»• €0'^$ 9^-i'ft^ I ^f ##^ ,^^j^f^ ;■ / 5fet» If ork hutz aialhgs of Agriculture At Q^atnell Iniversitg Dttjaca, Si. f. HC 53.2.W4r'""""'"'"""'"^^ "ocent economic changes, and their effec 3 1924 013 881 218 Cornell University Library The original of tliis 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/cu31924013881218 RECENT ECOIsrOMIC CHANGES AND THEIR EFFECT ON THE PEODUCTION AND DISTRIBUTION OF WEALTH AND THE WELL-BEING OF SOCIETY BY DAVID A. WELLS, LL. D., D. C. L. MEMBRE CORRESPONDANT DE L^INSTITUT DE FRANCE ; CORRESPONDENTK BEGIA ACCADEMIA DEI LINCEI, ITALIA ; HONORARY TKLLOW ROYAL STATISTICAL. SOCIETY, G. B. ; LATE UNITED STATES SPECIAL COMMISSIONER OF RfiVENUE, AND PRESIDENT AMERICAN SOCIAL SCIENCE ASSOCIATION, ETC. NEW YOEK D. APPLETON AND COMPANY 1898 COPYKIGHT, 1889, By D. APPLETON AND COMPANY. All rights reserved. TO D. WILLIS JAMBS, THE ENTERPRISING AND SUCCESSFUL MERCHANli THE PUBLIC-SPIRITED CITIZEN, THE WISE AND OENBEOUS PHILANTHROPIST, THIS VOLUME IS RESPECTFULLY BY THE AUTHOR. PEEFACE. The economic changes that have occurred during the last quarter of a century — or during the present generation of living men — have unquestionably been more important and varied than during any former corresponding period of the world's history. It would seem, indeed, as if the world, during all the years since the inception of civilization, has been working up on the line of equipment for industrial effort — inventing and perfecting tools and machinery, build- ing workshops and factories, and devising instrumentalities for the easy intercommunication of persons and thoughts, and the cheap exchange of products and services ; that this equipment having at last been made ready, the work of using it has, for the first time in our day and generation, fairly begun ; and also that every community under prior or existing conditions of use and consumption, is becoming saturated, as it were, with its results. As an immediate consequence the world has never seen anything comparable to the results of the recent system of transportation by land and water; never experienced in so. short a time such an expansion of all that pertains to what is called " business " ; and has never before been able to accomplish so much in vi PREFACE. the way of production with a given amount of labor in a given time. Concurrently, or as the necessary sequence of these changes, has come a series of wide-spread and complex dis- turbances ; manifesting themselves in great reductions of the cost of production and distribution and a consequent remark- able decline in the prices of nearly all staple commodities, in a radical change in the relative values of the precious metals, in the absolute destruction of large amounts of capital through new inventions and discoveries and in the impairment of even greater amounts through extensive reductions in the rates of interest and profits, in the dis- content of labor and in an increasing antagonism of nations, incident to a greatly intensinsd industrial and commercial competition. Out of these changes will probably come fur- ther disturbances, which to many thoughtful and conserva- tive minds seem full of menace of a mustering of the bar- barians from within rather than as of old from without, for an attack on the whole present organization of society, and even the permanency of civilization itself. The problems which our advancing civilization is forc- ing upon the attention of society are, accordingly, of the utmost urgency and importance, and are already occupying the thoughts, in a greater or less degree, of every intelligent person in all civilized countries. But, in order that there may be intelligent and comprehensive discussion of the situation, and more especially that there may be wise re- medial legislation for any economic or social evils that may exist, it is requisite that there should be a clear and full recognition of what has happened. And to simply and comprehensively tell this — to trace out and exhibit in some- PREFACE. vii thing like regular order the causes and extent of the indus- trial and social changes and accompanying disturbances which have especially characterized the last fifteen or twenty years of the world's history — has been the main pur- pose of the author. At the same time the presentation of whatever in the way of deduction from the record of experi- ence has seemed legitimate and likely to aid in correct con- clusions, has not been disregarded. In the main the following pages are a reproduction of a series of papers originally contributed to and published in " The (New York) Popular Science Monthly," and in part in " The (London) Contemporary Keview " (1887 and 1888). These have, however, in great measure been rewritten, care- fully revised, and brought up to a later date. Norwich, Connecticut, August, 1889. CONTENTS.. I. FAOE Eoonomio disturbances since 1873— Character and universality of such disturbances — Conditions antecedent — Experience of Germany— Of the United States — Effect of crop failures in Europe, 1879-'81 — Dis- turbances in Great Britain, France, Belgium, Russia, and Spain-^ Chronological presentation of industrial experiences — Speculations as to causes — Tendency to magnify local influences — The recognition of a cause universal in its influence necessary to explain a universal phenomenon ........ 1 11. The place in history of the years from 1860 to 1885 inclusive— New con- ditions of production and distribution — The prime factors of eco- nomic disturbance — Illustrative examples — The Suez Canal — Influ- ences of the telegraph on trade— Economy in the construction and management of vessels — Disappearance of the sailing-vessel — Revo- lution in the carrying-trade on land — The annual work service of the railroad — Tjie Bessemer steel rail— Future supply of food com- modities — Cheapening of iron — Displacement of labor by machinery — Natural gas — Application of machinery to the production and transportation of grain — Adam Smith and the manufacture of pins — The epoch of efficient machinery production — Influence of labor dis- turbances on inventions — Prospective disturbing agencies — Displace- ment of the steam-engine . . . . . . .27 III. Over-production — Periodicity of trade activity and stagnation — Increase in the volume of trade with accompanying decline in profits — De- pression of agriculture in Europe — Changes in the relations of labor and capital — Destruction of handicrafts — Antagonisms of machinery — Experience of British co-operative societies — Influence of improve- ments in production by machinery on international difi'erences in wages— Changes in the details of product distribution — Changes in retail trade— Displacement of the " middle-man " . . .70 X CONTENTS. IV. TAan Depression of prices as a cause of economic disturbance — Manifestafions of