man is. Mr. Thompson'. Tell us, then, how you propose to change this state of affairs. Mr. HiCKEY. By making the State hear the expense of vindicating the individual's rights. The Chairman. Suppose you are in my employment, and you and I disagree, and I discharge you, and then turn around privately and say to Mr. Eice, "I have dis- charged this man," and Mr. Eice thereupon declines to employ you ; that, I agree, is a hardship to you, but how can it he prevented 1 Mr. HiCKBY. The proper way would he to send you to State prison. The Chairman. But how could you do it ? All I say in the case is that I have dis- charged you. I do not slander you ; I simply state to Mr. Eice the fact that I have discharged you. Then yon go to Mr. Eice and ask for work and he tells you that he has no work for you. Now, what is the remedy ? Mr. HiCKEY. Yes, he says he has no work, and immediately afterwards he hires a half dozen other men. The Chairman. When the employer says, " I have discharged this man ; don't give him work; he is a dangerous man," I grant that you have a remedy; but when he coniines himself to the simple statement that he has discharged you, I do not see what remedy there is. As a rule, in such cases, whatever the employer says is said privately. Mr. O'Halloean. That is true, Mr. Honvitt. Mr. Thompson. The case that the witness put was where the employer discharges Ms employ^ and writes a letter requesting others not to employ him, because he is a dangerous character. Now I say that in such a case, if the charge is not true, the laws of Pennsylvania will punish the man who makes it. Mr. Smith. Of course, hut the trouble in all these cases is in the evidence. I guess you have not seen many papers of that kind lately. Mr. HiCKEY. You need not go outside of this room to find a number of men who have been treated in that way. The Chairman. That I do not doubt, and I have no doubt now that, if a witness should come before this committee and make very damaging statements to the em- ployers, he would be remembered as a man who had not accommodated himself to views of the employers. I think it very likely that that would happen, and I think it is a groat hardship, but I don't see what the remedy is. Now, as to this question of discrimination by the raih-oads, the radical difficulty seems to be that these great railway companies unite two functions, common-carriers and miners of coal, and that by uniting these two functions they are enabled to crush out all competition, because when a private coal-operator comes to them and offers his coal for transportation they give him rates which are prohibitory. This being so, is not the radical error in the fact that the laws of Pennsylvania have allowed common-car- riers to be also competitors in private business, and so to crush out the competition of individuals ? Assuming now that that is the radical difficulty, let me ask how can the Congress of the United States intervene to prevent a State from permitting a common- carrier to engage in private business enterprises ? Mr. HiCKEY. So far as the interference of Congress is concerned, I was thinking only of those railroads that are chartered, not by one State, hut by two, three, or more States. I think the United States ought to have supervision over such roads. The Chairman. Let it be assumed that the United States can have a supei-vision to regulate rates ; still, how could they in any way prevent a railroad companyfrom min- ing coal in the State of Pennsylvania, or from going into the iron business and own- ing blast-furnaces all along their roads, and then breaking down individuals engaged in the same business, when those companies are creatures of the State of Pennsylvania alone, and coniine their operations ivithin the State ? Mr HiCKEY. In this State the remedy, of course, lies with the State legislature, and not with Congress, hut you will bear in mind that I included in my suggestion both the State and national governments. , . ^, j.^ -.^ ■ ^-^ The Chairman. Yes ; but now I point out this other difficulty— m the case of roads running into or through two States. You hold that in such cases the United States can interfere, though they cannot interfere with those railroads which are wholly within the limits of a single State. Upon your plan, therefore, there would be two 382 DEPRESSION IN LABOE AND BUSINESS. governments — one Federal and the other State — exercising jurisdiction over roads do- ing the same class of business, and you would have one ruining the other. Mr. HiCKBY. Well, the state of affairs you describe is this, that we have a creature of tlie State greater than its creator. The Ci-IAIKMAN. But you have courts in Pennsylvania, as Mr. Thompson has pointed out, to rectify these evils. It is not the business of the United States Government to interfere in the concerns of a State, to compel the State courts to do their duty. The jurisdiction of the United States is limited by the Constitution, and does not apply to the case of compelling States to do justice between citizens. Mr. HiciiEY. You find a state of affairs existing here which you admit is all wrong, and then you say. Citizens of Pennsylvania, it is true that I am a member of Con- gress ; I took an oath as a Congressman to do thus and so The Chairman. To obey the Constitution. Mr. HiOKEY. Yes, to obey the Constitution ; and the Constitution gives Congress the power to legislate for the general good, and to see that every citizen is protected in his rights; and yet you, as a member of Congress, say that you admit the existence of these evils, but Congress is powerless to remedy them. The Chairman. But you have not stated the Constitution correctly. It provides a tribunal to adjudicate upon disputes between citizens of different States, not between citizens of the same State. There is no such power as you claim given to the United States Government. On the contrary, it is reserved to the States separately. There- fore we are powerless to intervene. There is a bill pending providing for a govern- mental supervision over the land-grant railways, but so far Congress nave not gone beyond that. How far they will go in that direction I, of course, cannot tell. Mr. HiCKEY. Well, there is another grievance. When I spoke of the "diamond" car I spoke of the Delaware, Lackawanna, and Western mines, and those controlled by that company. Now, the Delaware and Hudson Canal Company, which is also a coal- mining company, have their coal mined by the ton, but it is a dtfiferent ton from what you understand to be a ton in Kew York. You buy coal there at the rate of 2,240 pounds to the ton, but the miner in Pennsylvania who is employed by the Delaware and Hudson Canal Company has to mine 2,800 pounds to the ton. For every 2,800 pounds of coal that he mines the company pays him for mining one ton. The Chairman. That is a mere matter of private contract ? Mr. HiCKEY. It is a mere matter of robbery. You may call it what you please, but the fact is that the miner has to add on these sixhundred pounds to every ton thathe mines. The Chairman. AVhat difference would it make if the company kept the ton at 2,240 pounds and reduced the pay per ton ? Mr. HiCKEY. Well, the pay of the companies is all alike. The Chairman. But why do people continue to work for a company which requires them to mine 2,800 pounds to the ton for the same pay that another company gives for mining 2,240 pounds ? In my jjart of the country people would not submit to it for an hour. Mr. HiCKEY. Tliisy would if they were starving. The Chairman. No ; I don't think they would. I don't think a proposition of that kind could be carried out there at all; two men working side by side, the work the same in its character and the price nominally the same, and one required to do one- (]uarter more work than the other for the same money. Mr. HiCKEY. Well, I don't know what you have found in your experience, but I do know that three years ago the Delaware and Hudson Canal Company reckoned 2,240 pounds to the ton, and that, without any notice or ceremony, the miners were informed that ou and after a given day they would have to turn out 2,800 pounds to the ton. The Chairman. Suppose that instead of that the notice had been in this form: " Hereafter, instead of paying a dollar a ton, this company will pay but 80 cents," wonld there be any ditference 1 Mr. HioKEY. The difference is this. The great public outside don't know anything about the facts. They pay so much a ton for coal, and they understand that a ton in the mines means the same as a ton in the market. Such a rule reduces the wages too for mining coal, and the general public don't know anything about it. The Chairman. I don't see what interest the general public have in that question. Mr. HiCKBY. They have a great interest. The newspapers announce that coal costs the company so much per ton to mine, but the fact is that it is a ton and a quarter that costs the price which they say a ton costs. The Chairman. But you have just testified hero that the companies regulate the ))rice of coal in the market, and do not send any more to market than they can sell at their own i)rico. Mr. HiCKEY. Well, but at the same time this misleads public opinion. Mr. Thompson. In other words, you think it is a deceptive or dishonest way of ■ stating facts to the public. Mr. HiCKEY. That is the idea. DEPRESSION IN LABOR AND BUSINESS. 383 Mr. Thompson. Hoav would you remedy tliat 1 Suppose I choose to tell you a story by innuendo, how can you regulate that by law ? Mr. HiCKEY. That is the question to be considered. The Chairman. In the old charcoal days a ton of blooms was always 2,464 pounds, whereas a ton of pig-iron was always 2,240 pounds. But was anybody deceived by that difference ? Not at all. When I bought a ton of the one I knew I was to get 2,464 pounds, and when I bought a ton of the other I knew that it was only 2,240 pounds. That has been one of the customs of the iron trade for a hundred years. Mr. HiCKEY. But this which we complain of is only a custom that this ijarticular company has' established a short time ago. I mention the matter because, in all prob- ability, you will be waited upon by Messrs. Sloan & Dickson and others who are large owners of coal mines, and they probably — Mr. Dickson in particular — will represent that they pay so much per ton for mining coal ; and unless you put the question directly to him the chances are that he will not say anything about this 2,800 pounds business. Mr. Thompson. Do other companies pay for 2,240 pounds as a ton ? Mr. HiCKEY. That is the only company around there that pays by the ton. The Chairman. The others pay by the car-load, do they not ? Mr. HiCKEY. Some of them. The Delaware and Hudson Canal Company, for the most part, pays by the ton ; the Delaware, Lackawanna and "Western Company pays, for the most part, by the car-load. Mr. Thompson. When you gave the figures $1.31 and $1.52 per car, how much did that car that you had in mind contain? Mr. HiCKEY. The company expects that every "diamond" car shall have a ton and a half of clean coal run through the breaker. Allow me to make another recommendation, which, if acted upon, wonld greatly benefit this locality, although the measure would be general. A large number of our people here wish to settle on the land, but they are unable to do so. I refer now to in- dustrious men who are able and willing to work, but who cannot get anything to do, aside from the question of pay altogether. Now, if this committee is anxious to bene- fit the people of this particular looalitv, and of the country generally, let them go to Washington and say to the Congress of the United States, "We must extend some aid to these poor people to enable them to get upon the land and go to work." The Chairman. That proposition has been laid before the committee by several wit- nesses in great detail, and more than that, your own Representative, Mr. Wright, has introduced a bill with the same object, and made a very elaborate and careful speech in advocacy of it. Mr. HiCKEY. I know that. I merely mention it to bring it to your attention. VIEWS OF MR. JAMES O'HALLORAN. Jambs O'Haxloran, a practical miner, of fourteen years' experience, appeared before the committee and was examined as follows : The Chairman. You are what is called a "miner," not a "helper," I understand ? Mr. CHallokan. I am a practical miner. _ x ■ ^ t xi. The Chairman. Can you state whether there are any grievances sustained by the mining population of these regions which, in your judgment, could be corrected by Federal legislation ? . , , , xt_ t-. j i i Mr. O'Hali-or AN. I can state the grievances, but I don't know whether l< ederai leg- islation can reach them or not. . x • j The Chairmax. Be good enough to state the grievances, and leave us to judge whether they can be reached by Federal legislation. Mr O'Hai-loran. From the close of the war, in 1865, until 1868 there was a contmual reduction of wages in this anthracite coal region, while the necessaries of life contin- ued at high prices ; and in 1869 the men formed a basis, providing that when coal was selling at a certain price in New York their labor for mining andloadmg the coal here shoulS be worth so much, and when it went below that price it was not profitable for either employer or employ^ to work at the business That basis also provided that if coal advanced above this price (which was $5 or |6 per ton at tide-water) the men should get an advance In their pay. The Delaware Lackawanna and Western, and the Delfware and Hudson Canal Company, and the Pennsylvania Railroad ^m^^^ never had a basis ; they mined by the car, and m 1870 they flooded the market with coal, and the consequence was that they had to reduce, or did reduce the wages of their miners 33 per cent. I was then at work under Pardee & Co before they con- solidated with the Lehigh Valley Railroatl Company We agreed to suspend on the 10th day of January, in order that the market should be cleared of the surplus stock, and that we might maintain the regular prices and be able to get a livmg-nothmg more The companies then combined against the miners, and said that they would 384 DEPRESSION IN LABOR AND BUSINESS. not allow tliein to go to work at all unless they accepted 10 per cent, reduction in that section of the country, and 33 per cent, here ; the individual operators who were ■willing to pay us the price that we left off at (and we did not ask any more than that to resume), \vere not able to give us work because of the tariff which the railroad comj)anies charged them for carrying the coal. For instance, Mr. Gowen, of the Reading road, charged $6 for carrying a ton of coal from PottsviUe to Philadelphia, about ninety-three miles. We took action against the companies, and brought them to Harrisburg before the judiciary committee of the senate, in 1871. I think Mr. William A. Wallace was the chairman of the committee. Mr. Thompson. Was that the committee of which Mr. Ruttan, of Beaver County, was a member ? Mr. O'Halloran. Yes, and the Hon. Harry White was also of the committee. It was a party from Danville who took the action, and the investigation lasted for about three weeks. The different companies were represented before the committee and the question was asked whether Mr. Gowen had a right to charge six dollars for carrying a ton of coal from PottsviUe to Philadelphia, 93 miles, when his charter stipulated that he was to carry merchandise at one and a half cents per ton per mile. The an- swer of the company was that although the charter provided that he was to transport merchandise at that rate, it did not provide that he was to furnish the cars, and he said : " If these parties will put their own cars on the road, we will transport their coal for a cent and a half per ton per mile ; but if they want their merchandise trans- ported in our cars, we will charge them a cent and a half per ton per mile for the use of the road and the moving power, aud then we will charge them whatever we please for the VTse of the car." Mr. Thompson. Was that view sustained ? Mr. O'Hallokan. That view was sustained. He defied the legislature of Pennsj-1- vania. Mr. Thompson. That was because he had a charter. Mr. O'Hallokan. He had a charter. He said he was simply a common carrier, sup- plying the road and the moving power, but not compelled to supply the cars. Mr. Thompson. Do you mean to say that that is the argnmentthat Mr. Gowen made before that committee ? Mr. O'Hallorakt. That is the argument on record. Mr. Thompson. That as a common carrier he was not obliged to supply anything but the road-bed and the moving power ? Mr. O'Hallokan. Yes ; that was the argument, aud it stands recorded so, I believe. Mr. Thompson. Do you mean the committee which met for a considerable time at the Continental Hotel ? Mr. O'Hallokan. No, sir. They met in the senate chamber at Harrisburg ; the committee on the judiciary. The Chairman. The result was that the right of the company to charge six dollars was sustained, I suppose 'I Mr. O'Halloraij. Yes. The Chairman. Now, if the charters of these companies allow them to impose rates which are prohibitory, what remedy have you to suggest ? Mr. O'Hallokan. I have none; I am giving you the facts. Better minds than mine can probably suggest the remedy. The Chairman. How docs that power residing in the corporations affect the inter- ests of the coal miners and the laborers ? Mr. O'Hallokan. It is running this country into an aristocracy which will be as destructive as it ever was in the old countries. It is producing a centralization of power. The Chairman. You mean, I suppose, an aristocracy of corporations instead of an aristocracy of individuals ? Mr. O'HALLORAi*^. Yes. The Chairman. And your idea is, that by some process or other this ought to be stopped ? Mr. O'Halloran. It ought to be stopped. If the State of Pennsylvania gives a company a right to run a railroad through my farm, and to take down my house if it stands in the way (paying me a fair compensation), I think that the State, when it does that, ought to guard the rights of the citizen against oppression by that company. The Chairman. Well, the State seems to have attempted that in this case, aud the rate established appears to have been no more than a fair one, because the Reading Company has been in a good deal of financial trouble, I believe. Mr. O'Halloran. Yes. A coal operator there was put on the stand to testify in our behalf, and was asked whether, if the Reading Company had carried his coal at the former rates, he could have afforded to pay his men the wages they asked and at the same time have made a fair, living profit on his capital invested ; and he testified on his oath that he could have done so, and that he was perfectly satisfied with what he could have made out of his capital under such circumstances. DEPRESSION IN LABOR AND BUSINESS. 385 The Chairman. If these oompauies were prohibited from going into the business of coal-mining and iron-making, and were limited to carrying on their own legitimate business as transportation companies or common carriers, would that afford a remedy ? Mr. O'Halloean. Most undoubtedly it would. Every man to his calling. Mr. Rice. Your legislature has revisory power, I suppose, over all railroad charters that have been granted by the State ? Mr. O'HLalloran. I don't kuow. Mr. Kick. If it has, then the proper course is to bring your influence to bear on the legislatiu-e to have the charters of those companies modified. Mr. Thompson. The only complication is, that in 1873 our State adopted a new con- stitution containing provisions having special reference to corporations, and the su- preme court has held that charters which existed prior to that time are not affected by it ; otherwise, of course, the corporations are the creatures of the State. Mr. O'Halloran. It has been a great curse in this State to allow any of the carry- ing companies to be at the same time mining companies. Some time ago the Phila- delphia and Reading Comijany were simply common carriers, but they saw competi- tion coming on, and feared that a certain amount of the business would go away from them, and the consequence was that Mr. Gowen came down with his friends and had a company incorporated at Harrisburg, under the name of the Laurel Hill Improve- ment Company. A protest was entered from the miners of the anthracite coal-fields, but notwithstanding that protest and the petitions that were sent in, this company were able to get their charter through as miners and shippers of coal and manufac- turers of iron. Mr. Gowen then went to London and borrowed |40,000,000, and bought np about 90,000 acres of coal-lands, some of which will not be mined for a hundidr years to come. Of course, the interest has to be paid upon that debt, and the peo- miners have got to pay it. These people are bearing now the burden of this debtoin RAN. Twenty-five dollars. The Chairman. What did your helper earn ? Mr. O'Halloran. About $iO. The Chairman. Was that a fair average? , , , , j.,. _. Mr O'Halloran No. In the colliery where I worked they make three-quarter time,' because it belongs to the Erie Railway Company and they consume their own coal. The other coUeries around here are making only haK time. The Chairman. In a colliery which is worked for the market a miner is now earn- ing about how much per month. ^ x*ic m^r Ifr. O'Halloran. About $20 ; and a helper about $15 or $16. The Chairman. How many days' work does the miner do for $20 ? Mr O'Halloran. Collieries differ. In some a mmer gets from $1.5U to |1.80, and in some $1.90 a day; and a helper from $1.30 to $1.60. ij ,, i, ^ The Chairman Then if yon had full work m this region you would be about as well off as the average of the laboring classes in the country at this tune ? Mr. O'Halloran. Yes. ■, -^ t, -u n ^ x ^ n The Chairman. What you want is that more coal should be sold so as to get fuller employment ? Mr. O'Halloran. Yes. , , . , xt_ i x j? i t. The Chairman. Can yon suggest any way by which the market for coal can be enlarged ? 388 DEPRESSION IN LABOR AND BUSINESS. Mr. O'Haixokan. There are people who have a great fleal more at stake in the country than I have who would like to tiud that out if they could. The Chaieman. But coal is sold at a very low price at present, so that it will not do to reduce the price. That is the plan generally adopted to enlarge the market for au article ; but it would not serve the purpose in this case. Haven't we aU got down to a point where we must wait for a general revival of business, and are not you working- men here victims of the general depression, your condition being aggravated by the fact that you have a larger mining population in this region than is required for the work that is to be done f Mr. O'Halloran. Yes ; it has been so ever since the war. In 1866, '67, and '68 we had one-fifth too much ; but now we have fully one-half too much. The Chairmax. Then wouldn't it be a great advantage to you if the surplus labor accumulated here could be distributed to other parts of the country ? Mr. O'Halloran. That is what we want to do. We are in favor of some legislation that would effect that, by giving people some help to go upon the land and put in a crop. After that they would be able to sustain themselves. The Chairman. In the history of this country we have had two or three periods of depression like this, and in the panics of 1857 and 1837 people helped themselves, and went to the West. They had fewer railroads and other facilities for travel then, and they went by wagon over long reaches of territory until they found desirable homes. Mr. O'Halloran. People were generally self-sustaining in those days, but after the war so many men turned up who wanted to live without work that it has made a much worse condition of things. The Chairman. But after the war we had a great revival of business industry and there was a general demand for labor ? Mr. O'Halloran. Yes ; but there were a great many men who didn't work and didn't want to work — "colonels" and "generals" and "captains," and they have sucked the life-blood out of the people. The Chairman. How did they get at the life-blood ? They didn't pick people's pockets, did they ? Mr. O'Halloran. Some of them went into speculations without a dollar. The Chairman. Well, anybody may go to speculating, or swapping jack-knives, or gambling, or anything of that sort, and undoubtedly it indicates a demoralized tone in the community, but I suppose they were not practical miners who went into spec- ulation. Your trouble here is that you have too many miner.M, and you have had too many miners iu this region ever since the close of the war. Now, after the war there was a long period of prosperity, during which many of them could have gone West and settled upon land if they wanted to do so. Mr. O'Halloran. They were not encouraged to go. Working-people generally are illiterate and do not know so much as the people who employ them. When an operator struck a shaft here he began selling town lots to his men, charging $75 for a corner lot and |50 for a side lot, and afterward as high as $100, and w*hen he got a sufficient number of peojile sruck down on this little piece of land about his coal-breaker, he turned around and said : " You must work for me now on my own termp, for you can't get away; you don't get enough to enable you to leave here." The Chairman. Then is it your idea that wherever men make a mistake (owing to their own ignorance, if you please) and get into a situation where they are unable to make a living, the government should intervene and remove them to some other place where they can make a living ? Mr. O'Halloran. No ; I am not of that opinion ; but I do say that the first duty of a government is to take care of its people, and if, from any cause not growing out of their own negligence or fault, a war for instance, a large body of the people are unable to find anything to do to make a living, I do think that a popular government like this, which has plenty of land of its own, and plenty of money, ought to do something to locate those people upon the land. The Chairman. Yes ; this government has plenty of land at the West, and every man who desires can go there and get laud. As you say, the government has got the money, too ; but how does it get money ? By taxing somebody, is it not ? Mr. O'Halloran. Yes. The Chairman. Whom would you have the government tax for this purpose ? Mr. O'Halloran. Tho.se that can afford to pay the tax. The Chairman. You gentlemen here who are earning $20 or $25 a month, have you lever realized the fact that you are tax-payers yourselves ? Mr. O'Halloran. Certainly ; and I am perfectly satisfied that the people who can pay should be taxed to help to remove these people, who have nothing to do, onto the land. It is better to help them in that way than to have them go into the poorhouse and have to support them there, because you must keep them in some way ; you can't let them die of hunger. The Chairman. Then, according to that view, is it not the business of the local gov- ernments, which have to maintain the poorhouse^, to send those people away, and not DEPEESSION IN LABOR AND BUSINESS. 389 the business of the general government t The purposes for which owe Federal govern- ment was instituted are set forth in the form of a Constitution. Now, the people who sustain the poorhouses are the local communities, and according to your view they are the communities that ought to send these poor people onto the land. The general government gives the land freely to all who will go and settle upon it. Mr. O'Halloran. Why does the government borrow money in time of need ? The Chairman. To do certain things which the Constitution authorizes it to do. Mr. O'Halloran. Exactly ; and now the people ask a similar loan. The Chairman. But the government never lends to individuals. It has no author- ity to do that. Mr. O'Halloran. But it has authority to borrow money from individuals. The Chairman. Yes ; it can borrow, but it cannot lend'. Mr. HiCKEY. Where do you find it in the Constitution of the United States that the government cannot lend money to an individual ? The Chairman. The Government of the United States is a creature with granted powers ; whatever it is granted power to do, that it can do, but it has no power that is not granted. Mr. HicKBY. There is nothing in the Constitution of the United States that you can torture into saying, either directly or by implication, that the government shall not lend money to an individual. The Chairman. O, no. But you proceed upon a wrong theory. The Constitution provides that the general government may do certain things, and the powers of the general government are simply the powers so granted in the Constitution. Mr. Chisholm. Has not the Congress of the United States the attribute of sovereign- The Chairman. Those are vague questions which I cannot answer. I will answer anything that I understand. Mr. Thompson. In construing the constitution of your State you go upon the prin- ciple that whatever power is not prohibited is granted ; but in construing the Consti- tution of the United States you must go upon the opposite principle, that what is not expressly granted is withheld. Mr. HiCKBY. We know that in many instances our government has lent its credit to railroad companies, and, if we are not much mistaken, it will lend its credit to the Texas Pacific Railroad Company at the next session of Congress, and if you as Con- gressmen have the right to lend the credit of the government to that railroad company, you surely have a right to lend it to such of the people as require assistance in order to settle upon land. Mr. Thompson. In other words, you think that if the government should make a loan to the Texas Pacific Railroad Company upon the theory of developing the re- sources of the country, it might properly, upon the same ground, make a loan to the people who wish to go upon the land and so to aid in developing the country in another way? Mr. HiCKEY. Yes. The Cblairman. I will accept that view ; but I contend that it is not within the power of Congress to make the loan in either case. Mr. HiCKEY. If the Government of the United States can grant a strip of land twenty miles in extent on each side of a railroad, why can't they do the same thing for individuals ? The Chairman. They have done exactly the same thing in that respect for indi- viduals, and every man now who chooses can go out and settle upon the land. The government did not give the railway companies any money; the government issued bonds for the purpose of aiding in the building a railroad, but that was done under its authority to provide for military defense and to establish post-roads. Upon the same principle the government at one time did actually construct the Mays- ville and Cumberland road. I do not defend that legislation; I think it was all wrong, and I never should vote for any such grant, but I call your attention to the fact that what was done in those cases was defended upon an entirely different ground from that upon which you put your proposition. Mr. Rice. Yes ; it was done under the authority to establish post-routes and to pro- vide for the defense of the country, and the constitutionality of it was very doubtful even then. Mr. HiCKRY. A little while ago the chairman remarked that poverty and distress such as we have been talking about always bred discontent and violence. The Chairman. Yes. Mr. HiCKEY. That is a bad state of affairs, and certainly very adverse to the general welfare. The Chairman. It is. Mr. HiCKEY. Now, it has been stated in Congress that there are two millions of men in this country idle The Chairman. Well, it is not true. There are not two millions, nor two hundred 390 DEPRESSION IN LABOR AND BUSIlfESS. thousand idle worMngmeu in this countrv- You live in the worst region, in that re- spect, in the country. There are more people idle here, in proportion to the popula- tion, than anywhere else. Mr. HicKBY. Why should not the government provide for the general weltare by gi vhig these people something to do ? The Chairman. The power to provide for the general welfare is limited by specific grants which are contained in the Constitution. The things there specified the gen- eral government may do, and it does them with the view of providing for the general welfare; hut other things not there specified cannot he done by the general govern- ment, even though they might he conducive to the general welfare. For example, it would probably be regarded as for the general welfare if the government should dis- tribute a quart of milk to every family in the country every morning; but no man supposes that the government would have any right to do that. The expression in the Constitution about providing for the general welfare is simply used to indicate the pur- pose for which the powers granted to the general government are to he exercised. Mr. HiCKEY. Take your own city of New York, for instance. You have there a great number of people living in tenement houses, and you have to pay an army of policemen to prevent them from robbing and killing you. The Chaieman. No ; it is exactly the other way, to prevent the rich from robbing the people in the tenement houses. Mr. HiCKEY. Well, those people, you say, are dangerous. The Chairman. No ; we do not say that the people in the tenement houses are danger- ous. I represent a district which embraces more tenement houses than any other dis- trict in New York, and I am not afraid to go into any part of it or into the houses in any part of it. The people who live in the tenement houses are mostly respectable mechanics who earn their living honestly and are not dangerous. Mr. HiOKEY. The way respectability is measured now is by the number of comer lots that a man owns. The Chairman. That is a view which I am sure, on reflection, you will not think a worthy one for you to present. Mr. HiCKEY. But it is the view of the great mass of the American people to-day. The Chairman. Then if the great mass of the American people take that view it is the view that must be accepted and acted upon by their representatives under our system of government. Mr. HiCKEY. It is the view of the Congress of the United States itself. Mi. Thompson. How do you ascertain that ? Mr. HiCKEY. Why, you say that such a man is " a very respectable man"; that he controls, this, that, and the other thing. Mr. Thompson. Who says that ? Mr. HiCKBY. Go into any court and you will hear the same view expressed. Mr. Thompson. I have practiced law twenty-four years, and I assert here that I would a great deal rather go before a jury with a poor man for my client than with a rich client, and that in nine oases out of ten the poor man would stand a better chance. That is one good quality of human nature, that if you can show that a man is injured and downtrodden, the fact appeals at once to our better nature. You can raise a pre- iudice against a rich man because he is rich, but you cannot excite prejudice against a poor man on account of his poverty. On the contrary, his poverty is his shield. Mr. HiCKBY. Not here. The Chairman. Are not the majority of the people here poor, and hasn't every man the right of suffrage ? Mr. HiCKBY. Not here. The Chairman. Haven't the people here sent General Wright to Congress? Mr. HiCKBY. Yes. The Chairman. Does he represent the rich or the poor, the minority or the majority in the community ? Mr. HiCKEY. The majority. The Chairman. Then why do you say that poor men here have not the right of suffrage ? Mr. HiCKEY. I do not consider that they have the right of suffrage when a foreman stands at his window and says, as a poor man goes up to cast his ballot, " There is another of those God-damned short tickets going in ; we will have to see to that fel- low"; and when, a day or two previous to the election, another man is told that the best thing he can do is to keep his mouth closed. In such oases men have the right of suffrage only in name, not in fact. Mr. Thompson. Don't you know that Mr. Gowen and Mr. Tom Scott are opposed to each pther in politics ? Mr. HiCKBY. No, sir. Mr. Thompson. They are avowedly and notoriously so. Mr. HiCKEY. They are in name, but onlj[ in name ; not in fact. Let a question of the rights of labor, or the rights of humanity, come up, and Gowen and Scott wiU be DEPRESSION IN LABOR AND BUSINESS. 391 found on the same side. Politics do not amount to muohi in tliese matters. Here, for instance, is Mr. Hewitt, the chairman of this committee ; he has occupied a very prominent place in the Democratic party, yet we find him, an avowed Democrat, vot- iug side by side with men Mke Garfield and Sherman, of Ohio, on these financial ques- tions. The Chairman. Have you ever voted on the same side with some of the rich men here? Mr. HiCKBY. The majority of our rich men vote one way, and their principal busi- ness, politically, is to coerce a sufficient number of poor men to vote with them. The Chairjian. Have they coerced them I Haven't the majority of the people elected Mr. Wright as their Representative 1 Mr. HiCKEY. Yes. The Ch urmax. Then the rich men have not succeeded in coercing the poor voters. Mr. Thompson. You say that rich men vote together, and you cite Mr. Hewitt as an example, but look at Mr. Hewitt and Mr. Peter Cooper, both prominent men, closely connected, yet their politics are as wide apart as the poles. The Chairman. I have voted on the same side with Mr. Garfield and against Mr. Cooper. I have voted on all questions according to my conscience, and I tell you that Representatives who do not vote conscientiously are unworthy Representatives. Mr. HiCKEY. I only mentioned your name to illustrate the fact that there is no sub- stantial difference, politically, between Mr. Scott and Mr. Gowen. Mr. Thompson. But your illustration does not serve its purpose ; on the contrary, it proves that there is a great difference. Whenever you get all men to go to the same church, or the same school, or to want to marry the same woman, then your theory wiU be sound. Mr. HiCKEY. James Fisk once illustrated my point very well. He was summoned be- fore an investigating committee of the New Yorlj legislature, and, in reply to some ques- tion about his politics, he put it in this way : That in strong Democratic districts the Erie Company was Democratic, in strong Republican districts Republican, and in doubtful districts both Democratic and Republican. Our object, said he, was to pro- cure Erie men, and it did not make any difference what name you gave them. The Chairman. Do you think that because General Garfield is a Republican he can- not hold a sound view on any subject ? Mr. HiCKEY. I only spoke of your voting with him on the financial question. The Chairman. And why not ? I happened to agree with him on that question. Here the committee took a brief recess. After recess Mr. James O'Halloran was recalled, and the following proceedings took place : The Chairman. How many shifts are worked now here in the mines ? Mr. O'Haxloran. Only one in ordinary work. In such things as driving headings and air-ways they work two shifts. The Chairman. Do you mean to say that the men work days and not nights ? Mr. O'Halloran. Not nights. The Chairman. How many hours constitute a shift now ? Mr. O'Halloran. It varies according to the vein of coal. In some places coal is harder and in some places easier to be got. In some places men can get enough coal for so many cars in four or five hours' work, and in other places it requires eight or nine hours' work. ... The Chairman. How many hours are considered to be a day's work in the mines here? „ . „• • x Mr. O'Halloran. That is according to the size of cars and collieries. In some places five hours are considered a day's work, and in some places six. The Chairman. Then the cars are not all of uniform size ? Mr. O'Halloran. They are not all of uniform size. The CHAiRMAjf. They speak here of the diamond car ; is that a special designation of acar ? ,. , ... . ^ ,, t^ . Mr. O'Halloran. Yes ; it is called so from the diamond vein belonging to the Dela- ware, Lackawanna and Western Company. , , . ,, The Chairman. In flush times how many shifts were worked m the mines— more than are worked now ? . , , , .^.j. j_ . .-, Mr. O'Halloran. No, sir ; they always worked only one shift, except in the case of headings and air-ways— opening up the workings. ^^ ^ ^, ^ , The Chairman. When times were flush was the length of the day's work as much Mr. O'Halloran. The men are working now only half or three-quarter time. During -that time they worked ten hours a day. The Chairman. And with one set of hands ? Mr. O'Halloran. With one set of hands. It was all day-work. Outside, around fhe T^i-ooVoTH the men worked ten hours a dav. 392 DEPRESSION -IN LABOE AND BUSINESS. The Chairman. I have heard it said that one reason why there is an excessive pop- ulation in this region is that the men were receiving pretty high pay in good times ; that they worked few hours ; and that in that way a larger force of men was kept on hand than if they had worked long turns. Mr. O'Halloran. No. The capacity of a shaft or slope is according to its breaker. If the machinery is capable of hoisting so many cars of coal, they do that much work, and they keep enough hands on to manage the amount of coal which the machinery is able to hoist. The Chairman. But was it not the poUoy of the companies here always to try to have a large excess of mining population on hand, so as to have a stock of labor to draw upon ? Mr. O'Halloean. That has been the case generally, and in no place so much as where the companies had stores in connection with their works. The Chairman. What was the means by which the companies contrived to keep this excess of population on hand and contented? Did the companies distribute the work among them so that the men did not work full time ? Mr. O'Halloran. Exactly. That is the way they did it. The Chairman. And in the flush times, how many days' work in the week did men usually do ? Mr. O'Hailoran. In this v.alley here the men generally worked full time — about 24 days in the month. In the Schuylkill section they generally worked 20 days in the month. The Chairman. Then there was always a little surplus of labor, so that when one man dropped off another took his place f Mr. O'Halloran. Yes, always. The Chairman. Was there any understanding by which a man must not work more than 20 days in the month ? Was it limited in any way, or was that matter voluntary on the part of the men ? Mr. O'Halloran. It was not voluntary on the part of the men. The men worked every day that they could get work. The Chairman. The companies did the limitation ? Mr. O'Hai.lcran. Yes, sir. Mr. Rice. You, for instance, would work 25 days in the month if the companies gave you work ? Mr. O'Halloran. Exactly. The Chairman. Has it been a matter of long standing that there has been an. excessive population ready to do this mining work ? Mr. O'Halloran. After the war, in 1865, there seemed to be a little slacking off in the work. In 1869 the work got better again. Then the strike commenced in 1871, and from 1871 to 1873 employment was pretty regular. It would average 22 days a month. It has been falling off ever since. The Chairman. You spoke of stores in connection with the companies' works. I& that the general practice throughout this region ? Mr. O'Halloran. Not here. The Delaware, Lackawanna and Western, and the Delaware and Hudson, and the Pennsylvania Coal Companies have never kept stores in connection with their works. They pay cash. It is only in the other regions that such stores are kept. The Chairman. Then it is mostly private operators that keep these stores ? Mr. O'Halloran. The Hazleton Coal Company used to keep stores in connectioit with their works. The Wilkesbarre Coal and Iron Company did not keep a store directly in their name ; but there has been a store kept in connection with their works.. The Chairman. Do these stores charge higher prices than ordinary stores? Mr. O'Halloran. I know, of my own knowledge, stores where they charged from 20 to 30 per cent, higher than the goods could be got in other places for cash. The Chairman. Was the mining population in the collieries which had these stores in connection with their works in worse condition than the mining population in other- places ? Mr. O'Halloran. They were not in any worse condition ; but it seemed arbitrary to compel them to deal in those stores. If a man drove up to the door of a miner with a wagon and dumped a barrel of flour there, and if the boss of the mine foimditoutj he would give the miner a broad hint that if he did any more of that trading he might go and get work elsewhere. The Chairman. Have there been many efforts here to provide rational recreation or instruction for the mining and working-classes, in the way of reading-rooms, club^ rooms, singing-rooms, &c. ? Mr. O'Halloran. Nothingexceptwhatthepeople do for themselves. In connection with rihurch matters they have literary societies and singing societies and Sunday schools, &c. But this is individual enterprise and generally sectional. For instance^ the Father Matthew Society, which is Roman Catholic, provides entertainments on, Sunday evenings in this city, and other societies belonging to other churches do th& DEPRESSION IN LABOR AND BUSINESS. 393 same. They have literary and musical entertainments. But there is nothing done by the public. The Chairman. I meant to ask whether the owners of collieries united in doing anything of that sort? Mr. O'Halloran. They do not. The Chairman. How far has intemperance been an evil in this region? Is the mining population here given much to excessive drinking, and has that been one of the great evils in the place? Mr. O'Halloran. No, sir; there isn't a quieter city in America than the city of Scranton with its 35,000 population. A few policemen keep the peace here, and the statistics of arrests brought before the mayor show this to be as quiet a city as there is in the Union. The Chairman. Are there many temperance societies here? Mr. O'Halloran. There are a good many. The Roman Catholics have their tem- perance societies, and the other churches have their temperance societies. The Chairman. You think that, in the prospei'ous times when men could generally save money, they did not waste their money in extravagant living ? Mr. O'Halloran. Not the majority of them. There was a good deal of money saved by them and put into real estate here. The Chairman. Was there much of it that went into savings banks ? Mr. O'Halloran. Considerable. The Chairman. Have there been any savings-bank failures in this region ? Mr. O'Halloran. None that I know of. The Chairman. Then there have been no losses on the part of the working people through savings banks? Mr. O'Halloran. No, sir. The Second National Bank here failed a short time ago, but that was not a savings bank. The Chairman. Then you set down the suffering that prevails here to the great ex- haustion of the mining population in consequence of their not having employment ? Mr. O'Halloran. Exactly. The Chairman. That explains it ? Mr. O'Halloran. That explains it. The Chairman. And you think it is not due to improvidence on the part of the workingmen? Mr. O'Halloran. It is not. The records of the county court will show that the miners have acquired a good deal of property here ; but the value of their property has gone down like everything else, and if they' wanted to sell it to-morrow they could not get 11,000 for what may have cost them $2,000. The Chairman. Everybody every where is in about the same predicament. There is a general shrinkage of value everywhere. Mr. Thompson. I have no doubt that my own immediate neighborhood is the worst off in that respect in the United States. There the production of oil has made busi- ness very active, and a few weeks ago oil which was selling at |4 a barrel is now sell- ing at 91 cents. The Chairman. I want Mr. Thompson to say how far the contraction of the currency can have had anything to do with the fall in the value of oil. Mr. Thompson. There are two things, and only two, that have led to it. The first is that the production of oil is over 40,000 barrels a day, while the consumption, prob- ably, is 35,000. In the next place, by a combination between the Standard Oil Com- pany and the railroad companies, there is a discrimination against the oil producer. If a producer will sell to the Standard Oil Company, then the railroad company' will ship the oil, but not otherwise. The Chairman. Then the result is that monopoly on the one hand and over-produc- tion on the other, when thev happen to concur, produce an absolute destruction of values, and that is the condition in that region. That seems to be the state of the case here as well as in the oil region. Mr. Thompson. Precisely. . ,. . j.. The Chairman, (to Mr. O'Halloran). You made a suggestion about relieving the excessive population here by putting them on the lands. In what way could the selec- tion be made of the proper persons to go out upon the lands and to cultivate farms, because yon know that everybody cannot be a farmer ? How would you manage the selection ? Suppose there was a chance to take away a thousand families from this region, how would you get at it ? , , , , i, ^ . x Mr. O'Halloran. I should think that if Congress would make a law that assistance was to be furnished to families to go out on the public lands, suitable citizens could be found who would recommend men for their temperate habits and industry and economy. They could very easily select the proper persons to go out on the lands. The Chairman. But if you take away all who are temperate and industrious out of the community, what would be the natural condition of those who would be left be- hind, as a rule ? 394 DEPRESSION IN LABOR AND BUSINESS. Mr. 0'Halt.oran. I do not expect that you would be able to take away all who ■were temperate aud industrious. But if you did, and if you left the rest hehuid, I think it would be a good incentive for them to try to follow in the footsteps ot those who had been selected; and those who are left behind might become temperate and industrious. . .^, „ ... . The Chairman. Your idea would be^to leave the selection to committees ot citizens ? Mr. O'Hallokan. Yes. " The Chairman. And that would be your only mode of selecting the persons who were to go on the lands ? Mr. O'HOLLORAN. Yes. VIEWS OF MR. -J. R. THOMAS AND OTHERS. ScRANTON, Pa., November 1.3, 1878. Mr. J. R. Thomas came before the committee. The Chairman. What is your business ? Mr. Thomas. I am a blacksmith by trade. The Chairman. Do you work at your trade ? Mr. Thomas. Not now ; at present I am a clerk in the Lackawanna County court. The Chairman. How long is it since you have worked at your trade ? Mr. Thomas. I worked a little at it last June, but it has been nearly two years since I worked at it regularly. The Chairman. Did you have a shop of your owu ? Mr. Thomas. No, sir. The Chairman. What wages did you get ? Mr. Thomas. The last time I was getting $1.85 a day. The Chairman. At steady work i Mr. Thomas. No, sir. The Chairman. ^Vhat wages did you get the last time that you had steady work ? Mr. Thomas. |2.10 a day ; that was in 1876. The Chairman. So that, in your case, as in other cases, the fall of wages aud the lack of employment have gone together— that is, the less the employment the less the wages ? Mr. Thomas. Yes, sir; I used to get, about five years ago, |110 to $130 a mouth, or from $4 to $4.50 a day ; but then I worked piece-work a good deal. The Chairman. Do you happen to recollect the price of flour at that time ? Mr. Thomas. I do. The Chairman. What was it a barrel. Mr. Thomas. Eight dollars. I paid $8, $3.20, $8.15, and $8.30, averaging about $8 a barrel. The Chairman. And what is the present price of flour here ? Mr. Thomas. I paid $6.25 for the last I got. The Chairman. That is to say, that flour is about one-fourth less in price than it was then ? Mr. Thomas. Yes. The Chairman. How is it about meat? Mt. Thomas. Meat is a little less now than it was then, but very little. The Chairman^. How as to pork? Mr. Thomas. I do not know ; I never bought any. The Chairman. Is not salt pork consumed in this region? Mr. Thomas. I cannot answer as to that. A Bystander. Pork is now about four cents a pound here ; and I paid ten cents a ^ound for it two years ago. The Chairman. Do you think that wages have fallen here more than the fall in the price of commodities consumed by the workingmen ? Mr. Thomas. Yes, sir. Five years ago it cost a workiugman, on the average, $28 a month for his table — that is, for a man, his wife, and two children — and his wages a ■; that time averaged about $75 a month. At the present time the wages do not average more than |15 a month in this country (taking Lackawanna and Luzerne together), and the table expenses of a family are, at least, $12 a month, without living one-half as well as they lived then. I have been traveling about in different places, and I know, from families that I have visited and from men with whom I have asso- ciated, that they are in the same condition precisely with myself and others in that respect. Reference has been made here to companies' stores. That is one of the evils that workingmen, as a rule, have to complain about. There are stores called. com- panies' stores, from the fact that they are owned and controlled, as a rule, by mining bosses. I do not wish to name any workmen in particular who complain of this, be- DEPRESSION IN LABOR AND BUSINESS. 395 cause if any one was named it is almost oevtain that lie would be discharged. For instance, here is a company's store in this city (a large one), and I know that when I was employed by the company a few years ago I had to pay $40 in that store for goods that would only cost me |28 in the town. But the evil did not come so much eveu from that as it did from other causes. For instance, if I worked for that company, and if I was suspended during the winter mouths, I could not get credit in the com- pany's store, whereas, if I had got my pay from the company in cash and dealt with a store in town, and if I was suspended for one, or two, or three, or six mouths, the merchant would give me credit until I got work again. It was that failure to get credit in the companies' stores that caused so much suffering here years ago ; but within the last two years two of those companies' stores have changed materially in that respect, and now they do give credit to a man who is temporarily out of employment. The Chairman. I understood that, as a rule, companies operating here did not have stores. Mr. Thomas. There- is one company that has stores, and there are individual opera- tors who have stores, and there are some stores in which the bosses are largely interested. The Chair man. I will call your attention to a little fact in the development of business in this country. Mr. O'Halloran testified that these large companies do not have any connection with stores. Now, gentlernen who recollect anything of the condition of the iron and coal trade in this country 25 years ago will recollect that the rule was that every operator had a store in connection with his work, and that the men em- ployed under him always dealt in those stores. I suppose it was a rare thing for money to b3 paid out as wages either in coal or iron operations. Tiie wages were all paid by traffic arrangements. Therefore, whatever progress has been made has been in the right direction, and the influence of the great companies all the time has been towards more cash and less truck. I want that fact brought out and remembered, because we onght to give the good points in regard to the companies as well as the bad points. I ean recollect the transition from the track system to the cash .system, and I know that there is more of a cash system done to-day in the United States than at any previous period. Mr. Thomas. The largest company that has a store here is the Lackawanna Coal and Iron Company. Two years ago this winter a man employed by an iron operator up here worked for two months, and at the end of the two months he received a notice that unless he traded in the store he must find work elsewhere. At the end of the third month he was again informed that he must trade in that store or else he would be discharged. I saw myself the notice that was sent to him. It was on a printed form an I the blanks were filled up. At the end of the fourth month he was discharged from the works. The Chairman. Iu New Jersey there is a law which prohibits that sort of thing. I do not know whether there is such a law here. Mr. Thomas. There is not. The Chairman. These matters are, of course, all matters within the jurisdiction of the State and not within the jurisdiction of the general government. Are there any suggestions that you can make which you think would tend to relieve the condition of things here to which you object ? What has occurred to your mind as remedies for the evils you have been describing ? Mr. Thomas. I believe that the best remedy is more wages to the workingman. That is the best remedy that can be given. The question is, now, how to get the most wages. I believe that so long as money can be invested where it pays no taxes, and where it receives equal protection with the money that is invested in property that does pay taxes, the wages of the workingmen will be poor. In 1865 there were in the neighborhood of 22,000 men working in this county (Lackawanna and Luzerne Counties were then one) for daily wages. They were receiving an average of $900 a year, or in the aggregate $19,800,000 a year. Now the wages have been reduced, and without taking into consideration the increase of working population within the last twelve years, but calling it still 22,000 men, they now receive an average of $180 a year (taking those who are at work and those who are idle). This makes the aggregate wages paid in this county between three and four million dollars a year, being a dif- ference of fifteen millions of dollars less than was paid here thirteen years ago. The Chairman. And you would like to have that fifteen millions of dollars come in here again ? Mr. Thomas. Yes, sir. The Chairman. How do you propose to get it ? Mr. Thomas. If this fifteen millions of dollars were coming into this valley now as it was then, the money would pass through many hands and back again into the hands of business men. It would stimulate manufacturing interests in the East. It would increase the traffic upon the raifroads, and bring more money into the hands of rail- road companies and business men so that these men could be kept employed. It is not over-production that is the difficulty, but it is under-consumption. 396 DEPEESSION IN LABOR AND BUSINESS. Tlie Chairman. How are you going to increase tlie consumption? Will putting the price of labor up increase consumption ? Mr. Thomas. The rise in wages will naturally increase the price of coal. The Chairman. But will putting the price of coal up increase the consumption of coal? Mr. Thomas. The increase of wages should precede the increase of coal. The Chairman. Suppose I were the owner of a coal mine and believed in your doc- trine and thereupon doubled the wages to my men. I go on and pay this double wages, and I find that in New York I will not get one cent more for my coal than the other man does who does not pay as much wages as I do. The consequence is that I become a bankrupt. Mr. Thomas. This cannot be done by one individual. The Chairman. How is it to be done ? Mr. Thomas. By passing such laws as will prevent men from investing their money in the property that pays no taxes. The Chairman. Then you propose to limit the discretion of men as to the investment of their money ? Mr. Thomas. No, sir; I propose that Congress shall pass such a law as will protect men who invest their money in property that pays taxes. The Chairman. Suppose I have got $100,000, and I go to the government and say, "I will take a 4-per-cent. bond exempt from taxation." If the government should say that it could not give me a bond exempt from taxation, but that it would give me a 6-per-cent. bond on which there would be a taxation of 2 per cent., what would be the difference to the taxpayer in that ? Mr. Thomas. That may come in the future. I am speaking of the past. The Chairman. Congress has done the very thing you recommend. Instead of the government selling 6 per cent, bonds. Congress has prescribed that the government shall issue 4 per cent, bonds free of taxes. Is not that the same as if the government issued 6 per cent, bonds subject to a taxation of 2 per cent.? Mr. Thomas. Tliat piece of legislation has been already accomplished, but the evil has been in the past. I noticed this morning, when Mr. Smith was here, that he was speaking of the reduction of the currency. You claim that the currency has not been contracted from 1865 to the present time. Well, admit that, for the sake of argument, but why is it that wages at that time averaged $900 a year, and that at present, with the same amount of currency in circulation (as you claim), wages are $180 a year? The Chairman. If you want me to answer the question whether wages are deter- mined by the amount of cuiTeney in circulation, I answer no. Wages are not de- termined by the amount of currency. Wajjes are determined by the condition of business, by the demand for labor, and the supply of labor. Mr. Thomas. The consuming power of the people is what makes the demand for labor. The Chairman. Certainly. If you increase consumption you will increase the de- mand for labor ; but please give us the receipt for increasing the power of consump- tion. Mr. Thomas. You cannot increase the consuming power of the people without in- creasing their purchasing power. The Chairman. But how is it to be done ? Mr. Thomas. Here is one thing which we object to — prison contract labor. That is one of the great evils that we are laboring under. Mr. Rice. How much of the iron or coal business is done by prison contract labor ? Mr. Thomas. There is no iron or coal business done by prison contract labor, but there are some articles manufactured by prison contract labor. Mr. Rice. What are they ? Mr. Thomas. Hobbles for horses are manufactured by prison contract labor. They are manufactured in Maine and sent through the country. In this State they man- ufacture oil barrels, carpets, brooms, and various other articles. You may find ia this city men who are barrel makers by trade working in the mines. Mr. Thompson, who lives near Pittsburgh, must know that there are nearly 300 barrel makers in Pittsburgh who used to make from $2.50 to |3 a day, who have been thrown out of em- employment because barrels are now made under the prison contract system. The Chairman. What would you do with the prisoners ? Mr. Thomas. If I were making .$2.50 a day at my trade, I would be willing to pay half a dollar a day out of my pocket for the support of the prisouers, in preference to having them interfere with my labor. The Chairman. What would you do with the prisoners? Mr. Thomas. I would educate them. If you work a man in prison, and tell him that he is to do a certain amount of work, he cannot improve his mind, and when he comes out of the prison he is a worse criminal than when he went into it. The Chairman. Would yon make prisons like flrst-olass schools, in which prisoners should be educated, so that when they come out they may be professional men? DEPRESSION IN LABOR AND BUSINESS. 397 Mr. Thomas. If a prisoner works let liim work for the State, and let the product of his labor be sold by the State to whoever wishes to buy it, and let the surplus go to support his family. The Chairman. In that case the State would set up a workshop to compete with private individuals. Is not that the very thing you are objecting to? Mr. Thojias. It is only the very thing- that ^Ye are having now. The Chairman. But you object to it? aayma oners,' men who were earuiug $2.50 a day at that business, "it will be far better to give the prisoners wages and let them support themselves. The Chairman. But who will pay them the wages ? Mr. Thomas. Their earnings would pay their wages. The Chairman. Then their product would have to be sold in competition with the product of other men. Mr. Thojias. Yes, but that would be an honest competition. The Chairman. The State must always sell the product of such prisoners. Now, Mr. Thomas. That he can do now. Mr. Thompson. Aud you propose to leave the matter there ? Mr. Thomas. Xo ; we propose to make eight hours a legal day's labor. Mr. Thompson. And if a man had a wheat field right in harvest and had no hands except his sous, aud if it were going to rain to-night, would you make it an offense for him or his hands to work till sundown ? Mr. Thomas. No, sir ; what we want is this : If I go into a company's workshop here (eight hours being a day's labor) and say that I will work eight hours a day for a fuU day's wages, I do not want that company to have the power of discharging me because I will not work ten hours a day. The Chairman. Aud do you want the government to punish the company for that ? Mr. Thomas. No, sir ; but the government can pass a law that eight hours shall constitute a day's labor. The Chairman. Yes; just as the legislature can pass a law making 2,240 pounds a ton of iron, but that will not prevent a man selling 2,500 pounds to the ton if ha chooses. Mr. Thomas. No ; but after you make a law that eight hours shall be a legal day's labor, I would make it a penal offense to discharge a man for not working ten hours. The Chairman. Have you ever seen a man compelled to work more hours than he could well do ? Mr. Thomas. Yes, I have ; and I was discharged myself because I would not work more than eight hours. The Chairjian. I have never known a time in which men were not anxious to work more hours than I could give them work. If you can give men overtime they all want to make it. Mr. Thomas. I have been discharged, and I have known other men to be discharged because we refused to work ten hours when eight hours was a legal day's work. The Chairman. Then you would limit the right of people to hire aud discharge workmen ? Mr. Thomas. No, sir ; I would not. If I hire out to a man to work for so much an hour, working eight hours for a day's work, and if he comes to me and says that he will discharge me if I wiU not work ten hours at the same price, I want that to be a penal offense. The Chairman. That is a matter personally in the discretion of employer and em- ploy6. Mr. Thomas. Let him make a new contract with me. The Chairman. That is what he proposes. Mr. Thomas. Let him give me the same rate of wages per hour. The Chairman. That is regulating wages by law. Mr. Thomas. And wages ought to be regulated by law. The Chairman. Then you believe that the law ought to regulate the rate of wagt's ? Mr. Thomas. Yes ; and no man should receive less than a certain sum per The Chairman. What minimum would you fix? Mr. Thomas. Just whatever Congress thinks best. The Chairman. What do you think ought to be the minimiiiii ? Mr. Thomas. I think that a man ought not to work for less than $2 a day. The Chairman. If a tramp comes along starving and says that he is willing to work for |I a day, would you let him work ? Mr. Thomas. No, sir. ' The Chairman. Then you would let him starve ? Mr. Thomas. If you give meirgood wages there will be plenty of work for all. 402 DEPRESSION IN LABOR AND liUSINESS. The CHAiiiMAN. Yes, there -will be plenty of men to work. If you offer high wages vim will find all the men you want at high wages. Jlr. Thomas. From 1868 to 1873 there was work enough for all who wanted to work. The Chairman. Yes; because there were then thousands of miles of railroad being built. There ^v(■re built in the course of five > cars what it ought to have taken ten or fifteen years to build; aud the result was a collapse, which left us in our present condition. Mr. Thompson-. .Just as, in this region, you built more coal-breakers than yon needed. The increased facilities for production were increased faster than the power of con- .sumptiou among the peo])lc. The Chairman. And that occiu-red at a time when wages were very high. J[r. Thomas. Yes. The Chairman'. Tluit is just what you said could not happen. You said that if we would only pay high wages we would not have any collapse or any distress. Jlr. Thom.vs. We want souuithing to regulate that matter. The Chairman. I know we do, and that something is what we are iu search of. Mr. Thojias. Vou say tliat a law cannot be passed to regulate it. Now I will ask you a question or two. The laws that were iiassed 100 .>ears ago were ap])lieable to the jicople living at that time, and to the sun-ounding circumstances, were they not ? The Chairman. Probably. Mr. Tiio.MAs. And are the sauu- la^-.s applicable to-dny as were applicable 100 years ago i? The Ch.virmax. Probably not, Mr. Thomas. Those laws have got to be changed. If Ave find our productive facili- ties increasing faster than the power of consumption of the people, is it not an act of moral justice on the part of the law-making power to prevent that, and thus to save trouble and misery ? The Chairm.vn. You say that when the productive facilities are increasing faster than the power of cf land aiul come here with a million of dollars in my pocket to work a coal mine, would you not think me a benefactor to the region ? Mr. Thomas. Certainly. The Ch.^irman. And would I not be adding to the productive facilities of the region so greatly that all the productions of tlic region could not find a market i Mr. Thomas. Certainly. The Chair.m.vn. But you .say you would limit production. Mr. Thomas. I would pass a laiw that the production should not exceed the con- suming power. The Chairman. That is, you would let me invest my money and put down my coal .shaft, but you would not let me sell the coal out of it ? Mr. Thomas. If a community is producing all that the market requires, and if the people are happy and contented, is it fair and right that other men should he allowed to come in and increase the product and thus injure the whole region ? The Chairman. Here you are in the valley of Rasselas, the happy valley, with every- thing you want, Avith high wages; and there comes along a gentleman with plenty of money and says, "I will buy a piece of property and will .sink a coal shaft"; would he he a benefactor to the country or the opposite i Mr. Thomas. He would be a benefactor. T'he Chairman. But if, by the time he got his coal shaft down it turned out thattbe otber men iu the business could not get a market fortheir coal, what are you going to do with that m.in ? Mr. Ti[OM.\s. I would regulate by law the amount of coal to be produced. Tbe Chairman. Is it not considered a grievance in this valley that the great corpo- lations have got together and attem))ic(l to regulate the market by restricting the pro- duction of coal ? Mr. Tho.mas. Yes. The Chair.via.n. And is that any nmre objectionable than the law- which yon would 'H'oposc to lia\'e nuide ? DEPRPJSSION IN LABOR AND BUSINESS. 4Uo Ml-. Thomas. The great ooi-poratious here control the market for the purpose of keeping wages down ; and, by keeping wages down, they keep the times hard. The Ohairm.xn. The reguLating of the market is the limit of the supply 1 Mr. Thomas. Yes. The Chairmax. Do they not snpply every ton of coal that the market will take off their hands ? Mr. Thomas. Yes. Bnt suppose that the workingmeu in this valley were receiving in wages a million dollars a year more than they are now receiving, would not that help to give employment to others, and would yon not have a belter price for your iron * \Vhen overproduction exists, I would have it restricted. The CiiAiHMAX. Is not that the present state of tilings ? Mr. Thomas. Y'es ; but you must not attempt to regulate it in that way. The Chaikman. In other words, a man should not put down the w ages of his work- men even though he cannot sell his coal for enough to pay the wages? Then he ^^ ould have to stop work. Mr. Thomas. Certainly. The Chairman. If he has to stop woik, wluil happens to tlie men w ho would be other- wise employed f ,, Mr. Thomas. They are idle. The Chairman. And they star\ e ? Mr. Thomas. Yes. The Chaiujian. Is he a benefactor or not when he employs workmen even at re- duced wiiges ? Mr. Thomas. If a man is receiving reasonable wages, and if the community is con- suming jiist what is l>eing produced, why not strive to manage to keep things so ? Mr. Thompson. Would not the remedy be more natural and eflicient if we could increase the consumption by law ? Mr. Thomas. Yon cannot increase the consumption by law. Mr. Thompson. Bnt you think we can limit the production by law ? Mr. Thomas. Y'es. The Chairman. And limiting the production will throw people ont of employment. Mr. Thomas. Are not people thrown out of employment now 1 The Chairman. Yes ; that is your trouble here. Mr. Thomas. Why not let the wages be as they \vere three years ago « The Chairman. Because nobody would buy coal at the price that it would limn cost. Mr. Thomas. It would put more money in circulation. The Chairman. I have to buy coal to make iron. If I ha^e to pay 50 cents a ton more than the present market rate of coal I will have to shut up my works. Mr. Thomas. But if you can get |3 a ton profit on your iron ? The Chairman. I wiU be delighted if you will give me a receipt for it. You will be my benefactor. How am I to get it ? Mr. Thomas. If men had more wages tliey would create greater demand for produc- tions. . . The Chairman. But you seem to think that you can create a market by raising the wages first, whereas the ability to pay wages comes from the fact that manufacturers are getting higher prices for their products. I cannot pay wages out of nothing. I must first sell my pig-iron for enough to enable me to pay higher wages, and then I would be deUghted to do so. You say, "Pay the higher wages first and you will get more for your pig-iron." I tried it, bnt found that I had to go with the rest of the maufacturers. Mr. Thomas. Certainly. Mr. Thompson. There would be, under your theory, no limit to the amoimt ot Avngea which the law should fix. Mr. Thomas. That matter would control itself. Mr. Thompson. But you propose to control it b> law. The Chairman. Whenever there was a slack demand foi- coal, ,\oii say that you would put up wages. Mr. Thomas. No, sir : I do not. , ,, .^ Mr. Thompson. If you can fix the rate of wages by law at lj.2 per day, why not fix it at 120 a day? ' . „ ,• ai.T , i 4.- Mr. Thomas. Because there is no need of it. If a man can live on p a day, what ts the need of his having |20 a day « The Chairman. If $20 and $2 were synonymous tenns, there would be no advantage Mr Thompson. If the State of Pennsylvaiiia has the power to say that a day's labor shall 'be worth |2 a day, why has it not the power to say that it shall be worth |20 « Mr Thomas. If it has the power to say one, it has the power to say the other. Mr! Tho-mpson. I think so, and why not do it? Suppose we do make wages $20 a day what would coal cost then in the market ? ilr. Tho:m AS. There is no need of making wages $20 a day. 404 DKPRE.SSION IN LABOR AND BUSINESS. Mr. TiiOMrsox. Then wliat need is there in saying that -wages siiall be $roducing our own fine fab- rics. Wo imported nearly twenty millions' worth last year. DEPRESSION I\ LAJK)K AND BUSINESS. 411 Mr. Campbhtj.. StiU, \vp have tlic. oapacily lioro for prodiicing cotton goods at a very low figure for importation. Take Mexico, for instance. England has the cxclii-sive trade of Mexico in cotton fabrics. Tbe CHAinm^vx. Because England sells them cheaper. Mr. Campbeli,. How can England sell tlicni cheaper, when wc can sell our cotton fabrics even iu Manchester ? The Cii.\iRMAX. A few cases of cotton goods have been sent from here to Manchester and have been sold there, as an experiment ; but they were sold with a loss. We are not exporting cotton fabrics to England as a matter of trade. W<' are exporting some to China and to Jap.m and to South America. Our exports of cotton goods amount to some ten or eleven millions of dollars ; but they are of coarse fabrics. When it comes to fine goods, we are undersold by foreigners. Mr. Cajiphei-l. I suppose that it is an admitted fact that not over one-third of the raw material of cotton is manufactirred in this country. The CiiAiP.MAX. Not quite one-third. Mr. Campbell. Would it not bo better, having the labor and the facilities for man- ufacturing cotton, if we would manufa<'ture it in this country and seek a market abroad for the manufactured article ? The CnAlP.iiAX. Granted; but suppose yon could not sell it as cheap as the English sell it, what then ? and we cannot. The is'ew England mills are trying to do the very thing you desire, but they are met in the great markets of the world by the cotton goods manufactured iu England. How would you do it ? Would you give a bonus to the American mauufacturers ? Mr. Campbell. No, sir ; but if we were to manufacture our own raw material the foreigners would not get it iirom us. The Chairman. The answer to that is that the English pay to the men who raise cotton in the South more than New England men would pay for it, and the English will undersell us in the foreign markets. How f Because they have got a cheaper cap- tal and cheaper labor. If the state of things now existing goes on much longer we wil 1 have cheap labor too, but that is precisely what these gentlemen [indicating the representatives of the workingmen] do not desire. Mr. Ca^ipbell. Is it not the same in the woolen trade? Is it not true that three- fouiths of our entire fleece of wool is manufactured abroad, and that three-fourths of the woolen goods used in this country are imported here ? The Chaikmax. Admitting the statement to be tnie, the answer would be, what is the ditference ? The rates of wages are higher here than they are there, so that we cannot compete with the foreign manufacturers. The remedy is to out the wages down, but gentlemen have been tcUing us here that the way to prosperity is to get the wages of the workmen up. I leave you to reconcile the difference. Mr. Campbell. I think that the ditficult>- about the whole question is m our not keeping the volume of currency at a certain figure. If you regulate the volume ot currency and keep it there until there is a demand for an increase we would not suHer under these changes as we do now. The Chairman. What better system can you have than the freedom to issue any amount of cunency that the people want, provided it is made redeemable iu gold and silver? , . . „ , ,, Mr. Campbell. But one year your voliune of circulation is all up and another year it is all down. ... The Chairmax. That is because the community does not want .so much circulation one year and does want it the next year. For instance, under a free banking systeiu the banks can issue any amount of circulation. The only trouble is that they have to redeem it. You would not have them issue it without redemption. Mr. Ca:mpbell. Is not the principal trouble this, that the governmcut is issuing bonds to absorb the money that is in circulation? ^, ^ . • • i The Chairmax. But the government is not absorbing the money that is in circula- tion, because it is selling the bonds for gold. , , ^ , ■, j. j-i • i • Mr. Campbell. The government takes for the bonds greenbacks at their value m ^"rhe Chairmax. Excuse me ; the Treasury Department is only authorized to receive gold for the bonds. . , , j. i i The committee desires to say that if there is anybody present who has any sugges- tions to make the committee will hold another session this evening; otherwise, the committee will close its session in Scranton now. But I think we have succeeded in getting at a fair statement of the condition of things here, and we are greatly obliged to those who have come here to give it to us. . , 4. 4. j Mr Thomas fa former witness). I heard you speak this morning about trades unions for the purpose of arriving at some understanding between employers and employfe. Is there any possible way of having a law to protect the members of trades unions? The Chairman. The General Government cannot do anything lu that way ; but the States can. 412 DEPKESSION IN LABOR AND BUSINESS. Mr. Thomas. The reason why I ask you is this : We have several times had trades uuions in this valley, and these trades unions have had committees for conducting ne- gotiations between them and the employers, and every member of these committees, with probably an exception or two in different localities, has been discharged. The Chairman. You have only repeated here the experience which occurred in Great Britain, and which lasted for nearly 40 years there. The employers would not listen to the representatives of the trades unions, and the greatest injuries and wrongs were committed. The men who belonged to these trades unions underwent an amount of suffering which was simply heroic, and at last, iu 1867, the famous trades union commission was appointed by the Queen. The chairman. Sir William Earl, one of the' greatest jurists that England ever had (he was chief justice of the court of common pleas), reported in favor of legalizing trades unions, and bringing them under the law which governs the friendly societies in England, and they now make reports to a reg- ister, Mr. Tidpratt. The result is that the masters not merely recognize the necessity for trades unions, but they recognize the immense advantage which there is in having trades unions, by which they can arrange all questions in dispute. Take the society of Amalgamated Engineers in England. That society has had but one strike in about ten years — ^the famous New Castle strike. That was a strike for nine hours' time, and since then they have had no strikes, but every dispute between the engineers and their employers has been settled by agreement between committees of the masters and com- mittees of the men, or by arbitration. This little book here (indicating) contains a history of the arbitrations in every branch of business in Great Britain for the last few years. There are many pages devoted to the coal trade. There are more than twenty arbitrations recorded here. It is the same in the iron trade, in the lace trade, in the carpet trade, and other trades. All these trades have trades uuions, regularly organized and legalized. These unions all appoint committees, and the masters also appoint committees, which meet upon equal terms, just as this committee has met you gentlemen and as you have met this committee. The result in England is that strikes have been diminished in number. They are suffering there as they are here, but per- haps less than they are suffering here. The distress is increasing there, particularly in the cotton trade, and if we undertake to meet them in the foreign market, we will be met by people striving in desperation to get something to keep them employed ; so that it is a wry bad time for us to try to compete with them. It is a State matter, however, and not a Federal matter, and I think that it is the first duty of every State in the Union to give every possible facility to trade organizations, and that it is equally the duty of the workingmen to organize trades unions ; to put the best men in charge (if them ; and to avoid, if possible, demagogues, and especially petty demagogues, who live upon tribute money. The workingmen should get their most intelligent men, and put them at the head of these organizations ; and it will be an everlasting disgrace to the employers if they refuse to meet the committees of these organizations on fair and equal terms. If they do refuse, public opinion will not sanction it. I do not believe that there is a company strong enough to discharge an honest man of good character because he has organized a trades union, unless he has been playing the demagogue. Mr. Thomas. Bosses iu tliis region have been known to stand around the doors of lodge-rooms where men have gone into trades-unions, and when these men came to work, the bosess would quietly walk up to them and ask them how things went ou on .such a night. The bosses would ask them whether they belonged to such a trades- union, and if they admitted that they did, the bosses would come along some day and find somethihg wrong, and the men would be discharged. The Chairman. You are only repeating what happened year after year in Great Britain, and which has come to an end there through the force of public opinion. The legislature cannot make a law to prevent one man from discharging another. That matter has got to be reached by public opinion. We had a ease the other day at om: iron-works. Before we blew out the furnace we called our men together and gave them the figures. We showed them what the iron was costing and what its price was, and we said to them, "There, we cannot get the cost for the iron. Appoint a committee and see these things for yourselves; and if you want us to continue the business, make up a rate of wages that you will be willing to take." The men got together and made up a rate of wages which was entirely satisfactory to us. There was perfect ojicnness and fairness on both sides. I say that these great corporations here owe it to themselves, owe it to the country, and owe it to you to make a clean, open, honest statement of affairs. The public have got a right to know what these corporations earn, and you ought to know it. If they do not do that, they ought not to have the sympathy of the community. But if they deal honestly and fairly with yon, you must not try to get them to pay you what they cannot afford to pay you. You must not try to get up strikes. The truth is that a great many of the railroad com- panies in this country are not able to pay interest even on their bonds, and but a few of them are paying dividends on their stock. The Reading Railroad has had to fund the coupons on its consolidated mortgage because they could not earn the interest. If that company had never bought coal lands it would have been paying its interest DEPRESSION IN LABOR AND BUSINESS. 413 to-clay, but tln-sc railroad and coal comiianies made a, mistake iu purchasing coal lands, and have thus damaged the public as well as themselves. Generally, when people damage the public they damage themselves. The Delaware and Hudson Canal Company loaded itself down with coal lands and raih'oads so that it is no longer able to pay dividends on the stock ; and, from being the most prosperous corporation in the United States, it is now laboring under very serious difficulties. If you examine the case to-day and compare the prices of coal with the cost of production, you will find that after providing for the cost of transporting the coal to market none of those com- j)anies are in a condition to pay any more wages than they are paying. I do not think it possible for them to do so. I think they would be delighted if they could give full employment at better wages. The truth is that employers (I am an employer myself) are always glad to pay good wages and to have plenty of work for men, and I assure you that it is excessively disagaeeable for them when they have to cut down wages. I have never known an employer to reduce wages until he was losing so much money that he was driven to it. These coal companies were on the verge of bankruptcy when they reduced the wages of the workingmen.. I do not commend the system of uniting the carrying business with the business of mining coal or with any other business. I think that the thing is wrong and should be prohibited. All the sufferings of these coal companies and the depression in the coal business have been, in my opinion, the result of that mistake; because, were it not for it, the extension of coal operations would not have been made any faster than consumers and producers were ready to come together in the market. There is only one way in which the thing will be ever got right, and that is by each side telling the honest and exact truth to the other side, and not trying to deceive the other side. We are only passing through a transition period here. I am afraid that, for another year or so, we will have hard times, but I think I may take the risk of prophesying that, after another year, we are going to have better times, and that you are going to find em- ployment here for all the people who will need employment. But the old rates of wages you will never see again in this coiuitry. They were largely fictitious. In- stead of getting iif'.i or |i4 a day you will probably get about $1.50 a day,but the wages that you will get will be iu gold. The real Grievance of the workingmen generally is not that they are not getting high enough wages, but that they are not getting work enough , but I hope that, iu a very little while, prosperity will be restored and that there will be no lack of employment. I did not intend to make any remarks to you, but I was pushed on to do it ; and I am sure that if these gentlemen who are in- terested in the trades union mattin will take this little pamphlet and digest it [hand- ing around a few printed pamjihlets on the subject], it will do them good. Mr. Campbell. I would like to inquire whether the depression in the railroad com- panies is not due to their watering their stocks. The Chairjiax. It might be, if they were paying dividends on tlieir stock. Mr. Campbell. Were they not paving as high as 12 per cent, in 1869 and 1870 ? The Chaiuman. Yes ; but what they are doing now is the question. I do not believe that the fact of their watering their stock is of any consequence now, because they are not paying dividends on their stock. What difierence is it, when they do not pay anything at all on their stock, whether they call it thousands or millions ? They have got to have monev to pay the interest on their bonds. If they issued bonds for which they had not received any value, then there would be a good ground for complaint; but the watering of their stock does not really make any difference. It does not make a man richer or poorer whether he marks his stock up or marks it down. It made a difference to the people who bought the watered stock. Mr. Campbell. The railroad companies have a larger capital to pay dividends upon. The Chairman. But they do not pay any dividends at all; so that that does not affect this question at all. Mr. EiCE. They are not paj-ing running expenses. , ,,r 4. Mr. Campbell. I have no doubt but that the Delaware, Lackawanna and Western Company is paying running expenses now. A Spectator. It earned |500,000 last year. . The Chairman. You gentlemen of Soranton have got no grievance to complain about in regard to the building of a line of railroad by the Delaware and Hudson Canal Company tS Canada. The company built that Une and thus got access to u-on beds, the ore from which is brought here to run the steel works. You are the gamers by that operation, but the stockholders are the losers. Mr. Campbell. The watering of the stock did not do that. The Chairman. The watering of the stock has no earthly influence upon things here The company sold the stock and put the proceeds in its business. The men who bought the stock were injured by it; and if you are a stockholder you have a griev- ance, and I would recommend you to go to the next meetmg of stockholders and make ^ Mr^CAMPBELL. It injured hundreds of men here. It injured the whole community. The Chairman. Well, let those men go to the next stock meeting and make a row 414 DEPRESSION IN LABOR AND BUSINESS. about it. But when a carrying company is authorized to "buy coal property, or any otlier kiiul of property, to run iron-works and to engage in business, and if it then will not allow other people an outlet for their products on proper terms, it becomes a monopoly of the most odious kind. It is wrong in principle and fatal in its results, and has got to be undone. Tlie comnnmity will never prosper until that has been re- p>\iloyerK of labor were to express themselves as you do and to act in conformity with the \'iews which you have expressed, it would be well for the working classes. The Chairmax. No man has suffered any more from misrepresentation than I have, and on this very labor committee, simply because I have asked questions on all sides of the subject. I have been misrepresented all over the country ; but my hope is that out of this investigation and out of the frank declarations of opinion to which I think honest men who studied the question would be driven, we shall anive at a solution of the difficulty. The corporations are not your difficulty. They are your friends, but they must be properly conducted and nuiuaged. It is the abuses of these corporations that we want to correct. We do not want to destroy the corporations themselves. Mr. CiiiMioi.M. I desire to say one word in regard trades union for the information of gentlemen who are opposed to them. In England the national associations com- mittees in the diiferent localities meet in the first, second, third, or fourth week of the month, and discuss the question of wages for the following month. That is the way it should be here. If the corijoratious and the men were to meet intelligently, aU dif- ficulties could be amicably adjusted, and that would be better for the corporations as well as for the men. I think that it behooves every workingman to support the ))rinciple of trades unions and to pu.sh them along as best he can. Trades unions should be legalized in this country as well as in Great Britain. The C'llAlliMAN. Trades unions when badly loiiducted are very great evilg. They should be wisely and intelligently conducted. I am glad to say that iu England they have arrived at a development which iu the main is creditable. The more intelligent the men are and the more disinterested th« managers are, the better the results will be. It cannot be expected that trades unions will be respected when they lead to such outrages as the Molly Maguire outrages, at which the moral sense of the com- munity revolts. I take it that every intelligent workman is as nnich opposed to mur- der and outrage and ra]iiue as any employer can be. In consequence of the MoUy Magnire outrages in the Schuylkill region property there has become almost worth- 1(^S8, becau.se you can scarcely get a man to .stay there as a manager. But the future of labor .and capital in the whole country is, in my judgment, bound up ijj the main- tenance of trades unioii'.i, Iheir enlargenuMit, anil their intelligent action. When you get Nucli digaui/ations as tliitt here, and when its representatives go in the proper spirit to till' employers, and when the employers meet them in the proper spirit, Tueu most of the ditticulties will ilisapiiear. Mr. CiiisiioLJi. Yes, sir ; I belie\'e that trades-unions, when headed by intelligent men, will succeed, but that they will collapse very shortly if they are not headed by iutelligeut men. Mr. Thomas (to the chairman). Would it not be a good idea for such men as yonr- si'lf, who hold those views, to advocate them f The Chaiuman. I have handed you a i)amphlet in which 1 have advocated them. Mr. Thomas. I mean other men besides you. The Chaikaian. Men have got to be convinced, ami the only way that men car be I'imvinced is by studying the question. Mr. Rkjb. You will have a report from this committee which, 1 think, will be ur.an- moiis and which « ill exjiri'ss those views. Mr. Thomas. Tradi's-unions are held in abhorrence by the employers, and we have been unalile to create a seiiTimeul iu faVor of them. We have asked the jue*". ' -i rcss, as a rule, has gone entirely against the trades-unions. 'I'lie (.'HAiiniAN. The press, as a rule, expre.ssivs the views of those who support it. Mr. Tiio.>L\s. That is it exactly. The corporations support the press, and tlev .'n- struct tlu! press to rarry out their ideas. The Ch A] U.MAX. You have got to rely on tw'o things. You have got to have asi organ of your o\\ u, and you have also got to rely upon growing intelligence. All this «ill contribute to luiiig about a better state of things. I have been aggravated once to a degree that I cannot state, by the action of a trades-union. It ordered a strike once from Pittsburgh, in the Trenton Mill belonging to Cooper & Hewitt. We did not know what the trouble ■\\ as. The strike was ordered fi-om Pittsburgli. I felt per- Ci'ctly aggravated, as the men in the mill had not said a word about it. I ordered the works to bo shut up, iind said that I would never open them again until 1he order for the strike was withdrawn. Then Mr. Cooper saw a couple (if the men, and in five DEPRESSION IN LAUOIl AND BUSINESS. 415 miuntes the whole difficulty was adjusted. Now, I say that the power of tiades- uuions must uot be used in that aggravatiug kind of way. A Spectator. May I ask what the committee is going to recommend to the woik- ingmen generally ? Did I understand you as saying that the committee will report against the raik-oad corporations huyi-ng coal-lands 1 The CiiAiRMAJj. We are not going to make any recommendation at all to the work- ingmen. We are going to try to state, so far as we can, the causes of the present diffi- culty. We are goiug to try to find out, if we can, some remedies for the evil, and to recommend some improvement in legislation, and also to make some suggestions to the public at large, thus doing something towaxd the formation of public opinion. If it comes to a question of saying whether we will recommend the workingmeu w>t to work for the coal companies until they give up the coal-lands, the committee is not going to periiptrate any such folly as that. This committee will now adjourn nine ilie, so far as Scrauton is concerned. AVasiiixctox, Dicemher 11, 187 c*. Isaac Ci)in:x appeared voluntaiily before the committpe, and was examined as follows : "^ By the Chairman : Question. Please state your residence and your business. — Answer. 1 reside in Washington ; I am a machinist by trade. Q. Do you work at your trade f — A. No, sir. Q. How long is it since you have worked at your trade ? — A. A year and a half. Q. What is your present business ? — A. My present business is taking part in the cause of the distressed laborers. Q. Are you m the employ of any association I — A. No, sir; not in the employ of an association. I belong to an association. Q. Are you an officer of any association ? — A. Yes. Q. WTiat association is it ?— A. An association which I am not at libeity to men- tion. I am also president of the Workingmen's Relief Association of the District lA' Columbia. Q. How many members' has the association of which you .speak? — A. That I cannot tell you now. I have been away for some time. Q. How many members has it had at any time ? — A. It has had as many as 10,OUtl members in the District of Columbia. Q. Do you mean to say that yoii have had 10,000 members enrolled? — A. Not en- rolled ; we had that number that took part ; we had as many as '3,000 or 3,000 enrolled, but the others were members, too. Q. What constitutes memberslup ? — A. llembership at that time constituted by giving names, places of residence, and occupations. Q. Then how did you distinguish between the 2,000 or 3,000 that you had enrolled and the remaining 7,000 or 8,000 that were, not enrolled ? — A. I distinguished them b> those that were enrolled having their names on the books. Q. And how did the others become members? — A. Simply because they took part in meetings, parades, and that sort of thing. Q. But you say that that did not constitute membership '! — A. No, sir. Q. Then they were not members? — A. They were not actually members. Q. They were sympathizers ? — ^A. Yes; you might term them sympathizers. Q. Y^ou said something about secret associations; are you also a member of secret associations? — ^A. Yes, sir. Q. Are yon in a position to explain anything in regard to those secret associations ; can you state what their object is? I do not vmnt yon to violate any confidence in asking these questions, but I should like to hear what the object of these associations is.— A. I will state the object. I do not propose to violate any secrets, however. _The object isjiojinite in or pranizin g citizens of tlie United States of eighteen years ofage^andnp- ward, witiou£iffaidJ;flia«iroX'ol<>r, and aTHFo oflabor of whai^er^iituie, agaiSslPtheaggressive inroads of capftal and class legislation. That~is about the main object" Q. To prevent the inroads of ca])ital ?— A. No, I didn't say that. I said to unite labor of whatever nature against the aggreS8i\e inroads oi cai)ital and class legisla- tion. Q. Are those associations numerous ? — A. They are. y. Can yon give ns any idea of the number of members ])robal)ly belonging to tliem? — A. No, sir; I could not gi^e you the number of the membeiship, and I wonlil not be allowed to do so if I could. Q. Do these associations extend ovei' the wliole United States? — A. Yes, sir. 416 DEPRESSION IN LABOR AND BUSINESS. Q. Do thoy exist in every State in the United States? — A. I think so. Q. Can you explain to the committee tlie methods by which these associations pro- pose to prevent tlie "aggressive inroads of capital and class legislation"? — A. Yes. I think, in the first place, by voting for such candidates as they may select ; and, where they have not got the strength to select men of their own, by pledging the members to vote for such men as the order shall agree upon, and to buUd up a party of their own in the interest of labor and of the laboring man. Q. Explain to the committee what you understand to be the meaning of "the aggressive inroads of capital." Do you object to capital? — A. No, sir, I do not. Q. You do not object to capital coming into this country? — A. By no means. Q. Then what do you mean by the aggressive inroads of capital ? If capital were to pour into this country at the rate of millions of dollars a month, or millions of dollars a day, you would not regard that as an aggressive inroad of capital ? — A. No, sir. What I mean by that expression is that capital takes seven-eighths of the wealth pro- duced through labor, and labor gets only one-eighth. " Q. That is, you mean to say, that you regard the present dist ribution of the proceed? of industry as unjust and "aggressive," and that you want to introduce a ose a different division, in the language that you used a while ago. Q. You say that at present the capitalist gets seven-eighths and the laborer only one- eighth, and you say at the same time that business is bad and capital is unproduc- tive ? — A. I beg to qualify that. I say that capital is not making anything now out of the product of labor simply because the government is holding out inducements to capital by which it can make money without employing labor. I refer to the bank- ing system, where a man can buy bonds and make four or four and a half or six per cent, interest, whereby capital can make money and be independent of labor. Q. Then you think the government policy which offers a 4 per cent, bond to capital is an inducement for capital to leave business and invest in bonds ? — A. Yes. Q. Then, of course, you are of opinion that capital inbusiiiess could not make 4 per cent, interest ? — A. No, sir ; it could not on a large scale. Q. Then, if capital could not make 4 per cent, in business, how can it be possible that capital gets seven-eighths of the products of industry and labor only one-eighth? Seven-eighths, you know, is 87^ per cent. — A. I will explain. Suppose capital should invest in iirivate enterprise and should only make three per cent. Then what I hold is that capital takes seven-eighths of that three per cent, profit, while the laborer gets only one-eighth. Q. Then you think the iniquity is that capital takes seven-eighths of the profit and not seven-eighths of the product ? — A. Seven-eighths of the profit, whatever it may be. Q. Take the case of a private enterprise in which there is invested a capital of 11,000,000. The interest on that cai)ital at three per cent, would be |30,000 per an- num. Now, it is a law which has been pretty^well established by experience that every f 1,000 employs a laborer ; that is the way it works in this country practically. There- fore, a capital of $1,000,000 would employ just 1,000 laborers. At a dollar a day the earnings of those laborers would be, say $300 a year each, making an aggregate of $300,000. In that case labor would receive |300,000 and capital $30,000; or, iu other words, labor would receive just ten times as much as capital. How does that comport with your statement that capital takes seven-eighths and leaves labor only one-eighth of the iJrofits ? — A. That may be your theory, and it reminds me of a fact. While in the South I heard the farmers there abused for raising only cotton and told that they should raise pro\dsions, so as to be sure of having something to live upon ; but calcu- lations were made on the other side by which it was proved that the exclusive raising of cotton was more profitable ; that it was cheaper to raise cotton and buy provisions than to raise them at home, because the West could furnish provisions so much cheaper. This calculation was proved. You could show a farmer that it was a great advantage to him to raise cotton and buy his provisions, but while the theory was good on paper, it was bad in practice ; it ruined the South, and when they turned the scale on the calculations of the theorist it showed that they were not correct. Q. But do you deny that capital employs labor? — A, I do deny that it employs it at this time. Q. Is the labor of this country idle ? — A. Yes, sir. Q. Tlieu there is nobody employed iu this country ? — A. Hardly anybody. There are some people employed, as a matter of course. DEPEESSION IN LABOR AND BUSINESS. 417 Q. What iiroportion of the lahor of the country is employed and what is unem- ployed ? — A. I believe that the largest proportion is unemployed. Q. More than half, you think ?— A. Yes. Q. Are you aware of how many jiersous there are in the United States engaged in manual labor — the laboring classes, as you term them ? — A. I don't know the exact number. Q. But you are satisfied that half of them are doing nothing at present ? — A. Yes, sir ; I hold that half of them are doing nothing. Q. Have you got any evidence of that fact beyond your mere belief? — A. No, sir ; except what information I receive. Q. Have you any knowledge at all of what is supposed to be the capacity of a com- munity actively employed to earn a surplus ; what percentage of the profits of labor can be saved over and above what is consumed by the community ? — A. No, sir ; I haven't gone into any calculations of that kind. Q. YoTi have said that capital cannot earn over 3 per cent, in profitable enterprise ? — A. Yes, sir. Q. Then that would indicate that the community could not earn over 3 per cent, surplus in a year ? — A. I don't know what legal deductions you are going to draw. Q. I am not drawing any legal deductions. I am trying to get at the facts. Your own statement is that capital cannot earn over 3 per cent. , and that therefore it is glad to invest in government bonds at 4 per cent. You state also that capital takes seven- eighths of the profits. Therefore, if capital takes over seven-eighths of the profits, and if then it cannot earn over 3 per cent., that proves that seven-eighths of the profits cannot amount to more than 3 per cent, on the capital. Now, if that is true, and if it is also true that more than one-half of the laborers of the country are idle, how long will it be before we shall all be suffering starvation ? — A. I think that is what we are doing now. Q. Are you suffering ? — A. Yes, sir. Q. Are you suffering from want of food ? — A. No, sir ; not exactly that, but from seeing other people suffer. Q. They are at work? — A. No, sir; most of them are idle. Q. They are idle ?— A. Yes. Q. And you are idle ? — A. Yes. Well, I am doing something ; I am working for other people. Q. Are you working for the people that are idle? — A. Yes, sir. Q. Do they pay you for working for them ? — A. No, sir; nomore than they pay you. We are both working for the same cause. I am working for these people, and I am not paid for it. Q. Well, that is a very creditable way for people to work for their fellow-men. Now you said yoa wanted to make some statement to this committee in regard to the con- dition of 'tne laboring classes in this District? — A. I do. By Mr. EiCE : Q. Were you bom in this cormtry?— A. No, sir; I was not born here, but I am now an American citizen ; I was bom in Germany. Q. How long have you lived in this country?— A. Eleven or twelve years. Now, then, I would like to give a few of the reasons to which I attribute the difficulties of the laboring men, and then we will follow that up with the condition of the laboring men in this District. It is claimed by a great many that overproduction is the cause of our distress. I ask, why should that be the cause when the people are idle ? How can we have overproduction when the people are idle ? The balance of trade is in our favor ; we can find markets for our products. Is that a sign of overproduction ? Extravagance on the part of the people is also named as a cause of distress. If the people are extravagant, how can we have overproduction? If the idle people who don't consume now because they have nothing to consume with were employed and earning, would overproduction cause them to be naked and suffering for the neces- saries of life ? Overproduction might be brought about by a too large increase of labor-saving machinery which produces without consuming. By the Chairmak : , Q Do yon hold that overproduction is or is not the cause of the depressed condition i of labor ?— A. I will get to that question in a minute. I hold that we havetoo_muoh X wnrlrdnne by prison labor. . ^ i J.T. J. J J.. I must ask you to answer mv question. Do you mean to say that overproduction is or is not the cause of the businiess depression ?— A. I hold that it is not. I hold that the cause is non-consumption. , ^ i, ^ xi. O That is, you hold that there is not too much production, but that there is too little consumed ?— A. Yes, sir. Then I think that the work that is done now in the prisons ouo-ht to be abolished. Those ])risoners are supported at the expense of the public They do not compensate the public ; they do not work for the public, but 418 DEPRESSION IN LABOR AND BUSINESS. they are hired out to individuals and corporations. They learn trades at the, exi)en8e of the public ; they come in competition with the workingman, enriching the few and impoverishing the many. Q. What would you have the prisoners do 1 — A. I would have the prisoners work for the community and the government which places them there and support them- selves. Q. That is, you would h.ive them produce the articles which they now produce for the government instead of for private individuals ? — A. No, sir ; not necessarily. They need not manufacture shoes as they do now. Let them work on farms, and make- themselves self-sustaining. Q. Then you would have the prisoners work at fanning instead of at mechanical trades ? — A. Yes ; let them work at that and jiroduce their own provisions and such things; hut I would not let them produce articles which honest workingmeu are sup- jiosed to make a living from. Q. Is the farmer an honest workingman ? — ^A. He is ; hut he is a more independent irian. He is not dependent upon his daily lalior to pay his expense from day to day.. He has his fields and earns his bread, and if he does not work for a day or two, or three, or even a month, still he has something to live upon, while the workingmeu in the large cities are dependent upon their daily ])ay for their daily necessities. Q. Are you aware that there is very grievous complaint from those engaged in agri- cultural industry all over the country that they are not able to make sufficient wages to get what they regard as the necessaries of life ? — A. Yes ; hut that is not due to the fact of their being engaged in agriculture ; that is due to various causes now operat- ing against their interests as well as against the interests of other workingmeu. I hold that the laborers on farms are not suffering by any means to the extent that the- laborers in the large cities are. While the laborers on farms have at least something to eat if they don't make any money, the workingmeu in the cities cannot make a sup- port for their families and are suffering for the necessaries of life. There is the differ- ence. Q. What branches of business do the prisoner.s engage in now 1 Shoemaking is one, I believe ? — A. Yes, sir ; shoemaking and cigarmaking. I have not examined that closely. I have examined the subject, but not the prisons. Q. The pri.soners make shoes. Do you know any shoemakers who are starving ? — A. Yes, sir ; I know plenty of them. Q. Starving? — A. Starving; not in the sense that we use that word. Q. And you say that the agricultural laborers are sure of enough to eat ? — A. Yes,. sir. Q. Do not the shoemakers that you speak of get enough to eat 1 — A. No, sir. Q. Don't they have anything to eat? — A. They get something to eat, of course, or they wouldn't be alive. ' Q. Now, if you set the prisoners to cultivating the farms, vrill they not displace just as many farm laborers as they now displace, shoemakers and oigarmakers? — A. Yes;- but I would not work them to that extent. 1 would work them just enough to make them self-supporting. Q. That is, you would let the prisoners have an easy time while the honest men had to work hard ? — A. Well, yes ; if it is easy to lie in a cell. Q. But you would take them out and let them work in the open air ?— A. Yes ;• enough to make them self-supporting. Q. Then, according to your plan, the criminal will work in moderation and have .t, pleasant time, while the hard-working laboring man is to be kept with his nose to- the grindstone ? — A. That is not necessarily the consequence. The next point that I want to call attention to is the Chinese question. The- Chinese are a barbarous, debased, demoralized people. If they oome here, and are detrimental to the interests of the workingmeu, then I say, in the language of Dennis Kearney, "They ought to go." Q. Would you limit that view to the Chinese, or would you include all other de- graded and demoralized people? — A.Iwould Ijiiiit xLXn the Chinese. Q. Then you would not exclude all~flegradcd and dcuior;iiized people from this- country, but only the Chinese? — A. Only the Chinese. I could not include American citizens. Q. But suppose they were not American citizens. Suppose they were persons land- ing hern, Germans and other nationalities, who were unfit to make good citizens, degradecl paupers and criminals, as I have seen them come into the city of New York myself, by ship-loads, in times past, would you apply your rule to them ? — A. AVell, it wouldn't be a bad plan to exterminate them too. Q. Then you would not limit your view to the Chinese, hut would include all demor- alized, degraded people coming into this country? — A. For the purpose of my state- ment here now I would limit it to the Chinese, but if there .are any such men as yon have just now mentioned I shouldn't have any complaint to make if you applied it toi them. DEPRESSION IN LABOR AND BUSINESS. 419 By Mr. Rice: Q. Is not the very suflfering of which complaint is made in the great cities liirgcly to be attributed to the fact that the commmiity is made up of such persons as havo been referred to here; persons cast off from the pauperism of Ireland and other coun- tries who are unable to take an independent place or make a living? Is not the suffering that yon speak of largely to be attributed to that fact ? — A. This is the iirst time I have heard of it. I understand Mr. Hewitt to say that theie are such people, but I do not understand him to say that the people who come here from abroad are all criminals. I understood him to ask me whether the criminals of other nations who come here ought not to go with the Chinese, and to that I answered him in the affirm- ative. The Chairmax. Yes, I want to know whether it is because of their nationality that you want the Chinese to go, or whether you apply your view to all the people who are unfit, owing to degradation and demoralization; to be good members of society. — A. Yes, sir ; I wantjthe Chinese to go, in the fixst place, because of their coming here and. / bein g. hiredTier e as serfs, andjbeoause the effect of their being here is dgtrimeittaLJp ( the welfa re of_th e people of this country, aud especially to the State oif California. \ They come here as serfs, they are hired _as serfs, they live as serfs ; they produce aud \ do n ot consume . The legislature of California appointed committees to investigate > this subject, and reported that the Chinese are detrimental to the welfare of the people — of that State and to the country at large. That being the case, and basing my view upon that special report, I say they ought to go. Q. Suppose the authorities of some other State should make an investigation of the condition of society tliere and find that it was detrimental to have Germans, or Irish, or Italians, or negroes (because they are free to come here from Africa), What would you do then ; would you exclude them all on the same principle? — A. I suppose I will have to do so to be consistent. Q. Then you think that this United States Government should, upon the representa- tion of the authorities of a State that some particular class of labor was detrimental to that State, exclude that labor from the country? — A. I take it that this governmeut is for the benefit of the people, and that if the majority of the people, who are sup- posed to rule in this country, declare that a certain thing is detrimental, then it must be abolished. Now, as to whether it is just or unjust, I call your attention to the fact that that is done every day, under the cover of law, to American citizens, whether of Irish, or German, or native birth ; they are classed as tramps, aud imprisoned because they cannot find employment, although they are not criminals of any kind. If the law' can do that, I think it can do almost anything. Q. I ask you whether it is your opinion that, on the representation of the authori- ties of a State that a certain class of laborers are detrimental to its interests, the gen- eral government should proceed to exclude that class of laborers from the country f— A. Yes, if they were found to be detrimental. Q. And that should be done upon the representation of any State ?— A. I hold that, if the Congress of the United States satisfies itself that the presence of the Chinese or any other nationality is detrimental to the community, then that class of people ought to be got rid of. I do not say in what manner it should be done ; that is for the Con- gress to determine, but some action should be taken on the subject. Q. Do jou know what percentage of the occupants of the poor-house aud prisons of the State of New York, for example, are of foreign birth ?— A. I do not. Q. Well, nearly three-fourths of them are of foreign birth. Now, if that is so, it is detrimental to the State of New York that it should have to maintain a large num- ber of paupers aud criminals of foreign birth, is it not? — A. Yes. Q. And therefore, if the people of the State of New York said that they wanted the Germans and the Irish aud tlie other foreigners who fill their poor-houses and prisons excluded from the country, you would have the general j;o\ernment excludt- them?— A. Yes; but here is the qualification I made: if these men come here as oriraiuals. Q. Do you know that the yovemmeut has taken every possible precaution in that . particular by having commissioners of immigration to look after these foreigners who come here for the first five years ?— A. If a man has been here five years, aud natural- izes, he is an American citizen, and then if he becomes a criminal, he is to be treated the same as a native would lie. . . „ Q. But you know that a mau may have been five years here and not be a citizen ?— A. Well, if he is not a citizen, and iif he has been in the country any length of time, and has acted as a respectable member of the community, he could not be sent out of the country. , „ ,, ^, . , . . , Q. Have you ever compared the percentage of Ihe Chmcf^e who are ni prisons and poor-houses in California or any other part of the United States with 1he percentage of prisoners of European birth ? I want to know whether your denurciafion of the CHiinese as a degraded and demoralized race is based upon an examination of the f.jcts. A. Yes ; I have taken the facts from the report of the committee of the legis- lature of California. 