such disturbances — Their universality — Average fall in prices since 1867-'77 — Methods of determining averages — Cause of the decline — Two general theories — General propositions fundamental to inquiry — Ecoent production and price experiences of staple commodities — Sugar — Petroleum — Copper— Iron— Quicksilver— Silver — Tin— Tin-plate — Lead— Coal — Coffee and tea — Quinine — Paper and rags- Nitrate of soda— Meat— Cheese— J?ish — Freights — Wheat— Cotton — -Wool — Silk— Jute— Conclusions of the British Gold and SUver Commission 114 Price experience of commodities where product has not been greatly augmented — Handicraft products — Prices of India commodities — Exceptional causes for price changes — Coral, hops, diamonds, hides, and leather — Changes in supply and demand regarded by some as not sufficiently potential — ^Divergency of price movements — Evidence from a gold standpoint — Has gold really become scarce ? — Gold pro- duction since 1850 — Increase in the gold reserves of civilized coun- tries — Economy in the use of money — Clearing-house experiences — Difference between gold and silver and other commodities in respect to use — Has the fall in prices increased the burden of debts? — Curi- ous monetary experiences of the United States . . . , 19i VI. Changes in recent years in the relative values of the precious metala — Subject not generally understood — Former stability in the price of silver — Action of the German Government in 1873 — Concurrent de- cline in the price of silver — Action of the "Latin Union" — Iniiu- ence and nature of India "Council bills" — Alleged demonetization of silver — Increased purchasing power of silver — ^Increased product of silver — Economic disturbances consequent on the declme of silver — Increased production of cotton fabrics in India — Industrial awak- ening in India— Eelation of the decline in the value of silver to the supply of India wheat— International trade, a trade in commodities and not in money— Economic disturbances in the Dutch East In- dies-Natural law governing the selection and use of metallic money — Experience of" Corea— The metal coinage system of the world tri- metallic— The gold standard a, necessity of advanced civilization — The fall of prices due to more potent agencies than variations in the volumes or relative values of the precious metals . . . 224 VII. Governmental interference with production and distribution as a cause of economic disturbance— Economic sequences of the repeal of the Brit- CONTENTS. xi PASE ish com laws — Extension of commercial freedom — Resulting pros- perity — Eeaotionarj policy after 1878— Causes influencing to reaction — Commercial policy of Russia — Illustrations of recent restrictive commercial legislation — Franco and Italy — French colonial policy^ Eevival of the restrictive commercial ideas of the middle ages — Local and' trade legislation in the United States — Kestrictions on immigra- tion and residence — Retrogression in the comity of nations — Results of tariff conflicts in Europe — The development of trusts — Indications of the abandonment of commercial restrictions in Europe — Extraor- dinary experiences of the beet-sugar production — International con- ference for the abolition of sugar bounties — Experience of France in respect to shipping bounties — Relative commercial importance of dif- ferent European nations — Per capita wealth in different countries — Relative production and prices of iron and steel in the United States and Great Britain — Augmentation of domestic prices by taxes on im- ports — Economical disturbances contingent on war expenditures . 260 VIII. The economic outlook — Tendency to pessimistic views — Antagonism of sentiment to correct reasoning — The future of industry a process of evolution — The disagreeable elements of the situation — All transi- tions in the life of society accompanied by disturbance — Incorrect views of Tolstoi — Beneficial results of modern economic conditions — Existing populations not formerly possible — The Malthusian the- ory — Present application to India — Illustrations of the effect of new agricultural methods on production — No future famines in civilized countries — Creation of new industrial pursuits — Doubtful pei-petua- tion of the Government of the United States under old economic conditions — Increase in the world's supply and consumption of food — Increase in the varieties of food — Low cost of subsistence under attainable conditions in the United States — Savings-bank statistics- Decrease of pauperism — Statistics of crime — Increase in the duration of human life — Extermination of certain diseases— Future of medi- cine and surgery — Unfavorable results of new conditions of civiliza- tion—Increase of suicides — Divorce statistics — Chaige in the condi- tion of the British people since 1840— Wealth of Great Bricain— British education and taxation— Present higher vantage-ground of humanity 324 IX. The discontent of labor— Causes for— Displacement of labor— Results of the invention of stocking-making machinery — Increased opportunity for employment contingent on Arkwright's invention— Destructive influences of material progress on capital— Effect of the . employ ment of labor-saving machinery on wages— On agricultural employments- Extent of labor displacement by machinery— The cause of Irish dis- xii CONTENTS. PAGE content not altogether local— Impoverishment of French proprietors — Is there to be au anarchy of production 2 — Effect of reduction of price on consumption — On opportunities for labor — Illustrative examples- Influence of taxation on restraining consumption — Experiences of tolls on Brooklyn Biidge — Characteristics of different nationalities in respect to the consumption of commodities — Creation of new industries ■ — Effect of import taxes on works of art — Tendency of over-production to correct itself— Present and prospective consumption of iron — Work breeds work — Pessimistic views not pertinent to present conditions . 364 X. Discontent of labor in consequence of changes in the conditions of em- ployment — Subordination to method and routine essential to all sys- tematized ojcupations — Compensations therefrom — Benefits of the capitalistic system of production — Werner Siemens's anticipations — Discontent of labor in consequence of greater intelligence — Best defi- nition of the difference between a man and an animal — Increase in personal movement— Change in character of the English, French, and German people — What is socialism 2 — Meaning of progressive materia) and social development — Advance in wages in Great Britain, the United States, and France — Coincident change in the relative number of the lowest class of laborers — Relation of wages to the cost of living— Increase in expenditures for rent — Curious demonstration of the improved condition of the masses— Eeduction of the hours of labor— Why wages have risen and the price of commodities fallen — Impairment of the value of capital— Reduction of the rates of interest — Decline in land values ....... 396 XI. The economic outlook, present. and prospective— Necessity of studying the situation as an entirety— Compensation for economic disturb- ances—Inequality in the distribution of wealth a less evil than equal- ity of wealth— The problem of poverty as affected by time— Tendency of the poor toward the centers of population- Relation of machinery to the poverty problem— Reduction of the hours of labor by legis- lation—Fallacy of eight-hour arguments— The greatest of gains from recent material progress— Increase of comfort to the masses from decline of prices- Oleomargarine legislation— DiflTerenoe between wholesale and retail prices — Relation between prices and poverty Individual differences in respect to the value-perceiving faculty Characteristics of the Jews— Relative material progress of different countries— Material development of Australia and the Argentine Re- public—Great economic changes in India— Great material progress in Great Britain — The economic changes of the future — Further cheap- ening of transportation— Future of agriculture— Position of the last third of the nineteenth century in history • . . . 427 RECENT ECONOMIC CHANGES. I. Economic disturbances since 1873 — Character and universality of sueb dis- turbances— Conditions antecedent — Experienceof Germany— Of tbeUnited States — Effect of crop failures in Europe, 18V9-'81 — Disturbances in Great Britain, France, Belgium, Eussia, and Spain — Chronological presentation of industrial experiences — Speculations as to causes — Tendency to magnify local influences — The recognition of a cause universal in its influence necessary to explain a universal phenomenon. The existence of a most curious and, in many respects, unprecedented disturbance and depression of trade, com- merce, and. industry, which, first manifesting itself in a marked degree in 1873, has prevailed with fluctuations of intensity up to the present time (1889), is an economic and social phenomenon that has been everywhere recognized. Its most noteworthy peculiarity has been its universality; affecting nations that have been involved in war as well as those which have maintained peace; those which have a stable currency, based on gold, and those which have an unstable currency, based on promises which have not been kept ; those which live under a system of free exchange of commodities, and those whose exchanges are more or less restricted. It has been grievous in old communities like England and Germany, and equally so in Australia, South Africa, and California, which represent the new; it has been a calamity exceeding heavy to be borne, alike by the inhabitants of sterile Newfoundland and Labrador, and of 2 RECENT ECONOMIC CHANGES. the sunny, fruitful sugar-islands of the East and West In- dies ; and it has not enriched those at the centers of the world's exchanges, whose gains are ordinarily the greatest when business is most fluctuating and uncertain.* , One of the leading economists and financiers of France, M. Leroy Beaulieu, claims that the suffering has been great- est in his country, humiliated in war, shorn of her territory, and paying the maximum of taxation ; but not a few stand ready to contest that claim in beha|lf of the United States, rejoicing in the maintenance of her national strength and dominion, and richer than ever in national resources. Commenting upon the phenomena of the industrial de- pression subsequent to the early months of 1882, the Director * The poverty in Australia, in 1885, was reported to be more extreme than at any former period in the history of the colonies ; multitudes at Adelaide, South Australia, surrounding the Government House and clamoring for food — the causes of distress assigned being failure of the harvest, drought, and general commercial depression. This depression, especially of the agricultu- ral interests, continued in a marked degree through the year 1885, the ex- ports of the colonies declining thirteen per cent and the imports six per cent as compared with those of the preceding year. Witli an increase of three per cent in population for the year, the colonial revenues of 1886 also showed a marked decline as compared with 1885. Since 1887, however, business in Australia has greatly improved. " The close of the year 1884 brought with it little, if any, improvement, in the material condition of South Africa. Commercial disasters may not have been so frequent as during the previous year, but this may be explained by the fact that trade has reached so low a level that very little room existed for further failures. No new enterprises have been set on foot, and the sus- pension of many of the public works has tended to further reduce the com- mercial prosperity of the country. Consumption has been upon the lowest possible scale, retrenchment universal, and want of employment, and even of food, among the laboring-classes, a grave public difficulty." — United States Consul SiLEE, Beport to State Department, 1885. January, 1885. The price of mackerel in 1884 (Boston') wa-s lower than at any time since 1849 ; and, in the case of codfish, the lowest since 1838. On the other hand, the price of mackerel in December, 1888, in the same market, was so high as to almost render the consumption of this article of food a mat- ter of luxury. In all countries dependent in a great degree on the production of cane-sugar, the depression of industry in recent years has also been very great, and still (1889) continues. ECONOMIC DISTURBANCES SINCE 1873. 3 of the United States National Bureau of Labor, in his re- port for 1886, considers the nations involved, in respect to their relations to each other and to severity of experience, to stand in the following order : Great Britain, the United States, G-ermany, France, Belgium. The investigations of the director also indicated a conclusion (of the greatest im- portance in the consideration of causes) ; namely, that the maximum of economic disturbance has been experienced in those countries in which the employment of machinery, the efficiency of labor, the cost and the standard of living, and the extent of popular education are the greatest ; and the minimum in countries, like Austria, Italy, China, Mexico, South America, etc., where the opposite conditions prevail. These conclusions, which are concurred in by nearly all other investigators, apply, however, more especially to the years prior to 1883, as since then " depression " has mani- fested itself with marked intensity in such countries as Rassia, Japan, Zanzibar, Uruguay, and Eoumania. The business of retail distribution generally — owing, probably, to the extreme cheapness of