420 DEPEESSION IN LABOR AND BUSINESS. Q. Does that report give the percentage of tlie Chinese in poor-houses and prisons as compared with other races ? — A. Yes. Q. "What is the percentage f— A. I think it is a very large percentage, but I cannot give you the figures. Q. By a large percentage I suppose you mean more than one-half. Now, there are only about 200,000 Chinese in the country altogether, and if half of them are in prisons and poor-houses, and not competing, there are only a hundred thousand left outside to compete with other workingmen? — A. I did not say that half of them were in prison ; I am speaking of the percentage, compared with other prisoners, whatever it may be. Q. What is the percentage, compared with others ? — A. I say it is a large percent- age, but I cannot give the exact figures. But I say that the percentage of Chinese in prisons is larger than that of any other class, foreign or native. Q. You think the percentage of Chinese in the prisons of California is larger than the percentage of any other class? — A. Yes; that is what I say; I jio not state that there are 100,000 of them, or any other particular number. By Mr. Thompson : Q. But you do say that the proportion of Chinese in the prisons of California is larger in proportion to the whole number of the people of their race in that State than the proportion of any other nationality ? — A. Yes, sir. By the Chaikmau : Q. Do you include paupers, also ? — A. No, sir ; I leave out paupers, because I don't think the Chinese ever become paupers ; they can live on rats and mice. Q. Then you object to having a race here that can live on a little ? — A. Yes ; a race who can work a great deal and live on a little. I say that their presence is detrimental to the country. Q. Then if we could find a race that required a very large amount to keep them in good working order, it would be a good thing to introduce them here, you think ? — A It would, indeed. By Mr. Thompson : Q. Then why do you object to capitalists, who don't labor at all, according to your view of labor, but do consume a great deal, for they are said to be extravagant ? — A- I don't object to a capitalist being extravagant. Q. But capital lives on labor, as you put it. Now the less labor the capitalist does, and the more he consumes, the worse it is for the country, as you nut it, is it not ? — A. No, sir; I didn't put it in that way. I say that capital is aggressive upon labor because it takes seven-eighths of the profits accruing from labor. Q. In other words, capital requires so much to live on ? — A. I don't say whether it requires it or not; I say it takes it. By the Chairjian : Q. I understand your view to be that in proportion as a man consumes much and does little, he is a benefactor to the community. The less a man produces and the more he eats and drinks the better the condition of society, according to yourview? — A. No, sir ; I didn't say anything of the kind. Q. You said you objected to the Chinese as a race that eat little and produce much, and that it would be a great advantage if we could find a race that would eat a great deal and produce little in proportion to what they consumed. — A. Well, I will state it in my own way and leave you to draw the inference. I say that any race that comes here and performs hard labor, works a great deal and does not consume in pro- portion, is detrimental to the welfare of the community. By Mr. Thompson : Q. What would you say about a race that consumed a great deal and produced notliing ? — A. That is another question altogether. Q. But would such a race suit you ? — A. That inay be a deduction drawn by you, but I am making a proposition of my own. I hold that the Chinese come here and work for little or nothing. They work like prisoners under the control of overseers, who make them work from morning until night, and hence, of course, they produce a great deal. If we have any over-production, as claimed, I hold that the Chinese are a part of the cause, because they work a great deal and do not consume. By the Chairman : Q. Is it good or bad for the community to have a surplus? — A. I must answer that in my own way. It is good if the comnmnity can use it first for themselve.s and then dispose of the surplus; but in my judgment it is no benefit to any community to have a great deal, or to have a surplus if they cannot use it. If wp liaro ovov-productiun now I ask why are wo hungry and naked 1 i DEPEESSIOK IN LABOK AND BUSINESS. 421 Q. But my question is this : Is it, in your judgment, a good thing for the com- munity to consume as fast as it produces and so to have no surplus, or is it a good thing for the community to accumulate a sui'pJus which will enable it to go on with great works of improvement, and which can be transferred into the form of fixed capi- tal f — A. I am perfectly willing to have a surplus. In fact, I think the surplus would enrich the community if it were sold in foreign markets ; but to have a surplus, and at the same time to be suffering, I think is the height of folly. Q. It certainly is unfortvinate, but I am asking now about the broad principle, whether it is an advantage to a community to purchase more than it consumes and so to have a surplus ? — A. It should produce more than it consumes. Q. Then how do you make out that a race which produces a great deal and consumes very little is an injury to the community ? — A. Simply because what they produce goes into the hands of a few. Q. But what can the few do with it ; they cannot consume it ? — A. They can invest it in bonds and draw their interest from the government. Q. But when the capitalist buys bonds, the money which he pays is disbursed for something else ? — A. Not necessarily. It sometimes goes'into Wall street and into the vaults of the banks ; it is not necessarily used in the employment of labor. Q. Jf you sell me a bond of $1,000 and I pay you for it, then you have got my |1,000. Now, what good is that |1,000 to you unless you make use of it ? — A. But I might turn around and buy another bond. Q. Then the man who sold you that bond would have the iJljOOO, and it would be no benefit to him unless he made use of it ? — A. He might buy another bond, and so it would be a bond speculation all the time, and the laboring man would be kept out of employment. Q. Then you think there would be a ijerpetual investment in bonds ? — A. Yes, sir ; bonds and stocks. Q. Well, are not even bonds and stocks the representatives of property which is or has been productive for the benefit of the community ? — A. Sometimes the property is imaginary. Q. Then the man who pays the money for a bond based on an imaginary basis has lost his money ; he gains nothing ? — A. No, sir ; he is played out. Q. But the money, the |1,000, still circulates in the community, doesn't it ? — A. Yes, but it may circulate in speculation. Q. But after all the bonds are owned by somebody ? — ^A. No doubt about that ; they are owned by somebody. Q. What other points have you to present ? — A. I have a point in legard to machinery. I am not in favor of the^destriiction of machinery,n5eCaaseit7H7a factor of civilization, BiitTbold thaf "ffieTimirs pfTabbi^ shoiiiajbe' decreased in accordance with the increase of machinery. Inventions slipuld be for the benefit of mankind, and not for the benefit of inventors or owners. "qT S uppostTMr. Edison by his invention reduces the price of light one-half, will you confiscate that iuvention for the benefit of the community, or would you allow him some reward for it ? — A. I would discriminate according to what the inventions are. There are some inventions which in my judgment do not take away labor from the workingman ; they are not labor-saving inventions. Q; But at present the gas companies employ large numbers of laborers in handling the coal, filling the retorts, &c., and Mr. Edison proposes to displace many of those labor- ers, probably more than hah^ the result being that light will be reduced in cost one- half: now is that a benefaction to the community or an injury ?— A. I hold that all in- ventions that bring with them simplicity and advancement in civilization are properto be encouraged, but I am very positive that as machinery increases the hours of labor must be reduced to correspond. Q. Ah, your proposition now is different from what it was before? — A. No; I made that proposition at first. Q. But you said that inventions should be for the benefit of the community and not forthe benefit of the inventor?— A. Yes. , , , , Q. Now you say that as machinery is introduced the hours of labor should be re- duced ? — ^A. Yes. I put the two propositions together, you understand. Q. You say there is no over-production at present ?— A. No ; I think there is under- consumption. , 1, XT i. J.1 J. 1 • Q. Then if you reduce the hours of labor and consequently the time that machinery shall be run you reduce production still further, do you not ?— A. Yes, sir. Q. Then, of course, there will be less production than there is now?— A. Yes. Q. But you say that there is no over-production now ?— A. I say there is not. Q. Then if there is no over-production and if we produce still less, as you propose,, won't the suffering of which you complain be increased ?— A. There is no over-produc- tion now, simply because the people have nothing to buy our products with. -Q Then if the people have nothing to buy with there must be more produced than the people can buy at present ?— A. That is a fact, but it is not because the people do 422 DEPRESSION IN LABOE AND BUSINESS not want the goods. If everybody was at work and earning we would still produce more than the United States could consume, and need not suffer. Q. But you said at the outset that there were people enough to require and consume everything that had been produced heretofore, that there was no over-production. If that is so, and you still further reduce the hours of labor and the time during which machinery runs, you, of course, reduce the production still more. Now, will not that give us under-production and so increase the distress ? — ^A. I said that we have no over-production according to the present consuimption. The Chairman. Then I don't know what you mean by over-production. The Witness. I mean by that, that we produce more than the nation does consume at this time for reasons I have given. The Chaikman. Do you meau that there has been more produced than the nation ought to consume ? The Witness. No ; not more than it ought to consume. The Chaikman. Would you reduce the quantity that is produced ? The Witness. I would not. The Chairman. But if you reduced the hours of labor, as you propose, and the hours during which machinery should run, wouldn't you necessarily reduce ,the produc- tion 1 The Witness. My proposition is that the hours of labor ought to be reduced if we have got too much labor-saving machinery. The Chairman. Have we got too much ? The Witness. I think we nave. The Chairman. And yet wo have not got over-production ? The Witness. No ; because we have nnder-consumption, owing to the fact that the people are idle, earning nothing, therefore cannot consume. The Chairman. Well, can you give us a remedy to enable the people to consume more ? Your idea just now was that a race that consumed little was a nuisance, and one remedy, I suppose, for the present evils is to find a race that can consume more. The Witness. I will give you my views of how that can be changed. I have given my views upon the Chinese and we wiU let that pass. I say now, that if our people were all employed (and I can point out how they might be employed), and were earn- ing, then there would be no under-consumption. The Chairman. But how could the people be more employed than now if you re- duced the hours of labor, and ran the machinery a less time ? Machinery now runs ten hours a day, and half of it in the country is running at the present time, and yet you say the people are not half employed, but you propose to run the machineiy a less number of hours a day ; how is that to add to the employment of the peopleT The Witness. I will illustrate. Suppose I can make by hand ten coats a day and I can make the same ten coats by machinery in three hours, then by working only three hours a day I can produce the same number of coats that I can produce by hand in ten hours a day's labor. That is my principle. The Chairman. Would you stop the use of machinery and go back to hand labor? The Witness. I would not, because, as I said a while ago, machinery is a factor of civilization. The Chairman. Then what would you do ? The Witness. I would reduce the hours of labor in proportion to the increase of machinery. The Chairman. That is, you would restrict the hours during which machinery should be nm ? The Witness. Yes ; so as to bring about the same amount of production that haud labor would give, working the ordinary number of hours per day. The Chairman. Wouldn't that make' goods of every kind dearer? The Witness. I suppose it does. The Chairman. If it did, wouldn't that make them harder to buy ? The Witness. No, sir; not necessarily. The Chairman. Then you think that people can buy a dear article as easily as a cheap one? The Witness. Yes, sir; if they earn accordingly. I have always found the best times in the country where things are high. For thi' name reason I am in favor of a protective tariff. The Chairman. Then if we were to reduce the hours of labor to three hours a day all would be prosperous and be able to buy goods at higher prices ; is that your idea f The Witness. The immediate result would be that you would be able to employ so many more men. The Chairman. Yes, you would employ more men, but would you have more goods ? The Witness. We would have the same amount of good.s tluit we have now. The Chaii^man. Then you tliink that if all the laboring men were working three hours a day, and yoii distributed among them what is now paid for ten hours a day labor (for of course you cannot distribute uuire than there is), then there being les„ DEPRESSION IN LABOR AND BUSINESS. 423 goods produced, everybody -would be able to buy them. In otter words, a man now works ten hours a day and gets so much money, which at current prices will purchase, so much goods. Upon your plan there will not be any more goods produced, and there- fore there cannot be any more distributed; but you would distribute them differently, that is, those who are getting |1..50 a day would get a dollar a day, and those who now earn nothing would get half a dollar a day. How then could anybody buy more goods than he can now ? The Witness. I am not speaking now about buying goods ; I am speaking about «mploying labor. The Chairman. I can understand how you could get along on your plan if you had a race that did not consume so much, but whd.t you want is a race that consumes a,- great deal and produces little. The Witness. I hold that your deduction does not necessarily follow from the proposition I laid down. The Chairman. You propose to have people consume more than at present, and at the same time to prodiicp less, because you propose to restrict the hours during which machinery is run. Now, I do not see how the community can acquire a surplus on that theory, although you admit that a surplus is a good thing. The Witness. It will acquire a surplus when all the people are employed, whether they work ten houiu a day or only one hour a day. Mr. Thompson. The result that yon desire from machinery is not to increase pro- duction, but to reduce the hours of labor ? The Witness. Yes, sir. Mr. Thompson. Then why not do away with the machinery and work all the hours that we Work now on the theory that it is better to work than to be idle, even if it idoes not pay any money ? The Witness. Because, as I have said, machinery is a factor of civilization, and I would not go backward- Mr. Thompson. But how is it a factor of civilization if you do uot make use of it ? The Witness. I would make use of it. If I use the same amount of machinery and ■employ a greater pumber of lueu and work them fewer hours a day I do make use •of machinery. >Ir. Thompson. But you do not get the benefit of the use of machinery. The Witness. If I employ ten men one hour a day, instead of one man ten hours a day, does it not amount to the same thing ? Mr. Thompson. Why not get rid of machinery altogether and go back to hand labor ? The Witness. Because machinery is easier to work. Why should a man work hard ten hours a day when he can do the same work more easily in one hour ? Mr. Thompson. Then you think that idleness for three-fourths of the time is a factor •of civilization ? The Witness. I did not say that, and I do not mean that. Mr. Thompson. But wouldn't it come to that? The Witness. No, because a man can employ in a very good way the hours that he is not working. It gives him an opportunity to improve intellectually. Mr. Thompson. And the more leisure a man has the more effective is he as a factor of civilization? The Witness. Exactly. And another thing. If you employ ten or twelve men instead one, they consume aa well as produce ; while your machinery does not con- sume ; it neither eats, drinks, nor wears clothes. The Chairman. Yon say you have been a machinist ? The Witness. Yes, sir. The Chairman. From your experience do you think it would pay to light up a .steam-engine and set it going to run only one hour a day ? The Witness. No, it would not ; but I do not insist upon one hour a day. My prop- osition is only that the hours of labor ought to be reduced in proportion to the increase of machinery. The Chairman. But you want to limit the hours of machinery to such a number of hoTirs as will give employment to every idle man. The Witness. That ought to be done. The Chairman. Wouldn't that add to the cost of running the machinery ? The Witness. That is a different question. Each individual for himself would in- vestigate that. Mr. EiCE. I suppose you would have one set work Ave hours a day and another set work five hours a day, and run the machinery ten hours a day. The Witness. Yes ; that could be done. Mr. Thompson. How would you do in the cases of raih-oads and steamships? The Witness. I think that the government ought to assume control over all rail- xoads, telegraph lines, and canals, just as it does over the post-offlces. Mr. Thompson. The telephone lines too '! 424 DEPRESSION IN LABOR AND BUSINESS. The AViTNESS. Telephones are a different thing ; hnt the government ought to as- sume control over railroads and telegraph lines for the benefit of the people. The Chairman. Why not take possession of the iron-works also which supply the telegraphs and railroads with iron ? The Witness. I would have the government assume control over the railroads and canals because they are great thoroughfares pertaining to the interests of the people all over the country, while I have no interest m the iron-works or founderies. They are sectional, and established in the interest of individuals; but every citizen of the United States is interested in railroads, canals, and telegraphs. The Chairman. Having got possession of them, how would you regulate the hours of labor on them ? The Witness. That should be according to the principle I have laid down. The Chairman. Take, for instance, a train running from here to New York. It igi now a day's work, I believe, to run an engine about two hundred miles. You, I sup- pose, think that is too much and that the hours of labor should be reduced ? The Witness. Well, working on railroads might be exceptional. The Chairman. Then you make exceptions ? Tne Witness. As a matter of course I always make exceptions where they are- necessary. The question of production and consumption is a different thing from the, question of running a railroad. Production and consumption do not apply to run- ning railroads or telegraphs. The Chairman. How would you pay the men working on the railroads — according to tlie time they ran ? The Witness. Yes, sir. The Chairman. Then one class of workingmen in the community would be per- mitted to earn more than another class of workmen of the same kind. The Witness. Not necessarily. The Chairman. The machinist running on a railroad would be permitted to earn the wages of ten hours a day while one working in an iron foundery would be permit- ted to work only live hours a day, and to earn only the wages of five hours a day. The Witness. If he produces the same amount he is entitled to the same wages that would be paid for ten hours' labor. The Chairman. But don't you think it would be a hardship to compel one man to work ten hours a day in order to earn the same amount that another man gets for five; hours a day's work? The Witness. That is just the case now, and that is what I intend to abolish. The Chairman. But you say you intend to allow that. The Witstess. Men are working now, without labor-saving machinery, ten hours a day and getting a certain wages ; working with labor-saving machinery they should get the same wages for five hours' work. The Chairman. What would you do with farm laborers ; would you work them only five hours a day ? The Witness. No, sir; I am speaking of cases where labor-saving machinery is used. The Chairman. But is there no labor-saving machinery used on farms ? The Witness. Yes, sir. The Chairman. Then when a man working on a farm was running a reaper or a mower, you would let him work five hours a day, but when he was working in the old-fashioned way without labor-saving machinery, should he work ten hours a day t The Witness. Yes ; I lay down the principle ; it will apply itself. The Chairman. But is there anything interfering with its applying itself now ? Is there aiiy law which compels a man to work on a farm or in a machine-shop so many hours a day ? The Witness. I do not speak of making laws on the subject ; I am giving tlus as one of the causes of the dej)re8sion of labor and not for the purpose of having legisla- tion in regard to it ; that is not the idea. T ha.vy. T>i'?ptione d this as one of the causes ^ of depre ssion, and I .suggest the^ remedy. The Chairman. "BuFwho is to apply the remedy ? The Witness. The jyeople themselves. The CiiAiRMAN.TBy what ineans do the people in organized communities express their views ? The AVitness. By meeting together. The Chairman. But what is the object of the meeting ? Is it not to secure legisla- tion which will carry out their ideas ? The Witness. Yes, sir. The Chairman. Then if they had arrived at the conclusion that a man ought not to work more than five hours a day, wouldn't you have that provision put in the fornii of a law? The AVitness. I do not know now whether I would. The Chairman. If not, why is not the matter all right as much as it is now? DEPRESSION IN LABOR AND BUSINESS. 425 The WiTNKss. You might iust as well say why do not all the people do right or un- derstand everything one way. The Chairmax. But you say that this is a remedy for present evils, and I ask you how are remedies to be enforced in organized communities except through the machi- nery of the legislature and the courts? The Witness. If the people see lit to apply the remedy by legislation, of course they can do so. The Chairman. But how can it be applied in any other way ? The Witness. The people can apply it for themselves. The Chairman. How ? The Witness. By just adopting the principle. The Chairman. But suppose I have a foundery, and say I won't adopt it, and go on and run my foundery in my own way. The Witness. Then either you or your laborers will have to suffer the consequences.. The Chairman. What consequences ? The Witness. The consequences of keeping up the depression we have now. The Chairman. But my laborers who are employed and earning their living will not he suffering. The Witness. No ; those that were employed would be satisfied, hut others would be- dissatisfied. The Chairman. But how would those who were dissatisfied secure relief except by legislation ? The Witness. Then if the people want legislation on the subject, let them have it. The Chairman. Then, after all, your suggestion is, that there shall be legislation to meet this case. The Witness. That is for Congress to determine. I only state the principle. The Chairman. But you came here to give us advice, and I ask you whether you would recommend legislation for this purpose. The Witness. I would recommend it myself, but whether my recommendation would meet the views of the people I do not know. The Chairman. Have you any other remedy to suggest for the present depressed condition of labor ? The Witness. I think we ought to establish a graded income-tax, by which the enormous wealth accumulated by a few individuals Uke Vanderbilt, Astor, and Stew- art should bear more of the burdens of taxation, and relieve the poor people of some of the taxes they have to pay now. The Chairman. What limit would you allow ? The Witness. I would allow a man to be worth a million dollars, and on all that he is worth over that I would require him to pay a tax in a proportion, so that the bene- fit of all the money he accumulated from the community over a million dollars should fall back to the commnity. The Chairman. That is, you would not let him have any net profits or anything' over a milUon dollars. The Witness. No, sir. The Chairman. Then probably when a man had got his million he would not be very willing to go on working. The Witness. I do not suppose he would, nor do I think he should. The Chairman. But suppose him to be a man of extraordinary talent like Edisoiv who can make inventions that save the community enormous sums, and who gets his one million very quickly, he will then sit down and have a good time with his million and do nothing more for the benefit of the community. The Witness. There is no fear of Edison accumulating many millions. Inventors never do. But take the case of Vanderbilt. If he had been allowed to accumulate only one million doUars he would not have had so many railroads, but somebody else would have them. The fifty or the one hundred million dollars that his estate has in- vested in railroads would be distributed among a great many other parties; or if it, were not invested in railroads it would be in something else. The Chairman. Is it a good thing for the community to have capital stay in this country ? The Witness. Yes, but not in the hands of a few men. The Chairman. Suppose that Mr. Vanderbilt is prohibited from having more than one million dollars here, but that, being a man of energy and capacity, he does go on making money after he gets his one million, what is to prevent his sending his sur- plus profit to Europe and investing it there ? The Witness. There is nothing to prevent him from doing tJhat now. The Chairman. No ; but he is allowed now to accumulate all that he can in this coun- try, he has no inducement to send his capital out of the country, On yoiir theory, he would not be allowed to accumulate more than one million ; and then what would there be to prevent him from sending all beyond that for investment in Europe ? The Witness. If he did not accumulate it he could not send it. 426 DEPRESSION IN LABOR AND BUSINESS. The CiiAiRJiAX. But suppose he has got his million and he finds at the end of the year that he has made $100,000 beyond his million, and a month before the income < .statement is to be made he goes down to Wall street and buys a draft on the Banlt gt England for $100,000, have you not driven capital to that amount out of this country f The Witness. O, well, if a man would be dishonest he could evade the law, 1 sup- pose. The Chairman. I have considered this question a great deal and at one time in my life I was misled a little in regard to it, but I became satisfied that the result of a sraded income tax would be to drive capital out of the country. The Witness. Well, I would like to exchange views with you on that subject. It seems to me that it does not necessarily follow that a man will stand idle because he is taxed upon what he earns above one million dollars. He might still go on and ac- cumulate ten millions. The Chairman. But he will be much more likely to stop when he has aocumnlated his million and enjoy it. The Witness. That is true. The trouble is that we have too many rascals that would do so, because they are selfish. The Chairman. Did you observe that there was one million dollars in British consuls in the estate of Mr. Astor? Now it would be a great deal better for this community i;o have this capital here. • The Witness. But Mr. Astor sent this capital out of the country without having «ny graded income tax in this country. the Chairman. He did it to guard himself against possible dangers. The Witness. Yes, he was a little overanxious. The Chairman. No ; he had the good, hard, German sense, and the wisdom of hav- ing a little laid by in a safe place. The Witness. Well, you know the argument has been advanced that the uprising -of labor has driven capital away. The Chairman. I do not say so. The Witness. AVell, I say it is a base falsehood. The Chairman. You had better wait until the assertion is made. That is not evi- dence. You have stated that you think a graded income tax would be desirable, and I have pointed out a difficulty in the way. If you have any further points, please state them. The Witness. I have. Why are not savings banks and other savings institutions who receive tlie deposits of the hard-working people of the country obliged to secure ■the money deposited with them in the same manner that natioilal banks have to secure their notes ? The Chairman. Because the general government has no power over the State sav- ings banks. The Witness. Then why does not the general government provide safe places of de- posit for the people's money ? The Chairman. Have you observed that the Secretary of the Treasury has recom- mended something of that kind in his last report ? The Witness. I hope something of that kind will be done. The people have suf- fered greatly by unsafe institutions of that kind. Men work hard the greater part of their lives and save something, and these savings banks rob them and then the robbers go at large. If the banks were chartered by Congress, thtiy could be compelled to secure the money deposited similar to the national banks securing their notes. The Chairman. You would have the savings of the country put into bonds the -same as the capital of the national banks is invested ? The Witness. No ; I simply ask why are not these savings institutions recLuired to secure their deposits ? The Chairman. Bat they cannot secure them unless they get the bonds, and they cannot get the bonds unless they buy them, can they ? The Witness. No matter how you fix it. I say they should be compelled to secure their deposits. The Chairman. "No matter how you fix it"; can you get something for nothing? The Witness. Do not those banks charge for the money they lend ? The Chairman. Yes ; when they lend a man money they charge him interest upon it ; but how do they get their government bonds ? Don't they buy them f ■The Witness. Yes ; they buy them. The Chairman. And you would have the savings banks do the same thing ? The Witness. Yes, sir ; as long as there are bonds sold ; and then, when you stop the sale of bonds, if banks cannot secure the deposits in any other way, let the govern- ment do it. ' The Chairman. Then you do not think it wrong to put the savings of the poor into the government bonds ? The Witness, Not so long as bonds are sold, anyhow. DEPRESSION IN LABOR AND BUSINESS. 427 The CiiAiRMAX. Well, there are two thousand millions of bonds that are going to ■be sold at some time. You said a little while ago that it would ruin capitalists to put their mouey in government bonds, but you do not think it is wrong to put the savings of the poor in bonds. Therefore, I understand that you think it is right to do for the poor what it is wrong for the rich to do for themselves ? The Witness. I do not say that the deposits of the savings banks ought to be put in government bonds. I simply say that they should be secured in some way. The Chaiuman. But how would you secure them ? The Witness. In gold and silver if you Uke, for aU I care. The Chairman. Then you would have the savings of the poor used in buying gold and silver ? The Witness. I do not say that, either. I simply say that I would have them secured in some way. The CHAIR.MAN. Tell me what way and I will try to ascertain how it will work practically. The Witness. Well, it might be secured in real estate. The Chairman. Then you think that the savings of the poor ought to be secured by mortgages upon real estate. Now is it not by making loans upon real estate that sav- ings banks do secure their deposits at present ? The Witness. Yes, sir. The Chairman. Then how would you make any improvement upon the present system by your suggestion ? The Witness. I simply mean that the banks should be reqviired by law to have some visible security^-to keep something as an equivalent and security for the money deposited with them. The Chaikm.\x. But how are they to get that security ? By buying it with the money that is deposited with them ? The Witness. No, sir ; they ought to have some money to start with like any other Ijusiness man. The Chairman. Then you would let an individual put up capital and go into the savings-bank business ? The Witness. Yes ; I think a man who has not got capital or security has no right to go into that business. The Chairman. Then the national banks which hive got capital would be very good parties to take up the savings-bank business, would they not ? The Witness. Yes, sir ; while I think the national banks are all wrong and are ruining the country (I can explain that in connection with the finance question), but in regard to security they are much better than the savings banks. A national-bank note 18 just as good as a greenback to-day, so far as its value and security is concerned. The Chairman. Have you any other points that you wish to present! The Witness. Yes, sir. The government has a Patent Office for the beneiit of in- ventors and manufacturers, and an Agricultural Bureau for farmers, a Medical Bureau for doctors, and libraries for lawyers, a Signal-Serrice Bureau for merchants, a syndi- cate for bankers, a Census Bureau for politicians, an Indian Bureau for Indians, and why not a labor bureau for laborers ? There should be oue in every State as well as in the national government. There should also be a sanitary inspection of all con- ditions of labor, means of subsistence, dwellings, &.c. Laws are passed to protect the manufacturer from the competition of the cheap products of other countries ; why are not laws passed also to protect the laborers in their wages ? Why are conspiracy laws passed ope rating against the rights of the workingpien to strike or induce o]Bfii.CTo st^HVeJjj protect TiT^ems^lves" from tKe oppression of employers, unless iSbeJouiaBress labor 7 Why are unemplo yed Vorkingmen whom necessity compels to waader as tramps in their^eajchjiarjrork imprisoired, and the wealthy tramps wandering about let afone i ■ , ■ The present contract system is not only depressing the laboring men, but is detri- mental to the government : depressing the laboring men becaune the contractor makes what the laborer ought to make; detrimental to the government because it holds out inducements for speculation to middle-men. The government with competent and honest officials certainly ought to be able to buy material not only as cheap as an in- dividual can, but cheaper, being a large consumer. So with freights. A contractor cannot, will not, and ought not, to work for the government for nothing. If, there- fore, he can make out of tlie government he will do so; if not, he will make it out of the laborers he employs, but m most instances he will try to make it out of both. Hence, the accumulation of wealth by middle-men, doing ,iust what we educate, at public expense, engineers, architects, and superintendents for, when the money that these middle-men make ought to go to the men that perform the work. They would spend it in the community, with the tradesmen and business men, causing it to circu- late and find its way back to the Treasury ; while, on the other hand, under the pres- ent system, it is hoarded up by a few men. The system not only enriches the few, but corrupts the yovernment officials legislating upon it and hiiving llie same in charge. 428 DEPRESSION IN LABOR AND BUSINESS. These Cdiitractors, or their liondsmen, are generally influential men, often ex-members of Con firess, or ex-utttcials, understanding the game thoroughly. A notable case is that of the jiresent Sccn-tary of the Interior. The Forty-tifth Congress, first session, ap- ]>ropriated $10(1,000 to replace a roof upon the Patent Office, to give, as was said at the time, employment to idle workijigmen, directing the Serretary to invite and select the best pla'n. There being a chance for somebody to speculate, the Secretary did not invite and select the plan as the law directed, but he selected apian to be proposed to a future Congress, the cost of which is estimated at $970,000. How he knew that Con- gress, with no additional light upon the subject, would appropriate |970,000 instead of $100,000, is hard to conjecture, except upon the theory that he knew he couJd find plenty of legislators ready to give a helping hand on a profitable job. Whether Con- gress will gratify the Secretary is yet to be seen. Certain it is, however, that the workingmen were and are kept out of employment, and sutfer in consequence. The Chair:m AX. Wouldn't it be better for the workingmen to have $900,000 expended on the work than $100,000? The Witness. It would, if they could get it; but in the mean timethey have to wait and suffer. Professional contractors, like, other corporations, pool their issues, to elect legislators to legislate in their behalf, and this can only be avoided by abolishing the whole system. The government miglit buy the material under competitive bids to a certain amount, but the work should be done by day labor. It was on account of the action of the contractors and the officers having the work in charge that last summer the laborers, being offered 65 and 75 cents per day for work, demonstrated under my leadership, in consequence of which the government incurred an expense of not far from $100,000. The Chairman. Have you refunded that amount to the gov^nment ? The. Witness. Not yet, but I will refund it whenever I can. I am trying to refund it now by giving the government good advice. The Chairman. Ah, yes ; but I wish I could pay my debts with good advice, and a good many other people would be glad to do the same. The Witness. Yes, sir ; that is the trouble ; there are too many theories advanced, too much written and reported on these subjects, all of which does not buy anything. The Chairman. But yon think what you have written and read, and reported, is good ? The Witness. I do not say that. I submit that for yon to decide. That the con- tract system ought to be abolished is conceded by every officer of the government having the same to execute, and the demand for its abolition comes with thundering tones from every labor organization throughout the land. Adjourned. At a later meeting of the committee, Mr. Cohen submitted the following points : Under the contract system, $300,000 to build a new printing and engraving building were appropriated in June last, the contract was awarded in September, and work be- gun in October. Under this system the Commissioners of the District of Columbia received a very large appropriation from Congress in June, awarded contracts from August to Novem- ber, letting willing hands stand idle, begging for work while the weather was fair, until the cold winter set in and they cannot work. Under this system bids are put in lower than "actual cost with a view of either ob- taining material on a credit and not paying for the same, or else defrauding the gov- ernment by measurement, count, &c., as the case may be, throwing the contracts into the hands of a set of thieves, and barring the honest contractor. How much money was .ipprojjriated to be expended by the Architect of the Capitol and give employment to labor I do not know, but I do know that but a very few men were employed during the summer, and a few more since Congress met again, and that only on half-time. In a report made by this officer for the fiscal year ending June 30, 1878, to the Sec- retary of the Interior, I find, on page 6, a statement that considerable damage has been done to the bases of the columns by the use of the portico at the District court- house for the use of public meetings. He therefore recommends that the practice of holding public meetings at that building be hereafter forbidden. I was present and jpresided at the meetings referred to, and know that the statement as to the damage is not true. The United States marshal and officers of the police interposed objections to some of the meetings at the time, never upon that ground. The recommendation to forbid the holding of public meetings at public buildings is entirely in keeping with the corruption and fraud practiced in that office, which I will point out in another connection. DEPRESSION IN LABOE AND BUSINESS. 429 monument; state, war, and navy building. Two hundred thousand dollars were appropriated— to be expended $50,000 per year— to complete the Washington Monument, under the charge of a board. Duriiig the summer months the board had to take their- pleasure trips, and the workmen stand idle ; now, in the cold weather, the work is rushed forward to be pushed to comple- tion, the execution reflects great credit upon the officers in charge of the same. Three hundred and twenty-five thousand dollars were appropriated to complete the east wing of the new State, War, and Navy building, of which $177,000 have been expended up to date, giving employment to 520 mechanics and laborers, receiving in wages $1,000 daily. The balance, $148,000, is to be expended and the work kept up right along till its completion in May. Here the music of the busy hammer, pick, and shovel is heard ; a thousand applicants for work on file, showing that people will work if they can find it. If all the officers having public expenditures in charge would have done likewise, there would have been no need for suffering in this District, and the government could have saved the trouble and expense of sending last summer to Fort McHenry for troops, employing extra policemen, and additional watchmen to watch the starving people. DISTRICT OP COLUMBIA. The District of Columbia has a population of over 160,000. Not being a manufact- ni-ing or commercial center, but the seat of the national government, the people are dependent, and, therefore, very much interested in the just dispensation and fair com- pensation of the government employes. The salaries of all the government employes are fixed by law, except that of the mechanics and laborers. The former are employed by the year, the latter by the day or hour. The former receive a salary from $50 to $2,000 per month, while the latter receive from 75 cents to $3 per day. The former send their surplus money away from hei'e, while the latter must spend it here. If the government does not employ the mechanics and laborers of the District it fol- lows that all kinds of business stands paralyzed. The Commissioners of the District being appointed by the President instead of being elected by the people, are independent of the people, and need only please such influ- ences as are of benefit to them. This is a clear case of revolution, according to the conception of our forefathers, that there should be no taxation without representation. The effects of this injustice will be apparent from the following transaction of said Com- inis.sioners : The pay of the officers of the Metropolitan Police was, on account of insuf- ficiency of funds, reduced from $90 to $70 per month. The pay of sergeants, lieuten- ants, and detectives was reduced, while the highest pay, that of captain and major, remained untouched, and that of the District attorney, fixed by law at $3,000 per year, was increased to $5,000 per year. On page 11, of their last report, I find laborers re- ceiving $35 per mouth, while in all other departments they are receiving $55 per month. That political influence controls all appointments down to the day-laborer is a well-known fact. The people of the District having no representative in Congress, the Commissioners being independent of the people, they must pay the penalty of a disfranchised people by looking on and see how people from the States come with their political influence and take the bread out of their mouths. This being an injury not only to the workingmen but to the trades and business men of the District, to the ten- ant as well fts to the property-holder, they are clamorous to again have their own mu- nicipal government, have drawn a petition, of which the following is a copy, which is now circulated among the citizens for signatures, and in the granting of which I trust tihey will have your assistance : A PETITION TO CONGRESS BY THE PEOPLE OF THE DISTRICT OF COLUMBIA. To the honoralle the Senate and Mouse of Bepresmtativea of the United States of America in Congress assembled: The petition of the undersigned, citizens of the United States and residents of the District of Columbia, respectfully represents : That by the act of June 20, 1874, Congress abolished the system of popular govern- ment in this District, after it had been in existence for but two years less than a cen- tury. This act of abolishment was in derogation of common right, m violation of irre])cnl- able law, and in direct tendency and effect subversive of the American system of doui- oeratic representative institutions. It needs no argument to show that citizens of the United States are entitled to self- ffovemmeut, for such is the principle lying at the foundation of constitutional law and social ord -r in every one of the States of our Union. This riirht was guaranteed to the inhabitants of this District by the compact between Marvland and the United States which resulted in the cession of this territory. 430 DEPRESSION IN LABOR AND BUSINESS. The act of cession of Maryland provicled that the jiiriMdiction of her laws over the persons and property of the District should not cease until Congress should provide for the government of the District. Congress did provide in 1801 that the laws of Maryland as they then existed should continue in force, and among those laws was the fundamental precept of the first and second articles of the declaration of rights, "That all government of right originates^ with the people, is founded in compact only, and instituted solely for the good of the whole ; second, that the people of this State ought to have the sole and exclusive right of regulating the internal government and police thereof." This was a part of the constitution of Mars'laud, and its adoirtion by Congress as a law made it a covenant between the United States and the inhabitants of the District, which Congress cannot abrogate, but is bound to fulfill. Congress has no power to abolish the bill of rights. This guarantee of legal government was well understood by the wise and patriotic men who procured the adoption of the Constitution. James Madison said, in No. XLII, of the Federalist, upon this subject : "And as it (the District of Columbia) is to be appropriated to this use (that of a seat of govern- ment for the Union) with the consent of the State ceding it ; as the State will no doubt provide in the compact for the rights and the consent of the citizens inhabiting it; as the inhabitants will find sufificieut inducements of interest to become willing liarties to the cession; as they will have had their voice in the election of the govern- ment which is to have absolute authority over them ; as a municipal legislation for local purposes, derived from their own suffrages, will of course be allowed them; and as the authority of the legislature of the State, and of the inhabitants of the ceded part of it, to <'oncur in the cession, will be derived from the whole people of the State, ill their adoption of the Constitution, every imaginable objection seems to be obviated."^ Following out the terms of the compact of cession, and its covenant with the inhab- itants. Congress finding local government existing in the District, in the cities of Alex- andria and Georgetown, and the levy courts in the county, maintained these popular institutions, and in one of the earliest acts of authority created the municipal corpo- ration of the city of Washington, which continued in existence for seventy years. It is not, however, solely in the view of common right and valid compact that the question of local government in this District rises to important considerations. There is much more inv(dved. It concerns the character and reputation of free government at large. With what countenance can the representatives of the American people stand before the world and declare a detei-mination to deprive 160,000 of their fellow- citizens, a population larger than some of the States, of the right and benefit of local government? To continue persistently this wrong and injury would be a standing calumny upon the American system of governiuent, and iuliict uppn the inhabitants, as it has already done, the evils of an arbitrary exercise of power, where taxation ex- ists without representation, and obedience enforced to rules not sa,nctioned by popular choice. We, therefore, respectfully pray yon to j)ass such laws as will organize popular municipal government in this District. PAY OF WORKINGMEN UNDER THE GOVERX.MEXT. The pay of the laborers in the different departments of the government varies from 75 cents to $3 per day, those performing the easiest labor receiving the highest pay, while others doing the same kind of work receive different pay. Tliey*dare not com- plain of this injustice for fear of being discharged. It is also a practice in .some of the departments to employ mechanics, paying them laborer's wages, and again paying favorite laborers mechanic's wages. This has been thoroughly investigated by the Trades Union Assembly, and made a report to that ett'eet. A man with name of Charles Sherer was employed by Architect Clark as a carpenter; he was ordered to bring his own carpenter's tools, which he did; he performed carpenter's work. Wit was paid laborer's wages, $1.25 per day. He came to me complaining ; I went to see the architect about it ; he sent me with a note to Captain Brown ; Captain Brown sent me to Colonel Clark ; that is the way responsibilities are shifted about ; it was not cor- rected, and the man quit work. This is the way this olficer economizes. Mechanics receive different pay for the same kind of work at the ditferent depart- ments of the government. This is owing to the manner in which the appointing offl- crrs ascertain the ruling rates. Inasmuch as the wages of the President, members of the Cabinet, members of Congress, clerks, watehmen, and laborers on the regular roll are fixed by law, I see no earthly reason why the wages of the mechanics and laborers that do the hard work should not be the same. The government has no busi- ness to speculate upon the labor of its own subjects. PAY OP WORKINGMEN. In paying the ascertained wages as paid by individuals in depressingtimes as of late years, the government, instead of helping to build up wages, helps to depress the stme, robbing Peter in order to pay Paul. DEPRESSION IN LABOR AND BUSINESS. 431 It may be argued with some force that supply aud demand regulate the prices of labor between individuals, but the demand and supply of labor for the government being regulated by law, it follows that the pay should also be regulated bv law, which I trust will be done, making the pay of a day-laborer, in view of the fact that they are m very bad cii-oumstauces, with no constant employment in view, not less than $l.oO per day for unskilled labor, and the pay of the mechanic the now highest price paid by the government. The pay of all officers in the departments at this city not exceeding $1,800 per year are to be increased 25 per teut. ; it is false economy to reduce the salaries below living rates. If the oflice is not needed, let the office be abolished. Competency and hon- esty cannot and are not to l)e rewarded less by the government than by individuals, which is the case now. UNIOX SOLDIERS. The law providing that Union soldiers (being qualified) shall be preferred in the civil service is printed on cards aud conspicuously hung out in some of the depart- ments, but just as con.spituously violated, I suppose because there is no penalty pro- vided for any violation of the same. Many cases have come under my personal ob- servation were honorably-discharged Union soldiers, qualified and well recommended, applying for watchmen or messenger positions, were put off under the plea that there is no vacancy, when the places they are entitled to under said law were and are now fiUed by young men from 14 to 20 years of age and others that never saw a battle, throughout every department of the government, while Union soldiers can be found by the hundreds wandering the streets of Washington in despair. Their only fault in not filling the positions they are entitled to is that they are perhaps not good enough politicians to command political influence, or they are perhaps so unfortunate as to be citizens of this District, or for not having influential friends or relatives. The posi- tions of watchmen and messengers are fined in an undue proportion by colored men, servants of those that secure the same for them, not Union soldiers. The duties are such as just fit the Union soldier. This practice, if not coiTected, will have its effect upon those that might be called upon to defend this government again, to say nothing of the flagrant violation of an existing law. The employment of women in the different departments to the extent of late years has grown to be an evil. It originated and was intended, as I understand, for the purpose of providing for the widows aud orphans of Union soldiers, but, unUke the Union soldiers living, they cannot get places, while ladies of influence can. In some instances they are better qualified than men to perform particular work, but generally they do what men are to do in order to support a family. If men are intended to sup- port women, then the opportunity ought to be given them ; otherwise, women are to support men. The discrimination in the pay of women is sufficient to show upon what principle they are employed. Women employed for the sake of charity receive a charitable pay, from $15 to |30 per month, while ladies of influence, doing the same or less work, receive from |75 to flOO per month. A correction would not only benefit men having families to support, a\ Inch the most of the women employed in the depart- ments have not, but would have a very purifying effect upon the departments. CIVIL-SERVICE REFORM. It Ls remarkable, and can only be appreciated wheu examined, the amount of political influence it requires for a person to even obtain a laborer's place under Ihe government under the present civil-service reform. It would seem to an impartial observer that labor ought to be allowed to speak for itself, but it does not under the reform we are having now. The Piesident and the champion civil-service reformer did declare their intention that their appointments should not be influenced by political influence, but, alas, saying is one thing and doing is another. It never has been done ; but this may be owing to circumstances over which they had no control. The intention was, no doubt, very ingenious, namely, to transfer the patronage from Senators and Members of Con- gress to the appointing officers, in the interest of the party they represent. How this would improve the civil service I fail to see. Why Congress does not pass a law that the patronage of the government shall be distributed among the several States on a proper jW-o rata basis, and provide for a heavy penalty in case of violation, is a matter that comes home to the constituency of the most of the members. To see a watchman or messenger examined under the civil-service humbug — not as. to the duties he is to perform, namely, to clean a spittoon, carry a piece of paper across- the floor, watching the door, and admitting visitors, but how high is the sun and how low the moon — is perfectly amusing, but serves the purpose of rejecting, under some pretense, those not wanted, by classing them incompetent, and those wanted compe- tent. Irrelevant questions submitted to clerks I guarantee the heads of the depart- ments themselves could not answer in the manner required of applicants. 432 DEPRESSION IN LABOR AND BUSINESS. LEGISLATION. Legislation lias been very Ijad, becanse the banknipt law contained some bad pro- vision.s, namely, that the expenses attending a bankrupt absorb the best part of the assets. Congress, instead of remedying the objectionable feature and substituting a remedy, abolished a law that is now in force in uvevy civilized country, and drives the largest class, the debtor, either to dishonesty or else at the mercy of the smallest class, the creditor. By demonetizing the trade-dollar, whereby a dollar containing 420 grains was reduced in value below a standard dollar of the same quality containing but 4iaj grains. By appointing a committee, at a heavy expense to the people, to investigate frauds in obtaining the Presidential chair, and declaring, before a report is made, the seat inviolate. By paying in the aggregate more salaries to the ofBcers of the government than to the rank and tile. MONEY. It is said that the tampering by Congress with the currency affect.s trade so that the people lose confidence to invest. So it does ; but the tampering with paper money destroys confidence as much as the tampering with coin money. It is said that money should be of stability. So it should, whether it be gold, silver, brass, leather, or jiaper. It is said that one dollar now will buy what three dollars did directly after the war. So it does ; but a poor person could sooner get hold of six dollars than of one now. It is not because tlie money is any better now, but because then there was plenty of money in circulation, within the reach of everybody willing and able to earn it, while now it is locked u]) in vaults, or in stocks and boncls not taxed, and so little of it in •circulation, that the people could not buy what they wanted if an article that sold then for one dollar was to sell now for ten cents. REMEDIES. If the resumption of specie payments, close at hand, should bring to the country the prosperity predicted in the late Presidential mes8a"e, then your committee will no doubt feel greatly relieved. If it should not, but to all appearances increase the mis- eries now suffered by the people, then I suggest that first such financial measures be enacted as are proposed by the Greenback i)arty. Let the hours of labor be reduced so as to corri's]iond with the increase of labor-saving machinery, and the pay be in- creased so as to stimulate consumption equal to production. Abolish the prison man- nfaetnring system. Abolish the contract system. Stop any more immigration of Chinese. Let the government assume the control over all railroad, canal, and telegraph lines. Estalilish public depositories. Establish a graded income tax. Establish a labor bureau. Protect the manufacturer in his products and the laborer in his wages. Stop yonr sinking fund to pay the public debt for a while, while men, women, and children are sinking at the same time. Abolish all unnecessary, ornamental offices. Provide for sufficient penalties for violations by public officers. Revise the civil service. Encourage actual settlers upon public lands. If the government has a right to grant lands and loan money to corporations, it has to do so to settlers. But if our best lands have already been taken up by corporations and what is left not fit to cultivate, then acquire more territory like other nations do. The acquisition •of California settled a large number of people and brought wealth to the nation. Make liberal appropriations for public buildings and improvements to employ a large number of now idle workmen profitable to the government, saving millions of dollars for rent now paid by the govern uent. Establish workingmen's wages by law. Establish a municipal government for the District of Columbia, and call upon the officers having public expenditures in charge to inform Congress and the people why nearly four millions of dollars appropriated by the Forty-fifth Congress, first session, in June last, have not been expended during the past summer mouths to set the then idle and suflcriug people to work, and what has become of the money That in times of general distress like the present, it behooves the representatives of the people to devise ways and means by which to ameliorate the same there can beuo jioubt, and that it must be doue by the government taking the iuitiati\e steps of reviving the business and sUmulating the enterprises of the country all agree. That this can be brought about in a way I have pointed out I feel confident, and let the people be the judges. The trouble is with Congress in not truly representing the people; they can always find a way where there is a will. A great deal has been said and written about the dear people, the bone and siuow of the country, which will neither buy a loaf of bread nor a pair of shoes. An ounce of go ahead will be more welcomed than a pound of promises. Theories hereafter to be realized, and speculations depending apou con DEPKESSIOX IX LABOR AXD BUSIXESS. 433 tingenoies, will not do at this time ; we must have help or elss tlie people will help themselves. It has been said in Congress that the government cannot take care of every pauper. It seems that the government can make paupers. If a government cannot take care of its paupers and falls to be a benefit to the majority of the people, then there is no use in having one. If the government cannot devise ways and means for the benefit of the people, then there is no use in having one. If the-people are willing to work when they can get it and jiroduce, is it not better and' cheaper for the government, the factor of the people, to asssist in providing employment than to have idle men, paupers, and tramps who, from necessity, are compelled to beg, steal, or rob, and be supported at the public expense in jails and penitentiaries ? The workingmen are told to assert their rights through the ballot-box. How, if they vote for a certain man and he is counted out ? How, if they vote for a man they be- lieve to be honest and he proves dishonest ? How, if they are threatened to be dis- charged if they vote for a man of their choice ? If Congress will remedy existing evils by proper legislation peace and happiness will reign in our land and the laws will be obeyed. If it is not done by legislation Congress are to know what must follow. The workingmen are associating themselves throughout the land for self-protection in a manner and numbers that if the ball is once set rolling it will be too late to regrtt the consequences, whatever they may be. Representatives elected are the representatives of the people, no matter to what po- litical party they may belong. The people are getting sick of the words Republican and Democrat; they want bread, and if the day of reckoning comes, those that have refnsed to do their duty will surely be held responsible. I trust that your committee will recommend to Congress some measure that will bring relief to the suffering people, no matter how it is done. VIEWS OF MR. EDWARD ATKINSON. Washington, D. C, December 12, 1878. Mr. Edward Atkinson' came before the committee in response to its invitation. He stated, in reply to the chairman, that he resided in Brookline, Mass. ; that he is engaged in insurance business at present ; and that for twenty-five years previously he had been engaged in the mauufjioture of cotton goods. The Chairman. The duty of the committee is to inquire into the present condition of business m this country ; to ascertain, if possible, the causes of the depression in business; and to suggest remedies which it may be possible either for individuals or for Congre.ss to adopt in order to remove the evils. The committee would prefer that you should take your own method of dealing with the subject. You have had a copy of the resolution under which the committee is acting, and undoubtedly you have formed in your own mind some mode of procedure, which we prefer to have you Mr". Atkinson. In regard to the specific question as to the ratio of wages at the present time to past periods, I have been for a year out of the direct management of affairs and have not been taking cognizance of wages; and, therefore, am not up to the times on that subject. It is also to be considered that as Mr. Can-oil D. Wright has been officially compiling facts on that point in Massachusetts, it is not worth while for any private person to meddle with it. ^, j. , . j. j. i. The Chairman. Mr. Wright has undertaken to furnish tables on that subject to the committee. , , , ^ . , e Mr Atkinson I have, therefore, the general staten^ent to make ot my impression that "at the present moment, it is not a qwestion of the adequacy of wages, or rather of the adequacy of earnings (for I think that there is a very broad distinction between wages and earnings, most of the work being now done by the piece and uot by the dav) The adequacy of earnings to pay for a good subsistence for those who succeed in settbiff regular employment is greater to-day than it has been withm my memory ;. but the adequate employment of all who desire it is not yet The Chairman. About what time did this surplus of labor appearj ^ Mr Atkinson. Unquestionably with the railroad crisis of 187.J. My view would be that 'the united effect of war, inflation of the currency, and tariff duties (imposed without much regard to consistency, but only with a view of taxing the largest num- 434 DEPRESSION IN LABOR AND BUSINESS. ■ber of articIoN .inii getting the greatest revenue tliat could be had for the necesBary pur- poses of war) caused a false distributiou— an entirely abnormal distributiou— of th» labor of the country through the period of the war. It is also to be observed that at the beginning of the war the railway service came to its point of concentration and' became a unit by the building in of ithe gaps which had existed previously, and that the excessive demand of war concentrated population in an entirely abnormal way. The 1/urdens of war would have been felt vastly more except for the excessive stimulus given to invention in respect to agriculture. For it is to be noted that all through the period of the war, although a million of men were withdrawn from the fields and the factories, no great crop seriously decreased in the north. The effect of invention was such that the few who remained at home could make ample crops ; could also manu- facture an ample quantity of goods, with the single exception of cotton goods, and could provide for all the lii-cds both of those who remained at home and of the excess- ive destructive demand of war. The Chairman. Do you thiulc that that was due solely to invention, or was it not rather due to the increased labor of women and children who ordinarily would not have exerted tliein.selvps so much in the rural districts, and. who took the jdace of the men who had gone into the Army ? Mr. Atkinsox. I should say that inventioti was a very large factor even in that. Except for the imentiou of tlie plow, which could l>e ridden instead of being driven by hand, women could not have done the work. Except for the reaper, the mower, and the thraslicr, the harvest would have failed. Undoubtedly the labor which staid at home was, under the excitement of the times, worked more effectively, aiid the women's labor supplanted that of the men in many occuj)ations to a greater extent than ever before. All these facts would have culminated at the_en(LQf_the_war in a disastrous decline. oT^viees, "aiid in enforced idleness on the nart oFthe reSM med'^ or- diers , if it had not been for tjie era of railway construction and of municijgal indelaad- nfia8_and extiavagaace^ by which the etlect of the , cessation of tEe~wa"r waT deferred for five or eight yeai's^ The CuAiiiMAN. You mean municipal indebtedness caused by the expenses of the war? Mr. AtivIxson. Caused li.\' the vast expenditures for the construction of public build- ings and works. In 1673thercfinally culminated the effects of war, of inflation, of many inventions, of municipal indebtedness and of railway extravagance ; and when that hap- pened it appeared that the population was wrongly placed ; when the redistribution be- came necessary it appeared that fewer persons could snjtply the community with the goods and wares that were required than had been the case at the beginning. Therefore the riedistrilintion which became necessary was not only that of distribution from the factory to the mine and from the workshop to the field, but the building up of new com- munities, of new industrial centers, to consume the products of the new fields — actu- ally a new settlement of the whole body of society, such as has taken place, to a great extent, in the Southwest, in Kansas, in Texas, and in the extreme Northwest. The ad- jiistment of the population to absolutely new conditions, which woul d have gone ^n under a normal condition of peace in a slow aiLd iuilion tln^ coiunmnity to be absorbed, just exactly as tltey were iu the case that you sjieak of In other words, would the war make any difference as to the number of men employed in railway construction!' AVould not the difficulty of ab.sorliing them, when the railway speculation collapsed, be just the same ? Mr. Atkinson. That is a very far-reaching ([uestion. I hold that there could have been no su
  • !an(l, and a long poiiod of fluctuating prosperity in this country en- suing after the war; and, during that period, neitlier in England nor in this country was much attention given to economy, or to the question of wages, or to the improve- ment of machinery. There was no time to stop to attend to the small economies. The hard times come on, and at once every one is thrown hack upon the necessity of economy, of sa\dng, of making profits by savings rather than in any other way, and in the last five years there have been greater improvements made in the processes of mamifacturo than were made for fifteen years before. All the inchoate inventions, so to speak, of fifteen years previously have been taken up and concentrated into five years ; and I should say that in a cotton mill to-day seventy-five hands can do the work which it took one hundred hands to do before the war. The reduction of cost by this means is very large, and at the same time it is coupled with higher earnings to those who continue to be employed. The Chairmax. Do you think that there is a market for the employment of so many workmen ? Mr. Atkinsox. I thirds; that the market has managed to absorb the products of as many workmen, but not to increase the number materially. Mr. Rice. While people in England are working at the low prices to which you have referred (caused by excessive production), and while they are seeking to find a market for their low-priced productions here, cannot our laborers be protected against those low prices while England is running herself out, or running herself clear ? Can we not in that way be enabled to avoid, to some extent, the evil results that have been caused there ? Mr. Atkinsox. So far as the great mass of staple cotton goods is concerned, I do not think that any artificial method of exclusion would Iiave much eifect one way or- the other. Mr. Rice. Are there any English cotton goods sold in our market now ? Mr. Atkixsox. In order to consider that question, you must discuss what are cotton goods. The great mass of the cotton goods — nine-tenths of the cotton manufactures — ■ consist of staple articles for the use of the million, and one-tenth consists of a nicer article depending upon its style, its weave, its color, or on how it is woven. We shall continue to import the tine laces, lawns and organdie, and fine muslins, and extremely fine threads from France, Switzerland, and England ; but we shall not import sheet- ings or drills, or the common wear of everykday people, under any circumstances. If you take the common sheetings and common drillings that are now exported from this country to China, South America, and other countries, you will find that the labor cost — ^the mill cost — of the fabric is only a cent a yard, or even less. Now you have brought, by the application of machinery (coupled with adequate wages, in comparison with any pre^dous period, and coupled with wages, to those who are at work, of greater purchasing power than they ever received before ; and coupled also with shorter hours of labor than existed before), the labor cost down to a cent a yard, or less — down to such a minimum that no difference that can exist between this country and Great Britain on that article can make any change in the traffic. Mr. Rice. Is the labor cost less here, or less in England ? Mr. Atkixsox. I am not speaking now of where it is the least ; but I say that it is down to so low a point here that, even if the labor cost could be reduced in England twenty-five per cent, less, to three-fourths of a cent a yard, it would not make any difference. Our fabrics supply the home trade, would still go to China in exchange for tea, and to South America in exchange for hides, because it is better for our mer- chants here to have a direct traffic with those countries, and even to pay a quarter of a cent a yard more for their cotton cloths than to undertake to do business through London where they would have to pay exchange. The Chairmax. We cannot avoid paying the exchange in London for hides. Mr. Atkixsox. I do not know so much about hides ; I suspect that depends more on navigation acts ; but I am speaking of the trade with China for tea. The Chairmax. I do not know about the China trade, but I do know about the* other. . Mr. Atkixsox. The American tea merchant to-tlay buys American drills and sends them to China, not as an undertaking out of which to make profits, but as an excliauge for tea, and we have already evened our traffic in China, exporting to China as much as we impoii;. The Chairmax'. I was not aware of that. Mr. Thompson. You started by saying that the war developed activity m mven- tions and in the production of labor-saving machinery, and that that, to a certain extent, compensated for the draught made upon the labor itself; in other words, that the great demand for products stimulated the productive energies of the people. Now you say that the depression in business has stimulated the improvement of machinery within the last five years more than in the fifteen years previously. How do you reconcile the two statements, that prostration ha.s stimulated improvement in machinery to that 458 DEPRESSION IN LAUOK AND BUSINESS. extent, and tliat the war and the unnatnial demand also stimulated improvements in machinery? Mr. ATKrxsoN. The war demand stimulated agricultural machinery and the mak- ing of the things which constituted the rude and comparatively coarse work of war. That has gone by. While that was going on, all the nicer improvements, in regard to the nicer demands of peace, were neglected, and there was very little improvement or change in that respect. Now the war demand of beef, corn, pork, guns, and coarse fabrics having gone by, all the work is going into the nicer demand, and into an im- provement of the more delicate manipulations which constitute the demand of peace. Mr. EiCE. Why may we not raise up the highest present grade of our laborers into that still higher grade of manufacturing those finer goods which you say we must al- ways import ? Could we not, by doing that now, by protecting our entire laboring population from the influx of foreign products, bring about the time when we shall not import even those nicer fabrics f Mr. Atkinso.x. I did not mean in this discussion to consider the question of protec- tion or free trade, as I do not consider it to be the one now at issue. Mr. EiCB. We have so considered it. The question is a very grave one. You stated in the commencement of your remarks that the tariff jjut upon foreign imports (to be sure, you qualified it by slaying what we shall all agree to, that it was not a well-adjusted tariff) had done something towards bringing about the present dejiression in industry. Mr. Atkinson. I meant by that the extremely bad adjustment of the tariff adopted at that time. I am not considering the tariff question as a whole. The Chairman. But yon have also stated another fact — that at Oldham, in Lanca- shire, there has been an enormous develo]iment of cotton production, an abnormal and unnatural one ; that capital had been invested there under the co-operative system, so that there has been a great surplus of production there, and consequently a fall in prices ; a collap.se which has reduced the prices of cotton goods unnaturally. Assum- ing that we were going on normally hei-e (only supplying the normal demand of the country) with machinery quite as good as any machinery that they had in England, and therefore with no misdirection of labor, and suddenly this collapse (which is due to their ewor in judgment and to their bad policy) takes place, is there no method by which we can protect our own people from the consequences of snch bad judgment and jiolicy on the part of the people on the other side? That is the question. Mr. Atkinson. I do not think that we can protect ourselves from that, because that competition meets us in neutral markets, not in our own market. The Chairmax. But our own market is the gicat market for those goods. Mr. Atkinson. Yes; but I do not think that the particular fabrics which are in excess in Lancashire can be unloaded here under any circumstances. But they are unloaded in India, China, and South America, and aiv sold at a loss, thereby prevent- ing the extension of our own (commerce. The Chairman. Suppose that we had free trade in cotton goods, would not this excess of production be unloaded here? Mr. Atkixson. I do not think that they make to any great extent the kind of fabrics which our market consumes. They are making the coarse and medium fabrics, not the extremely fine fabiics. The Chaiem.vn. But we are usiug a largo quantity of coarse and medium fabrics. Mr. Atkinson. Our coarse and medium fabric is very different from the English coarse and medium fabric. When the tariff was lowered in 1846 there was in 1M7 a very large importation of British cottons of that sort, and there was a good profit made upon them. The next year there was a larger importation, and they could not give their goods away. The Chairman. Is there anything to prevent them manufacturing the same kind of cotton goods as wo manufacture 1 Mr. Atkinson. Tliere is nothing to prevent them; but the cost of carrying the cot- ton to that side and bringing the goods back would burden the goods with snch expenses that they would lose heavily by the experiment. The Chairman. You have estimated, of course, how mnch the freight is on a yard of cotton goods. How much would the freight both ways be? Mr. Atkinson. In the importation of goods from Great Britain the nee essary charges that cannot be avoided amount to about 5 per cent. The Chairman. If the competition were to take place, th(? English would have to pay freight on the raw cotton and on the cotton goods back f Mr. Atkinson. I have collated the figures in regard to cotton, extending over a long period, and I find that the cotton-spinner of New England has the advantage of at least half a cent a pound over the cotton-spinner of Lancashire, which advantage cannot be wiped out. The Chairman. You mean on the raw cotton ? Mr. Atkinson. On the raw cotton ; and if it is half a cent per jiound on the raw cot- ton, it must lie hiilf ii cent a pound on the goods sent back. In a mill constructed DEPRESSION IN LABOE AND BUSINESS. 439 to-day for making a coarse fabric of cotton in this country a cent a pound would allow the payment of 6 per cent, on the capital invested. The Chairman. And you think, therefore, there ia no longer any necessity for any duties at all on cotton goods ? Mr. Atkinson. I am speaking now of those coarse fabrics. I do not advocate the entire removal of duties on cotton goods. The kind of cotton goods that are imported liere are a perfectly fit subject for a revenue tariff, and the imposition of a revenue tariff on goods does no harm, even from a free-trade standpoint, because it makes no difference whether it is imposed or not. The Chairman. In a time of great depression in business, when the English manu- facturers want to get rid of their surplus, might not a tariff under such circumstances ^for the producer would then have to pay it, not the consumer) be a protection to us ? Mr.. Atkinson. A moderate revenue tariff would be undoubtedly a certain protection against that abnormal condition of affairs. The Chairman. Do you think it legitimate legislation for one nation to make pro- vision against such cases of glut ? Mr. Atkinson. Not unless there was another reason for it. In other words, if you did not need the revenue, you would not need a revenue tariff; but, needing the rev- enue, and considering the revenue standard point of view in imposing your duty, you compass the other object at the same time. Mr. Thompson. Would yoii not, for the purpose of encouraging infant manufactures in a new country, make a partly prohibitory tariff for the time being, without regard to revenue ; or would you permit infant manufactures to be broken down by competi- tion with established manufactures abroad ? Mr. Atkinson. I would not, from my study of history, impose a protective tariff where one had not existed. I would let the infant grow up on its own legs and be- come strong. Mr. Thompson. Has any mauufactiire in this country grown up on a free basis in competition with foreign manufactures ? Mr. Atkinson. Unquestionably. Mr. Thompson. What one ? Mr. Atkinson. The iron manufacture in this country began when we were colonies, and, under the repressive acts of Great Britain, grew to so large an extent that it had to be put down by absolute law ; and yet it could not be put down. The Chairman. I do not understand that to be history. Mr. Thompson. Do you mean to say that the iron business in this country grew up, and not only in the absence of protection, but in the face of repressive measures on the part or Great Britain ? Mr. Atkinson. I so "viuderstand it as a matter of history. The Chairman. At the time you speak of (the colonial history), the only kind of iron manufactured was charcoal iron. At that time pig-iron was made with charcoal, none with mineral coal. England was short of forests, and tried to encourage the manufacture of iron in this country so as to be able to procm'e it froin her colonies rather than from foreign nations. Charcoal furnaces thus grew up in Massachusetts, Pennsylvania, New York, and Virginia, and pig-iron was exported in considerable quantitv (comparatively) from this country to the other side, although the largest record of its exportation that I can discover, was 7,000 tons in one year. The result was that the American manufacturers undertook to use the pig-iron themselves and convert it into finer forms. They were allowed for a long time to convert it into bar-iron, and considerable quantities of bar-iron were sent to the other side ; but they were not al- lowed to manufacture it into nails and other articles. That was prohibited by the famous act to which von have referred, just before the revolutionary war, and was undoubtedly designed to preserve the colonial market to Great Britain, There never was any repression on the part of Great Britain ; but, on the contrary, there was every encouragement to the production of iron in this country, and yet the business was so small that when the Revolution broke out there was considerable difficulty in supply- ing the American army -with the necessary iron. Mr. Atkinson. So I believe there was, at the beginning of the war of the rebellion, considerable difficulty in. this country, notwithstanding the extension of the iron in- dustry, in procuring the exact kinds of iron needed. The Chairman. Yes. For one year there was a deficiency in the iron needed for wun-barrels, because, while we made it in this country, we were not making it on a sufficiently large scale. But there was no iron business worth talking about in this country at the time of the revolutionary war. The iron business first obtained con- siderable development in the war of 1812. That did give a great deal of encourage- ment to the iron industi-y ; and from that time on (rising more or less irregularly) there has been a steady growth in the business. Mr. Thompson. Is there any other branch of manufactures that you can instance to have grown up without protection in thi.s country ? 440 DEPRESSION IN LABOE AND BUSINESS. , Mr. Atki.\S(1n. All our grandfathers and grandmothers Avere clothed with homespun woolen goods, made in their own houses, on single spindles and hand-looms. Mr. Atkinson. You dp not cei-tainly intend to give that as an example of manu- factures. Mr. Atkinsox. I call that an infant manufacture. Mr. Thompson. A rude manufacture. Mr. Atkinson. An infant manufacture. Mr. Thompson. You might as well instance the case of a dug-out as compared with a steamboat. That intere.st did not need protection, because it had no competition. Mr. Atkixson. But from each of these small beginnings comes, by evolution, the great undertaking. Mr. Thompson. Is there a single staple manufacture in this country which is a suc- cess to-day, and which has been and is now manufactured in older countries, that has grown up without protection in this country f Is there a single case of the kind — ^I mean partial protection — at least friendly legislation ? I do not know of any. Mr. Atkinson. You are .siieaking now as we customarily speak of manufactures, as if cotton, wool, iron, and steel constituted the manufactures of the country. They constitute an exceedingly small jiart of the manufactures of this country. Mr. Thompson. Have not all these been encouraged by friendly legislation in the line of protection. Mr. Atkinson. It has been undoubtedly attempted so to encourage them. ilr. Thojii'S(jn. Is there any other manufacture that has made any considerable progress in this country that lias not in like manner been partially protected? Jlr. Atkins( in. I was about to say that these three branches — cotton, wool, and iron — constituted the employment of about 400,000 people out of 48,000,000. They constitute four out of two hundred and odd branches of manufacture which are listed under the head of manufactures in the last census of the United States. There is employment given to millions in other manufactures as compared to hundreds of thousands in these ; the rest are mainly manufactures the production of which cannot under any circumstance be impeded, in which cotton, wool, iron, and steel are the raw materials ; and these other maufactures have grown up irrespective of the tariff policy of the country, because they are natural and "to the manner bom," and cannot be kept out. The Chairman. Then the tariff on iron and steel has not prevented their growing up? Mr. Atkinson. It has not, hut has hindered them. I have come to the conclusion that the effect of tariffs has been exaggerated by us all. Mr. Rick. On both sides ? Mr. Atkinson. On both sides. Mr. Thompson. I think you are correct. Mr. Atkinson. I hoped not to get into this discussion at this period. The Chairman. We do not want to get into a tariff discussion; but there are some facts wliich are really desirable to have considered* by men of intelligence who have studied the subject, and which have a bearing on the conclusions of the committee, and it is in respect to them that the question is asked. Mr. Atkinson. The question whether or not infant manufactures would have grown up in this country is a question of the past ; it is merely a question of what might have been the facts under other conditions. Mr. Thompson. Then take the converse of that ; has any manufacture grown up in this country which came in competition with other manufactures in foreign countries that has not been protected to some extent here ? Air. Atkinson. I do not believe that there is any branch of manufacture in exist- ence in this country on which there has not been an attempt made to put a duty ; but whether that duty has been of any effect at all is an entirely different question. It can be alleged, with reference to the most infinitesimal things that men use, that there has been an attempt to stimulate their production by putting an excessive duty upon them. But that is a question of the past, which I think has gone by. The Chairman. I do not know any staple production of this couiiti-y which, if the duty upon it were absolutely removed, could not be laid down cheaper from England than we can produce it. Take, for instance, steel rails ; steel rails were worth $160 a ton when the manufacture of them was tirst commenced in this country ; they are now sold here at ,|46 a ton, and have been sold as low as $44 a ton. They are made in this country to the extent of 500,000 tons a year, and not a ton of steel rails is now imported. The price of th[r. Atkinson. I should say that, if there was no (xuestion of revenue coming in, no nation would attempt to impose a tariif for the purpose of protecting itself against that accidental or abnormal condition of things. But it does not seem to me a lire question at this moment. We all ailmit that, whether beneficially or otherwise, we have changed the direction of our industries through the policy that has obtained ; and no man of common sense proi)oses to sweep away the existing tariff at one sweep. I would cease the discussion between the two opposite theories (and I have tried to do so for the last two years), and I would have the two sides come together as they can come together, and, from their respective standpoints, agree upon a practical measiu'e which both can sustain. The ChairmaJv-. But the question will not down. You cannot get rid of it. The difficulty is just this : The duty which protects the manufacture of steel rails in this country is not a revenue duty, and the moment you make a revenue duty of it it ceases to protect, and it opens the market to the foreign producer. That is the fact, and you cannot wipe that fact out. Adjourned till to-morrow morning. Mr. Atkin.son, at the next session, added: "I would answer your question aa Daniel Webster did in 1820, that the imposition of a tax on foreign goods for the purpose of keeping out a temporary glut that might somewhere exist, would be like a strong and healthy man daily taking jihysic lest, at some future time, he might be sick." VIEW.S OF Mi;. EDWAIJD ATKIN.SON— CoH;iH»((/. W.vsiiiNGTON, D. C, December 13, 1878. The C'i[.AiK:\rAX. Passing from tbo question of tariff and free trade (which we may consider to have, been exhausted yesterday), I should like yon to turn your attention to the labor question, with refereiict! to wages in all parts of the globe. I desire to ask you whether you detect any agencies that are equalizing the rates of labor in different countries, and whether you are able to state any consideration that would go to show that wages can be, artificially or otherwise, kept higher in one leading commercial country than another. I put the question in a very general form, in order that you may answer it in your own way and from your own direction. Mr. Atkixsox. I shall answer it in a little different direction from that indicated by the scope of the question. I think that therHons siirviving would be very much less than the luimber that is now able to have a comfortable li^'elihood. Jlr. Atkinson. Uncincstionably. This country has passed through two periods, and DEPRESSION IN LABOR AND BUSINESS. 447 IS. now passing through the third — a very strange one, such as never hai)peue(I before in the history of the world. The first period was a period of possible scarcity for large masses of population^ when the possibility of producing enoiigh for the barest subsistence was the question at issue. It was an absolute struggle for life, for the means of living, on the part of great masses of the people. Invention and discoyery have abated that, and we passed into the period where there was the possibility of excess in one section of the country and of scarcity in another, when the question at issue was the question of the mechanism of distribution — ^the raih'oad, the canal, the highway. We have passed out of that into a period to-day when, with the existing machinery and the existing population, the idea of possible scarcity anywhere, at any time, of any essential thing, can hardly be conceived in this country ; and you have come to the point where the questions at issue are the method of distribution, and how to stimulate consumption ; how to make use of the vast excess of quick capital which burdens all markets throughout the country in every line of production — how to stim- ulate consumption here or elsewhere. The Chaikmax. That is, how to diffuse the area of consumption so that people, who are now uncomfortable for want of things, may be able to get them ? Mr. Atkinson. Yes ; you have on the one side the mass of uncousimied commodities loading the warehouses, and a, cause of depression and loss to the producer. You have on the other side, to a very much more limited degree than the ])i)pular mind conceives, a considerable number of unemployed laborers eager and willing to do the work which would entitle them to consume this excess, or a portion of it. Aud how to establish such conditions of mind (for it comes really to a mental condition), that constructive enterprise (having reference to the need of a future population) shall begin again in a large way, seems to me the problem of the hour. The Chairman. In other words, there are plenty of things in this country that ought to be done, and plenty of capital to do them with? Mr. Atkinson. Yes. The Chairman. But there is an indisposition to use capital for that purpose f Mr. Atkinson. Yes; but there being something wanting, the machineiy has sto])]ic(l for the present. The Chairman. The machinery has stopped? Mr. Atkinson. That is my view. The Chaikman. Can you suggest anything that govcrnuiciits lan do to set this ma- chinery in motion ? ilr. Atkinson. The one thing that you can do, aud that you are about to do, in my hope and judgment, is to establish a single unit of value which shall be the single legal tender, and which will give confidence to the man who invests his capital to-day that he can get back its equivalent next year, or in the next generation, if he wisely makes his investment. The Chaikman. You are aware that the State now aiier and gold. If it was sure that that would continue, then this state of uncertainty would no longer exist. Mr. ATK1N.SON. It would exist no longer. You havc> got to the point of equilibnum of the existing notes in gold. Mr. THOMPSt>N. And consequently of values. Mr. Atkinsox. And I think vou have got the values of some commodities even below the gold standard, owing to the absence of enterprise. I think that the one thing which would stimulate enterprise more than any other at this moment would be a de- cision of the Supreme Court that nothing but coin was a legal tender. I do not believe in any absolute certainty about it until that decision is had. Mr.' Thompson. Yon liave stated that values are now even below' the gold standai-d, and that any change in the future must consequently be an appreciation of values. Now, if a man invests his money in these articles to-day, how can any change in the turrencv aftect him adversely ? Mr. Atkinson. You have in the public mind the possibility of a silver standard in- stead of a gold standard, and in the public mind that is an idea of depreciation. The public mind is very much alamied about the apparent excess of silver. Mr. Thompson. But what difference does that make to the man who puts his money in these articles to-day? Would not the depreciation of the currency appreciate his property, and would he not be the gainer by it f I am taking the case of a permanent investment — tlie case of a man who buys a farm or builds a house, at the present value. If, to-morrow, greenbacks be made a legal tender, or be doubled in volume, or if silver be made a legal tender, by which the relative values of property are changed, how does that hurt the capitalist? Mr. Atkinson. Yon cannot get the apparent (but not real) benefit to individuals of an inflation of the currency, unless that inflation of the currency is accompanied by a war demand for commodities. It was the combination of the two — the stimulus of the excessive war demand, accompanied by an inflation of the currency — which caused the ri.se of prices. Mr. Thompson. Do you mean that the depreciation of the currency does not appre- ciate the apparent value of property or the relative value of property? Mr. Atkinson. It may, asnamed in that money ; but it depreciates the actual value in the relation of one piece of property to another. It may appreciate the price of property. The price of property may be named in a larger number of sham dollars than of real dollars ; but the actual relations of one piece of property to another, and of the actual service which one man can render to another, is constantly depreciated and rendered less and less. Mr. Thomson. Do you mean that property is really intrinsically of less or more value dependent upon the character of the standard by which it is measured? Mr. Atkinson. I do most absolutely. The actual real value of property and of ser- vice and of commodities comes from its use as to the property, and from its quick cir- culation and consumption as to the commodity. Mr. Thompson. Take the case of a man who, during the war, when gold was at 2.40, bought up property in Washington City at its then estimated value. When paper money has got back to the point it has reached to-day, does not that property shrink relatively in value ? Intrinsically it is of the same value ; that is, it takes the same amount of labor and the same amount of material. Mr. Atkinson. Not at all. Its value consists in its use at one time or another ; and even when you have got it back to an apparent equality with gold, unless there is as- surance of the stability of that equality with gold, the use of that property is im- paired, and whatever its price may be its value is less. Mr. Thompson. I can understand the suggestion made by the chairman, that where capitalists loan money to enterprises there is an unrest about it; but when a man in- vests his money at bottom prices, as it were, any change that may take place must be in the direction of his interest, necessarily and inevitably, as I understand it. There- fore I do not understand why capitalists hesitate to go into investments now. Mr. Atkinson. The vast majority of capitalists understand perfectly well that any fluctuation in the standard by which services are to be measured, and property is to be measured, restricts and hampers the service which one man can render to another, checks the circulation and consumption of commodities, and impairs the use of the property which he holds. Therefore he will not move until he is assured of the sta- bility of the unit any more than he will buy goods unless he knows that the yard is to be continually 36 inches. No man will buy goods and put them away for future use to be measured by the yard on the chances of a change in the yard next year. Mr. Thompson. I do not see how that would affect him at all, provided the compen- sation was correspondent, which it must be. Mr. Atkinson. Which it may not be? Mr. Thompson. It must be ; it cannot be otherwise. A yard is only three feet be- cause we call it three feet. DEPRESSION IN LABOR AND BUSINESS. 451 Mr. Atkixscix. A yard is a certain existing element of space. The Chairman. Suppose a capitalist makes a loan dependent upon a certain num- ber of yards to be repaid next year, and that next year the yard is reduced to twenty- four inches, and that the fellow to whom he has made the loan returns it in yards of twenty-four inches instead of thirty-six inches? Mr. Thompson. I said a moment ago that I can understand the condition in the case where capitalists lend money for enterprises ; but, where a capitalist invests his nioney at the lowest values of jjroperty, then I cannot understand how any deprecia- tion in the currency can depreciate his property. The Chairman. We are considering the effects on prosperity and on the activity of business. Capitalists are of two kinds — those who invest their money in property and those who lend money. The capitalists who lend money will not lend it unless they are sure that they are going to get back as good as they lend. I would ask Mr. Atkinson, in a general way, how large a proportion of capital is in the nature of capital that is loaned ; is it a very large amount of the aggregate of capital ? Mr. Atkinson. It is a very large amount, an essential amount. The Chairman. Does the prosperity of business depend upon a very small percent- age of capital; that is to say, do enterprises go on readily when tihere is plenty of capital to be loaned, and do they cease when there is not much capital to be loaned ? Mr. Atkinson. In a normal condition of affairs, that is the fact. The Chairman. If capital is unwilling to be loaned in consequence of the uncer- tainty as to how it is to be paid back, will not that bring about a depression in busi- ness and a cessation of enterprise ? Mr. Atkinson. Undoubtedly it will, and has. I have a knowledge of masses of cap- ital lying idle to-day. Mr. Rice. Are not the men who put most life into business enterprises the men who borrow capital f Mr. Atkinson. Unquestionably. Mr. Rice. And without such men, business stagnates ? Mr. Atkinson. Without them, business stagnates. The Chairman. The nature of cajjital is not to be enterprising ? Mr. Atkinson. Not to be enterprising. The Chairman. And it is the nature of men without capital ? Mr. Atkinson. To be enterprising. The Chairman. Are the enterprising people borrowing money now ? Mr. Atkinson. Not for constructive enterprises. The Chair.man. Are they afraid of borrowing money for constructive enterprises ? Mr. Atkinson. They are afraid to begin constructive enterprises in Massachusetts now. Mr. Rice. No railroads are being projected there and no factories are being planned ? Mr. Atkinson. No railroads, no Victories, and no works of any kind. Mr. Rice. I suppose that the owners of factories are doing something toward re- placing their machinery. Mr. Atkinson, That is going on at a very great rate. Almost all factories (where there have been means to do it) have been reconstructed within the last five years to the extent that the same work can be done there to-day by 75 hands that took 100 hands a few years ago. Mr. Thompson. Is not that state of affairs rather an irrational one, that borrowers are afraid to borrow money to go into constructive enterprises, for the saime reason that capitalists are afraid to lend money ? Mr. Atkinson. No : the same causes produce like effects on both minds. They must have an absolute standard unit of value for either transaction (either to borrow or to lend), or else the borrower may be called upon to pay a good deal more than he receives and the lender to take back less than he advances. Mr. Thompson. No. The borrower has got to that point where he cannot be called to pay more. He may be called to pay less, and that would help those who would borrow money to engage in enterprises. Mr. Atkinson. There may be fluctuations. It is the fluctuations that trighten. The borrower may be called upon to pay more than he can recover from the community. Mr. Rice. Is it certain that we liave got to the lowest point yet i Mr. Atkinson. fTobody can say that it is certain; but the judgment is that we have got the prices of some commodities down to the lowest point or even below it. The Chairman. Mr. Thompson does not make allowance enough for the effect of the disasters in business for the last 25 years. The older men are gone and the younger men are not in a position to take hold. There is at present an enormous demand for money but upon security that capitalists do not consider sufficient. Mr \k.TKlNS0N. Yes; you can lend plenty of money if you choose to; but you can- not have the free eirculation of capital, except upon a standard unit of value which cannot be changed. 452 DEPRESSION IN LABOR AND BUSINESS. The CiiAiitMAN. Voii made a statemont just now which I wish to follow up. Yoa said : Admitting that we have now got down to efjuivalent values of gold and paper money, there i» a fear in the public mind that silver may be substituted for gold, and that therefore the man who lends money that is now worth gold may be obliged to take back his money in silver. What is the dittereuce now between gold and silver? Mr. ATKl.Nsnx. From 15 to 17 per cent. „ . , x- j The CiiAiRMAX. If, by any possibility, gold should be driven out ot circulation, and if a lender should be paid back in silver, what would he the loss f Mr. Atkixson. Just the difference between the bullion and the com value of gold and silver. The Chaikman. If silver should be declared to be a legal-tender for debts, what must be the inevitable result ? Mr. Atkixs(-)X. The inevitable result must be a single silver standard. The Chairman. And while the danger of that prevails, capitalists are not willing to lend their mouev ? Mr. Atkinson. They are not willing to lend their money, and will not do so; and even the men who ought to borrow capital will be afraid to do so, or to enter upon any new enterprise. They will live on what they have got and wait events. The Chairman. And then your judgment is that there can be no recovery until this silver question is all settled ? Mr. Atkinson. I agree to that most fully and conclusively. I think that we stood in the best position to avoid all the silver complications had it not been for the legis- lation of last year. The Chairman. In other words, you think that we deliberately plunged into the difficulty ? Mr. Atkinson. We deliberately plunged into a sea of difficulty which we of all na- tions could have best avoided. We could have left the determination of that difficult and dangerous question to the cost of other nations. The Chairman. Were we not the only great coiuuiereial nation that was out of the scrape ? Mr. Atkixscjn. We were the only gi'eat commercial nation that was out of the scrape; and, while not believing myself in the permanent depreciation of silver in the ratio to gold which now exists, my objection is to the fluctuations which are in- evitable. Mr. Jones, 'i'ou say that we were the only nation out of the silver scrape. Was not Germany out of the scrape ? Mr. Atkinson. Germany has been the prime mover in the change, and my idea of the cause of it is that Germany was unduly alarmed by the apjiarent excess in the pro- duction of silver, and that she disused silver without sufficient reason. My idea is that it is the temporary silver mine opened by (Germany, in selling her old silver, happening to faM upon a period when Eastern exchanges are not in their normal con- dition, that has been one of the prime causes of these great downward fluctuations in silver ; because I can find in the relative production of gold and silver since 1850 nothing to warrant so enormous a fluctuation. Mr. Jones. Germany is a country that has a single standard, and yet that country has not enjoyed the prosperity which you say would come if we had a single standard. The Chairman. Mr. Atkinson expects it to come in German}- when it comes here. It will all come together. He only says that it is impossible to restore constructive enterprises here until this question is settled here. It is settled in Germany. There there is no difficulty except in selling silver at a loss. But what we want here is to set constructive enterprises going. The owners of floating capital will not lend it unless they know they will get back as valuable a commodity as they give. That is the difficulty here. The general depression of business extends all over. Mr. Atkinson. The depression of business began in Germany before the demoneti- zation of silver, and it was perhaps a mistaken move in Germany that caused her to enter on demonetization. My own judgment is that Germany made a mistake in that. The Chairman. At any rate, we were out of it, whether the Germans made a mis- take or not. Mr. Atkinson. We were out of it. We were entirely out of the question. AVe need not have considered whether it was a mistake or not. We need not have had any- thing to do with it ; and the only effect of it then would have been on the fall of our silver as bullion, which, in ratio to the value of all our other commodities, is a mere hagatelle. Tlie Chairman. And Congress has no more to do with it than it has to do with the fall in pig-iron ? Mr. Atkinson. Not the least. We should have let it take its market value. It would have found its level on the new condition of supply and demand. The pending question in that regard is whether the United States can supply itself with the gold needed without aggravating the difficulties of Great Britain, where there is as yet quite enough gold to serve its purposes, but perhaps none to spare. DEPRESSION IN LABOR AND BUSINESS. 453 The Chaikman. Our annual product of gold is about 150,000,000 a year. Mr. A iKixso-V. Undoubtedly. That again affect.? us. We have the command of the gold of the world if we choose to exert it, because we are now producing in excess the meat, the cotton, and the corn which the civilized world must have, or must go hungry and stop work. And when all our bonds are home (as they are now sup- posed to be),^ and when we present our hills for the cotton, the corn, and the meat supplied to Europe, as demand checks payable in specie, then there will come a new condition of things, the effect of which cannot be yet foreseen. But that we have that power and that we can use that power to our own advantage (no matter who suffers) is a fact that cannot be gainsaid. The Chairman. Suppose we were to exercise that power and insist in having payment for our exports in gold, you can foresee what would be the consequence on the other side. Mr. Atkixsox. I can foresee a terrific depression in Great Britain and a fall in prices here. The CHAIU.MAX. Prices would fall on the other side to such an extent that we would be willing to take their goods for our commodities ? Mr. Atkinson. Yes. The CHAIR.MAN. And, therefore, the effect of that state of things would be a readjust- ment of values upon a lower scale than now prevails f Mr. Atkinson. Yes. The Chairmax. So that it is among the possibilities that we have not got down to the bottom yet ? Mr. AXKix.sox. We may not have got to the bottom in regard to some of the great staples of the country by any means. The Chairmax. That is to say, that gentlemen who are holding cotton now for higher prices may be still mistaken, and that there may be still a lower depth for cot- ton? Mr. Atkin.son. They may be still mistaken, in consequence of the inability of our customers to find means of paying for the cotton. That discloses the difference be- tween this country and all other countries at the present moment. All other countries suffer from the scarcity of something or other which they must buy and for which they must find means of payment ; and we suffer from a plethora of everything under the sun that we need for our use or with which we can supply other people. The Chairsiax'. Is not the increasing depression of business in England an indica- tion that that process is going on ? Mr. Atkinson. It is undoubtedly so; and, furthermore, I think it is an indication of the permanent change which I referred to when I first began my evidence (of the equalizing process of machinery); that is to say, that it is no longer so essentially a question of wages, in the competition between this country and Great Britain, as it is a question of the position and of the open market in which to sell the product of the wages. The Chairman. You say that we can go on and produce in this country more cheaply than they can in Great Britain or any other country, by reason of the fei tility of the soil and the existence of the raw material here. Still they must go on and produce, they having got a population which must be employed in order to live. Would they not put down their wages in order to equalize this difference, and will not the effect of that be the transfer of that population to this side? Mr. Atkixsox. Unquestionably ; and I expect to see immigration from Great Britain to this country within ten years something like that which followed the Irish famine in 1846 from Ireland. But this is hypothesis. The Chairman. But it is not hypothesis to say that they put down the wages of their employes to a point to enable them to carry on competition with us, and that that competition still goes on. Mr. Atkinson. Yes; and if I am right in my position, we can, in very many direc- tions, pay higher wages than Great Britain, and still produce goods at the same cost as they can, or less. The Chairman. But as their wages go down, ours must go down correspondingly. Mr. ATKiNSf)N. Yes ; but at the same time the purchasing power of our wages will not go up correspondingly, and the laborer ^^ ill be still better off here than in Great Britain. The Chairman. The fall in the price of food goes back to the farmer. Will he get as much for the net results of labor as he formerly got? Mr. Atkinson. He may not; but he again has got the application of machinery to enable him to produce upon a larger scale, and he gets his profit from the vast quan- tity he can produce rather than from higher prices of limited quantities. The Chairman. But take the cases of small farmers — of whom we have such great numbers in this country — would not the result be (if the cost of the product is to be determined by the largeness of quantity) to drive out the small farmer, and to aggre- gate farms in larger areas? 454 DEPRESSION IN LABOR AND BUSINESS. Mr. Atkinson. I do not see it so ; because, after all, tlie small farmer lives on the .■scale of little limited area in which he resides. He cannot compete with the great ■capitalists engaged in farming on a large scale. The Chairman. He would be driven to produce those things which do not enter into the general market. Mr. Atkinson. Yes; and, in that regard, bear in mind that the product of the small farmer is not the great staple product that goes into the markets of the world. For instance. Central New York, that used to produce wheat, and that was considered a :great wheat country, is a vastly richer country to-day — so far as its farmers are con- cerned — from the product of small miscellaneous crops, which will not bear long trans - portation. The Chairman. Central New York has got into the butter and cheese business ; and the butter and cheese produced there are really matters of exportation. Mr. Atkinson. There is the same room for diversifying farm products as tliere is for diversifying factory products, and the tendency of diversification is that the small farm products fall into the hands of the small cultivator. Mr. Jones. Mr. Atkinson states that the fall in the price of food, for instance, is compensated for to the farmer by the application of machinery to farm work, and that he is compensated by the profits from a large product. He seems to have had in his mind the case of wheat growers, dairy farmers, &c. But how will it be in the case of the cotton planter, where machinery does not come into play, and where, the more extensive his operations are, if cotton is as low as seven or eight cents a pound, the more disastrous they are to him ? Mr. Atkinson. The cotton planter appears to have disappeared from the face of the earth. Cotton has necessarily fallen into the hands of small farmers, because it is a matter of individual enterprise and individual picking. But there is more room in regard to the right preparation of cotton and to the application of impro ved methods to the ginning and picking of cotton that will inure to the profit of the farmer when entered upon — ^more room than in any other branch of occupation that I know of in this country. The methods of treating cotton (from the field to the railroad and to the mill) are more barbarous and more unfit than the methods in any great branch of industry that I have any cognizance whatever of. The saw-gin is a most absurdly unfit machine to apply to the cotton. Then, again, there is a vast field opening before the cotton farmer. The seed that was formerly wasted (almost absolutely wasted) has a market value anywhere now, I believe, of $6 a ton, and a market value in the porte of this country (Philadelphia, for instance) of $20 a ton. Its intrinsic value nobody yet knows. The seed which belongs to a bale of cotton of SOOpounds, weighing 1,300 or 1,400 pounds, contains 50 pounds of organic salts drawn from the soil, mostly phosphate of lime and phosphate of potash. The utilization of this seedis a most extraordinary and marvelous development — andl watch its development with the greater interest, as I had the pleasure of foreseeing it in 1861. This seed is now decorticated, as tliey term it, the hull separated from the kernel, the kernel pressed, and the oil sold and exported very largely. I have every reason to believe that they have discovered a method of treating that oil in Europe chemically by which they get out of it very valuable dye stutfs. That information comes to me from a Texas gentleman who was chairman of the group of judges of cotton and its productions at the exhibition in Paris, and I am now trying to verify it. The treatment of the hull is now begun. It may be either converted into potash by burning, or, as is now discovered, it contains a large amount of tannic acid. Probably its greatest value is not for tanning, but for dyeing purposes. And after it has been used for that purpose, and all the tannic acid taken out of it, it proves to be a most admirable paper stock. In proof of that, I happen to have in my pocket a specimen of cotton-seed hull converted into what is called " half stuflF." In conversation with a gentleman who knows more of the value of cotton seed than anybody else in this country, I submitted the other {lay the hypothesis that the cotton farmer might be presently in the receipt of the relative price of ten cents a pound for his cotton, by getting six cents per xiound for the cotton fiber and equal to four cents per pound of cotton out of the seed. He thought a few moments, and then said, " You are not far out in your judgment." The Chairjian. Suppose that that were so, would not the inevitable result be to stimulate the raising of cotton and agaiu to bring it down to the point where it would give a mere subsistence to the fanner ? Mr. Atkinson. The tendency of every discovery is to bring every kind of business down to the jioiut which leaves a subsistence only to those who do the work and a margin not exrei'ding 4 per cent, to tliose who furnish the capital. The Chairman. In other words, machinery and inventions are the groat commu- nizevs ? Mr. Atkin'siiv. They arc tlie groat ooramuuizers, and will lead to the economic mil- lennium, when the control of men over the forces of nature will be so absolute that a DEPRESSION IN LABOR AND BUSINESS. 