commodities— does not, moreover, appear to have been less profitable than usual during the so-called period of depression ; in contradistinc- tion to the business of production, which has been generally unprofitable. It is also universally admitted that the years immediately precedent to 1873— i. e., from 1869 to 1872— constituted a period of most extraordinary and almost universal inflation of prices, credits, and business; which, in turn, has been attributed to a variety or sequence of influences, such as excessive speculation ; excessive and injudicious construction of railroads in the United States, Central Europe, and Rus- sia (1867-'73) ; the opening of the Suez Canal (1869) ; the Franco-German War (1870-'71) ; and the payment of the enormous war indemnity of fifty-five hundred million francs (eleven hundred million dollars) which Germany exacted from France (1871-73). The contemporary comments of 4 RECENT ECONOMIC QHANGES. two English journals, of recognized authority, on the course of events in 1873, constitute also an important contribution to our information on this subject. Under date of March, 1873, the London " Economist," in its review of the com- mercial history of the preceding year, says : Of all events of the year (1873) the profound economic changes generated by the rise of prices and wages in this country, in Central and Western Europe, and in the United States, have been the most full of moment. And the London " Engineer," under date of February, 1873, thus further comments on the situation : The progress of events during 1873 will not soon be forgotten by engineers. The position assumed by the working-classes, and the un- precedented demand for iron and machinery, combined to raise the cost of all the principal material's of construction to a point absolutely without parallel, if we bear in mind that the advance of prices was not localized, but universal, and that the duration of the rise was not limited to a few months or weeks, but, having extended already over a period of some months, shows little sign at this moment of any sen- sible abatement. In 187S scarcely a single step in advance was made in the science or practice of mechanical engineering. No one had time to invent, or improve, or try new things. The workingman is setting spurs to his employers with no gentle touch, and already we find that every master with capital at stake is considering how best he can dis- pense with the men who give .him so much trouble. Of course, the general answer always assumes the same shape — ^use a tool whenever it is possible instead of a man. The period of economic disturbance which commenced in 1873 appears to have first manifested itself almost simul- taneously in Germany and the United States in the latter half of that year. In the former country the great and successful results of the war with Prance had stimulated every department of thought and action among its people into intense activity. The war indemnity, which had been exacted of France, had been used in part to pay ofE the debt obligations of the Grovernment, and ready capital be- came so abundant that banking institutions of note almost EXPERIENCE OF GERMANY IN 1873-'73. 5 begged for the opportunity to place loans, at rates as low as one per cent, with manufacturers, for the purpose of en- larging their establishments. As a legitimate result, the whole country projected and engaged in all manner of new industrial and financial undertakings. Thousands of new concerns were called into existence, the management of which did not give the slightest attention to sound com- mercial principles. In Prussia alone six hundred and eighty-sev.en new joint-stock companies were founded dur- ing the year 1873 and the first six months of 1873, with an aggregate capital of $481,045,000. The sudden growth of industries, and the temptations of cities and towns (the sud- den augmentation of which is so striking a feature in the history of Germany after the year 1870), had also induced hundreds of thousands of men and women to desert agri- cultural pursuits and to seek employment in trades. Such a state of things, as is now obvious, was most unnatural, and could not continue ; and the reaction and disaster came with great suddenness, as has been already stated, in the fall of 1873, but without anticipation on the part of the multitude. Great fortunes rapidly melted away, industry became paralyzed, and the whole of Germany passed at once from a condition of apparently great prosperity to a depth of financial, industrial, and commercial depression that had never been equaled. In the United States the phenomena antecedent to the crisis were enumerated at the time to be, " a rise of prices, great prosperity, large profits, high wages, and strikes for higher ; large importations, a railway mania, expanded credit, over-trading, over-building, and high living." The crisis began on the 17th of September, 1873, by the failure of a comparatively unimportant railway company — the New York and Oswego Midland. On the 18th, the banking- house of Jay Cooke & Co. failed. On the 19th, nineteen other banking-houses failed. Then followed a succession of bankruptcies, until in four years the mercantile failures 3 6 EECENT ECONOMIC CHANGES. had aggregated 1775,865,000 ; and on January 1, 1876, the' amount of American railway bonds in default amounted to $789,367,655. The period of economic disturbance which thus began in Germany and the United States soon extended to France and Belgium ; and thereafter, but with varying degrees of severity, to Great Britain (i. e., in the latter months of the succeeding year), to the other states of Europe, and ulti- mately to the commercial portions of almost every country. The testimony before the British Parliamentary Commis- sion (1885-86), however, shows that the depression in Great Britain was not at once universal ; but that, on the contrary, production, employment, and profits, at such great manu- facturing centers as Birmingham and Huddersfield, were above the average until 1875. By many writers on this subject, the depression and dis- turbance of industry, which commenced in 1873, are re- garded as having terminated in 1878-79 ; but all are agreed that they recommenced, with somewhat modified conditions, and even with increased severity, in 1882-'83. A full con- sideration of the larger evidence which is now (1889) avail- able would, however, seem to lead to the conclusion that there really was no termination of the abnormal course of events, and the marked definite commencement of which is assigned to 1873, but that what has been regarded as a "termination" was only an "interruption," occasioned by extraordinary causes, varying locally, and by no means universal. Thus, a failure during the years 1879, 1880, and 1881, of the cereal crops of Europe and most other coun- tries of the world, with the exception of the United States — a failure for which, in respect to duration and extent, there had been no parallel in four centuries — occasioned a remark- able demand on the latter country for all the food-products it could supply at extraordinary prices — the exportations of wheat rising from 40,000,000 bushels in 1877 to 132,000,000 in 1879, 153,000,000 in 1880, and 150,000,000 in 1881 ; while EFFECT OF CROP FAILURES IN EUROPE. 