455 good subsistence will be perfectly sure to raeu witb ordinary intelligence, and wlien- it will not pay to bother about acquiring wealth. The Chairmak. Nobody will want to be rich f Mr. Atkinson. Nobody will want to be rich. And that leads me to the most inter- eresting branch of the subject. The committee here took a recess for one hour. After recess. The Chairjian (to Mr. Atkinson). How much capital is employed in proportion to the value of its product in the course of a year f Mr. Atkinson. The fact has been referred to in the books, first by Dr. Chalmers, not many years ago, then followed up by reference in Mill and others, to the eifect tfiat the capital or substantial result of labor saved in a given community never did and never can exceed two or three years' product in the richest community. The demon- stration of that theory, I think, had not been made absolutely possible until the pub- lication of Carroll D. Wright's census in Massachusetts for 1875, taken in connection with the commissioners' reports on what D. A. Wells calls the pagan system of taxation in Massachusetts — ^the taxation of all kinds of personal property under duress. By col- lating the facts in these several publications, it appears that the actual property of Massachusetts reached by assessment was, in 1875, $2,200,000,000 in value. That con- sisted of |1,311,000,000 of real estate; |530,000;000 of personal property; $238,000,000 of savings-bank deposits; $84,000,000 taxed by the State to manufacturing corpora- tions; $31,000,000 of bank capital taxed by the State. Now, in this list of property there are, of course, two kinds — the land, which obtains its value from the use that is made of it (which the Almighty gave free), and the symbol of or title to property as it exists in the form of bond and mortgage. Between these two comes the real substance, or capital, representing the saved labor of two and a half centuries of existence of the colony and State. The ordinary rule of the assessor in appraising values (which are now fully as high as the real values throughout the State) is to consider the land two- thirds and the buildings and works on the land one-third. It would be safe to take the rale of halving it and counting one-half of the real estate to be actual capital, or substance put into form for use by human labor. I then take the personal property and divide that in a similar manner, n6t by halving, but according to rules not diffi- cult to apply. The $238,000,000 in savings banks consist of real property to the extent named ($8,600,000). The rest of it ($230,000,000) consists of evidences of debt in some form — mortgages or personal securities. The corporation tax is mainly on real capital ; the bank tax, of course, is so only to a small degree. Ruling on the larger side rather than on the minimum, the capital of Massachusetts does not exceed $1,000,000,000 for 1,652,000 people. That is $600 a head in round figures. In addition to that there would be mechanics' tools and stocks of goods on the way to the consumer, on the shelves, and in the shops, and a few other comparatively insignificant items which would not add very much to the valuation or alter the conditions very much. These valuations were in currency at a time when there was a premium of from 10 to 12 per cent, on gold. On the other hand, the annual product of Massachusetts in manufactures was $592,000,000; in fisheries, $7,700,000 ; in agriculture and mining, $43,500,000; aggre-, gating $643,000,000 in currency. Of course there is in this computation a large du- plication of cloth and clothing, of leather and leather goods, and the like. There is also a very large omission which represents work done iu the year, and productive- work, to wit, the household work, on which no price can be put. But, after consulta- tion with Mr. AVright, and after looking it over with the utmost care, we reached the conclusion that the actual original value of the natural product of Massachusetts was $300 a head, so that the sum of saved labor in the richest State in the nation, in ratio to the population, is two years' work. If you want to be perfectly safe, cut the pro- duction in half, call it $330,000,000, then you have three years' gain; and that is all, that you have. ■ ■, ■, ^ ^- j- -j. -, That illustrates the proposition that the law of progress is the destruction ot capital, through invention and discoverv, that nothing old is useful, and nothing useful is very old ; that there is nothing so fluid as fixed capital ; nothing that requires such constant change in order to keep up with the discoveries and inventions of the day. The most striking example of that is the analysis made by Mr. William A. Burke, of Lowell in one of the cotton mills of Lowell, as between the dates of 1838 and 1876, by which analysis it appeared that a cotton mill in 1838 (being a piece of very fixed cap- ital to the eye and the imagination) required 231 persons, working thirteen hours a day to yield a given product of commodity ; and that, in 1876, what passed from the. same mill required the work of 90 persons working ten hours a day to produce the same quantity of cloth. But of the original mill there is nothing left but the founda- tion. It has been changed entirely, I think, more than once. Yet it is the same cap- ital to the mind, and it is the same coqjoration. It has always been successful, and it has always done its work well. Its product has been mainly exported. 456 DEPRESSION IN LABOR AND BUSINESS. Now the idevi of most of the advocates of what is called labor reform is thatthe prosperity of a community consists, to a vast degree, in this accumulation of things constituting oiipital, whereas the welfare of the community consists far less in that aeromoted, or the redis- tribution of product promoted by acts of legislation, is most absurd, for the reason that it would lead to contentions not between the laborer and tlie cai)italist but between different classes of labor as to the respective share which each should get out of a given occupation. Take that list of the occupations of the people of Massachusetts (1,650,000 in number), most of whom are at work about something, and you will find that the variation of dis- tribution of this enormous product (of which, I have said, ninety-nine parts now go to people who work for their living and one part only to the wealthy for the accumula- tion of wealth) is strictly according to the intelligence, the industry, integrity, and ability of those who do the work. You find the highest rate of distribution in some higher branches of the mechanical arts. You find a less and less rate as you get down towards labor that is merely automatic, and you finally land at the lowest rate, of the digger and the delver, who is hmited to that work by the want of capacity to do anything else. Hence I have thought that it was of the most importance to draw out the fact of this extremely insignificant proportion of capital to labor ; and, there- fore, it is of the utmost importance justly and rightfully to give to capital the oppor- tunity to accumulate, in order that it may increase the abundance of things to be distributed amongthe laborers with whom it is associated and whom it assists in doing the work which constitutes the welfare of both. As I said, the point to be observed is that, as time goes on, a less and less proportion of the population is required for the lower grades of drudgery that afford no mental stimulus, without which even leisure becomes of no value ; I say as a less and less pro- portion is required, because machinery is set to do that drudgery, there is a gradual steady lifting toward a common diffusion of products on a plane that gives a fair sub- sistence, and a constantly better and better subsistence as the centuries roll on, to each and all ; and by this lifting of the middle masses (the middle region, so to speak, of the social order), making room for a class below that would starve and die if they were not thus lifted up from the ordinary common labor of life. I was forced into this investigation by a little contention that I once had with Wendell Phillips, who alleged that the property of the United States, by the last census, -was .$30,000,000,000 ; and that the reason why it was not $500,000,000,000 of capital was that the capitalist, by charging interest at the rate of six per cent, or more (while production increased at the rate of only three per cent.), had prevented its accumulation ; and that, if law had interposed and had prevented the rapacious capital- ist from absorbing (through a high rate of interest) an iindne share of the products of labor, the accumulations of substance would have been so great that everybody would have had more, and that no one would be obliged to do much hard work. The t'HAiKMAN. Have you stated what your idea is as to the proportion of capital to actual production in the course of the year ? „ . , , . Mr Atkinson. I have stated that, in the whole manutacturing and mechanic occu- pations in Massachusetts, the capital is $282,000,000, and the product $592,000,000. The Chairman. Then, if capital got six per cent, and if there was only an increase of three per cent, of the accumulation of capital, that would practically give all the accumulation to the capitalist ? , , , . , . .„ Mr. Atkinson. Yes. These figures which I have given on the cotton mill are proxi- mate. I have said that all the accretion of wealth that is luxuriously expended con- sists of one per cent. Capitalists have not received anything like that in the last few 458 DEPRESSION IN LABOR AND BUSINESS. years ; but that may be the normal condition. You find that the same ratio holds in regard to persons that holds in regard to the distribution of the product. You cannot find in the list of the population of Massachusetts one per cent, of the population that can, in any sense, be set down as wealthy persons. Y'ou find a larger and larger pro- portion, as the years go by, that have saved something, by which they can give their children a better start in life than they had themselves. But of those who can be said to have accumulated capital, on the income of which they can thereafter live without work, or which they can leave in trust so that their children may be spared the healthy stimulus of prospective want, there is not exceeding one per cent, in any State where the articulations of society are free, and where there are no artificial modes of accretion compassed by act of law. We have assumed an accretion of wealth from the cotton industry in a normal con- dition of one per cent, on an outside retail value of |150, 000,000 per annum. Suppose we double it and call it $3,000,000. Now suppose that the |3,000,000 had been set aside as this fund of wealth, and suppose that it was divided and not held out as the boon for the exertion of the brain in establishing all these great enterprises, but was divided annually among those 500,000 or 600,000 persons who received the other ninety-five to ninety-eight parts, it would amount to just five or six dollars a year for each of them. That is a fair example ; because, in that branch of industry, the capi- tal required is equal to the annual product. These figures are proximate, but they fairly represent true facts ; the truth being that the true product of labor is more widely distributed than I have named, and that the sum of luxurious expenditures is less than the figures which I have given. On the other hand, the moment that the net profits of the capitalist become more than six per cent., business will increase, wages will rise, the price of cotton will advance, and the additional sum to be distrib- utea among the working men and women will be far greater in proportion than the sum contributed by capital. Suppose an additional two per cent, profit on capital in cotton fabrics to warrant an increase of only two per cent in wages or earnings ; then for every million of dollars absorbed by capital, labor will secure ten to twenty mill- ions. You cannot get away from that ratio for any long period. The moment you get excessive profits in any occupation you promote a rush of capital into that business which brings the profits down to the average. There is a rule stated by Bastiat which will fully cover this point. It is, that in proportion to the increase of capital the absolute share of the profit of capital is in- creased, while the relative share is decreased; whereas the share falling to the laborer is increased both absolutely and relatively. Now how is that one per cent, created ? By the busy brain and hard mental work of those who increase the capital and thereby increase the aggregate of things to be divided among the laborers. And what they, the capitalists, do secure to themselves is not secured out of the labor which they compel men to perform, but out of a small proportion of the labor which they save men from doing, and which would otherwise be necessary to be done. I think that the case of Vanderbilt and the New York Central Railroad is the best example of that principle that can be had, becaiise he, by name, is the exponent of the fortune which, in the common minds of the community, is considered the most obnoxious. Now, in what manner and by what method has that fortune been accu- mulated ? By the applying of his mind, his brain, and his skill to reducing the cost of transportation, until, by means of the railway service of the New York Central and its connections, this has happened : A barrel of flour and a barrel of pork constitute the crude material of the subsistence of an adult mechanic in Massachusetts for one year — constitute that part of his subsistence which can be brought in bulk from dis- tant points. At an average rate of freight of five dollars a ton the subsistence of an adult mechanic in Massachusetts (consisting of a quarter of a ton) is moved from Chi- cago to Boston, a thousand miles, at the price of a dollar and twenty-five cents, some- times less. One dollar and twenty-five cents is said to pay a profit to the railroad for doing that work. That is, one day's labor of an ordinary laborer or mechanic, on the specie basis, when employment is reasonably certain. It is half a day's labor of a good carpenter in ordinary times when building is tolerably brisk. Therefore, the function of Vanderbilt has been to eliminate distance and to abate friction ; to bring the western farm near to the eastern mechanic, and to save that eastern mechaniofrom the arduous labor which he would otherwise of necessity be obliged to exert in order to procure his subsistence in any other way. Therefore, I say that the fortune of Van- derbilt has been accumulated out of the saving that has been compassed by the capi- talist to the laborer, and not out of any labor which the capitalist has compelled that laborer to do. And what holds good there holds good throughout the whole of society. The Chairman. Of which saving the laborer got the greater part. Mr. Atkinson. Of which saving the laborer got ninety-nine parts where the capital- ist got one. And there are scarcely any fortunes (except a few made by gambling iu Wall street and in bonanza stock, that are infinitesimal in proportion to the great aggregate of fortunes in the community) that are not compassed by the same means. .So that it may be said by the man who does his work honestly and rightly in produce DEPEESSION IN LABOR AND BUSINESS. 459 tlve enterprises, and who grows rich out of it and obtains a great fortune, that the dol- lars Tfhich are placed to his credit on his business ledger are the sure tokens of the service which he himself has rendered to his fellow-uien, and not of the service which he has compelled them to render to him. The Chairman. That is admitted by intelligent men on the other side. They admit that Mr. Vanderbilt cheapened the cost of commodities to the community; that Mr. Stewart built up his great business on the same principle, and contented himself with very moderate profits. But they say that if Mr. Vanderbilt or Mr. Stewart had paid a little higher wages to the men whom they employed they would not have been so rich themselves, and their employes would have been better off, And the grievance is that so much of the savings did remain to Mr. Stewart and Mr. Vanderbilt, and so little of it was apportioned among their immediate and direct employes. lu other words, it is said that they did not divide fairly with those who directly contributed to their wealth. Mr. Atkixsox. Which statement I counter by the statement here made, that they did divide ninety-nine parts of the hundred in the transactions which they entered upon (whether of production or distribution), and that the one part which they re- tained constituted the fund out of which they have built works of art and architecture, and other things which constitute the wealth of the community, as much as of individ- uals. The Chairman. The answer to that is that the community would prefer to have comfortable homes and houses rather than galleries of art and fine architectural struct- ures, and that if Mr. Stewart and Mr. Vanderbilt had given more to those whom they employed directly, there would have been less money for the purposes described , but still Mi-. Vanderbilt and Mr. Stewart would have been abundantly rewarded by having ten or twenty millions of dollars, instead of one hundred millions, at their death ; in other words, that the one per cent, might have been brought down to one-tenth of one per cent, and still that they might have gone on, and that the great mass of the people employed by them would have been better off. Mr. Atkinson. To that I reply that the tendency of all niodein commerce, all in- vention of improvements, has been to reduce the great profits of adventure from the large per cent, of olden times down to the brokerage of to-day ; and as to the com- merce of to-day, that there is a constantly leveling tendency, through the doing of a large business, to the decrease even of that percentage. Is not that true ? The Chairman. I think it is ; and, as a matter of fact, the opportunities now to make those great fortunes in the way that Vanderbilt and Stewart made theirs, are not so great as when they undertook to make theirs. Is not the laborer, as a rule, getting to-day the whole proceeds of industry in the United States ? Mr. Atkinson. As a rule there is no question about it at all. The laborer is getting the whole proceeds, and the capitalist nothing or next to nothing. Some few capital- ists are gaining, but more are being depleted. The Chairman. On the subject of those great fortunes that have been complained of so much before us, I would like to ask you a question. Suppose that all the for- tunes which may be termed great (greater than a million of dollars) in this country were distributed over the mass of the people, can you form any idea how much each person would get ? Mr. Atkinson. Not much. People might realize that they got a little more spend- ing-Kioney for a single day, and that would be the end of it. The Chairman. Do you think that it would amount to ten dollars apiece ? Mr. Atkinson. No ; I do not think it would, if evenly divided. That would be nearly five hundred miUion of dollars ; and I do not think that you can find five hundred million dollars of great fortunes in the United States. The Chairman. We would contribute greatly in New York by the estates of Astor, Vanderbilt, and Stewart. Mr. Atkinson. If you leave out those exceptional estates, the rest would make up very slowly. It would be like a subscription list, starting out strongly at the head, but petering down very fast as it comes to the end. The Chairman. When those great fortunes are once accumulated by this process, is there anything to prevent the perpetuation of those fortunes — anything that legis- lation can do to promote their distribution ? For instance, you observe that Mr. Van- derbilt gave the bulk of his fortune to one of his sons. Now in France that fortune would have been distributed among the ten or a dozen children. Can we introduce into this country any different policy with reference to the distribution of fortunes ? Mr. Atkinson. I do not think that we can. I think that, in that particular case which you mention, the concentration of the fortune of one person happened rightly, for the reason that he was the only man who. could continue to do the service to the community. Whereas, if the fortunfe had been distributed more widely it might have resulted in a far less effective working of the system of transportation. The commu- nity would have had to pay the price. The Chairman. You are generalizing from a single case. I am on the great ques- tion whether it is desirable for a community to have great fortunes perpetuated in 460 DEPRESSION ]N LABOR AXD BUSINESS. single bands. Take tlie French experience, for example, where fortunes have been cut up — has it not resulted in a better condition of things in France than has taken jilace in England, or in this country, where the reverse rule prevails ? The Code Napo- leon absolutely broke up the great estates in France, and compelled a division. Mr. Atkinson. My mind has rather run in the direction of less restriction on bequests — I can hardly name it restriction ; I mean less provision for the perpetuation of fortunes, rather than more provision for their diffusion. The Chairman. You admit that the community has a very direct interest in the ownership and control of wealth? Mr. Atkinson. The community has a great intere.st in the fair distribution of the fortunes accumulated by individuals, that they should be rapidly diffused. I do not believe that you can compass that by a law, regulating and compelling the distribu- tion, but I think that there will be some acts of law passed in the future to prevent accumulation in the hands of trustees. The Chaieman. In England you have one policy pursued, that by which great estates are absolutely perpetuated. In France you have the opposite policy, positive enactments by which great estates are divided up. The question is, which policy is best for the community, or whether it would be best to have no policy at all on the subject. Would you be in favor of adopting one of those two policies ? Mr. Atkinson. I should incline to no policy at all, leaving it perfectly free to every individual to do with his fortune as he chose, subject to this, that there should be no existing law by which he could compass a perpetuation. I think that everj'thing should be done to discourage perpetuation. I think that we may have gone even too far in the protection of spendthrifts by trustees. The Chairman. Then your present policy would be to extend the present doctrine in this country which favors the distribution of property ? Mr. Atkinson. Unquestionably. Thfe Chaihman. But you would not do anything to compel the parent to divide his large estate up equally among his children? Mr. Atkinson. No ; I think we would run across other dangers there. I would only prevent his jiei-petuating it by a possible limitation of the present power of creating trustees. Mr. Rice. "Would you do anything to prevent the acquisition of large fortunes? Would you set a limit beyond which the acquisition of property should be taxed very heavily ? Mr. Atkinson. No ; I think that that is absurd. Mr. Rice. What would be the result of that ? Mr. Atkinson. Just what happened in the Middle Ages, when they tried to prevent the Jews from accumulating great fortunes, and when the Jews only grew the richer. The more you try to prevent it the more opportunities you give to accumulate fortunes in a hidden a\ ay, Mr. Rice. Here is Mr. Cohen (a former witness before this committee) who thinks that the government should tax any fortune beyond a million dollars. Mr. Atkinson. Then a man would conceal tlie fact that he had it, or else he would remove it elsewhere. Mr. Cohen. I should judge that that follows from the gentleman's own argument. He is in favor of the distribution of large fortunes, and that being the case I should think that the taxing of large fortunes would bring about distribution. Mr. Atkinson. I said that I was in favor of the distribution of large fortunes by the natural order of events, not by the interposition of law; and I think that anything in the shape of a differential taxing is one of the most obnoxious and dangerous proposi- tions that can be entertained. Mr. Rice. It would either cripple a man's energies, or Mr. Atkinson. Or sharpen them to evasion. The Chairjian. You would do nothing, therefore, to perpetuate large fortunes, and you would do nothing to restrict the control of individuals over them ? Mr. ATKIN.SON. That is my position, exactly. Mr. Cohen. In regard to the distribution between labor and capital, I hold that seven-eighths go to the capitalist and one-eighth to the laborer. The gentleman (Mr. Atkinson) says that ninety-nine parts go to the laborer and one part to the capitalist. Then X ask the question how it comes that, if the ca]jitalists have the smaller propor- tion and the laborer the larger proportion, the capitalist accumulates millious while the laborer has nothing to eat? The Chairman. If you go to Trentoii where we have iron-works you will fiud 400 workmen who own their own housesand their own furniture, all of which were bought out of wages paid at the iron-works conducted by Cooper & Hewitt. Cooper & Hewitt themselves have never had one dollar out of those iron-works. They have been run for the benefit of the workmen. And that is the result of thirty years' business. Mr. Cohen. That may hold good in that case ; but how docs it come that Cooper & Hewitt have any money left? DEPRESSION IN LABOR AND BUSINESS. 461 The Chairman'. Ninety-seven jior cout. of other iron-works ore not aa well off as Cooper &, Hewitt. Ninety-seven per eent. of all the iron-works of tlie country have been sold oti' by the sheriff, ami the original owners have nothing left; lint the work- men have the property which tliey accumulated. Mr. C1IHEX. Then Cooper & Hewitt have been good friends to the workingmou. Mr. Ric-K. There was no charity about it. The C11A.IRMAX. Xo, there was no charity about the business. We paid the current wages, that is all. Mr. CoHEX. How comes it now that the Astors, tlie A'anderbilts, and the Stewarts have aunissed \-ast fortunes, when the largest part of the profits goes to the laborers? The Chairman. Jlr. Stewart did a business of one hundred million dollars a year. One per cent, profit on that is one million dollars a year. " But if he took seven-eighths, as yovi suppose, then he would get eighty-seven ndllion dollars a year. Now, one million dollars a year builds up a large foituue. Mr. CdHKN. If a man makes such a large fortune on such a small percentage, it would be no iucumbrance upon him to have a tax placed upon his inmiense fortune. The Chairman. He is taxed upon his fortune ; but, if yon undertook to put a dif- ferential tax, the result would be that he would move out his surplus to some other country, or else not exert himself to do the work. Mr. Atkixsox. I want to make one statement in regard to yesterday's conversation lest it might be misconstrued. That is, I wish to make a personal explanation in re- gard to the tariff. I did not expect to be drawn into a discussion of the theories of protection and free trade, because I think that they are for the time being aside from the main issue. I did not wish, either, to appear to have changed my lonvictions as to the true theory in the matter. When one is reaching convictions on any one branch of this subject he is very apt to exaggerate the importance of that particular branch ; and I think that we who have promoted the free-trade agitation during the past eight or ten years have clearly exaggerated the imiiortance of that issue. That has been proved by the fact that disaster has appeared to strike all nations alike, whatever their tariff policy may have been, indicating that there are industrial forces at work in the world of wh'icli a tariff' policy is only one, and possibly not the mo.st important. 'In regard to changes in the tariff policy of the country, I should, even as a free- trade advocate, not advocate great rc\'(dutionary changes in a time of iudustrial con- vulsion. This is the very wroiig time for any such change. There are modifications to which all alike might consent, which might be wise ; but a great change of policy would be extremely unwise when all the conditions of our trade and commerce are as uncertain as they are to-day. Hence I think that the less discussion there is had in regard to tlwse theoines at the present moment, the more likely we are to get some modifications which may be useful to all, and may be consented to by all. The Chairjiax. You would like to take out of the tariff' the impediments in the way of the prosperity of manufactures ? Mr. Atkinson'. Unquestionably ; and I think that we might learn a lesson in that regard by the course followed in England in 1S42, when Sir Robert Peel's great meas- ure of changes consisted in the treatment of a very small part of the schedule of duties which were simply impediments, the removal of which so inured to the pros- perity ensuing afterward that there was less and less opposition to further changes in the same direction ; but they were made so gradual, and so justly, and on such a uniform consideration of all the conditions of the times that they conferred benefit without disaster, even to those who dreaded change the most, until at the end tariff Icnslation simply came to .be the ordinary legislation in regard to affairs without great contention. Therefore, I say that this is no time for heroic methods,. but for ex- tremely cautious and gradual ones. What the country now needs is stability in the currency and freedom from the excessive legislative changes in other matters. The Chairman. And you think that nothing in the way of legislation now can alter this equalization in the way of labor that is going on, and that if one nation pays higher rates of wages than another it is because it has superior advantages ? Mr. Atkin.son. Yes. The Chair.man. Carrying out that doctrine in regard to this country, would not that lead to the gradual transfer of cotton manufactures from Massachusetts to the South, where the cotton is grown ; where there is good water-power which does not freeze up, where there are abundant natural resources, and where there is a population that can be used for tending machines. Machinery having reached the point where the machine itself is the great thing, and where the laborer is merely the attendant on the machine, do you not think that there is some danger of the transfer of cotton manufactures from New England to the Southern States 1 Mr. Atkinson. I do not. The Chairman. What is the reason ? There would be a great saving in transporta- Mr. ATKIN.SON. There would be a saving in transportation, but I do not think that the ciimate of the South, or the condition of the Southern States, is consistent with 462 DEPRESSION IN LABOR AND BUSINESS. the kind of labor necesBary to be done in the cotton trade. In other words, I think that cold stimulates, and that yon cannot maintain the persistent honrs of labor (ten hours a day for three hundred days in the year) in the comparatively enervating climate of the South. The Chairman. Is not the machine a stimulant ? Mr. Atkinson. Yes ; but the attending of that machine is not. The Chairman. Do you think that the negro is unfit for machinery '! Mr. Atkinson. He is entirely unfit at present. We cannot tell how he may devlop. The Chairman. Suppose that the ChiueHe come here in great numbers and are em- ployed in that business ? Mr. Atkinson. That is a supposition so far off that it is not worth while to consider it. Yon and I will be dead before the Chinese come here. Moreover, for this genera- tion and the next, the transfer of a great industry requiring capital to the amount of twice the annual product is not to be considered, when the South has first to furnish itself with the wagon-maker, the stove-maker, the shoemaker, the harness-maker, the mechanic, and the workmen in the vast variety of small occupations which build up communities and towns, constituting the diversity of occupations which require very little capital in proportion to the product, and in which that capital is turned over four times a year in the payment of labor, instead of once in four years as in cotton- mills. The modem cotton-mill and. the woolen-mill are the growth of a century of in- dustrial civilization. The Chairman. Suppose I determined to-morrow to put a million dollars in the cot- ton business. I have not got a factory anywhere, and I can get the best cotton-ma- chinery by simply ordering it. I go down in the Southern States near the cotton-fields and near the coal-fields where I can have a motive power that costs nothing and that never dries up. I find a population there that desires to work ; young people suited to go into the factories, and having no other occupations. Is there anything to pre- vent my putting my million of dollars there with a certainty that I will get more profit than if I planted it in New England 1 Mr. Atkinson. The margin of profits on which cotton factories work is a quarter to half a cent a yard, and the difference between a population that has been trained, like the Canadians and the New England population, for years to the kind of occupa- tion of which the cotton factory forms part, will make it different. The Chairman. You brought your Canadian population in very recently and edu- cated them to this business. Mr. Atkinson. The Canadian population has been accustomed to the hand spindle and loom for centuries. They take to machinery as a duck takes to water, and our common school is the solvent of race, creed, and nationality. The child of the immi- grant, trained in the same school with the Yankee boy and girl, soon develops the same mobility, versatility, and power of adapting himself to new conditions of life. The Chairman. Is there anything in the present cotton-mill that requires anything moie than the crudest and rudest form of labor? Mr. Atkinson. Yes ; it is a work requiring very nice manipulation. It is not an occupation that rci|uires brain-power, but it is" one that requires extremely nice adaptation of fingers to the work. The Chairman. Are not the southern cotton manufactories at present more pros- perous than the New England manufactories ? Mr. Atkinson. No. Here and there is a prosperous cotton factory in the South. But they will mostly have to go through the sweating process. I do not look for any increase of cotton manufactories in the South equal to the increased demand in the South for cotton goods for a long time to come. Moreover the cotton factories re- quire to have the machine-shop adjacent. It requires all its surroundings to work right up to it. It requires the paper-mill, to take its waste, right alongside of it. It must grow with the growth of fit conditions ; it cannot be extemporized and planted here and there in isolated jtlaces. The following questions by Mr. Dickey were submitted in writing, to be also answered in writing : You have stated that inflation of the currency was one of the causes of depression in business. Please explain Iww this was so. Was not contraciion of the currency in this country one of the causes of depression, and what was the necessity of contraction ? As inflation and contraction were each brought about by legislation, and it is believed had nnich to do with the present depre.ssion of business, will it not require further legislation to restore confidence and prosperity, and, if so, what should be the nature of such legislation? How much money or circulating medium ought there to be, in this country, per c'tpiin, to insure confidence and prosperity ? What is your judgment as to the amount per actiitam dollars? DEPRESSION IN LABOR AND BUSINESS. 463 Mr. Atkixsox (in reply to Mr. Dickey). Inflation of the currency, or the issue of a larger amount of what was made by law to be lawful money, caused an advance in the prices of all commodities. The channes in prices caused speculation in various articles, not on the ground of any prospective change in the supply of or demand for the arti- cles, but on mere chance or gambling. Sudden fortunes were made by those who had not worked for them, or by those who chanced to have stocks of goods in hand on the rise. Then came the time for action for the promoter of railways that were not needed for years to come — some of tliem never needed. The credulous public took the bait, demand ensued, and labor was in larger demand, iron rose in price, iron-works were built in places where they had no right to exist. At one period of the railway mania, in the year when about 7,000 miles of new railways were built, the demand for iron for rails, cars, and engines I estimate to have been equal to the capacity of one-half the iron- works of the United States. The demand of the railway builders and of the iron- works and machine-shojis created a demand for coarse woollens and for farm pro- ducts. During the four years of railway building preceding 1873, when 20,000 miles of railway were added, the investment, at |30,000 per mile, counts up $600,000,000, or $150,000,000 a year of 300 working days, equal to 1500,000 per day. Added to this was the universal extravagance in municipal buildings and works, mostly based on bor-' rowing. During all this time legal contraction of the currency had ceased; the payment of the debt, that by every principle of law and equity was due on demand, had been for- bidden ; the promise of the nation that it would pay coined dollars was a lie, and like all lies it worked deception, corruption, fraud, and disaster. The short period during which Secretary McCuUoch had been wisely allowed to pay $4,000,000 per month of the demand-nf)tes had caused no disaster or depression ; it only scared fools and warned knaves that their chance to play upon the creut myself upon record on a question about which there is so much dispute as there is about that one. The Chairman. I will state the question then in a general way. Certain manufac- turers enjoy advantages in procuring the raw material from which their manufactures DEPRESSION IN LABOR AND BUSINESS. 469 are made, while tlie factories of others are disadvantageously situated. The latter would prefer to have a bettor location, but there they are and there are their work- men. Now, is it not obvious, in view of the smaller profits of the less favored manu- facturer, that there is less money to be divided between him and his workmen than there is in the other case ? And is it not equally obvious that somebody, either the workmen or the employer, must be compelled to take into account the disadvantages of location and like considerations ? Mr. Edwards. It is obvious, but there are other things to be considered. The Chairji,vx. Let us have " the other things " then. Mr. Edwards. As far as the coal is concerned, I could not say whether it is or is not dearer in Philadelphia than in Pittsburg. The Chairman. I will state, as a matter of fact, that it is. The question, therefore, is whether, when the product of two manufaetiuers is sold for the same price, and one is compelled to pay more than the other for his raw material, the workmen shall take less of value for their work or the employer shall shut up his works ; and does not the question between them often assume that phase? Mr. Edwards. The question does often arise. The Chairman. As an employer I have been in a condition such as that which I have described. I have had a mill and have had to shut it up. The case was stated to the men and they were told, "now, here are the facts," and the question put to them, "Shall we shut up the works or go on at a lower rate ? " And I confess I have always been ready to show the figures to the men. The question with which I have generally been met was this, whether, where there was such an understanding, and the men and the employers were willing to go on, they could be allowed to do so, or whether there was something in the laws of your trades-unions which would prohibit the men from taking lower rates. Mr. Edwards. Yes, I think there is something in our rules which would prohibit it. The Chairmax. Would it not make more trouble to prohibit any such arrangement than it would to have the men go on at less wages in the way in which they had been going on ? Mr. Edwards. The trouble with the workingmen is this: They are suspicious about this cutting down of wages by detail, in different localities of the United States. They do not know where it will stop. That is the trouble. The Chairman. They want, then, to have uniform wages without reference to the ability of an employer to pay the wages ? Mr. Edwards. I do not thmk they would object if they understood the case in that shape ; but they do not understand it in that shape. There are things connected with it that they do not understand. Now, the manufacturers in the East, we will say, make this argument and the manufacturers in the West make the other argument ; and of course we cannot find the facts out. The Western employers say to us that the work- ingmen of the East are working for so much, that "they have advantages over us," and you will say that the Western manufacturers have advantages over you, and so it goes. But, as I was about to say before, our organization has never sought to inter- fere with any rules in the different districts whereby they would be doiijg an injustice. I never saw any interference of that kind attempted. That was the object of the dis- tricting system. In some of the districts, for instance, they have six heats to each turn. We made a law prohibiting that in the West, because it was too much for one man to do. In the East we left the matter open to themselves. The Chairmax. Did you allow them to regulate their local wages ? Mr. Edwards. We allowed them to regulate their local wages in these districts, of course. The Chairman. That is what I wanted to get at. Then you have answered my question as to that. Your answer is that in the districts you did make arrangements by which the wages could be regulated in accordance with the necessities of a case. Mr. Edwards. Yes, sir. Mr. Rice. Was that the case in the district of Massachusetts ? Mr. Edwards. Yes, as to any district. But the limits of the districts were not de- termined by State Uues ; there might be two or three States in one district or two dis- tricts in one State. Mr. Rice. The wages in Massachusetts might be different from what they were in Pittsburg ? Mr. Edwards. In consequence of the difference peculiar to different localities in the same branches of work, each locality having its own mode of working, a difference in wao-es would not necessarily indicate that a higher or lower rate for the same work was paid in one locality above or below another. The Chairman. I remember that on one occasion there was an impending strike in eastern Pennsylvania, which included Trenton, and the president of the Puddlers' Union came there and it was aU settled. I do not remember whether it was you who came or not. Mr. Edwards. No; it was not me. That must have been about 1871 or 1872. 470 DEPRESSION IN LABOR AND BUSINESS. Tlie CirAlRMAN. Perhaps it was. I remember that it was all settled. Let me say to yon that this committee was organized to receive suggestions as to the means most likely to restore business prosperity in any way. You have very frankly and. clearly stated that in your own work the difficulty at present is the want of a sufficient de- mand. I take it that you are hardly prepared to express to the committee how the demand may be increased, are you ? -Mr. Edwards. I believe that Congress is trying to settle that question now. The Chaiemax. Many suggestions have been made to us in the course of our in- (juiry. One suggestion, constantly pressed upon us, is that Congress should make some arrangement to transfer the unemployed laborers of the country out to western lands and plant them down there. Suppose that some such provision was applied to puddlers and iron- workers, would it be likely to result in any amelioration of his con- dition for us to take a man engaged here at that occupation, transfer him westward, and plant him down upon a farm somewhere in the West ? Mr. Edwards. I have seen a great many of them make excellent farmers in their time, but they were men of independence, thrift, and economy, who had saved up their money, who put their axes on their shoulders like the pioneer settlers and went forth to overcome the obstacles in their way. ' The Chairman. Do you think that by its intervention in his behalf in the way of furnishing him with money, the government could put into a man those qualities which are essential to a man to make him a good pioneer settler? Mr. Edwards. I do not think that it could. Under ordinary circumstances I think it is better for a workingman to go West on his own account in preference to having the government send him out there. For one, I want to be as free to exercise my in- clination as isany member of our Congress himself. I consider myself an American citizen, and do not want to be an American pauper. Mr. Rice. Is that feeling a general one ? Mr. Edwards. No ; that is my feeling. The Chairman. The inquiry suggested by Mr. Rice is whether the feeling to which you have just given expression is a general one among the workingmen of whom you have knowledge? Mr. Edwards. No ; they are at variance in their feelings. I have talked with some of them, and found among them those who do not like that view of the case. I have my own views of the cause of the depression in the country, of course; they differ from those of others. Mr. Rice. Before you go to that, permit me one suggestion. Supposing yon were a member of Congress and the proposition was before you to vote an appropriation of money to transfer unemployed laborers from the East to western lands and set them up there on farms, from your standpoint, should you vote for such an appropriation of money ? Mr. Edwards. I would not of my own volition. If my constituents asked me to do it, of course I would endeavor to give expression to their wishes. Mr. Rice. How would you vote, assuming that you act entirely upon your knowl- edge and best judgment ? Mr. Edwards. I say then that I could not do it. I could not vote the money away in that shape. Mr. Rice. Excuse my interruption. You were about going on to state some of the causes of the depression of business when I interrupted you, and I would be glad to have you resume your statement at the point at which you were interrupted. Mr. Edwards. What I was about saying was this : In all countries, after a great war, the ordinary industries and avocations of the people are more or less affected by the disturbed condition resulting from the new order of things. The return to their former avocations and pursuits of the soldiers, whose places at home had been tempo- rarily supplied, occasions a superabundance of laber in certain channels, a fluctuation in prices of commodities, and eventually a period of business depression. This is true of our own country, and I have foreseen all along that the present condition of busi- ness would come about. During the war the demand for skilled labor in the various trades increased rapidly. A great number of our workingmen and artisans from the cities and from all branches of trade throughout the country were away in the Army. On both sides there were employed at one time as combatants probably a million of men. With the increased demand for labor in railroad and other enterprises stimu- lated by the war, and arising during the war, the rate of wages was proportionately increased. We had at the time a largo emigration from Europe to fill up the openings in the various trades. When the war had closed, and the armies had been disbanded, the soldiers all came home and flocked to their several avocations. Meanwhile the boys from the country, seeing higher wages paid in the cities, instead of going back to their country homes, staid around the cities, and continued to remain in larwe numbers for eight, ten, or twelve years, until now, while our cities are overcrowded with idle laborers, the agricultural industries are almost at a standstill for the want of efficient labor. I noticed some few months ago an item on that subject, taken, I believe from DEPRESSION IN LABOR AND BUSINESS. 471 the Asrloultural Report here. I am sorry that I did not keep the exact figures, liut not having done so, I can now give them only i'rom recollection. It showed that in 1860, when the population was a little over thirty millicnis, I believe, the cereals of this country, wheat and corn, exceeded in aggregate production by many millions of bushels the showing of 1875, and that the cattle of that year exceeded by many hun- dred thousand head the aggregate for 1875, when the population was forty and some milUons. ' The Chairman. I am afraid that the comparison you have given is not such as woiMd be justified by the facts, even though it was contained in the Agricultural Report. We have had, however, on that subject an elaborate statement by a gentleman in New York, one of the witnesses before the committee, which will be printed, and of which- you will be furnished a copy. I do not think that in the matter of cattle the state- ment of relative aggregates, to which you have referred, is correct. Mr. Rice. The statement may be correct, as applied to many of the Eastern States. The CiiAiRMAX. That is true. But the present production is upon a scale enor- mously greater than we ever had before. Mr. Rice. I am inchned to think that the agricultural products of Massachusetts are in the aggregate comparatively less than they formerly were. Mr. Edwards. I may have been laboring under a wrong impression as to the authority for the statement of which I have spoken, but I have stated the substance of what I saw in a newspaper a few months ago, and which purported, according to my recollection, to have been taken from the Agricultui-al Report. The thought that occurred to me in that connection was, that if the case was really as it was there rep- resented, then the most of our people had overlooked their legitimate business. In my own experience, too, I have noticed the tendency of our young people who have been raised in the country to flock to the city. You can scarcely go into a city in the Union where you will not find, particularly among doctors, clergymen, and in the other pro- fessions, a disproportionately large representation from among the youth of the rural sections. They crowd into the cities, while the agricultural population of the coun- try fails to receive such accessions as would serve to fill up the vacant places. The Chairman. These people in the cities are consumers of our agricultural pro- ducts, and we are now exporting these products to other countries in amounts that are comparatively enormous. Mr. Edwards. At the same time these people in the cities, many of them, cannot get money enough to buy those products. The Chairman^. I was coming to that. In Pittsburg and Allegheny City, for in- stance, are there many people suffering for want of food f Mr. Edwards. I have no knowledge that they are suifering for want of food ; that is, I do not know of that myself. The Chairman. Are there many unemployed persons in Pittsburg and Allegheny City ? Mr. Edwards. There are. The Chairman. How do they get their daily bread ? Mr. Edwards. Sometimes on credit, and sometimes they live in fact upon just what they can barely get. The Chairman. Can you give us some idea of the percentage of labor unemployed in your section of country ? Mr. Edwards. No ; I cannot. The Chairman. Can you not form any notion as to that ? Mr. Edwards. No ; I cannot. >■ Mr. Rice. Do I understand your idea to be this, that some portion of the unem- ployed might be employed on the waste land contiguous to the cities in which they live, in raising those staples which they consume, even though there should be a sur- plus of com and wheat to be sent abroad ? Mr. Edwards. There is no doubt that even if we were as industrious as the Chinese are reported to be in their native country, there would still remain lying waste in Allegheny County a quantity of land sufficient, if made productive, to supply with the necessaries of life all the people of Allegheny County. Mr. Rice. What would be the difficulty, if any, in the way of the people going upon that land and utilizing it sufficiently to enable them to live upon the product of their labor until something better presents itself? Mr. Edwaeds. It requires that capital shall be invested there. The land is like that between here and Baltimore, a comparative waste because unimproved. The Chairman. Suppose they wanted to go upon any land of that description in order to utilize it, is there any in the neighborhood of Pittsburg that they could get upon credit? Mr. Edwards. I could not say. The Chairman. You do not know about that because you do not know how far it has been monopolized ? Mr. Edwards. No ; I do not. 472 DEPEESSION IN LABOR AND BUSINESS. The Chairman. You said sometliing a while ago about this sliding scale having ■worked better here than bad arbitration in England. Suppose that after you have gone into a district, and attempted to establish your sliding scale there, the employers would refuse to comply, or the workmen would refuse to comply, would you not con- sider it better to go into an arbitration than that a strike should follow, and the inter- ■ ests of both sides made to suffer ? Mr. Edwards. They generally have a conference first. The Chairman. But when the attempt to conciliate has failed, would you not think it desirable to call in outsiders — disinterested men — who could settle the matter, rather than to have all the sutfering of a great strike? Mr. Edwards. I do not know about that. The Chairman. What could you lose by an arbitration 1 Mr. Edwards. I would rather trust in my own judgment than to be bound abso- lutely by that of other people as to what I should or should not do. The Chairman. Your side would have one arbitrator and the employers one — each side selecting men to represent its ideas — and these two would select a third, a man capable of understanding a case when presented, one of judicial mind. Now, would it not be better to take the chances of a misunderstanding than to ignore the possi- bility of a mutual arrangement, and thereby go through months of idleness and loss ? Mr. Edwards. No ; for if he should misunderstand the other side, then the other side might happen to lock us out. The Chairman. But I am assuming that both sides are going to abide by the arbi- tration. If both sides did not abide by the arbitration, it would be better not to have any. Mr. Edwards. If both sides would agree to abide by the arbitration, perhaps it would be better to have one than it would be to have a long strike. I never approve of a strike if I can get anything like a fair remuneration for my labor. The Chairman. Do you have the trouble in the iron business that occurs in some other businesses, arising from the fact of one workman being better qualified for work, and able to do more of it in the same time, than another ? We will say, for instance, that you are a boiler-maker, and your boiler is capable of the most delicate uses. A man alongside of you barely pulls through with his work, and makes an article the quality or strength of which is always in doubt and in question. Of course, you know that your work is worth more than his work. Would you, therefore, object to his being employed with you if you could have your employer pay you more for your work than he pays him for his work? Mr. Edwauds. At our work the difficulty you suggest is obviated in this way : If I am a better workman tlian my associate, I can bring more iron out of a certain amount of material than he can, and, as we are paid by the ton, I am compensated for my superior skill to the extent of the difi'erenoe in the respective amounts of iron produced by us. Therefore, I am better paid than the inferior workman. Now, in the case of a man who is working specialties, such as fine iron for hoop-iron or for other purposes, or where a man is better qualified than others to work heavy castings — some of such weight that every puddler could not handle them — in such ca'ses the claim has always been made that the man ought to be paid more per ton for his superior skill and ability than the ordinary rate, and in the West they have invariably paid it. The Ciiair:\ian. Do you object to that system ? Mr. Edwards. No ; we have upheld that. The Chairman. Yoiu- idea is that you would have a minimum below which the pay should not go ; in other words, you would not have a man paid less than a certain price per ton ? Mr. Edwards. That depends upon what the scale of prices calls for. For instance, if iron sells for 2 cents a pound, that is $40 a ton, we could claim $5 a ton for puddling it. For every advance of a tenth of a cent per pound, we would raise the price for puddling ten cents. The Chairman. And that would be the minimum of compensation for the men in the mill? Mr. Edwards. Yes. The Chairjian. Then for a man who could do good work was there any special compensation ? Mr. Edwards. For ordinary or common iron they make five heats for a day's work. In the special iron (hoop-iron) they make four heats; and for the four they would receive as much as would be paid for the five. In working heavy castings they Gener- ally put a man at it who was able to do that work and paid him' a dollar a tou extra. That used to he the custom. The Chairman. Your organization did not object to that ? Mr. Edwards. No ; they supported that. The Chairman. You have stated that you admitted only puddlers to membership in your organization. Mr. Edwards. That was the case at the time of which I spoke. DEPEESSION IN LABOR AND BUSINESS. 473 The Chairman. The helpers were not admitted ? Mr. Edwards. No, sir. The Chairman. Wore there over any disputes between puddlers and helpers as to wages ? Mr. Edwards. There have been. The Chairjian. Then the same difficulty occurred between puddlers and helpers that occurred between the puddlers and the employers ? Mr. Edwards. No ; the difficulty was not always the same, for this reason : The prices have been established for a period as far back as I can remember. The helper was paid one-third of what the puddler would make. That has been the rule all over ; at least, it was at one time the rule in Europe as well as in this country; but there are localities in which they pay them more than one-third. In some places thoy pay them one-third and so much a heat beside, I think ; in other places so much per heat. In Pittsburg they pay them so much per heat and 5 per cent, of the amount. The Chairman. What does the 5 per cent, come out of? Mr. Edwards. Out of the puddlers. The Chairman. Has there never been a dispute between the puddlers and the helpers in regard to what that percentage should bo ? Mr. Edwards. Yes, sir ; they settled it by agreement. It is understood now that that which I have stated is the price. The Chairman. Was that settled without a strike ? Mr. Edwards. I do not remember of any strikes that occurred, only in one mill, ou that account, and that was only for one day. The Chairman. There was a strike, and in that instance the helpers struck against the puddlers ? Mr. Edwards. Yes, sir ; for only one day. The Chairman. But the same difficulty has existed between the puddlers and the helpers that exists between the puddlers and the employers ? Mr. Edwards. Yes, sir ; but it has occurred very seldom, because that has always been the established rule on the subject. The Chairman. Have you any regulations which prevented the helpers from being promoted to puddlers ? Did the members ever undeitake to say, "You shall not put this helper up," or "This man is not fit to be a puddler " 1 Mr. Edwards. I cannot say that I ever saw anything of that kind. We have often gone and urged a man's case, and said "such and such a one is a good helper ; he Avorks steadily and faithfully " ; and suggested to the men that they should divide the money [the percentage] with such helpers. That is to the helper the first step in the way of promotion. The Chairman. So that the good feeling which exists between the masters and em- ployers also exists between the pnddlers and helpers at the present time? Mr. Edwards. Of course, there have always been exceptions to the rule, but that is the general feeling. The Chairman. Have you seen any grievance arising out of the truck system in this country — that of paying on orders? Mr. Edwards. Yes ; I saw one such grievance in a locality in Ohio, but it did not last long. The Chairman. So far, then, as you know now, the truck system is not a grievance to any extent ? Mr. Edwards. Not to my knowledge. Mr. Boyd. What do you wish to be understood as meaning by the truck .system ? The Chairman. Paying a man out of stores, by orders upon them, and such appli- ances. Mr. Edwards. There have been disturbances on that account, but I cannot speak ol them of my own knowledge. The Chairman. Have you any reason to suppose that by a change in the mode of carrying on business in this country, by which capitalists run the mills, employ labor, and pay wages, any other system could be introduced by which things could be put on a better basis than they are now ; that is to say, that instead of paying wages the profits should be divided on some other plan than the present ? Mr. Edwards. No, sir ; I cannot say that I have studied the question enough to en- able me to say I was dissatisfied with the wage question. 1 know there are projects on foot, but I never bothered my head with them. The Chairman. Thus far, have the workingmen of this country been able to secure for themselves what they regard as their fair share of the proceeds of the products of labor? Mr. Edwards. I did consider that under the scale I have referred to w© got a fair share for our labor. The Chairman. Have you ever felt that the employers had the upper hand to such an extent that they could make you take whatever thoy chose ? Mr. Edwards. I never have worked in that way. 474 DEPRESSION IN LABOE AND BUSINESS. The CnAiRMAN. Is it a faot that in this country the working classes have been re- flncefl to snch a condition that thoy have been obliged to take whatever was offered to them ? Mr. Edwards. No ; I do not believe it is. . . „ The CiiAiK.MAN. That is what I wanted to arrive at, because such a condition of things does exist in some countries. Mr. Edwa rds. There were some years when the workingmen did not get their proper proportion of the rise in the price of iron. That was in 1862, '63, and '64. The Chair:«an. You meau to say that wages were not put up in such a ratio as would have corresponded to the advance in the price of iron ? Mr. Edwards. Yes, sir. Iron went up 7i and 8 cents, and wages moved very little. The Chairman. Could not the laborers at that time have accomplished much by co-operation ? Mr. Edwards. They could. It was want of knowledge that prevented them. The Chairman. And, therefore, you believe in trade organizations ? Mr. Edwards. I do. The Chairman. You think that these trade organizations are the best means of obtaining tlie requisite advice and knowledge ? Mr. Edwards. To a curtain extent I do. I believe that the more we educate labor, the more advantageous it will be for all concerned. The CHAiiiMAX. There are persons who say that the more yon educate the working class the more you make them disinclined to labor, and make them seek to go into stores and clerk.ship8. What is your observation ? Mr. Edwards. I do not consider that a man who is in a store, behind a coanter, in any shape or form, or behind a bar (I mean a whisky bar, not a legal bar), or in any of those occupations or professions, so called, is any more respectable than a puddler, a boot-black, or any one employed at any other manual labor. The Chairman. Do you find, as a faot, many respectable young men seeking to learn the iron business, who are willing to begin at the bottom and work upward, depending upon their owi\ exertions for their advancement ? Mr. Edwards. Yes, sir ; I have seen them. The CiiAi RMAN. Do the young people who come now into those mills get a common school education ? Mr. Edwards. Yes; some of them do. Mr. EiCE. I suppose you have sons yourself, but I do not ask the question particu- larly with reference to your own case, but generally, whether, where a man in your occupation, or a similar one, is able to give his sons a better education than he received himself, those sons are likely to seek their father's business, or more likely to go off iuto the city to sell ready-made clothing or do anything they can find to do there ? Mr. Edwards. No ; they do not always go off to the city. I have known of men who have brought their children up pretty well, and tried to put them into different branches of trade outside of their own, but the children seemed to prefer the father's occupation, even when they were pretty well educated. I never had any regret for having gone into a rolling-mill myself. I was always very fond of reading and trying to educate myself as far as I could, and I never had any inclination to stick behind a counter. Of course, I have always been anxious to get beyond mere working for a bare living, and would like to be prepared for a rainy day, and have some provision for did age. The Chairman. On that subject, let me ask this : Taking the average since you have been in business, has it, generally, been possible for you to save something from your wages as a workingman? Mr. Edwards. Yes, sir. The Chairman. Have you any grievance to bring before us in regard to savings- banks, the places where workingmen save their money? Do you think the government ought to make any provision by which they could put their money into the Treasury, and have it assured to them ? Mr. Edwards. I never had any experience with savings-banks. We generally bought some little property. The Chairman. Invested your money in real estate? Mr. Edwards. Among our men, when one had saved a little money, he bought a little house for himself; others would save, what they could to buy farms. Mr. Rick. Then if a puddler had been able to save some money, would he prefer to buy a farm with it rather than to put it in puddling ? Mr. Edwards. Yes; I have known some that would do that, and know that has been going on for the last eighteen or twenty years. The Chairman. Is not puddling very hard work? Indeed, I do not know that I have ever seen any old puddlers. Mr. Edwards. Well, they never die. The Chairman. I was going to ask yon what became of the old puddlers. Mr. Edwards. They turn into "gray mules." [Laughter.] DEPRESSION IN LABOE AND BUSINESS. 475 The Chairman'. Are they, as a rule, ahle to turu to something else when they want to quit piiddling f Mr. Edwards. Many of them, owing to a hahit contracted in the places from which they came in the old country, are very fond of their beer. Many of them have become conlirmed in this habit and could not avoid it. But in the old country, during the last thirty years, they have been raising up schools. There are the national or British schools in England. Some of the iron masters in England have been spreading these schools around, and a better class of workmen appear to be coming forward. I think there is nothing that will do more good in any country than schooling. If I had my own way, I would say "educate all." I would have compulsory education, if you call it that. Furthermore, I would make a law, one stringent enough to secure its purpose, that no child should work at any labor whatever before he was fourteen years of age, and should be compelled to go to school under that age. When we have done this, we will have less idleness among mechanics and more robust men and women than we have now. Just think of your little boy of ten or eleven years being sent to the rolling-mill to work. I have seen children employed at so tender an age that they had to be carried to the mill on their fathers' backs and carried home again from work. That was what they did to me, and if it had not been for the care that I took of my- self in youth and when I began to pick up, I would have been more of a runt than I am. The Chairman. I suppose there is no branch of business that actually requires a. boy of less than fourteen years of age ? Mr. Edwards. Not in the iron business. The Chairman. If they began at fourteen they would be sure to learn the business ? Mr. Edwards. They would be sure to learn the business so far as having time enough for that purpose is concerned. It would be early enough for them to begin, and the ed- ucation they had received before that in school would be more beneficial to them than that which they woiild pick up if employed earlier. Let me say here that we require education iu a rolling-mill, and that the necessity for it there is as necessary as in any branch of business. The carpenter has his rule, the mason his implements, and each appreciates the importance to himself of an intelligent application of them to their several uses ; but how often you will find a roller in a mill who is a poor mathemati- cian. Yet it would assist that man materially if he was a good mathematician. It would not injure a puddler at all if, especially when he is at a blast-furnace, he is something of a chemist. The Chairman. It would save the lives, occasionally, of the men about a blast fur- nace ? Mr. Edwards. We have a practical education of our own, by which we get a crude knowledge ; but it is not one that gives us the chemistry of the theorist. We want the chemistry of the theorist to come down to us in the same shape that the mathe- matician hands down the rule and scale to the other craftsmen, so that we can under- stand it. Mr. ElCE. I would like to ask Mr. Edwards a single question. The section of coun- try in which he lives was quite famous a year or more ago owing to the riots that took place there. Now we, who are at a distance from there, would like to get the views of an intelligent resident and looker-on to know what was the cause of those outbreaks. What was it, in your judgment ? Mr. Edwards. I could not tell you. I was there at the time. I generally go up to visit a friend of mine on Saturday evenings, and I was there on the street on the Sat- urday evening when the riots began, taking a walk, around. The first thing that I heard was that there had been four or five men killed. It created an agitation, and this agitation was not confined to any one class. You would find merchants on the comers, men from this or that office, all alike excited. I would pass men on the street whom I did not know, and they seemed to show the same agitation. In fact, the city was all a mob. On Sunday morning I went along the streets when the rioters were burning the railroad property. At every corner the same scene of excitement was vis- ible. In the crowds were policemen, judges, and the mayor of the city, and, appar- ently, they were all rioters. I do not blame it on the railroad men. The Chairman. Who were doing the burning ? Mr. Edwards. There was some half a dozen men going along in broad daylight. They would set a torch to a car, for instance. I did not know any of them. Mr. EiCB. Were they residents of Pittsburg ?^ Mr. Edwards. I could not say. Mr. RiCB. Have you any information on the subject ? Mr. Edwards. No ; I have not. I never had any satisfaction as to that. The Chairman. Did you ever hear that the internationalists had agents out to fan this spirit of violence ? Mr. Edwards. I may have heard it on the street, but I never knew any of the in- ternationalists. Mr. EiCB. Was the outbreak caused by want of labor, or by suffering for want of th : ".^l^Ll 476 DEPRESSION IN LABOR AND BUSINESS. Mr. Edwakds. In fact, I did not understand their business and did not interfere with them. Mr. Boyd. You know nothing at all about the origin of the outbreak ? Mr. Edwards. No ; I did not know anything about that. It was none of my busi- ness. I did not know any of these railroad men, and did not converse with them on the subject. Mr. Rice. Your idea was that it was started by the railroad men ? Mr. Edwards. That it was a railroad strike. But, as far as I know, none of the railroad hands there were setting fire to buildings. They tried all they could to stop the conflagration. Mr. Rice. Who did set fire to the buildings 1 Mr. Edwards. I do not know. There did not appear to me to be any organized mob at any time. It always appeared to me that any time on Sunday fifty prominent, first-class citizens could have stopped it. Mr. Rice. You do not, then, connect these riots with the want of employment and the depression that existed among laborers at the time ? Mr. Edwards. I do not know what caused the riot, because there did not seem to me to be any excitement existing among the working classes at the time. In fact there did not seem to be any necessity for calling the soldiers at the time. There may have been without my knowledge. I only happened to be on the street on Saturday, and I know there was great excitement about these men being shot down ; and I saw some of the militia throwing down their arms to go home because other soldiers had shot down citizens. The CiiAiHMAX. The riot was rather provoked and intensified by the use of the soldiers. Mr. Edwards. Y^es ; I think a few prominent citizens could have stopped it at any time. As for the railroad men I can say this : So soon as the rioters began their work at Pittsburgh, the railroaders in Allegheny City went to work to protect the property of the com]iany, and even shipped the cars out from Allegheny City. The railroaders done that themselves. They even guarded the property of the railroad company with guns. The Chairman. Was there more distress in Pittsburgh then than there Is now ? Mr. Edwarps. I could not say that there was. The Chairman. Things have not changed much. Mr. Edwards. No, sir ; but I have not had much experience In that way for the last few years. The men in that part of Allegheny from which I come have worked pretty steady right along in the last five years. Mr. Rice. AVhat is the feeling among the laborers now, so far as you know, as to whether there is any improvement in their condition over what it has been in thepastt Mr. Edwards. The general feeling among the class who do not study these things is this : Take, for instance, a common laboring man who, a few years ago, got $1.75 a day. He finds now that they pay but $1.12 and $1.25 a day, and he feels the loss of the diiference, and naturally complains that wages are low. The Chairman. Do they not know that supplies, that the ordinary necessaries of life, are also low ? Mr. Edwards. That is a matter to be argued with them. The Chairman. But as a matter of fact f Mr. Edwards. As a matter of fact, they are low. The Chairman. Have you ever known in this country the necessaries of life in food and clothing to be as cheap as they are now ? Mr. Edwards. I do not know that I have. Labor has been as cheap as at any time, if not cheaper, and clothing a great deal cheaper than at any time since 1854. The Chairman. Then your idea is that if we could find some means by which we could alleviate the condition of labor in this country, the grievances would disappear. Mr. Edwards. That is it exactly. VIEWS OF MR. JOSEPH BISHOP. Mr. Bishop appeared before the committee in response to its invitation, and stated, in reply to the chairman, that he resides in Pittsburg ; that he is not of American but foreign birth, having been born in Wales, and having come to this country when a little less than two years old ; and that he is an American citizen. The Chairman. What is your occupation 1 Mr. Bishop. I have been working at puddling for about twenty-two years. The Chairman. Are you still workiug at puddling ? Mr. Bishop. No, sir; not directly at the furnace. I have not been working directly in the mill for a little over three years. The Chairman. But you were formerly a workiug puddler in the mill and were such up to within three years ? Mr. Bishop, Yes, sir. DEPRESSION IN LABOR AND BUSINESS. 477 The Chairman. During the past three years, what oocupatiou have you followed Mr. Bishop. From Augnst, 1875, until August, 1876, I was president of the United Sons of Vulcan, or Iron Puddlers' Union, as it is commonly called. The CiiAlRJiAN. Is that the successor of the society of which Mr. Edwards has been speaking ? Mr. Bishop. No, sir; it is the same society. From August, 1875, to August, 1876, I was president of the socity of which Mr. Edwards was formerly the president. From August, 1876, until the present time I have been president of a society made up partly of what was formerly the United Sons of Vulcau, together with other iron- workers' unions, principally the heaters and rollers. The CiiAiRMAX. What is the name of your society at present ? Mr. Bishop. The Amalgamated Association of Iron and Steel Workers. The Chairman. That includes puddlers, heaters, and rollers 1 Mr. Bishop. Yes, sir ; with other branches of skilled labor in steel and iron works. The Chairman. It includes other branches of laV>or ? Mr. Bishop. Yes, sir. You mean common laboring hands ? Of course, speaking of workingmen, they all come under that. The Chairman. Certainly ; we all agree to that, because we hope we are all laborers here according to our fashion. If you have no objection, I would like you to explain the objects of this association of which you are president. Mr. Bishop. The object of the association, in a general way, is the improvement of its members. We state it in these words — morally, mentally, financially, and intel- lectually. The Chairman. You adopt, of course, certain methods to bring about this improve- ment. Will you describe what those methods are, or in what way you attempt to make the improvement ? Mr. Bishop. Take, for instante, the improvement financially. We believe that our meu in many ways have lieen extravagant. Mr. Edwards, a moment ago, dilated somewhat on that point, and I do not know that I could add much to what he said, because he covered all the ground. The Chairman. I might ask yoTi the question there, how you try to make them less so — whether it is by trying to establish a better general tone ; whether you have any special means of admonishing them ; or what the association has to do with them in order to make them more economical and saving ? Mr. Bishop. We believe that if we improve men morally — for instance, in the mat- ter of intemperance ; if we create an improvement in them in that respect — we are benefiting them financially, because it will be the means of haviug them save the money that they would otherwise have been spending. Through improvement in that particular way their general condition is bettered. We have talked to the men upon the subject. The matter is embodied in our laws. It is, in fact, a part of the under- standing upon which they become members of the association. The Chairman. Suppose that a man, after he becomes a member, continues to be in- temperate, and you admonish him, do you do anything else? Do you let him stay in, or exclude him? Mr. Bishop. We have rules covering cases of that kind. A man may, of course, practice that to such an extent as to incur, we will say, the displeasure of the society to which he belongs. That may subject him to the penalty of a by-law, which may call for a fine, for suspension, or for expulsion. The Chairman. Suppose the man is expelled, is he permitted to work in the factory with your members the same as if he still belonged to your association? Mr. Bishop. We do uot try to stop him. The Chairman. You have no rule, then, which requires that the employers shall have only union men? Mr. Bishop. No, sir. , , . , The Chairman. You never insist that the employers shall "employ only union men? Mr. Bishop. We do not believe that we have the right to dictate to them. The Chairman. Where a man is not a member of your union, do you take any steps to prevent his working alongside of your union men in the works? Mr. Bishop. No, sir. .,,.,. » The Chairman. Do you object to it? Is there any offlcial objection ; Mr. Bishop. Doyou mean official action or official feeling? The Chairman. When I use the word " official," I mean do you take any action at all— are your members under any rule or constraint to exclude the man from working with them iii a mill? Mr. Bishop. No, sir. ^ . „ ,, . „ ,. , . , The Chairjian. None at all? Of course, unofficially, there is a feehng which every man has a right to exercise, and I suppose your feeling is that you would rather have members of the union than not to have them? Mr. Bishop. We feel as to that in this way, that the union is intended for the bene- fit of those who follow the trades it represents. Being for their good, we think it is 478 DEPRESSION IN LABOR AND BUSINESS. woi'tliy of their consideration, and of course we believe it would he better for them if they would become members of it. Mr. EiOK. Suppose there is a shop or works wlieri>. there are a hundred men, of whom ninety bclouj;- to y(jur union and ten do not. The ten who do not belong — are they as comfortiible, and do they get along as well, as the ninety who do? Is anything done to makeMt unpleasant for them? Mr. Bishop. Not that I am aware of. I have no knowledge of any case of that kind. Ml-. Rick. It is, I suppose, the same as with those who belong to a church, that those who belong think themselves more fortunate than those who do not ; but beyond that, there is no difference between those who belong to a union and those who do not in the same works. The Chairman. Have you ever loiown of a demand made upon employers to discharge men under a threat that if the discharge was not made, the men who were working would stop work ? Mr. Bishop. I do not get your idea exactly. The Chairman. The idea is this : Have you ever known a case in which a demand has been made on the part of the workmen that the employer should discharge a particular individual or individuals or else they would decline further to work ? Mr. Boyd. You mean, Mr. Chairman, by the workmen connected with this union? The Chairman. I mean, of course, by workmen connected wii.h this union. Mr. Bishop. Of their making a demand upon their employer for the discharge of a man who was not a union man and for that cause? No, sir. The Chairman. Not for Ihat cause, but for any cause? Mr. B18I10P. I have not known of it being done in that way. The Chairman. You seem to have known of it being done in some way, I infer from your answer. Will you state for what cause? Mr. Bishop. I could not state. I have known of cases, but they were not casesthat occurred under the jurisdiction or rules of the association, and the question was not one for -nhich the organization was responsible. The Chairman. Then I have already your answer on that point: the organization does not undertake to support a demand of that sort made by its members. Now with regard to foremen. Would your association take any action where the members of the association in any particular works demanded the removal of a foreman ? Suppose a foreman became obnoxious and they demanded a discharge, would your association take any action in such a matter? Mr. Bishop. No, sir. The Chairman. That would be purely local and left to the works? Mr. Bishop. Wc certainly would not take any action upon it ; wo do not believe it would be right. We believe, Mr. Chairman, jnst on that subject that you as an em- ployer have a right to engage as managers of your works whomever you may feel dis- posed to engage, and of course, while you would exercise your own preference in that respect, we would be glad to have those who are thus selected as managers to deal fairly with us. The Chaiejian. We are upon the moral ground of this subject now and I want to ask, before -n-e leave it, in what w.iy a grievance would be dealt Avith. Suppose the workingmen in a particular works think they are not receiving fair wages and pro- pose to strike — the employer says, "I cannot give any more"— what action would the association take in the case of a representation such as that being made by those workingmen ? Mr. Bishop. You mean, I presume, a representation made by members of the asso- ciation to the officials. The Chairman. Y'os, sir. Mr. Bishop. In the first place, no local or subordinate society is the judge of its own grievances. We have, according to our laws, in each works a committee whose duty is that of dealing with or, in other words, of standing between the men and the employers or managers. If a grievance arises — it may be a question as to wages or some other matter — it is presented to this committee. ' The committee, being the rep- resentative of the men, present the subject to the management or the employers, as the case may require; talk it over in a friendly manner without any disposition to create trouble ; and after an investigation in this manner, if it is foiind of sufficient importance and they fail to agree with the proprietors of the works, it is then reported to the society to which those men belong. The Chairman. Do you mean of the local district? Mr. Bishop. Yes, sir. The society then, after due consideration and investigation of the matter, if they are imprcissed with the idea that it is of sufficient importance, will report to what we term " the district." This district may cover a large stretch of territory. For instance, the district in our association called the second takes in all of the Ohio Valley from Steubenvillo as far as Ironton, Ohio; going out to Zanesville and Columbus, and taking in West Virginia, Southern Ohio, and Kentucky. DEPRESSION IN LABOE AND BUSINESS. 479 The CHAIUMAX. It does not take in Cleveland ? Mr. Bishop. No; that would be in another district. Cleveland would he in the fourth district. In this district we have what we term an executive committee, com- posed of the vice-president, two (lejjuties, and three persons elected by the various lodge or society presidents, together with the president of the societj^ having the grievance, making in all a committee of seven persons. They are required to make a thorough investigation of the matter, and, if necessary, visit the locality whore the grievance exists and talk the subject over with the management or the employers, with a view to avoiding, not to seeldng, trouble. The Chairman. As men who come to make peace? Mr. Bishop. As men who come to make peace; not to make a positive demand as much as to make a thorough inrestigation and use all honorable means to keep the matter peaceable and harmonious. After doing this, if they should fail to get what is deemed right (of course we do not mean by "what is right" that the representations made by the men should be taken alone, but that we should hear both sides, put their statements in the balance, and try to weigh them), and if the matter is deemed to be of sufficient importance, and the employers fail to do what is right and just under the circumstances, the committee would have the authority to order a strike. But the meu under no circumstances could stop work until this investigation had been made. The Chairman. As the result of these investigations, in practice, have strikes ever been ordered ? Mr. Bishop. Very rarely. The Chairmax. But they have been ordered ? Mr. Bishop. They have been In a few instances — very few. The Chairman. You observe that, according to your statement, while you take great care to get at the facts, the decision rests with a committee who are elected by your members principally, and that that is a part of your body ? Mr. Bishop. Yes, sir. The Chairman. Suppose that the employers should say to you: "We believe that you are trying to do what is right, nevertheless we differ with you in your conclu- sions; now ve suggest that somebody comes into arbitrate; you propose to decide the matter for yourselves, but we have some rights; let us have have an arbitration." Would your rules permit an arbitration under such circumstances ? Mr. Bishop. No, sir. The Chairman. In other words, yon reserve to yourselves the final and absolute right to decide whether you are right or not ? Mr. Bishop. Yes, sir ; for the reason that we believe we are able to judge of the merits of the case and know what our labor is worth. The Chairmax. On the other side, the employers claim that they are able to judge of the case and to know how much they can afford to pay ; and in that state of things both sides are desirous to avoid a strike and avoid trouble. Still there is nothing in your arrangements which would authorize your governing body to agree to an arbi- tration ? Mr. Bishop. No, sir. The Chairman. Would you refuse an arbitration in case it was offered under such circumstances ? Mr. Bishop. You mean as an organization ? The Chairman. Yes. Mr. Bishop. I could not say. No question of that kind has ever arisen, and conse- quently I could only presume an answer, and that I would not like to do. The Chairman. But if such a thing as an arbitration was offered under such cir- cumstances, do you suppose your association would take the question into considera- tion, or would they simply say, " We will not even consider it ; our decision is linal" ? Mr. Bishop. There may be cases where they would do it. Mr. Boyd. Let me ask, Mr. Bishop, whether there is anything in your rules or reg- ulations which prevents an arbitration? The Chairman. I understand him to say that it is not dealt with at all. [To the witness. ] There is nothing with reference to an arbitration in your rules? Mr. Bishop. Ourmle on that subject reads: "To obtain by conciliation and all other honorable means just and right pay for the work performed," &c.; local regulations, of course, being considered. The Chairman. Then there is nothing in the rules that would prevent an arbitra- tion if yon approved of it I Mr. Bishop. There is nothing said on that subject. The Chairman. Since you have been at the head of this organization and known of its existence, what do you think has been the effect of it? Has it been to dimmish collisions or strikes or to increase them ? Mr. Bishop. We have had less trouble since its formation than we had before. The Chairman. Do you find the employers ready to meet you half-way and talk over the troubles in a friendly spirit? 480 DEPRESSION IN LABOR AND BUSINESS. Mr. Bishop. Wc do iu the West. We do, though, sometimes find ohjections on the part of employers to confeiTiDg with us on any subjects whatever. _ , • i, +i Tlie Chairman. Are there any instances in your iron or steel works in which the rule pi-e^-aiJs not to employ any one belonging to the union ? Mr. Bishop. I have heard of cases of that kind. The C'liAiRJiAN. But, as you have stated, you have no rule which says that men sliall not work with other men who do not belong to the union ? Mr. Bishop. No, sir; we have no such rule. The Chaihmax. Then the exilnsion is on the part of the employers, not on yours? Mr. Bishop. We have no rule excluding from work those who do not belong to us. We have, as I stated before, information of mills where men who belong to our organ- ization are denied the privilege of working; and I am free to say that in all such cases I believe it would be far better for the employers if they would give us a recog- nition. . The Chairman. In the cases -where that exists, do you know -whether the conclusion of the employees had followed a strike ? Mr. Bishop. I have no knowledge of any strike ever being in those places. The Chairman. Take the case of the Cambria -works, -n'hich I suppose is near you, and, as you are the head of the organization, is of course known to you. They would be in the second district? Mr. Bishop. No, they are not in the second district. The second district is away west of that. The Chairman. At Cambria there was a strike. Is that one of the -works where only non-union men are employed? Mr. Bishop. I had no reference to that case when I answered the question. I see from the newspapers that they had arrived at some such determination. I could not say -whether the Cambria Iron Works -would deny a union man the right of -working there or not; and if they did, 1 could not say it would ho the result of a strike. The Chairman. Was the strike which took place at Cambria ordered by the organi- zation of which you are the head ? Mr. Bishop. No, sir; there has been no strike in Cambria since I have been the president of the association. The Chairman. The organization was ia existence at the time the strike took place at Cambria? Mr. Bishop. The United Sons of Vulcan was in existence. The Chairman. As I underst.and, they ordered or approved that strike ? Mr. Bishop. They were in full sympathy with it. The Chairman. And asscssmenxs were levied, were they not, in order to maintaia the strike ? Mr. Bishop. Yes, sir. The t'HAiKJiAN. Another works that I have heard mentioned where union men are not permitted to be employed are those at Troy. Is that one of the cases that you know of? Mr. Bishop. I have heard of that case. The Chairman. If the men (who are non-union men) employed in one of those works where union men are not permitted to work' should go upon a strike, they could get no assistance from your organization ? The AViTNESS. Yes, sir, they could. The Chairjian. Notwithstanding they are not members? Mr. Bishop. It is optional with ns. The Chairman. Then you could actually assist men who are on a strike, and who are not members of one of your associations ? Mr. Bishop. Yes, sir. The Chairman. You reserve to yourselves the right to do that ? Mr. Bishop. Believing we have a commen interest, and have a right to aid each other. The Chairman. In other words, as you stated at the outset, your object is to pro- mote the welfare of your own people, and if you can do it by helping non-union men, you will do it ? Mr. Bishop. It may be, as I Said before, that there is a case worthy of assistance. The Chairman. Has this association a reserve fund, or does it rely upon assess- ments ? Mr. Bishop. It has a reserve fund. The Chairman. A regiilar contribution of the members, whether there is a strike or not ? Mr. Bishop. Yes, sir ; a monthly contribution. The Chairman. Have you any objection to telling the amount ? If you have, I will- not press the inquiry. I will say to you, however, that I see no reason why you may not properly make provision for an accumulation on hand, as the ability of the mem- bers to serve themselves (lep(Muls upon the fact of their having this accumulation. DEPRESSION IN LABOE AND BUSINESS. 481 Therefore, if I were in your place, I would not hesitate to answer the question as a matter of propriety ; bnt I leave it to you to answer it or not. Do you make allowances to your members in sickness or distress ? Mr. Bishop. Do you mean by what are commonly termed "sick benefits," or such benefits as are usually paid by beneficial societies? The Chairman. Yes, sir. Mr. Bishop. No, sir. . The Chairman. This is simply for a trade purpose, or for the purpose simply of maintaiuiug your trade interests, and for no other purpose ? Mr. Bishop. Yes, sir. ■ The Chairman. Are you incorporated under the law 1 Mr. Bishop. No, sir. .The Chairman. Then your officers would not he subject to the penalties which arc provided by law for breaches of trust on the part of officers of incorporated compa- nies ? Mr. Bishop. Of course we are subject to our own regulations. AVe are not incor- porated by State or national authority. The Chairman. You know that after some trouble in England the organizations there succeeded in securing legal recognition. They considered it a great benefit. In this country is there any obstacle to your legal recognition ? Could you not incor- porate yourselves under the laws of' your States, if you wanted to do so? Mr. Bishop. I do not know. Judging, Mr. Chairman, from the little progress made last winter by the Iron Moulder's Union of North America, who have a bill before Congress at the present time asking for a charter, I am incUned to the belief that we would make very little if any progress, and perhaps meet with utter failure in the end. The Chairman. Are you aware that the State laws authorize incorporations, and that when corporations are created they have the rights of all corporations in any of the States of the Union, and that, therefore, it is not necessary to come to Congress? The reason why these gentlemen have not made any progress is that the Judiciary Committee are unable, thus far, to see any right or power in Congress to grant the incorporation while they can obtain a charter under the laws of the States. Mr. Bishop. May I ask a question ? The Chairman. Certainly. Mr. Bishop. Why cannot Congress pass such a bill ? The Chairman. Because it is one of the things which are believed to be withheld from Congress. Nowhere has it yet been found that Congress has been given ])ower8 to make incorporations for any such purpose. It is doubtful whether they have the power. Mr. Bishop. Is there any law which would deny to Congress the right to do it ? The Chairman. I must explain to you that point. The Congress of the United States has no power except that which is gTanted to it under the Constitution. All the powers not granted are reserved to the several States. You must find, therefore, an exception to the general denial of power and an express grant for that specific pur- pose. AVe have not found any such express grant of power, and the inference is that that power is among the others' reserved to the States. Besides, these organizations, such as the National Moulders' Union, can go into the courts, under the laws of the State of New Y'ork, for instance, and have all the rights which they could have under incorporation by Congress; therefore there is no occasion for them to come here for that purpose. ,,.,,, ,j , Mr. Boyd [to the witness]. What advantage do you think there would be, even it the power on our part existed, in having a general law as compared with a State law ? Mr. Bishop. Only this, that I think it would give such organizations a more gen- eral recognition, and that such a law, if properly understood and practiced, would work for the general good both of those who are employers and of those who labor The Chair.man. A word more upon the point to which I referred. One of the in- corporations with which I am connected is located in the State of New Jersey. It has its property there, and has the right of protection for its property, not only in the courts of that State, but in the courts of any of the States of this Union. There is no prohibition of any kind upon its rights with regard to locality. So it is with charita- ble incorporations. The moment they are incorporated they acquire all the rights, the right of appeal, &c., upon the questions concerning them arising out of the State in which they are located. . Mr KiCB Congress could not possibly incorporate your organization. The Chairman, They could not incorporate an iron company; there is no grant of nower for them to do that. They have incorporated banks and railroads under necoiliar circumstances, where the railroads passed through Territories of the United States and the i urisdiction was divided. So with the banks ; they incorporated them under the general power which gave the government the control of the money ques- tion But in no other case can they take such action. They vio lated the Coustitu- 482 DEPEESSION IN LABOK AND BUSINESS. tion, in my judf^nicnt, in one case. They incorporated a national insurance company. I could tin'd no power nnder the Constitution for Congress to do that ; and the result of it was most disastrous ; the poor people who invested their money lost it. The aulieme of the Freedman's B)iuk proved most disgraceful and disastrous. Mr. Bishop. If you will allow me I will state the reason for asking the question about the right of Congress in the matter. I have an indistinct recollection of some members ot Congress— I could not just name them now— who have been making par- ticular inquiries regarding the position of trades-unions upon the subject of the troubles of the summer of 1877, particularly the troubles at Pittsburg, with a view of basing on that information their action as Eepresent ativcs on the question of the charter of such organizations. I inferred from that, if it could be shown in any manner that trades-unions participated in or sympathized with the riots, the Representatives would feel fully justified in withholding any favorable action from the bill providing for the incorporation of the Moulders' Union. The Chairman. I think you have been misinformed as to that ; I think it is a mis- apprehension on your part. The first question would be the question of power ; and so far as that has been examined here by lawyers (I am not a lawyer, but I have been asking lawyers what their judgment was) it has been that there was no power in Con- gress to pass such legislation. Mr. Boyd. There could be no objection to favorable action, I suppose, if Congress had the power to act; but, as has been suggested by the chairman, onr State laws have already liberally jjrovided for the incorporation of snch organizations. Mr. Bishop. I am free to say here that we who are counected with trade organiza- tions have been lookijig forward with a great deal of anxiety to the passage of the bill for the incorporation of the Moulders' Union. The Chairman. Suppose it should turn out, on the report of the Committee on the Judiciary, that there was no power to grant the request, you would not expect the bill to pass ? Mr. Bishop. We certainly would not expect an impossibility. Mr. Rick. Mr. Bishop, you will find many members of Congress — and I would not hesitate to say that among them are the members of this committee — who, while they do not commit themselves on the question, are very kindly disposed toward these trades- unions, and have been looking into the matter with a great deal of care and with a desire to see through them, and to see where there may be worked out improvement for both labor and business. So that we do not share in any of that feeling to which you have referred. The only trouble is that we do not see how Congress can incorpo- rate a trades-union in regard to the iron business any more than it can incorporate a company to carry on the iron business, and which we know it cannot do. The Chairman. The object of the questions I have put to you about trades-unions and the organization of your union was to disabuse the public mind of any error in regard to the intentions of your organizations. Of course, if you have anything ob- jectionable in the organization of your societies, the making them public will be very likely to correct that and lead to the improvement of the organization itself. But we do not claim, and I am free to say that the committee are unanimous in that opinion, that we have any power to supervise your trades-nuions. We have the right to find Avlietherthey are advantageous to the interests of labor or detrimental to the interests of labor, and that is the problem we have been trying to work out. I understand you to saytliat the effect of your organization is to discourage strikes, and therefore it has T)een advantageous both to capital and labor, for there is nothing more hurtful to either than a protracted strike. Mr. Bishop. I am free to say, Mr. Chairman, that we are opposed to strikes, and that under no circumstances will our organization permit a strike when it can be avoided, and then only when it is the last resort we have for getting a fair day's pay for a fair day's work. The Chairman. It was my knowledge of that fact which induced me to ask the question which you have already answered, viz, whether there was not one step for- ward which might be introduced and which had not yet been resorted to, and that was arbitration on both sides. I hope sincerely that that will he considered on both sides. Mr. Bishop. With regai'd to arbitration I think that perhaps our men are divided on tlie subject. I think we have some who are favorable to it, and others, again, would no doubt oppose it. The Chairman. Arbitration in England has been applied of late under very favor- able circumstances. It has always been on a falling market, and the arbitrator has been always obliged to decide that wages should go down. It has been a very great trial to the laboring men, but they have abided the result with credit ; and I have yet to hear of one case where the men have not stood up loyally by the bargain which was made. Mr. Bishop. I doubt the advisability of establishing arbitration at the i>resent time. 1 think it would be better at some other time. If arbitration must be resorted to, I DEPRESSION IN LABOR AND BUSINESS. 483 Ijhink it would be better that it sboulfl be adopted at a time wlien evorything was quiet, when there are no indications of labor trouble whatever; and then each party wonld take the chances of a fall in the market. The Chairman. At present you are working vinder the sliding-scale of which Mr. Edwards spoke ? Mr. Bishop. Yes, sir. The Chairman. Is it working well now f Mr. Bishop. Yes, sir. The scale, however, is somewhat different from the scale made at the time referred to by Mr. Edwards. The figures are changed, but the prin- ciple is the same. The Chairman. The original sliding-scale was found to work badly, at least there were objections to it when the market fell. It was thought to be a little too hard ou the employer then. Mr. Bishop. It worked both ways. The original scale provided that for each ad- vance of one-fourth of a cent in the price of bar-iron, the ijrice of puddling would advance 25 cents per ton ; and, on the other hand, for each decline of a quarter of a cent in the price of iron the price of puddling would decline 25 cents per ton. The rule is that iron does not advance by quarters or halves ; it goes up more by tenths. Therefore, under the former arrangement, the iron might advance two-tenths without the puddler getting any benefit whatever. Ou the other hand, it might decline two- tenths without the manufacturer getting any benefit. For that reason it was thought better to revise the figures, and that led to the scale referred to by Mr. Edwards pro- viding for a rise or fall by tenths. The Chairman. Did you alter the rate of wages in any way? Mr. Bishop. No, sir. The change only provided that we should get an advance of a tenth of a cent, instead of waiting for iron to go up a quarter of a cent, and that there should be a corresponding reduction when it went the other way. The Chairman. Do you confirm what Mr. Edwards has said about the districts ; that each district makes its own rates; that is to say, is this sliding-scale universal throughout all its districts, or may they adopt a different r.ate in particular districts ? Mr. Bishop. No, sir ; it is not universal. The scale differs in some sections irom what it is in others, and then other places have no scale whatever. The Chairman. How do they get on where they have no scale ? How do they msmt- age ; by agreement? Mr. Bishop. By mutual agreement. Mr. Chairman. But the union requires that there shall he the same rate in that district? Mr. Bishop. As near as we can, we practically do so. Mr. Rice. Have you establi.shed a district in Massachusetts, and extended the scale- there ? Mr. Bishop. No, sir ; we have not yet. The Chairman. Suppose that an employer and his employes in a particular dis- trict, wliere they have a sliding-scale, were to come to an understanding by which' the employes should take less than the rate, in order to execute a particular contract. The employer represents to theni that he is in difficulty, and proposes to them to- work for lessto finish this contract, and they say, "Well, we will work along for six months longer to keep you on your legs." "Would your organization tolerate such an arrange- ment as that ? Mr. Bishop. With the scale of prices in existence, do you mean ? The Chairman. Yes, with the scale of prices in existence. Take a case in Pittsburg, for instance. An employer there, who has paid his men and dealt fairly with them, says, "Now, I have got 'to stop ; but I could get through this trouble, provided yon would all turn in and work at such and such a rate." The men say, "Let us pull through and keep the concern ou its legs." Would you make an exception inisacha case and permit it ? Mr. Bishop. We have had a few cases of that kind, but not in the manner you refer to. Instead of making a reduction in wages, the men have allowed the employer to have the use of a certain sum of money. Instead of their employer going to the bank, and paying a high percentage for money, they would permit him to use a' certain amount of their wages, and pull him through his trouble in that way. The Chairman. It was very creditable to the workingmen to do it. But take a case such .is we had the other day, where we had a blast-furnace running and were going to blow it up. Before doing so, we called a meeting of these people, and said to tMm, "Now, if you choose to go on with this furnace and work, you may have the whole of the proceeds; whatever it produces over the cost of the raw material, we will give you." They accepted the offer, and the cost of production was less than the current rate of wages in the neighborhood. Would you find that that was a violation of the union rule? Or was it a case in which you could make an exception 1 ■ Mr. Bishop. We might and we might not. I think it is a case thadr might lead to 484 DEPRESSION IN LABOR AND BUSINESS. a great deal of trouble, and that in eucli a case the men would be justified in declining to make the arrangement. The Chairman. But tliese men did not decline. Mr. Eke. Suppose that the men engaged in any such arrangement had belonged to your organization, what would you have done with them if they had accepted the proposition ? Mr. Bishop. We never had a case of that kind to deal with. The Chaieman. There is nothing, however, to prevent your dealing with such a Mr. Bishop. As I stated before, the manner of dealing with cases of that kind is confined to the district, and the district could authorize an arrangement of that char- acter. We have no law denying to a district the right to do so; and, in fact, the dis- trict has entire jurisdiction in such matters. The great trouble in cases of that kind, however, is that every other employer expects the same of his men that the men of another cencern may have conceded to their employer. For instance, you may have works located here or thi're, no matter where; the men make a certain concession to you, either in the price of labor, or in other conditions, which gives you an advantage over the established system in that particular section of the country. This advantage may be made use of in such a manner as to be of great disadvantage to another em- ployer. That employer would then come to his men and say, "I demand the same terms of you that my neighbor gets from his men." In that way we find that it runs from one to another. It would work a great deal of iujury, not only to the men iu reducing their wages, and thereby limiting their purchasing power, but generally to that biisiness community and to the trade. Mr. KiCE. Suppose there are two works, at both of which are employed men be- longing to 5'our society, and one of them should get a little advantage over the other for any reason. We will say, for instance, that a railroail that has been a convenience to one of the concerns is discontinued and the works cannot compete with its rival as it did before. Suppose further that those works are situated iu a village which has grown up around them, where the workmen have lived and worked all their lives, aud it comes to pass that by reason of this change (for which the owner of the works is not responsible at all) the works cannot continue to employ the men unless they take less wages. The question is put before the men whether they will work for less and let the works go on, and they continue to live there where they have lived and work where they have worked; they are desirous of doing it; they accept the prop- osition. Now, what action would be taken against those workmen, in your judgment, for having done that, by the union to which they belong? The Chaiuman. That is, would they be excluded from the union? I suppose that is the penalty. Mr. Bishop. That case would admit of a variety of views perhaps. If the matter had been advised by the district in the way 1 have stated, of course there would be no objection to it. Mr. Kick. That is, you would consider it a matter for discussion and consideration, aud if you would see that the association would not be injured while these men would be benefited, probably it would be allowed. Mr. Bishop. There is where the injury comes in. We are unable to see wherein society could be benefited, or, in other words, we are unable to see how that could result otherwise than iu injury. In the first place, the concession in that ease, as you put it, by a reduction of wages, means a reduction in the cost of producing the iron. Mr. KiCE. But there is an increase in the cost of transportation which prevents that mill from running, if the usual rate of wages is paid there. Mr. Bishop. The reduction in the cost of production means a reduction in the cost of production of iron elsewhere. The history, I believe, of all questions of this kind, at least the bulk of our information (perhaps that would be the better way of putting it), justifies us in the opinion that all movements of that kind have an evil rather than a good tendency. Reducing the price of labor does not tend to benefit the community. Ml'. EiCE. Would you rather have those works fail, and tho.se workmen be driven off somewhere else to hunt work, than to have them work at a less rate? Mr. Bishop. We believe that the prosperity of our country depends very much upon the pnrchnsing power of our people, and when you limit or reduce that purchasing power, yon injure its prosperity to that extent. As an organization, I believe our mem- bers would agree in this opinion, that perhaps one cause of the trouble has gTown out of the very limited purchasing capacity of the people. The Chaieman. Yon mean that if they had more money they would buy more ? Mr. Bishop. That it would create more demand. The Chairman. Would not the purchasing power of those people who would have to suiTender son\ethiug they now have he reduced? Mr. Bishop. Not necessarily. The Chairman. Is not the piirchasing power of one man proportionate to the amount of capital he now has ? DEPRESSION IN LABOR AND BUSINESS. 485 Mr. Bishop. Yes, air. The Chairman. If you take awjiy a portion of that power from one man, and give it anoth ' f ' '^"" ""* diminish the pui'chasing power of one man for the benefit of Mr. Boyd. The question is whether it is proper to punish the few for the benefit of the many ? [Mr. Bishop here made a reply which was inaudible at the reporter's scat.] 1 he C HAIRMAN. I understaud, then, your testimony to be to the effect that the organi- zation ot these unions has been a benefit, in your Judgment, both to the employer and employed, and that they are both better off than they would have been without the existence of the unions '! Mr. Bishop. I believe that. ixrT^'*' Chaiimax. Let me ask you another thing about the employment for labor. When employment is slack, does your union do anything to lead the men to divide up the labor, so as to distribute it among a greater number? That is, do yon help the men to divide up the labor, and is that done among them to a greater extent than is done by non-union men ? Mr. Bishop. Wo have no special law on that subject; but, as we have a common feeling in regard to it, our men act upon that principle to some extent. The Chairmax. Is there at present much excess of unemployed labor in Pittsburgh ? Of course I speak always of the branch of business with which you are connected Mr. Bishop. I find quite a number of idle men. The Chair.max. I would like to arrive at about an estimate of the percentage of unemployed. Does the number of iron- workers or puddlers who are out of employment amount to as much as five per cent, of the whole— one in twenty? . Mr. Bishop. I could not say. There is a floating population, a sort of French class who are moving about, and I think perhaps quite a number of that class are to bo found in onr locality. It would be difficult to say just what proportion they amount to. The Chairman. It has been asserted very frequently before the committee, that large numbers— some have said one million, some a million and a half, and some two millions— of the workingmen of the country are out of employment. If we could determine as to some percentage of the number in Pittsburgh or particular localities who are not able to get work, we might ascertain whether the percentage is so con- siderable as to warrant any such statements. Mr. Bishop. I could not say. We have a working population, and basing my answer on the assumption that the other manufacturing localities have been doing as well as Pittsburgh, I would say no. As I have no information as to what other manu- facturing localities have been doing in different branches of the liusiness, I would not perhaps be justified in expressing an opinion. Taking Pittsburgh by itself, I would say no. Mr. Rice. Are there many laboring men in your business who have been permanent residents there, and who have been industrious workmen of good habits, who are now unable to get employioent ? Mr. Bishop. We have some of that class; yes, sir. Mr. Rick. More than you have had in years heretofore — I mean until within the last two or three years? Mr. Bishop. I think so. The Chairman. Do you see any remedy for this state of things beyond that of the gradual improvement which always comes when prices get low and the, people begiii to buy things because they are at low prices ? Does anything else occur to you by way of legislation to improve the state of things? Mr. Bishop. I do not know, Mr. Chairman, unless you could legislate people into work. The Chairman. Some people have suggested to us that we should issue a very large amount of paper money; that that would give them work. But you have evidently gone on the idea of enlargement on their purchasing power, and you do not measure that by the number of dollars a man gets, but by the amount he can buy with his wages. Would there be anything gained by putting out this paper money, in your judgment? Would that produce any work? Mr. BiSHOi>. I do not know whether this is drifting into politics or not; I am free to say here, on this money question, I think it is one of those wide, deep questions that the people, as a mass, do not understand; I am free to say I do not want to discuss it. The Chairman. You have discussed the other questions very freely, and I am glad to hear that you do not wish to discuss that. Mr. Bishop. I have been noticing that ever since the financial question has been before Congress, and with all the legislation we have had about it, it still seems to he a question which, if settled, does not seem to he settled to the satisfaction of some people at least. The Chairman. All this time the prices of manufactured products, not only of the manufacturer, but what the farmer produces, have been downward, have they not? 486 DEPEESSION IN LABOE AND BUSINESS.' Mr. Bishop. The tendency has been downward. The Chairman. And the effect of low pricIr. Bishop. No, sir. The CiiAir.jiAN. You would discourage it '? Mr. Bishop. I would do this, Mr. Chairman, which you or any other gentleman would have a right to do under the circumstances : For instance, you are a manufac- turer engaged in a certain business, and believe that the product of your business is worth a certain price. You want to get that price. Another man may come into your loi'ality and go to work, and offer the product of his mill at a less price. The price of your product is lessened, and you are obliged to come down to meet his figures. You thereby make less money. Now, you have the right to talk to him on the subject and reason'witli him as to what his interest is. That is all that we claim to do. If, after reasoning with a man, he is disposed to go on 'in the way that we believe to be inju- rious to his own best interests, we let liim do it. The Chairman. But yon are aware that it goes beyond that in practice, however? Jlr. Bishop. Never, in our society. The Chairman. If you find it going beyond that, you do not try to prevent it ? Mr. Bishop. I can only say, that we have never encouraged strikes. It is true we were charged with that, but we have never been guilty of it. Indeed, the reports in- imical to our fair standing in the community have been often much exaggerated. Once, when we had a strike of several months in the city where I live, it was reported abroad that the streets were running with blood, and so on ; and yet the fact was at that time, that the peace of the city never was better. The Chair:\iax. The old strike iu Pittsburg, in 1867, was accompanied with some murders, was it not? Mr. Bishop. I do not recollect that it was. The CiiAiUMAX. I refer to the long and famous strike in Pittsburg, in 1867, when certain persons were killed. The matter, however, is one of official record. There were nmrders at the time, and it was charged that they were committed by the strikers. Yet, on the trial, I think it was very clearly proven that the strikers had nothing at all to do with them. The fact appeared that murders had taken place in a low oToo-shop where certain strikers were in the habit of resoi-ting, and upon the strength of that it went all over the world that the strikers were mnrdering .people. I was in London at the time, and saw the newspaper accounts. Finally, when the matter was traced out, it was shown that the responsibility for the outrages did not i-est with the strikers at all. Mr. Bishop. I have a distinct recollection of that strike. I worked in Pittsburg then, went through the strike, and remember many of the incidents of it, but I have no knowledge of that to which you refer. The Chairman. If you remain in town until to-morrow, I think I can tni-n to the ici'ord of the case I have spoken of. Mr. Bishop. It was my knowledge of the fact that unwarranted rumors, sucli as that one, had been disseminated to our discredit, that caused me to make the remark which I made a moment ago. Murders may occur at any time, and often do occui', even when laborers are employed at high wages, and it does not follow that they are, ill any manner, necessary incidents to labor troubles. At the meeting of the committee on the following day, Mr. Bishop again appeared and made the following statement: Mr. Chairman: I stated yesterday in a brief way tJie objects of our association, which statement was substantially the improvi'ment of its members, and our advance- ment in everything that tends to make us good citizens. This morning, Mr. Chair- man, I noticed in your ex.amination of Mr. Humphries, that you questioned him with regard to whether the trades-unions of Pittsburg had any connection whatever with the railroad companies, and, indirectly, whether they were identified with the riots at Pittsburg. It then occurnMl to me that it might be Avell for me to make that matter clear by .showing the action of our organization f. Yes, sir. The Chair:man. If you could get transportation for an additional quantity, would it not reduce the price ? Mr. PeriUn-. I think not. The Chairjian. Do yon think that an increase of the quantity on the market would not have the eflect of reducing the price 'I I know that in the case of iron, for instance, an increase on the market would have that effect. Jlr. Perrin. But our oil is on the market all the time in its crude state. The relief that I spoke of would come from the embargo being raised from the other branches of tlu' trade connected with oil. The most of that business is performed now in other sections of the country. There are small blanches there, but the most of the trade now is carried on in Cleveland, New York, and Philadelphia. The Chairman. Is not the price of the manufactured product in New York, Phila- delphia, and the other places very low ? Mr. Perri.v. There is one kind of oil quoted low ; that is barrel oil for export; but oil for home consumption is not low in our own country. The Chairman. Be good enough to tell me, as I have lost the run of it, what is the present price of refined oil of the iJrojxT standard test, of good quality? Mr. Perrix. For oil in barrel packages it is now about nine cents a gallon. That is, the oil that is lowest in price. Till' Chairman. That is for export ? ilr. Perrix. Yes. But remember there is a very large portion of the oil now exported incases. That oil is high. Mr. Tho.mpson. In tin cases ? Mr. Perrix. Yes, sir; a very large amount of it is. thus exported. The Chairman. Why is that higher thaa the other oil? Mr. Perrin. They claim for it a better or higher grade of oil. I believe they do put up some better grades in tin cases, as they claim to do, but they send them to the far eastern countries and to the southern markets. It is higher because there is an op- portunity to receive a better jirice for it as specialties. The Chairjiax. Is it not a trade open to all the world? Mr. Perrix. It is, if they get transportation. The Chairman. I have a practical difficulty here which I would lika to have re- moved. The complaint is that the price is so low as to be unremunerati\'e. I under- stand it to be as low in the markets as nine cents a gallon, and that, to my knowledge, is very low. How would that be increased by free transportation ? You would only bring more oil into market and make that price still lower, it seems to me. Mr. Perrix. I cannot say that free transportation would increase the price of re- fined oil in New York at once. Jtr. Thompson. On that point a single moment. Is not nine cents a gallon for re- fined oil high as compared with the price of crude oil ? Mr. Perrin. There is a margin. The Chairman. It is not a large margin, is it ? Jlr. Perrin. Not very large. The Chaikmax It is not a fair profit, is it ? Mr. Perrin. Not with open rates ; that is to say, with published rates, what we call " open rates." The Chairman. I do not think, if you make the case clear, that any benefit would be done to any interest by what you call "free transportation," but I will pursue the suhiect further by asking you what you mean by "free transportation"? Mr. Perrin. I mean by free transportation the extension of such facilities as will enable any person engaged in the production and- manufacture of oil to move it to the seaboard. The Chairman. Do you have any trouble in that particular ? Mr. Perrin. Yes, sir. The Chairman. What is that trouble ? Mr. PERRi>f. The railroad company refuse to afford care. The Chairman. They do not afibr'd cars ? Mr. Perrin. They do not atford cars. Messrs. Thomi'mo'n and Rice suggested that a legal remedy was available on the part of the sufferer from any such cause. The Chairman. Do you not uuderstaml that the law makes provision for a case such as that of a common caixier who refuses to furnish cars? Mr. Pekhin. We had supposed so, but Mr. Cassatt, of the Pennsylvania Railroad, in DEPKESSION IN LABOR AND BUSINESS. 493 the answer recently made liy him, claims the right to discriminate as to the furnishing of cars by the corporation he represents, and also in rates. He does not make any con- cealment of the fact. The Chair:\[an. That is, does he claim the right to refuse to furnish cars ? Mr. Pehmn. He claims the right to discriminate. The Chairman. Has any common carrier set up that he is not houud to furnish the means of transportation ? Mr. Perrix. Mr. Cassatt said that he would not do it. I do not think he has ever clainied that he had the right to refuse to do it, hut, I believe, ho claims a right to discrimi nate in rates. Mr. Thompson. I understand he has claimed that he has the right to distribute cars proportionately, and that yon would have the right to have a certain proportion of the whole. The Chairman. I have suffered from a like grievance in a similar case, being an owner of a colliery on the line of the Reading Railroad. We applied to the company for cars and were obliged to accept a less number of cars than we required. Yon say to the company, under such circumstances, " You must give us more cars." The an- swer is, " We have not got them." You threaten to seek your remedy in the courts, and they reply, " The court may order us to furnish them, but wc have no more money with which to procure more cars, and cannot get any more money for that purpose." Mr. Perrin. That gives me the opportunity of stating that, in the case of which I have been speaking, the railroad company made the very stntement which you now give as having been made. They made the same statement at a time when the aver- age shipment from the oil region was less thau thirty thousand barrels per day, and the fact is that, subsequent to that, they had cars enough to ship over fifty thousand barrels per day without any new cars having been constructed. My idea is that when they said they had no additional cars to spare (it was at a time when the daily average shipment was but thirty thousand barrels), they said what conld hardly have been true ; because after that, without any manufacturing of n(^ w cars, there were facilities at hand for the shipment of over fifty thousand barrels per day for from thirty to fifty consecutive days. The Chairman. What corporation or railroad company was it that refused this ? Mr. Perrin. There was a refusal on the part of the New York and Erie and Penn- sylvania Central. The Chairmax. You are a resident of Pennsylvania, are you not ? Mr. Perrin. Yes, sir. The Chairman. Why is not yourremedy with Pennsylvania? AVhat has Congress to do with this f There you are, a resident of Pennsylvania ; the railroads of Pennsyl- vania do yon this wrong ; your property is there in Pennsylvania ; what has Congress to do witii this thing ? Mr. Perrin. The claim is that there are so many of these railroads running through different States, say the Lake Shore, for instance, and a large amount of this oil pass- ing between the States, say into and through Ohio, New York, and Pennsylvania, that the matter is one that must be governed by some provision regulating inter-State com- merce. The Chairman. Is that true of the Pennsylvania Railroad ? Mr. Perrin. Of the oil which it transports, the Pennsylvania Railroad takes but a small proportion to Philadelphia. The main objective point is New York City. The Chairman. But they have a line from Philadelphia to New York ? Mr. Perrin. They have a line to New York. The Chair.man. And that being a leased line, they can be attached as to that in the courts of Pennsylvania and compelled to do this work over that as well as over all their lines wherever they have one. I do not think that that presents any grievance which addresses itself to us so far as yon are concerned. You may have a great grievance and I would be glad to have it'explained fully, but it seems to me your remedy is at home. Mr. Perrin. We are trying to get it there. The Chairman. Can you not get it in the courts ? Mr. Perrin. We might perhaps get it if we should live to be twenty or twenty-five years older. The Chairman. Now suppose that everybody who has a grievance, every man who cannot get the ears that he thinks he ought to have, for instance, was to come down to Washington and invoke the intervention of the general government, do you not think that Congress would have its hands pretty full ? Mr. Perrin. X do not think that you can take up every matter of a purely local na- ture and specially adjudicate upon it, but where an article of prime necessity and general constimption is produced in different States, as this one is, both in Pennsyl- vania and New York, and is carried irom the one to the other or through those States for shipment, the question \^■ould seem to be an exceptional one. 494 DEPEESSION IN LABOR AND BUSINESS. Tlie Chaiuman. So far thon as the Erie Railroad is concerned, does it not run for its entire lengtJi within the State of New York, and is it not amenable to the courts of New York ? Mr. Pekrin. Yes, sir ; I assume that it is. The Chairman. I do not think then there is any trouble in bringing .1 suit there to right your wrong. If you are wronged in any way, you can be righted there. Mr. Perrin. There was a suit brought there, you remember, by Mr. Ohlin, where the railroad company had refused to permit the use of their cars. The CHAiR!\rAN. I can understand that a man may persist in going on and doing wrong notwithstanding legal efforts to restrain him, but in the end the courts will right the wrong by giving damages in a corresponding amount. But aside from that, the claim is made here that where a railroad runs through certain States we shall do certain things ; and the bill that was framed on that subject has passed the House. Mr. Pkrrix. And that bill is all that anybody in our section of the country expects to get at the hands of Congress, that is, if it be made effectual. Mr. EiCE. That remedy would not touch you, however. Mr. Thompson. Not on the particular grievance here complained of, but this is only one of other grievances. Mr. Pbrrin. That bill has reference to the way in which people shall be treated in their petitions to the railroad companies in asking for cars, viz, that there shall he no favoritism, and also that rates shall be equal. The Chairman. Do you contend now that you do not have your fair share of cars •given to you ? Mr. Perrin. "We certainly do. I might say that outside shippers do not get any cars at times. The Chairman. Do you say 'they refuse to give you any ca.rs ? Mr. Perrin. They did. But since the supreme court of the State of Pennsylvania has taken jurisdiction of the cases they have been doing better. The Chairjian. That only confirms my idea that the remedy is at home, and that you can get all that you need there. Mr. Perrin [continuing]. But while we have been getting cars we have been pay- ing the full rate of freight, $1.40 I think it is on crude oil now ; at the same time, it is ■well known that a different rate is enjoyed by the monopoly. The Chairman. Nevertheless Congress cannot enter into the State of Pennsylvania, for example, nor into the State of New York in order to apply a remedy for that. Mr. Perrin. That may be so, but you can make it unlawful to maintain this dis- crimination in traffic between the States. The Chairman. Suppose the arrangement should be made as you suggest, and then that the railroad companies would no longer transport the oil through one State into another, but would take it by the local route all through the same State, then the legislation you suggest would not apply. Mr. Perrin. That may be true, but when in Pennsylvania we shall have reached that iioint the question can be taken up there by our State legislature. The Chairman. Why may it not be taken up as well by the legislatures of New York and Pennsylvania without a Federal law ? Mr. Perrin. I will tell yon why. The management of the Pennsylvania Eaih-oad claim that if there was a law of that kind and it was enforced by the State it would ruin the Pennsylvania Railroad, but that if a national law of the kind was in exist- ence, then they could have a State law, and would suffer no material damage from it. The Chairman. Does the Peimsylvania Railroad want a national law, then ? Mr. Perrin. I have been told that they have no objection to such a law; I have no knowledge on the subject. The Chairman. I wondered what influence it was that put that bill through the House. I am getting a new idea. If they want it, it is a new development. Mr. Perrin. I do not know whether they want it or not. I understood they did not oppose it the other day. The Chairman. To come back to the point, your idea is that the particular interest with which you are identified will be very much relieved and benefited by the pas- sage of a law such as that which the House has passed ; is that it ? Mr. Perrin. Yes, sir; it will be relieved aud benefited by it if there is no mistake in it; if there is no loop-hole whereby it can be evaded. Let me add hero that the fact of our having an overproduction to-day is no indication that we will have any some time hence, say in three months or five months. It is very fluctuatiii"-. The Chairman. But we are required to deal with the market as we find it. You come here and say that there is an overplus on the market, and you ask, in order to relieve that condition of things, to have certain barriers taken away. I do not see that the particular thing you ask for is going to relieve the excess of business. Mr. Perrin. In the latter part of 187tj and in the year 1877 the condition was just the other way. We did not produce enough, and- the consumption ran into our stock DEPRESSION IN LABOR AND BUSINESS. 495 very lieavily. While there was somewhat more remuneration in the price for crude, yet there was a refiner's margin of from fo\ir dollars to seven dollars a barrel. The Chaihman. Why is not all that remedied by more people going into refining when it is profitable? Mr. Pkriun. All that were ready to profit by it did profit by it ; that is, they were benefited by it where the margin could not be concealed. The Chaiejian. I do not understand what you mean by "concealed." Mr. Perrin. I refer to the matter of drawbacks. The railroad company give a drawback to one particular company on all the oil that is produced in the oil regions, whether they ship it or not. The Chairman. They give a drawback to one company on all the oil that goes out of the regions ? Mr. Peerix. Yes, sir. Mr. Thompsox. In other words, if the witness's oil is shipped, this monopoly gets a certain amount per barrel on every barrel that he ships. The Chairmax. Is that capable of proof? Mr. Perrix. AVe have always supposed that it was readily susceptible of proof; that is, if we can get the witnesses on the stand. The Chairman. There is nothing to prevent your getting the witnesses on the stand, is there ? Mr. Perkin. We tried to do that in the State of Pennsylvania just as hard as any men could try to do anything, and we have not got them there yet. The Ch.\irmax. But you have the legal right to put them there, and having done so, and the fact being demonstrated that a railroad company, which is a common car- rier, gives a rebate to a monopoly on every barrel of oil, whether shipped by theni or not, it strikes me there is not a court in existence which would sustain such a tiling as that. Mr. Rice. Here is a case analogous to that of a rich man holding out in a lawsuit against a poor man, having advantages in doing so from the fact that he can hire bet- ter attorneys, spend more money, and can get delay and all that ; but I do not know of any mode of jurisprudence that can remedy such difficulties. They are misfortunes. They are not right, but they exist and cannot be avoided. The Chairman. Do you propose to produce any evidence here of the existence of a state cf things such as you describe? Mr. Perrin. No, sir. The Chairman. You only say that you believe that to be the fact? Mr. Perrin. Yes, sir. The Chairman. I do not see where we can find any cause for intervention in that particular; it does not concern anything affecting the United States courts ; there is no question of the kind pending in the United States courts, as I understand, although I suppose it might be introduced there. Mr. Rice. I see no reason why it might not be got into the United States courts; but there would be, perhaps, the same long delay there that there is in the other courts. The Chairman [after an inspection of certain papers handed to him by the witness at the suggestion of Mr. Thompson]. The papers here produced, I find, are extracts fi-om a contract made with the South Improvement Company, which contract has ceased to exist. Mr. Perrin. The contract was made between the South Improvement Company and the railroads, and was in force for a time, but is not now in existence, having been substituted. The Chairman. Therefore I do not think that it is worth while to put these papers in evidence, as it is a thing that is past and gone. Mr. Perrin. The trouble is that when you find out what this monopoly is doing, then they abandon that particular thing and adopt some other method of accomplish- ing the same object. When the time comes for holding them to some degree of ac- countability, the particular thing complained of has been done and only the evil con- sequences of it remain. The Chairman. I can only repeat that to secure redress at our hands you will have to come to us with a tangible grievance and a remedy which may be applied. If you present to us a tangible grievance and a feasible remedy, then, of course, we can ap- 2)ly that remedy for your relief. Mr. Perrin. In reply to that I would say that what the people of our section ask for is not unreasonable, and if that was granted they would be entirely satisfied. You seem to direct them to the State courts, to their home institutions. All that they ask is that transportation companies shall treat all men alike. The Chairman. Are not your judges in Pennsylvania elected by vote of the people ! ivfir. Perrin. Yes, sir. 496 DEPRESSION IN LABOR AND BUSINESS. The CiiAlitJiA?^. Is there iiny more powerful influence to he brought to bear on the court than public opinion umlcr tliat system ? Mr. Perrin. Perhaps not. The CiiAiRJiAN. As I have stated, I have suffered from the same grievance about a colliery I have in Schuylkill County in your State. There the judges are elected by the people; and if I should find that the Reading Railroad Company had unfairly dis- criminated against me iu withholding the use of their cars, I have no doubt that I could get damages against the company. Mr. Perrin. In that connection jjormit me to state this : The people with wliom I am associated had an investigation instituted before the secretary of internal affairs in our State, and we have had that investigation printed in a pamphlet of which I have some copies here. It contains reports of interviews between persons who de- sired to ship and the railroad officials, showing what the railroad officials said to them and the reasims they gav<' for not furnishing cars, &o. The whole matter is shown more fully and clearly than I could give it in any statement that I might be able to make. These men were at the time directly interested in refining. They had vessels chartered, wvTf paying demurrage, and Avere pleading for facilities in order to get oil to the seaboard to fnltill their contracts. I have not been placed just iu that situa- tion myself, and hence could not state it in as close details as it is in this pamphlet. [The pamphlet referred to \\'as here handed to the chairman.] The Ci-IAIRMAX. Still you think that that condition of things exists ? Mr. PErkix. Certainly I do ; I hav<' no doubt of it. We have had that trouble for four or tivc years. I was engaged at one time in shipping, but it was iu shipping and refining, and I was forced out. The CiiAiR.MAX. Is not all business subject to the contingency of being "forced out," as you call it, whenever a man of superior c-ipital or superior facilities, no matter how he gets them, comes into business and comiietcs with another? Mr. Peurin. ] would not admit it iu our own case, without he had some advantage in transportation. Ordinarily speaking, of course, if he has superior ability, and can X)rodu(^e a thing cheaper than can anybody else on equal rates, with equal facilities, aud without undue advantages can undersell his competitor and make money, the result will be such as you have intimated. But that is not the case with us. The trouble with us results from this aggregation of capital, supported and sustained by four railroads to the seaboard, to the exclusion of everybody else in that locality. I do uot think that our locality is the only place that is suffering in that way : I do not mean so to be understood ; 1 know that it is not. I know that the cattle trade or the shipping of cattle is manipulated in the same way. I know that the coal trade is manipulated in the same way, and that the iron trade and the grain trade are likewise mauipulat<'d. My po.sition is that the country is fast drifting to a point where there must be some steps taken to protect the masses of the people against this tendency to monopoly. The Chairman. Your idea is that the common carriers of the country, instead of being .carriers for all upon equal terms, are now- carrying for special parties, upon terms unfavorable to the mass of the community. Mr. Perrix. That is the fact. There is no doubt about it. The Chairman. And that that is true in many branches of business besides that of oil? Mr. Perrin. It is iu nearly all. I do not think that ours is the only case of suffering. Now the railroad aide of the question is this : They claim that they "have to do this in order to keep their roads out of bankruptcy ; that tbey must have but a few men to deal with in order to preserve rates. That is their side of it. And let me say here, that iu the year 1877 A\e paid the railroads eighteen or nineteen millions for freight on oil, and that there is no such thing reported in their earnings — not over .six or seven millions. The Chairman. Where do the other eleven millions go ? Mr. Perrin. If I should tell you that I knew, you would ask me, as you did awhile ago, for the proof, and I would be obliged to tell you that I could uot "prove it. But we are satisfied as to that. We have worked at that for four or five years and can give an idea A\here it has gone, although we cannot take hold of the luaterial which it would be necessary for us to have to pro\-e our assertion. It has largely gone tothi' Standard Oil Company. I am informed by a gentleman who was once a- partner iu that concern that during a part of 1876 and a jiart of 1877 (this period I referred to a short time ago), iu twenty-one months their revenues were 119,000,000. The Chairman. I do not think it is material to this committee to know what any- body's jirotits on his business are, provided he gets them legitimately ; aud whether they have nineteen millions or one hundred and ninety millions of pr'ofits is the same to us as if a man had found a silver mine on his property. Mr. Perrin. Certainly, that is so, if he becomes possessed of his money honestly. But you asked a moment ago what became of the rebate fund. The Chairman. Yes; because 1 wanted to find out if the railroads did not get it to give it to somebody else — whether that was a legal or an illegal system. DEPEESSION IN LABOR AND BUSINESS. 497 Mr. Perrin. It is a rebate system. The Chairman. I understaud you tliat yom- remedy would be to i>ass legislation •which would prohibit any rebates to anybody under any circumstances. Mr. Perrin. It would be — that is, for over n car-load. The Chairman. You think a car-load should Vic the unit ? Mr. Perrin. I do. For the additional labor, they should be allowed to charge for broken lots. . The Chairman. Would you make this legislation general, or apply it to oil ? Mr. Perrin. I would make it general. The Chairjian. Now, take tliis case, and sec liow you would work it out. The price of wheat is telegraphed from Mark Lane to-dny to be ten shillings a quarter. The price of wheat on the Cliioago market is a dollar a bushel. There comes a steamer into New York to unload and take a return cargo. The owner of the steamer finds he cannot, at current rates of freight, load his steamer and get his money back. He goes up to tlie railroad company, and says, "If you make a rebate to me of a penny or two cents a bushel from Chicago to New Y(nk, I can take a cargo of grain." The law says you shall not make a rebate. The consequence is that the man does not take his grain; the Western producer does not sell his grain abroad ; down goes the price of grain in this country, and the producer of grain is damaged. How are you going to meet that casef Tliat is a case that occurs cvcrv day in the week in the' city of N'ew York. Mr. Perrin. I think that if you forbid rebates and a liardship is done in that case to an individual in the West who produces wlicat, it would certainly be more than overbalanced by the hardship that is inflicted in the absence of any such prohibition upon men all over the country every day and liour that we live. The Chairman. Yes, the hardship is this : that it absolutely stops the export of grain for the whole country, as it cannot go on under any system you can devise if the rebate ip not allowed under such circumstances. Remember that we are not the only people who are furnishing grain, and that we are in comj)etition with other grain- growing countries, notably India and Russia. This matter of the price of grain we know every day and every hour, and the freight must be rated just according to the price in Chicago and Mark Lane in London. Mr. Perrin. I confess that that is a problem that I was not familiar with. But this other policy is one which makes it an absolute peril' and ruin to any person to en- gage in any kind of business on railroads in this country without he has the aid of some of these private arrangements in some of these localities. Take the case of our ovTn petroleum. There you find an aggregation of capital fortified by the rebate system, and which stands against all other capital of any amount. You will find individuals with from twenty-five thousand to half a million of dollars who cannot do their own business, but who are compelled to lay it down and let it be taken up by this other concern. That condition of things obtains, I understand, to a certain extent in all branches of trade throughout the country. The Chairman. If it does, it is illegal by law now ; then what additional law do you want ? There is not a State in the Union in which that is not illegal. I am entitled in any State of this Union, as I understand the law, to as good a rate as my neighbor upon business of the same kind ; and if I am denied that, a suit for damages will make up the difference.. I confess I have never been able to find a case of that kind. I want to find some railroad company that will not give me as good rates for my busi- ness as they will give to somebody else. The grievance in this matter of coal of which I spoke is of a different kind ; it is not one of rate but of cars. They say they have not got the cars, and I have not been able to see my way clear through that. But I say now, that if I was an oil producer and was satisfied they were giving a rebate to another man alongside of me for service by the car-load, I would findmy remedy in the courts ; and I do not believe there is a State in the Union where a man would not get it. Mr. Perrin. As I told you before, the best men in our country have been making that effort for a long time. The Chairman. I agree with you fully if the thing exists, but the remedy is in the courts. Now take the case of this shipment of grain. I hold that if they make a re- bate to one man for that grain they are bound to make it to any other man on the same day. The bill which passed the House provides that no rebate sliall be made except upon five days' notice posted up. In the meantime the shipper goes oft' without his cargo. The principle that should be laid down is a sound one. It is the principle of the common law ; there is no statute law which makes it otherwise ; and it is enforced in England, as I happen to know, by the railroad commissioners whose business it is to find out and see that that law is enforced at once. My remedy would be to have United States commissioners to see that no discriminations are made. Of course the abuse is fatal to all private enterprise, and, if unchecked, will end in an absolute mo- nopoly and concentration of wealth in a tew hands. That is not the policy of this country nor of any other country, but I do not see that yon have made any case for 4'98 DEPRESSION IN LABOK AND BUSINESS. interference on the part of the national government, for I do not believe that you have exhausted your remedies. Mr. Pbrrin. I was going to tell you how we were defeated in our efforts, and then would he glad to hear you say how you would do if you were placed in a like situation. We went to the supreme court with the case when the court were in Pitts burgh in the fall just closed, and we gave our reasons for coming to them. These were that the process of coming up to the supreme court from the lower courts was a long and tedious one, and that we thought the matter one of so much importance and so vital to the interests of our country that they should take jurisdiction at once. They did so. There was an agreement entered into by the attorneys for the Pennsylvania Railroad and our attorneys that a master should be appointed to take testimony and see if the necessity for interference existed. This was a suit brought by the common- wealth. Now, the other day the attorney-general of Pejinsylvania gave this decision. He said that we could not call to the witness-stand any railroad official, or any man, agent or owner, in the monopoly, until we ourselves had made out our case. The Chaieman. And I should say that a sounder decision was never made in the world, and that it w^ould have been most oppressive upon the rights of citizens if any other decision had been made. What right have you to go around and call up men to prove your case before you have gone into court? Suppose that you had a grievance against me, for instance, and tliat the proof of the fact was to be found in my fire- proof safe, therefore you would undertake to go into court and have an order made to permit you to go into my safe for the purpose of securing that proof. Any decision of a court that would enable you to do that would be an outrage, and would be one that would not stand for a moment. Mr. Perrix. May not the commonwealth ask a railroad company how they are doing their business ? The Chairman. The commonwealth oiight to have certain officials, such as a board of commissioners, whose business it would be to make such an inquiry ; and your error and your grievance is that you have uot in the State of Pennsylvania such a board of commissioners who would get this inforniation. Mr. Pereix. But in our own case, as I have just stated, it was the commonwealth that wanted this iuforuiatiun and the attoruey-geueral would not let the common- wealth get it. The Chairman-. Exrusc me a niomcut. It is not the commonwealth that asks for it, but you or tliosc who are identified with you. Ytu made use of the name of the commonwealth in what is technically known as "an information," and did so by per- mission of the attorney-general. You cannot now undertake to say, after having done that, that you are the commonwealth. The commonwealth expresses itself in another way, through acts of the legislature. If the commonwealth has an interest in this mat- ter, it can assert its interest very readily by the x>aS3age of the necessary legislation. Mr. Perrin. If there is any such power in the commonwealth I would like to see it asserted. The Chairman. Then why uot go home and agitate the subject and thereby bring about such action as the case demands ? The tribunal at whose hands you may find redress is in your own State and not in the halls of Congress. Mr. Perrin. But you have not yet convinced me that there would be anything im- proper or unjust in any action which Congress might see fit to take upon a question of the character of this one in the way of preventing discriminations on the part of railroads where they run through different States. The Chairman. I have already said that I believe it is competent for Congress to appoint a board of railway commissioners to supervise the matter and get at the facts ; and I suppose that in the report which they will make this committee will recom- mend some such proposition ; but, notwithstanding that I am prepared to do that, I say it is not your grievance that induces me to do it, for you have a remedy in a law in your own State. Mr. Rice. I am clearly of the opinion that Congress cannot enter upon a settlement of all the little points which arise in a question of the character of this one, such as the fixing of rates, and so on. All that Congress can do, as Mr. Hewitt suggests, is to create some supervisory board which shall say that what the railroads are doing is just and fair or otherwise. The Chairman. We may point out an abuse, but to the State would still be rele- gated the duty of applying the remedy to correct that abuse. The remedy against any particular railroad company is a State remedy. Mr. Perrin. I appreciate that fact. > Mr. Rice. In Massachusetts ourraih'oadcommissiouersrequire the railroads to make returns and put questions to them. If the commissioners do uot think they have au- thority themselves to bring the roads to terms, they communicate the fact in their reports to the legislature, setting forth that this or that road is doing thus and so, and needs attention. I can tell you that the railroads do not long continue to persist in their course after that. The legislature gives them attention. DEPRESSION IN LABOR AND BUSINESS. 499 Mr. Pkrrin. I am aware of that fact, and have read Mr. Adams's book, a work for ■which I have a very high appreciation. But in other sections of the country the sit- uation is different. Elsewhere we find a system under which, as the result of purchase, lease, or otherwise, a number of our railroads are joined together in one system which runs from the Mississippi River clear through to the seaboard. In such a condition of things our State alone cau do nothing toward controlling or managing the infrac- tions of law by those roads. The Chairman. Now, let me call your attention to this : My firm are glue-mak- ■ers, and have been such for sixty years. Within my knowledge, they have swallowed up twenty-six glue factories. We did not try to swallow them up ; they perished alongside of us; they were practically a nuisance and we got rid of them. We never tried to kill them oft', but we made better goods, and sold them at prices lower than any at which they could afford to sell goods of the same description. Mr. Perrijst. I recognize that that is all proper and right, but the same thing is not true of the trade about which I have been speaking. The tendency there is, as in other directions where all the power is in the bauds of one man or a few men, to use the power to the injury of the many. The Chairmax. With your Standard Oil Company, the fact is, I understand you, that it is not by superior talent or superior capital that they are powerful, but it is because they have secured a monopoly by the violation of what is known as the com- mon law, inasmuch as they hold a monopoly of all transportation facilities. Mr. Perrijst. That is true. And their way of doing business is the most expensive of any of the ways in which business cau be done. Refined oil can be produced more cheaply than they produce it, for this reason. If you had a refinery in Pittsburgh, or elsewhere, which they did not want to have in existence, and you were a man of rec- ognize force and ability, they would dispose of you in this way : After crushing you out by the use of various means best known to and most cruelly practiced by them- selves, you would be employed by them perhaps to work, perhaps to remain idle ; in either case you would be paid a large salary. The same is true all over the country. They have scores of men of that kind. Thus their product is not prudently prepared for market. The Chairman. Have you heard the history of A. T. Stewart iu that respect ? As his business developed, he absorbed that of others engaged in the same line of busi- ness, and hundreds of men alongside of him finally broke, went in under him and be- came heads of departments under him. Yet Mr. Stewart never had a monopoly of his business. Mr. Perrin. I do not recognize the parallel. Mr. Rice. We are all gainers by the business which these railroad men have made and by the power and system which they have brought to the business. The Chairman. Is it not a matter of fact that the published tarift' rate which you pay is lower than it was ten years ago ? Mr. Perrin. The rates vary sometimes to the extent of a dollar per barrel. The rates have been sometimes low, then again high — that is, in the past ; but now, I judgej they are uniformly high as they are known to the pubUc. Mr. Rice. This really does not touch the complaint which Mr. Perrin makes against the Standard Oil Company, which really does seem to be one of some importance. The Chairman. His complaint is that they have really an illegitimate support by the railroads. If his statement is correct — and he certainly makes out a case — then the case as made out is one for the State courts. Mr. Perrin. Let me illustrate the matter more plainly. Suppose you want to ship oil from the oil region to Philadelphia, and you go to Mr. Scott and ask him for the rates. He would tell you to go to Cleveland and see Mr. Rockafellar. The Chairman. Well, I would simply decline to go to see Mr. Rockafellar. Mr. Perrin. I can only say that these things are m evidence. If the man seeks for bis remedy in litigation, he will be ruined before he can obtain it, for the monopoly will fight you all the way up to the supreme court, and all the way down again. Mr. Rice. That is going on everywhere iu litigation on a small scale. It cannot be helped. The Chairman. It is either legal or illegal. If legal, there is no remedy for it, and if illegal, the remedy remains to be applied. Mr. Perrin. I am clearly of the opinion that it is illegal. The Chairman. Then you have got your remedy. But you do bring to our notice an- other matter which is of very great consequence to us as a public matter, charged as we are -^ith the duty of considering the interests of the country ; and that is the fact that a monopoly may be or has been created by such means as are contrary to the public interets, and that this ought to be prevented and can be prevented by legislation. That is a question that we will have to consider, and, to that extent, your testimony is very im- portant to us. The general proposition is that we should so frame legislation as not to create, but to destroy, monopoly ; that is to say, to destroy the power of one individual, in the eye of the law, to have more protection or privileges than any othei 500 DEPRESSION IN LABOR AND BUSINESS. ndiyidual. That proposition is one that we can be perfectly clear about. The ques- tion presents itself either as a legal or a moral one, involving the right to go in and take advantage of contracts under the law to create a monopoly. If you have now any additional facts that you would like to submit, we will attach them to your evidence. Mr. Pbrrin. An additional consideration that has occurred to me is this, whether our thoughtful public men, engrossed as they are in the all-absorbing topics of current legislation, were sufflciently well aAvare of the necessity for and importance of the protection of the people against monopoly all over this country. I entertain a well-grounded apprehension on tliat point, and my reason for it is, that as a class our public men have never done anything nor sought to bring forth anything in the way of remedial measures. My conclusion invaiiably has been that they could have no adequate knowledge of the wrongs which have been and are daily inflicted upon the people of the country from this cause. The CiiAiR]\iAN. I have maintained that public opinion requires that monopolies in the form of sjiecial privileges to individuals should be discouraged, and every individ- ual given an equal chauce before the law. I feel sure tliat that opinion will be ad- vanced by this committee in tlieir report. The things of which you specially com- plain are not, however, such as pertain to our own sphere of action. They are reserved for correction to the several States, and if I were a member of a State legislature, and such a condition of things existed in the State, I would devote myself as far as I could to their rectification. Mr. Rice. Mr. Hewitt and myself both express ourselves in favor of a certain supervision of the railroads Tiy the national government ; that is, so far as the Con- stitution permits it. But what you need is to ha\'e such a supervision by your own State government at home. It is not within our province to afford you that help. We have not the power to do it. [Note. — Certain statistics produced by Mr. Perrin showing the volume of the oil business were ordered to he here appended. They show the amount of the business on the ground (the crude production), amount of the oil exported, average prices of crude and refined through the year, &c., as follows :"| DEPRESSION IN LABOR AND BUSINESS. 501 o a 15, 178 in, 418 20, 825 27, 682 23, 003 26, 699 40, 309 1 a > 1 en -»■ yi a t> o o t- 5o o' L-f r^ rc" x" ir x" x" •& i-( i-i 7J CO 7J CM 7J CO ^ o o O Wr5 71C001W(MX-r^ r^i-ric-ofoooo^t-- 1 i-li-H COMfNTJCOTj- 1 Pi '<*'r:oxo^oir-=j X i~ w> i-Tx Tf 00 oTus" rl r-l i-i CO M M (N CO "* 1 s 7i3:x3i7im"^3 cci-*t-oomi>oeo WrHTHCOCO(N(M'^"<*< 1-3 m o 71 --0 r- 1-H -rC in 71 ■ co7i = »ro{OOt-x c-t~i>o:roO'^»3i © 3 1-5 r-ix-HOJ oiowm^o cot-c^-tcMWOJcoeo t-:3C0-*c^iHajfflrt' co" H" » o' cT m" V r-" 0" i-H t-. ■-- 7J CO 71 71 ^T* I— ir-';oTj!mcofoeoo rH X 75 ■* =r. Oi in --o cir-;ooxin(M=>ai T-lXTfCOOlCOCO-^ o c-f 7f m" rn" in" CO co" 7 f rf ^^ ^^ r^ Ti 71 a Ti :^ -^ os-^oi-ix'-amtsr- 05--~-,D31»-OXC0 C^3JX^-fCJir-Xt- s -a p^ ■^ o o ":?. 05 1 Ti r: n n n ^ 1 n 554, 626 532, 000 1, 084, 423 1, 625, 167 3, 706, 639 3, 672, 077 2, 816, 870 3, 086, 972 1 576, 014 502, 960 886, 909 1, 493, 875 3, 449, 845 3, 794, 947 3, 142, 397 2, 474, 490 1 u E2S;SKSS3'5g rieC « .^ ?1 rh 1 1 m t- ic* ..*.,}. 10 c-o,HXoo; =ow 419 541 931 1, 521 2, 758 3, 813 3,011 2,549 4,653 |§§|J|||| » Q t> CO 71 in 71 tf -r COirjCTlKj. TlT-iOlr-l •^ 1 ;- i a July. X 71 71 50 ti "* .r, rH r-irH = C0Jl»O71-f r-i 71 -V COCO X O 7 1 CO 1.0 CO 70 Oi in COOOC- TI3-. -^XTf rHOCO-T''i>X;DCOrH : t- o I- s z-. rH rH* 7 1" "l*r m CO" ■*" X => CO r- -O. =. T- 71 0: .- 71 -t 3-. a-, -t X """'"""' ^■ 609 000 832 64.3 534 827 703 675 857 x" i-rt-'x"co* t-' =" n 0" '-' eg ..i- .-^ 0^ -J* Tj< o -rr s [^ CO --*oo 1.0 sin %. ii 5 00 C-- CO 71 ^ 7) T ^fT^Tf" uOinWlM-iJUDCOO r-i" T-f -*■' CO' Co' Co" o't-" 7 r co' X TjTco'co (M" -fccroX-pOOX'^ CO Li m rH Tj rH to OJ CO 3 -H -1 CO -f ■* x> r- X' I- IT- r- t- ^- r~ r~ t- r- xxxxxxxxx CO -f O CO I-- X r- i~ I- c- D- i~ X X X X X X 502 DEPRESSION IN LABOE AND BUSINESS 6^ IS o p n o I t»3 '8 «. .9 so ,= eas t-~ oi o A o o in I- t- lO W »-l O) CO Ttiin - (D mcD CO o (D ■* '^ " 5ji (Ni-HI>Oi-IOro * cq TQ •* CO CQ ■* OS OS o CO w in i-lOSO t-"^(D Tj( CO CO -* ■* o I>rH« (COO Olin r 3 OD kn in iH 00 cq B oco in to coco - rH t- OS CO <0 iH (D in o o lO 1-H o n o H in r-1 m o t- rn os-^t-iHt-Nininin^-!t"03ro^ -*t-l— COOOOSOmt^i-HOCOt--?' i— mooinco-*Ci0t> t~ O C) iM O r o; to M M 2] f t C^ '■jC -^ I- lO -± S T-'i t~ 'Xi •-* T1 '^ '. [- 3C CO '— t 'X) ^ CO 00 r^ TP -^ r 1^^.— 1 cJ-Tfioi— o-^Oi— i-ro 3ci^ci,-ocsinTfc^x )ocoinioin"*oscJ.-H t^OS- M CO C o oo« IS CO -*> 3 I— CO !S QO W O-TtHMt^iHOCOOOOOOS COOOSTtliHiraOirHCOlM O-sf(M00rHO(0OCai- rl -^ t- «? C-1 I- Hi>oscqoscoooTfHMi- Trf iH irfcoffq"i-rci"co' -* rr t- o: :■) in ro O t> Tj" -1" ;hKm lO cocoo)t»-Tfi-:j«coin-^i>t^inoo n; c^ -j:: i:~ = o:^ o ci rt oc S ■^ o to -(•NCOM'lO^OOO OOOOOOOOQOOOOOCOOOOOOOOOOOQOCCCOOO DEPRESSION IN LABOR AND BUSINESS. 503 Quanlitiea and values of petroleum and its products exported, and average price per gallon of refined petroleum. [From Bureau of Statistics, ■Washington, D. C] Fiscal years ending June 30— Gallons. Dollars. ATerage price of refined pe- troleum, per gallon. 1862 $ .264 179 1863 1864 23, 210, 369 25, 496, 849 50, 987, 141 70, 265, 481 79, 456, 888 100, 502, 152 113, 728, 423 149, 677, 585 145, 251, 047 187, 884, 103 248, 104, 635 222, 377, 660 244, 078, 748 309, 752, 294 io, 782, 689 16, 563, 412 24, 830, 887 24, 407, 642 21, 810, 676 30, 625, 446 32, 101, 485 36, 857, 380 34, 058, 390 42, 050, 756 41, 245, 815 29, 891, 465 32, 916, 786 61, 789, 438 4C, 574, 974 1865 1866 542 1867 359 1868 294 1869 .. . . 1870 .... 305 1871 .257 1872 249 1873 235 1874 .173 1875 . 141 1876 144 1877 .211 1878 .144 504 DEPRESSION IN LABOR AND BUSINESS. "^ ,' 1 o ^ 35 ift o ■?! oc a; -+ iQ 00 tj< o 't ^ Oi 00 CO in ■ > ^ij =>Sl i-HMt-COmtNMinm-^COrHi-lrHGMiM M ^ ' 4fr -^si-^^l KoMw ooo = =>ooooooooiJ-:t-(Mmo(M ' -J. om^i-^^'r-. ^i-^ofaomofS^or-rpfH 1 Z O^ ri-T.-H'X'(MC4-*»fO-*C^rHrHf-(CO(M ' -^ C-f r-T ' f ■ -'li -<« r' =. := c: =■ - = - If: 'c o i-: o o o 71 o o >--: 00 1 i o o r-i =i - I.- =. '^ r~- wc-i CO o o C-. 00 CD Lt t- 1 q 71 rir7 = .-^rH,-H-*i>;rf« rHCO^H c f ■-." -.;.J;i «xrt* 1 1 oo=:ocooooo=>i-oor~-?iinio-*co 1 1- r- 1:; r: <© = I- — rj •-= "^ " 00 X -t CO ^ j 0-* ':iMi-ICO?^0;'t:CrOTj--«tt-( .-HCOC-JrH 1 '€ c r ^'" 2 '^ ' .(■■rit^, -f:. ,<* 5=! — S^-C r=-=-c;c;=.o.-it-Tir:i-OOQ0 . ^ X ^ 1- -^ ^ cm;: ^ =; -J Ci c- -* ^ ! iCO (TJCCCr. OClC^COiClCOCCCO I-1C0(MW -^i-i';i -Kf-tit o o o =; '-^ o o If: o lO m i-: m i': i-: i-^ :■! o i- to l 1 o o i-i O r^ 1--: ..- c 1 o :m to -^ oc r-< -t = i-~ 0-. CO o ;; OO CI,-^T: r. -Prf^irecC-^COrHrlr-lCOiNrH | M ' f O I 1 -i ^ - =1 = 1- — ■ 1- C'-! - 10 =1 1(^ I- m CO OS =;^'-t-or->-^0'+.-icOi-'^00'^ CI i-~ 0: "* >=J7ii--:.--iTio = ci=o-fcci':if:— oc cs-*^ 1 S 1 ■= Jt~ ,-irtT--5-, iO'+T*'i,OC0-*C-:rH.-(r-('*(NrH -=) a ' =• ' S ^ "Hh <= s .-: =! - = ^ .-. = L- X I- CI a I- X r-' C S C 1 ; 1 ^ ■- L- T 1 X r- -* .-H -H- = r-l = ^ LO CI = r_^ 0:0 i-.TOO-rf-tClCOincO'J'COrtr-lrHCOrMrH 1 r^'N-^'J-'^ -» 1- in =: i--: ift fMO r- «6 .-1 CO .lo ii.o 1- OT1 =.-: c:r~i^r~ = "*rHt-ioi-'M 5: ■ t- .-. --0 i- lO lO CO IT) in CO Tj- Tj- rH r-C rH ■* Cl rH ! bij 1 'i^ -':! f- -4-1 -1 i * . I- i-MCi — ^ = ^5 1-: r-- f~ t^ X 10 CI in ■ 1-1 (M C'] = 10 X ;+ 1^ IT —; ^ ^ Cl rH 9 to. .0 10 c ic p t- X c 't n '■" !^ CO CO ■'-. ?i ri L'^ lO -^ {0 ^ rt w ^ CI cl y ■^ ■3 7 -„^, „■.-„ 1-3 .-. O 10 '_'- =: =: kO 10 10 X =: =, Cl Cl UO CO t- Ci = ?i "1 lO r- t> =! CO 10 L.- — w oci t- X --1 CO '-'_,1.0 CjT-l-^irTCO-^-COWi-lrHCar-li-l I-". = 1 c 1 r- iC CO — .— 10 -h CI CO -rj" = — CO —_ -^ Tf ci »r:. ir. ^ i~ Tj- c 1 cj ^ M ci r^ a (=i H^ 1 -' ,^-1-'- J-lL-Ol 0000^ = 000 1-0!D0 10 CI -HC: 10^ 1 1 LO iO .0 .0 CO = 10 X CO CI ^ IC CI CI ,- CO r- 10 C": -^ -* -)l T*. -t CO 01 -- .-1 cq ^ ^ = lo 1.0 o 10 ic 10 t^"'.r. T-f in 01 CI 10 r- r- 1—1 1— 10 -H Th :o i-H CO t— x in c 1 -* '-0 -t ifs ■* ci c^ >-< C-] N rH 1 t^ ,-r a 0=. = .000000 = OOOOWO(NXCO 1.0 L- I- .0 >- (M to i-l ^ to 10 CO CO 00 Th CI(DOTt<(NCOi~. rH-*CO(Mr-(r-(r-l!rqS .0 ?1 = =>ir. C] = >0 OXLO C7 ^ [- L- = — -f = CO -- -J? r ' |.~ CI a r~ 01 .-O t- !"*■ CJ CO 'X> Tt* Tf CO Cl (M r-l C-] CJ ^ rd ,h" '^ @ ■5" OOODI-. -^ — c^ ClC30ClOlOC:iOC0 0.1CX LI t- :^ =■ .0 C-. ^ -- C: -* CI c: Tf- X ^ -* O CMOUOCOt-HCJIO-^COCO^Ii— (I— (t-I(Mi-( * r^ looioiir: ooooiooooicoioooooi t^OCjr-OOOOX— 't-OXCMOCiCOffi-OO C-1--1 C10C~-^CIM^TtnX^CJClC-'«f-^-'iH(NCV|i— IffOeOCJ s g fe ^ s oCiOO'-jCSooo^iocDoo 1-^00 100 oot-iio r-ooi- = cj)coo:tO!Mo-*omt- X.H ClCOt-Ttfn-lC-lO-^COCOtNrHWNtNiH 00000000 0000 1-0 CO 10 L0Ot->-H 00.-II- OOO.-i--'O0;-pO-H---t'MQ0C0 ?;;> OrH CIT( 00 » ■■^' -a ;o (O « '^ 1 - 1— r— h- 1— I— 1- r— r- ^ to CO c^ ■o to CO to *>- CO o- tJ 5 ^ CO CCH to 'O cr > r CO to to CO c*- o. o- > . C^' CO to to CO 0»- o- C3 :::=- m CO ceH K*- CO ^ Ct » GO CO *0 .g -^ . CO cr- ccH to to CO cr >: =- to C3 CO CO to CO -=£ :- to CO to CO o :^ I'O CO to to CO o- ^ (0 p CO ts to (O / a ~ — ;^ ■to CO e*3 to to to o ^ -o to 10 to ! ''^~^ ^o " ==■ " lO -! to CD CD to to to rO = T to to " ' --0 03 o CD 00 w CD 00 03 CD 00 CD CO to 'O 00 CO C<3" CO Of CffJi CO Oi ON CO CD c** CO CO HI o o cct« o 506 DEPRESSION IN LABOR AND BUSINESS. Crude petroleuin. Total produc- tion. Daily aver- age. Pricp. 82, 000 500, 000 2, 113, 600 3, 056, 606 2, 611, 359 2, 116, 182 2,497,712 3, 597, 527 3, 347, 306 3, 715, 741 4, 210, 726 5, 260, 559 5, 205, 234 5, 983, 294 9, 893, 786 10, 926, 975 8, 963, 091 9, 600, 684 13, 179, 313 12, 898, 410 1 QfiO 1,361 5,790 8,374 7,154 .5, 781 6,842 9,856 9,170 10, 179 11, 636 14, 373 14, 222 16,346 27, 032 20, 855 24, 489 26, 232 36, 009 3ggl $.279 igg2 .142 .365 ;lgg4 .785 1865 .648 .378 .25* 1868 .385 .512 1870 ..345 .415 .375 .172 .129 .148 .273 .245 1878 » VIEWS OF MR. MILES F. HUMPHREYS. Washington, D. C, Becemler 19, 1878. Mr. Humphreys appeared before the committee in response to its inyitaticm, and stated in reply to the chairman that he resides in Pittsburg ; that he is an American by birth ; that his trade is that of puddler ; tliat he has not been working at hia trade during this pre.spnt year, but is foreman of the puddling department of the Keystone Rolling Mill; and that he was engaged in the occupation of puddling for 20 or 22 years. The Chairman. Have you been connected with any of the trades organizations established among puddlers ? Mr. HiiMPHRKYS. Yes ; I was among the number who founded the " United Sons of Vnlcan." The Chaikmax. That is a comparatively recent organization, is it not ? Mr. HuMPHKEYS. No. That is now merged into the Amalgamated Association of Puddlers. The Chairmant. When was that association formed ? Mr. Humphreys. It was tirst organized m IS5>^. It existed for a few months ojily, and was then revived about 18110. During 1859 the organization was dormant. The Chairman. Were you an officer of the association ? Mr. Humphreys. I was. The Chair.'man". In it a national or a local association ? Mr. Humphreys. It was originally local. The Chairman. When did it get to be national ? Mr. Humphreys. The national organization was organized, I think, about ISjI. The Chairman. Wliat was the object of the association '! Mr. Humphreys. The object of the association was to improve the condition of the men generally, and to bring them into closer association with their employers. The Chairman. Your object was to have harmonious relations with your employers ? Mr. Humphreys. Yes, sir. The Chairman. And to prevent strikes ? Mr. Humphreys. That was the chief end of the organization. The Chairman. But you did not contemplate the abolition or avoidance of strikes? Mr. Humphreys. No ; but as far as possible. The Chairman. Your object was to avoid strikes, if possible ; but, if necessary, to resort to them ? Mr. Humphreys. Certainly. The Chairman. After the formation of tliat association were strikes more frequent, or less frequent, than before ? In other words, what effect did it have ui'»n the ques- tion of strikes ? Mr. Humphreys. They were not as frequent afterward. The Chairman. Wcie you able to settle, by disonasion, difficulties A\hich previously had culminated in strikes ? Mr. Humphreys. Yes. Previously to that in the iron district (Pittsburg and its surroundings) we wci-e troubled considerably with local difficulties — that is, difficul- ties oonfluecl probably to one mill. Those difficulties would have influence upon other mills; and, in addition to that, we would have probably in the same mill a divisionin DEPRESSION IN LABOR AND BUSINESS. 507 sentiment among tlie men, witli reference to prices, and various other things ; and the object of the organization was, in the first place, to create unanimity among the men, and to bring grievances in a general way, as to prices, &c., before the manufacturers. The Chairman. That is, you wanted to bring about such a vmiformity of work and such a compensation for work as that there would not be these differences of opinion in particular mills ? Mr. Humphreys. Yes ; and, in addition to that, we were satisfied among ourselves that there were a large number of men who followed the business, and who, at times, had a tendency to disgrace it. One object of the organization was also to try and make better men of that class of men. Mr. Thompson. Was there a system adopted by which the difficulties between em- ployers and employ^ might be discussed ? Mr. Humphreys. Yes. I think that the first agreement, which was made in Pitts- burg, was about 1863-'63. There was a scale of prices agreed upon by a conferenoa committee (a portion of it representing workingmeu and a poi'tion representing the manufacturers). That conference met at the request of the trades association ; and the meeting resulted in the adoption of a scale of prices based upon the selling price of iron, so that, as the market-price of iron should advance or decline, wages would advance or decline accordingly. That scale existed until the spring of 1866. The agreement was that either party, on becoming dissatisfied, should give ninety days"^ notice to terminate the arrangement. Iron advanced very rapidly in the market, and the men became satisfied that, under this agreement, they were not receiving in wages their fair proportion of the selling price of iron. The Chairman. Was it the result of your organization, in regard to your relations. to the employers, that those relations bec.ime more cordial, and that the emijloyers were ready to listen to delegations of workingmen ? Mr. Humphreys. Yes. As I was relating, the first scale of prices required ninety days' notice to terminate the agreement. Along about 1866 the price of iron advanced very rapidly, and the workingmen thought that their wages did not advance corre- spondingly. Accordingly we gave the ninety days' notice, and terminated that scale ;. and then we demanded an advance of $2 a ton. We received that advance. The fol- lowing winter the manufacturers gave notice to reduce the rate of wages $2 a ton. We had several meetings on the subject; but finally we agreed to dis.'igree, and we had a strike. That was the strike of 1867. On the termination of the strike, our organization again sent a communication to the manufacturers requesting a confer- ence. Each party sent a committee. We conferred, and then we agreed upon another scale of prices. That went into efifect to be terminated by a notice of thirty days, I believe. That scale operated until 1874 or 1875. I believe it expired ou the 6th of December, 1874. The manufacturers gave notice of its termination. Then we had another struggle, which finally resulted in another scale of prices, which is in force at the present time. The Chairman. Was this last a strike, or was it a lock-out on tlie part of the pro- prietors ? Mr. Humphreys. The proprietors refused to run their mills without a reduction of prices. The Chair:man. Then it was a lock-out ? Mr. Humphreys. Yes, sir. The Chairman. Then the "honors seem to be easy." You terminated the first agreement by notice, and the proprietors terminated the second agreement by notice,- then you made a strike and they made a lock-out. Mr. Humphreys. Yes ; and the scale now in existence is a sort of compromise between the two. The Chairman. Has there been any other strike in Pittsburg since 1867 than the lock-out which yon have named ? Mr. Humphreys. No. The Chairmax. Prior to that period were strikes very frequent ? Mr. Humphreys. We used to have occasional local strikes in particular mills. The Chairmax. But general strikes of all the mills were not very frequent ? Mr. Humphreys. No, sir; they were more frequent previous to the establishmeut of the organization than they were afterwards. The Chairman. Then the effect of the organization has been, in your judgment,, practically to reduce the necessity for strikes ? Mr. Humphreys. Yes ; I think there is no question about that. The Chairman. You are now on the employers' side. Are the relations between em- ployers and workmen cordial and good at the present time? Mr. Humphreys. I think they are.' The Chairmax. Is there any troublenow about the lack of employment in iron- works at Pittsburg* Mr. Hr.iiPHREYS. There is not employment for all the men. 508 DEPRESSION IN LABOR AND BUSINESS. The CiiArRMAN. How is that difficulty met? Is the work distributed, or are some men steadily out of work ? Mr. Hu.MPHUEYS. The men, .is a rule, are very friendly to each other. In the works in which I have been during the present year, there are some men idle; and, oocasion- all>-, those men who are at work give theK(^ idle men a few days' work, when they be- come in such a condition that they are thought actually to nec^d the work. The Chmioi.vn. Is that done be any concentrated action among the men, or is it only an individual matter ? Mr. Hi'MPHKEYS. It is individual. The Chairjiax. You have no arrangement among the workingmen l)y which the work shall be distributed ? Jlr. Humphreys. No, sir. The Chairmax. And this local assoriaticm which you s^ieak of does not deal with till' question as to how to distribute the work ? Jlr. Humphreys. No, sir. The Chairmax. Are the employers absolutely free to employ whom they choose f Mr. Humphreys. Yes; so far as my knowledge extends. The Chairmax. You are the foreman of a puddling-mill. Do you feel constrained by anv reason to ask whether a man who wants work is a member of a trades- union or not ? Mr. Hujipiireys. No, sir. The Chairmax. As a matter of fair, do yoii inform yourself on that point ? Jlr. HiT.MPHREYS. No, sir; all that I require to know is whether the man is a compe- tent workman. The Chairmax. Is there any class spirit in the Pittsburg mills that would drive out non-union men? Mr. Humphreys, Not to my knowledge. The Cii.viRMAX, Are puddlers in Pittsburg generally in the trades-union? Mr. Humphreys, The majority of them are. The Ch.\ir;max, Do you think that they nearly all are? Mr. Humphreys. Yes ; nearly all are. The Chairmax, AVhat do you understand to be the fact in that regard, through the country generally ? Jlr. HUMPHREY'S. The workingmen are, generall.y, in trades-unions, throughout the western portion of the country at least ; I do not know much about the East, The Chairmax. Has not the introduction of Bessemer steel interfered •^'ery much «'ith puddlers, in the way of reducing the demand for their labor ? Mr. HuMPintroYs. It has, to some extent. The Cii.^iRM.vx, Is not that the real cause why there is a surplus of puddlers st'.ek- in,^' work? .\Ir, Hu.mphreys. That may be pnrtl.,- the cause. , The Chair.m.vx, For instance, for rails, all the iron that was not reworked from o'.d rails was formerly puddled? Mr. HuMPHREY.s. Yes, sir. The Chairmax. But now, nearly all the material used for rails is steel. Mr, Hu.mphreys. Most of it. The Chairm.vx, Was uot one-thir.l of all the puddled iron in the United States for- merly used for rails ? Mr, Humphreys. Nearly one-third. The Chairmax, A.ud the change in that respect would account for any distress among puddlers? Mr. Humphreys, It would account for a good deal of it. The Chairmax, Is there as much distress among the rollers and heaters as there is among the puddlers ? In other words, is there as much surplus of rolling and heating experience seeking work, as there is of puddling ? Mr. Humphreys. I think tliere is, in proportion to the number. The Chairmax, How would you account for that; because there is no loss rolling aud heating wanted under the new demand for steel ? Mr. Humphreys. The only way that I can account for it, is the fact that since the close of the war a very large number of rolling-mills have stopped. A good many of them have been torn down, I know several mills myself, which, since the panic, have been sold aud torn down, the castings sold, aud the machinery broken up and sold for old castings. The Chairmax^, In other words, machinery can bo got rid of, but men cannot bo. Mr, HuMPiiRKYs, This is so. The Chairman, The men survive, >Ir, Humphreys. The men .still live. Th(^ Cjiaikmax", Do you think thii t the trouble in regard to the demand for labor of piiddloTs is increasing or diminisluTigf Mr, lIu.MPHRHYS, I think that there, Is a .sli.ght impi-ovoment this fall. DEPRESSION IN LABOR AND BUSINESS. 609 The Chairman. Iu otlicr words, you tliiuk tliat there is not such a pressure for work as there has been ? Mr. Humphreys. No, sir. Still there is considerable pressure for work; but not to the extent that it was some months ago. The Chairman. Is there positive suffering iu Pittsburg, among those engaged in the iron business, for want of the necessai'i<'H of life? Mr. Hn.MPHRKYS. 1 cannot say that I kiKiw of any particular person or persons starving to death. The Chairman. Are they resorting in unusual numbers to municipal relief? llr. Hu.MPHREYS. Not very many of them. The Chairman. Do you know anything about the pawn-broking business in Pitts- burg — whether that has sensibly inoreiised ; in other words, whether thes<' people have been compelled to pawn their propeity iu order to got the means of life? Mr. Humphreys. No, sir ; I do not. I liave not lieard of men complaining that they had to pawn their property from sheer uece.snity. The Chairman. Compare the condition of workingmen in Pittsburg, at this time, with their condition when you first went into the business. Do you think that the condition of the ii'on-workers is better ov worse with reference to the means of livirg, to general comfort, to the style of living, to intelligence, and to the education of fam- ilies. Is the standard higher or lower than it was when you first knew the bu,sinessf Mr. Humphreys. I think it is higher. The Chaip.jian. Is there as much intemperance among the puddlers as there was formerly ? Mr. Humphreys. I think not. The Chairman. Dp you know whether, during the period of high prices that pre- vailed prior to 1873, the puddlers cultivated habits of saving, and did save any sur- plus out of their wages ? Mr. Humphreys. Very many of them did. The Chairman. In otlier words, do you think that there is a more provident tone prevailing among the puddlers than formerly ? Mr. Humphreys. Yes; more than there was previous to 1862-'63. The Ch.urman. Do you attribute any of that improvement to the existence of trades- unions ? Mr. Humphreys. I certainly do. The Chairman. Do you attribute it mainly to that cause ? Mr. Hu.MPHREYS. Mostly to that cause. The Chairman. Have you not observed that in industrial occupations generally, the workingmen are, on the average, better off than they were twenty years ago— liv- ing in better houses and having more of the general comforts of life ? Mr. Humphreys. They are where labor is obtainable. The Chairman. Their standard is higher. They want to have better things than they had formerly. They are dissatisfied if they do not have them ? Mr. HUJIPIIREYS. Certainly. The Chairman. In the course of your experience in the iron trade you have seeu periods of depression in business before ? Mr. Hu.MPHREYS. Yes, sir. The Chairman. Is that which we are now passing through any worse than previou,* ones ? Is the suffering greater ? Mr. Humphreys. Comparatively speaking, I do not know that it is. There are a great many more people in the iron business, and to some extent it is worse. The Chairman. But, to the extent that people are relatively employed, you think that the present period of dejjression is no worse than previous periods 1 Mr. Humphreys. No, sir. _ -,o— ^ lo-i <. The Chair.man. Do you recollect the period of depression from 18o/ to IHol I Mr. Humphreys. Yes, sir. j- ■, , The c:hairman. There was apparently just as little demand then for iron or lor labor as there is now. Mr. Hu.MPHREYS. Very nearly so. The Chairman. It was very much the same state of things. Mr. Humphreys. Yes, sir. . ^ ^ , The Chairman. Did the city of Pittsburg at that time have to afford employment in any way to the unemployed people? t t;, ^i,., Mr. Humphreys. I do not recollect. I was quite young then and did r.ot let the world bother me. . , , ^ The Chairman. You evidently think that youth is the best possession. Mr. Humphreys. Yes ; still, I was working part of the time. -The Chairman. Can you state whether there are any other trades-unn n organiza.^ tions in Pittsburg, or the West, besides this iron association? Mr. Humphreys. Yes, sir. The Chairman. A large number of them ? 510 DEPRESSION IN LABOR AND BUSINESS. Mr. Hnwi'iiREVS. Yes, quite a number. The Chaiu.man. Hare the}' also resulted in the same way, as to reducing strikes and bringing about a harmonious relation between employer and employed f Mr. HuMPHKEYS. That is their tendency. I am not so familiar with their opera- tions. The CriAiRMAX. la there not a strike going on now in Pittsbiu-g ? Mr. HuJirHREYS. Yes, sir. The CriAir.JiAN'. lu what business? Mr. Humphreys. In the flint-glass works, where they manufacture table ware. The Chairm.vx. Do you know anything about the points of difficulty in that strike ? Mr. Humphreys. I am not familiar with them. It is something in regard to the amount of work per day. The CiiAiRMAX. Had' the riot at Pittsburg last year any connection at all with trades-unionism ? Mr. HuMPHRKYs. Not to my knowledge. The papers stated that there was an as- sociation among the train hands, but I have no personal knowledge of it. The Chairm.^x. AVith whom did the strike originate, so far as you know ; was it with the engineers and brakemen, or the train hands ? Mr. HUMPHREY'S. I think it was the train hands. The Chairm.vx. Have they a trades-union organization ? Mr. Humphreys. They had at that time. The Chairmax. Have they now ? Mr. Humphrey's. I do not know; and I do not know that they had then, except from what I read in the newspapers. The Chairmax. Do you think yourself that the trades-unions contributed in any way to the riotous iirocet'dings which followed the strike in Pittsburg; did they take any part in the di-struetiou of property ? Mr. Hu.mphreys. No, sir. The CHAiiiMAX. AVhat, so far as you know, is the feeling of the members of the trades-unions in regard to property — as to its preservation or destruction ? Mr. Hu.MPHREY'S. So far as my knowledge goes, in onr section of the country tlisy condemn anything looking to the destruction of proxierty. The Chairman". Do they generally understand that capital and property are essen- tial to the carrying on of Imsiness ? Mr. HujiPHREYS. Certainly. The Chairmax. And that when they destroy property they destroy their own liveli- hood ? Mr. Humphreys. Certainly. The Chairman'. In other words, there is no feeling among the working classes that liroperty is their enemy per se f Mr. Humphreys. No, sir. The Chairman. They do not share in that feeling ? Mr. HuhphreyS. No, sir. The disposition among the trades-association men in our section is to bring about a state of affairs that will bring employer and employed into closer relations. In other words, they admit that what is the employer's interest is their interest, and they endeavor by these associations to bring the two classes to- gether, and to count the cost and profits of production, and concede what is fair to the manufacturer for his capital invested, and endeavor to obtain a fair rate (from their standpoint) as compensation for their labor. The Chairman. When business is unproductive does capital get anything at all 1 Mr. Humphreys. I do not see how it can. The Chairman. All the proceeds then go to the laborer. In good times capital in- demnifies itself, but in bad times the laborer gets all the proceeds ? Mr. Humphrey's. They get a fair share, at all events. The Chairman. Do you know, as a matter of fact, or from report, whether there is any concern in Pittsburg in the iron business (not including steel) which is supposed to have made any money for the last four or five years ? _ Mr. Humphreys. My private opinion is that there are very few establishments mak- ing anything of any account. The Chairmax'. Some failures have taken place there in that business? Mr. Humphreys. Y^es, sir. The Chairman. Showing that they have lost money. Mr. Humphreys. Yes, sir. The Chairman. And the probability is that none of the concerns have made money ? Mr. Humphreys. Some of them have made money. There are some iron establish- ments there that work on specialties exclusively, and I suppose that some of these have made money. The Chairman. Of course, if a man had a patent in his business he might make money ; but I am speaking of the business generally. DEPEESSION IN LABOR AND BUSINESS. 511 Mr. Humphreys. Some of these manufaotui-iug establiskmeuts make oottou-ties and a fine grade of hooks. That is a specialty. The Chairman. But these cotton-ties are subject to patents ? Mr. Humphreys. Yes ; they have a patent on the buckles. The Chairman-. That is the same thing ; and that makes a monopoly. I have been trying very hard to make these cotton ties myself, but I have been met by a patent. Mr. Thompsox (to Jlr. Humphreys). Do you refer to the Eussiau iroii works up the Kisklniiuitas? Mr. Humphreys. No, sir. I refer to where they are making the fine hoops. Mr. Thompsox. Have they a rolhug-niiU up tliere, where thev use gas instead of coal ? Mr. Humphreys. Yes; and there are other places where they make galvanized sheet-iron, and other places where they make Russian sheet-iro'u, and other places where they make railroad spikes. The Chairman. What proportion of the foremen of iron e.stablishmeuts in Pittsburg liave been, within your knowledge, workmen! Have you any foreuien who have not come up out of the class of workmen? Jlr. Humphreys. No, sir ; I know scarcely any. The Chair.man. They have been all workmen ? Mr. Humphreys. Y'e's, sir. \ The Chairman. Do you know whether among the owucih there are many who have Tjeen workmen ? Mr. Humphreys. Quite a number of them have been workmen ; I do not think that the ma.iority have been; but I know a number of thorn who have been workmen. The Chairman. When firms are organized do they not geuerally try to associate some practical man in the concern ? Is there not in all concerns one prncticiil man ? Mr. Humphreys. As a rule, I think that that is correct. The Chairman. Do you tliink that there is any better system for tlr.', workman to get his rights and to rise in life (if he has activity, industry, and capacity) Hian the system which now prevails ? Can you imagine auy syatoui better calcuhiti'd to give a deserving and industrious man a chance to rise than the present system I Mr. Humphreys. I know of nothing, and can think of nothing that is better than the policy proposed by this association, that of bringing the employer and the em- ployed together, calculating the cost of the article produced, and endeavoring to lix the price of labor upon the pi'ofit of the article, so as to make prices fair to both par- ties. Of course it is a man's nature to be somewhat selfish. I have atteuded mauy conferences of committees in behalf of the puddlers, and I am free to confess that, in figuiing up our scale of prices, we have had quite a siege on one or two occasions. The manufacturer would naturally try to get a scale that would be most advantageous to him, and we would just as naturally try to get one that would he most advantage- ous to us. I do not think that you can better that state of affairs until the millennium arrives, and I do not know when that will be. The Chairman. We have had a great many suggestions as to the government be- coming owner of all the mills and railroads of the country, and that everybody should work under the direction of political agents— officers of the government — and that the proceeds should be divided, some say equally and some say according to the talent of parties. What sort of an impression does that kind of a proposition make on your mind? Mr. Humphreys. I think that if all the reports which we hear be true, we have a considerable amount of dishonesty in the country now, and that we would have a ^reat deal more under that system. The Chairman. Do you not think that private interest can protect itself better by the conflict of private interests, and by conferences, than by auy interference of the government ? Mr. Humphreys. Certainly The Chairman. Have you not been in political Ufe yourself? Mr. Humphreys. Some little. The Chairman. State to the committee what public positions you have filled. Mr. Humphreys. I was in the Pennsylvania house of representatives for three years, and was in the State senate for three years. The Chairman. And of course, in that experience, you had occasion to make your- self familiar with the effects of legislation on industry ? Mr. Humphreys. I went out of the workroom into the legislature, and went back ao-ain and went to work; and then again I went to the legislature and then back to ■work. The CHAiRMAjy. I would like to ask you which sort of work you found the best and ' f^fi H16h1; Mr. Humphreys. I think that the six best years of my life have been spent in the Penn,sylvania legislature — not very profitably to me. The Chairman. Did you not find the labor and responsibility there wearing upon 512 DEPRESSION IN LABOR AND BUSINESS. you, and telling upon you quite as much as your work in private life ; or did ytni ""^"^ it a period of rest and lelaxiition '! Mr. Hu.'MriiREYs. There was a little variety in it for me ; that was all. The labor, physically, was not so hard, of course. Mr. Rk'E. Vou were speaking, a moment ago, of the difficulties Avhich you inet in arranging a seale of prices between the employer and the employed, eiieli tryiug to make an arrangement the most I'avorahle to his own interest. Would that he helped in any respect by an arbitration such as we spoke of yesterday, such as is in practice in Eagland— a hoard of arbitration with one member selected by yourseUes, another by the employers, and the third by these two ? Or, is the spirit of our people so pecu- liar, in keeping in their own hands their own interests, as to mal;e a dilfercuce between the result of such an experiment here and in England ' Mr. Humphreys. My opinion is that the parties themselves can settle their difficul- ties without arbitration. Jlr. Rice. And that arbitration is not congenial to the feelings of the people here ? Mr. Humphreys. No, sir. Mr. Rice. Your tra.des-unions might add that to your syst(^m, voluntarily. Mr. Hv:mphrey.s. Then it would depend entirely upon circumstances. TheCiiAtRMAN. Vou know that in England arbitration is voluntary on the part of the trades-unions, and it is made binding by law. There they have a pinvision by which people who enter into arbitration may have it enforced Ijy law. Mr. HuMPHREY.s. My opinion has always been against arbitration of that kind. The Chairman. Take that long strike which you had in Pittsburg in 18 17 ; would it not have been better, when you found that yon could not agree with your employ- ers, to pick out some man, let the employers pick out another, and let those two call in a third man and decide the difficulty? Would not that have been better for both sides ? Mr. HuJiPHREYS. It might have been ; I would not liljie to express a decided opin- ion upon that point. ' The Chairman. That was a very long, destructive, and disastrous strike on botlk sides, was it not ? Mr. Humphreys. Yes ; and what made it so was this : The first scale of prices that we adopted was about 1862 or 1863. That scale of prices evidently gave the manufac- turers an advantage, so far as the question of wages was concerned. They derived a greater benefit from that scale than the workmen did ; so that, in the end, the work- men terminated the scale by notice, and demanded an advance of $'2 a ton. My im- pression at that time was, and is now, that in the year previous to that, if the work- men had made a study of what really belonged to them in the shape of wages, they might have received $14 atonjust asweUas|9, because the manufacturers atthattime could have afforded it. But on the termination of that scale of prices, the workmen gave notice of an advance of $2 a ton, and they obtained it. That, however, did not exist long, because prices began to tumble, and manufacturers asked a reduction of that |2. The impression prevailed, howevei-, among the workmen that they were en- titled to the $2 at least for a while. On the close of that strike of 1867, after the manufacturers gave the $9 a ton, and we had started to work, the manufacturers again met us in conference on an invitation extended by our association. We agreed then upon another scale of prices which virtually established a reduction of prices and took eifect, I think, in two months. In arranging that scale of prices we had benefited somewhat, I think, by the experience of the past, and we reported that scale (in con- junction, of course, with the committee of the manufacturers), so as to protect us a little more when the price of iron came down. The jirice of iron in the market began to fall pretty rapidly ; and the manufacturers began to realize what we had realized in the matter of the first scale, and gave notice to terminate the scale ; and the scale of prices that is now in force is a sort of compromise. The Chairman. Can there be anything in the nature of things which would have made arbitration imdesirable in that case ? Would not arbitrators have aided both sides, and said to one side or the other, "Yes, there is a grievance, and you ought to remedy that grievance." Do you not think that if a strike of nine months could have been avoided in that way it would have been better ? Mr. Humphreys. Perhaps so. Mr. Rice. Suppose you had had a board of arbitrators selected without reference to any particular occasion, but agreed upon in the trades-union district lieforehand, to which all such matters should be referred — a board in which both sides had confi- dence — would not the strike have been saved by the action of that board, after the two parties had failed to agree among themselves? Mr. HuMPHRE'^-s. I presume it would, if both parties had agreed upon arbitration. The Chairman. Suppose that you came to an underst.anding with your employers to this etiect: " \Vc agree to this scale of prices, and we agree that if there sh.all after- ward be a difforenee heiweeu us, that ditfcrence shall be referred to a board of arbitra-. tion iiiovi" have a set of hands or eniploy(5s this year that yon will not have next year, so that I think a fixed board of arbitration would not be so commendable at all times. The Chairman. But your association represents the aggregate of the men, and your dealings an- with all the puddlers as a whole, though they may change slightly from year to year. Tour strikes have now been generalized instead of localized, and there- fore you deal with a thing as a wliole and not in detail. It is not the men who are employed in particular mills that you have to consider, but the question of reconciling the manufacturing interest and the laboring interest. And if these two interests, on meeting by their n-prescntatives, cannot agree, why should not some disinterested jper- son or persons come in and say what is right, so as to avoid a struggle ? Mr. Humphrf.y.s. So far as my experience goes, when they do come together in the right spirit, they agree. The Chairman. But snp])Ose that they came together in the wrong spirit? Mr. Humphreys. Then they will not agree. Mr. Rice. You stated a while ago that each party would try to get the better of the other, and that the strike arose from their not agreeing. Mr. Humphreys. That is a sort of trick which is in human nature generally. Every man tries to get the best in a bargain. The Chairman. Do yon think that if a system could he invented by which the workman, instead of receiving all of his wages in money, were to receive part in money 514 DEPRESSIOX IN LABOR AND BUSINESS. and part in a k1;:u<' oltlii pvufits, tnul that books Avirc ko^it ojien so that a committee of till- workiiicii iniglit cxamint- tlirni aud know all iibont tlie state of alfairs just as- owntin do — would that lend To i)rom- labor. Labor-leagues, trades-unions, socialistic agitators, and political speakers asserted, first, that labor alone creates wealth, and, second, that capital is antagonistic to labor. Last Sunday he had been in a church in Washington, and the minister, in the course of his sermon, gave utterance to the sentiment, "Labor and Capital stand glaring at each other ready for a spring," Other sentiments were that-labor was op-\ pressed; that niachinery throws men out of employment; that the rich are growing ) richer andthe poor poorer ; and that the condition of labor to-day is worse than in the I past. Mr. CoiBn proceeded as follows : In considering .these points I propose to go from cause to effect, in order to ascertain how much ground there may be for these assertions. I shall endeavor to show the so- cial condition of society, past and present ; the earnings and havings of labor and capital, past and present ; what labor and capital together have accomplished; and some of the canses that have produced the present discontent, and will make some sug- gestions in regard to the future of labor. These complaints are not new. One hundred and ninety-nine years ago John Basset made a speech in Parliament complaining that the English manufacturer could not compete with the Hindoo weaver, who was content with a small copper coin per day, whereas the English weaver demanded from sixpence to a shilling a day. One hun- dred and ninety- three years ago the justices of Warwickshire, England, fixed the prices of agricultural labor, making wages from March to September four shillings per week, and from September to March three shillings and sixpence per week, without board. One hundred and seventy-two years ago Gregory King, in a book entitled " Natural and Political Conclusions," states that there were 880,000 families in the kingdom ; that half of them were able to eat meat twice a week (including the gentry and aristoc- racy), and that the other half ate it but a few times during the year. He also stated that the population of the kingdom was 5,500,000, and that the wheat raised was less than 500,000 bushels. This would give but a pint and a half of flour in the year to everj- man, woman, and child in the United Kingdom ; that their living consisted of rye, barley, oats, and pease. Bear in mind that at that time Boston, Albany, New York, Philadelphia, and Charleston were considerable towns. Since 1830, within half a century, there has been the coming in of a new civilization. I propose to take a glance at the conditions of life and society as they were in my boy- hood, in the year 1830, which I can remember distinctly, in contrast with those of the present time, in order to see whether these demands of labor to-day are reasonable or unreasonable. The stage-coach then made 75 miles a day. To-day you are whirled 40 miles an hour, and across the continent in a week. The mail then went 75 miles a day. Now you talk with your friend in Chicago and hear the tones of his voice through the tele- phone. The broker in Wall street, the pork-packer in Chicago, the cotton-broker in New Orleans manage their business by hourly reports from every commercial center in the world. In those days the country houses as a rule were unclapboarded, unpainted, unplastered, with a yawning chasm in the chimney for a fire-place, and it was a com- mon remark that in winter people froze one side while they roasted the other: To-day a majority of country houses are clapboarded, painted, blinded, are neat and comfortable. In the country they have the base-burning stove, and in the city the furnace and steam-heater. The furniture of those days consisted of some common 516 DEPRE.s.SlOX IN LABOR AXD liUSLNE.s.S. chairs and a bedstead aiade by a common carpenter. Carjiets there were none. The table garniture consisted of pewter plates aud iron spoons, knives, and forks. The kitchen ware consisted of a Dutth oven, a frying-pau, a skillet, and a dinner-pot. To-day there is no end of household furniture. In those days the industries were car- ried on in the household. There was no industry for females except that of the spin- ning-wheel and the loom. I had the curiosity to ascertain just what a spinner could do in a day, and I sent up to New Hampshire to a sister of mine who used to be an ex- pert spinner, knowing that she had a spinning-wheel and some rolls, and I had the exact measurement of the distance which she walked in spinning with a large wheel. A day's work of ten hours would enable her to spin 3. 8 miles of thread, and she would walk nearly 5 miles in doing it. Now, in one of our manufactories you will see a girl \^of iifteen minding a machine that spins 2,100 miles of thread in a day — a thread that would reach from ^Vashington to California. In those days the woman who com- menced with the spinning-wheel :iud loom to get her fitting-out when about to get married would have to spend many weary days in making her sheets. To-day she obtains them at seventy-five cents apiece. In those days there was no industry that females could- turn their hands to excei>t the spinning-wheel and the loom. They were utterly cut ofi' from doing anything else except working in the field with the men. The Chairman. It is alleged that that was a much better condition for women than the existing one ; that they were then in the household, in the family, in the relations for which nature designed them, instead of being as uow in factories and occupations which sever them from the domestic circle. The proposition is laid down that there is in the present position of women a degradation from the better state of things that existed at that time. What answer have you to make to that ' ^ Mr. CoFiiN. That is not my ojjiuiou. Those women who labor in factories with whom 1 have come in contact (those of American birth, certainly) have as much dig- nity and modesty and refinement as those whom we find at the farm to-day. The Chairman. But do they come as readily into the proper functions of woman ? Do they marry and settle down aud have homes of their own, as women did have a century ago when the farmers w ere living in the way you describe, and when pretty much every girl was married in the conrse of time, and had a home of her own 1 Mr. Coffin. The trouble in Massachusetts is that we have vastly more women than men ; but that arises from the fact that emigratiou has taken off the men. Mr. Thompson. That disproportion is counterbalanced by a preponderance of men in some other parts of the country. Mr. Coffin. Yes ; but they do not happen to come together in marriage. The Chairman. Now we are asked to transfer the surplus of labor to the land— to undertake that as a national duty. Would it not be equally a national duty to trans- fer the unmarried women to the men? Mr. Coffin. Quite as much as to do the other. A half century ago my father's house was lighted with a tallow caudle or by a pitch-knot on the hearth. To-day you have the softer radiance of the kerosene. In those days, if the fire went ont, you had only flint and steel with which to relight it, while to-day every man carries alight in his pocket. In those days a man who loved tobacco, if he was away from a household, could not indulge in the luxury of a pipe unless he had a flint and steel with him. In those days we measured the hours by the shadow of the sun on the floor. Clocks were very ^rare. Costing from |40 to $60, few could aftord them. To-day who does not carry a watch f And as to clocks, you can buy them by the cart-load that cost to manufacture sixty-two cents apiece. Almost the only books in the household, in those days, were the Bible, the almanac, and some text aud school books, with a Walker's Dictionary, about 4 by 4 inches square and i inch thick. I had the curiosity to ascertain from the printers of the two unabridged dictionaries the number of those dictionaries printed, and while they did not wish to give exact uombers, they gave approximately the number, between 600,000 and 700,000, which would give one to every sixty or seventy inhabitants of this country. In the libraries that contain over 10,000 volumes (college and public libraries ) there are 10,650,000 volumes. It is estimated that, including the books in the Sunday- school libraries, there are at least 20,000,000 volumes in the libraries of this country which have been brought in mainly since 1830. In those days we could only obtain clothes by the long process of the manufacture of the cloth at home, the tailoress coming around to make the clothes. Now we can obtain ready-made clething, neatly fitting, better than the best that could have been obtained in those days, by stepping into any clothing shop. This change of social condition has been brought about by the improvements in man- ufacturing. The first power-loom was set up in Waltham, Mass., in 1816, and by 1830 the spinning-wheel had pretty nearly disappeared. In 1830, the female help employed in my -father's house received 50 cents a. week. The girls went to Lowell, Mass., where they received from $3 to $4 a week, or i||i2 above board. The wages of agricultural laborers in 1830 were from $ti to $10 a month, with their board. In 1845 I worked on a farm in New Hampshire, receiviug $10 a mouth aud board, and on that same farm last DEPRESSION IN LABOR AND BUSINESS. 517 year the haiul received SI8 a mouth and board for doing not the same work ; he rode the mowinfi-machine, whereas I swung the scythe. The Chairman. In regard to the purchasing power of the |10 and the $18; which _ would he able to buy the most supplies, the |10 then or the $18 now ? Mr. COFFIX. I will show you that before I get through. Now, did the introduction of raachijibrjLthrow men out of employment? Let us see what was called for to build manufactories, and who were set to work. First came the inventor, then the capitalist, who employed brick-makers, stone-rjuarriers, masons, hod-carriers, wood-choppers, lum- bermen, blacksmiths, millwrights, carpenters, joiners, miners, puddlers, coal-heavers, machinists, brass-founders, coopers, tool-makers, the whole fraternity of trades, to bnild the manufactory. Then when the manufactorywas erected, the operatives were called from the country. Girls in my father's kitchen who had been receiving 50 cents a week went to the manufactory and there received from |2 to $3 a week. Men were called to be overseers, superintendents, architects, clerks, accountants, machinists, inventors, experimenters, chemists, and dyers. What were they doing before they were thus called forth by capital ? They were on farms, they were in coopers' shops, blacksmiths' shops, carpenters' shops ; they were behind counters, they were doing ordinary work, but they were competent to do something higher and better, and to receive higher pay. Thus , we see first, invention ; second, capital setting labor at work ; third, labor receiving higher wages and advancing to a higher plane of life ; and fourth, skill commanding a premium. From 1620 to 1830 may be taken as the beginning of manufactures. In 1870 the factory system had developed so that by the census it appears that there were employed in all the manufacturing industries of the country 2,053,993 persons; the capital invested was i^iS, 118,208,000, and the wages paid per annum amounted to $775,587,000. The wages of all farm laborers in this country, by the census of 1870, aggregated $:?10,286,000 — less than half the amount of wages paid to laborSrs in the other gainful occupations. The increase in manufactured products has been altogether dispropor- tionate to the growth of population. From 1850 to 1870 the population increased 65 percent., while manufacturing increased 322 per cent. It is proper to say that a part of this increase may have been due to an increase of values, and it is fair to say that , manufacturing increased three times faster than population. The Chairmax. I do not know how to arrive at that. Of course, values fluctuated very much from year to year. Take the iron business, for instance, and it is well known that there has been a reduction year by year, and so with many other branches of business. Mr. Coffin. I make the suggestion on the authority of the notes to the last census. I think there has been so much cheapening in the cost of manufacture as to make the rise in product much less than is generally supposed between 1860 and 1870. The Chairman. I should be very doubtful about it, because you simply take the year 1870 ; that year was before very high prices. I should think it was an average year. Mr. COFFIM. Perhaps I am wrong in my statement. The Chairman. I doubt whether it is necessary that you should make any qualifi- cation of that kind. Mr. Coffin. In 1832 there were 1,200,000 cotton spindles in this country ; in 1845 there were 2,500,000 ; in 1875, 9,500,000 ; and in 1878 there were 11,000,000. In Great Britain there were, in 1832, 9,000,000 ; in 1845, 17,500,000 ; in 1875, 37,500,000. In Eu- rope, outside of Great Britain, there were, in 1832,2,800,000; in 1845,7,500,000; and in 1875, 19,500,000. The total for the world in 1879 is about 71,000,000 spindles. The result has been, that while between 1830 and 1875 our population increased between threefold and fourfold, the amount of cotton manufactured and used increased thir teen- fold, because each person uses three to four times as much as they used to. Coincident with this development came railroad construction. In 1830 we had 29 miles of railroad ; in 1878 we had 81,000 miles. There was not labor enough in this country to carry on this construction, and we sent abroad for it. And here let me call the attention of the committee to the remarkable correlation between emigration and the development of these industries. We had no statistics of emigration prior to 1820, and it is stated that the emigrants in one year did not then reach 8,000. Between 182o'and 1830 there was a considerable increase of emigration. In 1830 the number of emigrants was 23,322. I have here a table showing the statistics of emigration in connection with the number of miles of railroad in operation. 518 DEPEES.SION IN LABOR AND BUSINESS. The table is as follows : Year. Emigrants. Miles of rail- r oads in operation. 1830 23, 322 22, 633 60, 482 58, 640 65, 365 45, 374 76, 242 79, 340 38, 914 68, 069 84, 066 80, 289 104, 565 52, 496 78, 615 114,371 154, 416 234, 968 266, 527 297, 024 369, 980 379, 466 371,603 368, 645 427, 833 200, 887 200, 436 251,316 123, 126 121, 282 153, 640 91, 920 91, 987 176, 282 193,416 249, 061 318, 494 298, 358 297, 215 395, 922 378, 796 367, 789 23 1S31 95 1832 229 1833 , 380 1834 633 1835 1,098 1836 1,273 1837 1,497 1838 1,913 1839 2,302 1840 2,818 1841 3, 535 1842 4,026 4,185 1844 4,377 4,633 1846 4,930 5,598 5,996 1848 .-. 7 365 1850 9,021 10 982 1852 12, 908 15, 360 16,728 18,374 22,016 24,503 26, 968 28,789 30, 635 31, 286 1854 1856 1858 1860 1861 1862 32, 120 1863 33, 170 1864... 33, 908 35,085 36, 827 39, 27C 42,255 47 208 1866 1868 1870 52, 898 60 ,568 9, 000, 000 It will be seen that we reached the maximnm of emigration in 18r)4, when the num- ber of emigrants was 427,833, and at that time we had in operation 16,728 miles of railroad. Then we began to decrease in emigration, the next two years being only 200,887 and 200,436. Then in 18.57 it amounted to 251,316. But the construction o"f railroads was going on rapidly during those years, running down to 1861, when the number of miles in operation was 31,286. From 1862 emigration began again to in- crease, until it again reached its maximum in 1869, when it was 395,922, and then we had 47,208 miles of railroad in operation. In 1871 the emigration was 367,789 and the number of miles of railroad in operation 60,568. The total number of emigrants that arrived in this country from 1820 has been a little over 9,000,000. The Chairman. Your proposition is that the railroads of this country were princi- pally built by foreign labor, and your reason for that is that American labor could ilnd something better to do ? Mr. Coffin. Yes; that is the proposition. We wanted this foreign labor. American labor went in the first place into the manufactories, but there again foreign labor has superseded it in those branches requiring the least skill and intelligence. DEPEESSION IX LABOR A\D BUSINESS. 519 The Chairvtax. Are you aware that the Southern railroads have heeu chiefly built by slave labor ? Mr. Coffin. Yes, sir. The Chairman. Then your statement will be limited in the main to Northern rail- roads? Mr. Coffin. Yes, sir; but there were comparatively few railroads in the South and no manufacturing industries to call for labor. In order to induce this foreign labor to come here, we advertised our cheap lands, which probably were an attraction, aside from the high wages paid for labor ; we advertised our high wages ; we advertised our polit- ical institutions ; we advertised our citizenship ; we advertised ourfreedom. The rail- road companies sent agents all over Europe and established emigration agencies. While this great development is going on here, a similar development was going on in Europe. Millions there were called from the farm and the shop to do something higher and bet- ter, and to receive higher wages. Everywhere there was an advance of wages, and of course an increase of production. Let us see how three great nations have advanced since 1827. Here is a half century of progress contained in a few figures. I give the foreign trade, the imports and exports, by decades, of Great Britain, France, and the United States. It is an exceedingly instructive table, for it enables us at a glance to see how three great nations, by the use of the forces of nature, through discovery and invention, the employment of machinery to do the work of human hands, have added, to the wealth of the world : Tears. Total of imports and exports, great BRITAIN. 1827-'37 $4,948,750,000 1837-'47 6,771,555,000 1847-'57 Il,0fi5,280,000 1857-'67 20,379,890,000 1867-'77 28,879,205,000 FRANCE. 1827-'37 2,002,400,000 1837-'47 2, 97H, 400, 000 1847-'57 4,601,800,000 TenrK. Total of imports and exports, FRANCE — Continued. 1857-'67 19,261,200,000 1867-77 13,313,600,000 UNITED STATES. 1827-'37 2,006,218,000 1837-'47 2,285,428,000 1847-'57 4,255,074,000 1857-67 7,103,309,000 1867-77 11,016,805,000 The total trade of Great Britain has within those five decades increased six times, that of France six and a half times, and that of the United States five and a half times, What are the results? It has equalized the world's markets, given low prices to the consumer, taken business out of the hands of the few and given it to the many, dis- tributed wealth, elevated the masses, enlarged the area of civilization, and contrib- uted to the comfort and happiness of the human race. The Chairman. Do you not omit to state that pauperism has increased ? Mr. Coffin'. I am not sure about that. Is it a fact ? The Chairman. You are stating one side of the question, and stating it wonderfully well and in a forcible way, but yonhaveo mitted to a acgr tain the fa ct Jjli at on the ot her side t he alle gation is copafenii^m acts' to the commltteejthat witf allJthi8_gro- gres s one~poFtio fof th e hu man race haS~been- placed in a ver^wreKheTcoiaSrtion — a Tinpaipga f^nnfiiq ^^Tmos t — tbaFliau perism an d want and "(|e8ti|ifEi5n have iflgrgaseS in England. In this cpujirj_paupen8mwas unknown" in "niany of the year8_ which you has 3 descri bed, through which years "alfhave "15een~aJSIe to live. Now we have a greatmaes ^yjajuonaly estimated at from fivehundTed thotisand to two million of per- sons) absoUiteljLaiUSfiEiB.gjor want^of ^e necessaries of life, and living on charity. Mr. Coffin. I can refer youT(7one illustratitrtr?" "IBnirrriatTVe town in New Hamp- shire, the population never exceeded twenty-four hundred, and in former d ys the poor supported by the town varied from eighteeu to thirty individuals ; now t e poor are supported by the county, buj; I think that not more than three or tour ar j credited to the town. Mr. Thompson. Is it a manufacturing town ? Mr. Coffin. No, sir ; it is almost wholly agricultural, but it is iu a manufacturing community which pays high enough wages to keep agricultural towns even as pros- perous as my own from growing, by attracting away the labor which agriculture can- not employ. The Chairman. That fact does not meet the main question. The fact of pauperism being now a strong element iu the present constitution of society is admitted. A com- parison, however, would be interesting of the present state of society in England, with its condition, for example, in the time of Queen Elizabeth, when the poor laws 520 DEPRESSION IN LABOR AND BUSINESS. werp passed, owing to the fact that the sturdy beggars all over England compelled the people to give them relief on the highways, which led to the enactment of the poor laws. I suppose that if you had investigated the relative condition of society in England at that period and at the present period, you would find a less percentage of pauperism now than then. I ask you the question to see whether you have consid- ered that poiut. Mr. Coffin. I have some facts to present bearing upon it. The Chairman. You can get the statistics of English pauperism from the Bine- Books, and they show that for the last ten years from 800,000 to 1,000,000 jiersons have been relieved annually at public expense in England, in a population of, say,, about 30,000,000. That is, that about 3J per cent, of the population are in a condi- tion to require relief and public help. That is in a time of prosperity, so that it seems to be a normal condition resulting from the manufacturing system in England Hhat about 3J per cent, of the population is reduced to a condition of pauperism. Now, unless previous to the introduction of the manufacturing system a state of things as bad or worse existed, it would appear that the establishment of the manu- facturing system has had something to do with its pauperism, and your case would probably break down, although I suspect it to be a fact, that the paupers now have more of the actual comforts of life than those who were not paupers had then. Mr. Coffin. The last English Blue-Book gives the number of persons, exclusive of vagrants, in the several unions and i>arishe8 under boards of guardians, on January 1 of each year since 1863 — those that receive indoor and outdoor relief. The Blue-Book also shows the amount of relief given. I present the following table: Year^. =*; EM^LAND AXD WALES. 1 1863 i 1 1864 . j i' 1865 ■■[ ' 1866 1H67 "1 1868 I 1 1869 ' l' 1870 :.;; ]; 1871 1 1872 1873 ■"' '. 1874 . ; 1875 , : 1876 1S77 1878 v.'..'.'.'.'.'.. IKEr.AND. 1863 1876 '.'.'.'.'.'.'.'. SCOTLAXD. 1863 1876 .■ '.'.'.".'.'." 3^ o a H ■< 142, 624 20, 590, 356 £6, 527, 036 009, 289 20, 834, 496 6, 423, 381 971, 433 21,085,.)39 6, 264, 966 920, 344 21, 342, 864 6, 423, 381 958, 824 21, 608, 286 6, 264, 966 034, 823 21, 882, 059 6,439,517 039, 549 22, 164, 847 6, 959, 840 079, 391 22, 457, 366 7, 498, 059 081, 926 22, 760, 3.'>9 7,673,100 977, 664 23, 067, 835 7, 644, 307 890, 372 23, 356, 414 7, 866, 724 829, 281 23, 648, 609 8, 007, 403 815, 587 23, 944, 459 7, 692, 169 749, 593 24, 244, 010 7, 664, 957 72^, 350 24, 547, 309 7, 488, 481 742, 703 24,.854, 397 7, 400, 966 66, 538 .■i. 716, 975 701, 031 85, 330 5, 350, 950 1,018,497 120, 284 3, 126, 587 736, 028 96, 404 3, 593, 929 658, 907 ^e see that in England, in 1863, the per cent, of population receiving aid was 5.55, --whereas in 1876 it was 3.06; in Ireland, in 1863, it was 1.15, while in 187C it was 1.59t. in Scotland, 1863, it was 3.84 ; in 1876 it was reduced to 2.68. I do not know the number of spindles in operation in Great Britain in 1863, but as there were 17,500,000 in 1845, while at the present time the uumber is about 40,000,000, 1 suppose 25,000,000 may be an approximate number. The period since 1863 has been the most active in the history of Great Britain. There has been a far greater develop- ment of machinery than at any other period of her history, and yet pauperism haa -declined from 5.55 per cent, to 3.06. Undoubtedly there is at the present time great dis- tress in England, but it has come on within the last eighteen months. Can we say in th& face of these official returns that the use of machinery increases pauperism ? The reverse seems to be the case in England and Scotland. I think that if we were to make- ' diligent search we should flud the causes of the present distress in England in other DEPKESSION IN LABOK AND BUSINESS. 521 directions. Some of the causes that have produced depression here are operative there, and some are not, while some that are operative there have not been known here. England has had no war, no inflation of currency. During our troubles she swept away our commerce and became almost wholly the world's carrier, manufact- urer, and banker. She profited by our misfortunes and by the distuibauces on the continent between Germany, Austria, and Italy in 1866, and between France and Germany in 1870-71. Her accumulations have been so vast that she has been able to put off the evil day till now. Having hut a small area, she has not been called upon to construct railroads, as we have been doing. In 1862 the mileage was 11,555, cost- ing £385,218,000 ; in 1877 there were 16,872 miles in the United Kingdom, with a cap- ital of £658,214,000, or, at $5 the pound, $3,290,000,000, against our 81,000, with a larger capital. Her roads were not constructed in solitudes, and although they may not all have made immediate returns to those who built them, they were of imme- diate value in the development of trade. Among the causes of the present distress in England, incident to that country and ^ not to this, is the gradual decrease of acreage devoted to the production of food. Here the acreage is constantly on the increase, and there is a steady and rapid advance- ment in the productions of the farm and pasture ; there we find the reverse. I give the following table from the Blue-Book : Acreage in cereals. Acres. 1867 11, 432, ,503 1876 11,064,940 Grass, flax, hops, and clover. Acres. 1867 5,679,433 1876 6,641,180 Permanent pasture. Acres. 1867 -22,052,510 137C 24,053,271 Horses in (ircut Brilain. 1870 2,631,306 1876 2,834,241 Cattle. 18fl7 ^731,473 1876 9,957,180 Sheep. 1867 33,187,951 1876 32,252,570 t Swine. 1867 4,221,000 1876'.!; 3,754,000 The acreage in cereals is diminishing, while pasturage and grass lands are increas- ing. Horses and cattle are increasing, while sheep and swine are diminishing. Popu- lation is increasing. Since 1863 the acreage of grain has been reduced 367,000 acres, while the increase of population has been 4,365,000. Of course the food is imported and the modem inventions in steam transportation enable a nation in times of peace to rely on foreign supply ; but it has to be paid for by the operative with money. Having no land to cultivate he can transform his labor into food only through wages received at the factory. When the supply and demand for goods are equal (and the^ — i demand will always bring up the supply) all goes well, hut the least falling off in the ' demand is felt at once at the factory by reason of the rapidity of comnunication and transportation. And with the inability to save, which seems characteristic of the ^ English operative, a few weeks idleness brings that distress which shows in the form of pauperism. Now, if machinery has caused pauperism in England, what shall we say of Italy, where there is no machinery and where pauperism abounds ? Prance has a great deal .522 DEPRESSION IN LABOR AND BUSINESS. .of machinery, not so much as England, but pauperism does not prevail to any extent, Nifhile in Spain where there is no machinery the country is overrun with beggars. We have no data in this country by which we can ascertain to a certainty wnetner pauperism is on the increase or decrease. We have only reports of cities and towns from year to year, but nothing from which we can predicate anything one way or the other. It is said that the number of the poor is increasing, but it is only assertion. I am disposed to think that in 1875-'76-'77, the number of men out of employment was greater than in 1873-74 ; and I am also of the opinion that there are fewer men out of employment to-day than a year ago ; but my opinion, with no facts behind it, is of little account. That pauperism is increasing out of proportion to the increase of popu- lation in this country, I am not ready to admit without something besides assertion. €olouel Carroll D. Wright, chief of the bureau of statistics in Massachusetts, has given testimony upon this point, and I need not further pursue it. But allow me to revert once more to the Blue Book of Great Britain. It is said that machinery produces pauperism, and pauperism leads to crime. If such be the sequence, what shall we say to the following exhibit of commitments for trial in the United Kingdom : Teara. England. Scotland. Ireland. 1862 20, 001 20, S18 19, 506 19,614 18, 849 18, 971 20, 091 19,318 17, 578 16, 209 14, 801 14, 893 15, 195 14, 714 1^,078 3,630 3,404 3, 212 3,117 3,003 .3, 005 3,384 3,510 3, 046 2,948 3,044 2,755 2,880 2, 372 2,703 6,660 1863 6,078 5,086 1865 4,657 1866 4,326 1867 4,561 1868 4,137 1869 4,151 1870 4,936 4,485 1872 4,471 4,544 1874 4,130 1875 4,248 1876 ... 4,146 In 1869 the total in the three countries was 30,291, while in 1876, with an increase of 4,365,000 population, the commitments ran down to 22,937. What shall we infer from this ? That justice is not so vigilant in Great Britain now as in 1863 ? Or that from some cause there is really less crime ? I will not attempt any elucidation here ; but behind this fact there is a good deal of food for thought, especially for all those who believe that the world is going to the dogs about as fast as it can go. Further on I shall have something more to say in regard to the sentiment of the world in relation to pauperism. There is a class of inventions that we may terra generic, which have had a great •effect upon the condition of society. There is the telegraph, unknown at the begin- ning of this new civilization. There are to-day from 40,000 to 50,000 telegraph offices in the world. We may think of the great number of men that have been called from the farm, the workshop, the smithery, to make the wire, to construct the machines, the insulators, the batteries, and all other things employed in telegraphing. The operatives were doing something else. They have been called from a low employment into this higher occupation, which requires education, lifting them in the scale of civ- ~l[lization. The telegraph now gives employment to a large number of women who before were shut up to the industry of the household. Photography is another generic invention which has had a very wide effect, even affecting the egg markets of the world. That is one reason why we do not get eggs cheaper to-day. It has affected the rag-pickers of Paris and every other city in the in- creased use of paper. Another generic invention is the use of India rubber, affecting not only people of this country but the natives of Borneo and South America. So also with gutta-percha. Then there have been the great developments in chemistry, a oitilization of the articles that were formerly thrown away. Coal-tar, for instance, is now wholly utilized, and its products have become great articles of commerce. Agricultural machinery is not generic. Tlie reaper was invented in 1833, but was not brought out until 1844, when there were 150 machines put in operation. In 1850 there were about 5,000 reapers in operation. So clumsy and so unwieldy were they, that in 1852 the judges of the New York State Agricultural Association decided that it was not then determined that the mower would supersede the scythe or the reaper the cradle. And yet invention has been going on until to-day it emancipates the farmer from the tyranny of the men, the binders, who, starting in the South, make progress with the season, the ripening of the wheat, and move north to Minnesota, DEPRESSION IN LABOR AND BUSINESS. 523 making the farmers' necessity tbeir opportunity, and compelling him to pay them from $3 to $5 a day. My brother in Minuesota had to pay that much last year, and he found the exactions of the binders so great that when the harvest came on this year he secured a self-binding reaper for his own protection, otherwise he could not have afforded to harvest his grain. The result is, we are able to take $180,000,000 a, year from Englaud for our food products alone. The Chairman. Permit me to put a fact la there as to tbe increased demand pro- duced by new inventions. Five years ago the first order was given for wire for the self-binder. The order was for about 50 tons of wire. The next year the order was about 300 tons; the next year the order was 2,800 tons; the next year it was 6,500 tons, and in the present year the order for wire for eelf-binders has been 12,000 tons. You can put that fact with your present facts to show the rapid progress that is being made in that direction. Fourteen thousand tons of iron twenty years ago would have covered the entire product of wire for the United States for all purposes whatsoever. Mr. Coffin. Besides that, sir, the invention of the cattle barb has made wire fences practicable, and all through last spring they were built at the rate of 160 miles a day, each foot of fence using about 7 feet of wire — all to the gain of the farmer, the iron-worker, and to the preservation of our timber for more important uses. This new civilization has its power in the development of the forces of na- ture. Before the beginning of manufactures there were coal deposits in Pennsyl- vania as there had been from the day of creation. But the time came when inven- tion, capital, and labor together employed the stored-up sunlight of the primeval ages for the benefit of the world. Let ns see how coal and water have been employed to do the work of human muscles during the last half century. Take the State of Mas- sachusetts in 1875 and let us see what was done. The horse-power of the steam-engines of Massachusetts in 1875 was rated at 208,166 horses, and the water-power at 318,748 horses, making a total of 526,914 horjes, which was equal to the labor of 1,912,608 men, perhaps 300,000 more than the entire population of the State. By the census of 1870 the horse-power in steam-engines in the whole country was 1,213,000, and in water-power 1,130,000, a total of 2,343,000, which is equal to the labor of 14,058,000 men, a horse-power being estimated to the muscular force of six men. I come now to railway transportation. The Massachusetts railway reports for 1876 show 1,030 locomotives at work. One of our ablest engineers, Mr. Edward Appleton, has set himself to see what those locomotives would do when compared with the use of horses on common roads, and he estimates (after throwing out the locomotives that are used on tracks that are being repaired and in machine shops) 682 locomotives in use, and that the work performed by them would be equal to 1,519,496 horses on com- mon roads. Taking his formula and applying it to the locomotives of the United States, as given in Poor's Manual, we fiud that the locomotives in the entire country are doing the work of 29,676,960 horses on common roads. The cost of transportation has greatly decreased since the introduction of railroads, even over canal transportation. Last summer it cost but fifty cents to transport a barrel of flour from Saint Louis to Boston. How far caa a barrel be transported on a common road ? Not much more than five miles. Even if a man were to make a busi- ness of it, he could not transport a barrel more than ten miles at that price. Contrast this with 1830, when, on the Erie Canal, the cheapest transportation of that period, it cost 118.32 to transport a ton of frieght from Albany to Buffalo. In 1840 the speed of the Allantic steamships was 8.3 knots per >our, and in 1877 it was 15.6 knots. The consumption of coal in 1840 was 4.7 ; in 1877, 1.9 tons. The Chairman. Do you mean per horse-power? Mr. Coffin. 'Jo be precise, letmegiveMr. Bramwell'sf-tatement that within even the last fifteen years the consumption of coal in regular ocean steamers has been brought down from 5 pounds to If pounds per gross indicated hiirse-power per hour. But in this connection I call your attention to the fact that although the pound of coal can accomplish three times as much to-day as fifteen years ago, and ten times as much as it could at a time within our own recollection; we do not get along with one-third the coal we used in 1863. On the contrary, there was probably never so much coal used for steam as now. Its increased efficiency has cheai eiied its use, or the power which is its product, and this cheapness has inert ased the demand not only for povrer but actually for coal. And I believe the same lule holds ttue of labor whtn its efficiency is increased. I think it is apparent that if the locon.otive were blotted out of exis- tence, if, in the matter of transportation, we were to be set back to our condition of a half century ago, vast areas of this country, now prosperous and powerful States, would be solitudes — the home of the buffalo and the Indian. Let us not forget that the first furrow in the State of Iowa wae turned in 1833, and that up to 1856 Min- nesota did not raise enough wheat to feed her population. The number of operatives engaged in the manufacture of cotton goods throughout the world is estimated by Mr. Edward Atkinson at 1,100,000. The English statisti- cians estimate the number 1,300,000. I take the larger. The cotton manufacturers 524 DEPRESSION IN LABOR AND BUSINESS. state that machinery has increasediiidividuallabor a thousand fold ; therefore there are 1,300,000 persons employed in cotton mauufactnresthronghout the world, doing the work that, nnder the old way, of hand-loom and the spinning-wheel, would require the labor of every individual ou the face of the earth, as given by the Almanaeh de Gotha. In i!i'M) the price of prints was 50 cents a yard — not so good a quality as that which you can purchase to-day at 5 cents a yard. I have at home a piece of the cloth such as was manufactured in 1830. It was given to me by Jlr. Sauinel Bachelor, one of our venerable manufacturers of New England. It is of such quality as to-day would be hardly used for the lining of shoes ; but then it was con.sidered a very good class of cotton goods. The CHAiiiMAX. In 1790 a man was executed in Dublin for some crime. He was a linen weaver, and in his dying speech he said that if it had not been for the introduc- tion of cotton superseding his trade, he would not have been reduced to poverty and would not have been compelled to steal, and he charged his fate on the invention and introduction of cotton into England which had destroyed his business. He made quite ^-a strong philosophical politico-economical argument in his last dying speech, warning the people to turn cotton out of England because it would bring everybody into the same unfortunate condition as it had brought him. Mr. Coffin. If you visit Garsed's manufactory in Philadelphia, you will find his engine doing with seven tons of coal the work of seventy thousand men. If we reckon seven tons of coal as costing $21, and the labor of seventy thousand men at |1 a day, then it is $21 as against $70,000 of expenditure saved in muscular effort. Does it throw men out of employment ? Does it not liberate them from muscular toil '! Does it not leave them to do something better and higher ? Instead of employing their mus- cles they employ their brains. The Chairman. Take the bluing machinery introduced into manufacturing and displacing twenty or thirty men. They have no place to go and use their brains; they are turned out of this particular work and have no other occupation. What are they to do ? ■' Mr. Coffin. Under the conditions of life in this world there will always be a re- I adjustment of things, and some men are going to be thrown out of employment and (^^ forced to seek new fields of labor. That is the operation of physical law, and can no vmore be changed by legislation than the revolution of the earth on its axis. The Chairman. You do not deny that immediate distress is produced, but you think that ultimate benefit results T Mr. Coffin. It would cause immediate di.stress if all machines were invented at once and Ciirae into universal use at once, but neither is true. A machine is always of slow growth. It takes years to bring it to perfection. Take the locomotive, for ex- ample. Stephenson's first machine weighed from three to four tons. How crude it was! It, has taken three-quarters of a century to bring it to its present degree of perfection, and it has not reached its ultimate power. The locomotives of the future will accomplish far more work than those now in use. Did the locomotive come into universal use at once ? How many men did it thrOAv out of employmentthe first year of its introduction 1 Very few, if any. They were wanted on the railroads. Improvements of the last twenty-five years, particularly the hydro-extractor, have greatly decreased the labor required to refine a pound of sugar; but the result in the long run has been that everybody uses refined sugar instead of the moist brown sugar we used to have, and I do not doubt that more operatives are employed in the business. Take the reaper for illustration, invented in 1833. In 184S, only one hundred and fifty in use. In 1852, at a trial of reapers in Geneva, New York, there were nine machines by diflTerent makers, and so imperfect were they that not one could stop in the grain and start again without backing to get up speed. Nineteen years had passed since the taking out of the first patent, and there were not at that time only about eight thousand machines in use. Since then more than two million reapers have been manufactured, and the manufacture is going on at the rate of about one hundred and fifty thousand, per annum. If these machines had all been brought into use at once they would doubtless have made a great disturbance of manual labor; but, as I have said, no machine ever does so come. I have shown that before the capitalist can start his manufactory he must build it, and that he calls a great number of men from other employments. The moment that they left one employment for another read- justment began, and it was so gradual thatthere was no immediate distress. I have yet to find proof that the use of machinery causes any considerable distress; but, ou the other hand, I will show you that forthe lack of it there hasbeenterrible distress. Chinahas no ^machinery — no railroads. All labor in that country is muscular, and yet we have seen several provinces depopulated by famine, notwithstanding the efforts of the govern- ment to relieve the distress. It was an impossibility. There was food enough in the world ; we could have supplied it in abundance ; but if we had sent millions of bushels of grain to Shanghai or Pekin.the starvation would have gone on all the same for want of railway trauHportation. Take the famine in the East Indies a few years ago as an illustration. The British governmeut piled the docks at Madras with mountains DEPRESSION IN LABOR AND BUSINESS. 