7 the corresponding values of the amount exported rose from $47,000,000 in 1877 to $130,000,000 in 1879, $190,000,000 in 1880, and $167,000,000 in 1881. There was also a corre- sponding increase in the quantity and value of the Ameri- can exports of other cereals, and also of most meat products and provisions.* Such a demand at extraordinary prices for crops, beyond the average in quantity and quality, brought temporary prosperity to American producers, and induced great in- dustrial and commercial activity throughout the United States; and although the crops of other countries were notably far below the average, yet the great advance in prices undoubtedly went far to alleviate the distress of the foreign agriculturist, even if it did not in some cases actu- ally better his condition and increase his purchasing power of other than food-products. The extent to which the American producer availed himself of his increased purchas- ing power during the years under consideration is indicated by the inci'ease which occurred in the importation of foreign merchandise on the part of the United States, namely, from $437,051,000 in 1878 to $667,954,000 in 1880, and $722,- 639,000 in 1882. Such an increase represented payment in part for American exports ($110,575,000 in gold and silver being imported in addition in 1881), and a corresponding demand for the products of foreign industries — the special effect on British industry being characterized by a statement from one of the witnesses before the Royal Commission (a representative of one of the districts of Liverpool) that " the depression continued until 1880, when there occurred an American boom, which temporarily lifted prices and induced * No. 1 spring wheat, which commanded |1.05 per bushel in the New York market on the lat January, 1878, was quoted at $1.60 at a corresponding date in 1879 ; and at $1.39 in 1881. The oon-esponding advance in corn was from 45 cents per bushel in 1878 to 63 cents in 1879, and 70 cents in 1881 ; while the advance in mess-pork was from $7.05 per barrel in 1878 to $12. 62^ in 1879, and $17 in 1881. 8 KECENT ECONOMIC CHANGES. activity." The testimony of other witnesses was, however, to the effect that in many branches of British industry there was no improvement of condition either in 1878, 1880, or in any subsequent year ; the Commission itself reporting (in December, 1886) that there was a general agreement among those whom it consulted that the depression under consid- eration, " so far as Great Britain was concerned, dates from about the year 1875, and, with the exception of a short period enjoyed by certain branches of trade in the years 1880 to 1883, it has proceeded with tolerable uniformity, and has affected the trade and industry of the country gen- erally, especially those branches connected with agriculture." The Commission further reported that the information re- ceived by them leads to the conclusion that " in Belgium, France, Russia, Scandinavia, Spain, and the United States," the depression has been " almost identical in its leading feat- ures with that existing in the United Kingdom." In Germany and Belgium the reaction experienced in 1879, it is admitted, did not extend beyond 1883. In France the condition of agricultural and other labor- ers continued so deplorable that the French Chamber of Deputies appointed a special commission of inquiry in 1884 with a view to devising measures for relief ; while in Great Britain the condition of trade and industry has uninter- ruptedly been regarded since 1882-'83 with great anxiety. There is a very general agreement of opinion in England and on the Continent of Europe that the years 1879, 1885, and 1886 were the worst that have been experienced in the period commencing with 1873. In England, Prance, and Germany, the increase or decrease in exports is popularly regarded as an indication of the condition of business, and, assuming 100 to represent the exports for 1883, the decline in the value of the exports of these several countries since that year may be represented as follows: England, 1883, 100 ; 1884, 92-3 ; 1885, 88-5, a falling off in two years of 11-5 per cent. The record of France is better — 1883, 100 ; ILLUSTRATIONS OP BUSINESS DEPRESSION. 9 1884, 93-1 ; 1885, 923, a falling off of Tl per cent ; while Germany falls behind both countries : 1883, 100 ; 1883, 98 ; 1884, 89 ; 1885, 87-5, a falling off' of 12-5 per cent. The transport of merchandise on all the French railways, calcu- lated in tons carried one kilometre, fell progressively from 11,064,000,000 in 1883 to 8,804,000,000 in 1886 ; the water- carriage of France for the same period, calculated in the same manner, remaining stationary. The extreme depression of business in the United States in 1884-'85 showed itself very curiously in the diminution of the receipts of the postal service of the country. In October, 1883, the rates of letter-postage were reduced from three to two cents per half-ounce. The aggregate receipts fell off — as was to be expected — but the deficiency for the second year under the reduced rate was largely in excess of what was experienced the first year, although population had increased by at least a million during the second period. For the year 1887 there was a general concurrence of opinion that the world's business experienced a marked improvement. Eeviewing the condition of British trade and industry, the London " Economist," in its " Commercial History and Eeview of 1887," says : That we did a distinctly bigger business than in 1886 there can be no doubt. Whether it was a more profitable business is another ques- tion, and one which it is more difficult to answer. In certain branches of trade manufacturers did undoiibtedly impi'ove their position. It was so in the finished iron trade, in ship-building, in the spinning branches of the cotton trade, in the jute trade, and probably in the woolen trade as a whole. And in other branches, if there is no improvement to record, there was certainly little, if any, retrogression. It appears somewhat anomalous that a year which has witnessed these changes for the better in the general condition of (British) trade should also have been characterized by louder complaints of lack of employment for and of distress among our working population. For 1887 the foreign trade of Frange, calculated on the returns for 1886, showed a small improvement. IQ EBCBNT ECONOMIC CHANGES. On the other hand, the condition of trade and industry in Eussia, which is almost exclusively an agricultural and pastoral country, continues, as it has been for recent years, to be one of extreme depression. In the production of wheat she has had to compete with two great competitors, the United States and India, both of which have had de- cided advantages in the contest. Both the United States and India, too, have gained more by the great reduction in the cost of ocean carriage than has Eussia, which, moreover, has suffered from many special diflEiculties ; her political and economical position having necessitated a considerable increase in taxation, which has added to the cost of produc- tion, while some of her best and most accessible customers have shut out her cereal produce as far as possible by the imposition of high customs duties.