525 of food : it employed all the carts it could obtaiu ; but with all the means at their com- mand it was found impossible to relieve the distress, aud the government, to prevent a recurrence, has constructed railways, not simply as commercial enterprises, but in the interest of au advanced civilization and in accordance with humanitarian ideas. We shall find, I think, when we examine this question closely, that the use of uia- •chinery instead of causing distress alleviates it, and that it will be seen that instead of supplantinj; labor creates ever a new demand for it by the opening of new fields. I would not be understood as saying that machinery does not necessitate a change of occupation ; that is inevitable. It belongs to progress. If it is complained of as a bard- ship for one who knows only one occupation to be compelled to change it for another which he must acquire in old age, I admit it, aud have only to say that there are a great many other hardships in life under the domain of physical law. The tire burns my house, the bail destroys my w^heat, the sun scorches it, rust renders it valueless, and I am powerless under these forces of nature, just as I am when the introduction of a new machine forces me to seek other employment. Is it said that we cannot prevent fire, hai], mst, and mildew, but we can prohibit the use of machinery ? Very well. Put on the prohibition and become Chinese, for that is what we shall be — stationary, utterly non-progressive. Pardon me for elaborating this point at such length, but I have been led on in con- sideration of the loose ideas afloat in regard to it. The Chaibman. You do not deny that immediate distress is produced, but you think that ultimate benefit results ? Mr.'CoFFix. That is the proposition. . I would not have it understood as immediate relief. The Chairman. On the contrary, immediate distress. Mr. Coffin. If it causes immediate distress, it produces ultimate benefit. It leads men to a higher plane of existence. With the capacity which our people have to change their occupations I doubt this immediate distress. I have never been able to find instances or proof of it. J'or illustration, blued screws, blued iron is much more used than a few years ago, and nickle finishing is a new art. In Lowell each factory building for thirty years has been increasing its product and diminishing its hands; but the city has increased several fold, and Lawrence, nearly as large, has grown up a few miles from it. ftt Take another illustration. Under the old process of cleaning cotton, before the in- vention of the Whitney gin, a mau could clean four pounds a day. The gins now in nse clean 4,000 pounds a day. The cotton crop of this country last year was estimated at 4,700,000 bales. It probably exceeded that. That would be 2,021,000,000 pounds. Under the old way it would have required 505,000,000 days' work at 11 per day (that is $505,000,000) to clean cotton— a work which is done at present by 1,614 men work- ing 313 days in the year, and costing not over |500,000. From this presentation it is clearly manifest, it seems to me, that through the em- ployment of the forces of nature, through discovery, through invention, by capital and labor working together, there has been a great increase of accumulated earnings. Labor claims that it has done pretty much all that has been accomplished, aud that capital is oppressive. Waiving for the present an examination of the claim, let us glance at some of the accumulations of labor and capital jointly during the last few years. The fir.st savings bank in this country was established in Philadelphia in 1816. The^ deposits in 1830 in all the banks of the country were about six millions of dollars. In 1876, as by the American Almanac, they were a thousand million dollars. In general banking we have no data of capital in 1830, but the circulation in 1830 was $74(248,000, or 15.77 per individual. In 1874 the circulation (greenbacks and national bank notes) was $777,538,000. or $18.14 per individual. I suppose that to-day it would not be more than $16 per individual, but I have not the figures. The national bank exhibit for December, 1877, shows : Capital paid in $479,467,000 Surplus fund 122,776,000 Undivided profits 44,572,000 Individual deposits 616,218,000 Or a total of 1,2 63,033,000 Other banks and trust companies, capital paid in 223, 503, 000 Deposits 1,351,867,000 1, 575, 370, 000 Total banking 2,838,403,000 I have not been able to obtain, in regard to insurance, full data. Fire and marine insurance are of ancient origin. Life insurance belongs to the new civilization. 626 DEPRESSION IN LABOR AND BUSINESS. New York joiut-etock companies in 1H77 had gross assets to the amount of $r)9,661 ,000. The companies of other States doing husiness in New York had gross assets to the amount of $77,047,000. The Connecticut fire companies had gross assets to the amount of $100,000,000, the Connecticnt life companies 197,000,000, and the Massachusetts fire and life companies $140,000,000, making a total of |414,047,000. It is probable that the assets of all the insurance companies in the country will aggregate about $800,000,000. In railroads, the stocks and bonds in 1878 amounted to $4,413,000,000. Of course there is a large amount of indebtedness on them. As to national and State securities, the amount of national securities in 1877 was .$2, 060, 000, 000 State securities in 1870 ^08,000,000 County securities in 1870 157,9.55,000 The secnrities of 1-^6 towns in 1876 (according to the American Almanac, page3e-2) 644,119,000 Total 3,730,074,000 The national bonds held abmad are said to be no more than $200,000,000, and onr total indebtedness held abroad is supposed to be about $500,000,000. The aggregate capital in banks and insurance, railroads, national, State and other bonds, thus gives an aggregate of about thirteen thousand million dollars. In 1870 the census gave the value of property in the United States at thirty thousand sixty-eight millions. A writer in an English statistical journal, in June, 1877 (Mr. Bouve), says that the wealth of England is increasing at the rate of twelve hundred and fifty million dollars per annum. Mr. Gladstone says that the development since 1800 is greater than tbat from Julius Ciesarto that date. Mr. Edward Atkinson has shown you that labor takes 95 to 98 per cent, of the earnings, leaving to capital froui 2 to 5 per cent. I have nothing to say on that point, and therefore pass it. But capital is liable to utter annihilation. I have no data in reference to the amount lost by tire per annum, but several gentlemen conversant with insurance have given me their opinion that it amounts to at least $100,000,000. Invention destroys capital. The manager of the Amoskeag Mills, Manchester, N. H., informed me that no manu- facturer could afford to take as a gift to-day a manufactory equipped as it was in 1860. A gentleman from South Carolina informed me that one of the manufactories in that State was sold the other day under the auctioneer's hammer ; that the men running it had been running the same machinery that was in use before the war, and that it had bankrupted them simply because invention had gone on so far and so fast, that no man can take the machinery as it was in 1860 and run it to-day and make a living. The Chairman. Onr own iron-works at Trenton were begun in 1845. They have been rebuilt practically five times since 1845, absolutely rebuilt, not on account of de- struction by fire, but in order to keep up with the improvements. I speak of rolling- mills. Furnaces have had to be rebuilt in exactly the same way. For instance, no fur- nace that was in existence twenty years ago could be run to-day. No man could aft'ord to take it as a gift and run it. Mr. Coffin. Progress destroys capital. Fashion destroys it. A few years ago there was a large amount of capital invested in the manufacture of hoopskirts, IJut the ladies took it into their heads not to wear hoopskirts any longer, and that capital was utterly annihilated. One remarkable thing, however, has come out of the capital in- vested in the manufacture of crinoline skirts. The inventions in the manufacture of the steel used (thin strips of steel) have been turned to good account in other depart- ments of industry. Change of style destroys capital. If you go into one of our manufactories of mixed goods (cotton and wool), you willfind that the change in taste is constantly compelling the owners to banish their old machinery and put up new. At first sight it seems to destroy the laborers' capital, the skill of handicraft which enables him to earn more than the wages of mere unskilled labor. But I think that the modern training of the workshop gives him something better than manual skilly namely, the intelligence to learn new things ; and this is a capital which a change of fashion does not destroy. In order to show instances of the extinction of capital, 1 will state that in 1878 there were in this country forty- eight railroads in bankruptcy. These companies represented thirty-nine hundred miles of road and three hundred and twelve million dollars of c apital. Lai5t year twenty-seven railroad companies, representing thirteen hundred and twenty miles of railroad, had receivers ajipointed. The Chairman. Was there any extinction of capital in that case ? Mr. Coffin. Yes ; about one-half. The Chairman. What kind of capital? Mr. Coffin. Bonds and stock. The Chairman. Was it capital ? Suppose I mark up my goods, have I a right to regard that as capital ? The fixed capital was the railroad itself. That still survives.- What was wijied out ? Mr. Coffin. The real capital was what the road cost. The Chairman. But after it became fixed, then the capital is not what the road cost,, but what it was worth. DEPRESSION IN LABOR AND BU.SINESS. 527 Mr. Coffin. And if is not worth what it cost, or if it never will be worth what it cost, it is so much aociiniulated capital lost forever. Mr. Thompson. Somebody lost the money invested in the bonds. The Chaibman. Provided they paid for them. Mr. Thompson. Of course they paid for them, otherwise they could not have pro- ceeded against the company. Mr. Coffin. 1 come now to the causes of the present depression. Under this new[ civilization an amount of capital has been called for far beyond the accumulations ofl the past, and the future has been drawn upon as never before in the world's history, j The country tied up in mortgages all its past accumulations and all its prospective/ earnings for a long period of years. Everybody issued promises to pay. The out- standing bonds of the United States at present are to the extent of more than twol thousand million dollars. The States, counties, cities, towns, villages, railroads, man- \ ufacturing companies, churches, societies, individuals, all issued promises to pay. We constructed railroads where they were not needed, in solitudes where there was no present and but little prospective revenue. We laid out towns in the wilderness, giv- ing a fictitious value to land. That which had had no value suddenly became assets upon which we issued more promises to pay. Multitudes, instead of producing, turned their attention to creating fictitious values, upon which they issued promises to pay, j adding nothing to real accumulations, but, instead, mortgaging prospective earnings. It was in no sense real capital, but it could be used as real. We purchased carriages, pictures, books, pianos, articles delightful to have, but which produce nothing and which are constantly depreciating, and we paid for them in more promises to pay, increasing the lictii ious value, but adding nothing to real accumulations by the pro- cess. So long as we conld meet our promises to pay by issuing more promises the miner went on mining, the furnaces blazed, the rolling-mills turned out iron, the railroad- builders went on laying down tracks in the solitudes, trade was lively, and every- body seemed to be on the road to fortune. We bought and sold, scattered that which we called money right and left, losing sight of the fact that everything in the uni- verse is under the domain of law, and that sooner or later the laws which govern human progress, which are powerful to build up, are equally powerful to destroy. Society is so complex, so interwoven and interdependent under the new civilization, that any derangement of one wheel in the system will be felt in every part. We had used up so much of our past accumulations in unproductive enterprises, had issued such an enormous quantity of promises to pay, that, when in Irtl'i, a firm that had issued large promises, failed to meet its obligations, the whole fabric tumbled; other firms failed to meet their promises, and there was a general stoppage of the entire machinery, throwing a multitude of men out of employment. There was nothing for them to do, nothing to pay them with. Then came the clearing away of the wreck by trustees, receivers, courts of insolvency, the wiping out of indebtedness of railroads, trust companies, and savings-banks. Men who had invested their earnings in them, who thought themselves rich, saw their assets disappear like the fog before the sun. In addition, cities, towns, counties, and States openly repudiated their solemn obliga- tions. Am id this wreck and ruin labor complains, and we are brought to the question of present earnings and havings. I refer, in this connection, to the statement of factory operations given by Mr. W. A. Burke, of the N. E. Manufacturers' Association, show- ing that the factory operatives in 1838 worked seventy-six and one-half hours, and in lb77 sixty hours per week ; that in a factory in Nashua, N. H., with6,100 spindles, the number of hands employed was, in 1838, 28 males and 213 females, total 231 ; and, in 1877, males 15, females 7.5, total 90. The increase of wages comparatively was, for males 40 per cent., for females 47 per cent. The amount of production in 1838 was 1.01 and 3.33 pounds of cloth in 1877. The cost of production was 4.79 in 1838 and 2.58 in 1877. This advance of wages, this decrease 'of the cost of production, was brought about by annihilation of the original capital. The records show the earnings and the prices of board in 1860 and 1878. They are as follows : Average earnings of girls, per week, in 1838 |3 26 Board paid by the girls themselves - 1 37 Their net earnings 18^ Average earnings in 1876 ■ 4 34 Board paid by the girls '^ 10 Their net earnings 2 24 The Chairman. How much is the present rate of board— that of 1878 ? Mr. Coffin. Two dollars and ten cents ; that is what the girls pay. The Chaikman. It is very low. , , , , Mr. (;0FFiN. Yes, sir. The quality of the board was probably better m 1878 than it was ill 1838. Through the kindness of Col. Carroll D. Wright, of the Massaohu- 528 DEPKESSION IN LABOR AND BUSINESS. setts statistical bureau, I am able to present the following statement compiled from his forthcoming report on the increase and decrease of wages in Massachusetts in 1878, as compared with 1860: Per cent. Agricultural laborers, by the day (increase^ . . 38 Agricultural laborers, by the month (increase) . . 15 Blacksmiths (increase).. 47 Book-binding, men (increase).. 17 Book-binding, women (increase).. 14 Boots and shoes (increase).. 26 Bread and crackers, men (increase) . . 38 Bread and crackers, women (increase) . . 13 Boxes, men (increase) . . 3 Boxes, women and girls (decrease) . . 12 Brick-makers (increase).. 12 Brushes, men (increase).. 9 Brushes, women , (decrease).. 6 Brushes, boys (increase) . . 25 Building trades (increase).. 16 Cabinet, men (increase) . . 6 Cabinet, women (increase) . . 16 Carpenter (increase).. 23 Carriages (increase).. 30 Clothing (increase).. 8 Cotton goods .' (increase).. 19 Dress-making (increase).. 19 Leather (increase).. 28 Linen (increase).. 20 Machinists (increase).. 27 Cutlery (increase).. 9 Soaps (increase).. 15 The Chairman. It is interesting to observe in your running through the table that the higher the grade of intelligence — so far as I can judge from your reading there — the greater is the increase of the rate. Mr. Coffin. Yes, sir; in most cases you will find that to be the rnle. Mr. Coffin (resuming) : Ffr cent. Type ■ (increase).. 16 Metals, fine work, jewelry (increase).. 25 Millinery (increase).. 23 Paints (increase).. 28 •P^PS'i" ' (increase).. 41 Envelopes (decrease).. 11 Painting (increase).. 30 Snips (decrease).. 52 Silk '. (increase).. 45 Soap and candles (increase).. 13 Stone-cutters (increase).. 8 Tobacco (increase).. 22 Woolen goods (increase).. :"! Worsted goods (increase).. 22 -A-verage (increase).. 24.4 The Chairman. In regard to the showing for paper, can you account for that? Mr. Coffin. I presume that in these figures the compiler may have included under that head not only the manufacture of paper, but the business of paper-hanging. The Chairman. That is true ; there may be the decorative part ; I do not know what all may be in there. Mr. Coffin. I am also enabled, through the courtesv of Colonel Wright, to present a list of the average retail prices of articles of living 'for 1860, 1872, and lb78. I will not give them unless you desire to have them. The Chairman. I was going to ask you what is the average rate of increase or de- crease. Mr. Coffin. I will give you the average rate of a few of the articles in 1878 as com- pared with 1860. In the matter of groceries, the increase was 7 per cent. ; provisions, 28 per cent. ; fuel, 5 per cent. ; in dry goods, a decrease of 9 per cent. ; boots, increase of 18 per cent. ; rents, increase of 25 per cent. ; board, increase of 49 per cent. The average increase of the cost of living is 14^ per cent. I will run over a few of the articles that are given here in the table showing the average retail prices. These are as follows : Flour (superior and family), rye flour, corn-meal, codfish, rice, beans, tea, cotfee, sugars. BEPRESSION IN LABOR AND BUSINESS. 529 molasses, soaps, staroh,.beef (rump sfeak), mnttoti, pork, ham, lard, mackerel, butter, cheese, potatoes, milk, eggs, coal, wood (hard aud pine), shirtings, sheetings, canton- flannel, and so on. The Chairman. He arrives at his average by dividing all those articles into the total amount, I suppose. Mr. Coffin. I do not know how the average has been obtained. The Chaikman. That would be the ordinary way of obtaining it ; yet the staple articles alone ought to be the ones he would take in order to arrive at a decision on that point. Mr. EiCE. Do you think, Mr. Chairman, that the staple articles show an increase ? The Chairman. My experience ia that such is not the fact. Indeed I may say that my own books show that at no time since the concern in which I am interested has existed have the prices of pork and flour been as low as they are to-day. > Mr. Rice. Those are the two things that enter most largely into daily consumption. The Chairman. My conclusion is that pork and flour are cheaper now than they have been since 1861. Mr. Coffin. The figures given in this table for flour in 1861 are : In 1860, $7.61 ; in 1872, $10.75 ; in 1878, $8.63. The Chairman. Flour is rated very high there, it seems to me ; but then he has possibly given the retail prices. Mr. Coffin. The "Haxatl" flour is probably here given. The Chairman. That flour is not in general use. That which we use at our works is the New York State superfine flour. It is a grade which we buy now at a little less than |I5 a barrel, aud we buy pork at 8 cents a pound. It is incredible, but we are doing it. Mr. Coffin. From this exhibit we see that so far as labor in Massachusetts is con- cerned the increase of earnings since 1850 is 24.4 per cent, and the increase of expense 14.5 per cent.; this on a basis of sixty hours per week against seventy-six and one-half hours per week in 1860. The Chairman suggested the propriety of some such revision of the figures just read as would show more definitely the facts which they purported to substantiate. As a case in point, he referred to the matter of sugar, upon which in 1S60 there was a very low tariff, while now we have a very high tariff; the effect of this upon the price and necessarily upon the expense of living to the workingman, being one of the points which required more explicit demonstration. Mr. Coffin. I concur fully in the suggestion. The showing here given is based upon sixty hours per week as against seventy-six and a half hours in 1860. In this connection I give a statement taken from the Charleston News and Courier of January 8, in regard to prices in that city and the effect of resumption. It is as follows : "The United States is now standing on a gold basis, and every transaction measured .by that. To this the country has been tending for three or four years. On January 1, 1878, in Charleston, a pound of bacon, a ponnd of lard, a bushel of corn , a pound of sugar, a gallon of molasses, a pound of coffee, a bushel of salt, a pound of rice, and a barrel of flour, bought at wholesale prices, cost altogether $7.31. These same things can be bought to-day for $5..'S5. The reduction is 2i per cent. That is, every dollar now earned goes as far in buying necessaries of life as a dollar and a quarter went a year ago. Wherever wages have not been reduced since last January, they who earn them ai-e really getting a fourth as much more as they were get- ting then." Referring again to New England, we find that in 1845 farm hands received ten dol- lars per month, with board in summer, and lived in enforced idleness in winter. In 1878 they received from sixteen dollars to eighteen dollars per month, with board, though they had not, probably, much more to do in the winter season now than they had in 1845. Mr. Rice. In many sections they are kept working in the winter upon the bottoming of chairs and in many other kinds of labor sent out from the factories. The shoe busi- ness also is carried on more extensively in the winter than in the summer. Mr. Coffin. The shoe business is spasmodic. The hands have more work in the winter than in the summer, as a rule, I think. I wish to call attention to the fact that no farmer. East or West, could now afford to pay to a laborer who can only use his muscles even such wages as he could afford to pay in 1845. The crop would' cost too much to export, too much to be freely used at home. In point of fact he does pay more wages per day, which shows that the demand for labor has not fallen off; he raises each bushel of grain at a less cost for labor. Ma- chinery enables him to reconcile these two conditions. The complaints of distress that reach this committee come from laborers ; but therer is another class in the community who have not asked for relief, whose distress is quite as great as that of those who ask that the government shall give them employ- ment. I refer to that large class, made up in a great degree of women, who have seen 530 DEPRESSION IN LABOR AND BUSINESS. their aconmulated earnings STvept away by courts of insolvency or openly repudiated l)y sovereign States. It is hard to conceive of any condition more unfortunate than that of the men and women who, without any fault of their own, relying on the pro- tection givi n by law to depositors in trust companies and savings banks, find that the laws are powerless to protect them from the losses inflicted upon them : of those who, with implicit confidence in the pledges of municipalities, find that they have no re dress upon default of payment; and of those who, relying upon the honor and integ- rity of sovereign States, upon the guarantees of legisLitures, the signatures of governors and tieasurer-, discover ultimately that State honor is but a synonym for repudiation. Mr. Rice. You are leferiing now to that class of people who have accumulated a little money. Mr. Coffin. Yes, sir ; I am referring to those who have saved a little. The reason why I ir»troduce it is that, while one class complains of distress, there is another class which, it seems to me, are equally distressed, from whom I have not heard any com- plaint. Mr. Rice. They make complaints also. Mr. Coffin. They have not made their complaints to this committee, I presume. The Chairman. We have complaints from all quarters. But I think we have not had brought before us in a tabulated form the evil caused by the enormous accumu- lation of corporation and State debts; that is to say, the exactions which such debts make upon incomes, especially fixed incomes, io order to meet the taxes levied thereon. I do not think that that has been brought out as it ought to have been. Mr. Coffin (resuming). What is the result ? Capital folds it arms and waits, while labor, with nothing to live upon, looks in vain for remunerative employment. I The Chaikman. Your whole argument up to this point has been to show that there has been more occupation and employment for labor latterly than ever before, has it not? Mr. Coffin. Yes, sir ; not, of course, taking any one year, but a series of years or an average year. But capital does not go into new enterprises. It simply goes on in its old enterprises at a slow rate. I think you will find very few new enterprises starting. The Chairman. You mean to say that there is an indisposition to invest in new directions. Mr. Coffin. Yes, sir. The Chairman. We admit that. Mr. Coffin (resuming). Let me call your attention to the fact that repudiation by States and municipalities is a boomerang, which comes back to inflict a blow upon labor ; and that nothing can be more detrimental to the interests of labor than to make capital insecure. Now, Mr. Chairman, what has been made manifest by this review ? It seems to me that the apparent results may be summed up under the fol- lowing heads: First. That the earnings of to-day are from 40 to 60 percent, greater than they were in 1830, and 24 per cent, greater than in 1860. Second. That the cost of living in 1878 is but 14 per cent, in excess of what it was in 1860. Third. That the Jiavings of to-day are immeasurably greater than the havings of 1830, ^nd far greater than in 1860. Fourth. That the mass of the people are better fed, clothed, housed, and in posses- sion of more of the comforts of life than at any other period of the world's history. Fifth. That this change has been brought about by the development of the forces of nature through discovery, invention, the use of machinery, and the harmonious working of capital and labor. Sixth. That capital and labor, instead of being antagonized, are naturally helpful to each other ; and that any conflict between them is brought about by elements that are beyond the control of either acting separately. Seventh. That there are four such elements: discovery, Invention, fashion, destruc- tion. Eighth. That there must be an equalization between production, distribution, and consumption. Ninth. That at present the facilities for production are far greater than our facilities for distribution. The Chairman. What do you mean by "distribution" — the distribution of the com- modities or the distribution of the proceeds of labor? Mr. Coffin. 1 mean the distribution of commodities. The Chairman. Do you mean to say that we cannot distribute our commodities as rapidly as we can produce them ? , Mr. Coffin. I mean that we cannot reach a large enough area ; I mean that the depression of to-day, the stagnation of business, is for want of a market. The Chairman. That is one thing, and whether the people have the ability to buy is another. But you allege a want of facilities of distribution, and I was going to ask you, Have we not railroads enough to-day ; have we not an ocean and ships enough ? DEPRESSION IN LABOR AND BUSINESS. 531 Mr. Coffin. I do not think I have made clear the point that I wished to proaent. It was this, that there is a world outside of our own country which we have not reached yet, and that our facilities for distribution do not enable us to reach that. The Chairman. Let us see whether our facilities of distribution do not enable us to reach it. Have we not an ocean ? Mr. Coffin. Yes, sir. The Chairman. Is there any trouble in getting ships to go to foreign ports ? Mr. Coffin. A good deal of trouble to reach some ports. The Chairman. What is it. Mr. Coffin. It arises, in part, from the fact that steamships have superseded sailing- vessels, and we have no steam marine. ^ The Chairman. Do you not know that our ports are open ; that all the shipping re- quired is in existence, and is to-day lying idle for the want of business ? The ocean lines are anxiously looking for freight, but we cannot adequately supply them with business. Mr. Coffin. We can iind steamships enough to ply between this country and Englaud, but I will bring up in reply the argument which has been frequently made in advocacy of a steamship line to Brazil. English steamers will take », cargo of goods from Liverpool to Brazil, a cargo of coflfee from Brazil to New Orleans, a cargo of cotton from that port to Liverpool, but on no account will they take a cargo of American products back to Brazil, even at higher races than to Liverpool, for upon the whole it is not for their interest. The Chairman. Your answer does not meet the point. The reason why a line has not been established is that there are not freights enough for it. Mr. EiCB. Assuming that the freight at this end would be sufficient to meet proba- ble requirements, the question would be what profitable disposition could be made of the freight when it reached the other end. The Chairman. There was no market there for our goods, for the reas on that our own were undersold in the market there by British goods ; and the reason was per- fectly obvious in the fact that we taxed our raw material and then carried the prod- uct to Brazil to compete there with a nation which did not impose a tax on raw mate- rials. If, therefore, you refer to the abolition of our shipping as one evidence of a lack of facilities of distribution, you are in error. When you say it is because of the want of a market, I agree with you. If you will point me to any agency of distribution that is defective, I will be glad to agree with you as to that. Mr. Coffin. The question of tariff and free trade is so wide, that you can hardly expect me to enter upon it in this connection ; but the fact remains that, from some cause, 'w,& do not have a foreign market for our products. What I wish to say is that the American manufactlirer has not such facilities for distribution as his competitor across the Atlantic. The British Government, by its system of ocean postal service, reaches every country with its steamers, giving constant facilities to the merchant and manufacturer. The American manufacturer has no such facilities for distribution, and I do not see how he can find a market. England aids her manufacturers through her postal service. Our government does nothing of the sort. But I think that is not the only, perhaps not the greatest, difficulty. To go no further, there are consumers unsnpplied in every house in Mexico and South America. The manufacturers of this country are capable of producing enough to supply them. So far as cost of manu- facture is concerned no one can do it more cheaply. Mechanical skill has furnished and is ready to furnish every physical appliance for communication and transporta- tion. It is the business of the merchant to place that product at that consumer's house, and he does not do it. Whether it is because he lacks skill and enterprise or because the laws are unfavorable to trade I will not discuss. It is enough to say that the fault does not rest with the manufacturer or the machine builder. It is the same with regard to internal commerce. The cost of manufacture is, in general, very small as compared with the increase of price that comes in between the factory and the consumer. We must find some way of improving this wasteful and, therefore, imperfect method of distribution. Tenth. I state, as the tenth in order of the series of results shown, that the laws of progress will ever require a readjustment of labor; that discovery, invention, and fashion will ever force men to abandon their old and seek new occupations. I Eleventh. That every advance in inventions will demand a higher degree of Intel- 1 ligence, requiring a higher education. jl Twelfth. That men must accommodate themselves to the laws of progress or be crushed by them. Let me not be misunderstood on this point. The laws which un- derlie progress are physical. No legislative enactment can alter, amend, or stop their working, and any attempt to accomplish such an end by any such means w^ould be as futile as would be that of attempting to protect from injury a man who happens to stand in the way of the thunderbolt. I assert with emphasis, that under these laws labor will ever be compelled to seek new employment and that .capital will ever see itself annihilated. 532 DEPRESSION IN LABOE AND BUSINESS. Under the new civilization there has been a higher plane of living. We are not content now with what satisfied us in former days. There has been also a develop- ment of humanitarian sentiment. Man is more than an animal; he must do more than simply exist. I am glad that it is so. I am glad that men in the lower strata of society are not satisfied with things as they are, hut are reaching out after something higher and better. The idea thac men must have more than bare existence has so permeated society that penal, reformatory, and charitable institutions now have com- forts that were unheard of a half century ago. Mr. Bonamy Price* states that it has been officially announced that the present cost of maintaining one thousand paupers in London is five times greater than it was in 1815. The British blne-book shows the advance made since 1863. In the table already given we saw that the total number of persons relieved in England in 1863 was 1,142,624, at a cost of £6,527,036. That was at the rate of $28.50 per individual, reckoning $5 to the pound ; whereas in 1^73 the number relieved was 742,703, at a cost of £7,400,966, at the rate of $49.50. In Scotland the number relieved in 1863 was 120,284, at a cost of $30.55 per person ; while in 1876 the number was 96,404, at a cost of $44.60 per person. In Ireland in 1863 the number relieved was 66,228, at a cost of $52.90 per person ; while in 1876 the •number relieved was 85,330, at a cost of $65.11 per individual. It is evident that the differences do not arise from any corresponding increase in the price of provisions; and I think it is equally clear that they do arise from the increase of articles now regarded as necessary to human comfort. We have seen the bank circulation increased from $5.77 per individual in 1830 to $18.14 in 1874. With increase of production there was increase of consumption. We issued i)romise8 to pay, and purchased our carriages and pianos and picttires, and went on till prudence became improvidence. We took it for granted that things were to go on just as they were going. We became extravagant in everything ; rich and poor alike lived up to and beyond their means. To-day we are compelled to study ecou- -omy, to deny ourselves things that we formerly enjoyed, and hence the widespread restlessness and discontent, and hence the appeal to Congress to give employment to the unemployed. I need not enter upon the question of the power of Congress in the premises. I have only this to say in connection, that any restriction of the hours of labor; the removal of the poor of the cities to farms; the construction of public works that are not needed ,will not give any permanent relief. If the government has works that need to be carried on, very well, let them go on ; but it is just as wise to employ men to remain idle as it is to employ them to do that which we do not need. In any case the tax- payers must foot the bill. The Chairman. Suppose that in a community there are many families who do not want to be idle and would be glad to work on the Western farms, who can find no em- ployment here at their own business, and want to go to the West — do you not think it would be advantageous to the nation if those people could be transferred from the place in which there is no work to a place where there is work ? Mr. Coffin. I do, but I do not think it is the province of the government to do that. The Chairman. Do you mean to say that the government should not do it because the question is a difficult one, or that we should not do it on politico-economic grounds ? ^ Mr. Coffin. I think it is a question of political economy. The Chairman. Do you know that there have been and are at this time governmental colonization schemes, such as this one, in operation ? Mr. Coffin. Othernations have put the principle in operation, but, in so doing, they have assumed to be paternal. Our own government is founded upon a principle the reverse of that idea ; this is a government of the people. The Chairman referred, by way of illustration, to the Canadian policy in offering inducements for immigration, the effect of which was apparent to-day in taking from Great Britain her surplus population. He knew of no moral principle which would prevent a nation encumbered with too many bees in a hive from assisting, out of the accumulated property which all had gathered together, those of its people who were willing and desirous to cultivate new lands and make new homes within its borders. The question of constitutional power in the case of our own government was quite another consideration, but, with reference alone to the abstract principle involved, he failed to see why the people of a nation could not be assisted in this way when, other- wise, they wonld be compelled to stay at home unable to produce an equivalent for that which they consumed. Mr. Coffin. I think that any such scheme, if carried out, should be through that humane sentiment of the community, which manifests itself in voluntary contributions and diffuses among men a spirit of brotherhood. The Chairman. I understand you to say that it would be better to have it left to individual action rather tiian to the government, because in the hands of the latter it would not be an economical or wise mode of doing it. *Political Economy, page 237. DEPRESSION IN LABOE AND BUSINESS. 533 Mr. Coffin. I think it would not be a wiae mode of doiug iti The Chairman. But you do not object to its being done ? ^" '6 Cotton stockinis Doz. pairs . . 1, 105, 666 364, 054 Mixed goods, cliiefly cotton Yards.. 11,833,900 429,405 In contrast, our own export was equivalent to only about 76,000,000 yards. It is a well-known fact that American cotton goods are superior in their make to the English ; that English manufacturers are using American trade-marks ; that English manufacturers have carried "sizing," to an extontwhich has become prejudicial ; that their excuse is that they cannot compete with American manufacturers in the making of substantial goods. It seems to me morally certain that we shall take a portion of the present trade of England from her hands, and that we shall secure our fair share of the increase. On the other side of the globe, in China and the other countries, there is a popula- tion variously estimated at from two hundred and fifty to four hundred and fifty millions. Before the war in 1860, for instance, our exports to China were about four million yards. England sent ont to China in the same year about thirty-three thou- sand pieces of goods (the number of yards has not been stated), and our export was larger Ihan that of England. The war swept that trade entirely away. Last year we sent ont to China eleven millions of yards and England sent out three hundred and seventy-eight millions of yards. That is the beginning of a volume of consumption which has yet to develop itself in China. That is a trade which it is possible for the American manufacturer to obtain wholly. The Chairman. Do yon know the rate of wages for workingmen in China? Mr. Coffin. I have not the data, but I know it is very low. I know from personal observation that a very large number of people procure but a bare existence. The Chairman was understood to remark that on the plains in China the rate (meas- ured by file money of the United States) was a little over two cents a day. [To Mr. Coffin.] Do you know anything about the facility with which the Chinese workmen learn to do anything that our people do ? Mr. Coffin. Yes, sir. They are exceedingly imitative. The Chairman. Do you not foresee that when the demand of the Chinese for cotton goods has been largely increased they will utilize their facilities for the manufacture of cotton ? Mr. Coffin. I do not. The Chairman. Why not ? Mr. Coffin. Because they have not the land for the purpose. The Chairman. What would be the cost of freight to China on a bale of cotton goods ? DEPRESSION IN LABOR AND BUSINESS. 535 Mr. Coffin. I do not know that the freight on a bale of cotton would be much less than that upon an equal weight of cotton goods. The CHAiiiJi.vx. Su]ipose, then, that when we were about to send them our goods the Chinese would say, "We will not take the goods; we will take the cotton itself" ; would not the result be that they would take the cotton and make the goods for less money than they would pay to get the cotton ? Mr. COFFix. I do not think that capital would ever go to China to make Chinese manufactures. The CuAiRMAX. Will not capital go where it can make the most money? Mr. Coffin. I admit that it will go where it can make the most money and get it home safely. The Chairman here remarked that in a letter recently received by a friend of his ■ from Mr. Hague, the geologist, now engaged in China in surveying, the statement was made by that gentleman that he had found on the banks of a navigable river a bed of coal and iron ore of the very best quality, where labor was abundant at two cents a day, where the people are a strong, stalwart race, capable of doing good work, and that there was no difficulty whatever in producing pig-iron at four dollars a ton in our money. Under these circumstances he (the Chairman) was more apprehensive of dan- ger than sanguine of any possibility of good to us from the demand that was likely to come from the direction indicated ; for when the market in China was once opened we would be confronted with four hundred millions of people who could live at a cost of one-tenth of that paid by our own people, and who were quite as capable and in- telligent as our own. We saw there a race of people who had learned to live upon so much less and learned to do so much more, comparatively with our own people, and where all the conditions for the manufacture of raw material were as favorable or more favorable than they were in any other place in the world. Mr. Coffin. That is, of the raw material on baud. The Chairman. No ; but of the raw material that may be imported. The difference in freight is so small that a bale of cotton could go, I believe, at as low a rate as could a bale of goods ; and if that is the case, there is nothing to prevent the Chinese from working up the raw material which they have purchased from you and competing with you in the sale of your domestic manufactures. Mr. Jones. Nevertheless, Mr. Cbairman, we would get the value of the bale of cotton. Mr. EiCE. Yon will sell the cotton, but we will not make the cloth. Mr. Jones. Then so far as the interests of the South alone are concerned we would be benetited in securing a new market for our cotton. The Chairman. Of course you of the South would not be injured, but I want to know where we, who make the cloth, are to come out. Mr. Coffin. I think it will be a long time before we are called upon to compete with the Chinese in cotton manufactures. Tliey are imitative, but not progressive. The Chairman. It may be a long time coming, but it uiay come. Mr. Coffi^'. There is one element in connection with thesnbjectof progress in China to which I would like to allude here. The Chinese religion is a barrier to progress. You go to China and yon find it a vast graveyard. The resting places of the dead in that country are kept witb reverentialcare. The people worshi p their ancestors, and they entertain the belief that their ancestors in the spirit world need the same things there that they needed when they were in this world. You will find, as you go along the streets, day by day, basketahung out on the fronts of thehouses as receptacles in which the people place their offerings for the benefit of the departed. They fashion their gifts after such patterns as will be most likely to indicate the particular employment which was followed by the departed in this life. They are made of paper, and may be a boat, may be a hoe, or any other implement; maybe an article of clothing. These offerings are finally all gathered together and burned, and the popular belief is, of course, that with the burning they go into the spirit-world and the spirits have the benefit of them. Then, again, a Chinaman, before sitting down to his table to dinner, takes his food into the ancestral hall (in which tablets are arranged around in commemoration of his ancestors), and there he offers his prayers, burns his joss-sticks, and implores his an- cestors to partake of the food. He believes that if he neglects any of these devotions his ancestors will punish him through reverses in his business or in other ways. My own belief is that so long as China in its religion is wedded to these superstitions, it will make but little progress in the way of adapting itself ^to modern improvements. I remember that when I was in that country, on one occasion, I went with a gentle- man throngh the city of Shanghai, and that when we came to the north gate we passed through and came to a wall built almost directly across the highway. We were obliged to pass around and get behind this wall in order to yiroceed. I asked my com- panion what was the meaning of that wall, supposing it was intended for a defense, though it was very curiously constructed. He explained that the wall was the Fung Shney (the meaning of which is good and bad influences), and that it was erected to prevent the bad spirits coming from the north from going any farther. It was popu- larly supposed that those bad spirits always came from the north, and that they 536 DEPEESSION IN LABOR AND BUSINESS. always came in a straight line; that they could not tnrn at a right angle, and that therefore this wall stopped their farther progress. Ho informed me that almost xha entire litigation arising in China was beoanse of this Fung Shuey. If a man bunt a house which would keep out from his neighbor the good influences which came from the south, or which would admit the had influences coming from the north, his neigh- bor would go to law about it. That is the reason why the telegraph line was cut down between Woosung and Shanghai ; it interfered with the Fung Stiuey. The .rea- son why the railroads cannot come in there Is because it is supposed that their influ- ence disturbs the graves of the dead, and that the etfectof their introduction will he to bring disaster, trouble, and sickness to the whole country. My friend informed me that the opposition to railroads was predicated upon the belief that they would dis- turb the entire religious sentiment of the empire. The Chairman. Suppose, Mr. Coffin, you were carried back to the middle ages in Europe (which have been appropriately called "the dark ages"), when there was but one church — you know what the influence of the church is supposed to have been — when all progress is supposed to have ceased for a thousand years. Is there anything in the tone ot the Chinese polity that is any more repressive of progressive influences than was the domination of the church then? Mr. Coffin. It is not merely the Chinese polity; it is the character of the Chiiiese people. They are more cultivated, more cizilized in a material sense, than the west- em Europeans of A. D. 1000 ; but they have not that spirit which led to the crusades and which covered the land with cathedrals. The church repressed an active spirit which finally overcame it. In China the obstacle to progress is in the people and not in the government. But if we have two hundred to look forward to, that is enough. I can hardly compare the two epochs and people enough to give a precise opinion. The Chairman. Yet it is a matter upon which we may readily base an opinion. Why may not a new era in religion be introduced into China with the new forces that accompany such modern appliances as railroads and telegraphs? To a man looking liack from the standpoint of to-day, the prospect would certainly appear a very hope- less one that Europe would ever emerge from the obscurity of the middle ages ; yet the world has come out of it very bravely. Mr. Coffin. I suppose that China will, eventually, come out of her religious dark- ness, but I do not expect to see it in my own lifetime. The CiiAiUMAN. A lifetime is comparatively a short period. Of course we are all looking ahead to the prospect of such a result. I agree with you that this country will get rid of her present difficulties at an early date. There is more labor unoccupied to-day than there was when the panic came npon us, but its pres- ence is not so apparent, because the covmtry has grown, and the necessities which are incidental to its expansion have given employment to additional labor; conse- quently, there is not so large a surplus of unemployed labor as there was at that time. The difficulty IS but a temporary one ; but, in looking ahead, I appreciate the fact that all the world has yet to face this fact, that population will finally grow up to the limit of the means of subsistence. That is the tendency. The reasons presented to this committee by the reformer.s, the gentlemen who have presented grievances here, are that there has not been a proper distribution of the fruits of human industry; , that some men can get too much and others, quite as deserving, get none at all. That is the problem which they present to us.' If you can throw any light upon that, as you have reached the end of your lucid statement, you will be conferring a benefit upon the committee, and upon the country as well, and we would be glad to hear any suggestions that may occur to you at this time on that point. Mr. Coffin. The condition that you have indicated has always been the condition of the human race. There always have been rich people and poor people, and there always will be. Some men can make money and some cannot. All who have the abil- ity to earn have not the ability to accumulate. It is a questicm of natural condition. No legislative action ever will change those conditions. When the Saviour of the world said " the poor ye have with you always, and when ye will ye may do them good," he I uttered an eternal truth. I do not see how there can ever be a complete solution of ^ the question. I mean by that, I do not see how it is possible for society to exist with- out a diiference in condition, but I fully believe that as the years roll on wealth will be more generally difl'used, that the poor will be better cared for and will have more of the comforts of life. I think that I have shown that the tendency of the new civili- sation is in that direction. The moral and Christian sentiment of the world lead in that direction, but Christian and moral sentiment cannot set aside the physical conditions under which the Almighty has created human beings, nor the physical laws with which ^ he has surrounded them. Many things can be done to reduce poverty to a minimum. Education maybe an aid; so may charity, temperance, and legislative enactment; but all of them never will absolutely abolish poverty from the world, for there are con- ditions and influences beyond the control of all these ameliorative agencies that will make some men rich and others poor. The Chairman. Suppose that when monopolies tend to give those who control them ' DEPEESSION IN LABOK AND BUSINESS. 537 a larger price than they would otherwise be ahle to get, legislation, yon say, cannot alter that. If we have a monopoly in any form disguised in our legislation, ought we not' to eradicate it at once ? Mr. Coffin. That is auotlier and quite a different point. It is the dlity of the legis- ^ lator to protect every mau in his rights, to see that no man who may hold a monopoly shall have the power to oppress you or any other man in his natural rights. The Chairman. Yes; hut that is only groping in the darli after all. What is law and legislatitm but the restriction of people in what may be called their natural rights ? The natural rights of one mau iutei-fere with the natural rights of another man. Mr. Eice and I may go into and settle uponsonie unoccupied territory, and each may lay claim to a particular tract that is more desirable than any other tract because of the presence of water or something else. We get to fighting about our claim, and the law steps iu or society steps in and establishes a rule by which his natural riglit and my natural right are subordinated to some genei-al law. Therefore, when you say that no mau can inter- fere with your natural rights, I answer that every man can interfere with your natu- ral rights under the law. Mr. Coffin. Take the case of the railroads, for instance. The Chairman. We will take the case of the railroads as you suggest. The allega- tion is that by legislation we have conferred large quantities of laud upon railroad companies; that they have monopolized these lands and excluded settlements which would otherwise have been made upon them by holding the land at higli prices; that what they have done is hostile to the natural rights of man; that this legislation is so vicious that we ought to repeal it ; and that if they (the railroad companies) have acquired any rights under it they ought to be more specifically defined. On the other hand, if this legislation had not been passed, and this land conferred as it was, we should still have had this vast amount of land tied up in its unimproved and com- paratively worthless state, as it was before. What would you do iu tliat case ? Mr. Coffin. There is another side to the question as you have stated it. There is a vast amount of land in this country, which, if those railroads had not been constructed, would not have been settled to-day. Take the Northern Pacific, for instance. I was one of a party who traversed the line of that road before a shovelful of earth had been thrown up. At that time there were not fifty individuals to be found along the whole proposed route, and the land was in exactly the condition in which nature left it. The men who built that road have increased the value of that land to the government to $2.50 per acre, and the government has received, I think, from the land offices along the line of that road nearly three millions of dollars. It was utterly worthless prior to the time when the projectors of that road, by their own individual enterprise and the use of their money, carried it forward to its present stage of completion. The question presents itself to us whether these men who are regarded to-day as monopo- lists and land-grabbers are not really benefactors. They have given value to the laud ; they have given homes to more than fifty thousand people who live along the line of that road to-day ; and they sent over to Europe during the past year over five million bushels of grain which would not have been produced but for the enterprise of the men who built the road. They have lost their capital, while the public has been greatly benefited. They are denounced as land-grabbers, whereas in fact they have opened a vast section to settlement and added millions to the national wealth. In- stead of excluding settlements they have invited settlers. It is not .true that they hold lands at high rates. Sales of the land-grant roads average between four and five dollars per acre, which certainly is not a high rate. The Chairman. Yes; that is the argument of the men who have built up some of our great public works, and is applied with reference to the operation of the tariff. We are met on the other side by crowds of people who say to us that " With all your protection, all your land grants, we are in a wretched plight ; before you did this everybody was comfortable, now we are suffering ;, you do not give us any consolation by telling us that somebody else is better off than he ought to be." What are you going to do in the case of those people ? Mr. Coffin. I do not think that I will take up the questions of tariff and free trade, but I would say to these people that they are not any worse off than they have been at other periods of commercial depression ; that such periods will occur in the future as they have in the past ; that they are incident to civilization ; that legislative action never will be able to wholly prevent their occurrence ; that the legislative action that they ask for would give no permanent relief. There are two or three points to which I have not alluded, but I will do so now as they touch upon the point which you have just suggested. I refer to disturbing ele- ments. The production of gold and silver in this country since 1849 amounts to $4,500,- 000,000. That has been one disturbing element. The Chairman. Do yon mean as a benefit or an injury ! Mr. Coffin. I am not prepared to make any remark upon that, only that it has been a disturbing element. 538. DEPRESSION IN LABOR AND BUSINESS. The Chairman. Yon call it a "disturbing element," but I ask you has the effect or its disturbance been for good or for evil ? ... Mr. Coffin. It has disturbed values; it has had both a beneficial and an lujunous effect upon them. The Chairman. Its effect would be to enhance values, would it not ? Mr. Coffin. Yes, sir. , j. i The Chairman. Yet you have been endeavoring to prove to us all along that values are falling oft? ^ „ ^ , n. Mr. Coffin. Not quite, sir. Certain particular values have fallen oft, because the cost of production has diminished, or because certain things have gone out of use. But wealth has accumulated. Labor has a higher value and will bring more comforts than a hundred years ago. But I have not yet shown the applicability of this point in connection with my previous argument. I was going to remark that when I visited India a few years ago, I found that the cost of living was greater than it had been ; and it is greater to-day than then. The same is true of China. Then the next consideration is that this great increase of the precious metals has been productive of speculation. The speculation in mining stocks which is going on to-day, on the Pacific coast, is the cause of a great deal of distress. The disturbing element manifests itself especially In that direction. The Suez Canal is another disturbing element. Free labor is another. The amount of capital invested in the South before the war for raising one hundred bales of cotton was as great as that which is to-day invested for the raising of one thousand bales. The Chairman. There never was in reality any capital in the slave ; the war left the laborer in the South just where he was, and his master who thought that he had capital in his slave, found that he had never had any capital. Mr. Coffin. Then the petroleum product was another disturbing element. These brought on inflation. The war and the issne of paper money also came in as disturb- ing elements. Now, it is not probable that these same elements or anything like them will come in to disturb us in our immediate future. Therefore, I say that I look for a remarkable degree of prosperity in this country. I do not see how it is possible for the country the next twenty-five or fifty years to be disturbed by any causes such as those I have enumerated. The Chairman. You think, then, that in a normal condition of things the distribution of labor and capital becomes well settled and will be harmoniously adjusted; that in the near future everything will go on smoothly and in proper relation, the one to the- other, this being what you call a prosperous condition of the community ? Mr. Coffin. Yes, sir. The Chairman. And that when a disturbing element enters in dislocation ensues, which while it makes some people rich makes others poor? Mr. Coffin. That is the inevitable result. The Chaiuman. Could not legislation contribute greatly to remove these disturbing causes '? ' Mr. Coffin. I think so. The Chairman. Could not legislation contribute to prevent these disturbing causes ? Mr. Coffin. I think not to prevent them. The Chairman. I admit that legislation cannot wholly prevent them, but can it not accomplish that olijeot in some degree ? Mr. Coffin. Unquestionably ; but it is a question which requires the highest states- manship. I do not tliink that commercial distress in the future will be avoided by the adoption of any of the theories or plans that have been presented to this committee, so far as I understand them. The Chairman. One point of your testimony has been the proof that there has been an enormous increase in the productive power of the world within the last century ; and you have shown it to be something so vast as to be simply fabulous. The world has been living after its fashion, and, as you have shown, has been growing in population at a moderate pace, while the increase of production has been enormous and very much out of proportion to the increase of population. What do you suppose has be- come ot all this vast increase in the material wealth of the world — who has got it, where has it gone ? ^ Mr. Coffin. Much has been destroyed. It has been more widely dift'used ; but allow me ' to state some of the questions that arise in the course of industrial progress, and tend to and relate to increase of production for each day's labor. As regards the man there are four kinds of progress. He may accomplish more in a day than formerly, because he has become intrinsically a more capable man ; more intelligent in the use of his brains; more rapid in the use of his hands, making no false motions and causing every stroke to tell ; or more industrious. Or he may accomplish more because the material conditions under which he works make his labor more productive ; i. e., many men are brought together under one head ; they are better organized ; their work is laid out for them, so that no time is lost; they become an organized army instead of an undisciplined mob. In the third place the material he works upon or the tools he works with may DEPRESSION IN LABOR AND BUSINESS. 539 be so improved that he can accomplish more in a day ; and these tools may be hand- tools, as the plane, the saw, the center bit, the steel shovel, or hoe, or pitchfork, or scythe, or cradle, or plow, as compared with the rude stone implements and the crooked stick of the primitive man ; or, fourth, they may be machine tools or machines. broadly (though not for all purposes precisely) distinguished from tools by the fact that the power, instead of being furnished by the hand that guides, is supplied from some other source, which may be a treadle or crank, and may be a steam-engine or water-wheel. {E. g., the old blacksmith gave power to his hammer by his arm and directed his arm by his will. It is hardly a figure of speech to say of the Nasmyth steam-hammer that the boiler supplies the power and the hand of the engineer, raised one step in the scale, becomes itself the intelligence which controls.)' The popular mind makes a dis- tinction between those improvements of the three first kinds, which better utilize the muscular force of man, and those improvements of the fourth kind (including discov- eries in chemistry and physics), by which the forces of nature are utilized. But for the purposes of this inquiry the distinction cannot be made, because greater intelligence, more skillful organizations of labor, and better tools are the result of or form part of the mental progress of civilization as nmch as the invention of machinery does ; and it is probable that their results in greater product from a day's labor have been larger than the results from the use of machinery in the modern sense of the word. And al- though the phrase "labor-saving" is popularly applied to machinery alone it belongs equally to all four lines of progress. If the welfare of the community requires that all progress shall bo stopped which will enable the worker to prodiice more to-morrow than he did yesterday, or enable a given product to be obtained by less labor, then prog- ress not only on the fourth line, but equally on all must be forbidden. Civilization would not do this if it could, for it will not destroy itself; with man to stop is to rust, to recede. It could not if it would, for the mind of society cannot tie itself up in in- action ; and if it once did it, it could not long stay in fetters of which itself kept the key. Since this tendency certainly cannot be (and I am sure that it ought not to be) repressed, let us see what questions arise in its progress. During the last thousand years the production in the industrial arts in civilized , countries has increased vastly faster than the population. The comforts and con- i veniencesof life have vastly increased, In other words, each household has more and better material things to use and to consume than it had formerly ; the increase in consumption has kept pace with the increase of production. I mean taking it in the long run. This is quite different from the question of increase of wealth. The large manufacturer of to-day may not grow rich — may not accumulate — any faster than ' the master workman of five hundred years ago. The laborer, at the end of bis career i to-day may have laid up nothing, but it is a good deal that during his life he has lived , in a wooden house with a carpet and decent furniture produced by the manufacturer I instead of in a hovel with a dirt floor and logs to sit on. This increased production he has consumed. He h.ns not destroyed it as a fire destroys ; he has worn it out in enjoy- ing it, and this is the fate of most things that are produced for the use of man. In-\, creased oonsnmption and production is therefore intrinsically a public benefit, even | where the producer grows no richer. This is seldom denied. The outcry sometimes made against increased production refers to a production in excess of the consumption. This trouble does not dome (necessarily) because production grows, but because con- sumption does not ; and an increase iu the latter is as legitimate a way of meeting the difficulty as a diminution of the former; more legitimate and more natural because it is in the direction of the invariable and irresistible progress of mankind anfl not in opposition to it ; and improvements in society must take place along a natural line of progress and not contrary, to the logic of events. At any given time there are two methods of increasing production. One is to dn-A plicate the jiroducing establishments, making no change in their character ; they will J manufacture more, but at the same cost per piece. The other is, by some of the means already described to increase the production from a given number of operatives. The first has the apparent advantage of employing more labor, but is only an apparent advantage, for if the increase exceeds the natural growth of population and wealth, i. e., if it increases faster than the number and means of the consumers, there will be failures, stoppages, and hands thrown out of employment. Historically this has been the case at the periods of great industrial depression. The high price of iron and con- sequent profits eight years ago led many men independently to put up new works, and when one found himself just ready to supply the unsatisfied demand, he discovered a dozen others equally ready, and this meant disaster for all, and the operatives just drawn to this industry were thrown out of work. And sO with other branches. So with railroads. The impetus of apparent or real great demand showing itself in great profits carried the pendulum too far. The other method is to increase the production of an establishment of a given size and given number of operatives by improvements in organization or machinery. This means larger production at the same cost for the total and a smaller cost per piece, i. e., it means a cheaper product. Now a cheaper product always means a larger consump- 540 DEPRESSION IN LABOE AND BUSINESS. tion; partly because people will spend at least as much as they can afford, and if tilings are cheaper will buy more of the same kind, or with the surplus money will buy other things; it is not desire nor inability to find something desired which limits expenditure with mankind, but want of means. More than this, the cheaper a thing becomes the larger the circle of possible and therefore certain purchasers and con- sumers, and wants grow by indulgence. The tendency of this kind of increase in pro- duction tlierefore is, of itself, to increase the consumption which will support it arid will maintain it. The improvements which lead to this increase do not, either in theory or in fact (the illustrations have been given at length already), tend to dimin- ish the total cost of production, but only the cost per piece. The cost of transporta- tion required by a population of 100,000 souls is to-day tenfold what it was 100 years ago. The railroad from New York to Washington costs for its construction and for its daily' operation many times as much as the stage-team of fifty years since. Bat it will do much more woik, i. e., is so much more productive, that the cost of each passenger or ton of freight hauled one mile has amazingly diminished. Almost every railroad that is started occupies a field where the existing work of transportation would not pay the increased expense of the new method, but it is projected upon the theory that the diminished cost per piece, so to speak, will increase the demand so as not only to compensate for that diminution in cost, but to far increase it ; will lead the inhabitants not only to spend as much but a great deal more in transportation than before. So much for the effect of improvements in existing industries. But besides that the same disposition to invent and improve leads to new industries. Sometimes strictly new industries, as in the case of printing, vulcanized rubber, photography, telegraphy, gas-making, steam transportation, and a host of other things; sometimes virtually new industries are made commercially practicable by a reduction in cost of some neces- sary thing or process. Many branches of trade and business to-day would be impos- sible without steam transportation and telegraphs. The habits and powers of business men have Ijeeu greatly modified by the sleeping-car. The Bessemer process for making steel not only employs, certainly in this country, far more men than the old process, but it has made possible many things which the old process forbade from the high cost. The steel rails have cheapened transportation. And the engineers say that a little more reduction in the cost of production will make it available for ship-building. The fallacy of those who object to improvements in labor-saving machinery and processes lies in the false assumption that as many articles would be made by the old and expensive method as hy the new and cheap one. This is absolutely untrue iu theory and in fact. One other point. The concentration of manufacturing operatives in large towns is not the result of the invention of power-driven machinery, but long preceded it. Five hundred years ago Florence was a city of artisans. In Queen Elizabeth's time certain industries were concentrated in certain localities. Forty years ago, when hosiery was made on hand frames in the workmen's homes, it came' from a few towns. Philadelphia was long full of hand looms worked at home. On the other hand. New England was dotted all over with little industries wherever a village waterfall fur- nished power. The moment industry got beyond the supply of a purely local demand, such as supports the village blacksmith, it became concentrated in large centers, where one master employed many'journeymen or piece-workers, and the product passed through the hands of the merchant and the avenues of commerce before it reached the consumer. The distinction between the village industry, where the man was half artisan, half agriculturist, and could support himself tilling the soil when his trade was dull, and the urban life where the man must find work in his trade or suffer, pre- ceded the use of power-driven machinery. This, however, increased the concentra- tion of operatives and of production in a particular locality. It also gave rise to the factory system, properly so-called, i. e., the collection of the work-people in one build- ing, instead of having them work at home on piece-work ; but the effects of that sys- tem belong to a different inquiry. Now the moment that production in one town exceeded the consumption of that town, agencies for its distribution must be set up. When increased production calls for or is intended to lead to increased consumption, there must be means for taking the products from the factory and offering them for sale to the ultimate consumer. The merchant and the carrier must come in. Commerce must be equal to the increased work put upon it, for if it is not, the whole fabric breaks down and the product is not consumed. Whether the merchant has grown in his ability to do this as much as the manufacturer has improved in his art, and what means should be takeu to improve him, are foreign to this inquiry ; the work of the mechanic and the mauufactiirer staps with the production, but it is a striking commentary on the inefficiency of the mer- chants of this country that in many trades the manufacturers have been forced to be- come their own distributors to the local retail stores. The suffering among the manufacturing population of England during the thirty years which followed the introduction of power-driven machinery, say from 1785 to 1815, was due largely to the failure of the merchants to reach consumers with the DEPRESSION IN LABOR AND BUSINESS. 541 product of the factories. Consider the enormous increase of goods to be distributed; canals were not ; railroads did not come till 1830 ; steam ocean navigation ten or fifteen years later. Commerce wag paralyzed by the material obstacles of blockades, orders in council, Berlin decrees; still more perhaps by the wars or rumors of wars which, during nearly all that period, checked the business of interchanging commodities, while a curious system of legislation did its best to prevent a supply of food from reaching those workmen whose occupations or mode of life made it impossible for them to till the soil. But as these obstacles began to disappear, England, with a vastly increasing production, entered upon a career of unexampled prosperity, because her merchants were equal to her manufacturers. The factory system, properly so-called — that is, the system of aggregating large num- hers of operatives in one Ijuilding under one control — has unquestionably in England at least required legislation to enable or compel the masters and the workmen to con- form to what the welfare of society under this system reqnired. But it is one of its chief merits that it brings the workmen under such organization that public opinion' and legislators can be informed about their conditions and can act npon them and im prove them. Reforms in ventilation, hours of work, labor, and schooling of children vrhich could not be enforced against operatives doing piece-work at home, can be en-| forced in a factory, and the necessary discipline of a large establishment requires more regular habits of the workman. Let me add one more remark about the factory system. It enables less skillful labor to be used under more intelligent oversight. The practised hand is less important than the quick brain. The number of foremen in proportion to the number of oper- atives constantly increases. The financial view of education is beginning to be felt. And it is not the apprentice system but the technical schools that will furnish the supply of overlookers. I think I see an improving tendency in this direction. The Chairman. You think that the great mass of mankind is much better off now than they were, and that that is the way in which the increased production has been used up, in making mankind more comfortable, prosperous, and happy ? Mr. Coffin. Yes, sir. The Chairman. Do you think that if the ownership of very large masses of this increased wealth was in » few hands, that fact would in any degree invalidate the proDosition which you now lay down that the great mass have been made more com- fortable ? Mr. Coffin. I think that it would. The Chairman. Do yon think that if this great increase of wealth were nominally owned by one single individual — a great king or emperor, or call him by whatever name you like — if he had the ownership of the whole of it, it would materially affect the comfort and enjoyment which the great mass of the people derive from it ? Mr. Coffin. I think it would diminish it very much. The Chairman. What could he do with it ? Mr. Coffin. I do not know what he could do with it, but I do not think that his monopoly of it could contribute to the universal happiness of free beings. All his- tory shows that it could not. In a free society the laws imposing restraint should be as few as possible consistent with the general welfare of men. The question which you have put is an abstract question, and it is not likely to call for any practical solu- tion in this country. The Chairman. Would you restrain men in the acquisition of property. Mr. Coffin. No, sir. The Chairman. Then if you do not restrain the acquisition of property, would yon do anything to prevent one man from acquiring a very large proportion of it, as many men have done? Mr. Coffin. No, sir. The Chairman-. But yon think it is injurious to have that condition of things exist- ing? Mr. Coffin. I think that, in consequence of it, the condition of society would not be so good as if it were very widely diffused. The Chairman. If it is bad for society, why would you not restrain it ? Mr. Coffin. Because I do not think it would be best for society to interfere. The Chairman. Is not society formed for that very object? Is it not declared in the Constitution of the United States that the government is formed in order to " pro- mote the general welfare," &c. ? Mr. Coffin. Ours being a government of the people, the people can pass what laws they please to promote the general welfare; but it is manifest that the general welfare can only be promoted by wise laws. For one, I do not think such a law would be wise, neither that it would commend itself to the general judgment. The Chairman. There is a point which I would recommend some intelligent man like yourself to consider, viz: whether, after all, it is not the function of society to introduce limitations upon the acquisition of wealth. There is no process by wliich any one man could have contributed to society one hundred millions of dollars, and yet 542 DEPRESSION IN LABOE AND BUSINESS. we have numbers of men who own tliat amoun t of value. In a case such as that, ''^"f'J a man has obtainerl a great deal of wealth, and never did anything to obtain it, will yon do anything to prevent it ? Mr. Coffin. Your question opens a very broad field. It is a question which con- fronts Eugland to-day ; whether with her acreage under cultivation diminisbir^g from year to year, the Duke of Devonshire and others of the landed aristocracy shall be allowed to go on and keep their game preserves. Behind that question lies another, as to what shall be the limit of ownership in land ; and behind that still another which the communist raises, whether a man shall have any individual ownership in land, or in anything else? When our fathers framed the Constitution they excluded primogeniture, rightly seeing that with such exclusion there could be no long-contin- ued inheritance of large areas of land. As a practical question I do not think that we •shall be called upon to grapple with it in this country. The CHAiEM/tN. In France you are aware they overturned the whole landed system by revolution. Suppose that Mr. Vanderbilt and other rich men like him would club together and make themselves proprietors of the State of New Jersey. Do you think that society would be justified in preventing them ? Mr. Coffin. Your question takes us back to the beginning of things, and the first point to settle is the original ownership. The first title-deed is found recorded Gen- _esis, chapter 1, verse 28, direct from the Almighty : " Be fruitful, and multiply, and re- plenish the earth, and subdue it." Subjugation is the title to ownership. Labor upon -the land is the only ground of ownership. To begin with, every man owns himself and all that he produces by the exertion of his powers. It is the fundamental condi- tion of existence. When he employs his power upon any material substance all that he adds to it is his. It is a natural right which society cannot interfere with. The earth was made for man ; from it he oljtains subsistence just in proportion as he em- ploys his powers. This whole presentation that I have given is based on the exceed- ing richness of nature. Land in its natural state does not supply man's wants. It must be "subdued." True, in the tropics it produces food-bearing trees, and it provides sustenance for game, but nothing more. When our fathers came to this country they found it a wilderness filled with game, and Indians that existed by living on the game. Did the Indian own the land ? He was in possession, but was his possessory title valid? Certainly not, for he had done nothing to "subdue" the land except here and there to scratch the soil. In no sense had he suljdued it. Until labor has been applied to land it is utterly useless to the human race. There are millions of acres of unoc- cupied land, rich and fertile, in this country to-day capable of producing twenty to thirty bushels of wheat to the acre in the possession of the government, which is only another term for the people; and the government, recognizing the fundamental law that labor upon land is the true and only title to ownership, says to every individual go and occupy eighty or one hundred and sixty acres of that land for five years, and yon shall have a title secured to you and your children forever. Or if you will pay $1.25 per acre you shall have it. Labor, occupancy, gives the right of ownership. Gov- ernment has not said that a man shall not purchase more, only that he shall not oc- cupy more without paying for it. Shall he be limited in his acreage by purchase ? If so, what shall be the limit ? Shall it be one hundred and sixty acres or one acre, or a quarter of an acre ? 'J'he right to limit at all implies the right to limit to a square rod or less. That brings us to the demand of one class of socialists who maintain that there shall be no individual ownership in land, a question that is hardly worth while for me to enter upon in this connection ; which so far as the subject-matter I had in view at the outset can only be speculative. ^^,^ I think it is clear that under our industrial progress wealth(;^3oq,8 not accumu- late in a few hands, as it did undei the Roman Empire, or in the middle ages, or be- fore Arkwright and Watt began to use the forces of nature for the benefit of man. There certainly is more chance for change in condition now for the mass of the people than there has been at any former period of the world's history. We have only to compare the past with the present to find unmistakable evidence on that point. It is easier for men now to change their lot In life than in any age. Why ? I think I have shown conclusively that it is because we are using the forces of nature instead of our own muscles. It is incumbent upon those who say that machinery throws men out of employment to show the contrary. Whenever I survey the past and contrast it with the present; whenever I recall the Social coudition of former times; the want, the squalor, the limited employments, the unchangeableness of situation, the few opportunities for advancement, in contrast with the present enjoyments, the diffused wealth, the varied occupations, the progress of the people, I can arrive at only one conclusion, that the physical, moral, and spirit- ual forces together are lifting us in the scale of being to a civilization immeasurably higher and nobler than the present. Allow me, Mr. Chairman, in conclusion, to express my thanks to the committee for their kind consideration. DEPRESSION IN LABOR AND BUSINESS. 543 ■Wasi-iington, D. C, January 22, 1879. VIEWS OF MR. JOSEPH D. WEEKS. Mr. Joseph D. Weeks appeared before the committee in response to its invitation, and in reply to preliminary qnestions by the chairman, stated that he resides at Pitts- burg, Pa. ; that he is .an American citizen ; that he is associate editor of the Irou Age, and secretary of the Western Iron AsBooiation and of the Western Nail Association, both being associations of manufacturers. The Chairman. Have you had occasion in yonr professional studies, or in conse- quence of your official position in connection with those bodies, to make an examina- tion of the relations between capital and labor ? Mr. Weeks. Yes. The Chaiuman. And in regard to the disputes which take place between them — have yon of late or at any time examined the subject i Mr. Weeks. Yes. At the time of the strike in Pittsburg in 1874-75, and several times since, I, as secretary of the Iron Association, have found it necessary to make certain investigations as to wages, &o. Also during the past summer, previous to my departure for Europe, I received a commission from Governor Hartranft, of jPenn- sylvania, to examine into the working of trade arbitrations in England and France. I investigated the subject, and have made a report of the same to him. The Chairmajs^. Are you prepared to give the committee any information as to the methods by which you think the disputes between employers and employed can be settled or their relations improved in any way f Mr. Weeks. My views are at present entirely in favor of arbitration and concilia- tion, and they have become 30 from the investigations which I made in England of the practical workings of arbitration and conciliation there. The Chairman. Do you believe it possible to introduce arbitration into trade dis- putes in this country ? Mr. Weeks. Before going abroad I did not understand the question, and without nnderstanding it I did not think it possible to do so ; but since then I have become thoroughly convinced that it is practicable in this country. The Chairman. Is arbitration extending in England ? Mr. Weeks. I hardly think it is at the present time, owing to the extreme depres- sion in trade there. There seems to be trouble there to know what to do. But I think that in the trades where arbitration has been tried, it is still continued. I think that last week there was an arbitration in the north of England iron-trade, which has brought wages to a lower point than ever before in that district, or at least lower than at any time for twenty years. The Chairman. Has the reduction been made by the board of arbitration 1 Mr. Weeks. Yes. Mr. Thomas Brassey, M. P., was the umpire. The Chairman. Have the workmen submitted to the rednotion ? Mr. Weeks. Yes. The Chairman. Do you know any case where the workmen ever refused to abide by the arbitration ? Mr. Weeks. Yes, there have been a number of such cases, but I think that in pro- portion to the number of cases which have been arbitrated the cases where the work- men refused to abide by the result of the arbitration have been so very few as to be scarcely worth mentioning. The Chairman. Still there have been such cases ? Mr. Weeks. There have been such cases. There was one case in the north of Eng- land iron-irade in connection with a certain mill that was rolling rails. The board of arbitration gave an award against the men, aud the men at those works refused to accept it. The employ^ members of the boardused their utmost efforts to get the men to go to work, but they would not do so. A certain order had to be completed at a specified time or there would be a violation of a contract on the part of the establish- ment which might entail very large expense in the way of damages. The employ^ members of the board found it impossible to prevail on the men to go to work until long after that time had passed, and the board of arbitration paid the damages that were agreed upon — the men paying one-half and the manufacturers paying the other half. The Chairman. That was a mere local rebellion in a single establishment, and was against the general judgment of the trade organization ? Mr. Weeks. Yes ; it was against the general judgment of the board of arbitration- men and " masters," too. The Chairman. That was rebellion ? Mr. Weeks. Yes. The Chairman. But it does not invalidate the principle ? Mr. Weeks. No, sir ; I think that the north of England iron-trade is one of the bes examples that I know of the success of trade arbitration. You know something about the trade, and you know that it was a trade which was of very rapid growth, begin. 544 DEPKESSION IN LABOE AND BUSINESS. niiig, I think, early in 1860. The trade in this district grew rapidly at the time when otlier districts were increasing until in ten years it had become the largest of any of the districts in England. It had to draw its labor from all sources; some of it came from other districts, some was picked up from the mines, some from among agricultural labor- ers, and some from among common Irish laborers who had to be brought in and taught the trade. The result of course was that they had a body of men who had nothing in common, no cohesion, nothiug to lead them to union, nothing to lead them to have that good feeling toward their employers which comes from long years of service. Strikes in that trade were of constant occurrence. In the winter of 1865-'66 there was both a strike and a look-out, the lock-out lasting four months. From that time up to 1868- '69 there were constant reductions of wages made necessary by the condition of trade, and strikes and lock-outs were of constant occurrence — hardly a month passing in which there was not a strike in regard to wages or in regard to something connected with the trade. In March, 1869, iron began to advance in the market, and it was seen that there was going to be a good deal of trouble. Mr. David Davis, a large Iron- master, suggested the formation of a board of arbitration something in accord with the plan adopted by Mr. A. J. Mundella, member of Parliament, in the hosiery trade, and in March, 1869, that board was established. It should be stated that Mr. John Kane, president of the Ironworkers' Association, had urged arbitration for years. From that time to this there has not been a general strike in that trade, although before that it was one of the worst trades for strikes in the whole of England. They have had a large number of arbitrations. The first arbitration awarded an advance of wages for puddling to eight shillings a ton of 2,400 pounds. From 1869 to 1874 there was a constant advance of wpiges, until in 1874 the wages for puddling were thirteen shillings and three pence a ton, and other wages in pro- portion. Since 1874 there has been a constant decline, until in the arbitration of last week, I see by the telegraphic dispatches, the wages have been reduced to seven shil- lings a ton, which is equal to $1.56 on our ton of 2,240 pounds. The Chairman. What are you paying in Pittsburg for that same work ? Mr. Weeks. Five dollars a ton, and it is easier work in Pittsburg, because you know that to puddle our Pittsburg pig-iron is much easier than to puddle the north of England pig-iron. The Chairman. Do you understand the conditions of trade at Pittsburg to be profitable or unprofitable at the present time? Mr. Weeks. I understand them to be unprofitable- The Chairman. Do you mean that the manufacturers are losing money ? Mr. Wekks. No, but I mean that if yon take bar-iron as a basis, manufacturers are losing money. But the Pittsburg mills have certain specialties — some of them patent specialties— by which they are able (taking the whole thing through) to about clear themselves. The Chairman. In othej words, having the advantage of a monopoly of some prod- ucts they are able to continue their works without loss f Mr. Weeks. Yes. The Chairman. But if they had no monopoly they would be losing money in Pitts- burg ? Mr. Weeks. They cannot make bar-iron to-day without loss. The Chairman. In order, therefore, to reduce the cost they would have to reduce wages ? The Weeks. Yes. The Chairman. Therefore monopoly is the friend of labor, is it ? Mr. Weeks. Just at this time, and under these circumstances, it is. I may say in regard to Pittsburg, that the Pittsburg manufacturers are not at all satisfied with the wages paid certain classes of labor there. There is before Pittsburg and the West (for the Pittsburg prices govern all the rest) a most serious labor difficulty if these rates are not reduced. The Chairman. In other words, if we were to abolish all these patents and make free trade in the patents, there would be a readjustment of wages? Mr. Weeks. I think you misunderstand me. All these things are not patents. They are specialties in the nature of rolls and rolling shapes— shapes for agricultural irons— for which there is so small a demand that it does not pay more than one or two mills to take them up. The Chairman. Still there are patents which influence trade in Pittsburg ? Mr. Weeks. Yes; there is one firm there which has a patent for making" iron drip- ping-pans by which it consumes a portion of its sheet-iron. Then there are patents for wagon hardware which was formerly made by the blacksmiths. That trade is almost entirely taken from the blacksmiths by these mills rolling the iron into these shapes. Then there are cotton-ties ; but these can be made by any hoop-mill. Pitts- burg does not own these patents ; they are held by the American Cotton-Tie Company DEPRESSION IN LABOR AND BUSINESS. 545 which has its oOQce in Saint Louis, and whioh aslcs hids from the hoop-iron companies iinil furnishes the ties itself. To go bade to this north of England iron-trade. I spoke of arbitration and con- ciliation. There is a decided difference between the two which I would express in this way: That arbitration is formal and conciliation informal. Most of the difficulties between capital and labor are settled by conciliation. I suppose that at least 90 per cent, of the diffionlties that arise are settled by conciliation in this north of England iron-trade. The board is established in this way. Every establishment that becomes members of the board has a right to two members in the board, one of them being a worliman and one of them an employer. This board elects a president, vice-president, and two secretaries. The president is generally a manufacturer, the vice-president an employ^, and a secretary from each side, one of the secretaries being an operative and the other a manufacturer. These four with eight members of the board form what is known as a standing committee, who take cognizance of all cases in the first instance. Mr. .Jones. They do not organize that board as the emergency arises ? Mr. Wekks. Not in the north of England trade, although they do organize arbitra- tion boards for special cases in some districts and trades. Mr. Rice. They are elected by those who enter into the arrangement ! Mr. Weeks. Yes ; the workmen of each establishment elect its own workman mem- ber, and the employers as a body the employer member. Mr. Rice. Although there is no recognized legal action ? Mr. Weeks. There are three laws on the English statute-books in reference to arbi- tration. One of them, I think, was passed in 18JJ4, which is known as the master and Avorknian act (5 George IV, cap. 96); one passed in 1887, which is known as Lord St. Leonard's .ict ; and one iu 1872, which is known as Mr. Mundella's act. So far as I' Ua%'e been able to find out, there never has been a case in which these acts have been used, arbitration in England being purely a voluntary thing in all its phases. It is voluntary in its submission, it is voluntary iu its progress, aud it is voluntary in the enforcement of its awards. The only power to force the men to abide by the awards is the individual souse of honor, or what Mr. Kettle so happily terms the " collective sense of honor" — the espnf du. corps of the trades-union. The Cn.«RM.\N. Then your conclusion is that the laws are not necessary and prob- ably not, desirable iu order to bring about arbitration aud conciliation ? Mr. Weeks. That is my conclusion. The Chaiumax. Did you ascertain whether there has been any change of feeling on the part of the employers within the last twenty or thirty years in regard to meeting their workmen for the purpose of conciliation? Mr. Weeks. Yes, there is an entire change iu many trades. Parties who have studied the subject in England give a great deal of credit JEor this change to the formation of arbitration and conciliation boards. The representatives of the manufacturers and of the workmen meet as equals. They do not get now, as they used to, half of them on one side of a table or room and half on the other, antagonizing eich other, but they now seat themselves promiscuously about the board. A good president, i£ he sees them beginning to separate, stops the separation. Mr. Jones. They act judicially V Mr. Weeks. Except in the case of conciliation. In conciliation they have no power to give an award. The parties who act as conciliators simply act as friends of the family, as it were. Mr. Rice. As advisers ? Mr. Weeks. Yes, as advisers. Arbitration has not only brought about a better feeling between the two parties, and served to take away that idea of domination and of servitude which runs through English labor, but it has also given the men a better idea of the conditions and demands of the trade. The boards hold quarterly meetings, as a general thing. They sit there to take an oversight of the trade, and to get infor- mation as to the°influence3 at work in tlie way of foreign or home competition and otherwise, and they ascertain the demands which the workmen have to concede in order to meet the cheap labor of Germany for instance. By this means the barrier of iirejndice and suspicion is broken down, and the workmen become informed as to the needs of the trade, and what they have to do in order to meet the competition. The converse is of course true. .,-.,, The Chairman. Do you consider that it would be of great advantage to the trade in Pittsburg if the workmen and the employers were to meet together in that way to talk over the conditions of trade? Mr. Weeks. I do. The CiiAiuMAN. Is there any difflonlty in bringing it about? Mr Weeks. I think that the prospect is very flattering that tjiere will be such a boarii Mr. Bishop, I understand, has been talking of the advisability, and Mr. B. F. .Tones, our largest employer of labor there. I had a conference with him on Monday, 35 L 546 DEPRESSION IN LABOR AND BUSINESS. and I am to address tte Cbamlicr of Commerce on Saturdaynext, and I hope that out of this movement will coirie arbitration. The Chairman. I have a letter from Mr. Edwards, in wliioh he expresses most nn- (jnalified approbation of the plan of conciliation and arbitration, and a desire to help it in Pittsbnrg. Mr. Weeks. We had in Pittsbnrp; generally a temporary conciliation board to settle wages, until 1875. Some lime between 18(50 and 1870 there was a slidin}: scale estab- lished there which worked up to 1875. There was a maximum and a minimum. In 1875 the minimum was reached. That was the point where bar iron was three cents a pound. The agreement ■when that scale was formed was that when iron reached there, the maximum or minimum, there should be a conference and the scale of prices read- iusted. There was a conference held, but the men refused to concede anything, and there was a strike, lasting from November, 1874, to April, 1875, and ont of that came a liort of arrangement. That has been abrogated, and there is a something in Pittsburg ■which is called a sliding scale, but it is a scale made by working-men, wlio come to the manufacturers and say, "Sign that, or we will uot rnn your mill." This is called a contract, but there is no sliding scale in the proper sense of the word in puddling. The Chairman. Are the relations between employer and employed in Pittsburg, as favorable to conciliation at present as they are in England f Mr. Weeks. I think that they are more favorable than they were iu England when those boards were formed originally. 1 think that those boards have affected both sides, and that perhaps the relations of the trade in Pittsburg are not quite as favor- .ible to the formation of such boards as they are in England at the present time— the boards having had an existence there. The Chairman. But there is a feeling in Pittsbnrg now on the part of the employ- ers that the working-men have a right to be informed of the state of the business, aiid to know just what wages they ought to have. Mr. Weeks. Yes; but I think there would be an opposition to what has been claimed by the workmen, viz, that they should see the books of the establishment, iu order to ascertain its profits. I do not think that the employers would be willing to concede Ihat. They do not do that in England, either. The Chairman. I am aware of that, but in England the umpire has access to the books. Mr. Weeks. Yes, the umpire or a sworn accountant, but not for the purpose of de- termining profits. It is simply for the purpose of determining selling prices, and the basis of wages there has been on the selling prices. The Chairman. The question of profits would not be a material question, because one establishment might be making profits while another was making no profits, and if wages were based upon profits, then there wouhl be a different grade of wages in every mill. The selling price is the only thing on which wages can be graded, and the arbi- tration boards in England proceed on that principle? Mr. Weeks. Yes. Mr. Rice. You say that they pay in England |1.56 for puddling compared to $5 in Pittsburg ? Mr. Weeks. Yes. Mr. KiCE. That is,, that what costs |1.5G in England costs $5 in Pittsburg? Mr. Weeks. Yes ; hut the rate is lower in Massachusetts. Mr. Rice. Is there any such discrepancy between the wages received by the laborers in England and in this country generally as that discrepancy in the iron business t Mr. Weeks. No, I think the discrepancy is greater in the iron business. The Chairman. How is it in heating ; is not the discrepancy i ust as great f Mr. Weeks. Not quite. The Chairman. Well, nearly as great? Mr. Weeks. No, I think not. The Chairman. How is it for common labor; what are they paying for common labor around the English mills now ? * Mr. Weeks. I have forgotten. The Chairman. What are they paying in Pittsbnrg ? Mr. Weeks. As a general thiug $i ; from 90 cents to $1.25. One or two mills only pay.90 cents. Mr. Rice. What do you suppose is paid In England f Mr. Weeks. I suppose abont three shillings to three shillings and sixpence. Mr. Rice. Then you mean that wages are about twice as high here as they are in England ? Mr. Weeks. Not quite; three shillings is equal to about seventy cents. Mr. Rice. Do yon know whether that same difference exists in other kinds of labor? Mr. Weeks. I will be able to fell you, but not to-day. I intended if I had time to make ont a table showing the wages iu Warrenton, near Liverpool, in Middleboiough, and in Btaflordshire, near Birmingham, as compared with wages in Pittsbur"- in the DEPRESSION IN LABOR AND BUSINESS. 547 iron-trade, and also tbe comparative price of living. I will make out a statement and fornisli it to the committee. Mr. Rick. These being the recognized relative prices received by laborers in the two countries, how are you going to bring the labor of America down to the price of English labor ? Mr. Weeks. I do not know anybody who wants to do so. Mr. Rice. Then how are you going to have the product of American labor compete with the product of English labor? Mr. Weeks. In the first place, I think that American labor is much more eflfective than English labor. The Chairman. Take hoiling, for instance ; how abont that? Mr. Weeks. That I do not know about, because the work of boiling in England is a great deal harder than it is here. The Chairmam. Is labor more effective in boiling pig-iron in America than it is in England ? Mr. Weeks. No; bnt that is one of the roughest kinds of labor in the trade. Mr. Rice. Is there any snch difference between the quality of American labor and of English labor as to make up for the difference in the rate of wages which each receives? Mr. Weeks. No, sir ; I do not think there is. Mr. Rice. Are the rates of English labor going to increase in the future ? Is there any prospect of their increasing? Mr. Weeks. That is a subject I have thought considerably about, and the more I think abont it the more I am nnable to decide. Mr. Rice. Is it not more likely that the rates of wages in England will go down? Mr. Weeks. I do not know how they can go down any farther unless the people stiirve. Mr. Rice. How will they go up ? Mr. Weeks. I do not know unless they can get markets fortheirproducts, and even then I do not see how, with provisions as high as they are in England, wages can go down. Mr. Rice. If the English can get the markets, they cannot. Mr. Weeks. I cannot see why the English should have the market completely as against us. Mr. Rice. Why not, if they pay less for the labor that enters into their products than we do ? Mr. Weeks. Take the iron trade, for instance. The pig-iron pnddled in the north of England at those prices does not give biir-iron that begins to eqnal that from our pig- iron. Tlie tensile strength of their common iron will be abont 35,000 pounds, whereas the ten.sile strength of our Pittsburg common iron is 50,000 ponnds and npward. That is, our Pittsburg iron (what we call our common irous here) are superior to their com- mon and equal to the best English irons. Their best bar-iron to-day is but afraction, if any, better tb;iu our common Pittsburg irons. They sell their Lord Dudley iron for, say £7 a ton (equal to about $35), while we are selling our Pittsburg iron for some- thing like |33 a ton. Mr. Rice. And we are paying the difference f6r labor? M. WitEKS. Yes. Our material, to begin with, is better than theirs. They have to rework their iron so much in order to get it up to a good grade, or else they have to take certain grades of pig-iron that are expensive. Mr. Rice. I understand that this discrepancy in wages runs through all kinds of employment in the two countries; that the wages are nearly donble in this country what they are in England. Now this diflference in the quality of production which you speak of as existing between the Pittsburg iron and the English iron does not extend to everything. How are you going (where the qualities are the same) to have the product of the labor of this country compete with that of England? Mr. Weeks. While I cannot say that the difference in quality does extend to all classes of goods, it certainly does to a great many. Our common cottons (what we used to call in Lowell cotton cloths) and our prints are much better than the English common prints; our shoes are better, and I think that our common woolen cloth is better than the common woolen cloth of England, although perhaps in the finer grades of goods the superiority is with the English. When it comes to the very fine grades of everything, they perhaps surpass us in some things, especially in those things where the quality depends on the amount of labor expended. Mr. Rice. Take an iron ship built in England and an iron ship built in this country, ■and which of them would you say is best built ? Mr. Weeks. I know a gentleman who told me that he has seen iron plates put into a ship in England that he would not risk his life on. I should judge that an English ship made of tbe same quality of plates that we put into our ships would 6o8t some- what less than our ships cost, but not much less. Mr. Rice. Is the work on an iron ship better than it is here ? 548 DEPEESSION IN LABOR AND BUSINESS. Mr. Weeks. No ; I think that oar work here as a general thing is better than theirs. Mr. Rice. On iron ships? Mr. Weeks. I am speaking of iron itself. Iron ships I know very little about. I know that our tools are better than theirs. Mr. Jones. The ships that Mr. PiympsoU refers to were iron ships. Jlr. Weeks. Some of them. When you get upon ship-buildiug you are out of my latitude. Mr. Rice. The fact of there being so great a discrepancy rather surprises me. The Chairman. It has always existed. (To Mr. Weeks:) Is there a discrepancy between the rate of wages paid in Pittsburg and in New England ? Mr. Weeks. Yes, a very large discrepancy. The Chairman. Take puddling, for example. What are the rates of wages in New England and Pittsburg ? Mr. Weeks. In New England the price varies from $2.50 to $3 a ton of 2,240 pounds, as against $5 a ton in Pittsburgh. The Chairman. If you should succeed in getting wages in Pittsburg down to the rate paid in New England, what would happen to the New England mills in the pres- ent condition of the iron trade ? Would they have to shut up shop ? Mr. Weeks. I think that that would be the result, although they have a home market there for a good deal of their product. A large number of the New England mills are nail-mills, and they have a demand for their product in New England. The Chairman. Wonld the freight from Pittsburg to New England be sufficient to counterbalance the difference in cost? Mr. Weeks. I do not think it wonld. There is a new railroad almost finished, and which will be open in two months, from Pittsburg to Youngstown, connecting with ihe Lake Shore road, that will reduce freight to New England from Pittsburg some- what. The Chairman. Then the same process of competition that now exists between the English workmen and the American workmen would inevitably take place between Pittsburg and New England, and would result in the same way f Mr. Weeks. I think so. The Chairman. Would you recommend us to have a tariff in New England against Pittsburg? Mr. Weeks. The tariff is an entirely different thing, which I can give my views upon if desired. I would like to see New England prosperous, for although I live in Pitts- burg, I am New England born. The Chairman. Would you think that the solution of the difficulty would be a pro- tection of New England against Pittsburg? Mr, Weeks. No ; I think that the trouble in New England is lack of fuel, and that that is a thing which no tariff or anything else can help. The Chairman. If they had free trade, they ct'uld get fuel from New Brunswick cheap. L'o you not think that with a tariff of a cent a pound as against Pittsburg iron, the New England mills could continue to run ? Mr. Weeks. I have no doubt but that such a tariff would enable the New England mills to run, but then other considerations would come into question. The Chairman. Then the iron consumed in New England would cost consumers more than it now costs. Mr. Weeks. I do not think it would. The Chairman. If New England had free trade in fuel and a cent a pound protec- tion on iron against Pittsburg, do you not think that the iron would cost the con- Bumers.in New England more than it now does? Mr. Weeks. No, sir. The Chairman. Why not? Mr. Weeks. That brings up the whole question as to whether the tariff is a tax upon the consumer. The Chairman. If it wonld not cost the consumer of nails in New England more money than now, why not let the New England iron manufacturers have protection* In the first place, you say that the Pittsburg nails (if your labor and the New Eng- land labor were ou the same grade of price) would go into New England cheaper than the New England mills produce nails. That would be so unless the price of labor were reduced in New England, and you say that you do not want to reduce the price of labor. Therefore, if you were to put a tariff of a cent a pound on the Pittsburg nails, would it not make nails cost more in New England? Mr. Weeks. At first it might. Yon are taking a special case and trying to get me to give judgment in that special case. I say that there are other considerations in regard to it. The Chairman. I want your opinion as to that point. Mr. Weeks. I presume that at first it might. A tariff generally results at first in increasing the pnco to the consumer, but it would ultimately make nails less in New England. DEPRESSION IN LABOB AND BUSINESS. 549 The Chairman. Why wonlcl it make nails cost leas ? Mr. Weeks. The only reason why nails are cheap in New England is that they have cheap labor there. Now yon are going to have as cheap labor as they have — the as- sumption being that the labor is eqaated on the same grade— either yours down or theirs up. Now I say I do not want to have labor put down. If they have protection in New England it would doubtless make nails cost more, but there would be counter- vailing advantages. The Chairman. Then the consumer of nails would lose that much ? Mr. Weeks. I presume so, if New England should separate herself from the rest of the country of which it is an integral part. Mr. Rice. Would the consumer of nails have compensation in any other way ? Mr. Weeks. Yes. For instance, a farmer would have an opportunity to sell his produce to those parties at work in these mills. The workmen would become consum- ers of what the farm raised, and perhaps at higher rates. The Chairman. But does not New England new import very much the largest quan- tity of food used there ? Mr. Weeks. Of certain kinds, yes. The Chairman. Then the farmer is as well able to sell what he raises in one case as the other ? Mr. Weeks. Yes. Mr. Rice. Does New England import a great part of what her people eat, such as vegetables, meat, butter, &c. 1 Mr. Weeks. I never looked into that question, but she does import a great part of the grain and flour consumed. Mr. Rice. In your judgment, are the laborers in Pittsburg better off now than the laborers in New England — do they live better, have better houses, better food, &c. Mr. Weeks. I cannot tell you. The Chairman. Compare the condition of the Pittsburg laborers with the condition of the English laborers. Mr. Weeks. The Pittsburg laborers live much better. It cannot be otherwise, be- cause with the single exception of rent and possibly of olotliiog (although I doubt, if that is au exception), there are but very few o£ the necessarips of life that do not cost in England higher than here. Pittsburg, however, is hardly a fair point for com- parison of the conditions of labor, because it is a place so hemmed in by the bluffy and the places of residence are so near to the mills and are so dirty from the smoke, that it is hardly a fair comparison to make. Mr. Rice. If labor is $3 a ton in Massachusetts and $5 a ton in Pittsburg, is that dif- ference of wages going to continue ? Mr. Weeks. That I cannot say ; on the other hand, I would say that the question whether a man can live on a given amount depends altogether upon how he lives. The Chairman. If the tariff on iron were mpealod, could the Pittsburg mills con- tinue to run in competition with England in the production of bar-iron ? Mr. Weeks. That would depend something on the question whether the English bar-iron would be sold at the rate which it would be sold for in England plus the freight and cost of handling. If the English should put their iron into New York for the purpose of breaking down the market The Chairman. Do not assume a case of that kind, but take the regular normal business. If there is no duty on English irou, would the result be the closing of the Pittsburg mills? , Mr. Weeks. No, sir. The Chairman. What would happen? Mr. Weeks. It would cut off considerable of their business. The Chairman. But could they still go on and pay their present rate of wages? Mr. Weeks. No; t do not think they could. The Chairman. Would they not have to reduce wages? Mr. Weeks. I think so. The Chairman. What is the present rate of duty on bar-iron ? Mr. Weeks. I do not recollect. The Chairman. It varies; but suppose the ordinary rate to be three- fourths of a cent per pound on bar-iron, or from $15 to $17 a ton. That is the barrier between English iron and ours. If we were to remove that barrier, would not the English iron come into Pittsburgh itself and be sold? Mr. Weeks. I do not think the common grade and kinds of iron would. The tend- ency of importation lately has been to drop off from the commoner grades and import the higher grades, like rods, hoops, and sheets. The Chairman. You think that English iron could not be brought into Pittsburgh? Mr. Weeks. I think that these higher grades of iron might be, because the differ- ence in the cost of labor in making these higher grades is much leas than the differ- ence in the cost of making the higher grades in Pittsburgh. 550 DEPRESSION IN LABOR AND BUSINESS. The CHAinMAN. Then the repeal of the tariff on iron Tvoald expose the Pittsburgh market to competition with fingland on the higher grades of iron ? Mr. Wkkks. Yes, it certainly would on steel rails. The CiiAiHMAN. At what rate can steel rails be laid down at any port here from England with no duty on ? Mr. Weeks. There have been some sales of English steel rails at £5 10«. per ton ])laced on board the vessel alongside of the works. If they were taken as ballast, the expense of landing them in New England would be very small. The Chaikman. But, suppose they pay freight for them at the present low rate of freight. They could send them certainly at 5s. a ton, but suppose the freight was 10s. a ton, that would make them cost under $30 placed here. Mr. Weeks. Yes. The Chairman. What is the present price of American steel rails ? Mr. Weeks. Forty-one dollars a ton, depending something upon the location of the mill. I suppose the price would be $42 to $4:5 a ton at tide-water. The Chairman. Now, to come to the countervailing advantages. Would it be to the advantage of any one to get steel rails at this low price? Mr. Weeks. It might be a temporary advantage to the railroad companies, but whether, ou the other hand, if they could get them at these low rates, there might nob be a worse side to the bargain, would remain to be seen. OL' course if the Pennsylva- nia Railroad Company bought its steel rails abroad, the Cambria Iron Works conld not make rails and would have to be closed. The Chairman. The Cambria Iron Company could offer its laborers as cheap wages as the English laborers receive, and then it would not have to close its works. Mr. Weeks. We do not want to see labor so cheap as in England. The Chairman. No matter about that. We must adapt ourselves to circumstances. We do not want to be poor, we want to be rich, but we have to accept the situation. Now, if the tariff were repealed, the Cambria Works could make steel rails as cheap as they are made in England, provided their labor was as cheap. Mr. Weeks. Yes. Everything else is as cheap. Coal is certainly cheaper ; ore ia about the same. The Chairman. That would enable the Cambria Works even to pay a little higher for the labor than is paid in England. Would not the laborer here be able to get beef, pork, flour, and other necessaries of life cheaper than the laborer in England gets them? Mr. Weeks. That is a question. They would certainly at present be able to get their provisions cheaper. The Chairman. Would not everything equate itself very rapidly ? There would be certainly an interval of great distress, but would we not all come down to a lower scale equal in purchasing power? Mr. Weeks. But the question would be whether that would be well or not. Mr. Jonbs. Farmers complain of tlie high freights eastward. Would not the cost of freight be reduced ? Mr. Weeks. I do not know very well how freight can be reduced when it is now only one-third of a cent per ton per mile ou some classes of goods. The Chairman. The railroad companies could afford to do it at less than half that rate, could they not ? Mr. Weeks. I do not know. The Chairman. Have you auy other facts to give to the committee in regard to the question of arbitration ? Mr. Weeks. I was going to speak especially of the trades in England, in which there seems to have been a great deal of trouble in the past, and in which these diffi- culties are entirely overcome by arbitration. I refer to the hosiery trade and the pot- tery trade. The hosiery trade is a trade in which the styles are constantly changing. There are changes in the number of picks or threads, and with every change there is a change in piices. This had made the hosiery trade (up to 1860) a trade in which there were constant strikes. It has been in that respect probably one of the worst trades in the whole of England. It is the trade in which the crime of maching-breaking (Luddism as it is called) was originated, and which gave thecrimeits name. I think that early in this century (about 1816) that crime was made punishable by death, and six men wore hanged in Nottingham for breaking frames. This is the trade in which the first board of arbitration was established by Mr. Mundella, nineteen years ago next March. From that time to this there has not been a strike in that trade, and yet the wages and price list covers over five thousand different articles. They have fixed the pricesof wages on these five thousand different articles, and the necessities of the trade are such as to require them to be changed almost every day. So in the pottery trade. The styles are con- stantly changing. There are many customs which have grown up and have almost the force of law. One of the questions, for example, most bitterly fought in the trade was, whether the potters should be paid for the pieces that were perfect as they came from their hands from the wheel, or whether they should be paid for the pieces that were DEPRESSION IN LABOR ANB BUSINESS. 