* In Spain and Portugal the economic condition of afEairs during 1887 and 1888 was reported as most deplorable. In the former country emigration was assuming alarming proportions ; and with a depression alike of agriculture and manufactures, the disposition to gain relief by the exclusion of all foreign competing products, or by further restrictions on foreign trade, was becoming almost universal. During the year 1888, owing to an undoubted expansion of trade and a marked rise in the prices of a few commodi- ties, " which bulk largely in the eyes of the public, there was a general disposition in England to believe that there had been a distinct rise in the general level of prices." Ac- cording, however, to the London " Economist," an examina- tion of all available data failed to confirm any such conclu- sion ; but, on the contrary, showed that, eliminating from the discussion a marked advance in the prices of the two * A striking illustration of the condition of Euesian cultivators is sup- plied by the fact that some 80,000 of them have surrendered their land, find- ing the costs incidental to ownership surpass the profits thereof, while the army of beggars includes in its ranks landowners numbered by tens of thou- sands. — Correspondence London '■'■Economist,'" November, 188T. CHRONOLOGICAL PRESENTATION. H metals lead and copper — which was wholly due to specula- tive influences — the general level of prices for 1888 was not materially different from what it was in 1887. For the United States, according to the New York " Commercial Bulletin," there was no recovery of prices, the year 1888 closing with prices fully six per cent lower than at its com- mencement. One point of interest which is here specially worthy of note from its bearing on the discussion of causes, is that the recurrence of the period of depression in 1882, after the favorable reaction which occurred to a greater or less extent in 1879, was quiet and gradual, as if matters were naturally again assuming a normal condition, and was not preceded or accompanied by any marked financial or commercial dis- turbances. On the contrary, the money markets of the world remained " easy," and were characterized, as they have ever since been, by a plethora of capital seeking invest- ment and a low rate of interest ; so that the economic dis- turbance since 1883 has been mainly in the nature of a depression of industry, with a renewed and remarkable de- cline of prices ; with absolutely no decline, but rather an increase in the volume of trade, and certainly no falling off in production, as compared with the figures of 1880 and 1881, which years in the United States, and to some extent in other countries, were regarded as prosperous. The following presentation, chronologically arranged, of brief extracts from various publications since 1873-'73, will further assist to a recollection and comprehension of the course of events since that period, and also exhibit the opinions which have been expressed at different times, re- specting the " influence," " causes," and duration of the so- called " depression of trade and industry," by those who, by position or investigation, have assumed to speak with more or less of authority on the subject. And, with this intent, attention is first asked to the following retrospect of the curious experience of the iron and steel industry of the 12 RECENT ECONOMIC CHANGES. United States, as exhibited by quotations from the reports' of the American Iron and Steel Association from 1873 to 1887: 1873. The year 1872 opened with an increased demand for ii'on in nearly all civilized countries. Prices advanced rapidly in all markets. The supply was unequal to the demand, although production was everywhere stimulated. — Report of the American Iron and Steel Asso- ciation, November, 1873. 1874. The reaction (in the world's demand for iron) in 1874 has- been as general and decided as the advance in 1873 was unexpected and bewildering. It has been lelt most severely in the United States ; but in the United Kingdom, and in Prance and Germany, the iron industry has been so much depressed, all through the year, that many iron-works have been closed, and many others have been employed but a part of the time. The testimony of statistics, and of all calm observers, shows that prostration is greater at the close of 1874 th'an it was at the close of 1873, and that the general distress is greater. At least a million of skilled and unskilled workingmen and working- women in this country are out of employment to-day, because there is no work for them to do. —Report, December 31, 1874- 1877. Since 18'3 each year has shown a decrease in the production of pig-iron in the United States, as compared with the preceding year, the percentage of decrease being as follows : 1874, six per cent ; 1875, fifteen per cent ; 1876, eight per cent. This is a very great shrinkage, and indicates, with concurrent low prices, a very great depression in the pig-iron industry of the country. If the rate of decrease which marked the period from 1873 to 1876 were to be continued, the pro- duction of pig-iron in the United States would entirely cease in 1884, less than eight years from the present time, and our furnace-stacks would only be useful as observatories for the study of astronomy. — Report, Jmie, 1887. 1878. More than one half of the furnaces, and many of the rolling- mills, were idle the whole year. Prices were so low as to warrant the impression that they could be no lower. — Report, July, 1878. 1879. In nearly all the branches of the domestic iron and steel in- dustries there has been an increased production in 1878 over 1877 ; but this increase in production has been accompanied by a decrease in prices. At no time in the history of the country have prices for iron and steel been as low as they were in 1878, excepting in colonial days, when the price of pig-iron was lower. — Report, May 6, 1879. 1880. Near the close of 1878 it became evident that the business EXPERIENCE OF THE IRON INDUSTRY. 13 depression which had succeeded the panic of 1873 was slowly disap- pearing, and that a general revival of prosperity was at hand. In the closing months of 1879 excitement and speculation took the place of the gloom and discouragement with which the American iron-trade had been so familiar scarce one year before, and the business of buying and selling iron became close neighbor to that of gambling in stocks. —Report, May, 1880. No. 1 pig-iron, which sold for $53 per ton at Philadel- phia in September, 1873, sold for $24 in 1874, $21.25 in 1876, $16.50 in 1878, $41 in February, 1880, and $25 in May, 1880. 1883. The year 1881 was the most prosperous year American iron and steel manufacturers have ever known. — Report, June, 188^. 1883. The extraordinary activity in our iron and steel industries, which commenced in 1879, culminated early in 1882. The reaction was not sudden, but was so gradual and tranquil that for some time it excited no apprehension. In November and December the market was greatly depressed. At the beginning of December, 1881, the average/ price of steel rails at the (American) mills was |60 per ton, but in December, 1882, the average price was only $39.* In all the fluctu- ations of iron and steel that have taken place in this country, we know of none so sweeping as this decline in the price of steel rails, if we ex- cept in 1879 and 1880, and many of these were entirely speculative. — Report, May, 1883. The cause of this serious reaction was attributed, in the same report, in great measure to the circumstance that " we had increased our capacity for the production of most forms of iron and steel much faster than the consumptive wants of the country had increased." 1884. Since the publication of the last annual report, in May, 1883, the unsatisfactory condition of the American iron-trade, as it then existed, has not improved. It has steadily grown worse. — Report, May, 188J^ 1887. The year 1886 was one of the most active years the American * The average price of Bessemer steel rails, which commanded $39 per ton at American mills in December, 1882, declined to $28.50 in 1885. For 1886 it was 13450; for January, 1887, $31.50. 14 RECENT ECONOMIC CHANGES, iron-trade has ever experienced. The improvement in demand which had commenced in the latter part of 1885 was well maintained through- out the whole of 1886. The production of the year in all the leading branches of the trade was much the largest in our history. The remote caAses of the revival in the prosperity of the American iron-trade which began in the last half of 1885, and still continues, may be diffi- cult to discover ; but one influential immediate cause is directly trace- able to the meeting of the Bessemer steel-rail manufacturers in August, 1885, at which meeting a restriction of production for one year to avoid the evils of over-production and ruinous prices was agreed upon. This action was almost immediately followed by beneficial results to the iron-trade of the whole country, and to many other branches of domestic industry. An incident of our industrial history for 1886 was the large number of strikes among, workingroen. More American workingmen were voluntarily out of employment in that year than in any previous year. — Report for April, 1887. The year 1887 was the most active year in the history of the Ameri- can iron-trade, far exceeding all previous years, including the remark- able year 1886, in the production and consumption of iron and steel in all their leading forms. In two years, from 1885 to 1887, we increased our production of pig-iron fifty-eight per cent ; our production of Bes- semer steel ingots, ninety-three per cent ; our production of Bessemer steel rails, one hundred and nineteen per cent ; and our production of open-hearth steel ingots, one hundred and forty-one per cent. These figures tell a story of truly wonderful progress, such as has been wit- nessed in no other great industry in this country, and in no other iron- making country. — Report for May, 1888. The report for January, 1889, may be regarded as in the nature of a natural sequence from the antecedent conditions above reported. There was a decline in the aggregate production of iron and steel in 1888 as compared with 1887, and there was a shrinkage in prices ; so that the year was not a prosperous one for our iron and steel manu- factures, although production was still very large. We did not con- sume as much pig-iron as in 1887. The shrinkage in consumption of Bessemer steel rails in 1888, as compared with 1887, was 790,180 gross tons ; the greatest that has occurred since the collection of the sta- tistics of these industries was undertaken. No. 1 anthracite pig-iron at Philadelphia declined within the year from $21 to $18 per ton; steel rails from $31.50 to $37.50. EVIDENCES OF BUSINESS DEPRESSION. 15 The following extracts from publislied. statements and opinions are more general in their nature, but not less in- structive : 1876. Our country is now passing through a period of unusual depression, both in its industries and its business. The present de- pressed condition of business and of financial affairs exists over all countries having a high civilization. — Facts and Observations ad- dressed to the Committee mi Finance of the Mutual Life-Insurance Company of New York, July, 1876. Printed for the Private Conven- ience of the Trustees. 1876. The inquiry has been suiSoiently broad to enable them (the committee) to point out with a considerable degree of accuracy the causes which have immediately operated to produce the present de- pression in the commerce of the country, and in some branches of its manufacturing and mining industries. These causes are quite beyond legislative control in this country. — Meport. of Select Committee of the House of Commons, Dominion of Canada, 1S76. 1877. Hard times ! For four years this sober pass-word' has gained in gravity of import. For a time it was panic ; but suppositions of speedy recovery have given place to a conviction of underlying facts that these hard times are more than a panic ; that the existing de- pressions of trade and dearth of employment are not, iii popular appre- hension, exaggerated, but are the serious results of cailses more perma- nent in their nature than is generally considered. — Hard Times, hy Franklin W. Smith, Boston, 1877, James B. Osgood & Co. Congress "OF the United States, House op Representatives, June 17, 1878. 