561 perfect as they camo from the oven after beingbaked. The principle was called "good fiom hand and good from oven." It was a very bitter fight. Arbitration was adopted in this trade some thirty-six years ago, before Mr. Muadella's board was established. It was not a permanent board, but was called together at the beginning of the year for the purpose of establishing prices for the year. All the troubles they have are set- Tied by arbitration, and there has not been a strike in that trade for thirty years, owing to this principle of arbitration. Some member of your committee has asked me in reference to the legality of arbi- tration. There are two systems of arbitration advocated in England. One is purely voluntary ; the other, which is known as Mr. Kettle's system, or as the Wolverhampton system, gives a partially legal standing to the board of arbitration. The principle is ■ an applioatiou of common law. Certain prices fixed and rules made, take the form of Avorking rules. These are tacked up in a shop, so that every employee is informed that that is the contract under which he is working. The tacking up of the prices in a shop becomes of course notice to the workmen, and any violation of the contract can be enforced by law. So far as I know that is the only form in which the advocates of arbitration in England propose to make it iu any way legal. There is a provision for the termination of the contract on giving certain notice. That notice iu the Wolver- hampton trade is two days, so that at the end of two days a man can withdraw from the contract if be chooses. In regard to the method of procedure of these boards. In bringing a case before them for trial, they provide that there shall be no strike or lock-out. The boards will not take any action in a trouble where the men are on a strike or where the employers have locked them out. Then, before the question can be brought before a board of arbitration, it has to come before a committee of inquiry or conciliatiou. This com- mittee endeavors to settle the trouble without bringiug it before the board of arbitra- tion, but in case it cannot do so, the question is brought before the board and the de- cision of that board is final. That is true of all questions except those that relate to future rates of wages. As a general thing these come before the in board in the first instance. The Chairman. But pending a strike the board of arbitration will not meet. Mr. Weeks. It will not meet during a strike. If there is a strike, and if the ques- tion is to be referred to arbitration, the first requisition is that the work shall bo re- sumed. They will not arbitrate a case nor take the subject into consideration while there is any strike on hand. In the coal trade, arbitration has not been quite so suc- cessful. For instance, from March, 1873, up to 1877, all the troubles that arose in the Northumberland coal trade were settled by arbitration or conciliation ; but from thai time to this the colliery owners have refused arbitration, and for this reason : In 1877 the employers demanded a reduction of wages. The men refused to concede it, and without waiting for the board to discuss the question (which they were bound to do by the agreement into which they had entered) the men struck. That strike lasted a number of weeks, and finally the men agreed to submit the question to arbitration. The nmpire decided against the demand of the operators ; that is, he refused to grant the demand which the emploj-era made. But at the same time herecommended the men to do exactly what the masters demanded ; that is, his recommendation overthrew his award. Shortly after that, the coal operators demanded another reduction of wages. The men proposed to arbitrate that, but the employers refused to submit the matter to arbitration. The men had first refused to arbitrate, and then when a new case came up the employers refused to arbitrate. They said to the men, " You refused to arbitrate; you went out on a strike, and while the nmpire gave his decision against ns, he by liis recommendation to you virtually overruled that decision, and now we will not arbitrate." The strike lasted for a long time. It was for a reduction of 12J per cent. The coal miners finally agreed to take 10 per cent, and to arbitrate the other 2i. The employers said "no, we will not do it"; and they finally won and the men went to work. I spoke to Mr. Burt, the secretary of the coal miners' association, when I met him one day in the House of Commons, and he made this remark to me : "Mr. Weeks, they have got the whipband of us now, but we will soon have it of them." This trouble ia only in the Northumberland coal trade. The Durham coal trade (which is a much larger tracre than the Northumberland) has since March, 1872, settled its troubles by arbitration, and there has not been a strike in the trade. They settled their troubles by regular arbitration boards from March, 1872, to May, 1877, and then established a sliding scale. Between March, 1872, and May, 1877, wages were ad- vanced 5&J per cent., and since that time there have been seven reductions of wages under arbitration boards, bringing wages to a lower rate than ever before in that trade. The present scale was adopted in May, 1877, and was to be in operation for two years, and it is still in operation. Mr. Kick. The result of this arbitration in England for a number of years past has been to bring about a reduction of wages, for the last three or four years, but not iii the first instance. Mr. Weeks. That is where I«think we may find the secret of the success of semo 552 DEPRESSION IN LABOR ANt> BUSINESS. lioards of arbitration. The iSrst effect of many of the boards was to put up wag;08. I think that if abitration had begun on a falling market, and if wage^s had kept going down, the workmen would have soon become disgusted with it. In the South Wales coal works there was a strike in 1875, lasting for seventeen weeks, in which it is estimated there was a loss of from three to five million pounds sterliug. The result of this was to establish a conciliation board and a sliding scale, with a maximum and a minimum. That had been in operation for a little while (a couple of years) when some of the men got dissatisfied and demanded a vote of the miners to see whether they should throw over the conciliation board, and although at that time the reduction had been 30 per cent, from the highest point reached, the vote stood 18,375 for continuing the board against 8,334 for discontinuing it. The minimum price fixed by that slidingscale was reached, some time ago, and the manufac- turers called a meeting of the men and submitted to them the question whether they would not consent that the wages should go below the minimum fixed. The men consented to it. A few months afterward they consented to a still further reduction of the minimum, and a third time since then they have consented to another reductiou. Now, I do not believe that under the old system of strikes and lock-outs they would ever have consented to that. Here was a point fixed below which wages were not to go, and yet three times the men consented to a reduction below that point. The Chairman. Then, on the whole, your testimony goes to show that there is rather more disposition on the part of workiugmea to listen to reason than there is on the part of the employers ? Mr. Weeks. I do not know where my testimony shows that. The Chairman. You say that the workiugmeu in South Wales have consented to a rednction below the minimum three times, whereas in the other case that you speak of the masters would not consent to arbitration ? Mr. Weeks. That was after the men had first refused to arbitrate, and had then after a strike consented. The C'HAIKMAN. Then the men repented, and were willing to submit to arbitration ? Mr. Weeks. Yes ; but it was after a strike, lasting for a number of weeks. The Chairman. Nevertheless, they did repent, and were ready to go to work and comply with the conditions of the board of arbitration ? Mr. Weeks. Yes. The CiiAiHMAN. Have yon ever found any case in which the masters have volunta- rily put up wages as these men in South Wales have voluntarily reduced the wages below the minimum? Mr. Weeks. There has been no occasion to do so since these boards have been estab- lished. There has not been that opportunity to try because the maximum has never been reached. Mr. Rice. Do yoii not think that in this country objection to such a system of arbi- tration would come from the employers rather than from the employed* Mr. Weeks. So far as I recollect, the most strenuous objection to arbitration in Pitts- burg has come from the employes. They were afraid, just as they were in England at first, that it would destroy their unions, whereas the result has shown that the unions iire necessary to the successful working of arbitration. I have a letter here from Mr. Trow, secretary of what would answer to our boilers' union, and which is known in England as the National Amalgamated Association of Iron, Steel, Tin, Blast-furnaces, and other workers. It is a trade which, in 1875, numbered 35,000 members. There were in the union in connection with the North of England iron trade, 32 works and something over 1,900 puddling furnaces — not quite half as many as we have in the whole United States. 1 wrote to Mr. Trow asking for his views on arbitration. He responds in this way: "With regard to my views on arbitration, I believe that it is the only fair and honorable mode that can be adopted for the settlement of questions between capital and labor; that where both parties meet with an earnest desire for a fair and honorable arrangement, and discuss the various questions in dispute in a kind and conciliatory spirit, there is no fear of failure, but, on the contrary, the old feeling of mistrust and jealousy is banished and confidence in each other is established. The faults in connection with arbitration are when workmen come to the meeting jealous and suspicious, believing that employers are their natural enemies ; and employers, by not conversing with delegates in a free and friendly spirit, foster this suspicion ; anil only under that action is there any fear of failure. Arbitration in England is regarded with great favor by workingmen, and only in a few solitary exceptions has it been refused or the awards rejected by workingmen. If you wish arbitration to be success- ful, employers must meet delegates in a kind and conciliatory spirit, so as to gain the confidence of workmen. Lot this be done, and arbitration will prove sueeessful— a blessing to employers and workjnen." The Chairman. Is not the first condition for snooessful arbitration in this country that employers shall not dismiss from their works men who have taken an active part even in strikes, taking the worst phase of them. Must not the employers shut their eyes to the fact that these men exist } DEPRESSION IN LABOR AND BUSINESS. 553 Mr. Weeks. I tliinlc that to-day in Pittsburg it would be utterly impossible to run a mill if men sliould be discharged iu that way. The Chairman. But it was formerly done. Mr. Weeks. They tried to do it, but they could not do it to-day. The Chairmax. The men have goc too strong? Mr. Weeks. Yes. The Chairman. Then the employers have learned a lesson by another process which they should have learned by the process of reason ? Mr. Weeks. I do not think that in Pittsburg employers have lately attempted to discharge men who have taken an active part in strikes, unless there has been actual personal violence or outrageous abuse. The Chairman. Why not let the law take cognizan'ce of that? . Mr. Weeks. The law cannot always do it. In Pittsburg we have had something like a conciliation committee. Manufacturers would elect iive or some number of men, and the workingmen would elect five other men, and these ten got together and speut hours and days and nights sitting and talking and discussing. There is a per- sonal friendly feeling between the leaders of unions and the prominent iron manufact- urers of Pittsburg (although the manufacturers do not always approve of the methods of the unions). The Chaiiiman. Has there not been an improvement in that direction ? Mr. Weeks. Yes. The leaders of the men have got to be a better class of men than they were formerly. They are a good deal more conservative than they used to be. In the organization of these unions in the first instance a good many men were put at the head of them of whom the workmen themselves were afterwards ashamed. The Chairman. If the employers had encouraged the organizations of working- men, would they not have had better men much earlier? Mr. Weeks. I think they would, but I am giving my own opinion now, not the opinion of the manufacturers. I think that the manufacturers ought to encourage trade-unions, and that they should also have as strong a union among themselves. I believe that the only way to meet union is by union. Then they come face to face, and they know that strikes mean something, and the men will not strike if they cau help it. I have mentioned the coal trade in England. I onght also to mention that there has been arbitration in the lace trade, the nut and bolt trade, iron-stone mining, the chemical trade, the boot and shoe trade, and textile trades. That shows something of the range of arbitration iu England. The Chairman. In other words, you found that a substantially new element has come into trade-disputes in England — that of arbitration — and that it is working eft'ectnally and extending its area all the time ? Mr. Weeks. Yes. Not simply arbitration, but voluntary, permanent boards of arbi- tration. It is voluntary, permanent, systematic. It di fifers from the conseil des prud'hom- nies in that it is purely voluntary ; that there is nothing legal about it. It is system- atic, and is entirely under the control of the men iuterested, without bringing in the state at all. I can hardly say, however, that it is extending at the present time. The Chairman. Is there any country in the world where voluntary action can be more easily brought into play than in this country ? Mr. Weeks. No, sir. We have not to get over the difficulties which they had to get over, in England. Note. — The following testimony, taken in New York in August, 1878, having been temporarily mislaid, lost its regular place in this volume: TIEWS OF MR. WILLIAM E. DODGE. New York, Auguai 22, 1878. Mr. William E. Dodge appeared before the committee by invitation. By the Chairman : Question. Pleaso to state your residence.— Answer. 225 Madison avenue. New York City. Q. Are you a merchant of this city ?— A. Yes, sir. Q. You have been president of the Chamber of Commerce? — A. Yes, sir. Q. You have been largely engaged in enterprises and have been employing labor on a large scale all your life ? — A. Yes, sir. Q. Can you give the committee some idea of the number of men now employed by your firm, and of the enterprises in which you are directly engaged? — ^A. I should say at a rough guess 2,000 men aside from my railroad interests. Q. You do not include in that number those employed in the Soranton iron-works in which you have an interest ? — A. No, sir. 554 DEl^EESSION IN LABOR AND BUSINESS. Q. You speak only of those employed in works in which you have the controlling interest? — A. Yes; the number is about 2,000. Q. How long have you been in business of this sort, employing men ? — A. I have been a merchant in New York for fifby-one years, and have been engaged in various manufactures for the last forty years. Q. Have you had occasion during that time to investigate the condition of the la- boring classs.s, and to understand what, in your judgment, promotes their improve- mMit, and affects their comfort and happiness? Have you given attention to that subject ? — A. I think I have, very carefully. Q. At the present time do you think that the laboring class (we have to use this term very unwillingly, as it seems there is no other term found except that of non-capitalists for people who labor and work with their hands) is in much distress throughout the country ?— A. There can be no question on that subject. Q. There is distress ? — ^A. Yes, sir. Q. Have you any theories or ideas about the causes of the distress or what makes it greater at this time than at other times ? — A. I asked to come before this committee as the president of the National Temperance Society of the United States. The vice- president and secretary are with me here. And it is with particular reference to that jnatter that I should like to make my statement, and I will then answer any inqui- ries of the committee. I wish to make a statement as to the influence of the manufac- ture, sale, and consumption of intoxicating drinks on the labor question. The Chaiuman. It is quite pertinent for you to specify any causes which you think affect the labo;ing classes, injuriously or otherwise. It Is not for the committee to direct what course you shall take. Mr. Dodge. I simply mention that so that the committee might understand why I dwell more particularly on that phase of the question. I may say that, from our earliest arrangement of manufactories in this country, I have made it a condition precedent in the various villages in which we are interested that no intoxicating drinks shall be sold within the circle of our employed men, where we own the whole land; and we have made it a condition with all our superintendents that if a man is addicted to the use of intoxicating drinks, after proper admonition, ho is to be dis- missed. The result is that we have invariably succeeded in having sober, temperate men ; and, in our various manufacturing villages, the men themselves have prospered. They have become owners, generally, of the dwellings in which they live. Many of them have accumulated property, and the result has been (for the last forty years in which I have had experience) that the use of intoxicating drinks as a stimulant to promote strength is (as far as that is concerned) positively demonstrated to be a mis- take, and that the men who let it alone are the men who prosper and are the best off. And there are very few in all the villages in which we are interested to-day who are out of employment. The Chairman^. In other words the distress which, you say, is very general in this country does not very seriously affect the villages where your works are located ? Mr. Dodge. That is so. I mean to say that, while our manufactures partake of the general depression of the country, that depression has not affected the employes so that many of them are out of employment. They have accepted the wages that our inanufactories are able to pay, and have, many of them, savings laid up for such times as this ; and so far as my experience goes, in all our manufactories in which wo are specially interested there is no depression to-day. The CiiAiKMAN. To what cause do I understand you to attribute the exemption of your employes from the severity of the times among workingmen generally? Mr. Dodge. I attribute it to the fact that they have abstained from the use of in- toxicatiug drinks, and have saved the large sums that are usually expended for their use. The Chairman. In addition to the interdiction of the use of intoxicating drinks, have you introduced any other agency, such as provision for saving earnings, that are not usually found in a community ? Mr. Dodge. In most of our villages there are institutions for savings, and one great point with us has been to ger individuals to settle down in those villages and to be- i;ome owners of property ; and we have given them the opportunity of paying for the property in small sums. The Chairman. In other words, you have given them facilities to purchase land, and to make payment in small sums ? Mr. Dodge. Certainly. The Chairman. Have you been in the habit of advancing money to these people when they want to build houses ? Mr. Dodge. Not as a rule ; but exceptionally, from the first. The Chairman. You have encouraged them to invest their earnings in that way ? Mr. Dodge. Yes ; and we have encouraged schools, and every moral influence that we could bring to bear on the good order of the community. The Chairman. Is crime of common occurrence in those villages? DEPRESSION IN LABOR AND BUSINESS. 555 Mr. Dodge. No, sir. The Chairman. Is it practically unknown there? Mr. DoDaE. It is practically unknown. Tile Chairman. How do you prevent persons wlio wish, to sell intoxicating drinks from coming to those towns ? Mr. DODSE. Our general jilan is, first to secure a sufficient amount of land to make it very difficult, so that a man who wanted to get a drink would have to go some dis- tance in order to get it. At Ansonia, parties who owned property there have died; and property has passed into other hands, and so grog-shops have occasionally boon set up, but they have not succeeded. The Chairman. Why have they not succeeded 1 Mr. Dodge. Because the men are brought up to temperance. The Chair:\iax. You have got a pre-existing moral tone there ? Mr. Dodge. Yes, sir. The Chairman. What is your idea on that subject — ^that the moral tone of the com- munity should be raised by instruction and by teaching, or by legislation? Mr. Dodge. By individual efforts, seconded by such proper and lawful legislative enactments as would be proper to help and aid them. The Chairman. Would you recommend legislation prohibiting the sale of intox- icating liquors? Would you go so far as that? You seem to- have accomplished your purpose in another way. Would you recommend the committee to report such legislation ? Mr. Dodge. I would simply say that I believe it ought to be left to the voice of the people in every town and village and county in the country to decide by popular vote as to whether intoxicating drinks sliould or should not be sold in it. Mr. Rice. You mean local option ? Mr. Dodge. Y'es ; local option. The Chairman. You would not recommend Federal legislation on the subject ? Mr. Dodge. No, sir; except so far as it could affect the manufacture of intoxicating liquors. The Chairman. You are aware that the government derives a large amount of rev- enue from intoxicating liquors. How would you deal with that question ? Would you increase the tax on liquor, or would you refrain altogether from obtaining revenue from such a source ? Mr. Dodge. If I did anything, I would make the tax so high that the manufacture of liquor would be decreased. The Chairman. How would that affect the use of alcohol in the arts ? Mr. Dodge. Provision should be made for that by way of a drawback. The amount . of intoxicating liquor consumed in the United States is enormous. The Chairman. Can you give us the figures ? Mr. Dodge. I have before me an article published in the Journal of Finance and Commerce within the last week — not a temperance article, but one having reference particularly to the present distress of the country, and not at all looking at the ques- tion ill the light of temperance. It shows the expenditure of |8O0,OOO,OOO directly in this country for intoxicating drinks ; and then it assumes that in the retail business there is at least |900,000,000 used up in the country in the course of the year. I will hand a copy of the article to the oommittee.i It does not touch the question of temper- ance at all, but it goe.s to show the impoverishing effect upon the country of the con- sumption lay the people directly of thi8|300,000,000 worth annually of that which does no good, but a vast amount of evil. It shows that that is a sum whicli would pay the national debt in three years, and that if this expenditure could be in some way^ot rid of there would be a call for labor by the use of that capital in the country, which is now annually lost or consumed. The Chairman. You think that this capital which now goes down the throats of men wonld serve in other shapes, and be available for the employment of labor ? Mr. Dodge. Yes; and the laborer himself would not be impoverished and thrown out of employment as he is now, from the use of intoxicating drinks. He would have something laid aside for a rainy day, and would be able to meet such an emergency as we are passing through now. The Chairman. Do you happen to know the estimated amount in savings-banks in tRe country ? Mr. Dodge. Yes ; about |1, 200,000,000, so that the annual expenditure for intoxi- cating liquors is half the amount of the accumulated savings of a whole generation. The Chairman. Do you see anything to prevent the saving of the $600,000,000, if this drink was not consumed? Does drink, for example, supply the place of food, or of anything else that would have to be consumed in lieu of it— tea, coffee, or tobacco ? I want to see what saving could be realized. Mr. Dodge. That subject of tobacco is also taken up in this article. I have no doubt that a very large proportion of this |600,000,000 could be saved to the country — 556 DEPRESSION IN LABOE AND BUSINESS. saved to the iudividnal. To l)e sure, on the other side, yoxi may say that the con- Buinption of other things would be so much the greater. The Chairjian. If a man, in consequence of drinking beer, consumes loss uread, and if the result of his stopping the nse of beer would enable him to consume more bread, then the saving from the dispensing with the use of intoxicating drinks would not be the whole |600,000,000. Mr. Dodge. Pie does not only want more bread himself, but he would be able to give his children more bread. The Chairman. The saving in capital is what I want to get at. Mr. Dodge. The saving in capital would be very large. The Chairman. But it would not be the whole $600,000,000 ? Mr. Dodge. Probably not. But bear in mind that the $600,000,000 expended directly iu drink does not provide for the results of the use of that |o00,000,000 from the bar- barism and crime that result from drink. The Chairman. Iu those villages to which you refer, have you any poor-houses? Mr. Dodge. No, sir. The Chairman. Any jails? Mr. Dodge. No, sir. The Chairman. Any prisons ? Mr. Dodge. No, sir. The Chairman. And you think that you save the cost of those establishments which are to be found elsewhere, because the inhabitants refrain from intoxicating drinks ? Mr. Dodge. I do. I do not think that the abstaining from intoxicating drinks is going to make a millennium or is going to make every man virtuous, but I believe that the experience of tliose portions of the country where absence from the use of intoxicating drinks has prevailed shows most conclusively a progress in all those directions. The Chairman. What towns or villages do you name as being the type or specimen of this state of aft'airs 'I Mr. Dodge. Ansonia, Conn. ; Dodge Mills, in the vicinity of Williamsport, Pa. ; Tobyhanna Mills, Monroe County, Pa. ; Saint Simonsville, in Georgia ; Waubesha, in Ontario, Canada (where we employ 300 men) ; Meganatawan Mills, in Ontario, Canada, and CoUinswood Mills, in Collingwood, Canada. The Chairman. Then climate (as the mills seem widely distributed) has nothing to do with it? Mr. Dodge. Nothing at all. The Chairman. Has the lumber business been, since 1873, very much depressed? Mr. Dodge. Very much. The Chairman. Have you been still able to give employment to your people during this period of depression ? Mr. Dodge. Yes. The Chairman. I would like to know whether you have carried on any of these businesses without profit to the capitalist, during this period of depression ? Mr. Dodge. Yes, sir ; mainly for the last three years. We have besn retaining our organization in hopes of better times, and looking after the interest of the men. The Chairman. And the workmen have had employment and wages during this time while the owners have had no protits ? Mr. Dodge. That has been the result. The Chairman. And that is generally true of all kinds of business of which you have any knowledge in this country? Mr. Dodge. There are very few exceptions to-day in the United States. The Chairman. Then the capitalist, so far as you have auy knowledge, is not at present deriving profit from the labor of his employes ? Mr. Dodge. I think that that is true as a general rule throughout the country. The Chairman. Not even getting interest on his capital ? Mr. Dodge. Very seldom getting interest. The Chairman. So that society is now in that condition in which capital is em- ployed to carry on business, but takes no compensation. Mr. Dodge. That is very true ; I can say so, feelingly. The Chairman. In your experience has the laborer been usually better off -when capital was making profit, or when capital was losing ? Mr. Dodge. That is a very difficult question to answer. There are exceptions. The very high wages paid during the war encouraged many of our mechanics and laboring men to extravagance which was very natural. When reduced wages came it has been very hard and inconvenient for them to submit to the reduction. It has been very dithcnlt for thorn to bring their style of living and their habits down to the economical methods which existed previmis to the war. The Chairman. If they were willing to live in such a manner as they lived in before DEPRESSION IN LABOR, AND RUSINESS. 557 the war, do you think that their present rate of wages would be as good a remunera- tion as the wages they then had ? Mr. Dodge. I tliink so, because the wages even now (which are called low wages) are very much higher than they were before the war. When I built my house on Madison avenue, twenty-six years ago, the common laboring men employed on it re- ceived 70 cents a day, the better class of laborers a dollar a day, and the carpenters and masons a dollar and a quarter ; and those were the prices throughout the city. The Chairman. Was that a period of distress ? Mr. DoDCE. No, sir. . The Chairman. There was not much complaint of distress at that time t Mr. DoDGi:. No, sir. Rents were not half what they are now. The Chaiumax. Do you not think that the employing classes have also got on an extravagant scale of expenditure as well as the laboring classes ? Mr. Dodge. I do, most certainly. The Chairman. Is not the destruction of capital, and some part of the present suf- fering, due to the fact that the employing classes have also used their capital unpro- ductively and extravagantly since the war? Mr. DoDGK. There is no question about it. Tlie Chaikman. Do you think that the laboring classes, who work for wages, are any more open to censure and condemnation for extravagance than the employing classes ? Mr. Dodge. Certainly not. The Chairman. Have not the employing classes set an example of extravagance to others which has had an unfavorable influence ? Mr. Dodge. I think so. The Chairman. Besides the abstaining from intoxicating drinks, are there any other things that the community can do to bring about a better state of things thau the present ? AVould a more economical mode of living be an advantage ? Mr. Dodge. I have no doubt that it would have its influence. The Chairman. Would not that stop a considerable part of the demand which now exists for things that are not absolutely necessary, and would not that produce a new evil? Mr. Dodge. That is a question which I was going to ask yon. I was just going to say that, if we have too much economy, all at once, in the higher classes, that would stop employment. The Chairman. But suppose that, instead of expending capital in mere unproduc- tive expenditures, the wealthy class wers to use it as you have been using yours, in carrying on industrial works, even at a loss, but by which labor would be employed, would not that bring about a better state of things ? Mr. Dodge. Yes; unless it produced an increased over-production. The Chairman. But those people who are unemployed and who are living in idle- ness could not certainly be worse off if they were employed at something of value? Mr. Dodge. Certainly not. The Chairman. If the consciences of capitalists were aroused and awakened, could not capital be utilized in a way that would tide over the present state ot things ? Mr. Dodge. Yes, sir. But while men who are already engaged in manufactures may continue them, looking for better times, no sane man would take his capital and put it into manufactories for the simply purpose of employing men, when he knew he was going to lose by it himself. The Chairm-an. Suppose that that man was in the habit of giving away the whole of his income in charity, would it not bo a better application of his capital to lose that same amount in carrying on business and employing people ? Mr. Dodge. That is a question that I am not prepared to answer. The Chairman. Have you any suggestion to make to the committee of any legisla- tion that may be recommended, in any direction whatever, that would tend to biing to an end this depressed state of things, and to bring about ar^ early return to pros- perity ? Mr. Dodge. I can only suggest this : The National Temperance Society has been endeavoring for three years to get a commission appointed by Congress (the proposi- titm has twice passed one house) to investigate the question in regard to the use of intoxicating drinks, and tlieir influence on labor and on the prosperity of the country. I think that if such a commission as that were appointed and made permanent, it would do a great deal toward opening the eyes of the people, and enlightening them. Such a proposition is now before the Government of Great Britain, and is being pressed with very great interest there by Sir Wilfred Slosson, in regard to the propriety of giving to villages the right of saying, by a two-thirds yote, whether they will or will not have drinking-houses licensed. The Chairman. Outside of that, is there anything else in the history of the country — either the tariji'-system or the financial system — which has any bearing upon the con- dition of tbs ecautry 1 558 DEPRESSION IjST LABOR AND BUSINESS. Sir- Dodge. My own impression is tliat much mighf, be done, in the modification of the tariff, to relieve tlie countiy. I still believe that the action of the froverunient in tihe return to specie payment will do a great deal toward relieving the laboring classes. It is not the want of money which has engendered the present state of things and the distress in the country. It is the fact that confidence is destroyed. The Chairman. It is asserted very frequently that there is a great deficiency of money and capital. Have' you, in your long business experience of fifty years, ever known capital to be so abundant and cheap as it has been for the last three years? Mr. Dodge. Never in my life ; and I have never known such an ntter impossibility of using it to advantage. I am acquainted with one trust company in this city. A few months ago one of our largest merchants deposited $300,000 capital at 2-J- per cent, interest, saying that it was impossible for him to use it in his business. Another de- posited two sums of $.'50,000. That is but a sample of what is being done. Money is iyiugidle everywhere. All that is wanting at present is confidence in the stability of lue government in regard to currency. The very moment that that confidence is es- tablished business will begin to revive, the wheels of industry will begin to move, and hundreds of men who are now out of employment will find employment. The Chair.max. Confidence in what respect; in regard to the currency ? Mr. Dodge. In the stability of the policy of the government in regard to the ques- tion of our currency. The Chaiem.\^'. Confidence in what direction— that the legal-tender dollar shall bo worth what ? Mr. Dodge. Shall be worth one hundred cents in gold. The Chairjian. In reference to the theory that if the government prints on this paper "This is one doUar," it is just as good a dollar as can be made, what is yoiu- view ? Mr. Dodge. Suppose the government should give us $10,000,000,000 of such paper money, would it be just as good? I remember when a boy that up in the garret of my father's house there was a large trimk in which were piled up batches of continen- tal money, which my grandfather had received for making continental wagons. It ■ had the same government stamp upon it. But the time came when it was not worth a cent, and that is why my grandfather, for this trnnkful of continental money, never received a dollar. The Chairman. Then the stamp of the government is worthless unless the govern- ment redeems it in something ? Mr. Dodge. That is the point. The Chairman. What is the something that it should be redeemed in ? Mr. Dodge. Gold; and when yon can redeem it in gold, it is justUke what the Frenchman said, "When I can get him I don't want him." The Chairman. Then the confidence which you speak of is the confidence that, when a man has a piece of this paper money, he can get the gold for it ? Mr. Dodgk. Yes ; anil in that case he keeps the paper money in his pocket. The Chairman. But he wants to bo sure that ho can get it if he wants it. Mr. Dodge. Exactly. The Chairman. Unless you have redemption of paper money in something that has positive value in the markets of tho world, will there be any stability in values? Mr. Dodge. No, sir. The Chairman. When there is no stability in values (and you have passed through that era), do you have to make allowance in fixing your prices to the consumer for the risk of the rise or fall in this unstable currency ? Mr. Dodge. We tried to do that, but wo failed most terribly. The Chairman. You were unable to protect yourselves with all your experience and judgment ? Mr. Dodge. Certainly ; we could not protect ourselves. The Chair.man. How do you think that if you, with all your experionce, could not protect yourself, a workman, who is not familiar with business and finance, can pro- tect himself against the extra prices put on such currency? Mr. Dodge. He has no safety in depending on his labor at all until he is sure that the dollar which ho receives for it will buy him an equal value. If he lays by a paper dollar that is irredeemable, he does not know but that, in a little, it will be so depre- ciated in value that it will take two of them to buy as much as a gold dollar would buy. The Chairman. Do you not think that the prices of commodities such as are con- sumed by families increase out of proportion to the comparative value of paper and gold, and remain so increased f Mr. Dodge. There have been.some exceptions to that rule ; but as a general rule it is true. The Chairman. Have not the retail prices outlasted the disparity between paper and gold ? Mr. Dodge. I think thoy have ; but I think that the retail purchaser of goods never DEPRESSION IN LABOR AND BUSINESS. 559 Ijonglit tliem so cheaply as lie cau buy them at the present moment. But purchaser" have suffered greatly all the way dowu. Now we have come to the point where the manufacturer receives nothing for his capital and labor, aud where the consumer is having the article at cost or less than cost. The Chairjian. Is not the effect of this state of things to increase the consumption ? Mr. Dodge. Yes. The Chairmax. Do you observe in business any signs of increased demand, or auy signs of recovery f Mr. Dodge. The gross amount consumed in the country to-day of tlie articles which we deal iu as merchandise is as much as ever it was. The CHAlRMAisf. In other words, the volume of business is as great as ever it was f Mr. Dodge. Yes. The Chairman. It is merely the prices that are down ? Mr. DoDGis. The prices are down very low. The Chairman. And the lowness of the prices tends to increase the volume of busi- ness? Mr. Dodge. Constantly. The Chairman. So that we are to-day doing as much business as we did in any normal period (leaving out the speculative era of 1872) ? Mr. Dodge. Yes; and there is another thing that cannot be overlooked. That is, that the very low prices of materials that enter into buildings are etimiilating the construction of buildings throughout the coTintry. I have recently traveled through seven or eight States, and I have been surprised to see the amount of building that was going on iu the towns and villages. That is going, eventually, to affect labor very favorably. The Chairman. In your travels outside the city of New Y'ork did you find any evi- dence that there was any very large amount of labor unemployed ? Mr. Dodge. For the last two months I have been traveling almost all the time. With the exception of the large centers of population great complaints have been made of the inability to get men during the harvest. The Chairman. Did you get any evidence at any other time (prior to or subsequent to the harvest) as to whether there was any deliciency of labor in the country ? Mr. Dodge. There was not a sufficiency of labor in the villages and rural regions. The Chairman. In other words, the surplus of labor is mainly confined to the large cities ? Mr. Dodge. That is so. The Chairman. Have you any remedy to suggest for getting rid of this surplus or excess of labor ? Mr. Dodge. I think that the government has offered very great inducements to laboring men in offering them land for nothing if they will only go and cultivate it. I think that there is no class of the community, high or low, so independent as the farmer. If laboring men would go into the country and work for themselves on the land, they could be very soon independent and be able to employ help. Mr. Rice. Have those who are out of employment in the cities the means of getting to these government lands and of settling on them? Mr. Dodge. A great many have not. Mr. Rice. Is there any way to help them to do so ? Mr. Dodge. Mayy of them, I have no doubt, have friends who would help them to go to such places rather than have them linger around the cities. Mr. Rice. Is there a way to help them by legislation? Mr. Dodge. I do not think that the legislature has any right to enter upon such a course. The Chairman. You were iu business in 1837 ? Mr. Dodge. Yes. The Chairman. And you were in business in 1857 ? Mr. Dodge. Yes. The Chairman. During the depression in business in those years, and subsequerit to those years, was there any difficulty among the laboring classes to get employ- ment ? Mr. Dodge. It was very similar to what it is at the present time ; but it lasted a much shorter period. After the crisis of 1837 we were in active business again before 1840, and everybody who wanted work had employment. After the criris of 1857 things were changed again before 1861. The Chairman. That was three yfears after the crisis of 1837, and four years after the crisis of 1857. Now, from 1873 to 1878 is five years. Have you any explanation that you can offer for the longer continuance of this era of depression ? Mr. Dodge. Yes ; in 1873 we had got much higher up on the mountain, and it takes na a good deal longer time to get down. The high prices and extravagance engen- dered by the war, and by vast speculations from 1863 to 1870-'72. inflated everything, aud gathered up everything so high that people went into debt enormously. Tlioy 560 DEPEESSION IN LABOE AND BUSINESS. wero practically head over ears in debt. Many of tlieiu had mortgaged their property and had to pay interest on those mortgages, and it has taken a very much longer time to get down towards the bottom. Wo certainly are getting down now towards the bottom. The CllAlEMAN. Do yon think that the losses caused by the war and the destruction of capital during the war have had any influence on the duration of this period (an influence which did not exist in 1837 or in 1857) ? Mr. Dodge. I do not believe that, as a country, we have ever really seriously felt the losses of the war, except so far as Imraan life is concerned. The Chairman. But I mean the destruction of capital. The war was supposed to have cost the Northern States ^5,000,000,000; and it is not known how much it cost the South. Do you think that the actual destruction and obliteration of all this cap- ital amounts to nothing in tlic problem ? Mr. Dodge. So far as the South is concerned there can be no question of it. So far .ns the North is concerned, it was greatly mitigated by the apparent prosperity that we had. But although those enormous losses resulting frora the war seem to have made i t necessary that there should be this suii'ering, yet I think that the suffering has grown more out of the stimulants of demand dnring the war, and out of the vast amount of paper money that was issued. I think that we had tided over that, and that we are suft'ering for it to-day. The Chaibjiax. The South had been a great consumer of northern products prio to the war ? Mr. Dodge. Yes. The Chairman. But it has not been since? Mr. Dodge. Not to any great extent. The Chairman. Therefore we have not got that outlet for our iiroducts. Mr. Dodge. No ; but the South is recovering very rapidly. The Chairman. And one of the elements of our recovery will be the growth of the South in prosperity ? Mr. Dodge. Yes. The Chaiksian. Otherwise you think that business is on as large a scale as it has been in any previous period ? Mr. Dodge. I think so, except always the shipping business. The Chairman. Do you think that a farther issue of paper currency would contrib- ute in any way to restore prosperity? Mr. Dodge. I think that the issue of $1,000,090,000 of paper currency might give apparent prosperity for a short time, but then we would be worse ott' than we are now. The Chairman. You think that we would want a great national temperance society to get over the results ? Mr. Dodge. Yes, sir. Mr. Thompson. Yon cited the cases of your little villages as proof of the good effects of temperance; and you attribute their success and the absence of depression there to that cause. Did I understand you correctly in that ? Mr. Dodge. Not to that entirely, but to the moral influences connected with it. Mr. Thompson. I understood you to say in answer to the chairman that in those places there was no general suffering of the laboring classes as coranared with other parts of the country. Mr. Dodge. I say so unhesitatingly. Mr. Thompson. Did I not understand you to say, also, that for the last two or three years yon had been running these establishments at a loss, for the purpose of keeping up your organization, and lor the benefit of your men ? Mr. Dodge. Yes ; we have been running them in hopes of better times. We should not, simply for the benefit of the men, go on indeHnitely with such a state of things, but if yon break up the organization of such manufacturing establishments it is very injurious. Mr. Thompson. So you have been running your establishments and employing these 2,000 men at an actual loss to the employers. Have you not been praotically koepiu" these men on charity? '' Mr. Dodge. I would not like to say that we were keeping them on charity. Mr. Thompson. Have you not been contributing to them at the sacrifice of vour interests ? •= j Mr. DoDGK. If we had stopped our various manufacturing establishments because thl^y were unproductive it would have been at the cost of great suffering to our men. Mr. Thompson. If your company had not been rich enough to run for^everal years at a loss to the stockholders, and if you had been compelled to stop your operations as other establishments did, would not the sufferings of the communities there have been the same as the suffering in New York City f Mr. Dodge. I have no doubt they would. Mr. Thompson. Then is it not a fact that in charity or in philanthropy you have been in a measure, maintaining these 2,000 uim for the last three years ? ' DEPRESSION IN LABOR AND BUSINESS. 561 Mr. Dodge. I tliink this: these men liave all earned their wages, they have worked faithfully and cheerfully, they were willing to go with us and to take lower wages. Mr. Thompson. But yovi were paying them more than they were worth to you ? Mr. Dodge. We have kept on our manufactories at a loss ? Mr. Thompson. Then, in fact, have you not been giving these men, in the form of wages, what practically has been charity ? Mr. Dodge. I would not like to say that, because many of those men are men who would not accept charity. Mr. Rice. Would not the suspension of your works have cost you just as much in depreciation as it has cost you to continue them in operation ? Mr. Dodge. As I r.emarked before, we hoped for a revival, and we kept on. Mr. Rice. Has not the continuing of the works been better for you than the stop- page of them would have been ? Mr. Dodge. Yes ; we hope so. Mr. Rice. Therefore, it has not been entirely unselfishness on your part ? Mr. Dodge. No ; we did not do it from charity. STATEMENT OF REV. J. N. STEARNS. Mr. J. N. Stearns next came before the commit^e and stated that he was the sec- retary and publishing agent of the National Temperance Society ; that, thirteen years ago, when that society was organized, it had sought to find the relations of labor to the liquor trafBc ; that it had found a man in Pennsylvania (Mr. Powell) who had been investigating the subject for a period of ten years, and that Mr. Powell was now prepared to lay before the committee the results of his investigations. He remarked that, in Maine, before the introduction of the prohibitory law, $13,000,000 a year had been spent for liquor, and that during the last year, under the effects of the prohibi- tory law, the amount spent for liquor had only been $500,000, and that, consequently, the jails of Maine were mainly empty. He remarked that Portland, which had been swept by fire, had been now rebuilt, and that the property valuation of that city had increased, during the last year, 480,000, while in Boston, with her 3,000 liquor shops, the valuation of property had fallen $17,000,000. The Chairman. Have you any evidence to show that the pressure of the haxd times is less felt in' Maine than in any other State ? Mr. Stearns. That is the testimony of Mr. Neal Dow at a very large convention of delegates from all parts of the State which I attended last year. The Chairman. I judge, from the reports of the greenback movement in Maine, that they are suffering there like the rest of us, and that they want relief in the shape of more money. Mr. Stearns. I presume that the count of the ballots will tell mainly on the result of that noise in Maine. Mr. Rice. You spoke of Portland and Boston in connection with the valuation of real estate. Have you any information as to which city business is most active in now? Mr. Stearns. Not from personal observation, but from statements of those familiar with it. Mr. Rice. Has not the business of Boston inci^eased more rapidly in proportion than that of Portland? Mr. Stearns. I presume so. Mr. ElCB. Notwithstanding its three thousand grogshops ? Mr. Stearns. The property valuation of Boston by the assessors was $17,000,000 less this year than last year. Mr. Rice. Is not that owing to the loss of capital invested by capitalists of Boston in Western and other securities that have fallen on their hands ? Mr. Stearns. I presume that that has had its influence ; but I know some merchants of Boston who, if they had been total abstainers, could have carried their business through, and who have now failed. STATEMENT OP MR. AARON M. POWELL. Mr. Aaron M. Powell, the gentleman referred to by the last witness, read the fol- lowing statement : intoxicating liquors and "hard times." The National Temperance Society respectfully submits for the consideration of the Congressional Labor Committee the following : Money spent for liquor is so much capital taken from industry. In 1870 there were n the United States 143,115 retail liquor dealers. The cost of liquors, exclusivfe of 562 DEPRESSION IN LABOR AND BUSINESS. domestic wines, as computed from best available statistics, was |619,425,098. By the census of 1870 the entire amount paid as wages for labor that year was $775,584,343. In 1872, Dr. Hargreaves, from internal revenue aud commerce and navigation reports, computes the quantity of liquors, distilled and fermented, at 337,288,066 gallons, the cost to consumers at |735, 720,048. In 1870, the value of all the food and food preparations at the place of manufacture, embraced in the census report for that year, was only .f600,365,571. In the single State of Pennsylvania the drink bill for 1872 was about |78,725,000. The same money employed in manufacturing useful and necessary articles which was spent in manufacturing and in the consumption of liquors would have employed 20,000 more laborers ancl paid |6, 000,000 more of money as wages in this one State alone ; that thousands are in want and distress is not inexplicable, while the annual expendi- ture of the nation for liquor is as much or more than is expended for food, and nearly twice as much as is spent for clothing. The |700,000,000 a year spent for drink would, in a single year, if appropriated instead for food and clothing, relieve all distress and place all in comparative comfort. Hon. Neal Dow, of Maine, in a careful estimate, states that this nation drinks up the equivalent of its entire property valuation, real and personal, everv twenty years. The liquor bill of Maine, formerly |13,000,000 a year, is now reduced to $500,000. The property valuation of the State was higher last year than ever before ; the valuation of the city of Portland, half destroyed by fire a few years ago, was, last year, $480,000 in excess of any previous year. There are 545,624 men employed in liquor making and selling, 600,000 drunkards, and 1,404,323 tipplers, as estimated by Dr. Hargreaves, the loss of whose time and productive industry to the nation is not less than $568,860,000. Intoxicating liquors are a chief source of pauperism. In 1873 the board of State charities of the State of New York found, out of 9,855 paupers, 84 per cent, of the men and 41 per cent, of the women were intemperate. Of these 44 per cent, of the fathers before them were intemperate, and 17 per cent, of the mothers. Careful inquiry shows from 75 to 90 per cent, of pauperism as due chiefly, directly or indi- rectly, to intemperance. Not less than 130,000 widows and orphans are left such annually by liquor -drinkers, a large proportion of whom become inmates of our poorhouses. Thus is the industry of the country burdened with onerous taxation made necessary by drink. The large and formidable army of "tramps" is being constantly recruited from the ranks of drinkers. The following sentence from a letter from an official of Spring- field, Mass., will serve as an illustration : " I would say that we have lodged and fed 8,052 persons that we call 'tramps,' and I seldom find a man among them who was not reduced to that condition by intemperance." Another cause of heavy taxation is the prevalence and cost of the crime induced by strong drink. Governor Dix, as governor of New York, testified: " Intemperance is the undoubted cause of four-fifths of all the crime, pauperism, and domestic misery of the State." In like manner Governor Gaston, of Massachusetts, testified :" In- temperance has been the most prolific source of poverty, wretchedness, and crime ; it has filled the State and the country with its destructive influences." Dr. EUsha Harris, of the New York Prison Association, says: "About 82 per cent, of the con- victs of the United States privately confess their frequent indulgence in intoxicating drinks." "The city workhouse, on Blackwell's Island," say the commissioners of charities and con-ections, "received, in the year 1876, 22,845 prisouers, of whom 11,250 were men and 11,595 were women. Drunkenness was the immediate cause of the incarceration of three-fourths of the former and seven-eighths of the latter, the pre- disposing cause in the cases of all the rest." The manufacture of liquors destroys millions of bushels of grain, which would otherwise be available for the poor as wholesome and nourishing food; the money spent for liquor is withdrawn from legitimate business ; the liquor destroys the health, begets idleness and vagrancy, and loses to the state the industry and wealth-produc- ing capacity of liquor-drinkers; the pauperism and crime impose enormous burdens upon tax-payers. The Chairman. How can Federal legislation deal with this question at all? Mr. Powell. First, it is quite within the jurisdiction of Congress to sav whether or not this liquor traffic shall go on in the District of Columbia, where there are over 1,000 drinking places. Secondly, it is quite competent for Congress to discourage, -or to encourage, the importation of liquors from abroad, just as Congress interdicts, through the machinery of government, the importation of hides and cattle into this port at times (perhaps at the present time). So it may lay its heavy hand on the im- portation of liquor fi-ora abroad. Thirdly, CongTess may preserve the Territories from the devastating effect of the liquor traffic. Mr. Rice. I understood Mr. Dodge to say that he would have the inhabitants of every town, village, and county vote on the question of the sale of intoxicating liquors. DEPRESSION IN LABOR AND BUSINESS. 563 If tliat were so, would you have the iuhabitauts of the District of Columbia vote on that question 1 Mr. Powell. Not necessarily. Mr. Rick. Then you do not agree with the president of the National Temperance Association ? Mr. Powell. I should not stand exactly on that platform in regard to the District of Columbia. Indeed I think I should not do so in regard to any part of the country ; for I believe in the competence of the State government to deal with the drink question as it does with other public perils. The Chairmai*^. Then, as a practical question, you do not believe in the principle of local option? Mr. Powell. Yes ; where it is practicable to put it in force. The Chaibman. Then, why should the District of Columbia be exempt from that principle ? Mr. Powell. Because the form of government in the District of Columbia is not such as to call the people to the polls on other questions. The Chairman. But they could be called to the polls on that question. Mr. Powell. To be sure they could ; but, as a matter of expediency, I would not do it, because it is just as competent for Congress to say that the drink traffic shall cease in the Distriol of Columbia as it is for Congress to appoint a commission for the District and to frame a government for the District. The Chairman. But why should not the same rule that applies to other places apply to the District of Columbia ? The legislature of Albany has the same right to abolish the liquor traffic in the State of New York. Why don't you get the legislature to do it ? Mr. Powell. We are asking the legislature to do it. The Chairman. Then you and Mr. Dodge do not agree. Mr. Powell. Not necessarily on that point. Mr. Thompson. On what theory would you interdict liquor traffic in the Territories? Mr. Powell. On the theory that the Government of the United States is the pro- teeter of the Territories, and has the power and the responsibiUty to use that power. Mr. Thompson. Suppose you were consulted as a lawyer as to the Constitutional power of Congress in the matter; in what provision of the Constitution would yon lind that power? Mr. Powell. I think I could And it. The Chairman. Perhaps in the provision that Congress shall have power to provide for the general welfare. Mr. Thompson. Welfare of whom ? That appUes to the State of New York as well as to the Territory of Wyoming. Mr. Powell. Not at all in this question. Mr. Thompson. Why, certainly; that clause of the Constitution applies to the United States and to the people thereof. It is not limited to the Territories. Mr. Powell. It applies directly to the Territories and indirectly to the States. Pass- ing over that for the present, let me take another point. It is that it is perfectly com- petent for this committee (if it is persuaded that the drink traffic is inimical to the public welfare) to recommend to the House of Representatives that the Constitution might be amended so as to meet any difficulties that are in the way. I believe that the enlightened Christian opinion of the nation will bring us to that, by and by, as a way out of what threatens to be a great national calamity. Mr. Rice. I agree with Mr. Dodge in his idea of local option ; I believe that that is the way to get at the difficulty. Now, if he be right, we do not need any constitu- tional amendment in that respect, because the people can be authorized to vote in all the towns, and cities, and districts^ and Territories, that there shall or shall not be drink trafiflo allowed there. Mr. Powell. There is no objection to that so far as it goes, but why make a dis- tinction ? Why not have local option as to whether there shall be counterfeiting allowed, or local option as to whether there shall be burglary allowed, or other things allowed ? Mr. Rice. Counterfeiting is a crime and burglary is a crime, but selling a glass of wine is not a crime. Mr. Powell. That is a question. The Chairman. It can be made a crime by law. Do you recommend us to report in favor of increasing the duty on foreign wines ? Mr. Powell. I would recommend that you suggest to Congress to prohibit the im- portation of foreign wines for drinking purposes. The Chairman. You are aware that we make domestic wines in this country. Would you have Congress suppress them too ? Mr. Powell. I would have the traffic in them suppressed. The Chairman. Would you recommend Congress to prohibit the importation of foreign wines in order that domestic wine growers might have greater profits out of what you think to be an immoral traffic ? 564 DEPKESSION IN LABOR AND BUSINESS. Mr. Powell. Not at all. The Chairman. That woiild he the effect of it. Mr. Powell. Not necessarily, because the moment the national government puts its face against the drink traffic, New England and the Middle States and the whole country ^^'ill turn their faces also against that traffic; but, so long as the natioiial government is where it is (with a Commissioner of Internal Revenue being the general manager for the liquor business of the nation, and just keeping his illicit distilleries from open warfare against the government) the States will never get much beyond their present condition on the question ; and therefore it is that I feel the deepest in- terest in having the national government deal with this question as its merits re- quire. The Chairman. You ask us to recommend Congress to put a prohibitory duty on the importation of foreign wines because you think that their use is demoralizing. Do you know anything about the habits of the French peasants and workingmen f Mr. Powell. I have seen something of them. The Chairman. They are great wine drinkers, are they not ? Mr. Powell. They are. The Chairman. Wine forms a staple part of every meal in France, even for the laboring men ? Mr. Powell. Yes, to a large extent. The Chairman. Do you know any nation in the world that is more frugal, more prudent, more industrious, more orderly than the French nation ? Mr. Powell. It is orderly, industrious, and frugal ; but it is not free from intemper- ance. The Chairman. The point is this : whether the consumption of wine is intemper- ance. You ask this committee to recommend to Congress to impose a prohibitory duty on foreign wines on the ground that the use of wine is demoralizing. Now I point you to France, whete the people drink wine in great abundance, and where they are known to be frugal, industrious, and moral, and I ask you whether, on that ground, you can sustain your recommendation ? Mr. Powell. Certainly I can, and I shall quote great French authorities to show Tthat the wise and statesmanlike men of France to-day are alarmed at the tendency of things there growing out of the drinking of wine and other liquors to which wine- drinking leads. The Chairman. I will thank you to send those authorities to the committee. In the mean time I will ask you to consult Chevalier, Leon Say, and other French econ- omists on that subject. The consumption of wine to excess is a wrong thing, as every- thing else done in excess is. I also have had large opportunities to observe the habits of the French people, and I am bound to say that I have seen very much less intem- perance in France than I have seen in this country, where we are not large producers of wine. Mr. Powell. That is undoubtedly true. The ChaiR/MAN. Then why prohibit the introduction of a thing that is conducive to temperance 'I Mr. Powell. I deny that it is conducive to temperance. The Chairman. The French are believed to be the most temperate and the richest people in the world, and they are the largest consumers of wine. Mr. Powell. I will send you the authorities which I quote. The Chairman. Please do so, and also send some reasons why wine should be ex- cluded from the diet of the French people. The committee adjourned until to-morrow. VIEWS OF MR. HORACE WHITE, OF CHICAGO. New York, August 23, 1878. Mr. Horace White appeared before the committee by invitation. By the Chairman. Question. "Please to state your occupation. — Answer. Journalist. Q. You have been many years connected with the Chicago Tribune ? — A. Yes, sir. Q. Have you, in the course of your studies, given special attention to questions affecting the relations of capital and labor, and to the financial question ? — A. Yes, sir; I made that a principal part of my studies in preparation for journalism, and also during the period when I. was actively engaged as a journalist, and I have also paid a good, deal of attention to it since I retired from journalism. Q. Have you directed your attention specially to the causes producing what is con- DEPRESSION IN LABOE AND BUSINESS. 565 ceded to be the present depression in business and tlie want of proper remuneration to the working classes ? — A. Yes, sir ; I have given a good deal of study to it. I cannot afiflrm that I have mastered the subject, but I have done as well as I could toward mastering it. I have studied it historically and theoretically, for a very considerable time. The Chairman?. The committee would like to have you take your own mode of stat- ing what you believe to be the causes ; and, if there are general causes affecting the condition of business all over the world and local causes aiiectiug it in each particular country (especially this country), discriminate as far as possible between them in your statement. Mr. White. I think that the present commercial crisis is merely one of a series of similar crises that have occurred in the history of commercial nations during the past two hundred and fifty yeais. I can name at least a dozen such crises which have had (you may say) a world-wide fame ; -ivhich have been very distressing and very far- reaching in each case ; all of which have been preceded by periods of rampant and extravagant speculation, sometimes taking one form and sometimes another form. I think that the crisis of 1873 in this country took the form mainly of gigantic railway and real-estate speculations. I find that prior to 1869 the average amount of railway building in the United States was a little less than 2,000 miles a year; that in 1869 this annual increment of railway mileage rose to over 5,000 miles ; in 1870 to over 6,000 miles; in 1871 to over 7,000 miles; in 1872 to between 6,000 and 7,000 miles ; and in 1873 (the year of the crisis) to between 3,000 and 4,000 miles, altogether making an unprecedented increase of railway mileage in the United States. I know, as a matter of observation, that pari passu with this very great increase of railway construction there was an enormous speculation in lands, both in the wild uncultivated lands of the West, and in city and suburban real estate, and that, all over the country, the prices of real estate were inflated, perhaps not beyond all precedent, but beyond any- thing else within my knowledge. I think that that was approximately the cause of the commercial crisis. I find that in other countries, and in our own country at other periods, similar crises have been produced by similar courses of extravagant specula- tion. The Chairman. Do you hold railways to be a good thing for the community ? Mr. "White. Yes, sir. The Chairman. There was no railway constructed in that time that was not valua- ble to the people at large, was there ? Mr. White. I suppose you may say there was none that was not in some way valu- able. The Chairman. All those that can be run without profit but yet paying their run- ning expenses are valuable ? Mr. White. All that can pay operating expenses are a benefit to the community. The Chairman. Then the building of such railroads would not of itself account for the calamities that followed ? Mr. White. No ; but the obligations incurred by reason of the building of those railroads and by reason of the purchase of vast amounts of real estate at high prices, and the advanced prices of everything else consequent on the enormous demand caused by railroad building could not be sustained. They were utterly factitious ; and the time was sure to come when the mass of obUgations so incurred had to be resolved in money and eventually in gold ; and the prices were such that they could not be re- solved in that way at all. Thus a vast number of people became iusolveut, and their insolvency caused a dislocation of trade and industry. The Chairman. If the investment in lands and in other fixed investments was not greater than the accumulation of wealth each year in the community (in other words, if there was an annual accumulation equal to the investment), would the investment have brought about this result ? Suppose the money had been accumulated out of other things in the community suflcient to pay for these things, would not business have gone on ? Mr. White. It could have gone on if the people had not been in debt. But, if they had incurred obligations by reason of this enormous extension of railroads and this excessive speculation in lands and everything else, and if they could iiot pay in dol- lars what they agreed to pay in dollars, of course there would be a crisis and a dislo- cation. The Chairman. But the annual accumulation of wealth in the world is at some rate or other (that is, the sum available in the community for plant, or for the construc- tion of fixed property). Do you suppose that that amount was steady during this era you speak o^in other words, do you think that the community was investing its floating capital too rapidly — transferring active into fixed capital too rapidly ? Mr. White. No, sir. You have got to measure your accumulation of wealth in something. In this country it is measured in dollars ; in England in pounds sterling ; that means a certain number of grains of gold or silver. If you are estimating your property at too high a figure, when the time comes that you have to settle your con- 566 DEPRESSION IN LABOR AND BUSINESS. tracts in (lollars or in pounds sterling, you cannot do it. That is what a crisis consists of. An increase of fixed capital is f;enerally accompanied by an increase of floating capital. The two things almost always go together. The Chairman. In other words the day of settlement came, and the property with which the man had to pay was not worth what it had cost to procure it ? Mr. White. Exactly; it was not worth it in dollars or pounds sterling. His promis- sory notes could not he paid with the proceeds. The Chairman. Had the nature of the currency anything to do with that state of things, that a man could not make his property produce enough to pay what it cost him on paper ? Mr. White. Very little, I think. I think that when the currency was increasing in volume it had a tendency to lead to speculation; hut, when it ceased to increase in Tolume, and when it became a fixed quantity, I do not think it had that tendency. The Chairman. This speculation took place during an era when the currency was not being increased in volume. Mr. White. Yes, mainly. The Chairman. What induced speculation ? Wliat brought on this trouble ? Mr. White. That is a pretty hard question to answer. I find that such periods of speculation do set in periodically, not only in this country, but in England, Ger- many, and the Scandinavian countries particularly. Much less in France, because the French are not a speculating people. The Chairman. You think it has a moral cause? Mr. White. Very largely so. The Chairman. It was given in evidence here yesterday that, at the close of the war, the policy of the government (confirmed by the judgment of the people) was to pay ofl^ the floating debt represented by greenbacks, and that that process of contrac- tion went on for sfmie time ; but that, in 1867-'68, that policy was reversed, and it , was decided tliat there should be no contraction of the floating debt, and that green- backs should continue as they were ; and it was stated that then the people of this country, seeing that the day of settlement had been postponed, were encouraged in a speculative tendency. How does that conform to your view of the case ? Mr. White. That is entirely a matter of opinion. My opinion would not coincide precisely with that of Professor Sumner in that regard. But still he may be right. I find that these commercial crises and these periods of speculation come upon nations utterly regardless of the currency. They may occur in a nation where the currency is entii-ely gold and silver, or they may occur where there is an irredeemable currency, and no gold or silver at all. Nevertheless, the observation of Professor Sumner may be correct. I would not undertake to deny it. The Chairman. You think that it was a moral cause (that is, a cause existing in the feeling or temper of the people at the time). Would it not contribute very largely to a speculative era when the people saw that the day of settlement had been post- poned? Would not that have had its moral weight upon the community at once? Mr. White. How could there be any rise in prices from that cause, when the cur- rency was nearly stationary ? The Chairman. We had been contracting previous to that period ; and, owing to the contraction, there had been a steady fall in values. That fall ceased. In other words, the thing was reversed. Mr. White. Do you affirm (pardon me for becoming the interrogator) that the fall in prices was in consequence of the contraction in 1867 ? The Chairman. I do not affirm that it was in consequence of that contraction, for I am perfectly well aware that the same fall in the value of goods took place in every other country where contraction did not occur. The fall in the price of commodities is the result of what has been going on in all countries, and we contributed our share to it bv that contraction. Mr. White. At the rate of $4,000,000 a month ? The Chairman. Yes. In other words, that may have affected the feelings of our people to such an extent that they were not willing to transfer floating into fixed capital at that time, and that may have produced the era of stagnation. When stag- nation ceased prices went up. Mr. White. Seeing that this contraction was to a very small amount and of only a short duration, I am inclined to think that its efij'ect was imperceptible. It only lasted for eleven months, and amounted to only $44,000,000. The Chairman. Then you think that this speculative era had no connection with the state of the currency ? Mr. White. I said, very little. I would not undertake to draw an arbitrary line and say that it had none, but I should say that the state of the currency was a very small ingredient. I find that the same thing was going on in England at that time, and the same thing has been going on in England prior to 1866, leading to a violent revulsion in that year ; and the English people had no irredeemable currency to help them ou. The Chair.man. You are clear, however, that the speculative era did occur, and DEPRESSION IN LABOR AND BUSINESS. 567 that the collapse from tliat era brought about the present stagnation and trouble in business ? Mr. White. Yes, sir. The theory of economists, as to the causes of speculative eras, is about this: that in the present stage of the world, and with its enormous productive machinery, there is a great deal more produced in a year than is consumed, and this surplus of annual products tends to bring profits to a minimum ; that is, to make the profits of capital less and less every year. When capitalists iind their profits dimin- ishing, they are driven to extremities to find a use for their capital ; and that leads them to go into untried experiments and new and distant investments. They go out into the world, farther back into the prairies and woods, to find something to do with their surplus capital ; and the era of speculation usually starts in that way. I think that history shows that to be so. For example, the great crisis of 1825 in England, was preceded by a vast extension of the commerce of England to South America, and an enormous expenditure of capital to find profitable investment, particularly in South America and Mexico. So many goods were sent to Rio, for instance, that the ware- houses could not contain them, and large quantities rotted on the wharves. The Chairjjax. Then you think that it is the accumulation of capital that brings about speculative eras ? Mr. White. I think it is the accumulation of capital acting upon the sanguine tem- perament of certain races of people that brings about speculative eras. The French are not a sanguine race of people. They generally hoard their savings, and for that reason they are very little subject to these commercial crises. They had no commer- cial crisis in France in 1873 or at any time since, but they have had great depression in business. That is attributable to the fact that the consumers of their products in other countries have been generally impoverished, and therefore the French are not able to sell their products in such large quantities or for such good prices as formerly. The Chairman. The real question is, here, what are the causes of this depression in business, and whether they are causes that may be removed by legislatiim. That is the problem, of course, which we are seeking to solve. France has suffered in exactly the same manner as England, the United States, and Germany. Mr. White. Not in the same manner. The Chairman. In what respect does France differ from those countries ? Mr. White. The English and American people have suffered by a genuine commer- cial panic and revulsion ; and the French people have not suffered in that way. They have suffered by a gradual diminution of their trade — a slow, gradual diminution of their trade, and principally of their foreign trade. The Chairman. You mean a fall in value ? Mr. White. Yes. The Chairman. Not a fall in quantity ? Mr. White. I do not think there has been a fall in quantity ; but I mean a dimi- nution in the returns which they get for their labor. The Chairman. In that state of things, if there had been only a fall in value and not a fall in quantity, there ought not to be any shrinkage in the demand for labor in France ; and yet that is precisely one of the things which the French legislative com- mission has been inquiring into, and it has reported that there has been a great dearth of employment in France, and that great difficulties have been produced by it. Mr. White. Is not that a dearth in wages, not in employment ? The Chairman. No. In Lyons and other manufacturing cities in France there has been a difficulty to get employment. Mr. White. Then there must have been (contrary to my supposition) a decrease in their exportr trade. I have inferred from what you said that the foreign trade of France, so far as quantity was concerned, had not diminished. I am not perfectly informed on that point. If it has not diminished, then it is a fall in wages, not in employment. The Chairman. So far as the committee has any knowledg:e on the subject, the diffi- culty seems to have been the same in regard to employment in all the great commer- cial countries — Germany, France, England, and the United States ; but, as you have said, affecting France at a much later period than other countries. The difficulty came in there more slowly ; but it has reached there. Whether the quantity of French exports has been diminished during the last year or not, I am not able to say; but, during the previous years, it was not diminished. I suppose it must be diminished now, especially in the silk business. Mr. WpiTB. Silk is an article of luxury, and people will economize on all articles of luxury before they will economize on articles of necessity, as a matter of course. The bnAiRMAN. You attribute the depression of business in this country to the one general cause of the collapse from a speculative era ? Mr. White. Yes ; because the obligations incurred during that speculative era could not be paid off in dollars and pounds sterling. The Chairman. And you think that that is entirely independent of the question of 568 DEPEESSION IN LABOR AND BUSINESS. currency, .and tliat there would have been the same kind of shrinkage, whother we were on a jj;old basis or on an irredeemable paper money basis ? Mr. White. I do. The Chairmaji. Do you think that the introduction of raachijiery so largely into this aud other countries has had anything to do with the breaking up of the specula- tive era, or with the crisis that followed the speculative era ? Mr. White. Not necessarily. That is a coutiuuing cause. It is not peculiar to any one era. It goes on during j)eriods of great speculative excitement just as at any other period. Anything superior to one's finger-nails is a machine. The Chairman. Does it not go on more rapidly ? Is there not an induceinent to engage in manufactures When prices are high that induces a large extension of mechanical power? Mr. White. There is ; and during periods of great depression there is an equal in- centive on the part of manufacturers to cheapen their processes by the introduction of new machinery. That is going on all the time to a very great extent. To stop it you must first extinguish the human intellect. The Chairman. Nevertheless, in many branches of business during the period of high prices, there was an enormous increase in the productive power of the country ? Mr. White. Yes. The Chairman. And that increase of productive power is not going on now ? Mr. White. Th.e increase in productive power went on during the war to an enor- mous extent — to an extent that could not have been anticipated, I imagine, by any- body. That leads me to remark that I am not able to agree with those who anirm that there was great destruction of capital during the war. I do not think that there was any considerable destruction of northern capital|during the war. Capital consists of fixed and floating capital Fixed capital consists of buildings, machinery, factories, rail- ways, steamboats, warehouses, &c., and floating capital consists of consumable com- modities. We know that fixed capital in the north was not destroyed during the war. It was not subjected to the scourge of victorious armies. Whatever fixed capital was worn out during the war was replaced during the war. The floating capital existing at the beginning of the war was no more than sufficient to supply the ordinary needs of the population for about a year. The Chaikman. Did we not incur during the war a very large foreign debt ? Mr. White. Not a large foreign debt. The Chairman. At the close of the war, how much did we owe abroad 1 Mr. Whitb. Not more than one-tenth of our national debt, in my judgment, had teen taken abroad at the close of the war. The Chairman. Since the war much more than that has been held abroad? Mr. White. Yes. As soon as the war ended and foreign capitalists discovered that we were firmly established as a government, they began to purchase our bonds very largely — not only national bonds, but railway and State and city bonds, to a very large extent ; but thdy did not do so during the war. The Chairman. Were not the Germans very largely buyers of our national bonds during the war ? Mr. White. Yes ; during the last year of the war, but not before. Holland and Germany then began to buy our bonds on speculation rapidly. But during the four years' period of the war there was no great sale of our bonds abroad. The Chairman. You would say that the fixed capital of the North was increased during the war, notwithstanding the withdrawal of the large body of men who were employed in our armies ? Mr. White. Yes ; to some extent. The Chairman. And you would say that the floating capital was not reduced in any way? Mr. White. It was not materially reduced. The Chairman. And we did not get anything worth speaking of from abroad during that period ? Mr. White. Yes. Therefore I say that there was no great destruction of capital during the war. What was destroyed was simply some of the natural resources of the country, such as coal, iron, copper, and lead taken from the bowels of the earth. That was taken out and destroyed, and can never be used again. The Chairman. If that same army of a million of men had been employed in pro- ductive labor, would not the country have been richer at the close of the war? Mr. White. Certainly ; if there had been a market for their products. The Chairman. These same men would have eaten only what they did eat as soldiers ? Mr. White. Yes. The Chairman. And the fruits of their labor would have remained in some form of permanent value? Mr. White. Yes ; if they had produced more than they consumed. The Chair.man. If the government had taken that million of men aud set them to DEPRESSION IN LABOR AND BUSINESS. 569 LuildiBg a railway to tlie Pacific, opeuing canals, and. putting up public buildings,, and had fed tbem with the same food as it fed them with as soldiers, would we not have been richer to the extent of the railways, canals, and public buihlings ? Mr. White. Yes ; on that hypothesis we would. . But, supposing that the govern- ment had kept to its own business and left these enterprises to be undertaken by private capital, they might have been undertaken or might not have been ; I do not attempt to say. The Chairman. That raises the whole question. If it turns out that when the gov- ernment does not stick to its own business the country grows richer than when it does, it raises the fundamental question whether we have got the kind of government that we ought to have. That is the problem submitted to the committee — whether we can recommend some improvement in the government, so that it will take these idle people and employ them, and so that the country may become richer. How far can the government intervene and become the employer of labor (as it was the employer of labor during the war from necessity) ; how far can it intervene in that direction with advantage to the community ? Mr. White. I do not think that the government can do anything in that direction. I agree entirely with the remark of Professor Sumner yesterday — that when the gov- ernment undertakes a j ob of that sort, there is no place for it to stop. There is nobody to say what employment I shall be engaged in, or how much money I shall earn. I may want to build a railroad to the Pacific, and if I do, have I not as good a right to the government means and the government credit as anybody else has ? The Chaikmaic. But you seem to have made a very powerful argument to the com- mittee to show that when the government did act as the employer of a large body of men the country grew no poorer, but that, on the contrary, it was better off at the close of the war in material wealth than it had been when the war began. That ar- gument is one which the committee has got to accept so far as it has value, and it has got to be answered or else accepted. Mr. White. I did not say that the North was any better off at the close of the war. The CHAiEMAisr. You said that it was as well off. Mr. White. I simply said that there was no considerable destruction of capital during the war, and I think I can prove that to a mathematical certainty. Mr. Thompson. I did not understand you to say or to intimate that the natural in- crease of capital had gone on in the north during the war. Mr. White. I did not say that. The Chairman. I understood you to say that we did not suffer by the destruction of capital during the war. I did not understand you to say that there was any in- crease in capital ; although, on the line of your argument, that there were more rail- ways and more factories and that there was no diminution of floating capital, there must have been an increase. Mr. White. I told you that from 1859 to 1869, the average annual increase of rail- way mileage was less' than two thousand miles. I presume that except in certain special branches of trade which were intimately coimected with war and the appli- ances of war, the increase of capital in the north during the war was not so great as it would ha-ve been without the war. Indeed I am quite sure of that. The Chairman. When the war broke out there was a certain stock of bullion in this country — gold and silver — was there not ? Mr. White. Yes, sir. The Chairman. What became of it during the war ? Mr. White. It was principally exported. The Chairman. We were large producers of gold and silver during the war ? Mr. White. Yes. The Chairman. What became of that ? Mr. White. It was exported also. The Chairman. Then we were poorer to the extent of our stock of bullion ? Mr. White. I told you that the minerals dug from the earth during the war were lost. They cannot be reproduced. Agricultural products, cotton, tobacco, domestic animals, &o., can be reprodivced. The Chairman. Must we not replace this coin before we have a permanent or regu- lar era of prosperous industry ? Mr. White. Yes, sir. The stock which we had at the beginning of the war was estimated by Secretary Chase at |200, 000,000. I never could succeed, in my researches, in making out more than $125,000,000. That, you may say, was sent abroad and spent in gun-powder ; and that was lost. That is destruction. The Chairman. Do you think that that is the limit and extent of the loss which we suffered then ? Mr. White. It is all that I can think of just now. I know that if there had been any considerable destruction of the floating capital (the consumable commodities) in the first year of the war, there would have been a vast deal of distress in the commu- nity ; but there was no distress. The stock on hand was no more than sufiScient for 570 DEPRESSION IN LABOR AND BUSINESS. the ordinary requirements of tlie population in time of peace. What happened dur- ing the war was an extraordinary expenditure of productive energy. The national resources were used to their utmost possible limit. The Chairjian. Do you not know that the accumulated stock of everything disap- peared during the war, and that at the close of the war there was no accumulation whatever ? Mr. White. I do not know. The Chairman. Was not that a loss of so much floating capital ? Mr. White. No ; because it was reproduced all the time. The Chairman. Suppose that we had a thousand millions of accumulated stock at the commencement of the war, and that at the close of it we only had n hundred mil- lions' worth ? Mr. White. Then the difference would have been lost. The Chairman. As a matter of fact I think that at the beginning of the war the manufacturers had a large stock of goods on hand ; and, at the close of the war they had no stock. Mr. White. Then the difference between the two was the loss during the war. The Chairman. Does it not take a certain volume of stock of all kinds of goods to be on hand to keep the community properly supplied ? Mr. White. Yes. The Chairman. And that stock was lost ? Mr. White. Perhaps. The Chairman. Then that would have to be made up ? Mr. White. Yes. The Chairman. Do I understand you that the making np of that loss is an element tending to the activity of business or to the depression of business ? Mr. White. That tends, of course, to produce activity in business. The Chairman. Then may not that have been one of the causes of the speculative era which you have described — the era of activity in the building of railroads and other investments of which you spoke ? Mr. White. Yes ; if the facts are as you state (that there was a great surplus at the beginning of the war, and that there was no surplus at the end of the war), the re- placing of the difference would have tended for a short time to produce an era of spec- ulative activity. The Chairman. At the time the crisis took place everybody had pretty large stocks of goods on hand, and they have continued to be large from that time to the present — and that may have been one element. Now, in addition to these causes, do you see any local causes peculiar to ourselves that have tended to bring about this depression in business ? Mr. White. Yes ; I think that the railway speculation and the real-estate specula- tion together were mainly local to the United States. There was no great increment of railway mileage in England or Germany, I tMnk, during that period — nothing like ours. The railway mileage of the United States was nearly doubled during this short period that I speak of. The Chairman. What effect, in your judgment, has the gradual approximation of our paper money to the gold value produced on business ? What has that had to do with it ? Is it the result of the panic or is it the cause of the shrinTiage? Mr. White. It is a result, most certainly. The Chairman. That is to say, that if the speculative era had continued the pre- mium on gold would probably have continued ? Mr. White. Yes, sir. The Chairman. And the fact that the speculation collapsed caused what ? Mr. White. That fact caused the turn of the foreign trade in our favor. We ceased to import capital from abroad. Our exports, consisting of articles of prime necessity, not only continued in the same volume as before, but increased steadily, until they have now reached an excess of more than $200,000,000 in one year. The Chairman. Then you think that the shrinkage (in other words, the approxima- tion of gold to the same level as paper) is due to the fact that the current of our for- eign trade is changed ? Mr. White. Precisely so. The Chairman. Then this shrinkage which has swept the debtor class out, forced it into bankruptcy, and produced this distress to the country is the result of a cause which is — healthy or unhealthy ? That is to say, the incretvs'e of exports and the dimi- nution of imports. Mr. White. It is most decidedly healthy. The Chairm^ust. Then what we are going through is a process of cure ? Mr. Whtk. Yes; emphatically. The Chairman. And any attempt to get back where we were by an increase of cnr- Tency, so as to make the difference between the value of gold and paper what it was ■would it be an injury or a beneflt to the country ? DEPRESSION IN LABOR AND BUSINESS. 571 Mr. White. It would be a great injury to the country. It would be a Herculean task, anyhow. It would puzzle the wisest (or the most foolish) of oiu' members of Congress to devise any plan to do it. There is just one plan, and only one, by which it can possibly be done, and that is, if Congress should undertake a vast amount of public works (which very many people demand) and should pay for them by issuing new greenbacks to the contractors, then you may bring it about ; but in any other way than that I do not see how it can be done. The Chaiemax. Suppose that thi.i committee should recommend to Congress, as a solution of the trouble, that the government should undertake great public works and should pay for them in paper stamped "This is one dollar " or " This is one thousand dollars — what do yon think would be the consequence of the issue of that money ? Mr. White. I think that national bankruptcy would be the first thing, and pretty nearly universal bankruptcy the next thing — ^public and private bankruptcy. The Chairmax'. Let us see the process. We pay this paper money out at a moder- ate rate. How would this national or individual bankruptcy come about ? What would be the effect on the prices of commodities of paying out this paper money ? Mr. White. People would sell their property and their labor for that money at what they thought the money was worth for the time being, and if this paper was legal tender and could be forced on creditors, it would run long enough to discharge the greater part of the debts that are due to-day; and it would ruin the people who would be obliged to take it. Then the value of the paper afterward would be what anybody might choose to put upon it. It could not have any fixed value. The Chairman. Would not people incur new debts very rapidly, foreseeing that this paper money was going to depreciate ; would there not be a desire to run into debt and get property ? Mr. White. I have not thought that out very far, and I would not like to give a hasty opinion about it ; but I should suppose that people who could get houses and farms for that kind of paper would be very anxious to do so. The question would be whether anybody who owned houses and farms would part with them for that kind of paper. The Chairman. But those to whom debts were due would be compelled at the out- set to take payment in this paper. Mr. White. Yes. That would be equivalent to a forced division of property, a divis - ion of property on a communistic basis, veiled under the forms of law. The Chairmax. The result would be, as I understand you, that the creditor would be compelled to take payment in something less valuable than he expected, and, there- fore, would have less property ; and that the debtor, paying his debt in something less valuable than he expected, would have more property. Mr. White. Yes, sir. The Chairman. It would be a transfer of property, to that extent, from the cred- itor class to the debtor class ? Mr. White. Yes. The Chairman. Do you think, from your study of this question, that the debtors or the creditors are in a majority in this country (I mean, of course, the net debtors and net creditors) '! Which would gain the most, in point of numbers, in that process ? Mr. White. I cannot answer that question. Everybody is in debt more or less. The Chairman. And they also have debts due to them, and it is a question of bal- ances ? Mr. White. Yes. I shoulil say that the net result would be very disastrous to all except insolvent debtors. The Chairman. Insolvent people would become solvent ; but, on the other hand, solvent people would become insolvent f Mr. White. Yes. The Chairman. They would just rsverse positions ? Mr. White. Yes. The Chairman. If the positions were reversed, would the community be any better off? Mr. Whi IE. No ; it would be much worse off. The Chairman. Would the thrifty and industrious people who have saved be likely to keep their property f Mr. White. Judging the future by the past, I should say not. I was looking the other day over the list of failures for the last five years, as published by Dun, Barlow & Co., and I found that the failures for the past five years were about 37,000 out of 680,000 firms in business. Now the number of insolvent debtors (taking that as an index of the whole community) is less than six per cent, of the whole. The Chairman. I can also say, in the same direction, that I took occasion recently to look over the books of my firm to see the percentage of persons dealing with us who have failed since 1873, and I found that the number of failures does not amount to 2 per cent, of the whole number of persons dealing with us. Hence, I conclude that the solvent people of this country are much more numerous than the insolvent. •572 DEPRESSION IN LABOE AND BUSINESS. Mr. Whith. You may he an exceptioually prudent merchant. The Chaikmax. Not at all; but I fancy that the percentage of ineolvunt persons is much less than 10 per cent. Mr. White. The tables of Dun, Barlow & Co. show it to be less than 6 per cent. The Chairman. This experimeut of putting out legal mouey receivable only for taxes and not redeemable in gold and silver has been tried iu the world several times, has it not '! Mr. White. Yes, it was tried in France, and it was tried in the Southern Confederacy very fully during the war. The Chaikmax. How about the experiment during the revolutionary war in this country ! Mr. White. Yes, it was tried then. The Chaikmax. And in all the cases that you know of, the attempt to make legal- tender paper money not redeemable in coin has always failed? Mr. White. The' mouey has become utterly worthless. The Chaikmax. Do you see anything in the condition of things in this country, or in the power of legislation that resides in Congress, to prevent the same thing occur- ring again if it was attempted here ? Mr. White. Nothing whatever. The Chairman. Have we discovered any new financial principle that has not been heretofore broached, advocated, and tried ? Mr. White. No, sir; nothing. The Chairman. During the two hundred and fifty years through wliich you have studied this financial question, have these same doctrines been repeatedly proposed, and finally got into use, and have they not always resulted in collapse and disaster? Mr. White. Over and over again. The Chairman. Do you know anything about the financial condition of China? Mr. White. I do not ; I bought Vissering's Chinese Currency the other day, but I have not read it yet. The Chairman. Then I have the advantage of you, for I have read it; and I may state as a mattar of fact that during a period of a thousand years, the same thing has been tried three times in China, and always with the same result. It has always been advocated by the same arguments, and has always ended in the same way. And as the Chinese have managed to support a larger population than any other nation, I suppose that their experience must be of some value. Now, there is another sugges- tion made. It is suggested that one cause of the difficulty among what is known as the laboring classes (I mean those who work for wages) is the immense tax levied on them by the necessity of paying the interest on the national debt in gold, and it is proposed as a remedy to pay off the national debt with non-interest-bearing notes — legal-tender notes, receivable by the government for taxes and dues of all kinds, but not payable in any other form than that — this paper to be the currency of the country and the interest on the national debt to be thus saved. What do you think would be the effect of that sort of legislation ? Mr. White. That is repudiation of the public debt. That is offering the holder of an interest-bearing security a nou-interest-bearing security of the same govern- ment. The Chairman. These gentlemen say, "Why not repudiate the national debt? What obligation is there resting on these people to pay the national debt ? There ought not to be any national debt. Why not pay it off in that way, giving the bond- holders a representative of value, and let them take it ? It will pay debts, it wiU pay taxes." There would be a loss by that process. On whom would that loss fall ? That is the point. Mr. White. It would fall upon everybody, I think, because it would lead to anarchy. It would dissolve the bonds that hold society together — the bonds of honor. Society ultimately rests on the form of government that existsin the country ; and if we destroy all confidence in the honor of the country, I do not see what else we have got to hold society together. The Chair.man. Of course the business of the country depends upon the use of capi- tal. A great deal of capital is movable capital. Wliat would happen to that mov- able capital if such a proposition were carried out ? Mr. White. It would get out of the way as fast as it could. The Chairman. It would retire from the country ? Mr. White. It would retire from the country. The Chairman. What would be the effect of that on the employment of labor ? Mr. White. I should say that it would throw ten men out of employment where there is one man now out. The Chairman. Would any prudent business man who had capital be willing to let his capital go out of his possession at all ? Mr. White. No, sir; the community would find itself dissolved. It would be in such a state of anarchy and chaos that it would soon have to begin right over a^ain DEPEESSION IN LABOR AND BUSINESS. 573 form anew goveriiiiifnt, siud comnipnce by reassumiiig tlie debt whicli it had repudi- ated. You canuot have a government in tliis country in any other way. The Chairman. There have been nations thatliave passed through that experience; for instance, France in the French Revolution, the United States in their Revolution. The Southern Confederacy passed through it too, but it has not been able to rehabili- tate itself. Did France and the United States reassvime the debt which had been re- pudiated ? They reorganized society successfully, but did they reassume the debt ? Mr. White. No, sir ; they did not reassume the debt ; and the reason why was be- cause they could not. This, however, would be a case where a country that is abun- dantly able to pay its debts voluntarily repudiates them. The other two were cases where it was absolutely impossible for them to pay their debt ; they were cases of bankruptcy ; but this would be a case of repudiation — a vast diiference ; the difference between misfortune and rascality. The Chairman. That brings us to the point that society may be so badly consti- tuted that it ought to be dissolved ; and, if it be dissolved, what is the course to be taken in order to reconstruct it ? The reconstruction proposed is by some called co-operation and by some called communism, but the general theory is that the gov- ernment is to be the owner of all the fixed capital in the country, to employ the peo- ple and distribute the proceeds of industry among them all, so that everybody can get a fair share. Do you know, in the experience of mankind, whether any attempt has ever been made to carry on society on that theory ? Mr. White. No, sir. The Chairman. There is no guide for us in that direction ? Mr. White. No, sir ; simply because it could not be done. The Chairman. If you can make it perfectly clear that it cannot be done, perhaps that would help us a little on our road to a solution. These gentlemen of whom I speak decline to accept the assurance that it cannot be done, because they think that it can be done. Mr. White. There are, I suppose, from 50 to 100 persons in this room. How many of that number would submit their talents, and their property, and their labor to the direction of government ? I suppose this is an average representation of the Ameri- can people. How many of them will consent to do that ? because you have got to have their consent first. The Chairman. Do you propose that we shall take a vote now and see how it will stand ? Mr. White. It would not alter my opinion if they should vote against me. The Chairman. You do not think that they would be willing to pool their property and have a new subdivision ? Mr. White. I do not think they would. The Chairman. You would be unwilling to pool your property ? Mr. White. I would be unwilling to pool either my property or my services. The Chairman. Do you think it possible by any legislation to alter the distribution of the proceeds of industry ? Mr. White. I think it might be done to some extent by the taxing power. The Chairman. Is there any other method than the taxing power by which the distribution of the proceeds of industry can be altered ? Mr. White. None that I know of. The Chairman. Do you think that the method exercised by the government in the taxing power has altered the distribution unfavorably to the working Qlasses ? Mr. White. That involves the great tariff' question, and I do not know whether the committee wishes to go into that. The Chairman. If the principle on which the tariff is constructed produces that result, it is exactly the question which the committee wishes . to enter into. We are here to discover the causes that have brought about this depression, and to re- move the causes by legislation if possible. The tariff is a thing purely of legislation ; therefore there is nothing more important than that. I see it has been said that I refused the other day to hear the discussion of the tarifi' question. That is not the fact. A witness offered to read to us a detailed tariif bill, and the committee de- clined to go into those details ; but the committee never declined to hear a discussion as to the operation of the tariff on business and labor. On the contrary, the commit- tee looks upon it as a most important subject. Mr. White. I think that a tariff can alter the distribution of property to the detri- ment of a portion of the community. I think that an article of necessity (such an article as quinine, for example) is made artificially high by the tariff ; so that people who have fever and ague have to pay more for the quinine thati they otherwise would. That is a distribution of property to the disadvantage of the sick people. The Chairman. But if, by the imposition of that duty, the man who buys the qui- niae gets a higher rate of wages than he would otherwise get, is he not better able to pay a higher price for the quinine ? 574 DEPRESSION IN LABOK AND BUSINESS. Mr. White. If, by reasou of that, he gets exactly a high enough rate of wages to cover the difference in the price of the quinine, of course, it makes no difference to him. The Chairman. What is your opinion as to the effect of protective duties on the wages of labor? Do they raise wages or not ? Mr. White. I think they do not. The Chairman. You think that the protective system raises the prices of commo- dities which the laborer buys, but does not raise the wages themselves ? Mr. White. I think that, in certain cases, it does raise the price of commodities which we have to buy. I do not think that it permanently raises the price of articles the production of which is adapted to the natural condition of the country. The Chairman. If it did not raise the price of labor, what is to prevent you from going into the manufacture of quinine and taking a share of the immense profits grow- ing out of that manufacture, until, by competition, the profits are brought down to the usual profits of business ? Why is not the price brought immediately down by competition to the general level ? Mr. White. I think it would be. I said that the protective system would not per- manently raise the profits. The Chairman. In fact, is quinine dearer here than it is in France, or England, or a ly other country ? Mr. White. Yes ; I have been told so by doctors. I have not investigated the sub- ject myself, but I have been told that it is a great deal dearer. The Chairman. Then why do not other people go into the manufacture of quinine and bring down the excessive price, if there are such large profits ? The business is open to everybody. Mr. White. I do not know. There may be some peculiarities in the trade. The Chairman. I know that iu the branches of business with which I am familiar people are free to go in and make what profits they can, and they have gone in so freely that the business now is not of any value to anybody ; and I suppose the same rule apples to quinine. Now, unless the prices of these protected articles are made permanently dear to the consumer, and if his wages are correspondingly increased, how does he suffer ? Mr. White. I think that it tends to produce an abnormal condition of things. I think that a protective tariff temporarily stimulates a particular industry and leads an excessive amount of capital into that business (just as it has done into yours), and eventually leads to bankruptcy and loss of employment. The Chairman. But iu England an excessive amount of capital went into the iron business at the same time that an excessive amount of capital went into that business in this country, and in England there is perfectly free trade, notwithstanding there was an abnormal diversion of capital into the iron and steel business. Was that not rather due to the speculative era, which created this enormous demand for iron, than to the tariff or to free trade ? Mr. White. I am perfectly willing to admit that. I did not select the iron trade as an example. I am speaking about the usual tendencies of a protective tariff. In re- gard to the existing state of the iron trade, which is in a great depression all over the world, the speculative era, the railway era, that we have been discussing, was un- doubtedly the cause of the excessive investment of capital in that branch of business. When the demand for iron ceased or fell off' at the beginning of the panic, a large num- ber of iron establishments had to close up. The Chairman. The same state of things prevails in regard to the cotton busi- ness. There is the same depression in regard to the cotton business as there is in regard to the iron business. The building of railroads, of course, demands more cotton shirts for the laborers; but still these same men are wearing most of the cotton shirts yet. Now, if that depression had occurred locally here, and had not occurred there, then it might be fair to set it down, undoubtedly, to the tariff; but free trade exists in England. On the other hand, it is also clear that the protective system which we have in such powerful operation in this country did not protect us from the same depression that exists there. Therefore, there must be some cause, en- tirely independent of the tariff and entirely independent of free trade, to bring .about this depression in business ; for we in this country have not been protected against it by the protective system, nor have the English failed to suffer in the same way be- cause they have fr-ee trade. Mr. White. I have not stated it in that form ; that the tariff was the cause or even a cause of the existing depression in business. You asked me whether there is any form of legislation to cause a laboring man to receive less wages than he was entitled to, and I named the tariff as one of them. That is rather a different question from the one we are now discussing. The Chairman. Accepting the situation as we find it, can we do anything in the way of a modification of the tariff which would tend to hasten the termination of this era of depression ? Can we help ourselves by any legislation on the tariff" subject ? Mr. White. Yes ; I think we can very decidedly. A vast number of articles in the DEPEESSION IN LABOR AND BUSINESS. 575 taritf that are the raw materials of manufactures are prevented by high duties from i-oming into the country. They are nob prevented entirely, but their cost is very much increased to the manufacturer. If those taxes were removed, so that manufacturers could get their raw material at less cost, they could sell their produce in the markets of the world at lower prices and could compete with other countries ; compete with England for example. I do not say that we can compete on equal terms in all respects with England ; but this is a wide world, and there must be a great many places where we can sell goods at 90 cents, but where we cannot now afford to sell them at less than a dollar. The Chairmaij. Assuming that that was done and that we commenced this export trade to other countries, would we not be met in the markets of the world with the goods already supplied by Great Britain and other countries, and would we not have to compete with them for those markets ? Mr. White. We would have to compete with them, undoubtedly The Chairman. Would not the supply in those markets increase and the prices fall correspondingly ? Mr. White. Yes, in some cases. The Chairman. And would it nbt come back to exactly the same state of things ? Mr. White. In some cases probably it would and in some it would not. Wo can- not tell till we try. The Chairman. Must not consumption be stimulated in advance of the increase of supply, and in order to induce the increase of supply ? If we send more supply than there is consumption for, does it do good to anybody, except to the consumer, by put- ting down prices ? Mr. White. But you cannot stimulate consumption unless you offer to supply cheaper. The Chairman. There is a cei-tain price for any article you like in the market, say 10 cents a yard for cotton. The market is now supplied by Great Britain. We take off aU duties interfering with tlie production of cotton goods, and we proceed to that market with our cotton goods in competition with Great Britain. As a matter of course, the supply being increased, the price will fall to 9 cents or to 8 cents a yard. If we are to keep our ground in that market, we must be able to supply it at 8 or 9 cents a yard ; and, in order to do that, we must reduce the cost of our manufactures. Now, where will the reduction come and on whom will it fall ? Mr. White. There are a great many things in which the reduction may come. You can improve the processes of production (and that this country has certainly done'). We make better goods than England — perhaps not at the same money — but the cotton goods that are made in this country are a better article than those made in England. Now, if we make a better article for the same money, we have tjie advantage in the market. The Chairman. But how soon will the people of Great Britain catch up with us, as they do catch up with us in everything where we get ahead of them ? It is a race all the time. How long will that superiority last ? Mr. White. That is competition. That is what we understand as competition. Mr. Chairman. Where do the ultimate results of that competition fall ? Must you not get down the wages of labor in this country to the rate of wages in England, as one of the elements of cost ? Is there any other way to do it ? Has not that been the history of all industries — that competition reduces the wages of labor? Mr. White. I do not think it has. I think that the wages of labor have increased within the last two hundred years. The Chairman. Yes ; the purchasing power of wages has increased. Mr. White. And the money-wages too. What do you mean by the use of the word " purchasing power" ? The Chairman. I mean that a day's labor will buy more of the necessaries of life now than it did two hundred years ago. Mr. White. Yes. That is all that there is in the problem, anyhow. The Chairman. I suppose that the condition of the laboring man has been greatly improved within the last two hundred years. Mr. White. Yes ; not only of laboring men, but of all other men. I was reading the other day Kogers' History of Agriculture and Prices in England, and I came across an inventory of the furniture in the house of an English nobleman of the thirteenth cen- tury, which it was said was an average inventory, too. It did not contain as many conveniences and luxuries as the house of an ordinary laboring man in Great Britain does to-day; nothing like so many. The Chairman. That undoubtedly is due to the productive power of machinery. Mr. White. Yes, sir. The Chairman. Therefore machinery is a blessing to the laboring men and not an injury ? Mr. White. Take it altogether it has been a blessing. There have been a great many individual instances of hardship resulting from the introduction of machinery. 576 DEPRESSION IN LABOR AND BUSINESS. The Chairman. Tlie competition lietween countries and people reduces the wages of labor; but there is another force at work increasing the production, and so rapidly, that notwithstanding the competition the laborer is steadily gaining in comforts of every kind. Mr. White. Yes; I have no doubt of that whatever. The Chairman. Now, in regard to the tariff, do you recommend the abolition of all duties on raw materials" as far as possible? Mr. White. Yes. The Chairman. Would you go so far as to recommend the imposition of duties on what are known as luxuries — tea, coffee, and sugar — which would be practically a tax upon production, not upon consumption ? Mr. White. I should. Those taxes yield a maximum of revenue at a minimum of cost. The Chairman. You are in favor, then, of takiug off all protective duties on aU the staple articles of industry ? Mr. White. I would not recommend a sweeping reduction of protective duties. I think it should be gradual and even very gradual. I do not believe in striking down large industries that have been established on the faith of existing laws ; but I think that they ought to receive notice that there was to be a gradual reduction of duties. The Chairman. Granted that any change shall be gradual, how would they be stricken down ? If we had as much advantage for the production of iron in this country as Great Britain has, why would not my iron business go on ? If I can make my iron with as little physical labor as the English can, why snonld not my business go on? Mr. White. It would go on. The Chairman. Unless the laborer here gets more pay for his day's labor than the laborer in Great Britain gets. Mr. White. Unless he gets enough more to counterbalance the cost of transporta- tion. The Chairman. Would not the inevitable effect of this system be the equalization of wages between this country and England ? Mr. White. There will be always the cost of carriage to make up for a difference in wages. The Chairman. I suppose you are aware that iron is brought over in ballast some- times as low as two aud sixpence a ton, which is less than I can have it carried in this country for ten miles, so that the item of transportation from England is merely nominal. Mr. White. But I think we have cheaper coal here than they have. The Chairman. Not at the iron-works, I fancy. Mr. White. I think so. The Chairman. At the present time ? Mr. "White. Yes ; I looked into that four months ago. The Chairman. I have been looking into it every week. I know of no iron- works in this country where they can get coal any cheaper than it can be got at Newcastle, m the great iron region of England. Mr. White. Do you not think that we get it cheaper at Scranton ? The Chairman. Yes. Mr. White. And at Pittsburg ? The Chairman. Yes; but there iron ores are dearer. Mr. White. Do you not think they get it cheaper in Eastern Tennessee? The Chairman. Yes; they get it cheaper in Eastern Tennessee, because there the coal and the ore are together; but Eastern Tennessee is far away from the market. The cheapest place in the world for coal and ore, where there is transportation, is the Middleborough region in England, and to-day pig-iron is sold there for |8 a ton with- out loss to the manufacturer, while there is no region in the United States where pig- iron can be produced for less than $10 a ton. Now, no more days' labor enters into the American cost of pig-iron than into the English cost; aud the reduction, therefore, will come by the equalization of wages in the two countries. I see nothing impossible in it; but the logical consequence is that the rates of labor must be equal in the two countries, and I see further that, without any extraordinary legislation, they are being equalized. Mr. White. All that tends to show that there are other elements besides wages which are to be taken into the account. The Chairman. Is not that one form in which the reduction must come ? Mr. White. Yes. The Chairsian. On the other hand, you hold that the purchasing power of wages will be fully cqwal to what it now is ? Mr. White. I cannot say that it will be es;actly the same. I cannot speak to a nicety •on that question. I should think that the purchasing power of wages would increase DEP.tESSION IN LABOR AND BUSINESS. 577 with the reduction of general prkes. I know that a dollar buys a sood deal more now than it did in 1870. The Chaiuman. How about I860? Will a dollar now buy as much for a working- man as it did in 1860? Mr. White. I think so. The CHAU^.^rA^-. Have you examined the question ? Mr. White. I have not examined it closely enough. I have not gone into the de- tails sufficiently to make an exact statement, but I have casually examined the ques- tion. The Chairman. The committee has made au arrangement to have testimony on that subject ; but I wish to say here that it was stated in evidence in the fir^t week of the examination that the laboring men are not getting their supplies from the grocers at as low a rate now as they did in 1860. The fact was testified to by workingmen that while the wholesale prices are down, the retail prices have not come down to a corre- spondiuji; figure. Mr. AVhite. I have not gone into the retail prices at all. I have only looked at the wholesale prices. The Chairman. How far, in your judgment, is the disturbance which exists due to a larjje class of middlemen who have to live out of the profits of labor ? Do you think that that class is excessive ? Mr. White. Yes; I think that the proof of it is that thirty-seven thousand of them have gone out of business during the last fixe years. The Chairman. Driven out by what ? . Mr. White. By bankruptcy. That means that tliere have been thirty-seven thou- sand men in the business more tlian could make a living out of it, and I think there are a great many more who have to go yet. The Chairjiax. Ought we to attempt by legislation to interfere with such a natural process, by which the unnecessary middlemen might be driven out of the business? Mr. White. You could not do it if you tried, and I should think it most unwise to make the attempt, and unjust. Who is to select what man is to go out of the business and to go into something else ? The Chairman. Yet the complaint is that this is a great evil, that many meritorious and worthy people are' ruined by the course of the government in shrinking up the currency; and that that has produced the result that these people were earning a good living prior to the contraction of the cuiTeucy ; and that they are being now driven off by the policy of the government in resuming specie payment. Is it possible to avoid coming to specie payment in a country that undertakes to do a large business in the markets of the world? Mr. Whitk. The assumption that the fall in the price of gold, or the decline in prices generally, has been brought about by the government is one that I entirely object to. It is not true. The Chairman. You think that the government has not done it ? Mr. White. The government has had nothing to do with it. The Chairman. It has been the result of something else ? Sir. White. Nothing that tha government has done has had anything to do with it. The Chairman. That something else has been the state of things which enabled us to export more than we imported? Mr. White. Yes ; bringing more gold on the market ; and the surplus of the currency has retreated to bank-vaults. It has contacted itself. The Chairman. Has there been too much money for the last two or tliree years? Mr. White. I do not know that there has been. The Chairman. You say that the currency retreated to the bank- vaults. What does that mean ? Mr. White. If there was a surplus of cun-ency (I think there was, but I am not wise enough to affirm it) during a period of speculation, that surplus has retreated to bank- vaults and is now unemployed. It has contracted itself. If there has been any con- traction, it has contracted itself. The Chairman. What i s the eviden ce tliat the currency has retreated to bank- vaults ? Mr. White. The extremely low rate of interest. The Chairman. If you found the amount of unemployed reserves in the banks to be out of proportion to the requirements of the law, would that he evidence of it? Mr. White". Yes ; I should consider that that would be an important piece of evi- dence ; and another important piece would be the amount of loans and discounts now, as compared with that of the speculative era. The Chairman. Have the loans and discounts been falling off? Mr. White. I have not looked to see. I know that they increased vastly from 1868 to 1873. The Chairman. It is alleged here that these loans and discounts have been pur- posely diminished for the purnose of producing a shrinkage in order that the capital- ists might buy up the property of^debtors for a mere song. 578 DEPRESSION IN LABOR AND BUSINESS. Mr. White. That assumes that a man who has $1,000 which he can lend at a fair rate of intersst — that will bring him an income — will go deliberately and put that $1,000 in a safe-deposit vault, where hi; will get nothing for it. I do not believe it at all. The Chairmax. What do banks loan as a rule — their own capital, or the capital of the community i Mr. White. The bulk of it is the capital of the community. The Chairmax. Do individuuls have money deposited with banks in moderate sums. or in large sums ? Mr. White. Usually in .small sums. The Chair.m.\n. Then the money loaned out is the money of the community, payable on call? Mr. White. Yes. The Chairman. Can there be, in the nature of things, a combination among the peo- ple at lai'ge to restrict discounts, and thus to produce a fall in values whereby some- body might buy up the property of the community ? Mr. White. It is a perfect chimera; there isno such thing possible. The Chairman. Is there anything further in regard to the tariff which you wish to state to the committee ? Mr. White. No, sir. The Chairman. You think that that subject has been fully discussed ? Mr. White. I do not know ; but 1 have said all that I wish to. Mr. Rice. Did I understand you to say tliat you think that business is depressed by, or that there is any injurious efiVct upon it growing out of, the j)rotective tariff? Mr. White. Yes, I do think so. Mr. Rice. Do you think that it would grow out of any protective tariff whatever f Mr. White. I think so. Mr. Rice. Do you belic;ve that any protective tariff would have an injurious effect on business ? Mr. White. Yes, I think so. Mr. Rice. Did I understand you to say that it was because a protective system ab- normally stimulates manufacturc.s ? Mr. White. It does if it accomidishes the object for which it is laid. That isthe ob- ject of a protective tariff. Mr. Rice. Do you think that a protective tariff' on manufactures would stimulate the manufacturing business of the country 1 Mr. White. I think it would if it accomplished its object. I say that the influence of a protective tariff is to draw capital from a more profitable employment into a less profitable employment. I do not know any other object ever assigned to it. Mr. Rice. Are you opposed to stimulation generally, where it can be applied, and where it produces greater activity ? Mr. White. Yes, I think it tends to produce commercial crises. Mr. Rice. Would yon be opposed to using fertilizers on a soil where fertilizers in- crease the production of the soil ? Mr. White. No, not at all. Mr. Rice. That is stimulating the soil, is it not ? Mr. White. Yes. Mr. Rice. In Massachusetts we cannot raise corn and other products of the soil as well as you can at the West ; would you not allow us to use fertilizers ? Mr. White. Yes, certainly. Mr. Rice. If we in the United States cannot carry on manufactures in competition with some other country that is older and richer, and that .has established its manu- facturing system more thoroughly than we, more strongly than we, would you not allow us to stimulate the manufactures here just as we stimulate the soil? Mr. White. No. Mr. Rice. Why not ? Mr. White. Because in the one case you withdraw capital from some place where it is productively employed, and you invest it in another place where, according to . your hypothesis, it is unproductively employed. Mr. Rice. Do you think that there is ample scope and use for all the capital that can be accumulated in those jpursuits that do not require stimulants ? Mr. White. There has been, up to a recent period. I think that the case now is somewhat different. I think that the accumulation of capital in this country has aiTived at a point where there is more than can be profitably employed, au(J that it must go into the outside world to find employment. Mr. Rice. Do you think that we have got our country so nearly finished, so full of everything that is needed, that we do not want to spend our surplus capital here any l:mger, but that we ought to spend it abroad ? Is that your idea ? Mr. White. I did not say that we had got the country so nearly finished. I said that we had more capital in the country to-day than could be profitably employed. DEPRESSION IN LABOR AND BUSINESS. 579 Everybody admits that. To say that the country is nearly finished is a different thing. Mr. Rice. If business -svere helped and stimulated into greater activity, vcould not that employ this surplus capital ? Mr. White. Your use of that word "stimulate" is something I do not understand. If you can create a market for more goods than are produced now, that is a stimula- tion which I can nnderstand, but any other stimulation I cannot understand. Mr. Rice. We can create a market for twenty-live million dollars' worth of linen goods by putting a high tariff on linen goods from abroad and keeping them out, and would not that enlarge the market for our home manufacture of linen? Mr. White. There would be a market in the world for just the same amount of linen goods that there was before. There would be no more linen goods consumed on the whole than there were before. But I admit that you can, by putting on a suf- ficiently high duty, compel the people here to buy their "linen goods at a higher price than they are now paying for them, and in that way you can have the manufacture of linen goods in this country and have an investment for capital wliich capital does not now possess, at the exi)ense of the consumers. Mr. Rice. And you thereby employ unemploved capital '? Mr. White. No ; not that. The Chairm.\x. That would tax the whole community that consumes linen goods ia order to employ laborers and give encouragement to capital in that business 1 Mr. White. Yes. It is identically the same, in effect, as if the money were taken out of the Treasury. Suppose there is a profit of 10 per cent, on the twenty-five mil- lion dollars' worth of linen goods to be manufactured and sold in this country, then you tax the people two millions and a half aud pay it over to the persons who employ la- bor in that business. The Chairman. Do you think that things could be improved in this couijtry by any limitation of the hours of labor ? One of the allegations here is that some people work a great many more hours than they ought to, and that that leaves other people unem- ployed, and it is said that if the hours of labor were to be limited that would permit the employment of the unemployed labor of the coimtry. Do you think that a feasible plan for legislation? Mr. White. No; I do not. That is an infringement upon liberty which I think would not be tolerated. The Chairman. Are you not willing to be restricted in the kind of labor you perform ? Mr. White. No, sir. The Chairman. Are you willing to be compelled to labor ? Mr. White. I am willing to be compelled to labor when the necessities of my family require it. The Chairman. Then you are compelled by natural causes ? Mr. White. Yes. The Chairman. You think that it is no part of the functions of government to inter- fere with the righ t of individuals to labor f Mr. White. 1 think that itis in direct contradiction of the functions of government — a most plain and palpable contradiction of them. The functions of government are chiefly to protect life, liberty, and property. The Chairman. But these people say that that is the protection of life ; that they are perishing from starvation because some people are doing all the work and leaving others without any work at all ; and they ask to be protected by this legislation. Mr. White. By the inflringement of somebody else's liberty. The Chairman. But is it not part of the business of government (is not that at least the object of society) that the members of society shall be preserved in life, and that measures shall be taken to insure their necessary support ? Is not that the main object of society ? Mr. White. The main object of government is to see that people shall be preserved from being maltreated, robbed, or put to death by violence, &c. ; but I do not conceive that it is the duty of government to see that anybody has work to do, or rather, has the particular work which he would like to do and the particular rate of wages that he would like to receive. That is what it results in. As Professor Sumner said yester- day, what people want is, not work but wages. If the government has an inexhaust- ible store of wages to distribute, I'have no objection to the distribution ; but there is no such store. I will find work for all the unemployed if somebody else will find the wages. ■The Chairman. People come to me every day and ask me to get them on public work. I have scores of applications daily. My house is almost uninhabitable by reason of them. I see that many of them are very respectable and wortliy people. What is to be done in such a case ? Mr. White. Do the best you can. The Chairman. But they say to me, " There is work here that will support us all. 580 DEPRESSION IN LABOR AND BUSINESS. but some people are working ten hours the men who were transported free to Kansas some years ago, what class of men they were and what has been the result. I know that there has been one United States Senator who was so transported, and there was a member of Congress who went out as a boy with his father, and there was one governor of the State who was transported in that way free. So that free transportation cannot be the test. ilr. HiNCHMAX. Before Mr. Rice replies let me make this remark : If, to-day, it was announced that somewhere in the inaccessible regions of the Rocky Mountains there was » new eold placer found, mines of immense richness discovered, thousands and thousands of people would be on their way there the next day, and would not "stand upon the order of their going." The C'H AIRMAN. You think they would go on their legs if necessary ? Mr. HiNCHMAN. They would go on their legs. But, if yon simply invit(^ them out to labor (m farms, that thing has not the shining aspect that the gold mine has. The Chairman. If they were jnovided with free transportation and did not otter to take advantage of it, there would be no harm done; but if, after being selected as suitable persons to go to the West, they were willing to go, then wfuild you do any- thing to help them out ? Mr. HiNCHMAN. If the thing were very carefully and judiciously (hme, undoubtedly individual good would result; but you would establish a very bad precedent. Asa rule, the people who are worMi caring for Avill care for themselves ; that is, taking adults and those who are capable. It has been suggested to me to ask whether the parties you speak of who were transported to Kansas were children or adults. The Chairman. They were adults with their families. Mr. Rice had better state it. He happened to be the secretary of the Emigrant Aid Society, and he had better state just how it was done. Mr. Rice. The idea was that people would go in that way who were entirely worthy to become members of the society when they got there. These gentlemen to whom the chairman refers were rather agents of the society. They were not absolutely poor persons themselves ; but they were sent out to take charge of the companies that were helped to get there. But the companies who were helped to get there consisted of the men who settled Lawrence, which is now the principal city of the State. Mr. HiNCHMAN. An enterprise of that kind, entered into by a company or society, would act independently. The society could discriminate. But, if you make it a governmental function, every man will consider himself equal in right to his neighbor and no discrimination can be properly made without making it a source of very great complaint. That is one objection to the government undertaking things of that kind. I have no doubt at all that it would be a money-making and good enterprise for some of those large western railroad corporations that have immense bodies of fertile lands, to offer inducements to settlers. Mr. Rice. Why might it not be a very good enterprise for the government, which also owns vast tracts of fertile lands ? Mr. HiNCHMAN. The government already offers land for occupation as a free gift. If the government goes farther than that it is obliged to add a pecuniary consideration, either in freight or money, which consideration it cannot make general. Mr. Rice. Take the Northern Pacific Raih-oad Company. It has an immense area of unsettled lands. Do you think it could offer inducement by way of freight (taking people there for nothing^ to get them on those lands and make a profitable operation from it ? Mr. HiNCHMAN. That is a matter of which I have no practical knowledge ; but I should think that a western railroad having a large body of lands which it wanted to have settled (so as to make a freight business for itself) would eventually make money by pursuing that course. In regard to the cost — the statistical and business part of the matter^I .have no experience that would enable me to speak. Mr. Rice. My obj ect in putting the question was to ask whether the government might not do it as well as the railroad companies, and, in doing it, also relieve the wants and necessities of those people (many of them out of employment by no fault of their own). Yoti say that we ought to get these unemployed persons to work on the land; that there are too many in the cities and in factories. Now, why might not the govern- ment profitably use a portion of the proceeds from the sales of the public lands to get these ppor people to the land ? 590 DEPRESSION IN LABOR AND BUSINESS. Mr. HiNCiiMAN. My objection to that is that it would establish a very bad precedent, and that it is contrary to the general spirit of our institutions. Mr. Rick. You mean that the helping of people by the government is? Mr. HINCHMA.N. I mean donating to individuals what cannot bemad(- a general dis- tribution. It is a species of unfairness which would produce a complaint oi favoritism against the government. Aa a rule things done under government supervision are not as well done as things that are done by private enterprise. The Chairman. Is not the best evidence that it caunot be well done by the govern- ment this : that the railroad companies with their large possessions of land which they desire to have settled, do not do it 1 Mr. HiNCHMAN. I should think so. Mr. Rice. Is not their failure to do it at least very suggestive of the difficulties in the way ? Mr. HiNCHMAN. It is. Mr. Rice. I believe that some railroads do give emigrants free passes. The Chaikman. Yes ; on the line of their own road, but not beyond. Mr. Rice. Probably not beyond. Mr. Hinch.man. To return to what I was saying. In 1870 we had fallen in the mat- ter of improved farms about 10,000,000 of acres ; that is, 10,000,080 of acres less had been improved than the increase of manufactures required. I find by making a calcu- lation that the number of persons employed in agricultural pursuits in 1870 was 5,900,000. Every man takes care of about 32 acres of land. The ten million acres which were undeveloped and which should have been developed in a normal state of affairs, would have accommodated about 312,000 workers. Calculating a worker with a fam- ily, of say three persons, that would have provided for nearly a million of inhabi- tants — about the number that are now supposed to be out of work, or in bad circum- stances. As compared with the advance made between 1850 and 1860, the falling off in improved acres was 20,000,000. These 20,000,000 of acres if used with the average occupancy would have accommodated about 625,000 workers, and provided for about two millions of people. And it appears very curious that the estimates which are made require about that number of people to be provided for in order to make a proper adjustment. This sheet (indicating) is tilled with figures that are more or less sugges- tive and that might be enlarged ujjou. The Chairman. You will please to leave those tables, that they may go in as a part of your remarks. Mr. Hinchman. With ]deasure. Mr. Rick. You think that the adjustment will take place by natural causes? Mr. HiNCHMA.v. Yes. Mr. RiCB. That men who can afford to get to the western lands will go there; that they are going there now ; and that they will make room for those here who cannot afford to go, and who, )ierliaps, you think would not be worth much if they got there ; and you think that, in that way, the remedj' will be applied without governmental assistance. Mr.HiNCHMAN. Y'es; I think so. Mr. Rice. By the questions which I have put to you, I did not intend to say that I had any different opinion from ycjurs ; but I only put tlieui in order to get your answers, which you have given very intelligently to the questions I put. It has been observed, I think, that where a government has offered to transport, colonists to the public lands (the English Government fq/c instance), and has offered to give them lands free, it could not get any colonists to go, and that when the government made it known that colonists could go and have the land for a price, a sufficient number were found to go and take possession of the lauds. Mr. Hinch.man, Yes. The probability is that it would occur in an attempted en- terprise of this kind, as it has occurred in almost every other such attempt by a gov- ernment — that the sliarp, unscrupulous people would come along and avail themselves of the first profits. I have here a comparative statement taken from the United States census reports of certain occupations whose productions are ephemeral in character, and are generally applicable to personal enjoyment. The figures are taken for the years 1860 and 1870. This paper contains a tabulated statement of about forty occupations of that character, made in those two years. I will say in general terms that the result of it is entirely confirmatory of my theory and opinion as before expressed, that the labor of the country had been very largely diverted from the-ordinary useftil, necessary productions, into those that were light, ephemeral, and that ministered only to luxury. To show the character of the manufactures that I speak of, I wiU mention some of them. Billiard-tables; cigar-boxes; playing-cards; carpets and floor-cloths; carriage-trimmings ; children's carriages; carriages and wagons ; wheel- wrighting, spokes, &,c. ; chromo-lithographs ; confectionery; cork-cutting; fire- works; fire-arms; furniture; dressed furs; glass and glass ware; hair- works; saddlery and harness; ivory-work; jewelry and cases; liquors and cordials; looking-glasses and frames; malt; mineral and soda water apparatus; musical instruments ; patent medi- DEPRESSION IN LABOR AND BUSINESS. 591 cines and drugs; perfumery; photographs and apparatus; tohacco-pipes ; plated ■ware; pocket books; regalia and banners; show-cases; silver ware; tobacco and cigars; toys and games; trunks, valises, and satchels; umbrellas; canes and whips; upholstery materials ; matches and cases. Now tliere is scarcely an article enumer- ated there — all respectable and all more or less useful, perhaps — that is not outside of the list of articles of positive necessity. Mr. Rick. Is it not just in the use of those articles that society shows that it is thriv- ing and becoming rehned ? Society must first supply itself with the necessaries ; and when it has supplied itself with the necessaries, then, if it has got a surplus, is it not rather an evidence of prosperity that the demand for such articles occurs, and that there- fore the supply increases ? Is not that a sign of improvement rather than otherwise ? Mr. HiNCHMAN. Certainly ; it is the outgrowth and illustration of the times that we have had. Times of prosperity have produced an excess in the manufacture of articles appropriate to such times. The Chairman. Is not that an evidence of the growth of civilization ? Mr. HiNCHMAN. Yes. Mr. Rice. A man cannot eat more than so much. He may eat things that cost him more than other things would cost ; but he can only eat so much corn, so much pota- toes, so much beef. When he has done that he may spend a good deal on horses, car- riages, yachts, billiard-tables, playing-cards, jewelry, and all those things that you have been speaking of. Mr. HiNCHMAN. All right within the proper limits, I agree with you. Mr. Rice. And the fact that there is an increased supply of such articles shows that there is an increased demand forthem; and does not that show that the condition of society is improving rather than otherwise ? Mr. HiNCHMAN. The fact that there is a glut of those things shows that there has been, a demand for them which no longer exists. Mr. Rice. Did I understand you to say that there is a glut of those articles ? Mr. HiNCHMAN. We hear of a glut in almost every article oli'ered in the market. The Chairman. Now you define a glut diii'erently. I told you that I had things that I could not sell, and you said that you would sell them for me. Mr. HiNCHMAN. A glut simply means a certain amount of goods that cannot be sold without loss, and where the owner does not want to make the loss. If I proclaim that I have a surplus I expect that the next man that I meet would be glad to relieve me of it. The Chairman. The business in chromo-lithograplis has increased very largely. Everybody who travels through the country sees these pictures everywhere. Where there were no pictures before you now see these chromo-lithographs. Prang & Co., of Boston, are the great manufacturers in this country of chromo-lithographs. It turned, out that, in consequence of the demand for this article, that company was able to offer to the trustees of the Cooper Institute a chair for a teacher in industrial drawing, and has contributed |1, 500 a year for that purpose for the last three years, and the classof pupils ' in industrial drawing has risen to over one hundred. The earnings of the pupils of the school for the last year were over $10,000, and as fast as they can get up to the point of becoming good teachers themselvfes, they are at once aljsorbed in the com- munity and receive from $500 to $2,000 a year. There is one fruit of this demand for chromo-lithographs. Now, no human being can predict in what direction these things wiU work out, and give proiitable and suitable employment to those who had no employment before. Mr. HixcHMAN. I quite agrae with you. There is no difference of opinion in that respect between us. What I mean to say is that many people who are now complain- ing of bare backs and empty stomachs have spent money within tl e last few years on this list of articles that I have read, whio'i, if they had saved it, would have given them something to live iipon. The Chairman. Would not the moral of that be, " never spend money for anything that you can get along without?" Mr. HiNCHMAN. Not at all. The Chairman. If we were always to refrain from spending, fearing that a rainy day might come, what would be the effect on the community ? That certainly is what you advise us to do — not to spend anything except for the necessaries of life; and would not that put society back where it was two hundred years ago ? Mr. HiNCHMAN. You appear to assume (which is a mistake) that I am opposed to refinement, or to the purchase of the various articles which minister to it. I am not at all. I am simply trying to illustrate, by these various charts which I have, that there has been a disjiroportion in industrial pursuits which on being adjusted, our troubles will cease. The Chairman. If we stop buying these articles, and if there be a certain number of people now employed in making them, would they not be thrown out of employ- ment ? Mr. HiNCHMAN. The illustration which Professor Sumner made the other day in 592 DEPRESSION IN LABOR AND BUSINESS. regard to the introduction of improved machinery answers that question very clearly. If we stop buying these articles there will be a temporary inconvenience to somehody ; there is no doubt about that. I was going on to say in regard to the item of liquors and cordials, that the raw materials for them in 1860 cost l|56,000,000, and in 1870 $101,000,000. The net result of this table is that the articles which I have enumerated cost in 1860 §238,000,000, and in 1870 (reducing the amount to a gold value) |453,000,000. Our population had increased within that time 22^ per cent., but the production of those articles had increased (at gold value) 90 per cent. The labor which is bestowed upon part of that increase it would have been very well and profitable to dispose of in improving these twenty millions of acres of land that should have been improved. The Chairman. Would not the result of that have been that a great many people would not have had the things which they w^anted to have, and that there would have been an increase in the quantity of food, which has already been sufficient during all that time, because there has been no famine? Mr. HiNCHMAN. I think that there has been no time within the last 15 years that we could not have found a foreign market at paying prices for all the food that we could raise. Undoubtedly we could at some prices. The Chairman. But the world has been fed. There has been no famine in civilized countries. By this process you %\'ould have increased the stock of food, and the people who were willing to buy these unnecessary articles wouW not have had them. Nobody ■would have been engaged in making them. People would not have had employment in that direction. Would that not have been a diversion of labor from something that society wanted to something which society did not need ? Mr. HiNCHJiAX. Decidedly the contrary. During the years from 1865 to 1873 we borrowed in Europe about $1,000,000,000! That $1,000,000,000 did not come here in gold and silver, or in anything that we could recognize as money, but it came to us in commodities. The Chairman. Mainly in commodities of that very class of luxuries — such as silks and satins. Mr. HixcHMAN. The annual importation of silk amounted to about $13,000,000. The Chairman. It has been up as high as $20,000,000 a year since you have beeu in business. Mr. Hin-chman. Yes ; from $12,000,000 to $20,000,000. It would have heen far better for our people to have sent abroad the property which they now complain of as a sur- plus, and to have paid for those things, if necessary, rather than to have borro ved them. The Chairman. But if we had not produced those very things at home, ■would we not have bought them abroad ? Mr. HiNCHMAN. Probably, in the condition of affairs that then prevailed, our people would have been like an anxious and fretful child. W^hat they wanted to have they would liave had. The Chairman. They did have it, and they did not ask whether it was made here or abroad. The only result of your theory, it seems to me, is that we would have bought these things abroad and not here, so that we would have beeu employing foreign labor instead of American labor. Mr. HiNCHMAN. Probably. I have a third paper which is an enumeration of occu- pations which supply clothing mainly. It takes in all the articles of clothing supply- material and manufacture. In round numbers in the jear 1860 our supply of clothing cost us 1429,000,000. In the year 1870 (reduced to a gold basis), it cost us $675,000,000, an advance of 57 per cent, against an increase of population of 22^ per cent. Mr. Rice. Was not that a good sign ? Did it not show that the community was improving and was able to have better clothes ? Is not that just what we are -work- ing for 1 ^ Mr. HiNCHMAN. I am not endeavoring to discriminate between good and bad ; I am simply endeavoring to show a state of facts. Let you or others decide, if you choose, as to whether they were good or bad. The simple point that I want to make is covered by the remark that there has been considerable div<'i-sion of labor from things useful and necessary to those things which minister to a higher style of life, and to luxury ; and that (the demand for that class of articles having slackened and gone out), as a matter of necessity, the people who were making them have got to go to other employ- ments. There is no escape from it. Mr. Rice. Not if there is an abiUty to purchase these articles on the part of society. Mr. HiNCHMAN. But there is not an ability. There is the very point. Mr. Rice. If society was all at work as it was in the year.s wlien these articles were all sold; if there was no unemployed laboring people, and if people could buy as they theu were able to buy, then the demand would be equal to what it was before, and might go beyond it. Mr. HiNCHMAN. In a state of industrial affairs in which there is no great excess produced in any one line of goods, there is a demand for about everything that is made. DEPRESSION IN LABOK AND BUSINESS. 593 We cauuot make too iimcli of desirable articles. The world never was,, and never wiU be, satisfied witli the amount of riches that it possesses. Mr. EiGE. It would be an unfortunate thing if it was, would it not ? Mr. HiNCHMAN. That is a moral question. I do not know, Mx. Chairman, that I have anything more specially to submit. The Chairman. I know the labor which that «ort of work requires, and the com- mittee wants to make its acknowledgments to you for the trouble you have taken. If witnesses generally would go through such preliminary preparation, it would save us a great deal of trouble. Mr. HiNCHMAN. I suggested in my first communication to you that I thought that a body of facts very usenil might be prepared under the supervision of the committee, and I am still very strongly of that opinion. I think that in a mere matter of opinion, without a basis of facts, you will never come to a conclusion. Yoiu' opinions must be guided by, or based upon, something substantial ; and it is, in my judgment, quite competent to make up, from accessible sources, such tabulated statement of existing affairs relating to business as will be very useful, not only to the committee, but to the public. , w lomn mm The Chairman. There is no doubt of it. The committee quite agree with you in that, and we hope to be able to accomplish that result. Mr. Walker, Superintendent of the Census, proposes to make in his next census report a very large series of com- parative tables of that sort. Mr. Hinchman left with the committee the following tables prepared by him : 38 L 594 DEPRESSION IN LABOR AND BUSINESS. •098XtnOG8traoJi jgoag pgap jo eBO^; •0981 O'i 0S8T inojj mBS X'B^^Q o:^po.tmboaiire§ •BijTdBOJodoAbqB 00 -f o in in OJO in £5; COD- CI o tD in « tootTc O t- l>» CO .-I o t-lO o 00 M i> in CO OS m 05 o c* -rf< M ^ T-^ CO iCi ,— — c: :3 «> fH lin co •098T o^ 0381 "10^ hibS B^td'GO J9a panb© 0% pojnib 9J SB (joupojj in 00 rH CO t- t-00 OS in O) i> oj ooi— looimocoot-cjrco-^ otjH--- oooootooocDccc; -o OD-»OOlrt(OOCt3CCO 'I-- -*Oio;«DXJt-cocc-+'- 5D fo t- Tt< b- in in o I— I CI 't - 1- o ■098T o:^ 0S8I inoar trreS 'b^jicTbo .iqu X^aba oi pojinb -9JSvare^.ioeeoi ■aoi;'Bxndo(I JO OSBaXDUt JOJ ■%UQO .19(1' ?2S 3mppB 'noaq 9 AB q p^noqe ;t en ioiipojj OTiriino-:fiOG>Oifo-«f'; -i oj oi a: Tti « ro "* 00 — 1^ — r> 7>a t- cr: c'l ^ t- OJ o o; r-:; i- 0-i>01T400-^OCt— it-«Si -fOJtDC>tDt-:OXil-~W' t"*cQ i-H oooooaoooM«o-ic- r-.i-HiH o: oj?ooooomoooo=;c:c- - (O ffcc >— i ooi^-s<:ooQOMO'-i!M-*Xi -XXTj-fMCIO'JiCCt-MM a ~(Oin00CCO01NO0CTft~O -FJj'^-w-^i.-3-^'i'OOi— It— M'^f^i'St-irt-'fm C-3 OOOCCfOC--!'— lOCO WOTli^ (rf«d"oo b^.-n"iri"^"r--"o ^'ic'm"o"oi"x''io:o --"co" oo" o'lrTi— "oc rcr-'^'rf x'ccx' OS O) so CI -^ >— I iTl Tl -— I T— I 71 C-.t 75 r- 00 "-0 re O >— 1 OJ >— > -^ CJ ■"# rH 7 1 O CI M L"^ i-H in ■— ( 'B:|Jod9.i sneuao B9:jTJ}g P9^TU£1^ J9d feB ^iiiipoij; dMi-0'*Oifj:DC-mr-irOOC005t~TO>-iT^:0-**XC - o to O X i-l^ H N t- -* •1 "* -t t~ (1 ^ in o O C- tMO 00 t CMt--in-#i— It, -J"*T-it-OC3iHt-Wt-OXr Tti"*OMr>i>«oinTtt - m co« moo "* O O CO® ■* O t-MOO - X l> ^ X ^ O ~ t- — o n oi re C] I X — O X 7 I t- ■-= ■Oi8T 1^ 098T ^ao.ij ^onpojd HI eeoi i O CO ■0i8T o* 0981 tnoJJ g Tfll-H CO O X o coos CO 00 ■e(iJ.od9.i Buenao S9{»ir4g p9^m0 J9d BB (}OTipO.T^ t-ocO"*Tjixcoior>Tfioi-iinw »n t>T-rH(MTi10050C^]00T*»X0iC0®»nrHTH(MOt-C0(M0)0S00-^aS0)00OC>]>n 59 o>nt-'-iino»-ioaoooscot-f-coooTjioooososocoQooo)ooi-HooiTj»H oco-» O CO MrH T O) COM N C Ho-yicooososoo ocoico-^iONN-^t-eocqastocoin t>Ln94inooaDr-ootDi-iintom-^co t-mt-eo-"(}co eo i> c5 N 00 ift ■* i*< WW "3=3 S.S.i Sfc°S ll <|WW!^3 H : : :£• :s :s :; ^ « SSI «| SI'S! ? K o o,= -j;_gS,Q g-; o o o o o^"g " o'g^ g" S j3 .a ja js ,ja a a Sja a III o o o ^* III fttO ftf^tt VlCHCtH 2"*-" O O OrQ O (D ) -i lO t-t- COr4" CO OO 1-1 1-1 QOt-"* i-H O -I C3 !0 5 ro ira (D 0) n 3 fe J p. d * I 4. e & ^ ^ ■;ionpo.id tb:jox -(OlOO)OOi-(OOOIOMOO-t} M CO rH t- i-i O H t— O « O Oi 1' IXMi-HQCOCiiftWC ■^Tjt-»inrciojTH«i>'0 - in 1-H (N in s o o o c :! in 00 o c ■J ■* O (M u CI n lO '3 -* m C'l =i HtDoooo^oointomoo DMOOX'MCOOIOOL— aOc^mi- OOSDO C'ococoooeocooitococ-iiftirt-^r-oi -•ooooffir-io^ocDoiooosint-coco -iccoos«THi>caino)Mt-osooot> N 00 00 00 (M CO X in (M c- ■: m'oc" ^ i oir:QOcooit-oo(Oc- XCi?T-(O0'*C-0O-^t nMroccint-i-Htoo 6(0l>O'3>-"tDO0SOin OMinriOO^IOt-MOQO OTfOSWOUMOOr-HOO 00-^ t- 00 00 CO e ION ff -( 05 O O m !i •[TJ^TrfuQ poXotdrao spa-BH •e!^Ti9raqsxiqBq.ea; oi^ooomriocoooc inMooxMoinoooc oioot-moocoinc'jtooei -( o o o in o eoMcoi-iojt-ojoot-in OIMrHi-lfflO"ii 1-1 o OiHIM^mWQ0l>mininr-li-lin*(MOJ(NOS»QO 00 CO «o -* o cq -*t" O (D-^ in t-O! ' -nn"*oi(Oo<©x«wmoo'OomQO <]i#oi in o o « -^ :ooo t- -* CO "* "I in ^ r-l ^ O M CI (M Tfl rt i- N ■* CJ C^ ^'co i-T CO _ CO in c: t- W lO 00 t- o i-h"cO l-^ Oi oj m i-H -* OJ S Si -'ft is So "co' .-•3 9^ . ^■Sg « 5-3 MS p,a = g .3 S— 2"" « "£ ® ; 3 -s s3 3 fo a V P rt S a ft43 ei ^j § r^ f^ r^ p^ rS "5 O ^ P O Q P^^ 3 !^ ftft ftftftp/c cc t- cooo 0S03 e^i oo Oi t- S3 Is I P< o o ^PPEDSriDIX. The foUowiuf; additioual statements were furuislied by witnesses subseqnejitly to their examination, and were, with the selected correspondence, ordered to Ije published as an appendix: A. The Shoe axu Leathkr Trade.^Information in connection with the state- ment OP Mr. George Walker, p. 271. Worcester, Mass., Jan nary 16, 1879. To the honorable the Labor Committee of the Forty-fifth Congress: Gentlemen : Not being able to appear before your committee to testify in our own behalf, we beg leave to submit through our representative, the Hon. W. W. Rice, the report of the committee appointed to investigate and report the amount earned by workmen employed at the four principal branches of the boot' trade in the city of Wor- cester, Mas.s., for the year 1878, without regard to the number of hours worked each day or the number of days employed during the year (the workmen averaged about nine months' work). Respectfully submitted. GEO. G. BAILEY, PETER LYNCH, DANIEL DUGGAN, JAMES HENNESSY, . PATRICK DOHERTY, Committee. The H(m. Abram S. Hewitt, Chairman of Congressional Labor Committer. ^. B. — An affidavit will be made in support of tlic inclosed report if deemed neces- sary. G. G. BAILEY, Chairman Committee, Xo. 10 Howard street, Woreester, Mass. Worcester Mass., January 16, 1879. At a public meeting of the boot and shoe makers of this city, held Monday evening? December 30, 1878, the committee appointed to ascertain the amount of wages earned by the workmen engaged in the four principal branches of the trade, and also the cost of living, beg leave to submit the following amount of earnings and expenditures for the year 1878; no consideration for the number of hours per day or days employed in the year : Per aDiiiim. Crimpers $460 00 Hand-siders 300 00 Bottomers 310 00 Treers 520 00 Allowing the families to average six persons, father, mothei", and four children, you get the average per head per annum and per week. Allowing for rent ]ier year at $6 per month |72 00 For fuel per year 30 00 102 00 Crim|)ers' families, deducting for rent and fuely receive each, for food, clothing, school-books, and doctor's bills, $59.67 per annum, or $1.14f per week. Hand-siders, deducting for rent and fuel, receive each, for food, clothing, school- books, and doctor's bills, |33 per annum, or $0.63^ per week. Bottomers, deducting for rent and fuel, receive each, for food, clothing, school-books,, and doctor's bills, $34.67 per annum, or $0.66Jper week. 602 DEPRESSION IN LABOE AND BUSINESS. Treevs, (lodnoting for rout and fuel, receive eacla, for food, clotlimg, school-books, doctor's bills, $69.67 per annum, or $1.34 per week, G. G. BAILEY. PETER LYNCH, JAMES HENNESSY, JOHN TROY, DANIEL DUGGAN, PATRICK DOHEETY,. Committei'. B. WAGES AND PRICES, 1860, 1872, AND 1878. ^IN CON.VICCTION WITH STATEJIEXT OF CARROLL D. WlUdHT, p. 'iH4. {Aclvauce slicets from the Tenth Annual Eei)ort of the Massachusetts Bureau of Statistics of Labor. | We ijreseutml iu the Imrcun report for 1874 the " comparative rates of wages and hours of hibor in Mas.sachusetts and foreign emiutvies," and also the "prices of provisions, &<•., and purchasi^-powt-r of money iu Massacliusetts and Europe." The wages and ]u-ices there given were for the year 1H72, the European figures having been collected in that year. These wages aud prices were figured and presented upon a double standard— that of the Ignited States paper dollar of 1872, and also on the gold basis. For man\- reasons it se'cmed to us that a showing of wages and prices for 1878, which could be compared with tlie returns of previous years, would he of great value. The small premium on gold during the year 187H, which premium was extinguished before the close of the year, renders our quotations of wages and prices for 1878 gold values, and allows of direct comparison with the gold values arrived at for 1872. In obtaining our figures for 1878 we deemed it advisalde and important to also obtain quotations for some year iire\-ious to 1872. We decided upon 1860, not because we have any sta- tistics to prove that 18(iO was more or less prosperous than 1859 or 1861, but XJrinci-, pally because it was the year Just ]ireiuion, well and good. If they showed that pulilic opinion was in error, iu a greater or less degree, then we had performed our duty of ascertaining facts and supplying valuable and incontrovertible data for the information and use of the legislature, the press, and the public generally. In our presentations for 1H60 and 1878 we have aimed to make such showings as will allow of strict comparison with our figures for 1872. We consider — First. The comparative rate of wages for 1860, 1872, and 1878. It should he remem- bered that, for each year, our quotations are average weekly wages, and not earnings. A man's average weekly wage, when employed, may be $10 per week; hut it does not follow that his yearhj mritiiif/s may he obtained by multiplying $10 by 52, the number of weeks in the year. Statistical statements are so often quoted in a misleading way we feel obliged to make this explicit definition of our use of the terms wages and earniin/n. Second. We present, in Part V of this report, some facts in relation to the hours of labor. It will there be seen that 263,452 persons, in 1875, worked an average number of 26(i.6 days out of a possible yearly working period of 308 days. Thi§ average period of 41.4 days unemployed, or about seven weeks of six working days cacli, shows that it is not fair to multiply average A\'eekly wages by more than 45 (weeks) in order to obtain ax)pi'0ximate yearly earnings ; and then, in the case of each industry, as will be seen in our consideration of the hours of labor, the time unemployed varies. Third. We give prices of groceries, provisions, fuel, dry goods, boots aud shoes, rent, and board for 1860, 1872, and 1878. Our agents have secured these prices from retail dealers who supjily consumers directly. In uo case have we made use of quotations from wholesale price lists. The dealer who furnished figures for 1878 from his books also sii]i])lied, friuu his old records, the prices for 1860. Our le with the prices obtained for 1872. Iu this investigation, as iu the previous one, to secure the prices of provisions, rent, &e., we have taken the testimony of respectable dealers in the various articles given, iu town and country; and, while the prices furnished us have diifered materially in many instances, yet, when we ascertained the prices for the same grade of goods, we have been satisfied of DEPRESSION IN LABOR AND BUSINESS. 603 the accuiiuy of our iuformatiou. Wlioru prices are given, we ineaii for a good fair article, uulesB especially stated otherwise ; and although many, in comparing our fig- ures with their actual expense, may discover scorning discrepancies, nevertheless they wonld find that they ^^•ere caused by some corresponding discrepancy in i]uality. It is of course imjiiissible to give a price that can he verified in every town in the State. We have aimed at a stan ^ai-s .3 fl.C o ..* 1 4,606 667 685 2,066 3,716 631 13, 113 10, 859 1,466 2,777 1,112 '746 4,877 361 1,008 3,521 6,447 642 6,927 1,717 ..O J l" £0 ?- Counties, citit'S, and towns. -S^o t g «.o S ^ tit bD ■sas^ HAMCSFUUK eOUXTY. Easthamptou . Northampton . Ware MIDDLESKX COUNTY. 360 f75 1,*00 Cambridge. Lowell SoinoTville . .[ 1,570 .1 8,422 -! 435 NORFOLK COUNTY. Quinoy '■ 600 SUFFOLK COUNTY. Boston . 1 WORCESTER COUNTY. Clinton Ktchburg . Leicester . . Millbury... ■Webster . . . Worcester . Total . 9,862 1,100 625 300 228 400 4,806 63, 515 1,209 1,886 1,745 • 6,953 18, 311 1,991 1,431 49, 656 2, 238 2,626 621 1,273 1,692 10, 770 170,^346 604 DEPRESSION IN LABOR AND BUSINESS. Our investigations, as regards industries, covered forty-seven occupations, in which 306,887 persons were employed in 1875. We obtained the wages of 63,515 employes for 1860 and 1878, being 20 per cent, of the whole number. The distribution in detail by occupations, as we have similarly shown by cities and towns, may be found in the following tuble : Table II. — The iurextigntion by occupations. % Occupations. ii; Agricultural laborers Arms and amnumition Artisans' tools Bla<}k8iniths Bleaclung, dyciiiji. ami printing Bookbinding J5(K)ts and shoes Boxes Biead and cracliei's Bi'eweries Bricks Brushes Building-trades Cabinet-niakiiij; Carpetings Carriages Clothing Hosiery Corsets . . . '. Cotton goods I>re88making (rlase Leather Linen and jute goodB Machines and machinery . . 420 750 240 193 2,875 531 11,040 193 261 260 419 :S9 1,742 1,063 1,720 147 2, 739 220 171 14, 424 .-.27 367 1,020 700 1,550 - " S " IS, 006 1,109 1,240 2, 458 3,750 1,096 48,090 1,528 2, 001 268 2,394 .329 44, 181 0,949 3,119 3,072 13, 437 265 60, 176 9,091 1,291 6, 620 1,059 it, 561 Occupations. Matches !Mctals and metallic goods Cutlery Safes Type Millinery Musical'instruments Paints Paper Envelopes Pi-csci-\-ed meats, picliles. &c Printing Rubber floods, elastic fab. rics Ships Silli Soap and candles Stone Straw goods Tobacco Woolen goods "Wool hats Worsted goods Totals an ^ ' O Poo llll 110 910 960 101 200 104 445 107 2, 775 375 129 1, 092 360 40 520 218 1,200 400 290 K, 145 273 1,000 63, 515 ^■s2- 2tz.= s 2 5 ■ 143 17. ,563 2.249 304 4.641 1.054 1,454 860 378 2.553 4,991 1,350 19, 036 1.499 If the validity of the figures which we present for 1860 and 1878 is questioned be- ( ause the results do not coincide with public opinion previously expressed, we can say, in support of our returns, that they were secured by our agents on the spot where the parties were employed ; that in the boot and shoe towns, where possible, the fifjures obtained were compared with those of the Crispin organization; that every practica- ble means for the verification of figures presented has been made use of by this bureau ; and that, finally, we consider a showing is fiilly representative and worthy of credence which is based upon returns for 37 per cent, of all employes in 34 impor- tant manufacturing cities and towns, and which covers 20 per cent, of the employiSsin 47 principal branches of industry, especially %\ hen it is borne in mind that t^je shops and factoiies visited were -taken at random by our agents, who were only instructed tn make returns for a certain number of emplo.vos in certain industries in certain to wns. In the boot and shoe and cotton and woolen industries we have retu,rns for 33,609 out of 127,30;i, or 26+ per cent. We are satisfied that our figures are founded upon such full and accurate returns that tliey cannot be effectually gainsaid. Our first presentation of wages is a table showing the average weekly wa,nc in tlie different occupations considered for the years 1860, 1872, and 1878, based upon the standard of gold. In addition we give a column which shows the actual money in- crease or decrease in average weekly wages for 1878 as compared with 1860. In .some cases it was impossible to obtain the wages for 1860. Many industries have been started sinci' thim. Some have grown from the position of minor industries to that of important ones ; and their conditions for 1860 and 1878 are not comparable. Others have changed tlieir character so miuih, owing to the introduction of macliinery, that comparative figures would be mi.sleadiug ; and they are consequently not given. In some instances, where wages for 1860 were not obtainable, the figures for 1872 apiiear, and allow of comparison with those for 1878. We liave stated that the wages of 63,515 DEPRESSION IN LABOR AND BUSINESS. 605 employes for 1860 Mud is? is were obtaiiicrl by our ag-ents. The statemeut is strictly correct for 187S. The mimber tbv 1860 was niidoubtedly somewhat less ; but the same employer who furnished rates of Wages for 1S7H suppli('d those for 1860 ; and, in some industries, certain firms employed more hands in 1860 than in 1878, especially in those indusTries where the hitroductioii of nuiehinery has been most marked. We therefore consider tlu' figures 63,515 equally applicable to 1860 and 187S. In the cxaiuinatiou of Table III, the followaug notes will be found of A-alue : The "dash" (— ) indicates that the wages were not obtained; the sign of equality (=), that there has bct-n no change in wages. In the manufacture of bricks the em- ployes in 1860 and 1S78 received tlie wages mentioned, and their board; while in 1872 they were obliged to pay their own board. The most marked decrease in wages is shown iu the shipbuilding industry. Table lIL—Jm-affe weekly wage, 1860, 1872, and 1878. Occupations. AGRICULTUUE. liaborers, per wionth, with board. . Laborers, per day, vrithout board . ARMS ANU AMMUNITIOX. Machinists MachlnistSf foremen ■Inspectors Inspectors, foremen Fittei-s Tool-makers ■ Armorers Watchmen Firemen ^ Engineers Laoorers Boys l*attem-makers . File-cutters Machinists Hardeners Forgers MoMers "Wood- workers . . Finishers Helpers Laborers AltTISANS' TOOLS. Blacksmiths. BLACKSMITH IN G. , BLEACHING, DYEING, AND rUINTIXti. Overseers Engine-tenders : Printers ^ Back-tenders Dvers . Designers Engi'avers Driers Starchers Finishers and packers. Soapers Dyers and steamers Singers :. Engineers Tarpenters , Teamsters Mechanics, repairs .... Col(fr-raixers Watchmen Firemen Men Women Boys^ Average weekly wage. Standard, gold. 1860. fi 50 11 33 11 00 10 SO B 83 5 00 27 50 25 00 5 00 5 50 25 00 23 50 5 00 5 50 6 00 11 10 5 00 7 00 6 00 5 50 4 25 3 37 1872. $13 63 $23 09 90 14 00 37 50 12 00 30 00 13 00 9 75 9 45 10 00 11 00 12 00 6 00 5 10 — 115 72 1 25 18 00 37 50 13 00 30 00 16 50 17 12 14 25 12 50 13 50 15 00 8 00 6 00 18 00 8 00 12 75 8 00 15 00 14 40 11 50 13 50 8 83 6 75 Increaae or ' decrease for 1878 as compared with 1869. + $2 09 + ■x, + 4 00 + 3 00 + 3 50 ' + 7 37 + 4 80 + 2.50 + 2 50 + 3 00 + 2 00 + 90 + 1 50 + 3 67 + 50 + 3 00 + 2 00 + 1 75 16 44 13 75 20 77 20 77 12 00 11 00 21 33 26 40 7 09 6 65 8 00 6 00 26 67 25 00 21 33 23 80 5 50 5 75 6 88 7 07 6 00 8 00 6 00 8 00 6 75 — 9 00 13 33 9 00 10 67 8 40 14 67 13 50 S 00 6 12 12 00 8 90 — 7 50 — 6 33 — 4 95 3 31 3 90 4 45 — 6 75 + 1 40 4- 1 65 + 50 + 30 + 50 + 25 + 1 0/ + 2 40 + 1 12 + 1 90 + 1 m + 83 + 70 + 53 60n DEPRESSION IN LABOR AND BUSINESS. Tabi.i:: lll.—Jrcraf/e ireelchj toage, 1860, 1872, and 1878— Contiiined. Occupations. Average weekly wiiy;* Standard, gold. 1872. ■ liLK VCIIJNG Girls Boys and ;iirls... Laborers DYKING, AND PKINTING — Continued. BOOKBINDING. Gilders Piuishers Forwarders . , Folders and sewers, women Collators, women IIOOTS AND SHOES. (•■ittei-s Hottomers Machine-closers Hnot-treers ( 'rimpers l^'itters Finishers Buifers Heelers Edge-setters ." Shoemakers Machine hands, women ilcKay operators Beaters Beaters-out Trimmers u Women Mtm W.omen and ^irls Boys KOXES. Bread-bakers Cracker-bakers . . Drivers Shippers Packers, women . lillEAD, CUACKEUS, ETC. IIREWERIES. Teamsters . . Engineers . . Watchmen . . <.'arpenters .- J'ainters Wash-house . Mash-floor... Coopers Molders Sorters Loaders Barrow-men Overseers EngiueeTS Carpenters Pressors Face-brick men Burners' assistants . Laborers Teamsters Hostlers Blacksmiths BRUSHES. Finishers l'"i idshers, low-grade work Nailers Paint-brush makers — - Paint-brush makers, fine work Painters iiorers Combers 17 00 U 85 13 89 5 21 5 66 $19 32 i 18 36 6 66 I 6 74 12 00 10 50 13 50 10 50 10 50 14 81 i 16 00 ' 14 50 16 00 _ 17 78 12 00 17 78 10 33 14 66 8 25 S 89 18 00 5 50 11 20 .-, 71 ! 3 50 8 00 7 83 I 12 60 ' 9 55 [ 6 93 9 95 13 50 8 00 10 00 10 50 9 66 12 19 12 00 With board. 3 10 2 97 3 12 3 43 7 50 6 00 G 00 6 00 6 00 3 23 3 00 4 00 14 00 7 00 14 80 13 66 21 00 11 64 12 47 10 89 17 78 I ]:i 33 .-. 48 j 4 77 13 10 12 44 12 00 i 13 78 12 15 I 16 00 I 16 00 ! 11 11 I 11 55 ' 16 00 \ Without boai-rt. 11 36 7 69 \ 7 69 8 82 I 13 33 , 15 92 I 14 16 10 04 ' 10 04 18 12 8 40 i 7 78 ! 7 78 12 89 15 55 1 17 78 ! 17 78 I 14 41 14 52 I IiKTease or flecrease - for 1878 as , „„„ compared ^'''^- with 1800. I - -— [ •14 80 3 W) 6 37 20 00 17 77 Ifi 20 6 05 6 32 11 (15 10 71 14 25 12 00 10 00 1 12 00 11 75 19 50 13 75 1 13 00 8 00^ 7 33 17 75 8 00 1 15 00 12 25 i 8 00 11 57 .-) 09 5 00 11 97 12 00 16 61 12 00 7 87 12 00 14 75 9 66 12 00 12 00 10 96 12 81 15 00 With boai-d. 3 37 3 12 3 96 3 85 8 50 7 50 6 00 5 36 7 06 13 57 3 00 3 77 3 00 4 00 13 48 6 00 17 10 18 00 25 00 15 00 15 10 14 24 DEPRESSION IN LABOR AND BUSINESS. 607 Table III. — Average weekly wage, 1860, 187::^, and 1878 — Confciuued. Occupations. ■* Brushes— Continued. Combers, low-grade work "VVasbers Pan-hands, women Drawers, women Boys BUILDING TRADES. Carpenters Painters and glaziers .' Steam and gas fitters Slaters : . . -. Paper-hangers^. ,■- Plumbers *. Plasterers Masons Carpenters' laborers Masons' and plasterers' laborers I'ADINET-MAKIKG. Cbair-makera Decorators Gilders Turners Carvers Cabinet-maters Mill-men Poli.sliers and finishers Upholsterers Upholstery sewers, women CARPETDJGS. Wool-soi-ters "Wool-washers "Wool-preparers Combers Finishers Dyers and driers Drawing in , FiUing-Doys Drawers Dressers WeaTers Burlers Section hands Drawers and spinners Doffers Frame-spinners Twisters Car^ders Firemen Packers Oversefers Machinists and carpenters Watchmen Laborers Laborets, boys CARRIAGES. Body-makers Painters Carriage-part makers Wheelwrights Trimmers ^ Blacksmiths ■- Blacksmiths' helpers CORSETS. Forewomen Overlookers Embroiderers Keedle-hands Fiitish6r8 and packers Machine-hands" Boners Eyeleters Binders - Cu t I —^ Average weekly wage. Standard, gold. 1878. $7 50 5 27 5 05 4 00 9 92 11 03 10 28 14 39 12 97 14 05 10 18 11 45 7 16 7 12 10 11 20 50 15 00 11 80 12 80 10 56 10 05 10 00 10 90 6 00 $6 22 4 88 4 44 14 66 14 11 19 56 16 00 14 82 14 22 21 33 21 33 — 11 56 22 22 17 33 15 11 16 00 14 66 12 44 1] 34 14 66 6 U7 6 50 — 5 50 — 5 50 — - 6 00 — 5 25 8 15 6 00 9 98 4 80 — 2 50 — 6 00 — •7 50 — 6 50 7 46 3 50 — 7 50 — 3 00 4 50 5 08 7 50 — 6 00 — 24 00 22 67 9 00 9 87 7 00 — 5 00 — 11 82 19 55 11 90 17 33 9 50 17 48 10 64 17 77 12 62 17 77 11 20 16 00 7 50 12 44 10 67 7 11 7 11 — 7 11 _ 8 00 7 11 — 7 11 _ _ $8 00 8 00 5 01 4 70 5 00 11 33 13 85 12 16 12 60 16 45 18 00 12 25 13 37 8 29 8 13 11 00 24 00 17 00 11 60 12 33 11 03 10 67 10 25 11 42 7 00 9 25 7 26 6 50 6 30 5 57 7 50 7 13 3 50 6 50 10 50 8 50 4 70 10 33 4 35 3 00 5 00 9 00 16 75 7 00 7 50 27 00 11 00 10 00 7 05 3 75 15 70 14 56 14 14 13 70 15 80 15 34 9 00 7 66 5 71 6 47 5 37 4 50 6 02 4 00 6 37 6 78 7 00 Increase or decrease for 1878 as compared with 1800. 608 DEPRESSION" IN LABOR AND BUSINESS. Tablk III. — AvcrafU' u'crklj/ waf/e, 1860, 1^72, and 1878 — Continued. (>LOupatioua. Avcni^e weekly ^va<^^■. luerease or Standa^il, jiold. decrease ! for 1878 aa 1872. laTii compared ^**^^- with 1860. CoitsETr,— Coiitiniied. Cuttera, men Pressers Preasers, men Custom-woi'li CLOTHINt; (READY-MADE). Overseerw Cutters Trimmers Preasers Basters, women — Macliine-operators, women Muisliers, at home, women Finishers, in shop, women Finishers, contract, women Finishers, custom, women Pants and vest makers, custom-work, women. COITON GOODS. Openers and iiirkeis Openers and iiickcrs, boys Strippers Strippers and grinders Grinders Frame- tenders . . /. Drawers Railway and alley boys Slubbers — Overseers of carding Section hands Second hands Overseers of spinning Second bauds Section hands General hands Young persona Spare hands Mule-spinners Mule-spinners, women Mule-spinnera, boys Back-boys Doflers , .-. Frame-spinners Frame-spinners, boys and girls Frame-spinneis, girls Frame-spinnera, boys Frame-spinnera, women Eing-apinners, overseers King-apinners, second hands King-spinners, third hands Ring-spinners, girls Ring-spinners, spare hands, girls liofturs, boya and girls Doffers, boya Fly and jack-frame tenders Reeling -end warping, overseers Reeling and wai-jiing, second handa Reeling and warping, spare handa, girls --- Reeling and warping, spoolers Reeling and warping, overseer of spoolers . Reeling and warjiing, young persous Reelers - Beamers AVarpers Dressers Dressers, overseers Slasher-tenders Thread -dressers Drawers Drawers, second hands Drawers, section hands Drawers, third hands .-. Drawers, room hands Quillers , Twisters Twisters, women "WiUiders Wiuders, women ..,. , $16 00 $12 00 — 8 89 7 50 — — 14 00 — — 5 00 $19 45 24 45 24 82 13 92 19 85 16 00 11 06 11 26 14 31 9 17 16 05 10 28 6 32 7 77 6 46 5 53 10 81 5 92 4 00 3 4(j 4 56 4 74 4 38 - 3 50 6 00 8 00 5 58 — 6 90 4 76 7 35 6 23 2 57 4 55 3 45 4 48 7 00 5 06 4 50 7 75 7 95 6 51 7 50 7 34 3 48 5 65 4 47 2 33 3 70 2 70 3 45 3 50 3 30 4 80 16 70 26 67 18 72 12 00 11 40 8 00 16 00 10 00 17 70 26 67 19 45 7 00 14 67 8 00 9 00 11 40 6 00 6 44 3 46 4 59 3 72 3 45 4 53 4 00 6 33 10 70 7 41 . — 6 30 4 00 1 98 1 68 2 07 3 68 2 32 3 00 4 65 3 28 3 96 2 68 4 55 3 34 2 37 — 3 52 — — ,2 70 — , 4 96 2 83 11 52 — 18 00 7 50 9 00 4 00 — 5 50 3 60 — 4 20 3 30 3 90 1 50 2 42 2 56 4 00 2 80 3 50 5 80 9 00 14 67 15 00 4 50 9 33 9 00 2 40 4 48 4 20 2 62 4 85 3 96 13 50 16 50 2 53 4 53 3 00 8 54 6 40 5 35 7 35 9 25 4 22 5 90 5 30 8 10 15 47 11 27 21 91 21 33 20 40 — 10 00 9 79 6 75 7 95 4 56 5 64 5 55 8 25 14 57 12 08 6 25 10 67 8 34 6 00 8 80 6 90 6 00 6 00 2 77 3 68 3 67 6 00 8 00 9 00 4 50 5 33 5 00 8 33 11 33 4 45 — 5 94 DEPRESSION IK LABOR AND BUSINESS. 609 Taulk lll.—Jrerayi' tvcekh/ ivaf/c, 1860, 1872, and 1878— Coutiimed. Drcupatious. COITON GOOI>S ■\riii.l(-r,s. ovi^r^^eors AVtWl Vt'TS '. AVi^^iA~eTs, overseers "Wt-avt'vs, second hands ■Wearers, section bauds Wi'aA'ers. spare hands Weavei-s. 4 looms Wfii vers. 5 looms "Weavers. 6 looms "Weavei-s, 8 looms Bobbin-boys Cloth-room overseers Cloth-room, secoml liands Cloth-room, men Cloth-room, women and boys . . Packing-room, girls and boys . Dyers Bandlers ■ Overseers of repairs Mechanics Mechanics* laborers Engineei's Fii'emen Overseers of yard Tard-hands ." Watchmen Teamsters -Continued. CUTLEKY. Forgers Forgers' helpers Grinders Sawyers Hafters and finishers Hafters and finishers, boys Machinists Packers Inspectors Inspectors, women Stampers, boys and girls Men "Women Boys Laborers DRESSMAKING. Mauao;ers ... Dres-smakers Cutters Trimmers Folders, women Machine hands, women . Overseer of ruling Rulers, women Printers Printers, women Box-makers, women Sewers, women Packers General help Laborers Fon-meji Blowers Kiln-men Cutters Polishers Gaffers Sei-vitors Foot-mak-ers Preesers... Gatherers Stickers-up Ware-wheelers . Avoraii e wt'elily wage. Inn- Standarti, gold. decrease fol- 1878 as 1860. 1872. 1878. compared \ritli 1860. $15 00 _ ' .$18 00 + $3 00 4 44 r, 88 - - 1 44 17 41 20 00 - - 2 59 7 00 1 00 - - 2 00 7 74 ,$10 67 9 71 -- 1 97 4 50 6 61 1 5 25 7.i — 5 78 3 96 — 7 81 4 50 — 9 50 5 01 — 11 33 6 30 — 4 00 — 4 50 + .-,1) 18 10 14 67 17 2.) — 85 7 17 8 64 9 30 + 2 13 5 44 8 16 i 6 45 + 1 01 4 06 4 80 [ 4 27 - 21 4 03 4 70 + 67 5 87 8 93 8 13 + 2 26 6 00 8 69 8 88 - - 2 88 17 10 17 33 20 00 - - 2 90 8 35 12 16 10 72 - - 2 37 5 47 8 72 6 94 - - 1 47 9 00 11 37 + 2 37 7 09 8 33 + 1 24 11 56 — 16 05 + 4 49 5 22 8 76 6 32 + 1 10 6 83 8 12 + 1 2!r 5 40 10 67 8 01 + 2 61 9 40 _ 12 00 + 2 60 6 00 — 6 00 = 12 60 11 65 — 95 8 25 — 9 00 - 75 9 00 — 10 62 - - 1 62 3 00 — 3 30 - 30 11 00 14 25 - - 3 25 5 75 6 00 - 25 10 00 — 10 50 - 50 6 50 7 50 - - 1 00 8 37 9 00 - - -63 13 60 13 60 = 5 17 — 5 17 = 4 53 4 53 = 5 50 — 6 00 + 50 9 94 13 33 12 19 + 2 25 6 52 7 11 7 43 + 91 19 50 16 44 16 50 — 3 00 12 05 10 86 — 1 19 7 75 7 33 6 75 — 1 00 7 75 6 89 6 75 — 1 00 18 00 ^- 15 00 — 3 00 6 00 4 50 — 1 50 11 00 9 60 — 1 40 4 00 3 00 — 1 00 9 00 8 00 — 1 00 10 00 , 9 00 — 1 00 10 50 . 9 75 — 7.S 5 00 4 50 — 50 6 00 6 00 =^ 21 00 — 21 00 = 8 89 12 00 _ 12 44 10 50 — 13 33 9 00 — 17 78 12 00 — 16 00 20 00 — 13 33 13 00 — 13 33 11 00 — 12 00 13 00 — 10 67 12 00 — . __ 7 11 8 00 — — 9 11 6 00 — 610 DEPRESSION IN LABOR AND BUSINESS. Tablk III. — Av&rage weeJcly wage, 1860, 1872, and 1878 — Continnecl. Occupations. Glass — C ontinued . Engravers Mixers Men, not in departments Boys Women and girls HOSIERY. Overseer of carding Young persona, carding Overseer of bleaching and dyeing . Men, bleacliing and dyeing Overseer of spinning Men and boys, spinning Shapers Finishers, women . . . : Cutters and boarders Winders Knitters Twisters Sewing-girls Menders Eotary-linitters, men Engineei 8 Yard bands and watchmen Limers and beamera . Tanners Shavers Finishers Splitters •Knife-mon Table-mcu Foremen Hacklers Preparers Preparers, boys . . . Preparers, women. Preparers, girls Bleathei'.s , Finishers Spinners , Spinners, hoys Spinners, girls ..... Spinners, women . . Spinners, men Rutfers , Spoolers , Warpers Dressers , Winders Machine-boys Meoh allies , LINEN GOODS. Carders Weavei's , Kovers Drawers , Feeders Bundlers Calenderers Batchei's Shifters Pieoers Bobbin-carriers . Winders Keelers , Oih^rs Yard hands JUTE GOODS. Pattern-makers . Iron-molders . . Brasa-molders . MACHINES AND MACHINERY. Average weekly wage. St&dard, gold. Increase or decrease for 1878 aa 1860, 1872. 1878. compared witli 1860. $18 22 !pl2 00 — 10 67 12 00 — — — 10 50 3 56 4 50 — 4 44 4 00 — 13 50 6 00 — . — 16 62 — — 7 87 13 50 — — 6 75 — — 7 50 — — 5 10 — — 8 40 — — 6 60 — 6 85 — — 6 00 — — 6 00 — — 5 70 — — 15 00 — — 12 00 — — 7 80 — .$7 50 _ .$11 00 4- $3 50 6 83 10 41 8 60 -- 1 77 9 00 — 15 00 -- 6 00 8 50 — 11 00 -- 2 60 14 25 16 00 16 00 + 1 75 12 00 13 77 13 50 -- 1 50 7 00 13 25 8 00 -- 1 00 15 00 — 20 00 + 5 00 5 75 _ 6 75 h 1 00 5 00 — 6 15 H - 1 15 2 62 — 3 30 - 68 4 50 5 45 i - 90 2 60 3 09 - 49 5 50 — 6 80 - - 1 30 6 00 — 7 50 - r 1 50 — — 5 18 — — 3 00 — 2 37 ^ 3 00 _ 63 4 00 — 4 80 - - 80 8 00 — 11 40 _ -3 40 5 00 — 5 70 _ 70 1 75 1 80 - - 05 4 50 — 5 40 - - 90 5 75 — 7 50 - 1 75 3 25 3 55 _ - 30 3 12 3 90 _ - 78 8 00 — 10 09 ^ - 2 09 _ 6 57 6 00 7 84 6 78 5 78 3 90 4 00 4 20 — 5 78 5 40 — 7 56 4 50 — 8 89 7 02 — 6 22 5 70 , 3 33 2 40 3 .'56 3 00 6 67 5 10 — 3 52 3 00 7 11 4 80 6 82 6 30 5 62 — 8 10 + 2 48 11 50 17 60 15 24 + 3 74 9 50 14 67 12 30 + 2 80 10 00 14 67 13 25 4 - 3 25 DEPRESSION IN LABOR AND BUSINESS. 611 Table III.— Avenufc weekly wage, 1860, 1872, and 1878— Continued. Oeciipatioiis. Machines and machineuy- Core-makers Blacksmiths Blauksiuiths' helpers Machinists Cleaners and chippers Chufkers Fitters Polishers Setters-up RiTet-heaters, boys Kiveters Wood- workers Painters Laborers "WatchmeA Teamsters -Continued. Men . .- "Women . Girls.... Bovs METALS AXD METALLIC GOODS. Hammers-men Heaters Rollers Pnddlers , Shinglevs Helpers Wire-drawers Annealers and cleaners . Ruifers Finishers Billoters , Stockers Reeleis Strikers-in Brick-masons Brick-masons' helpers... Sinkers Sinkers" helpers Machinists Laborers METALS AMI METALLIC HOODS (FINE WORK). Wood-workers Women Men Boys and girls . Molders Gold- workers .. SteeJ-workers . . Met-al- workers . Watchmen Engineers Managers . Milliners . . MILLISEKY. Case-makers Vamishers . , Finishers . . . Mill-i MUSIC.U. INSTI1L'MENI>- 1-men . Action-makers Action-makers, women. Tuners Laborers Foremen Mixers and gi-inders . Boys Average weekly wage. Standard, gold. decrease for 1878 as 1860. 1872. 1878. compared with 1860. $5 00 $6 00 f $1 00 , 9 15 m 00 12 15 - 3 00 6 50 10 20 7 70 - 1 20 9 64 14 40 13 05 - 3 41 6 00 _ 7 50 - 1 50 6 75 — 9 75 - 3 00 8 83 14 40 10 66 + 1 83 8 00 9 75 _ - 1 75 10 00 12 80 12 00 - 2 00 4 00 — 6 00 - 1 00 9 50 14 67 12 00 - 2 50 9 16 10 39 - 1 23 6 00 -^ 8 00 _ - 2 00 6 00 S .53 7 27 - 1 27 7 00 . 9 00 - 2 00 7 50 — 10 00 1- 2 50 16 00 10 50 — 4 00 4 00 4 00 3 00 — — 3 50 — 12 00 21 33 23 40 10 67 13 80 — 24 00 18 00 24 00 19 50 12 75 — 12 75 — — 9 90 21 60 — 27 00 — 9 60 — — 9 60 — 10 80 — 8 10 1 __ ^- — 18 00 ^- 7 95 22 50 ^ . — 12 00 . 10 85 14 42 4- 3 57 6 35 !) 33 7 38 + 1 03 9 00 10 .50 + 1 50 4 50 — 6 00 H - 1 50 7 .50 — 10 50 A - 3 00 3 75 — 4 66 H 90 8 50 — 11 75 - 3 25 15 00 — 18 00 - 3 00 10 50 — 12 00 - 1 50 7 00 9 00 - 2 00 7 50 10 57 - 3 07 10 50 — 12 00 - 1 50 7 84 13 33 9 62 H- - 1 78 .-. 72 7 11 7 16 -I- 1 44 13 50 13 12 38 7 85 — 10 12 1 H - 2 27 10 85 — 14 46 4 - 3 61 12 38 14 19 1 81 13 67 , 14 09 42 6 72 — 7 11 4- 39 16 40 — 15 00 — - 1 40 7 17 — 7 70 4 53 15 00 18 50 3 50 7 93 — 10 46 1 2 53 3 91 — 5 41 ! 1 50 612 DEPREJS>SION IN LABOR AND BUSINESS. Tablk III. — Airraffe urrkltf wage, 1860, lr^7'2, and l.*^?.-^ — Coutiinici]. (.)i;cu]iiiti()ii,s. Average weekly wage, ' Increase or Standard, gold. decrease - ; for 1878 as ForcDieu MiUwriiLjhts Hag-cugine tenders Paper-machiue tenders . Thresher-women Kag-cutters Finishers Finishers, "iris Finishers, hoys Finishers' heipcrs Cutters Cutters, :;irls Bleachers Rag-sorters Men on stock Mechanics Engineers and firemen - Laborers i'lIKSjatVRh MEATS. FRUIT, AND PICKLES. Men Women and girls Jol) comjiositors Joli compositors Proof-readers Proof-readers, women Jol) pressmen Jol) pressmen News-work Pi-ess-feeders Press-feeders Press- feeders, women Comi)ositors, daily Proof-readers Pressmen, daily Book compositors . '. Book compositors, women . KUISIJER GOOUS, ELASTIC FABRICS. Ruhber-workers Bubber-\?orkers, women Overseer of weavers "Weavers, women Dyers Dyers, foremen Sewing-girls Overseer of spoolers Spoolers, men Spoolers, women Overseer of h-ather-work Men on leather-work Boys on leather- work QiuUers, hoys and girls Wood- workers Safe-makers. Painters Helpers Carpenters, old work . Carpenters, new work. Calkers, old work Calkers, new work , Joiners, old work Joinera, new work , Painters , Kiggers BLaelcsmiths , SHU'-BUILDING. Winders , Doublors , Spinners Spoolers iiad skoinera . 1860. $16 63 !l 86 7 9U 10 00 5 70 7 SO 7 70 3 92 5 50 5 80 6 90 3 40 6 70 3 27 5 88 9 75 6 64 5 50 11 67 5 00 10 19 12 71 17 45" 8 67 9 95 10 60 8 77 6 17 5 05 4 77 "14 83 19 54 13 19 10 28 5 42 10 60 10 33 6 28 24 00 21 00 27 00 24 00 22 50 21 00 18 00 15 00 15 00 4 20 4 80 5 35 4 80 1979 I 1R7S ! ™mpare(t 1872. 1878, I „ijj, jggo^ $16 00 16 00 14 67 16 00 11 33 6 93 4 00 9 33 10 52 8 33 12 67 4 44 28 I 14 44 16 89 17 55 15 22 7 U 15 33 8 89 21 30 16 00 21 30 16 00 21 30 16 00 13 32 IS 66 $26 49 I 15 21 I 10 41 15 25 7 40 8 40 10 20 5 27 7 00 7 27 7 95 5 00 7 56 4 53 6 57 13 20 8 77 6 55 12 30 4 05 14 12 15 47 20 09 11 07 12 60 16 53 15 11 6 40 (i 38 5 80 18 28 25 26 18 11 12 87 7 22 12 00 5 55 15 00 5 40 7 87 18 00 6 30 15 00 8 75 4 75 16 50 8 40 4 37 11 11 7 56 9 00 7 50 12 00 10 50 12 00 9 00 12 00 15 00 9 75 5 40 5 40 6 75 r» 7(1 DEPRESSION IN LABOE AND BUSINESS. ()13 Table III.— Average weekly wage, 1860, 1872, and 1878— Continued. Average weekly -wage. Standard, gold. Occupations. Si lk — Continued. Dyers Silk-cleaners Watclimen Machinists Engineers and firemen SOAP AND CANDLES. Men , Candle-makers STOXE. Qnarrymen Paving-cutters 1 Stone-cntters Polishers Blacksmiths Teamsters . Laborers STRAW GOODS. Bleacliers Blockers Pressers Packers Machine-sewers Plaster-block makers ■ WhitUers Menders .» Tippers Trimmers Wirers Braid- winders Machinists TOBACCO. Strippers Cigar-makers Cigar -makers, women Packers TYPE. Casters Dressers Not designated Rubbers". Setters Breakers WOOLEN GOODS. "Wool-sorters "Washers and scourers Dyers Driers Young persons Dyers and scourers "Washers Dyers and driers - . . "Washers, scourers, and dyers Driers and pickers Sconrers Carders Carders, women ■ Carders, women, boys, and girls Carders, voung persons Carders, l)oys and' girls Carders, overseers - Strippers Strippers, hoys Strippers, boys and girls Spinners . -'.' Spinners, hoys Spinners, women Spinners, young persons Jack-spinners Jack-spinners, hoys Jack -spinners, young persons Spooler's, women Spoolers, girls-- Spoolers, women and girls Dressers and warpers 1860. $6 75 3 00 7 50 7 50 7 50 8 50 9 50 5 70 6 00 13 50 7 .-lO 10 22 8 17 .5 00 1872. + 50 12 00 7 50 16 00 16 70 17 64 18 00 5 48 .=•) 72 .-> 08 5 00 4 27 6 33 4 90 5 50 4 50 4 30 5 32 3 74 4 00 4 00 2 62 12 00 4 97 3 30 2 70 6 79 3 00 4 75 4 00 6 41 2 71 3 50 4 08 3 37 I 2 40 , G 48 $12 19 10 67 16 00 I 17 77 16 00 22 00 9 50 X 00 7 95 7 13 7 30 4 92 9 20 6 85 4 80 $10 50 3 60 12 00 15 00 10 50 9 47 11 00 6 80 6 75 13 00 9 00 10 .50 a 75 6 00 9 00 12 00 12 00 12 00 10 .50 n 25 18 00 7 5(1 9 00 9 00 10 50 9 00 18 00 7 80 12 75 9 00 18 00 18 56 19 60 20 00 7 27 8 50 6 66 6 66 6 12 6 00 6 50 8 15 6 90 7 12 6 00 5 75 6 19 4 54 4 03 4 50 i 4 00 ],'■ no 6 19 4 25 3 UO 7 64 D 00 6 15 4 50 8 01 3 91 5 00 5 64 4 22 4 60 7 68 Increase or decrease for 1878 as compared with 1860. 614 DEPRESSION IN LABOR AND BUSINESS. Table lll.^-Average weeMtj wage, I860, 1872, and 1878 — Coutiuued. Occupations. "Woolen goods — Coutiuuetl. Dressers and warpers, women Dressers ■ Dressers, men "Weavers AVeavers, men "VS'eavei'S, women "Weavers, men and women Piilleis Shearers Shearers, men and hoys Shearers, men and wo'men Shearers, hoys Fullers, giggers, and shearers Gigsers Biirlei-s Burlers, women Burlers, girls Finishers Finishers, women Packers Packers, women Mechanics Boys and girls Pressmen '. Section hanils -i- Fh-emen Engineers and firemen , Lahorers "Watchmen Teamsters Kngineers WOOL HATS. Carders Ciirders, boys Ciirdeis. foremen Carders, second hands Dyers, first gi-arte , Dyers, men Hardeners, fnveiuen Hardeners, men , Hardeners, hoys Machine-gills Trimmers, women Carpenters Blockers Blockers, overseers Finishers Plankers , Plankers, foremen Plankers, second hands Plankers, hoys WORSTED GOODS. Wool-sorters "Wool- washers "Wool-preparers AVool-comhers "Wool -finishers - , Drawers Il.)ping-tender9 Spumers Dofifers Bohhin- setters Dyei's Dressers , Twisters Drawers-in , Sleyers "Weavers Section hands FHlhng-tenders Burlers Finiali ers Crabbers Driers Average weekly wage. Standard, gold. $4 61 7 60 9 00 5 50 7 50 5 25 5 55 5 23 5 40 5 00 5 26 4 00 5 28 5 04 5 08 3 81 3 00 ' 6 04 3 08 5 00 3 78 8 90 3 05 6 50 7 23 6 56 9 00 5 44 7 08 7 50 12 00 7 00 6 00 6 00 5 75 4 70 5 80 4 00 4 80 3 00 3 00 6 00 12 00 13 00 75 3 00 6 50 9 00 4 00 4 20 6 50 6 50 $9 49 7 47 7 71 7 20 7 01 6 2.) 4 08 7 68 4 91 8 00 6 17 12 47 9 97 7 80 10 94 5 33 8 89 14 40 17 33 10 22 6 80 $6 73 9 18 12 75 7 00 9 50 6 95 7 15 6 89 6 60 5 81 6 60 5 40 6 75 5 90 6 34 4 59 3 2.J 7 08 4 95 7 23 12 33 3 50 7 50 i) 33 .'i 78 10 5U 6 60 9 41 U 00 18 00 10 00 3 70 21 00 il 00 12 66 9 00 10 50 9 00 6 00 12 00 7 50 15 00 9 83 21 00 15 00 9 50 21 00 7 50 6 00 9 00 7 50 7 70 7 50 5 04 32 5 82 5 70 3 30 2 70 7 14 14 92 14 94 9 18 3 go 7 02 12 12 5 58 5 40 7 02 lucrease or (lecreaae for 1878 as compared with 1860. DEPEESSION IN LABOE AND BUSINESS. 615 Table IV shows the percentage of increase Or decrease in average weekly wages for 1878, as compared with 1860, in each of the cities and towns visited. For purposes of ready comparison we repeat the columns showing the number employed in manufac- turing and mechanical occupations iu each city and town, according to the census of 1875, .ind also the number for which wages for 1860 and 1878 were obtained. Table IV. — Increase or decrease in wages by cities and towns. Countiea, cities, and towna. Adams . Great Ban-iugton- Lee. BGRKSHIUE COUNTV. Pittsfleld . Haverhill.. Ipswich . Lawrence Ly ES.SKX COUSTY. Methu (fethiien IS'ewburyport I*esbod\* Eocliport Salem « h (0 = « ^ 3 EiS j3 Uuckland.. Montague . FUANKLIX COU.NTY. Chicopee . - . Hoi yoke Monsun Springileld . ■Westfleld- - . HAMPUEX COUNTY. Easthampton . Woi-thampton. "Ware HAMPSHIRE COUNTY. Cambridge . Lowell Sonioi-villc. . MIDDLESEX COUSTY. Qaiary . Boston . N'OEFOLK COUXTY. SLKKOLK COUNTY. Clinton Fitchburg . Leicester . . MiUbury . . "Webster. . . Worcester. WOKCESTER COUNTY. 2,625 225 500 770 873 300 6,360 7,904 530 510 400 600 1,700 210 990 1,354 4,600 400 1,295 290 360 875 1,500 1,576 8,422 435 9,862 4,606 667 685 2,066 3,716 631 13, 113 10, 859 1,466 2,777 V112 746 4,877 3,521 6,447 642 6,927 1,717 1,209 1,886 1,745 6,953 18, 311 1, S»91 1,431 49, 656 1,100 2,238 625 2,626 300 621 228 1,273 400 1,692 4,806 10, 770 s p lis 40 per cent, increase. 47 per cent, increase. 63 per cent, increase. 29 per cent, increase. 10 per cent. 16 per cent. 16 per cent. .56 per cent. See note. See note. 10 per cent. 2 per cent. 12 per cent. increase, increase, increase, increase. increase, decrease, increase. 361 "Wages the s:inie. 1, 008 23 per cent, increase. 25 per cent, increase. 21 per cent, increase. See note. 8 per cent, increase. 19 per cent, increase. 30 per cent, increase. 33 per cent, increase. 43 per cent, increase. 15 per cent, increase. 12 per cent, increase. 13 per cent, increase. 23 per cent, increase. 12 per cent, increase. 48 per cent. 34 per cent. 21 per cent. 36 per cent. 40 per cent. 25 per cent. increase. increase, increase, increase, increase. increase. Notes on Table IV. Iu Mftliueu and !N"ewbiiryport the wages for 1860 could not be obtained. In Peabody the increase is in the leather industry. Kockport's decrease is in the stone industry. Salem shows a gain in leather; . no figures for the coiiton industry in 1860 in Salem could be aecnred. In Montague the increase is caused by advances in the pay of agricultural laborers and in the paper industry; the cutlery busi- ness, now 80 extensively can-ied on at Turner's Falls, in this town, has grown up since 1860. In Mon- son, on account of the great changes in the manufacture of straw goods, caused oy the introduction of machinery, no comparative figures could be obtained. In Easthampton the gain is on elastic fabrics. Table V resembles Table IV in every respect, exoeptiug that the presentation is by occupations, instead of by cities and towns. 616 DEPRESSION IN LABOR AND BUSINESS. Table V. — Increase or decrease in wages hy occupations. ■I: u Si > be i. ilD c' M te ^ ^ _ ? in Occupations. Agricultural laborers by the day Agricultural laborers by tbe montli . Arms and ammuDition Artisans' tools Blacksmiths Bleaching, dyeing, and printing Bookbinding, men Bookbinding, women Boots and shoes Boxes, men Boxes, women and girls Boxes, boys Bread and crackers, men Bread and crackers, women Breweries Bricks . Brushes, men Brushes, women Brushes, boys Building trades Cabinet-making, men Cabinet-making, women. Caipetings Caniagew Clothin^j Hosiery Corsets Cotton goods Dressmaking Glass. Leather Linen and jute goods (linen) \ Jute goods 5 Machines and machuirry Matches Metals iind metallic goods (heavy) Cutlery SatVs Type Metals and metallic goods (tine work, jewelry, fine steel- work, &c Millinery Musical instruments Paints Papei" , Envelopes Preserved meats, pickles, &c . Printin'.; Kubber goods, elastic fabrics. Ships Silk . Soap and candles . Stone Straw ;;oods Tobacco "Woolen goods . . "Wool hats .. Worsted goods . 420 750 240 193 2,875 531 11, 040 260 419 1,720 147 2, 739 \ 200 5 171 14, 424 527 367 1.020 700 l,.-)50 110 ■ 910 1 I 9fiO I! 101 I 200 J 18, 006 1 1,109 1,240 2,458 3, 750 1, 096 ; 48, 090 ' ],528 2, 091 \ 268 2,394 529 44, 181 6, 949 J 3,119 3,072 13, 437 I 265 60, 176 9,691 1, 29] 6, 620 1, 059 \ 9,561 143 104 339 445 2,249 107 304 3, 775 » 375 5 6,493 129 , — 1,092 4,641 360 1,054 40 1,454 520 860 218 378 1,200 2,553 400 4,991 290 1,350 8, 14.5 i 273 i 19, 036 1,000 1,499 38 per cent. 15 per cent. 19 per cent. 38 per cent. 47 per cent. 3 per cent. 17 per cent. 14 per cent. 2.6 per cent. 3 per cent. 12 per cent. 43 per cent. 38 per cent. 13 per cent. 15 per cent. 12 per cent. , 9 p<'r cent. I 6 per cent. j 25 per cent. 16 per cent. I 6 per cent. ; 16 per cent. ! 23 per cent. ] 30 per cent. ,1 8 per cent. I See note. ! See note. I 19 per cent. ! 19 per cent. See note. ' 28 per cent. : 20 per cent. ' See note. I 27 per cent. , See note. See note. I 9 per cent. \ 15 per cent. , 16 ])er cent. i I 25 per cent. I 23 per cent. I 8 per cent. 1 28 per cent. 41 per cent. ' 11 jjer cent. 1 2 per cent. j 30 per cent. Sei' note. 52 per cent. 45 per cent. 13 i)er cent. 8 per cent. Sec note. : 22 per cent. I 33 per cent. { Sec note. 22 per cent. increase, increase, increase, iji crease, increase, increase, increase, increase, increase, increase, decrease, incr',-a?*e. increase, increase, increase. UK-re a se. increase, decrease, increase, increase, increase, increase, inciease. increase, inrveasc. ni crease, increase. increase, increase. increase, increase, increase. increase, increase, increase, increase, increase, decrease, deciease. incveaso. decrease, increase, increase, ineri-ase. increase. increase. Notes on Table V. In the manufactures of Aosic?'2/, corseU., ptte goods, and heavy metallic goods, no figures for 1860 could be obtained. The wages of glass-makers tav 1860 were not secured, but employers expressed the opinion that there was no material clifference between 1860 and 1878. Manufacturers of matches reported ten per cent, less help employed in 1878, at about the same wages as in 1860. No comparative ligures could be obtained in the rubber-goods industry, but emjiloyers said wages wevt^ thirty per cent, higher than in 1860. The great change in the manner of manufacturing s(rawo ^rooc^s renders comparisons impossible. One hundi-ea hands, with present machinery, can turn eut as much work as two hundred did mrmerly. Besides, this business was once partially a home industry, much work being given out ; but now tfie greater part of the labor is performed in the shops. In the wool-hat industry the loss of books by fire prevented our securing wages for 1860. DEPRESSION IN LABOR AND BUSINESS. 617 By iuilepeudeut but verifying averages, drawnfroin the preceding tables, of wages by towns and industries, we find that the returns for 63, 515 "employes in the occupations considered, in the cities and towns visited, show that average weekly ivageSj on a gold hash, were tnrnty-fonr aud four- tenths per cent, higher in 1878 ihmi they were in 1860. The above n-sult couceruiug wages being arrived at, tlu' subject of the cost (»f living be.'omes u vitally interesting question. We first prrsout a table showing the prices of groceries, provisions, fuel, dry goods, boots, rent, and board for 18fi0, 1872, and 1878, together with a column showing the -percentage of increase or decrease on each item of expense for 1878 as compared with 1860 : Table Y1.— Average retail prices, 1860, 1872, and 1878. GK0CEKIE8. Flour, wheat, siiperfiiie per barrel . Flour, wheat, tamily do. . . Flour, rye .' per pound. Com lueal do . . . Codtish, dry do . . . Rice -^ do . . , Beans ' per quart . Tea, Oolong per pound. Coffee, Rio. green do. .. Coffee, roasted do . . . Sugar, good l»roT\Ti do.'. Sugar, coffee -u do . . Sugar, granulated 4. . do . . Molasses, ^ew Orleans per gallon. Molasses. Porto Rico do... Sirup do.., Soap, common l)i'r pound . Starch do . . . I'KOvisioxe. Beef, roasting per pound . Beef, soup do. . Beef, rump steak do. .. Beef, corned do. . , Veal, fore quarter do . . "Veal, hind quarter do . . . Yeal cutlets , do. . . Mutton, fore quarter do . . . Mutton, leg do. . . Miitton-chops do . . . Port, fresh do. .. Poilv, salted do . . , Hams, smoked do . . . Shoulders, conjod do. .. Sausages d(t. . . Lard do . . . Mackerel, pickled do. . . Butt«j' do . . , Cheese do . . . Potatoes per hushel . Milk per quart. Eggs - pel' dozen . FUEL. Coal ., per ton. Wood, hard per cord. Wood, pine do. . . 1)UY GOOIJS. Shirting, 4-4, brown per yard. Shirting, 4-4, bleached do... Sheeting, 9-8, brown do... Sheeting, 9-8, bleached do . . . Cotton flannel d&. .. Ticking ■' do . . . Prints do... Satinet do . . . m Average retail prices. .s^^ Standard, gold. -oif ^S £ 111. §■§£ 1860. 1872. 1878. en $7 61 $10 76 $S 63 + 13 7 14 12 76 7 96 + 10 3 3i 34 + 16 2i IJ - 4 5i 8i 6 + 13 7i Hi 9i + 22 8 9* 8i + 5 Hi 60 eoi , + 10 -'14 34i 23e + 10 23 «4 26i + 16 H lOi 85 + 5 fl 104 94 + 3 101 12 10 - 3 50J 70 57J + 13 o7J 76i 68 + 18 63J 75 86} + 35 8J 8 8 — 7 11 121 94 - 16 11 19 144 + 32 4i 74 H + 10 I4i 29| 205 + 41 64 104 8 + 26 7i 10* lOi + 39 11 17 loi + 40 14 28i 20 + 40 74 104 lOi + 39 124 19 17i + 39 134 loi 184 + 38 11 124 ID - 7 11 11 9|, - 11 13 134 124 - 4 8} lOi 9i + 7 114 Hi - 1 13i 12^ lOi — 19 134 124 + 32 2ii 39^ 25i + 15 13i 174 - 7 50 1 02 97J + 65 4} 8 .5} + 13 20i 30 2b + 22 6 40 9 25 6 45 + 1 6 49 10 124 6 74 + i 4 42 7 00 5 04 + 14 Si 13 74 - 18 10; 16 94 - 13 10 14 9 - 16 •13 194 11 - 11 15 274 14 - 7 17: 24 17 + i 11 m 7 - 30 56 69i 54 - S 618 DEPRESSION IN LABOE AND BUSINESS. Tablb VI.— Average retail prices, 1860, 1872, and 1878— Continued. Articles. Average retail pricea. Standard, gold. 1860. 1872. 1878. BOOTS. Men's heavy per pair. RESTS. Pour-room tenements per montli. . Six-room tenements ^. ..: do — BOAKD. Men per wenk.. AVomen do — $3 94 $3 24 5 5.5 9 43 5 62 3 75 4 19 2 63 + 18 + 25 -f 25 + 50 + 4T Averaging and consolidating the above returu.s nnder tlio group-lieads de.signated in the table, we filid that in 1878, as compared with 1860 : Per cent. Groceries have adviinced in })ri(f 7 Provisions liii ve ad^'auced in price 28 Fuel lias advanced in price f> Dry goods have fallen in price 9 Boots have advanced in price , IS Rents ha\c advanced in price 25 Board has advanced in price 49 On all these items of expense entering into the cost of living we find that the arerage price was fourteen and a half])er cent, higher in 1878 than it was in 1860. Continuing our examination of Table VI, we find that groceries were 53 per cent, higher in 1872 than they were in 1860, and 43 per cent, higlier than they were in 1878. Provisions were 50 per'cent. higher in 1872 than in 1860, and 17 per cent, higher than in 187K. Fuel in 1872 was 52 per cent, higher than in 1860, and 44 per cent, higher than in 1878. Dry goods were 28 per cent, higher in 1872 than in 1860, and 40 per <;ent. higher than in 1878. Men's heavy boots were 43 ijer cent, higher in 1872 than in 1860, and-21 per cent, higher than in 1878. Rents were 156 per cent, higher in 1872 than in 1860, and 105 per cent, higher than in 1878. Board was 104 per cent, higher in 1872 than in 1860, and 37 per cent, higher than in 1878. On all these items ot ex- pense prices were 76 per cent, higher in 1872 than in 1860, and .54 per cent, higher than in 1878. The final result, then, for 1878, as compared with 1830 and 1872, shows, on all the items of expense, prices 14| per cent, higher in 1878 as compared with 1860, and prices 54 per cent, lower as compared with 1872. These average prices were based upon returns from 30 out of the 34 cities and towns which supplied the returns of wages. The four iilaces from wliich we did not secure prices were the towns of Montague, Quincy, and Webster, and the city of Worcester. In order to show the local variations in the prices of groceries, provisions, &c., we subjoin the following city and town showings. It should be borne in mind that the clas.si- flcation of articles under the heads " groceries," " provisions," &c., is the same as that followed in Table VI. In each city and town showing, in order to make it complete in itself, we have also given the percentage of advance on all the items of expense and the percentage of increase or decrease in wages. TOWN OF ADAMS, COUNTY OK BHUKSHIRE. Groceries have advanced 3 per cent., provisions 9.5 per cent., boots and shoes 4 per cent, and the price of board 50 per cent. Fuel is 1.6 per cent, lower, and dry goods 28.4 j)er cent. Rents remain unchanged. Average increase of 5 per cent, on all items of expense. Wages have advauceil 40 per cent. TOWN OF GKHAT BAURINGTON, COUNTY OF BERKSHIRIC. Groceries have advanced 10.7 per cent., provisions 15.5 per cent., boots and shoes 9 iper cent., fuel 4.4 i)Br cent., rents 20 per cent., and the price of board 25 per cent. DEPRESSION IN LABOE AND BUSINESS. 619' Dry goods are 18 per tent, lower. Average increase of 12.5 per cent, on all items ol expousp. Wages have inlviuioed 47 per cent. TOWN OV LKK, COUNTY 01' BKRKSItlBE. •irroecrii's li:iv<' ailvaucetl 12.8 per cent., provisions 21.4 per cent., boots and shoes 13 per. cent., and the price of board 18.9 per cent. Fuel is 9 per cent, lower and dry goods 8 per cent. Rents remain unchanged. Average increase of 5.8 per cent, on all items of expense. Wages ha\e advanced 63 per cent. TOWN Oi- PITTSl'IELD, COUNl'Y OF BERKSHIRE. Groceries have advanced 17.7 per cent., provisions 16.2 per cent., boots and shoes 25 per cent., rents 20 per cent., and the price of board 41 per cent. Fnel is .7 per cent, lower and dry goods 11 per cent. Average increase of 18 per cent, on all items of expense. Wiises have advanced 29 per cent. CITY OV HAVERHILL, COUNTY OP ESSEX. Groceries liave ad\iinced 3'J per cent., provisions 58 per cent., boots and shoes 40 per cent., fnel 25 per cent., rents, 65 per cent, and the price of board 66.6 per cent. Aver- age increase of 39 per c(>nt. on all items of expense. Wages have advanced 10 per cent. TOWN ())• IPSWICH, COUNTY OV ESSE.X;. Groceries have advanced 12 per cent., provisions 43.2 per cent., boots and shoes 30.7 per cent., fuel 3.7 per cent., and no return for the price of board in 1860. Dry goods are 6.2 per cent, lower. Rents remain unchanged. Average increase of 8.7 per cent, on all items of expense. Wages have advanced 16 per cent. CITY (tV l.AWltKN'CK, COCNTY OF ESSEX. Groceries have advanced 20.6 i)er cent., provisions 28.5 per cent., boots and shoes- 22.7 per cent., rents 50 per cent., and the price of board 59.3 per cent. Fnel is 3.6 per cent, lower and dry goods 7.3 per cent. Average increase of 27 per cent, on all items of expense. Wages have advanced Ki per cent. CITY OF I.YXX, COUNTY OP KSSKX. Groceries have advanced 8.2 per cent., provisions 31.3 per cent., boots and shoes 31 per cent., fuel 21 per cent., rents 41 per cent., and the price of board 63 per cent. Di-y goods are 11.4 per cent, lower. Average increase of 32 per cent, on all items of ex- pense. Wages have advanced 56 per cent. TOWN OF .■Ml.THUEN, COUNTY OF ESSI:X. Groceries lia\e adxaiiced 16 per cent., ju-ovisions 71 per cent., boots and shoes 33.3 per cent., fnel 19 ])er cent., rents 25 per cent., and the price of board 64 per cent. Dry goods are 6.6 per ceut. lower. Average increase of 27 per cent, on all items of expense. No return was made for wages in 1860. CITY OF NEWBURYPORT, COUNTY OF ESSEX. Groceries have advanced 7.6 per cent., provisions 34 per cent., boots and shoes 28 per cent., fuel 12.5 per cent., rents 12 per cent., and the price of board 34 per cent. Dry goods are 10 per cent, lower. Average increase of 15 per cent, on all items of expense. Nf) return was made fcu' wages in 1860. TOWN OF PEABODY, COUNTY OF ESSEX. Groceries have advanced 18.2 per cent., provisions 68.2 per cent., boots and sKoes 27.2 per cent., fnel 19.6 per cent., rents 25 per cent., and the price of hoard 50 per ceut. Dry goods are 2.5 per cent, lower. Average increase of 26 per cent, on all items of expense. Wages have advanced 10 per cent. TOWN OF ROCKPOKT, COUNTY OF ESSEX. Groceries have advanced 19.9 per cent., provisions 64.8 per cent., boots and shoes 54.5 per cent, fnel 15.6 per cent., rents 27 per cent., and the price of board 58.3 per 620 DEPRESSION IN LABOR AND BUSINESS. cent. Dry goods are 7.3 per cent, lower. Average increase of 28 \»'V cent, ou all itoiiiR of expense. Wii,!j;e,s have tleoreased 2 per I'eut. CITY (II' SAI.KM, COl'XTY OK PCSSlvX. (irocerics have advuiieed 19 per cent., provisions 61.8 per cent., boots and shoes 60 iier cent., fuel 20 per cent., rents 13 per cent., dry goods 3 per cent., and the price of board 32.5 per cent. Averajic increase of 21 per cent, on all items of expense. Wag es have advanced 12 per cent. Ttnvs OF nrcKL.vxD, county of franklix. Groceries have advanced 15 per cent., provisions 20 per cent., boots and si. oes 30 pi'r cent., rents 9.5 per cent., and the price of board 37.5 percent. Fnelis 4.3 jier cent, lower and dry goods 5.6 per cent. Average increase of 11 per cent, on all items of expense. Wages remain unchanged. TOWX OF _-\IOXTAGUE, COUXTY OK FllAXKLIX. No" pric-es were, obtained for 1860. Wages have advanced 23 per cent. TOWX OF CIIICIII'IOE, COl'XTY' OF HA.MPDKX. Groceries have advimced 14 per cent., provisions 11.4 per cent., boots and shoes 8.6 per cent., fuel 10.7 ]ier cent., rents 23.8 per cent., and the price of board 38.8 ])er cent. Dry goods iire 'i |)er cent, lower. Average increase of 17 per cent, on all items of expense. Wages have advanced 25 per cent. CITY' OK HOLY'OKK, COUXTY OF HAMPDEN. Groceries have advanced 9.9 iier cent., provisions 27 per cent., boots and shoes 4 per cent., fuel 5.5 per cent., rents 41 ])er cent., and the price of board 58 per cent. Dry goods are 4.7 per cent, lower. Average increase of 24.6 jier cent, on all items of ex]iense. Wages have advanced 21 per cent. TOWN (IF MdXSll.V, CIIUNTV OK HAMPDEX. Groceries have advanced 12 per cent., jirovisions 24.9 per cent., rents 10 per cent., and the price of board 53 per cent. Fuel is 1.3 [ler cent, lower and dry goods 7.6 per cent. Boots and shoes remain nnchanged. Average increase of 14 per cent, on all items (if exjiense. No return was made for wages in 18:iO CITY' OF SPRINGFIELD, COUXTY OF I-IAMPDFN. Groceries have advanced 7.3 jier cent., jirovisions 21.8 jier cent., fuel 2.8 per cent., rents 23.3 |ier cen.t., and the jiriee of board 35 per cent. Dry goods arc 9.6 per cent, lower. 1) 1 its and shoes are unchanged. Average increase of 15 jier cent, on all items of exjiense. Wages have advanced 8 per cent. TOWX OF WESTFIELD, COUNTY OK HAMPDEX. Groceries have advanced 9.4 per cent., provisions 19 per cent., boots and shoes 9 per cent., fuel 8 per cent., rents 8 per cent., and the price of board 56 per cent. Dry goods are 12.8 per cent, lower. Average increase of 18.8 per cent, on all items of expense. Wages have advanced 19 per cent. TOVV.N OF KA.STHAMPTOX, COUXTY OK HA:MPSHIUE. Groceries liave advanced 2.4 per cent., provisions 26 per cent., boots and shoes 18 per cent., fuel 25 per cent., rents 34.7 per cent., and the jirice of board 50 per cent. Dry goods arc 10.4 percent, lower. Average increase of 22 per cent, on all items of expense. Wages have advanced 30 per cent. rOWX OF NORTHAMPTOX, COUNTY OF HAMPSHIRE. , Groceries have advanced 8.4 per cent., provisions 18.8 per cent. , boots and shoes 20 ■per cent., rents 12 per cent., and the price of board 42 per cent. Fuel is 12.5 pei- cent. lower and dry goods 8.7 per cent. Average increase of 11 jicr cent, on all items of ex- pense. Wages have advanced 33 per cent. TOWX OK WARE, COUNTY' (11' HAMPSHIRE. Groceries have advanced 9.3 per cent., provisions 14.4 per cent., and the price of board 22.5 per cent. Fuel is 14.2 per cent, cheaper and boots and shoes 4.5 per cent. No return for price of dry goods in 1860. Rents remain unchanged. Average increase of 14 per cent, on all items of expense. Wages have advanced 43 per cent. DEPRESSION IN LABOR AND BUSINESS. 621 CITY OF C.V.MBISIDGK, COUXTY OF MIDDLESEX. Groceries have advanced 13 per cent., provisions 24 per cent., boots and slioes 20 per cent., fnel 4.7 per cent., and rents 21 per cent. Dry goods are 7.8 per cent, lower. Ni price for board in 1850 could be obtained. Average increase of 13 per cent, on all items of expense. AVages liav(> advanced 15 per cent. CITY OF LOWELL, COUNTY OF MIDDLESEX. Groceries lva\"e advanced 15.5 per cent., provisions 26.8 per cent., fuel 1.3 per cent., rents 25 per cent., and the price of board 32 per cent. Dry goods are 10 per cent, lower. Boots and shoes remain unchanged. Average increase of 16 per cent, on all items of expense. "Wages have advanced 12 per cent. CITY OF SOMERVILLB, COUNTY' OF MIDDLESEX. Groceries have advanced 9 per cent., provisions 22.5 per cent., boots and shoes 25 per cent., fuel 2.3 per cent., and rents 20 per cent. Dry goods are 5.4 per cent, lower. No price for board in 1860 could be obtained. Average increase of 9.6 per cent, on all items of expense. Wages have advanced 13 per cent. TOWN or QUINCY, COUNTY OF NORFOLK. No return made of prices in 1860. Wages have advanced 23 per cent. CITY OF BOSTON, COUNTY OF SUFFOLK. Groceries have advanced 10.8 percent., provisions 18.6 per cent., fuel 2.4 per cent., and rents 15 per cent. Dry goods are 10.2 per cent, lower. Boots and shoes remain unchanged. No price for board in 1860 was obtained. Average increase of 8 per cent. on all items of exjiense. Wages have advanced 12 per cent. TOWN OF CLINTON, COUNTY OF WOUCESTEK. Groceries have advanced 10.3 per cent., provisions 19.6 per cent., boots and shoes 23.8 per cent., fuel 5.5 percent., rents 28.5 percent, and thepriceof board ,56.2 percent. Dry goods are 11.8 per cent, lower. Average increase of 16 per cent, on all items of ex- pense. Wages have advanced 4S per cent. CITY OF riTCHBUKG, COUNTY OF WORCESTER. Groceries have advanced 3.9 per cent., provisions 20 per cent., boots and shoes 13^6 per cent., fuel 17.6 per cent., rents 23 per cent., and the price of hoard 47.3 per cent. Dry goods are 6.8 per cent, lower. Average increase of 17.4 per cent, on all items of expense. Wages have advanced 34 per cent. TOWN OF LEICESTER, COUNTY OF WORCESTER. Groceries have advanced 11.7 per cent., provisions 17.9 per cent., boots and shoes 4 per cent., rents 10 per cent., and the price of board 37.5 per cent. Fuel is 2.6 per cent, lower, and dry goods 8.8 per cent. Average increase of 8.6 pev cent, on all items of expense. Wages have advanced 21 per cent. TOWN OF MILL15URY, COUNTY OF WORCESTER. Groceries have advanced 10.3 per cent., provisions 18 per cent., rents 16.6 per cent., and the price of board 37.5 per cent. Boots and shoes are 4.5 per cent, lower, fuel 7.6 per cent., and dry goods 10.5 per cent. Average increase of 7 per cent, on all items of expense. Wages have advanced 36 per cent. TOWN OF WEISSTBR, COUNTY OF WORCESTER. No return of prices for 18S0. Wages have advanced 40 per cent. CITY OF WORCESTER, COUNTY OF WORCESTER. No return of prices for 1860. Wages have advanced 35 per cent. Table VII is self-explanatory. It shows the purchase-power of money, or, in other words, the respective quantities of each article which one dollar in gold would buy in 622 DEPRESSION IN LABOR AND BUSINESS. 1860, 1872, anil 1878. Under the head of fuel, the " foot" means 16 cubic feet, or one- eighth of a cord. Table VII. — Piirchaae-power of money. Avticles. Wkat one dollar would buy 1860. 1872. 1878. GROCERIES. Plonr, superfine, -wheat liouuil.s- Flour, family do .. Flour, ryo il" -. Com meal do .. Codflsh, dry- do . . Rice do . . . quarts.. Tea, Oolong pounds.. Coffee, Kio, green do ... Coffee, roasted do ... Sugar, good brown do — Sugar, coffee do ... Sugar, granulated do ... Mmaasea, New Orleans , gallons.. Molasses, Porto Rico do Sirup do ... Soap pounds . . Starch do .. 25.04 27.77 33.33 4.5. 45 18.87 13. 33 12.66 1.83 4.67 4.36 12, 19 10.99 9.70 1.97 1.73 1.57 11.49 9.18 18.18 15. 38 31. 25 ^ ■'lo. 55 12.20 ■ 8.93 10.52 1.45 : 2.92. 1'. 35 : 9.80 9,62 ! 8.33 1.43 ] 1.31 1.33 12.50 8.19 ' 22.72 25 i;8.57 47.62 16,67 10.87 12. 05 1.66 4,22 3,77 11,63 10.64 10 1,74 1,45 1,16 12,34 10,64 rHOvisioss. Beef, roasting pounds Beef soup do.. Beef, ruinp, steak do . Beef, corned do . Veal, fore quarter do.. Veal, hind quarter do . . Veal cutlets do . Mutton, fore quarter do . Mutton, leg do . - Mutton.chops do . . Pork, fresh 1 do . Pork, salted do ,. Hams, smoked do . . | Shoulders, corned do Sausages do Lard do Mackerel, pickled do ... liiittev do (.'hecse do ... Potatoes , bushels . - Milk quarts . . Esg,-) ; dozen.. Coal Wood, hard . AVood. pine.. FUEL. -Ijnund.s, ....fcpt ...,do... 9.18 20, 83 6, 85 15,38 13,70 9.18 7,09 13, ,-|l 8.07 7.46 I 9.26 9.09 i 7. 7,5 11.49 8,77 I 7.57 ! 10,62 4,68 i 7,62 1,67 I 21.27 : 4.92 I 312. 5 1,23 1.90 j 5, 26 13.33 3.39 9.52 9.52 6,85 3,54 9,80 ,5. 26 (>, ,51 S !), 09 7.41 9.80 s 7,87 7, 57 2. 55 : ,5,71 ! .97 : 12. ,50 3.33 217,39 ,79 1,14 6.94 18.86 4,85 12, 34 9,80 6,53 ,5. 05 9.70 5,78 5,40 10 10,31 8,07 10,75 8,84 9.34 8 3.97 8,13 1,03 18,86 4 01 310. 56 1.18 1.58 UKY GOODS. Shirting, 4-4, brown yards..: 10,87 Shirting, 4-4, bleached '.do ...| 9.26 Sheeting, 9-8, brown do ...i 9,34 Sheeting, 9-8, bleached do . . . f 7, ,57 Cotton flannel do . . , ! 6. 33 Ticking .do...,i .5.81 Prints do....; 9,09 Satinet do ...j 1,78 7,69 I 6,25 I 7,14 I ,5.13 : 3,63 i 4.17 ' 8.55 ' 1,67 I 13.33 10.64 11.11 8,47 6.80 5, 78 12.98 1, 85 Men'M, 1 . IK-v ]>aiv. RENTS. Four.room tenements days Six.rooni tennmen t,s do'. . Men V,'om('n $3 94 %-i 24 6,75 3,98 2,03 1,87 5, 40 3,18 2. ,51 3,92 1,24 1. S7 1,67 2,63 WAGES AND TRICKS. We have shown the avevage weekly wages by towns ami industries for 18li(l. 187^, and 1878; and the ijrioos of groceries, provisions, &c., by city and town iierci'iitases, DEPRESSION IN LABOR AND BUSINESS. 623 and for the State, by uame, for each article of expense for the same years. The results show, as hereinbefore stated, an advance of twenty-four and four-tenths per cent, in wages, and fourteen and a /laJ/per cent, in cost of living. On the face of it, this means a pecuniary advance in the condition of workingmeq of nine and nine-tenths per cent. At the same time the reductions in the hours of labor which have been se- cured in various ways since 1860 should be taken into account. The application of the general average of increase in prices, 14^ per cent. , to a workingman's whole in- come, does not cover the whole ground, or tell the whole truth. We reproduce from our report for, 1875 a table showing the percentages of expenditure, as x-egards income, for the various items of the cost of living. The basis and absolute truth of this table are fully explained in the report above mentioned. Table VIII. — Percentages of expenditure as regards income. Items of expquditure. Sal)sisteuoe Clothing Kent Pnel Sundry expenses Totals Percentage of the expenditure of the family«of a working- man with an income. From $300 to $450. Per c&tit. 20 ej 3 97 100 From $450 to $600. Per cent. 63 Prom $60i to $750. Per cent. 601 "U4 14 f"* 6j 6 6 From $750 to $1,200. Per cent. 561 6 6 Above $1,200. Per cent. SI 10 10 ^90 100 To fully illustrate the effect of the advance in the cost of living, it is necessary to apply to the various items of expenditure their appropriate percentages of increase or decrease. We will take for our first illustration the case of a workingman earning .^400 in a year. His exijenses, in percentages and money-values, may be presented in tabular form, with a column showing the percentages of increase or decrease for each division of expenditure, based upon our figures for 1860 and 1878. Tablk IX.— Percentages of expenditure of an income o/.^400 yearly. Items of expenditure. Groceries Provisions Clothing Dry goods Boots and shoes . -Rent Fuel Sundry expenses Totals Percentages of expenditure. 47 17 4 1.5 1.5 30 6 100 Actual money expenditure. $188 00 68 00 16 00 6 00 6 00 80 00 24 00 13 00 400 00. Percentage of increase or decrease on each item of expense. 7 per cent. 38 percent. 9 per cent. 9 per cent. 18 percent. 25 percent. 5 per cent. increase, increase, decrease, decrease, increase, increase, increase. 14^ per cent, increase. The succeeding table shows the application of the 24.4 per cent, increase in wages, and the various percentages of increase or decrease in prices of the different items of expense, drawn from our figures for 1860 and 1878, to the workingman's income and expenditure of .$400 yearly. Tablk X. — A wm-kingman's income o/$400, increased 24.4 ^er cent., equals $497.60. Items of expenditure. Expenditure on hasis of $400 yearly. Percentage of in- crease or de- crease. Expenditure on hasis of $497.60 yearly. Groceries Provisions Clothing Dry goods Boots 4nd shoes. Rent Fuel Sundry expenses Totals ;188 00 68 00 16 00 6 00 6 00 80 00 24 00 13 00 -I- 7 4- 38 18 25 5 $201 10 87 04 14 66 5 40 7 08 100 00 25 20 12 00 400 00 + Hi 452 50 624 DEPRESSION IN LABOR AND BUSINESS An iitlvauce of 14.^ per ccut. upon >i;4(ll) expended would aniouut to .'Jo'^, or ¥>■'>'> more tiliau shown by the. ahove talile. Tlii.s result is cjvuse.d by different bfiBes being neces- sarily used in aA-erasing, and iilso from the fact that the percentage of iuerease or decrease on "sundry expenses" cannot be accurately determined. From the example given, it is seen that the workingtnau witli wages increased troni |40(J to $497.60 yearly, has his expenses also advanced from :i!i400 to !j4.5-2..50 yearly, or 13-f per cent.' This is a gain of $45.10, or 11+ per cent, for the workmguiau, as against 9.9 per cent. We have applied the percentages of increase or decrease in price m tlie various items of expenditure to only one division of Table VIII ; but an interested party can deal with tlie other divi.sions in the same way, or apply the rules to his own expendi- tures, if he has kept suitable books of account. He can also apply the rules to the city and town showings. To sum up, the result of our investigation as regards wages and prices in 1860 and- 1878 may be^tated as follows: That the aremye wnkiy n-aries of workiiiymeii in manu/ae- tuiinq liiid meohanical industries in Massachusetts, ullowi.n{) for the advance in the cost of Innn'g, ivi-re ten per cent, higher in 1878 tlum theij were in 1850, no account beim/ made of the fact thai the wat/es in 1878 were paid for fewer 'hours of labor per week, in many industries, than were required in 1860. PURCU.VSKS. C'ontem)i(U'a.neou8ly with the iin-estigation by our agents as regarded wages and prices, other agents were making researches into the matter of purchases by the labor- ing classes, visiting retail de;ilers in different branches of trade, and ascertaining the quantity and quality of housekeeping articles purchased by workingmeu, as compared with previous years, also impiiring if the workiugmen had suflicient income to enable them to pay their bills with promptness. Our agents employed in this investigation visited 345 dealers engaged in retail busi- ness. Their places of business were located in the following towns and cities : In Wakelield, 11; in Stoneham, 12; in Maiden, 19; in Wobnrn, 13; in Peabody, 12; in Lynn, 50; in Salem, 20; in Chelsea, 41; in Cambridge, 43; in Boston, 124, of which 37 were in the Charlestown district, 35 in East Boston, 22 in South Boston, and 30 at tte North and West Ends and in Boston Highlands. As regards kinds of business, 118 were dealers in groceries, 37 in provisions, 51 in both groceries and provisions, 38 in boots and shoes, 23 in ready-made clothing, 11 in custom-made clothing, 13 in hats and caps and gents' furnishing goods, 15 in furniture, carpets, and crockery, 15 in dry goods, 20 in wood and coal, and 4 in sewing-machines ; total, 345. In presenting the testimony of the retail dealers we shall keej] each branch of busi- ness by' itself ; giving, in each case, the results concerning the quality of goods pur- chased by workingmeu, the c|uantity as compared with jirevious years, and, finally, the information obtained regarding the promptness in payments. Groceries. — One hundred and eighteen retail dealers. As regards quality of groceries purchased by workingmeu, 85 dealers state, that, of the staple goods they buy the best ; while 57 dealers say they ahrays buy the best flour ; 28 dealers say they sell some of the best grade of goods, the balanee being good or ordinary; 32 dealers state that they sell few canned goods or fancy groceries, while 2 dealers report sales of more of this grade of goods than in past years. Concerning quantities purchased now, as com- pared with previous years, 97 dealers say the workingmeu bny in small quantities, be- ing very economical, purchasing only what is necessary from day to day ; 13 dealers state that their customers buy as muih as they ever did; 4 dealers think they would buy more if times were good. Regarding payment, 71 dealers — many selling exclu- sively fin- cash — report that bills are paid as promptly as they ever were : 29 dealers say that money comes in slowly; 10 dealers say payments are always prompt when theii' customers have work ; 1 dealer says payments ari; made more promptly than a year ago; 5 dealers say they lose no more by workingmeu than by those supposed to have money, and 5 other dealers state that the workingnieu pay better than those supposed to have money. Provisions. — Thirty-seven retail dealers. That Avorkingmen buy the best meats and vegetables is stated by 17 dealers ; 20 dealers say they purchase a good quality of meats, but not the best; 4 dealers say they use much soup-meat ; 6 dealers say tliey used to sell better meats ; 1 dealer says the laboring cla.sses do not buy fruits and canned goods; and 1 dealer thinks their economy is in quantity, not quality. Regarding ([uantity, 28 dealers coincide in the statement that, the workingmeu buy economically, in small quantities, as needed; 7 dealers say their customers buy as much as ever. Concerning payments, 24 dealers say they pay well, generally cash ; 10 dealers say they pay slowly ; 2 dealers consider workiugmen as good pay as business men, and 6 dealers think they would pay better if they had more work. Groceries and provisions. — Fifty-one retail dealers. Of this class of shopkeepers, deal- ing in groceries, meats, vegetables, &c., as regarding quality, 37 say their customers DEPRESSION IN LABOR AND BUSINESS. 625 purchase the best staple groceries, 20 say tliey always buy the best flour, and 30 say they buy the best meats and provisioi^s ; 20 dealers say they sell good and medium quality of meats, not the best ; 1 dealer says he sells as good goods as ever ; 1 finds it hard work to sell poor meats ; 4 sell medium grade of groceries and provisions ; 12 say they have no call for fancy groceries. With reference to quantity, 36 dealers say their customers buy economically, while 5 state that they buy as much as ever. Concern- ing payments, i'i dealers sell for cash, and have no cause to find fault about payments ; 6 dealers say their customers pay only fairly ; 2, that they pay as well as the rich ; 3, that they lose more by the poorer classes ; 10, that they pay slowly ; while 8 thinli, if they had more work, there would be no trouble about prompt payments, and they would buy more. One dealer says business is better than for five years ; and another says when business is brisk workingmen live as well as their employers. Boots and sho'S. — Thirty-eight retail dealers. Concerning quality of goods bought by workingmen, 11 dealers say they buy cheap goods at the lowest possible price ; 16 dealers say they buy cheap goods because they are too poor to buy better,,and the in- ferior articles wear out so soon it keeps them buying all the time ; 24 dealers say their principal trade is in medium grade goods ; 1 dealer says women buy better quality of goods than men, but not the best ; 2 dealers sell good, durable goods ; and 1 dealer says he sells same grade as five years ago, but that they are better goods than they were then. Regarding quantity, 15 dealers say they sell fewer goods than they used to, purchasers buying very economically. Payments are reported prompt by 25 deal- ers, as they sell for cash ; 8 dealers say payments are made slowly. Beadij-made clothing. — Twenty-three retail dealers. Quality of goods sold of medium grade is the testimony of 16 dealers ; 8 dealers say they sell cheap goods principally because their customers cannot afford better quality ; 8 dealers state that many who used to wear custom-made goods now buy ready-made, and that parts of suits are usually sold instead of complete outfits; 1 dealer sells as good articles as ever. Re- garding quantity, 1 dealer says he is selling more goods, 7 that they are selling less than formerly, and 7 say their customers buy underclothing very sparingly. Cash payments are required by 13 dealers ; 2 say their customers pay fairly, 2 that they pay better than formerly, and 2 poorly. Tailors. — Eleven retail ddalers in custom-made clothing. Concerning quality, 7 dealers say their customers buy pretty good suits, 2 that they want good work; 1 dealer says in good times all classes wore the best goods ; 4 dealers say many of their former customers now buy ready-made goods. Regarding quantity, 7 dealers say they do not sell as many goods as they used to, and many only buy parts of suits at a time. Respecting payments, 3 dealers say they usually get their money, 4 that payments are slow ; 1 dealer says laboring men pay as well as those with money ; 2 say give them work and they will pay promptly; 1 dealer says he sells some clothing on the install- ment plan. Sats, caps, and gents' furnishing goods. — Thirteen retail dealers. Workingmen buy medium quality of goods is the testimony of 11 dealers, and 8 of these dealers say by buying cheap goods they are consequently obliged to buy much oftener; 2 dealers say they sell as many dollars' worth as ever, but low grade of goods ; 4 dealers say when workingmen had money they bought the best. Regarding quantity, 9 dealers state that their customers biiy economically, parts of suits of underwear only at a time; 2 dealers say they sell fewer goods than formerly. Respecting payments, 11 dealers say they sell for cash ; the other 2 dealers report that payments are made slowly. Furniture, carpets, crockery, f, No. 2, of Williamsburg. Williamsburg (Brooklyn, E. D.), August 20, 1S78. To the Congressional Committee appointed to investigate the Condition of Labor : The Tailors' Union of Williamsburg feels ccEStrained to submit its contribution and conscientiously responds to the call, so far as it is concerned in this branch of labor. In order th(? better to comprehend our case, it must be understood that (this) our union is composed exclusively of shop tailors, i. e., tailors who work year in and year oiit, making clothes which are sent to every part of the United States, California included. The clothing of our handiwork therefore forms a handsome staple article of manufacture in which millions of dollars are yearly interchanged— a statement which is proved by the fact that between 30,000 and 40,000 working people of both sexes are employed at this trade in the cities of New York and vicinity. It is not, by any means, to be supposed that these are all thoroughly qualified workmen of the trade. There are coat-makers who during the entire year make nothing but coats, others who make nothing but vests, others nothing but pantaloons. The two last species of piece-work are easiest to learn, and consequently performed mostly by women and those who are not tailors by trade. We might rank these different clothes-makers into first, second, and third classes, who are paid according to the fineness or coarseness of the work. The manufacturers or employers are mostly to be found in New York, and count many millionaires among their number. It must not bo 634 DEPEESSION ]N LABOR AND BUSINESS. forgotten that in]ietitiou with cheaper AN-ares thrown on the market. A second cause lies in the improvements in machinery, such as cutting and fitting machines, &c. By these innovations a large number of idle hands arc^ created, who to stave off starvation un- derbid others by accepting any terms ottered them. We ha\e already said that the prices many years ago were a third higher, and for a time after the war of the rebellion much more than that ; so that many working people actually had their own homes, even palaces where a noble himself need not be ashamed to dwell. These favorable times are, however, gone. Many were obliged to forsake their homes, being unable to pay either tlie interest on the unpaid capital they had assumed, or the taxes levied every year upon them. A further cause of the reduction of the wages is that the manufacturer has developed all the methods of the division of the industry and applied thera. The manufacturer No. 2 is likewise a workman, employs a number of people, and sends away large quantities of work ' cut out. The larger part of his work is done by girls between the ages of 14 and 20 years, who receive weekly from |1.50 to $5. Those who work on machines get the pay of men, i. e., $rosperity in this direction until population grows up TO the level of the manufacturing facilities of the country. But Avith agriculture the situation was quite different. Here no corresponding de- velopment was made as in manufactures. The soldier returning from the war did not go bade to the farm. He had formed a love of excitement and adventure that could not lie satisfied in following the plow ; and so in 1870 but few more acres were culti- vated than in 18H0. Consequently agricultural products have sold at high prices rel- atively to manufactured goods, and still bring high prices compared with the wages of common labor. Trading was also overdone, aud financial affairs were out of joint, and since the cli- max in 1873 was reached, the process of leveling down, or leveling up, as the case may be, has been a natural order of things : and we cannot expect a full return of prosperity in all departments of labor until all these great industries have become ad- justed to each other and to the wants of society, and the values of things become set- tled and permanent. The necessities of men here and there, and the working of natural laws, will in time bring this about. The way to make it worse is for men to organize and resist the in- evitable decline of wages, encourage lawlessness and vagabondism, burn railroad and other property, declaim against capital and vote for an unlimited issue of greenbacks. Capitalists will then naturally lack confidence aud invest their money in four per cents as a measure of safety. But it may be stated in opposition to the theory that war has chiefly occasioned our troubles, that other countries have suffered at the same time similar depression in business where there has recently been no war. This is admitted, but it must be re- membered that in every such instance enormous standing armies have been maintained in anticipation, or in fear, of war, which has been almost as burdensome to the people and destructive of confidence as a condition of war itself. A secondary cause of the present disorders in business may be found in the develop- ment of machinery and mechanical appliances. The progress of invention, together A\ith the construction and operation of a great variety of labor-saving machinery which within a few years have given us the steam-engine, the printing-press, the reap- ing-machine, the sewing-machine, and greatly improved a thousand processes, concur- rent with the development of our gigantic systems of railroads and telepraphs whereby new channels of communication have been opened and new methods of business insti- tuted, have contributed to revolutionize trade and commerce, crowd the markets with manufactured goods, and turn unskilled or common labor out of employment. Our civilization has taken such strides forward during this period, that society has scarcely had time to adjust itself to the rapidly changing condition of things. These im- provements have amounted to innovations upon the slow methods of older times, and the natural result of so many important changes in our business life has been to pro- duce a certain amount of disorder, and to throw things out of balance, relatively, one to another. We are stopping to take breath, look around us, measure our growth, aaid see where we stand. We must have time to find our places in society, where we shall be able to earn a living. Improvements in machinery, however, can work no permanent injury to the labor- ing classes ; they may create a diversion in labor, but the ultimate effect of all such improvements must be greatly beneficial to society in general. We cannot live too well, nor too luxuriously, providing the means are at hand and we do no injury to ourselves or our neighbor. Various other reasons have been advanced in explanation of the present depression, such as "stock and gold gambling," "excessive railroad building," "useless importa- ations of finery," " extravagance in living," \ ory legitimate and proper means. Agriculture should also be encouraged in all parts of the country. Having been less de\eloped tlian trade and manufactures, it seems the most promising industry at present for a large class of people ; in partic- ticular, the cultivation of those products tliat bring the largest jtrofits, fruits, poultry, dairy products, &c. '\Vhate^■er contributes to restore a justifiable confidence in tlie stability of things, would be of benefit. Laws should be rigorously enforced, criminals punished, public affair's administered faithfully and economically, and the ])urity of the ballot-box guarded. The tramp. nuisance should be suppressed by uniform legislation, if possible, pro- viding for the forcible employment of all sli-olUni/ vagabonds m grading and improving the public roads. No legislation is wanted toucjung the hours of labor, but the right of all men to labor for such a number of hours daily, and for such compensation as they may agree to, should be guaranteed and ])rotected wherever interfered with. Miich legislation is disquieting, e.specially about financial affairs, the tarifi^, &c. Sta- bility and permanency are what is wanted. Some elements in the present situation are quite encouraging, and some are discoiu'- agiug. Among the former are our hopeful national temperament; rich agricultural and mineral resources ; our growing export trade ; our increasing ability to compete with other nations in manufacturing goods, and the restoration of values nearly to a gold basis. Among the discouragements are the great burdens of debt borne by na- tional, State, and municipal governments, corporations, firms, and individuals; an uneasy feeling about the stability of political affairs; too frequent elections; too widely extended an elective franchise, and the needless waste of the whisky and tobacco traffic. Notwithstanding all these, there are promises of a healthier condition of things. But we need not expect the retuin of former times ; nor is it desirable for the welfare of all sections that we should have a recurrence of unusual activity and high prices, any more than for a person in convalescence to wish the return of congestion and fever. Let us have good courage, and "lift up our exes unto the hills from whence cometh our help; our help cometh from the Lord.'' Very respectfully, J. H. STERNBERGH. Hon. A. S. Hewitt, Chairman, Neu- York. INDUSTRIAL CRISES— THEIR CAUSES AND REMEDIES. By H. Bowlby Willsox. 49 AVest Forty-eighth Street. A'eio York, September 16, 1878. Gentxembn: I avail myself of your kind invitation to "communicate, in writing,'' my views relative to the subject-matter of your investigations. 1. This, I imderstand, is to ascertain the causes, as far as possible, of the present depression in the industries of the country, and to receive suggestions on the subject of remedies within the domain gf legislation. 2. As a starting point, I admit the premisi-s, namely, tliat the country has been passing through one of those periodic crises, in nearly all its industries, since the paSTe of September, 1873. But, at the same time, as a student of economic phenomena, I cannot admitr that the causes which led to this panic differ materially fi.-om those of other similar experiences, of which a large number of business men and economic au- thorities, still living, are cognizant, and of others, recorded in the commercial history of the world, since the commencement of the present century. I also question the assumpthm of some who have testified before your committee, that the stagnation in lUiaiuess since 187.3 has been greater than existed iu 1835, 1837, and 1857 ; to which two latter periods hiy own personal reminiscences extend. Furthermore, I am of the opinion, founded on 'my own particular avocations, and a general knowledge of in- dustrial jmrsuits, more particularly in Ohio, and other Western States, and in Canada, that tlie present crisis has nearly run its course, and that ^^■e are entering on a new era of prosperity. Entei-taining these general views on the subject-matter of your itTquiries, I feefbound to suggest that anyremedies attempted by Congress shoul^ljje general in their chatactex, .and be framedwith the" view to the prevention of futuv« mseTby reriioving or diminishing the intensity of their causes. / 642 DEPRESSION IN LABOR AND BUSINESS. 3. I Ikivu l)i'i;ii engagfd fov ii tliird of a ceutury in what iiiiiy he called railway liiisi- ness, as contractor and financier, and shall confine the facts I have to commimicate chiefly to my own branch of industry. My first labors in this business were directed to the furthering the construction of railways in Canada and Michigan ; and in 1851 I removed to London, where I de\'oted some years to raising British (■ii])ital for rail- way construction, so that my experience has had a wide range. Horn recently, in 1872, I undertook the construction of a line in Ohio of considerable magnitude, only a small part of which is as yet completed, owing to the panic of 1873, and that part I built last year. 4. At the time I took the contract, in 1872, there prevailed throughout the country vast activity in the railway business. The annual construction of new lines had risen to no less than 7,000 miles. This unwonted and vast expansion of the railway busi- ness gave employment, directly and indirectly, in construction and providing rails and other materials and equipment, to not less than one million of men, tepreseuting a population of probably not less than four millions, who lived Ijy this vast branch of industry. A superabundant paper currency had inflated all values, the mark(_'t value of labor included. The capital expended was partly raised in many of the localities where the lines were located, and partly in Eastern cities and in Europe. New York, London, Paris, and Frankfort bankers reaped immense profits by " floating loans" on mortgage bonds for railways sometimes existing only on paper ; and many of the ' ' land-grant " jirojectors simply divided the proceeds among themselves, without build- ing a mile of railway. In North Carolina there were seven lines which had been partly built by State grants, whose managers got the State to appropriate 116,000,000 more of its bonds, under the pretext of "completing the State railways"; and eleven mill- ions of such bonds were brought to New York and were sold or hyijothecated at from 30 to 60 per cent., and, with only one or two insignificant exceptions, the whole ca,sh so raised was stolen. What took place in North Carolina was repeated, to a greater or lesser extent, in all the States under caijiet-bag rule. According to a stat(!ment made by the late Horace Greeley, about one hundred millions of dollars of Southern States bonds were thus i)Ut ou the market, and e\'eiy dollar they were sold or pledged for was totally' misapplied or stolen by governors, Fuited St;ites Senators, members of Congress, and other Federal and State officials. 5. What mateiially tended to iutensify the general railway inflation were the large sums voted by Congress fiu' subsidized national lines. These were called "Pacific railways," whether they ran North or South, East or West: and, as the government stood in the position of seiond-mortgage bondholder, the nrst-imu-tgage bonds were, in most eases, as good as government securities. Thus it happened that government furnished, in nearly all cases, the entire capital exjieuded in the consti'uctiou of some thousands of miles of railwa,y, while the speculators, by means of Credit MohU'ien and other devices, realized out of the company's bonds and stock a clear profit exceeding the entire cost of these so-called "Pacific railways." It is easy to perceive how these vast national and State grants stimulateil the building of other " unsubsidized" lines, and how the total expenditures inflated all other branches of industry. So long as prices, whether foft labor, (u- nuiterials, or food and clothing, lands and tenements, and securities contiinied to rise, everybody fancied they were gTOwing rich. In 1869 I published in Washington, and oirculatedin Congressional circles, a pamphlet entitled "The Science of Money," in which I pointed out, concisely and clearly, what the in- flation of the cuirency was leading to. I pointed out how the market value of labor and goods first felt the delusive influences of such a currency, and how lands and houses followed, and how their value would subside when the bubble birrst; but no one then heeded such information. I allude to this brochure, because the remedies for future crises must be fiumded on a radical change in our system of banking and the juethods of issuing currency, wherein the incipient causes of crises have their origin. 6. Though railways stood most prominently forward in the list of causes leading to the panic of 1 873, and the stagnation that has since existed, all other industries par- took of the intoxicating draughts administered liy the national and other banks, and the government itself, and the " car])et-bag" State administrations. To illustrate the effect on the cost of railways and the wages of railway "navvies," I must return to my efforts to construct the line in Ohio in 1872. Prior to the overissue of national- bank notes, after the establishment of that system in 1864, the rate jiaid for skilled labor, on railways, was about |1 a day, orl|i26 a, month; and the price of iron rails, in Ohio, was about .$40 a ton. The price of laborers' board, before the war, was about .ti2 a W(>ek. In 1872 similar labor was %-Z to $2.2.5 a day; board, .$4 to |5 a week; iron rails, |80 a ton; and all other materials, ineludiug engines, ears, &c., iu proportion. I now come down to present prices. Last year I paid fl to ,fl,15 for "navvy" labor; for board, 13 to $3.50 a week; .|35 a ton for iron rails at mills; and now I have ofters of labor at 80 cents to |1 a day, or .$20 to |26 a mouth; board at $2.50 to $3 a week, and boots and clothing at ante-war prices; and iron rails, for cash, at mills in Ohio, per ton of 2,240 ])onnds, $33. DEPRESSION IN LABOE AND BUSINESS. 643 7. The cost of raihvays, Ukc the eost of houses iu cities, was more thau double, during tlie period of iiitliition, what tlicy can now he built for. Leaving the " wateriua" iiio- cess out of sight, a staudard-gaiige line cost about |25,000 a mile in Ohio to build and equip during those days of greatest inflation ; and the speculators, bankers, managers, arid promoters added $25,000 perniile more, and, in some cases, $35,000, for their profits. Now, I can build an average standard-gauge line in Ohio, or almost any Western State, for from $8,000 to ^10,000 a mile cash, including all materials, but ex equipment. But it is more difficult to raise |10,000 a mile now than it was then to raise |25,000. Good substantial narrow-gauge lines over an average of Ohio country, laid with 35-pound iron rails, can at present l)e built, ballasted, and fenced for from .|6,000 to |7-,500 per mile. 8. These facts are both interesting and instructive, as bearing on one of the largest branches of our industry. Onr railway system is less than half completed. The peo- ple perceive that by putting their own means into cheap narrow-gauge railroads, they can make them pay. Hence there is in the West quite a revival in the construction of these cheap lines, hereafter destined to take the place of common highways, to a large extent, which will serve as feeders to the old standard-gauge, highly-watered trunk lines. Let me here suggest to your committee the desirability of constituting a national railway department after the model of the British Board of Trade, but with more comprehensive powers. If there is no warrant for such a board iu the organic laws of the nation, then let Congress take measures to amend those laws. The civili- zation and prosperity of nations are in the ratio of their facilities for transporting per- sons and property. The National Legislature is less likely to abuse such powers than State legislatures, whose members are " bought and sold like sheep in the shambles." by speculators and ca])italists, for money and interests in public undertakings. We know from unqiiestioned testimony, before a Senate committee in this State, that over one and a half million dollars were exjiended by two great railway companies to in- fluence legislation in a single session. Members of Congress will hardly again become members of Credit Mobilier companies. But it is quite ea.sy to so construct the su"- gested railway dejjartment as to kee|i it "like Ciesar's wife — above suspicion." 9. It will be recognized as a. great, if not a self-evident trnth, tliat when we have been able to state authoritatively the causes and effects of OTir financial crisis, with its long chain of disasters, the wreck of industries, and the general social ruin attendant thereon, we tiaw- only been illustrating a class of evils resulting either fi-om bad legis- lation or the imperfections of huuuiu society. But here I raise the que-stion, are not these imperfections the result of laws made to override the natural laws '! Those who have read the debates in the British Houses of Parliament, and of Congress, since the consideration of the famous Bullicni liepfirt, in 1810, on the recunence of each of the great industrial crises, must have arrived at the conclusion I have, that each and all of them have had a common origin. It may be laid down as an immutable law of nature that " like causes produce like effects." Let those who have not the time to wade through immense volumes of Parliamentary and Congressional debates, at least read the writings and speeches of .Jefferson and Madison, Hamilton, Calhoun, Webster, and Benton, the master minds of past generations, and especially of the three last, be- tween ISlij and 163H, and they will perciMve mo.st clearly that these crises are due to banks of issue and discount. This conelusion -v^ill greatly narrow the limits of inves- tigation on the. part of your connnittee. 10. Hay it down as a fundamental principle that a theory oi- a fact demonstrated by mathenuitics or by the sciencf' of logic is more reliable, more to be depended f>n, as the basis of legislation, or, "if yrovided tlnir quantity were not at the same time increased. But there cannot he a douht that under such circumstances it toould he increased." 16. Daniel Webster, like Lord Overstone, said: "Even convertibility is no guaran- tee against o\erissues." He was speaking of banks and the causes of crises when he made this remark. The New York Times, the most inflexible advocate of the jiresent time of banks of issue, in its leader of the 20th September, fully concedes this histor- ical fact.* As I have before observed, the true scientific method of regarding paper money is in the light of a more convenient tool than metallic money, and, an the pub- lic hax to paij the full face value for the notes thei/ require, its innne should he removed wholly from being t)\e subject matter of profit to private or public i.ixncrs. Exceyit as to the issue <)f the Bank of England of, at present, £15,000,000 sterling on securities, the issue of the bank is a state issue, and the notes are all bought aud paid for by the public or bankers for use iu their business at and for their face value in gohl coin or bullion. The issue on securities is a violation of the highest fundamental \iriuciiile of monetary science, which demands a paper currency founded on the metal most stable in its mar- ket value iu comparison with other suitable metals. "^ The Times remarks as followa : "One fale may be tluis postulated : " That wliioh is iiiaile b.\' law tlif meas- ure of all iitlici- \alues, inelndiuo- that of labor, should be of the highest kno^\ii stabil- ity in its own market value, among the metals suitable for eoiuage." 18. The issue of notes on seeurities may be regarded as a plan whereby a small class of capitalists are enabled to own or posse.ss themselves of a profitable investment, and at the same time to have 90 per eent. of its faee value in money. I hold that Con- gress lias no power under the Constitution to grant snc-h a privilege to a small class of favored in^"estors in government bonds to the exelusiou of all other members of the eommunity. The plan of lending the public credit to national banks in the form of " national currency," for which the government acts as trustee — no odds how good the security given may be — is a violation of that great principle of human equality set forth iu the Declaration of Independence, which should stand like a second Magna Charta, a bulwai'k against injustice and o]ipression, "All men are born free and equal." If there is any sense, any truth in this proposition. Congress continually violates it by making laws in favor of classes — laws which make the laboring majority " the hew- ers of wood and drawers of water " to a favored few. These are high moral and polit- ical considerations, coming within the scope of your inquiries, gentlemen of the com- mittee on labor, and their bearing and relevancy to the present and future of oiir industries cannot be overlooked. I therefore quote as appropriate the postulate formulated by Daniel Webster, as indicative of a sound method of providing a paper currency, now an indispensable necessity to the industrial world. 19. "'It is," said the illustrious Massachusetts statesman, "the constitutional duty of government to see that a proper cuiTency, suitable to the circumstances of tlu; times, and to the wants of trade and business, as well as to the payment of the debts due to the government, be maintained and preserved ; a currency of general credit, and capable of aiding the operations of government, so far as these operations may be conducted by means of the circulating medium; and that these are duties, tlierefore, devolving on Congress, in relation to currency, beyond the mere regulation of the gold and silver coins." 20. I have shown what constitutes "a proper currency," namely, a currency issued by a national department, to all comers, for gold. I have shown that bankers cannot on any pretext be allowed to trade and speculate on such issues at the expense of the whole people, besides, and to the injury of non-issuing banks, which conduct a large amount of the legitimate business of the country. 21. Before proceeding to point out other causes of inflation, arising from bad bank- ing, I respectfully suggest, as the next step towards the prevention of the ascertained causes of crises, that yoiu- committee consider the plan I have briefly outlined, of con- stituting a national issue department, independent of Treasury and political party influences. AVi' have already an excellent working-model in the national issue office and CoTuptroUer's Department, which have always been honestly and ably managed. But such a department should not be under the influence and control of the llinister of Finance, and should be restricted to the issue and sale of notes for gold, after the manner of the Bank of Amsterdam. There is a substantial distinction between currency and finance. The one is a Ivol of industry, the other a process or method of conducting the business aft'airs of nations, states, corporations, and individuals. Tlie temptation to use the isfiHc of paper money to create resources must sooner or later be wholly removed from the thoughts and pur- poses of those who manage the business affairs of nations and banks. If; after ample experience, the managers of the issue department find themselves possessed of a larger supply of metal than is needful to insure the convertibility of the natioiial notes, be- yond peril dventnre, tliey should have power to invest such surplus iu public securities bearing interest, and to reissue tlie same, or new ones in their place, for temporary purposes in case of any unforeseen einergency demanding the purchase of gold to main- tain sp<'cie payments! To put such a system into operation would require time and the best practical and theoretical knowledge of the country and the trained skill of those already in the em])loy of the Ti-easury issue department. The currency question has, next to slavery, been the most agitat(.'d and discussed of any of the great national issues, and is now by far the most prominent before tlie people. Hi'uce, regarding it as I do as one of the leading elements involved in industrial crises, I hope I shall be excused for tlie prominence I am giving it in this communication. The time is, I trust and believe, at hand when it will be divested of all fundamental errors and the pas- sion that enters into public discussion whenever it is mentioned. The moment the nation cuts loose from all connection with banks of issue, as such, the inflation dogmas will yield to common sense. The ojiiiiion gains ground that the issue must be made by the nation and for the nation's benefit, and not for the special profit of a mere handful of bankers. 32. I have here to remark on an important example to show how inucli a well-regu- lated note issue has to do in averting inflations leading to crises. Trance has been especially free from these "financial cyclones" for half a century, under the issue of notes by the Bank of France. During the great panic of 1857, when the Bank of 646 DEPEESSION IN LABOR AND BUSINESS. England nominally suspended uudor an anthoriziitionoftlir govcnnnciit, and made a •wreck of a vast number of business houses by rimniug up the rate, there was scarcely a ripple produced on French financial waters. There was no run on French bankers, and the general industries remained undisturbed. That and other exami)les show the diifereuee between a single issuer, and two thoTisand competing national banks, in 1873. 23. It has been testified before ycjur committee, truly, that crises are (h'veloped under circmnstances showing that other causes than inconvertible jiajier cuiTency have produced them. I now pi-opose to point out what are these causes. Jlr. Siianlding, in one of the quotations I have made from his Centeimial address, states the fact that, "In seven years from January 1, 1830, to January 1, 1837, the loans [of the banks] in- creased from 1200,000,000 to $525, 000, 000." When we come to analyze the operations of a bank of discount, we reach a great fundamental truth, of supreme imjiortance in monetary economy, namely, that by far the larger proportion of bank discounts rests on goods in course of production and distributiim. 1 have put this important truth in the form of a postulate, as follows : 24. " Commodities, in course of production and transmission from producers to con- sumers, or ultimate purchasers, represented by bills of exchange, bills of lading, warehousemen's receipts, bank credits, checks, and other devices invented by bank- ers and merchants to facilitate the transference of debts and credits, constitute the bulk of floating capital dealt in in the loan, improperly c;illed the ' money ' market." * 25. I will give another postulated truth, which, together with the foregoing, will cover the whole business capital dealt in by a banker, beyond his own trading margin : "Floating capital, or 'trading power' other than that specified in the last postulate, consists of money, the savings of industry, and the surjilils ineonu' of capital, not yet invested in more permanent things, or in lands, houses, factories, steam and other vessels, or in the shares of steamships and railways and all manni'r of continuing undertakings, which perpetuate themselves, when prudently managed, or in things not destroyed in use." 26. It must, in order to reach a clear eomprehcnsion of the jiower of banks for inflat- ing the industrial pursuits of the peojile, be borne in mind that a large part of the latter description of capital is held on deposit by bankeis, and is loaned, along with the "proceeds" of bills representing goods. It must also bi^ kept in view that the proceeds of discounted bills are entered in bankers' ledgers as " deposits," and are not distinguishable in the published accounts from other, or -what are called "cash depos- its." I suggest that such a distinction should be required by Law. It is true an esti- mate can be made by comparing the " discounts" and "deposits," but what I suggest is, that the facts shall be made apparent on the face of the statements, so that we can detect where and when business inflation begins, and how it fluctuates. I have now demonstrated that inflation is caused by excessive issues of jiaper money and excessive discounts. Q. E. D. 27. It will be seen how the magic power of the banker turns goods into "trading power," or floating capital, from the moment the raw material is read>' for the market until it pasjies through the hands of the various dealers and manufacturers, and finally reaches those of the numerous distributing agents or retail ili-alers. Each, in turn, gives a bill to his predecessor in owner.sliip, in the chain of traii.sfers; and each, in turn, takes such bill to his bank, to be turned into trading power, to which category belongs money, but which forms only an insignificant three or four per cent, of the vast pool of trading power or floating capital. It therefore hax>pens that the same bale of goods is represented several times in the loan market before it reaches the final distributer — the retail merchant. 2S. Again, it Aery commonly haxjpens, when inflation has set in, that the same bale of goods or cargo passes through several hands in a few days or weeks, while in transit or in warehouse, each seller realizing a profit on a rising market; and, in reg- ular and not purely speculative transactions, each bu.ver giving his bill in payment, to be passed through the "discount mill" and turned into trading power. Thus the sum total of trading power becomes enormously expanded. The market value of the same products is represented se\eral times in the loan market, and as about 95 per cent, of the "operators" in these industrial pursuits "trade" on margins of only about 10 ]ier cent., it is perfectly obvious how a panic, stopping the sale of goods and the * As this postulate embraces a most important fundamental truth, I take the liberty of quoting an extract from a letter I received in the winter of 187.5-'7(i on the method I ha%(> adopted for stating in a concise and striking manner leading pi'ineiples of mon- etary economy, from the pen of an able writer on economic science. Prof. Bonamy Price, of Oxford. The professor says : " So many thanks for your letter in the Ameri"- can Times. It is exceedingly good, and I rejoice over it muoli, especially the postulates and principles. The ' (35th in my forthcoming work) ' is capital. I had the thought, but not definitely and vividly expiessed. The meaning jumps on the reader and mas- ters him, and it is most true." DEPRESSION IN LABOR AND BUSINESS. 647 " discount mills" all over the country, wipe out, as with a sponge, all the weaker oper- ators "for a i-ise," and numerous others who huxc been imprudent in the matter of giving credit. This is a true and in no degree exaggerated description of what happened between the years 1830 and 1837, when the loans of discount banks, which were mostly banks of issue, rose from $200,000,000 to $525,000,000, to say nothing of the increase of paper money, which went out through the discounts. It is what happened during the sevi-u years immediately preceding each of the panics of 1857 and 1873; and these panics, and the succeeding crises, and all others like them, are perfectly natural con- sequences, resulting from excessive bank speculation ; and we are just now commenc- ing another era of similar inflation, to be followed, sooner or later, by another panic, and another long and agonizing period of .stagnation. Congress, in its ignorance — I am afiaid to say " wisdom," for that would be what Mark Twain calls "sarkasm" — has passed an aet to provide for the ''resumption of specie payments, and for the establislmient of tree banking," the effect of which, if it remains unrepealed, must be to work enormous evils in our industrial system ; to some of which I must now direct your attention. 30. This law authorizes the use of the whole of the outstanding national securities, beariag interest, and amounting to over one thousand eight hundred million dollars, as the ba.sis of issues of paper money to banking associations. This is called "free banking," as if the issue of notes formed any part of the legitimate business of bank- ing — which It mcst certainly does not. No educated economist will claim that the issue of paper money is a legitimate part of a banker's business. In England about 80 per cent, of all banking, and in France all biit that conducted by the Bank of France, is conducted by banks that issue no notes at all; and even in this country, according to Mr. Spaulding, the non-issuing banks outnumber those issuing paper money more than two to one. See Centennial address, last page. This so-called "resumption act," over which there is sueli a fuss and such a iiartisan tight just now, is simply a premium offered by the government for the expansion of bank capital, and bank- notes — of which there is already a large excess beyond legitimate business demands. In this city and in other Northern and Eastern cities we see the price of capital rang- ing from one and a half to two or three jaer cent. j)er annum, which is the one un- wholesome symptom of deranged industries, standing most prominently forward in the /Category. Who can doubt tliat this is not largely due to the excess of banking .capital, drawn from other industries by government bonuses paid in "national currency," , and to discounts or loans made on stock-exchange securities instead of on bills founded on goods ? 31. The principle of free banking, like the principle of free trades, is logically cor- rect ; but the principle of a free, and all but unlimited, issue of pajjer money on securities is fundamentally wrong. If such issues are restricted to one class, then the Government violates the clear intent of the Con.stitution. It is the most obnox- ious of all class subsidies. It is the payment of a large bounty on banking capital, and, though a few banks have returned a part of the bounty and withdrawn their securities, for want of employment for their share of the "national currency," it is only a ijuestion of time — a few mouths, or a year or two — when new demands will ag.ain arise, which will render specie ]iayments impossible, and Avill lead to a vast and wide-spread speculation, founded on a new era of bank inflation. One of the evils, and it is no mean one, from which the country now suffers is the withdrawal of bTisiuess capital ii-om thousands of small and great industries and occupations for the establishment of national banks. The idea of turning one dollar into a dollar ninety, bv a stroke of the pen, is \ery fascinating. 32. The very statement of the facts, and the logical conclusions I have made in tins communication, should sufficiently ex]dain the causes of the crisis fr'om which we are just emerging, as well as suggest the remedy for the evils that will surely result from future similar crises. I wisli. liowe%cr, to trespass still further on your time and patience, by offering a few brief general observations explanatory of the operations of the natural laws of industry. The effect of the expansion of bank credits, in the manner I have pointed out, is to stimulate to overproduction of goods, which pres- ently leads to a glut in the markets and a fall of prices. There then happens the rever.se of what took place when values and prices were going up. Then t he wages of labor rose, and the e. c>nipetitiou among buyers was brisker than among sellers , and every tJoclyTaScnsd they were growing rich, an', patiently, and honestly, to undo all legislation, repeal all statutes it has passed from the beginning, which assume to control or which intringe the natural la\\s, which are as certainly the laws of God as any we know of This work must, of course, be slow. CJongress, act- ing on the erroneous theory that it can make better laws than the great natural Law- giver, has piled up a vast mass of statutory laws, specially intended to change the n.atural orcler of things in the industrial worlil. If there ever existed a timeA\hen "all men were born free and equal," it must ha\ e antedated the existence of Congress, for nearly all its efforts seem to have been directed to have men born unequal. The evils of class legislation are very old, and cannot be eradicated by the stroke of a pen with- out causing great suifering. They cling to society like barnacles to the ship's bot- tom, but cannot, like barnacles, be suddenly removed without injury to the social shi]i. The country has prospered in spite of bad, and not becatise of good, industrial legisla- tion. 34. The theory that the legislature .should frame and enact laws tO' direct all indus- trial pursuits in particular channels isnot only fundamentally wrong, but has been the greatest hinderance to the development of national wealth. The true theory of all in- dustries is the utmost fi-eedom of individual action to ad and to do,,to buy and scdl, to select and follow, on the part of every citizen, as to him or her seemeth best, any pur- suit, just as each .and all may be inclined, without infringing each other's rights. These propositions may be postulated as follows: "All obstructions placed f>u individual rights, in respect to what people shall do or produce with their capital and labor, or where they shall buy or sell, are direct infringements of the natural rights of man and the laws of nature; and are injurious to society ju,st to the extent to Avhi(di such inter- ferences can be made effectual." 35. The last great error committed by Congi'ess, inspired by a wide-spread popular- delusion, and calculated to injure industrial pursuits, was the passage of the h, and amend the national banking laws so as to compel all joint-stock banks to organize mider them and report to a department the condition of their affairs. AVheu some- thing of this kind is done, and the National Government ceases to override the natural laws of society, one great step will have been taken towards averting those destruc- tive industrial cyclones, which are the efforts of natural causes to cure artificially- produced evils. 44. I had intended to have closed with the last |iaragraph, but, since it was written, I notice great stress is laid by many "stunqi" orators and some more thoughtful reasoners on the effect of the " destruction of property produced by a million of men during the fom years of the civil war." It is strenuously argued' by many that the panic of September, 1873, eight years and a half after the war, and'foUowing seven or eight years of great prosperity, was largely due to such destruction oi property. The same class also lay gi-eat, if not equal stress on the inflation of the paper cur- rency. Now, a moment's reflection will show the absurdity of the position taken by such reasoners. They argue, quite correctly, that bank and currency inflation led to over-production and a general fall in the prices of labor and goods. These gentlemen .aje_ called on to explain how the scarcity of labor and goods during the war, caused by the rtostructive occupations of a million of men, could have influence in bringing about a crisis at a time when the markets were glutted with labor and production, stimulated by inflation. The two propositions seem to me to be wholly irreconcilable, even on the theory of the Satyr, who blew hot and cold at the same time. ' DEPRESSION IN LABOR AND BUSINESS. 651 45. I win explain it for tliciu. Tlie destruction of goods aud waste of labor are represented Ijy the niitioiiiil debt, aud, to a large extent, bave yet to be paid for or made good to .society. AVe simply borrowed tbe capital which has enabled us to bridge over tiie t'hasra of wasted labor and destriictiou of goods and other property, and the interest tails lightly on the national industries. As a matter of fact, proved by the census of 1870, the withdrawal of a million of men for four years from productive in- dustry and their employment in destruction of property was set off by the stimulus of high prices (caused by the inflation of capital and values) on the productive energies of those wlio remained. About 95 iier cent, of all the products of labor are destined to destruction by consumption witliin tlie year in which they are produced aud taken to market. Besides, those who la>- so much stress on the destruction of the war are called on to prove that the surplus profit of labor and capital was less during than prior to and since the war. This «ill be a hard thing for any statistician to do. NOVEMBEK 16, 1878. Since the foregoing comniunieation was written the results of the elections in twenty- nine .States enable us to perceive most cleail\- that the country wiU not tolerate an incouvertible, inflated, and fluctuating legal-tender paper currency. No leading man possessed of common sense, will any longer follow the ii/nisfatui(S of " flat money." That (juestion may be taken as settled, and as being no loiiger a disturbing element in na- tional politics. The condition of laborers,' as a gen- eral fact, can be iinproA ed only by reforming the modes of doing busini'ss, and by elevating the general condition of society of which they form a part. When the .state authorizes a concentration of business by granting acts of incorporation, a con- dition of affairs more or less artificial is created. In such cases it may, perhaps, be the duty of the state to prescribe to some extent the conditions under which labdicis should be employed. If the aim should be to limit the hours of labor, they should not be reduced below ten hours a day, or sixty hours a week. T believe that the moral and physical w ell-being of laborers would be better promoteil by that num- ber of hoursof labor than by a lesser number. Whatever limit may be fixed, it should be the same for goA'eriimcnt employes as for private enterprise, and .should be nnitiirm in all the .States. The ]iresent law limiting the lionrs of labor in government work- shops to eight hours a day is unsound, and sliould be repealed. It is easier to specify the causes of "the general business deinession " than it is to ''devise and propose mea,snres of relief I think that nainral laws are much more likely to bring relief than s/«fH./e laws. In fact the operation of natural laws lias already brought ns to the beginning of a career of substantial prosperity. Any special measures of relief, based on the present iibnormal condition of affairs, would probably tend to diminish rather than increase tliat prosperity. It is the height of wisdom 1o know what not to do. In the Atlantic Monthly for October, 1 contributed an article on ''the relations of labor and capital,'' in which I eiidea-sored to set forth the principles which underlie the labor c|Ucstioii, and to designate some of the causes of the genci-al liusiness depres- sion. I have no new views to commnnieate, and take the liberty of sending each member of the committee a. copy of that .journal. I have the honor to be, very re.spectfullv, your obedient serva,nt, E. B. BIGELOW. Hon. Abham S. Heavitt, Chainudii of the Labor Comndttfe, H'nshiiigtoii, D. C. DEPRESSION IN LABOR AND BUSINESS. 653 BiDDBFOKU, Ml!., January 8, 1879. Dkar Sir: Iu oomplyiug witli your requost to respoud to tlio questions contained in your (.-irculiir, I state tluit I liave been in the inaiiagoment of the Pepperell Manu- faeturiug Comjiauy since 1850, when it began tlie business of making cotton goods. And in.-reasing its mucliinerN- from time to time, it now lias about 85,000 spindles and 2,200 looms, narrow and wide, employed in making drillings, jeans, and sheetings, turning out a yearly product of about 7,000,000 of pounds and 20J000,O0O of yards. These mills ha\e been run witliont iutervuptiou since 1850, and now employ about l.iiOO persons (say 400 males and 1,200 females), at fair wages; and there has never been a turnout or strike or any troxible about wages or the hours of labor. The cajii- tal is .$1,200,000, and it contributes iu taxes yearly from l$25,000 to $30,000. Betweeii 1850 and 1861 if large portion of the goods made, such as drillings and. jeans, were exported, chiefly to China, where they accjuired a reputation beyond all others. During the war this export ceased, and was not regained until within the last three years, since we have been approaching tlie coin standard of the world. While the prii.es of cotton, supplies, and labbr were in currency, considerably above their value in gold, exports of our goods wev(! not possible, and the English and Dutch used our trade-marks for fifteen years, and supplied the markets we had before the war, and it is ■within my knowledge that large fortunes were made in England by the use of the trade-marks of tMs company. Aiid during the last three years these mills could not have been run three days in the week if we had relied upon the home market for the sale of our fabrics ; and this would have been true of a large portion of the cotton- mills of New England working upon staple brown goods. Nothing but this outlet for our goods in foreign markets has enal>led the cotton-mills of this country to run full time a-nd give employment to those dependent on this great industry ; and this has turned entirely upon working upon a specie basis, or nearly to that, aud I am certain this has not been sufficiently considered by those who mold public opinion aud make our laws ; and I may add, it is not too much to say that, workinjT upon a specie basis with judicious legislation, we can displace our rivals in many ot the markets of the world, aud give to several of our leading industries, such as cotton manufactures, boots aud shoes, leather, iron, agricultural implements, furuiture, uot to meution others, a development and prosperity hitherto unknown in this country. , These, reacting upon our agricultural interests, and stimulating them as never be- fore to larger production and better methods, will send to the people of other lands the wheat, the com, the butter, cheese, beef and pork in such volume and at' such low prices as uever has been known, thus ameliorating the coudition of the toiling millions the world over, and enriching our own people in every part of the laud. To maintain, therefore, a specie basis is, in my opinion, the supreme duty of the hour, underlying as it does the ijrosperity of labor in agriculture, manufactures, and conuuerce. It is better than tariffs, which without it are a sham aud a cheat. This, indeed, is the true relief for labor ; this is the chief measure to riestore labor to its just rights. 1 now proceed to answer some of your inquiries in the circular sent to me : Ist. With cotton about 20 per cent, higher iu December, 1860, than iu December, 1"78, the selling prices of our products are more than 40 per cent, lower now than Then. 2d. In the Pepperell mills about 1,600 persons are employed; say 400 males and ■ 1,200 females. In December, 1860, the mill expense, which is exclusively for labor in making our goods, was 2.34 mills per hank; in December, 1865, 4.31 mills ; in June, 1873, 3.63 mills; in December, 1873, 3.41 mills; in June, 1876, 2.48 mills; in December, l'!'7S, 2.04 mills; and these figm-es represent the cost of labor per hank for the six months ending at each of those dates. But while we make our goods cheaper in 1878 by about 13 per cent, than in 1860, it must not be understood that wages are lower now than theu, for they are, in fact, fully 20 per cent, higher, while the purchasing power of a dollar is more than 12 per cent, greater now than then. We make our goods cheaper by reason of improvements ill machinerv and arrangement of it for economy of worif. The emplo\-^s have had steady employment in these mills between 1860 and 1879, excepting for a short period in "the summer of 1861, when there was a pause before entering upon our unhappy sectional strife. 3d. I am uot able to reply with precision to tlie third inquiry, as all the information asked for is in the treasurer's office in Boston; but, for many years past, the dividends have been five per cent, semi-annually ; but, to obtain this result, after expending a sum sufficient to keep the mills in good condition, the corporation has had the use of a rtum equal to 50 per cent, of its capital, accumulated during the 28 years of its active life. 4th. I am not able to give a reply to this question with satisfaction to myselt or so fts to give any very reliable information to you. 5th. The rents of tenements for the operatives are fully 25 per cent, lower in 1878- '7y than in 1866. 664 DEPRESSION IN LABOR AND BUSINESS. 6tli. The amoiiut of goods made iu 1860 was, in pounds, about 5,000,000; and, in 1878, about 7,000,000. The comparative value of onr goods in 1860 and 1878 is stated in my answer to question 1. With great respect, very tmly, \-onrs, ^ ' ■' -^YM ]... HAINES. Hon. A. S. Hewitt, Cbftirman of the Coiujri^fi>iinual Labor Cuitiitiiilrr. Condensed statement of the htisiness of Durham Iron Works from Junnury 1, 1874, to June 30, 1878. "S it ■i V ^ 'E. ■ a s rt 3g B.-Z Tear. =„ - "r P _3 d i- !© u r^ '• " Fs < H ^A ^ - 1874 $206, 707 $210, 000 .$418, 707 $104,905 $25, 122 $108, 170 1875 . 316, 877 373, 009 240, 000 350, 000 556, 877 723, 009 74, 930 130, 121 33, 41ii 43, 380 56, 132 1876 38, 391 1877 416, 400 270, 000 686, 400 13, 690 41, 184 416, 400 220, 000 636, 400 6, 515 19, 092 Totals 330, 1 01 162, 190 202. t)93 1 - ^_ a. ^ -^ ? = ' |& u ^ r. ■fri 5 c ti. n Year. — — c = t ,d. S'"^ - — ~ i a ;^. " H 1 00 3 00 $2 20 $2 00 2 60 2 25 2 00 1 90 1 40 1 30 1 25 1 10 1 10 1 00 3 00 3 00 $1 50 1 20 1 45 2 00 2 25 1 90 1 30 1 10 1 00 3 00 $1 40 1 10 1 40 1 90 2 00 1 90 1 20 1 00 90 2 50 • Kai-ii-il Febniary 1, 1874, to $1.10. t Monthly, for cottages, with gardens. 656 DEPKESSION IN LABOK AND BUSINESS. In additiou to tlio foregoiiig (■oniinuuiratious the committee lias received many others >yliicli it has not been deemed advisable tn pi'iiit. Some are incohernit ; others uri;v vie^vs that have been repratrdly ex^tressed ; and a very lar^*- proportion of theiu are ehietly devoted to generalities npon various points of ethics. Bnt Avhile it haa been jndged best uot to swell the bnlk of the report and inerease the expenne of priut- iug it, l)y publishing these letters, it has also buen thought proper to brief them and present in a table a synopsis of their contents. A list of persons wlio hare communicated in iviithir/ to the connaittee their opniUms an t^> il\e vause^i of the prevaUnuj depress'tot} of labor and the remedies therefor. AVriter. Biief. ' Proposes the organizatlou of co-operative societies. Capital to be raised by an initiation fee. Loss and expense during the first year j to be covered by a small monthly due. Kaw materials and, if nece.'i- j sary, tools and machinery, to be bought with the common fund, I The officers to be attorney, treasurer, and secretary. Shops to be I established for the sale of products, disabled members serving as , clerks. The division of profits to be monthly. Cites the instance ; of the Co-operative Society of Hatters organiTied in Liverpool in ! 1845, with 717 members and iE18 0*. Od., which, in 1858, had 1,950 j members, £18,165 cai>ital, -with library, reading-room, &.c. ; There should be provision for minority representation. Ten hours [ should be a lej^al day's work, and all above or below that amoimt should be paid pro rata. The conti-act system should be abolished and labor divided into foui' classes ; the fourth, or lowest class, to j be pa,id $1.50 iper day, or 15 cents an hour ; a higher rate for upper I classes. In this way good workmen would be produced. The basis of cuiTency should be the resources of the country and its property, not gold and silver. All property, including churches and^bonds, should be taxed. Knows what has ruined his trade — harness -making ; it is labor-saving machinery, with which no competition is possible. G-reat discon- tent prevails in his neighborhood (Smyrna, K. Y.) on this snbject. He would closo the Pateut-Oflice and tax heavily the machines and their products. Advocates the " decentraliz^ation of capital" by abolishing usury laws, and, in so far as they are mediums for collecting debts, the courts, if lenders cannot enforce payment, a cash system will prevail, which will render capital subservient to labor, as it shoold Believes the cuiTency should be i-edeemable greenbacks. A hoaxd of $800,000,000 or $l',000,000,000 in gold should be kept for purposes of redemption. Nothing short of this is specie payment ; and the cost to the country would be less than that of one week of panic. In the last forty years he has known times when specie could be had in small quantities, but never a time when a "run" would not cause suspension. Recommends that the poor in each State should be worked on " in- dustrial farms" for their food and clothing. Submits no plan. On the part of the German "Worltingmen's Association of New York submits a lon;^ paper, occuijied, for the most part., with an account of the hardships of the poor, but offering no remedy for the pre- vailing depression beyond shortening the day's work. Beeman, T., Indianapolis, Ind ...I After a laborious and economical life he is destitute at the age of 73, j althoTigh he has created enough wealth to make hia last days easy. The real producers do not grow rich. The present trouble is not Tiigh prices, but the lack of employment. He wants a gold basis for the currency, that a stop should be put to speculation and land grants, and that there should be a graduated income-tax. Believes the aoiuce of the depression is in the faulty and expensivo system of revenue collection. It yhould be abolislied, and all reve- nue collected by .stamps. Angerer, Mrs. A. "W., 75 Defrees street, "Washington, D. C. Abbott. L. J., 624 North Fourth stieet, Pliiladelphia, Pa. Babcock, "W. A., Smyrna, N. Y . Batory, Ignatius, post-oflSce, "Wood's Slills, Howard County, Maryland. Barrows, A., South Front and ! Heed streets, Philadelphia, Pa. j I Bai-tlett, P. A., Room 12, Ben- nett Building, New York City. Balte, F., 122 Christie street. New York. Appletou, \Ym., Albany, N. Y. .. Buck, Ed., Ill Manhattan avenue, Greenpoint, L. I. Olberg, J. G., 221) Maryland avp- nne, "Washington, D. C. Beiersdorf, J., Chicago, 111 Blood, James N., New York, City. Proposes that "Wiirkingmen torm clubs of 100 or 200 members. Each member shall contTibute 2.j cents every Saturday night. At the end of the vi-'ur twenty men shall be ihosen by lot, among whom the sum contributed (of $1,300 or $2,600) shall In- divided, and with this capital tin y shall take up in a colony go^'ernment land to be given them gratis liy the United States. Approves and rails attention to bill H. It. 24.'i4 (introduet'd January 14, 1878) tu promote iutei-State navii>atiim. After cauvasaing the furniture manufacturers of Chicago, Cincinnati, and Philadelphia, he thinks the ma.iority of them agn.'o that the rtiniedy for the present distress is an eight -hour law. It will break up the tenement-house .system, giving employes time to reach their shops from the suburbs; it will destrny piece-work; it will give the workingmon the benefit of labor-saving machiuery; railroads should be controlled by the government. He is himself a manu- facturer. In a very long communication, points out the evolution of society from separate fauiilies up to Roman imperialism — the first cycle — and from Roman imperialism, under a decentralizing tendency, to DEPRESSION IN LABOR AND BUSINESS. List of communkations, tf-c. — Continued. 657 "Writer. Brief, Blood, James !N". — Continued. Bryce, T. T., Hampton, Va ... Blanchard, R. P., Cliicago, 111. Brown, H. Byron, New York City Boyce, S. S., 1322 Fourth avenue, New York. Carhardt, James L., 169 West Twenty-third street, Kf w York. Coleman, A. E., 149 Hart street, Brooklyn, If. Y. American republicanism — the aecond cycle. But through all this political progreasion, society, in its industrial theory, has been always the same ; that is to say, politically, the common good ia re- garded ; but when money is in question individuals are left to prey on one another and the weak are unprotected. The amount paid in interest, including gold premiums and discounts, is $1,3(10,000,000 annnally, or $600,000,000 more than the annual incrBasa of wealth. All of this is tribute to non-producing classes. So long as interest was paid, it was reloaned and all went well. JBut when Jay Cooke's failure shook public confidence, hoarding began. Tbis, with con- traction of the currency, brought ruin on tho.se engaged in manu- facture and threw labor out of employment. If the right to life is inalienable, so is the ri^ht to the things which supiiort it — land, air, water. Blackstone admits that there is no natural right to land beyond that of present poaaession ; and that devises are con- trary to natural law. Under a system of barter, there was justice. For convenience of distribution the abnormal class of middlemen was introduced,^ and latei", those who loaned money to the specula- tive middlemen appeared, the bankers. These money dealers are the cause of all our woe. For example's sake, look at Champaign County, Illinois. "With $11,000,000 of real estate, it owen $6,000,000 on mortgage. Its yearly taxes and interest are $1,000,000. In A. D. 1911 this real estate at the average vearly increase of 2 per cent, will be worth $22, 000, 000: but the mortga^ies will be worth $96. 000, 000, These figures willnever be actuallyreaclied. because failures, bank- ruptcies, &c.. will intervene, and 'most of the property pass to the lenders. But this is the true cause of our panics occurring every twenty years. Land cannot pay the rates or interest on moi tgages. Arrears' are secured by further liens. At last cornea the crash and the owner loses his property. The remedy for all tbis is the abolition of interest-government loans with security for principal only. Let the debt be paid in greenbaoks, thus becoming a non-interest bear- ing debt. Colonize along the lines of the Northern and Southern Pacific Bailroada. Finally, provide by law for the escheat of all lands to the State on the (leath of its possessor, and let all land be held by the government for the people. He is a communist because he believes Christ ao taught. But communism is not dividing up propei'ty among the needy, but a consolidation of it for the general good. Believes the causes are, (i,) over-pi'oduction ; (2) unstable currency. The remedy is protection. Is an eraploy6. Thinks little can be done by Federal le^slation, though postal savings-banks and the prosecution of public works might help somewhat. The causes are of two kinds: (1) Those always operating; (2) those peculiar to this time and country. Of the first are, (a) ignorance of mental, moral, and physical science; (6) lack, among the masses, of that desire to be inde- pendent which is so characteristic of the Jews and Chinese ; (c) prevalent idea that idleness is happiness; (d) demagogues; (e) competition of dependent labor— that of women, children, and convicts — with indej)endent labor ; (/) hard bargains, which should be controllea by law; *{g) lack of reciprocal sympathy between the rich and poor. Of the second are, (a) speculation and extravagance, engendered by the war ; (&) emigi-ation and rapid increase in marriages (and oirths) after the war between those unfit to marry ; (c) the restless spirit growing out of the war. Sees no remedy beyond patient work and willingiiess to live cheaply on the part of labor, and on the part of capital cheerful aid wherever Carey, John, Kewton, Iowa . Represents an industiial club. Believes the function of government to be paternal; that it should control railroads; that taxation should be graduated ; that the debt should be paid in greenbacks ; that currency should be issued on a per-canita basis. Only wishes "to offer limits." Seema to find in protection the rem- edy sought. Cites flax and sugar as examples of how gi-eat a loss the country sustains nnder the present tariff. Thinks the 'failures of savings-oanks have caused much of the trouble. The law provides no safeguards for depositors. There has been too great an immigration. Too much has been spent in luxuries ; too high rents ; too high dividends on fictitious values in railroad stock. Remedies: Regulate rents bylaw; settle rail- road valuation by government inspection, and forbid watering stock ; enter into reciprocity of commerce with all American countries ; adopt a system of protection against Europe ; just nav- igation laws; postal' savings-banks ; subject mining-stock compa- nies to government inspection ; put tramps to labor on government works ; issue paper enough to make the volume of currency stable j forbid the "heathen" to come here except as manufacturers or tradesmen. Has seen four financial crises : (1) After the war of 1812; (2)1837; (3) 1867; (4)1873. Believes his plan would prevent a fifth. Let the o-nvflmTTiATif. hn'v im fll l the bullion in the market, coin it, aud, 658 DEPRESSION IN LABOR AND BUSINESS. List of communications J ^c. — Continued. Writer. Brief. Carey, John — Continued . Caldwell,, J. W., box 102, "Webb City, Mo. Curtis, Chai-lea, 87 High, street, Newark, N. J. Creed, Ed., San Jo86. Cal . X)ance,Abel, 158 Joy street, Brook lyn, N. Y. Bowns, James, Philadelphia, Pa . t)aggett, J. S., Boston, Mass. Payton.Charles, 10 Waverly Place, New York City. Dougherty, Jno., Mt. Union, Peuu. Edwards, "U. M., Say ville, N. Y . . . Eifert, A. F., 900 Third avenue, New York. Fprd, C. W., Philadelphia, Pa. Folin, C, v., Fordham, N. Y . keej)ing it as a rc8(^ive, issue $3 of paper in dollar notes for every $1 of gold. Let tills mouthy be loanea to the States as States, and by theia to the counties, and by these last to individuals. The rate of interest to be 6 per centum, and the proceeds to be ex- ponded in buying more bullion. The loans to be secured by mort- fage. Develop postal money-order system into postal savinge- anks. Believes the tendency of oui: financial system is to draw capital away from industrial pursuits to funded investments, and to concentrate it in few hands. Denounces strikes and eight-hour agitation, but suggests no remedy. Believes the cause is machinerj^, by which neither producer nor con- sumer profit, but only the middle men. The government should buy all machines and throw them into the sea. This would prove cheaper in the end than a .war, just as it would have been cheaper to have purchased the slaves than to have fought the war of the I'ebellion. Chinese inmiigi'ation should be stopped, and some scheme of colo- nization adopted. The colonists should be loaned $500 by the gov- ernment. The cause is our vicious financial system. There are too many sine- cures in the public offices. We need a system of convertible brmds. Upon the old bonds we should stop payiiag interest and "cry quits." All fortunes should be limited to $100, QUO. Any amount aliove that should be ^athei-ed by taxation into a " United States Frontier Set-' tier Soldiers' K.-lief !Fund." la a hand-loom weaver. His trade has been ruined by machinery so that he can barely keep together soul and body ; yet he is about as well off as most of his craft. He does not believe eight-hour laws or the issue of paper money will afford Telief, but thinks that cohmization will. People of good character should be chosen as colonists. Those of the same religious beliefs should be settled together. The government should advance to them the things nec- essary at the outset, branding its property, the price of which should be gradually repaid. Sends advance sheets of his work on co-operation. The world has outgrown a metallic cun-ency. Oui- cotton alone is worth more than our coin. We need paper money based, not on a handful of gold, but on the country's wealth and the national honor. The volume of the currency should be rejjulated by the needs of the country and wise legislation. We should then have no panics. He gives a graphic picture 'of what is accomplished by labor-saving machinery as compared with hand work. Incloses a paper, read before the American Social Science Associa- tion, upon the effects of labor-saving machinery. Labor, he thinks, should be equally distributed among all persons (but he does not show how it is to be done). The hours of labor should be short- ened. Incloses a platform of the People's Progressive Party- Incloses the "Idea-Heal" plan of colonization. Believes alcohol to be the cause of three-fourths of our pauperism. The amount of gi-aiu used in the manufacture of intoxicating liquor • would supply every man, woman, and child in the land with thirty- five bushels of coni. He offers no other suggestions and no plan of relief. The causes are (1) "the monopoly system "; (2) the custom of large firms, like that of Lord & Taylor, dealing in various sorts of ar- ticles whereby they can sell cheaper than those who deal in but one kind of merchandise, as the profit on one sort will balance the loss on another; e. g., jewelry he believes can be bought cheaper at Lord & Taylor's than at a jeweler's. Thinks that whatfiver the cause of decreased consumption may be, one thing is certain, that decreased consumption is the cause of OUI present distress. Let all employers raise wages 15 cents a day ; this would increase the annual expenditure by $3,000,000; con- sumption being thus increased would leuct to raise wages, and high wages would again act to increase consumption. This method would hold good in all times of depression. Government should fumish statistics of wages and prices in all parts of the world. Employers then, knowing what the rates of living were, could pay their hands properly and the employed, knowing the prices of prod- ucts, might be reasonable in their demands. It is not the mnc- tiou of government to arrange the terms of employment ; but it is one of its duties to prevent cither paily to a contract taking ad- vantage of the necessities of the other. Thinks the credit system ruinous, and believes the Constitution should be so amended as to make United States money issued In proportion to property as two is to one ; tbe property of the country to be the basis of the money and its value to be determined by anuual estimate. The cause is extravagance ; the remedies patience and frugality. More money is spent in New Yot k for liquor and tobacco than for biead and meat. When, in an area no larger than a Westchester DEPRESSION IN LABOR AND BUSINESS. lAst of communications, ^-c. — Continued. 659 "Writer. Brief. Folin, C. v.— Continued . Fitzgerald, M., 195 Eldridge street, N. Y. Franke, C. L., Louisville, Ky. Fox, Samuel, Quincy, HI Farria, N. E., Philadelphia, Pa. Fulton, M. A., Hudson, K. Y. Griffith, X., (;ovington, Ky . Griffin, E. M , Albany, N. Y . Gibson, Walter, 239 Broadway, New York City. Gilmer, G. A., Mathews, Ala . Hunt, J. C, Wilson, J. H. H., Nic- olfifon, J., Boston navy-yard. Hubbard, Ch. E., Elmira, N. Y . . County farm, and chiefly inhabited by the poor, there is a grog-shop for nvery 251) souls, counting women and children, it is not won- derful there should be want and suffering. He is one of 5,000 New York bartenders who work on an average fifteen hours a day for the average wages of $11 a week. He wants an eight-hour law, and believes the goveinment should expend $1,000,000 in buying suburban hits about New York and erecting thereon houses to be sold at cost to clerks and mechanics. A financial plan involved in statement, but accompanied with a great mass of statistics. He holds that as compared with any European nation we havt^ never had an infiated currency, i. e., we have never had a greater amount per capita than other countries. The causes of our distress are contraction and the destruction of capital. By abolishing national banks taxation can be reduced. There should be a, per capita circulation convertible into low-rate bonds. Believes there should be a government board of arbitration to over- see contracts and invalidate unjust ones. Sees no reason why the price of buUion should affect the value of coin. Proposes (1) that a tax equal to his passage-money be imposed on every immigrant; (2) that the United States negotiate a loan equal to $10 per capita of population to serve as a fund from which money may be lent to colonists; (3) that to every head of a fam- ily so desiring 160 acres of land be granted and a sura of moue^ to be repaid by annual installments within 10 years, no payment bein^ made the first year. That in this way colonies should be formed, the government having a lien on the land and stock for its advances. All land held by coi-porations under government grant and now unoccupied should be redistributed. The acts of March 23, 18B7, and July 25, 1808, should be revived, and $500,000,000 issued in 3 per cent, compound curren(;y loan certifi- cates of $10 and upward in vahio, to be held by the banks in lieu of the reserve now required ; $50,000,000 of legal-tenders should be issued as a fund for their redempti at West Point and Annapolis for ofiicers. Laws against gaming and liquor selling should be repealed ; they are hardly ever enforced, and are temptations to corrupt municipal officers. Cause : The violation of the ninth and tenth commandments by those living noi*th of Mason and Dixon's line, from whom God " has with- held the light of his Spirit." Bemedies: Eepentance; abolition of tariff'; reduction of salaries; lowering the gold dollar to the silver standard; paying those "you have injured;" imposing a direct ad valorem tax on all "persons and things" protected by the govern- ment. Believe that the working-classes derive no benefit from labor-saving; . machinery ; they are idle in times of depression : in busy times they work as long as ever they did. Relief would come from an eight-hour law and the proaecution of government improvements. A straw-worker, twenty-nve years old. He pictures his distress and the difficulty of finding work at his trade on account of the intro- duction of machinery. He would tax the machines proportioa- ately to the amount of labor saved. 660 DEPRESSION IN LABOR AND BUSINESS. List of communications J ^c. — Continued. Writer. Homes, H., Boston, Mass . Hartman, P., 36 Maiden Lane, New York. Harang, Th., Banana Grove Plan- tation, Parish of La Fourche, ilaceland post-ollice, La. Haley, "W., editor of The Enter- prise, Chico, Cal. Hyde, Oliver, 122 Taylor street, San rrancisco, Cal, Fite, Samuel, Philadelphia, Pa . .HoUinger, E. N., 12 East Four- teenth street, New York City. HaiTis, Nat. R., Philadelphia, Pa -Hunt, William, Woodbury, Md . . . .John, R. W. S., O'Hara Glass House, Pittsburgh, Pa, Itrwin, Clarke, Oi'egon, Holt Countv, Missouri. ■John, C. V. Fordham, N. Y . JKleinert, J.B., 497 Broome street, N. Y. ;;Kinzer, G. C, Madison Run Sta- tion, ya. IKallenberg, H., New Rochellc, N. Y. ^Kennedy, A. N., 47 Jane street, N. Y. Kirchner, H , 813 R street N. W., Washington, D. C. Brief. Causes are overproduction and credit system. No legislation can help matters. On a credit system dealers overload themselves and supply exceeds demand, whereupon brisk competition ensues and prices ffill nilnoualy. A cash system is the remedy. Incoherent and almost illegible. Thinks there is no overproduction; but that the scheming Republicans sold out when property was high and now want to control the money-market. Causes; The war; the sudden abolition of slavery; political an- tagonisms; the countenance given to fraudulent bankrupts and other dishonest men ; the clustering of people about cities. Rem- edies; Protection (on sugar alone it would save us $81,000,000 ao- nnally) ; love and concoi-d. Propcist's in general terms colonization through a frontier militia, re- ceiving government aid, and rendering service against the Indians. Cause : Decrease in the demand for labor on account of machinery. Remedy : Enforce the eight-hour law. Enlist for three years 4n "army of industrial occupation," to settle on government lands, and provide them with tools, atop paying off the national debt, and prosecute public works. Written in very general terras. He would cut down government expenditure and restore imprisonment for debt. Thinks that if a workingman would compare his condition with that of an Indian or a Mexican, he would admit that labor-saving machinery was of benefit to him. Causes are — Ist. Overtaxation; which ia due to the number of offi- cials, many of whom are unnecessary, at high salaries, and to the great bonded indebtedness, national, state, and municipal. 2d. Unjust laws. Women have an advantage over men before the law; the decisions of the courts are uqiust in many cases, as in the mat- ter of the New York Elevated Railroad, wtere property-holders' interests were sacritici^d, &c. The Fifteenth Amendment should be repealed. He believes that "what is good for the boss ia good for the workman"; and that whenever the employer can afford to he will pay his men well. He is a bookkeeper. The whole trouble ia with the currency. There is but one bulwark against revolution, a redundancy of paper currency. Advocates the removal of duties from raw materials. If this were done our market would widen and prosperity increase ; cites the effect of such action in silk induatr;^. Is a miner ; thinks the chief trouble 'is with the workingmen them- selves, and especially with the drift-men, who get from $2.50 to $4 a day, and cannot keep their families as well as sober, industrious men eai-iiing from $1,25 to $1.75 a day. The drinking men average six drinks a day, which cost them $218 a year, or enough to support them; they incite most of the strikes; the saloon is their councU- hall, and when excited by drink th&j do what afterwards they repent. The whole cause of the depression ia the heavy taxation oi the last 15 years. If our soil andT climate had failed us, we should not have been auipriaed at the condition of affairs ; but the results of heavy taxation are the same as those of "bad years," when imposed on the necessaries of lite. In 1846 Eii^land'was in our condition, and cured herself in a twelvemonth. We have only need to adopt her policy of that time. Thinks the trouble ia with the tradea-uniona, and pointa out their evils; they render ignorance able to compete with skill, and are haimful alike to the sober, intelligent woi'kman and to the employer. We are in a transition state, due to the introduction of labor-saving machinery, and there is a demand for employment. In order to ftirnish it, take the duty off aU raw material, promote ship-build- ing, foster agriculture, granting homesteads to hona-jide settlers only; tax only manufactured tobacco, incomes, and liquor; limit the franchise, extend education, and push civil-service reform; tax (here he is contradictory) church property except the edifice. Tax immigi'ants $100 each; prohibit the admission of coolies; apply the proceeds of said tax to paying the interest on the debt; a higa tariff on all we produce; admit tea, spices, coffee, &c., free; kill Mr. Wood's bill; issue plenty of greenbacks, tax bonds, create a United States savings-bank. (He earns 90 cents a day on a rail- road, and supports a family. ) Cause overproduction by machinery; remedj'-, 8-hour law, and the regulation of wages according to the cost of living. Organize a department of colonization to control public works and provide settlements for colonists, with tools, (fee. ; the cost of the implor ments and stock to be repaid witljout interest. Causes : repeal of banki'upt law — many went into insolvency to avail themselves of the old law ; the proposed change of tariff', by imaet- tling prices. We are comparable to a machine in perfect order, the drafts of which are stopped by the excess of fuel. Start up public works and take off some of the superfluous labor, and with this impetus the whole machine will act once more. In general terms advocates colonization, quoting Jackson, Webster, and Galusha Grow; cousiderd Mr. Wrightjs plan a good one. DEPRESSION IN LABOR AND BUSINESS. List of communioaiiona, cf-c. — Continued. 061 "Writer. Laudon, Albert, Rutland, Vt... Lee, W. F., Adirondack P. O., N. Y. Letson, Thomas, 20 Reade street, N. T. Mumford, J. E Miller, S- C- HO North Third street, Rea'ling, Pa. Monroe, J., New York City. McKinney, H., Plymonth, Pa McDonough, Th., Mont Clair, N.J. May. Mrs. C. "W. B., Bridgeport, Conn. Marten, A. W.,32 Oakland ave- nue, Jersey City, N. J. Millen, Ed., 139 Macdougal street, New York City. McLaughlin, M. J., Dubuque, Iowa. Mahn, Jos., Syracuse, N. Y . Brief. The remedy we need lies in ceasing to sell interest-bearing bonds, retiring national bank currency, making greenbacks legal tender with gold and silver, and paying the debt therein by 1879 ; arrang- ing a scheme of taxation to yield an excess of $50, 000, 000 a year over expenditure, this surplus to be destroyed until the debt is so wiped out. Articles we can manufacture should be protected; others should be admitted duty free. Believes liquor to be a chief cause. By Commissioner Raiira's report there are over 166,000 liquor dealers in the country, and nearly $596,000,000 were spent for liquor in 1877. Irrelevant. Wants food-adulteration and all tricks of trade stopped. Thinks the trouble is due to the revenue laws, which should be re- pealed ; each State should contribute directly its qiiota of taxation. Thp national banks, too, should be done away with. The United States should grant farms of — acres, with agricultural implements aud a house, to families of three persons willing to form a colonv. The occupants of eachfjiim should pay one or two hun- di-ed dollars in cash ; the balance of the actual cost of the house and tools to be paid in annual installments, at 4 per cent. Tbe gov- ernment should hold first mortgage ou the property, and the colo- nial affairs should be under a department. No liquor should be sold in the colonies. Eight months of schooling for children in each year should be compulsory. The war engendered habits of luxury; catering to these, industry was diverted from its old channels, and to supply the place of hand labor, machinery was invented. Thonnu is the original source of our pi esent depression. To remedy it the tariff should be reduced one-half. The tax upon liquor and tobacco should be so low as to make it unprofitable to defraud the revouuo. State banks should not be taxed. Liberal navigation laws should be passed. Notes and 4 per cent, bonds should be interconvertible. The amount of legal-tenders and the government exi)onditure should be fixed by law. By reducin'4 the dutiable list fewer revenue officers would be required. The Army and Navy should be cut down. Complains that the system of company's stores in the mining region oppresses both the laborers, who are practically forced to deal at them, and small tradesmen. The debtor class owe chiefly in short notes, bonds, and mortgages. The notes and bonds adapt themselves, more or less, to a fluctu- ating market ; mortgages do not. Thus when the relation between gold and paper was 1: 2, jf A borrowed on mortgage, he has to pay his debt twice over when gold and paper are at par. To remedy this evil he belinves a law should be passed making all liens on real estate payable at their gold value at the date when they were made. All crises are due to the credit svstem. Our currency rests not on coin but on debt, and capital fears to invest. The remedy is to " have coin -certificates as money and not to strain credit beyond readily convertible limits." Tbe common welfare also demands the removal of class privileges, e. g., that one to banks of issuing notes not based on coin ; the limitation on the powers of railroad corporations; free trade ;■ direct protection to weak industries; direct taxes. _ , Depression is caused by credit system and machinery. Both tend to the same result, the accumulation of capital in a few hands ; en- riching the rich, impoverishing the poor. The rcpiedy lies in basing currency on gold and silver as nearly as possible, equal in amount per capita as the currency of nations with which we trade ; in abolishing monopolies ; in diverting capital to production ;_ in paying well and employing all fi'om the proceeds of taxes im- posed on machinery and incomes above $1,000. Patents, being in their nature monopolies, should be jealously issued, and the promts from them should be limited by law. Corporations should not be allowed to iniiate their capital ; their surplus i-arn- ings, now so used, should go toward reducing the prices paid by the public for their articles or services. There should be no pro- tection, and duties should be imposed on as few articles as ijossiule. Is an employer. Would have a low rate of interest prescribed, by national law, and a graduated tax on incomes over $1,000, to form a fund out of which to employ labor on public works. Prices are now as low as in 1861 ; but wage.s, owing to the fact that men are only employed a few days in a week, will not average over fifty cents a day. Contraction is the cause of the depression. At the close of the war we had a good currency. It had no intrinsic value, and therefore was not hoarded but circulated. We need a per capita currency at least equal in amount to that in which tho debt was contracted. AH laws looking to resumption should be repealed. Labor-s iviug machinery will m the end be a blessin&^bnt it is bad doctrine to preach retrenchment in consumption. To consume is life's chief pleasure ; not to do so is t6 be a savage, &c. ' ' 662 DEPRESSION IN LABOR AND BUSINESS: List of communications, ^c. — Continued. "Writer. Brief. Moore, Stephen, 1243 Third ave- nue, New York City. Manning, S. N., Kankakee, lU . . . Merriken, F. M., Baltimore, Md . Niewland, E. J., Brooklyn, N. T . Newton, Chas. 0., Homer, N. T . V Nicholson, "\V. J., 45, Tribune Buildmg, New York. Pollock, J. A., 471 Newark ave- nue, Jersey City. Pingree, L. F., 8 High street, Port- laud, Me. Peck, A. T., Danbury, Conn . Parker, T.,, Baltimore, Md . Packard, A., 155 South street, New York City. The cause is a glut in the labor market. The remedy is to loan every industrious citizen $] ,00U, and place him on the public liiud ; let tlie rate of interest bo low, and collect none the first year ; provide them with implements, a])point fiiriners as inspectors, and if any 80 benefited squander their money withdraw their privileges. The chief causes are. nver-production, iind great immigration. The remedy against the hitter evil is some such rule as that no person shall be allowed to cnme to this ccmntry who is not pctssessed of a capital of $1,000, if the lieadof a family ; or. if a single man, .$500, or the right of settlement in some agticultural colony. Contraction and high rates of interest are the causes. Resumption is the remedy. Sends several pamphlets embodying his views ; believes the chief cause of all financial ti-onble to be the corruption of financid. edi- tors by the great capitalists. This he would remedy by establish- ing: a paper under government control, to inform the public truth- fully of the state of the markets. Times are only hard if compared to the "flush'.' days of the war. For farming communities they are better than before the war. But the present generation having grown up among fictitious values, does not know the true value of a dollar. "We need more labor in the fields and a smaller cousumiTtiou of rum and tobacco. The cause is small con-suraptiim. The remedy, (1) to make the na- tional <;urrency legal tender in payment of customs and debts to the United States; (2) to establish government savings banks; (3> protection; (4) to foster ship-building; (5) to cut the Darien Canal ; (C) complete the Northern and Southern Pacific roads; (7) revoke all railroad grants exeejjt sufficient roadway ; (8) revise patent and postal laws ; (9) make tlie Interior an industrial bureau, and settle Indians and other poor families on the public lands ; (10) consoli- date the "War and Navy Departments ; (11) substitute a ward sys- tem of nominations for that of the caucus. In the "flush times" individual credit was overstrained, whence re- sulted an abnormal development of trade ; on account of the shrinkage in values the debts so freely contracted then have now to he paid in a currency worth twice that in which they were con- tracted, and thus the capital which should be pushing forward is busy bringing u_p the reiir. Other causes are, high rates of inter- est ; the absorption of capital by the national debt in bonds ; labor- saving machinery; the concentration of trade into large firms, kill- ing out small enterprises (for the profits on iron, wool, cotton, &c., are tin> small to support trade except on a great scale) ; the present too great economy of all people ; and finally,'intemperance. By way of remedy are suggested, a railroad bxiilt by the government out of its lands across the continent, and carrying freights at actual cost; anothei' one from New York to the Mississippi River; and the fostering of agriculture by a national loan to counties, and by them to all who desire to go into farming, the rate of interest be- ing 2 per cent. The cause of the depression is the abundance of all kinds of securi- ties in the market which bear a high rate of interest ; these divert capital from industrial investments. The remedy lies in a redis- tribution of labor. The national bank system should be abolished. The reason labor does not earn enough to buy the products of fanus and factories, is that capital finds in fimds and banking the best investment. The history of national banks shows that it does not in,iure the government or increase the debt for the Treasury to loan money without interest. Establish, therefore, all over the country branch banks at which any voter can borrow $5,000 to secure a home, pledging himself to pay principal and 4 per cent interest, and to maintain national and legal-tender notes at par. As every dollar would he secured by a dollar's worth of property, there would be no loss. Proposes this scheme of colonization. Let the government survey bodies of land, good for fanning, containing 1,000 lots of 160 acres each, to be numbered, the even-numbered lots to belong to the United States, and to be sold by them. Let the odd-numbered lots be taken up by inhabitants of cities containing over :^5,000 souls; the grantees to be over 25 years old and residents of the country foi- five yeai-8 and of the city for one. Advance to the colonists A tents and ammunition, together with a non-interest bearing loan of $500 payable in fifteen years. From this loan let them buy at cost from the government depot necessary stock and implements. Give them free transportation to the colonies, and require an oath to support its welfare. Let the land only be granted to the destii' tute and coufirm the title at the end of fifteen years on payment of the loan by the settler or his heirs. Let the colonies be under su- pervision by agents, and do not allow one to be started until the en- tire 1,000 lots of^every other one are occupied. This plan would relieve the prevailing distress, restore prosperity, and solve the Indian problem. The various religious organiaations should be allowed to pre-empt townships and-'to settle on each one colonies of 100 fa-miiifia DEPRESSION IN LABOR AND BUSINESS. List of commimications, ijc. — Contiuued. 663 "Writer. Brief. Palmer, E. F., 560 Third avenue, New York City. Purdy, James "W., 33 Lawrence street, Nevpart, N. J. Hact, B . Kich, Josiah, 75 Broad street, Kew York. Kamage, Adam, Holyoke, Mass . . . "William Euchrwein, with Fay & Co., Cincinnati, Ohio. George Ehey, Millwood, Pa . Joslin, J". H., Second Auditor's Office, Washington, D. C. Schulein, S., Fort Scott, Xans - .. Sharp, Th. "W., 1018 Berks street, Philadelphia, Pa. Saraelson, "W., 7 Rutgers Place, ;N"ew York, Smith, Q. L., Buffalo, N. Y . Sperry, D. R., Batavia, HI.. Selleck, M., New York City . Singleton, "W. B., Lockport, N. Y. On hehalfof tho "Society of Industry and Lahor," writes in very gen- eral terms that the prt^sent depi esaion is due to misgoveniment, and could be remedied by prosecuting public works, promoting coloni- zation, fostering commerce, and destructively taxing coiijorationa. The cause is over-production through machinery. Thei'e is plenty for sale but no money to buy with. The remedies are (1), to cur- tail the hours of labor ; (2), to prevent the employment of children under fifteen in factories; (3), a protective tariff; (4), to issue greenbacks to pay the debt; (5), to establish government deposito- ries in which the people might bank. The government should establish savings banks paying 4 per cent, on deposits up to $1,000, deposits to that amount to be invested in a bond. There should also be government pawn-shops, the interest on pledges not to exceed 8 per cent. There should also be a gov- emnient tobacco factory. These three measures would afford great relief. The cause is a protective tariff. He argues this at length. Protests as a workingman against being represented by the average labor-reformer. The cause of the depression was the war expendi- ture of borrowed money. At the close of the war the army of con- sumers became producers, and every one found himself in debt. The remedy is to go to work and pay our obligations. If Confess will only let matters alone it will be worth more to each citizen than $80 and two mules. Incloaea his letter to Cincinnati Gazette. Proposes the setting apart of 25 sections of government land as a commencement. The United States to furnish a steam plow, a house for each family that will take a farm on its tcinia, provided they arc moral citizens and out of work ; each house to ne built on four acres of the middle section, fifty acres additional being provided each family for farming ; crops to be brought to government storehouse for sale ; the government to hold part of the land : night schools to be established, &c. The estimated cost of so locating 240 families is i6331,680; the estimated rate of payment to the government $95,400. Commenced farming on his present location in 1860, when the prices of agricultural produce weie about the .same as those of the pre- vious decade. Laborers were comfortable, and owners reaped about six per centum on money invested in land. During the war prices reached their maximum and remained thereat until the ciisis of 1873. Since then they have gradually faljen, and now are for moat articles at the minimum of the laat thirty years. The price of farms has risen and fallen in like ratio. During the war and imtil 1873 farmers realized at least six per cent, on capital invested. Now they do not realize 2 per cent. Farm products are more abundant now than in 1860. Prior to 1873 operatives were fully employed. Now the demand for their services is greatly curtailed, and those who are at work are on short time. Wages are as low as at any time during forty years. Manufacturers and mining operators are losing money. The end will be that all gov- ernment and corporate securities wiU lose their value unless their holders diminish their demand. Incloses a printed slip, wherein he attributes the cause of the de- pression to labor-saving machinery. The prevailing depression and three-fourths of the failures, drunk- enness, and idleness are due to secret mercantile agencies. The remedy lies in fixing wages at from $2 to $2.50 per diem, and curtailing the hours of work. Argues in a very long communication to the general effect that the introduction of labor-saving machinery is the great cause of the depression. But for it there would be an increased employment of labor, andconsequentlv of consumption. It should be taxed out, of existence. So far as the effect or this upon our foreign relations is concerned, it may be said that we can dispense with their luxu- ries better than they can forego our necessaries. The cause of the prevailing disrress is not so much lack of work as starvation wages. There is production in excess of demand. The remedy lies in shortening the day's work. Argues against leasing convict labor to contractors, as its competi- tion is ruinous. No State should be allowed to adopt such a system ; but convicts might properly be employed in chain-gangs on public works. States prisons should be abolished. Each county should manage its own criminals. Proposes many general measures by way of remedy, chief among which are the abolition of the United States Senate, the issue of currency at the fixed rate of $58 ;^er capita, and a gradual diminu- tion of the hours of labor, beginning with a six-hour law. The government should plant colonies, Every colonist should bind himself to remain five yeai'a on the land granted him, at the end of which time he should have the fee. The government should reserve alternate farms in the colonies, from the sale of which the expenses of__the undertaTiing might be defrayed. A oomprottflse ^ — ^^-^ ^Tv^ifch the railroads, under which cheap tranapor- 664 DEPRESSION IN LABOR AND BUSINESS. List of communications, ^c. — Continued. Singleton, "W. B.— Continued Steuber, A., 61 Bowers street, Jersey City Heights, N. J. Thompson, J. S., Chicago, 111. TJllman, H. C, 137 Broadway, New Vork. Van "Wagenan, J., 38 Bayeanx st., Poughkeepsie, N. T. Yose, N., "Whittier, Late County, Illinois. Van Benachotten, S., 76 Broad street, New York. "Warmoth, M. M., Brandenburg, Ky. Winston, "W. H., New York Wood, S. S., 27 West Twenty- fourth street, New York. Woodruff, E. P., Chicago, 111 Wolz, Win., San Prancisco . Whitehouse, F. C, Newport. Workingman's Society, 115 Chris tie street, New York. Whiteford, J., 1188 [Jnion avenue, Kansas City, Mo. Winslow, Ed., Boston, Mass. Wolf, G-. F., 277 East Fayette st., Baltimore, Md. Williams, S. M., 128 Leroy street, Ne-w York. Yoking, F. S., 110 E. Seventeenth street, New York. Zuarf, John H Brief. tation could be had for the settlers. Capitalists would find a re- munerative field for investment in colonization. The chief cause of the depression is the control of legislation by cap- ital, and especially by corporations. The payment of large divi- dends on watered stock elepresses the rate of wages. We need tenure of office during good behavior for all of&cials, including thereunder members of Congi-ess ; an eight-hour law ; direct taxa- tion; coui-ts of arbitration, instead of the present courts, wherein the expense of litigation would be borne by theState, &c. Is a workingman. who saves more than he did in war times, and thmks there is no real depression. Has always found work. Be- lieves liquor and labor agitators are the great causes of discontent. Chiefly a ciuotatiou from Webster's speech of May 25, 1832, on the bill to renew the chai-ter of the TTnited States bank, pointing out the evils of a paper currency. Paper money, corporate misman- agement, heavy taxes, and the bankrupt law just repealed he be- lieves to be the causes of the distress. Writes at great length, maintaining that nearly all the distress of the country is due to the use of intoxicating liquor; if this is checked the tountry will soon recover. Underconsumption, due to contraction, and not overproduction is the cause. The remedy is to return to the old amount of cuixency. Is a merchant of thirty years' standing, and believes that labor-saving machinery, railroads, and telegraphs, which have revolutionized the methods of business, are the causes of the depression. The rem- edy is to colonize the idle on public lands, advancing to each family of five $250. I'or the present push on public works and let all who can employ labor. Contraction is the cause ; inflation is the remedy. Sends an exposition of the causes assigned for the depression by the Greenback i)nrty, and indorsed by Mr. Peter Cooper. Is an iron-worker, and believes the duty on raw materials and the great numbtr of o'licial.rices as if each pound of bops were of as much importance as each pound of sugar, cotton, or beef, the quantities of each article entering into con- sumption or commerce have been carefully estimated. It is then supposed that the quantity of each article thus estimated was actually bought at the recorded prices of January 1, 1877, and of January 1, 1878. The resulting aggregates, it is believed, show more correctly than any other method yet devised the aggregate ettect of the various changes in price between the two dates. The detailed tables of prices are deferred in order to make them more complete. But it is believed that the prices. of wool, cotton, and leather quite closely represent by their variations the changes in price of clothing generally ; that other manufac- tured articles are approximately represented by changes in iron, coal, lead, salt, tur- pentine, and linseed oil; and that the general range of farm products at the North is fairly represented by the breadstufts, hay, cattle, and their products, butter and cheese, and hops, and at the South by cotton, tobacco, rice, hemp, sugar, and molasses. The fisheries are also rejjresented, naval .stores, whisky, and beside other imported articles already named, coifee and fruits. The quantities supposed to be purchased of each article are as given in The Public of January 18, 1877 ; the entire number of cat- tle believed to be slaughtered each year, less the number killed for packing, is sup- posed to be sold at the Chicago wholesale prices for the lowest shipping grade. Farther, in orJer to determine whether prices havj yet reached or passed the specie basis, we have made a similar calculation upon the New York wholesale prices of Jan- uary 1, 1860, adding Chicago cattle and hog prices of that date. In this instance, also, the amounts supposed to be purchased are the same.as in 1877 or 1878. But the grade or class of articles quoted in 1860 and at this time is in some instances so differ- ent that modifications, presently to be noted, are necessary. In the following is given a summary of calculations based upon the prices of over sixty articles, but for brevity arranged in classes : Articles. Breadstnffs Hay and wool Cotton, tobacco, rice, and hemp . Bee^ fresli and paclced Pork and hog products Butter and cneeae Iron and coal Sugar and niolasBes Leather, lime, linseed-oil Coffee Whi.sky Petroleum - Ashes, fnxits, hops Lead, salt, turpentine Fish Totals 1877 and 1878 . Totals 1878 and 1860 . $1, 290, 100, 000 427, 800, 000 316, 160, 000 138, 300, 000 160, 625, 000 172, 000, 000 121, 650, 000 232, 700, 000 117, 900, 000 64, 000, 000 70, 800, 000 51, 800, 000 24, 700, 000 17, 640, 000 7, 820, 000 $1, 241, 600, 000 600, 000 400, 000 260, 000 289, 000 060, 000 760, 000 540, 000 340, 000 600, 000 656, 000 975, 000 570, 000 160, 000 620, 000 286,. 114,; 113,; 120,1 116,' 168,1 101, 67, 68, 24, 24,1 12,: 3, 211, 195, 000 2, 877, 530, 000 1, 854, 665, 000 , 678, 500, 000 674, 000, 000 275, 280, 000 101, 900, 000 134, 890, 000 106, 150, 000 159, 040, 000 164, 700, 000 92, 480, 000 36, 800, 000 16, 302, 000 20, 060, 000 17, 070, 000 5, 730, 000 1, 895, 462, 000 666 DEPRESSION IN LABOR AND BUSINESS. Comparing first the prices of 1878 with those of 1877, it appears that the same arti- cles aud quantities which would have cost $3,211,195,000 on the 1st of January, 1877, would have cost only |2, 877, 530 ,000 on the 1st of Jiinnary, 1878. The decline during the year 1877 was therefore about 10.4 per cent. Only three articles in the entire list advanced in price during that time. Rico ailvaneed from 6 to 6-J- cents. There was also a small advance in packed beef, western and mess, lint a decline in heef-hanis. Four other arlicles, new Southern corn, coal, mackerel ami lime, were unchanged in quota- tion. In every other case there was a decline recorded, and in some cases, as the ag- gregates show', a verv large decline. So general and considerable a fall in prices is,, rarely seen, and it is the more remarkable Ijecause there occnrred during the year quite, . a flurry of speculative advance in breadstufts and some other articles. It naturally suggests the inqury whether we have not already reached or even passed the specie • basis. In order to answer this question correctly, important ditferonces in the three tables must be noticed. Petroleum was not a considerable product in 1860, and the quotation of any other form of oil then used would be misleading. For example, if there had been bought before the war as large a quantity of any illuminating oil then used as now entere into commerce it would have cost' |;171,000,000, against less than $25,000,000 paid for the product of tlie oil wells. This item must be onutted from the statement of 1878 in comparison with 1860. Again, the class of butter quoted in 1860 is not that which is now of chief importance in commerce, and a correction on that account adds nearly $35,000,000 to the aggregate for 1878. A much more important source of error is the fact that the quotations of shipping hay and Western corn at New York do not at all represent actual values of those ero}is at the point of consumption. In comparing 1877 and 187S, little difference is made by including the whole of those crops, and there ; were not, during that year, such changes in mode and cost of transportation, and in localities of chief production, as to render the comparison a faulty representation of the actual value of the two crops where consumed. Bnt between 1860 and 1878 there were such changes, and it seems to be necessary to include as to corn only that part of the crop which is transported to the East or South — perhaps 200,000,000 bushels at most — and to oniit the crop of hay altogether. Making these changes, it appears that the same quantities and qualities of all the articles remaining, which would have cost $1,854,665,000 on the iirst of January, 1878, would have cost $1,895,462,000 on the first of .January, 1860. In that case, the average of prices has now passed below that of 1860, which may be fairly assumed as the specie level for a year of good business, and is still tending downward toward the lower level of extreme depression which was realized in 1843. We shall readily admit that a comparison which requires so much of judgment as to , what ought to be included or excluded will have little weight with any who do not agree with us as to these essential preliminaries. It is very desirable, also, in com- paring prices at periods so distant, to include a wider lauge of articles, trusting less to the representative character of those chosen. This we aim to do hereafter, and it may be that different conclusions will then seem warranted. Bnt these calculations are submitted as approaching more nearly to a correct comparison of prices before the war aud now than any other yet made, or for which we yet have sufficient data. PRICES FOR FIFTY-THREE YEARS. The same quantity of the most important articles of commerce, which could have been purchased at New York wholesale prices May 1, 1860, for $2,069, and May 1 of last year for |2,464, could be purchased May 1, 1878, for $1,937. In other words, prices have already fallen 6.4 per cent, below the level of 1860, though they are still much above the extraordinary point reached in 1843 — the low-water mark of the cen- tury. This conclusion will greatly surprise many who give attention to financial questions, and we therefore give with much detail on page 406 the quotations of prices May 1, in 1835, 1837, 1843, 1860, and in recent years, thus presenting a history of the important changes in values for flfty-three years. To these quotations we apply the principles explained in The Public of two years ago, aud of February 14. Certain quantities of each article are taken, which approximate to the actual product or importation of that article. The assumed quantity of each is supposed to be pur- chased on the 1st of May, in each j:)iJJi£LjL6ars named, and the totalcostof articles of each class,.and of aUarticTes^ included in the~estfmate^is hereshbwiTTor the'earliest year to which our records extend, for the year of greatest inflation uf -priueslSeftrrB the war ;~ for the year of greatest depression of prices, and 8]pw beginning ofTOC'iTperatifliL after th e janic oT 1837 ; aud. for the latest year of generaL prosperity before the de- parture from a, speciei basjs... The same quau titles are also supiiosetl to ^Btave~beeii finrcliasedlast year, and this year, aud it will be noticed that some important articles,' of which we have no quotations prior to 1830, are included in the comparative aggre- ' gates for tho, three latest dates. The estimate for meats is based upon the Chicago* quotations, but all others upon New York prices. For re.isjus explained in February, DEPRESSION m LABOR AND BUSINESS. 667 the quantitj' of corn aas\imed represents not the entire crop, hut only the portion sup- posed to he marketed, and hay is wholly excluded. The iron quoted, be it observed, is Scotch pig ; the change in prioe of American iron has been still greater. Articles. Breadstuffs Cotton Suffar Molaeses Butter Cheese Coal Iron Leather Wool Coffee Tobacco Kice-. Linseed oil Balsins and nuts Fish, mackerel Fish, cod Salt Hops Turpentine Beef, fresh and packed. Pork and hog products . Whisky Ashes, pots Hemp Lime Lead Petroleum Compari.son, 53 years . Comparison, 18 years . Comparison, 2 years . . $537. 550. 153. 24. 82. 12. 171. 112. 96. 54. 60. 16. 5. 14. 18. 1. 1. 25. 4. $935. 220.0 108.0 23.7 72.0 17.0 198.5 128.1 80.0 72.0 33.6 18.0 5.0 14.0 6.0 2.0 1.8 13.0 2.0 3.2 1, 942. 4 1, 952. 9 1843. $557. 154.0 90.0 15.3 41.1 9.6 99.7 58.0 64 30.4 25.6 13.0 4 12 5 8.0 1.8 1.2 15.8 2.5 2.9 1860. $878. 242. 126.0 36.5 77.1 17.8 104.5 60.6 84.0 57.6 41.6 21.0 6.0 8.4 10.3 3.8 2.2 6.7 2.5 3.7 101.9 134 9 16.3 10.2 4 2 4.5 1, 206. 4 1, 790. 3 2, 069. 1 1877. , 071. 241.0 174.5 36.5 113.1 23.1 76.0 62.5 100.0 56.0 52.8 15.0 8.0 9.5 8.0 4 4 2.8 6.0 4.0 2.6 138.3 100.6 70.8 9.5 5.3 48 8.4 51.3 2, 066. 8 2, 464. 1 2, 515. 4 1878. $731. 5 237.0 130.5 31.4 108.0 20.2 71.2 01.2 80.0 56.0 44.0 8.0 8.0 8.4 8.0 4.4 1.7 6.0 2.2 2.3 121.0 106.5 66.5 9.5 4.7 4 8 3.7 38.0 1, 623. 7 1, 936. 7 1, 974. 7 According to these figures, |1,975 would purchase as much in 1878 as ^2,515 would have purchased in 1877, May 1. The date is somewhat unfortunate, because the out- break of war in Enrope caused a feverish and unuatural advance of prices for a time, and then this movement was followed by a sharp reaction. As we pointed out in Fehrnaryj^tli^ decline from January, 1877, to January. 1878, was about 10.4 per cetil.',' hifrthe decline from May 1 to May 1 was 21.5 per cent. It -will be found important to bear thi^fact in niiud when comparing transactions of banks, or exports and imports, with those of the inflated period last year. Omitting petrolenm, vrhich was not quoted in 18fi0, it is found that the prices of like quautities of other articles in 1880, 1877, and 1878 stand related to each other as |l-i,069 and |2,464 and 11,937. The unnatural ad vance last year was not confined to bread- stuffs. It will be seen that sugar, butter, cheese, leather, coffee, linseed oil, hops, beef, pork, and lead shared in an advance which did not endure, and which brought disas- ter to many. Avast amount of imaginary wealth was thus "produced," and was as easily "destroyed" when the speculative spirit collapsed. The wrecks remain, and the fictitious prices caused by vague dreams as to the effect of theEuropeau war serve to remind us that, instead of a great blessing to industry and commerce in this country, the war proved a curse. The quotations for meats, whisky, potash, hemp, lime, and lead, for the years pre- ceding 1860, are not at hand. Omitting these articles, we are still enabled to compare twenty classes which include over fifty articles regularly quoted in wholesale tables. The remarkable expansion of other prices from 1825 to 1837, however, is nearly hidden by the great shrinkage in the price of cotton. From 1837 to 1843 a loss of nearly 37 per cent, occurred; indeed, it would appear a little greater if the changes in quota- tions of packed meat he accepted as indicating the changes in cost of fresh meat also. Upon that basis, the totals for comparison would he $2,161.40 in 1825, against .|2, 190. 90 in 1837, and |1,364.80 in 1843. From this point prices gradually advanced until a new era of inflation followed the discovery of gold mines. The country experienced an- other reaction in 1857, but had so far recovered that business was generally considered prosperous in 1860. The figures show that as to breadstuffs, cotton, molasses, coal, leather, wool, tobacco, linseed oil, codfish, salt, hops, turpentine, liog products, potash, and lead, prices have fallen to or below the level of 1860, and iron is in reality much lower than it was before the war. A foreign demand has made butter and cheese and beef and its products higher than before the rebellion, and the disorder in Cuba ac- counts for an advance in the price of sugar. Prices of some other articles, it will be 668 DEPEESSION IN LABOE AND BUSINESS. readily seeu, have been lifted by onr present system of taxation. But, these special exceptions aside, the average of prices has now fallen so far below the specie level that there is good reason to hope that bottom has been touched, and that a gradual irmn-oyeraent may hereafter be expected. The prices of imported articles as shown in the official returns of imports are less reliable than city quotations as a basis for comparison, because the qualities of arti- cles imported under the same designation are often materially changed. However, much useful information is thus obtained as to the changes of price abroad, and we give (page 406) the average prices of about fifty articles imported during the mouths of April, 1878, and April, 1877. The general result of the comparison may be more readily attained by contrasting aggregates of quantities and values actually imported. But, owing to the' peculiar distarbauce of prices in some foreign countries, as well as here, during the month of April, 1877, we prefer to compare aggregate importations during ten months ending April 30, 1877 aud 1878, as follows : Quantities. Values. 1878. 1877. 1878. 1877. Tree Dutiable lbs.. lbs.. 1, 016, 312, 948 3, 629, 242, 751 941, 278, 667 3, 560, 584, 410 $84, 261, 209 97, 511, 555 $81, 823, 150 96, 173, 316 4, 645, 555, 699 63, 893, 764 20, 192, 190 4, 686, 630 4, 501, 363, 077 65, 548, 109 25, 785, 257 3, 144, 619 181, 772, 784 13, 752, 445 7, 390, 667 1, 310, 557 177, 996, 466 Goods Liquids Glass Tds-- galls.. sq. ft... 14, 719, 403 8, 449, U37 1, 533, 424 Total 204, 226, 433 202, 698, 330 The only considerable decline in average price, it will be seeu, is in the free goodc and in textile fabrics ; the decrease in dutiable goods reported by weight is small, and in liquirt.s and glass some increase in average price appears. This may be traced, as well as the amallness of the increase in apparent price of other articles, in part to purchases from abroad of better qualities of goods, but the comparison, as far as it has value, indicates a much smaller decline in foreign prices of goods imported than has been found in i>i-i(:es of domestic products. A similar comparison of quantities and values of the chief articles exported during ten months, ending April 30, shows very dift'erent results : Quantities. Values. 1878. 1877. 1878. 1877. Pounds. 7, 411, 744, 750 1, 477, 049, 001 279, 276, 152 284, 116, 549 691, 391, 622 345, 111, 024 239, 126, 123 Pounds. 5, 658, 446, 350 1, 299, 578, 105 233, 616, 973 236, 891, 655 570, 807, 176 259, 025, 406 247, 575, 041 $146, 176, 863 165, 770, 256 4, 188, 108 40, 327, 828 65, 888, 737 20, 754, 616 21, 223, 095 $98,467,355 154, 165, 627 4, 134, 134 60, 905, 015 62, 528, 577 27, 442, 012' 2.5, 475, 724 Cotton Oil.oalfo Oil Lard and pork Total 10, 727, 814, 281 8, 605, 940, 706 473, 329, 553 433,208,444 This table embraces about 80 per cent, in value of all merchandise exports, and shows an increase in quantity of about 26 per cent., while the increase in value is only about 11 per cent. As to these articles, therefore, the average price during ton months ending April 10, 1878, seems to be about 13 per cent, lower than the average price during ten months ending April 30, 1877. In other words, holders have been compelled to abate during the last ten months about one-eighth of the price obtained duriug the corresponding months of the year preceding. We therefore estimate that the domes- tic transactions of the last year have been conducted on a scale of prices lower by about 13 per cent, than that of the year precediug, but that the decline from May 1, 1877, to May 1, 1878, on account of the sudden rise of prices last year, was about "21 per cent. DEPEESSION IN LABOR AND BUSINESS. GGd -*W -^M-WHW -ts He* oioooOTjifS3tooaiooo O QO O "* t- « in iH (N t- r-i r-i C^ (H ca O » t> * (M t- lO in CS 3eooc-Ht-OOOr-"*(M-*OeOCiHT-ieOCOOOt>C0500rHO-^ ,«■ i-( 00 St.* .pg^ ?50PMOO!3! n O O o 5S 670 DEPRESSION IN LABOR AND BUSINESS. mm OQO O) I- 00 oj 00 in (M T-l CO o o o o 0£N"*0 1^ iot-oinoooi>oicoi- OOr-lt^QOi-tOJOOO-** t- --( eq Oi to 00 o o ■JOOrHO-*-*-^ HCIr*0 JO 5 O O Ift r- O T-iS - ii>ojojoi-io3»nii O OS O t- CO >0 00 CO OimOO=>000»ft030>f?(MCO rx 5K ?C ^** I f^K ^-% I ^-^ ir* ^^^ rn- ^ -"^ r^ rtT fn rw. w-m rr, en m oo in iH O) o m»r--^jooiOi^Ti*r-tr QOOOrHiHWCOr- oiNomcotr-(NinTi"inoo-^c OP'S ^ F^ . p-^ Lis ®i' io^ 3 3 = M.g „-"■§ S S-a £« ^sli^l^l^lllllilliiii ■■S3 «.= i'l fe g-ooo^ g^'S "S^l ^ .S wj ^ rt 13 -s .a S DEPRESSION IN LABOR AND BUSINESS. Import prices — Average value of articles imported in April. 671 Articles. Ar^oLs, per lb Camphor, per lb Chloride oi lime, per ton CoHee, per lb Cutch, ttc, per cwt Gypsum, per ton India rubber, per lb Indigo, per lb Madder, per lb Rags of cotton or linen, per lb. . . SilK, raw, per lb Soda, nitrate of, per lb Sulphur, per ton Tea, per lb Tin, per cwt Kice, per lb Chicory, per lb Coal, bituminous, per ton Cocoa, per lb Copper pigs, brass, &c., per lb . Cordage, per lb Glass; oylmder, crown, per lb . . . Glass, cast polished plate, not sil- vered, per su. ft Glass, cast polished plate, silver- ed, per sq. ft 1878. $0 12 16 28 52 15 3 60 01 34 81 4 2i 4 34 23 98 22 15 98 3 3i 3 35 31 12 18 1877. $0 14 19 31 78 16 3 80 1 18 38 85 5 3 5 12 1 25 27 49 26 17 80 2i 3J 3 39 25 15 10 4 92 27 Articles. Pig- iron, per ton Bar-iron, per lb Sheet-iron, per lb Jute, raw, per ton Jute, for bagging, jier lb Lead, pig, bars, pei' cwt Leather of all kinds, per cwt . White lead, per cwt "Whiting and Paris white, per cwt Salt, pertun Saltpeter, per cwt Flaxseed, per bush Soda, bicarbonate, per cwt ..- Soda, carbonate, per cwt Soda, caustic, per cwt lirown sugar, per cwt Molasses, per gall Molado, per cwt Tin. in plates, per cwt Tobacco, leaf, per lb "Wool, unuiauutactured, per lb Carpets, per sq. yd Dress goods, persq. yd Zinc, in blnclis or pig.s, per lb Zinc, in sheets, per lb 1878. ,$31 35 2i 4 56 93 5i 3 49 6 55 6 93 3 76 3 67 4 60 1 54 3 K6 1 48 2 90 4 30 23 3 30 4 42 52 18 1 69 23 6 1877. $21 43 2i *4 43 68 5* 4 67 6 33 6 41 4 19 3 73 3 90 1 46 2 31 1 53 3 10 6 40 27 3 90 4 79 49 15 1 38 25 5 6 PRICES BELOW THE SPECIE LEVEL. Prices have Jen dedJoTEQwairii veryjapidly since May 1. At that time, it -will be remembered, in an extended review of the changes in prices since May, 1877, we noted a general decline, and gave full tables showing that the average quantities of the dif- ferent articles entering into commerce being taken into account, was 6.4 pel' cent, lower than the average in 1800. In other words, we had not only reached but passed the specie level, and were on the way toward that hard-pan of prices, the lowest jjoint ever reached in this country since 1825, which was touched only in 1843, and from which the upward rebound was so rapid in the years 1844-'48. It is well known that there has been a considerable farther decline in average prices since May 1, but perhaps the full extent of the change may not be generally realized. Wheat, selling at 77 cents for No. 2 at Chicago, has touched the lowest point known for many years. It is twenty-seven years since the price has been as low in this mar- ket as it was last week. Excepting in June, 1861, corn has not sold in this market as low as 46 cents since June, 1845, and the only previous quotations as low were in July, 1828, and January and February, 1825. It is twenty-three years sincejcotton has sold as low as it sold last week. Mess-pork has not sold aa low as it sold last week since Jane, 1844. These striking facts have suggested a preliminary comparison of prices in advance of the usual half-yearly review which we shall prepare in November. The method pursued is the one repeatedly explained heretofore, viz, quantities of each article corresponding as closely as possible to the quantities behoved to enter into commerce throughout the country are supposed to have been purchased on the 24th of October and at other dates mentioned, at the wholesale prices in the New York mar- ket. Without giving details at this time, general results may be thus stated : The assumed quantities of about fifty leading articles of commerce could have been pur- chased here, May 1, 1878, for $1,974,700,000, and could have been purchased OctoberS4, 1878, for about $1,717,800,000, a decrease of 13 percent. The comparative cost of some of the leading classes of articles at the dates named, and in 1860, may be shown in millions, thus: "Wholesale cost at the prices of— 1860. May, 1878. Oct., 1878. $878. 242.0 134.9 77.1 60.6 17.8 $731. 5 237.0 106.5 108.0 61.2 20.2 38.0 672.3 $648. 5 215 7 Pork 92 5 57 5 34 65i.7 675.6 Total - - . - 1, 974. 7 1, 936. 7 1,717.8 1, 683. 8 2, 069. i 672 DEPRESSION IN LABOR AND BUSINESS. These figures, for which only approximate correctness is claimed, as they may be modified upon more exteuded compai'isou of quotations, point to the conclusion that the general average of ))rices is 13 per cent, lower now than it was May 1, and that it is 18.6 per cent, lower now than it was in 1880. Bat it should be stated that the figures for November 1, 1860, have not yet been prepared, and the comparison is therefore with the quotations of May 1, 1860. The advance in the general aver- age of prices from that year to 1864 was, as was shown two years ago in this jour- nal, about ld5 per cent., so that IJilOO would buy as much in 1890 as could be bought of the same articles in 1834 for |225. From 1884 to 1873 the decline was irregular, but in the aggregate considerable ; on the 1st of May, 1873, it is esti- mated that |132 would have purchased as much of the various articles quoted as could have been purchased with |2i5 in 1864. In 1876, the decline had jjroceeded much farther; it was then calculated that $112 was the equivalent in i)urchasing power of $100 in 18;;0, or $2-& in 1864. In May last the average of prices had fallen below the level of 1830, anil $93.60 was the equivalent of $100 on the old specie basis. Now, if these computations are correct, the decline has been so groat that $81.40 will purchase the same quantities of over fiftj' articles quoted, at wholesale rates, as could have been purchased in 1860 with $100. It is of course understood that in all these comparisons the quantities purchased of each article are suppo.sed to be proportioned to the quantities of that article entering into commerce, and not to the quantity enter- ing into domestic consumption. If we have so far passed " the specie basis" on the downward movement of prices, what is to be expected for the future ? No reason is perceived for expecting a general upward movement until after resumption has either been accomplished or has failed. Eveu then, the changes may neither be rapid nor easy to predict. It will be observed that, while the extreme low price of agricultural products causes the entire difference in average prices between 1860 and 1878, the prices of all other articles quoted in the aggregate are still somewhat higher than in 1860. As usual, the main difficulty is in securing an equable adjustment of prices to the specie basis, and this does not yet seem to be altogether accomijlished, nor can it be fully while two disturbing forces re- main. Those forces are, first, uncertainty as to permanence of resumption, and, sec- ond, interference with prices by government through tarifis designed to hamper free exchange with foreign nations. INDEX. TESTIMONY TAKEN AT NEW YORK. Views of Mr. Thomas Rock (Journeymen Stonecutter's Association) 1 Hugh McGregor (jeweler) 8 Cornelius O'Sullivan (granite-cutter) 14 Robert H. Bartholomee (Socialistic Labor party) 17,41 Isaac Bennett (Socialistic Labor party).... 25,42 Adolph Donai (Socialistic Labor party) 29 James Connolly (National Labor Greenback party) - ,42 William Hastings (capitalist) 49,81 Thomas Goodwin (physician) 50 William A. Carsey (Greenback Labor party) ' 51 Osborne Ward (Socialistic Laborparty) 57 George W. Maddox (Congress of Humanity) -161 Mrs. S. Myra Hall (Congress of Humanity) 69 J. J. O'Donnell (a sovereign citizen) 69 F. Bruuer (tailor) 74 Patrick Logan (representative of the working classes) 75 Robert W. Hume (American Labor League) . '^_77 Morris Cohen (Socialistic Laborparty) 83789 Alexander R. Robb (plumber) 84 Constitution of the Workingmen's Industrial Association 87 Views of Herbert Graham (Workingmen's Union) 89 Horatio D. Sheppard (Land Reform Association) 94 Memorial of Laud Reform Association ^ 99 Views of Mr. A. Strausser (Cigar Maker's Union). ;f.... 99 Wesley Pasco (printer) 105 Valentine Becker (cooper) 108 Andrew P. Vau Tuyl (plaster-works) ,. 110 George E. McNeil (International Labor Union) ..'X. 115 A. T. Peck (comb manufacturer) 122 Merrill Selleck (student of the labor question) 124 Henry Kerap (produce broker) 125 Henry V. Rothschild (clothing manufacturer) 130 Statement of the Stonecutter's Society , 136 Views of Jacob Jacobs (student of the labor question) ... J37 William Hanson (student of the labor question) 137 Henry Schraeder (piano-maker and teacher) . . 141 William Wittick (student of -the labor question) 143 George Winter (cigar-maker) 144 Jeremiah E. Thomas (colored waiter) 145 WiUiam Wagner (cigar-maker) 145 A. Merwin (export business) 146 Mr. Clark (engineer) . 148 Harlan (Blue-Rlbbon Temperance Organization) 149 Charles Sotheran (journalist) 150 Letter from William D. O'Grady 150 Views of Mr. Goodwin Moody (student of the labor question) 153 Herbert Radclitte (Business Improvement Society of Boston) ' 167 William G. H. Smart (stonecutter) 173 Professor W. G. Sumner (Yale College) ... .% 181 ■■ Charles Francis Adams, jr. (railway commissioner) , 208 Charles Frederick Adams (lawyer) 218 Charles F. Wingate (editor) X 218 Francis 13. Thurber (transporter of food-produce) 220 Silas R. Kenyon (inventor and practical mechanic) , 231 Letter from John Peters, and remarks of chairman 233 Views of Mr. Charles H. Marshall (shipping and commission business) 234 Table of American tonnage from 1820 to 1877 258 Progress of British shipping 259 674 INDEX. I'age 262 262 Pauperism iu Eiiglaiifl and Wales Imports aud expoits of Euf>Iand , Wagps of longshoremen, sliip-carpeuters, <&c ^^' A''essels launclied and in process of building, 1 877 ^ob Views of Mr. Bobert F. Austin (wholesale grocer) -sSt George Walker (Gold and Stock Telegraph Company) ^l Carroll D. Wright (bureau of statistics, Mass. ) ^oi- AVorlung time of Massachusetts operatives 290 Locomotives compared with horses ^™, Views of Jlr. J. H. Walker (leather-manufacturer) JOI. Alanson W. Beard (collector of port of Boston) 321 Charles WylUs Elliott (agriculturist) ^34 John Koach (ship-builder) 339' Cyrus Bussoy (New Orleans Chamber of Commerce) 348 Trade of United States with countries south - 353 Views of Mr. George A. Potter (merchant and student of finance) 360 William E. Dodge (m(^rchant aud employer of labor) 553 Rev. J. N. Stearns (National Temperance Society) 561 Aaron M. Powell (National T(?mp(!rance Society) 561_ Horace White, of Chieago (journalist, student of the labor question). ^4 John H. Hinehman (student of the labor question) SBSTi Agricultural and mannfactui-ing statisties 594 Comparative statement of occiipatiims 59-6-> TESTIMOXV TAK1':X AT SCIJANTON, PA. Statement of the oliainnan - 372,414 t Views of Mr. Cornelius Smith (lawyer) 373 .Tames B. Hickey (practical miner) 373 .James O'Halloran (practical nuner) - 383 J. K. Thouuis and others 395 TESTIMONY TAKEN AT WASHINGTON, D. C. Views of Isaac Cohen (Wnrkhi!j,uien's Relief Assoeiation) 415 Edward Atkinson, ot Massaehusetts (insurance business) 433 .lohn O. Edwards, of Pittsburgh, I'a. (ironbusiuess) 404 Joseph Bishop, of Pittsburgh, Pa. (iron bnsines.t) 476 Andrew N. Perrin, of Titnsville, Pa. (oil business) 491 \ Tables of production, export, ic., of ]>etr( ileum 501 Views of Mr. Miles F. Humjdiri'ys, of Pittsburgh, Pa. (iron business) ,506. Charles C. Coffin, of Boston (journalist, student of thclabor question). - 515_ Sta,tistics of immigration i _ 518 ~ Imports and exports of England, Frani'e, aud the United States 519 Statistics of jiauperism iu Grc^at Britain 520 English production of farm and pasture 521 British criminal statistics .'i'i2 National Bank exhibit for Deeember, 1P77 .'ivio Average earnings of girls in WAS and 1H7G 527 Wages in Massaehnse'tls in 1860 and l.-'78 528 Exports of cotton manufactures in l-'/d 534 A'iews of Mr. Joseph D. AVceks, of Pittsburgh, Pa. (editor of the Iron Age)-- x.543) APrENDI.X. Fa.cts as to shoe and leather trade 601 Wages aud ]uiees, IHliO, lri72, 1878 vji02 Communication from Charles Savage, Brooklvn, N. Y (>27 John S. Perry, Albany, N. Y 628 Henry C. Cadv and others, Burlington, Iowa 628 I. Smoliuski, Washington, 1). C 629 John Clough, Woburn, JIass 632 Report of Tailors' Union No. 2, of \Villi.aiiisbnrg 633 Communication from .lames Haddou, New York 635 William H. Rees, New York 636 John B. Perry, New York 636 Charles 11. Marshall, New York 636 INDEX. 675 V-.rj.t' Commumoation from Peter P. Miller, Detroit, Mich lii^? F. B. Thurber, New York (prices of tea) < >: iT J. H. Sterabergh, Readiug, Pa. (wages, prices, &c.)... (4:!s Industrial crises, tlieir causes and remedies — (Paper contributed by H. B. Willson, New York) C^ll ' Communication from G. L. Waterman, Melrose, Mass. E. B. Bigelow, Boston, Mass William P. Haines, Biddeford, Me Business of Durham Iron Works, 1874 to 1878 Brief of Correspondence Information in regard to prices — (Paper contributed by William H. Grosvenor ) . .1 Date Due Cornell University Library HC 105.7.A4 1878 The causes of the general depression in 3 1924 002 366 445 HC