1878. Mr. Thompson submitted the following resolution, which was agreed to': Whereas, labor and the productive interests of the country are greatly depressed, and suffering severely from causes not yet fully understood, etc. : Therefore, Resolved, That a committee of seven members of this House be appointed, whose duty it shall be to inquire into and ascertain the causes of general business depression, etc., and report at the next ses- sion. 1878. Commercial depression is the universal cry— a commercial depression probably unprecedented in duration in the annals of trade, except under the disturbing action of prolonged war. . . . Ample evi- dence abounds on all sides to show its extent and severity in England. 16 RECENT ECONOMIC CHANGES. Have other countries bowed their heads in suffering under the com- mercial depression? Let America be the first to speak. In 1873 she experienced a shock of the most formidable kind. She has not recov- ered from the shock at this very hour. Let us visit Qermany— Ger- many the conqueror in a great war, and the exactor of an unheard-of indemnity. What do we find in that country? Worse commercial weather at this hour than in any other. Nowhere are louder com- plaints uttered of the stagnation of trade. Austria and Hungary re- peat the cry, but in a somewhat lower voice. And so we come round to France, the people whose well-being has been so visited with the most violent assaults. Her losses and sufferings have surpassed those endured by any other nation. Yet the deep, heavy pressure of her commercial paralysis has weighed upon her the least oppressive of all. Such a depression, spread over so many countries, inflicting such con- tinuous distress, and lasting for so long a period of time, the history of trade has probably never before exhibited.— Bonamy Peice, Ccm- tempwary Review, 1878. 1879. The prevailing depression in business from which this coun- try has suffered for six years, and from which nearly every country in Europe is suffering still, has probably furnished support to a greater number of conflicting economical theories than any other occurrence of ancient or modern times. . . . The result, we need hardly say, has not been to raise the reputation of political economy as a science. In fact, it has never seemed so little of a science as during the past five years, owing to the extraordinary array of proof and illustration which the holders of the most widely divergent views have been able to pro- duce.— 2%e Nation {New York), May, 1879. 1879. We have just passed through a period of depression, of which, though it came in perfect agreement with all past experiences, was complicated by such an exceptional conglomeration of untoward cir- cumstances, and protracted to such a weary length, that men seemed to lose faith in the revival which was almost certain to come sooner or later, and began to ask whether the commercial supremacy of this country was not permanently undermined. And now, with the new decade, the revival is really here. — The Recent Depression of Trade, being the Oxford Cdbden Prize Essay for 1879, by Walter E. Smith, London, Trilbner & Co., 1880. 1881. The industrial depression is generally thought to have com- menced in the closing months of 1874, and it increased in intensity throughout 1876 and 1877.— Pro/. Henry Pawcett, " Free Trade arid Protection," Lort/don, 1881. 1885. The present depression of trade is remarkable, not so much EXTENT AND INTENSITY OP DEPRESSION. 17 for its intensity or for its extent— in both of which respects it has been equaled or surpassed on previous occasions — but for its persistence during the long period of eleven years. The industrial depression is generally thought to have commenced in the closing months of 1874 ; and, during every succeeding year, it has continued to be felt with more or less severity, and its remarkable persistence has been com- mented on by politicians and public writers. Usually a period of de- pression is quickly followed by one of comparative prosperity. Such a reaction has been again and again predicted in this case, but, up to the present time, there are no satisfactory indications that the evil days are passing away. It is evident, therefore, that we are suffering in an altogether exceptional manner ; that the disease of the social organism is due to causes which have not been in action on former occasions, and that the remedial agencies which have been effective on former occasions have now failed us. — Bad 2'imes, an Essay on the Present Depression of Trade, hy Alfred Russel Wallace, London, Oc- tober, 1885. The following are notable extracts from the testimony presented to the Eoyal (British) Commission, appointed August, 1885, to inquire into the depression of trade and industry, and embodied in their reports submitted to Parlia- ment in 1885-86 : 1885. At the present time a general depression of trade and indus- try is stated to exist throughout Italy. While, however, depression is general, it does not act uniformly on all industries. — Testimony of Ellis Colnaghi, Her Majesty's Consul-ffeneral at Florence, October 8, 1885. The depression began full ten years ago, and still continues. — Tes- timony of the Linen Merchants' Association of Belfast, Ireland, No- vember, 1885. The origin of the depression from which we suffer, and which is at the lowest point yet reached, seems to be a reaction from the coal-famine period of 1872-'74, and which was perhaps due to the inflation consequent on the Franco-German War in 1870. The prog- • ress of depression has been irregular, but with a persistent downward tendency since 1874. The present tendency is still downward. — Testi- mony of the North of England Iron Manufacturers' Association, Sep- tember, 1885. The depression has been increasing in intensity during the last four years. It was probably never greater than at present at this 18 RECENT ECONOMIC CHANGES. season of the year.— Testimony of the British Paper-Makers' Associa- tion, September, 1885. Trade began to be depressed in 1876, and has continued so until the year 1883, with intermittent spurts of improvement. But from the end of 1883 the depression has become inereasiugly acute. — Testi- mony of North Staffordshire Chamber of Commerce, October 21, 1885. As a proof of the deplorable state this trade [woolen-yarn spinning, Huddersfield, England] has been in for the last ten or fifteen years, we most respectfully beg to inform you, we hold the list of fifty firms of spinners who have been ruined and brought into bankruptcy court during that period. Another proof of the very serious state of trade here is to be found in the depreciated value of carding and spinning machinery. Good machines, and for all practical purposes equal to new, if brought into the market will only realize some thirty or forty per cent of their cost price. Mill property is also in a similar posi- tion. — Report of the Huddersfield {England) Chamber of Commerce, October, 1885. 1886. Out of the total number of establishments, such as factories, mines, etc., existing in the country [the United States], about eight per cent were absolutely idle during the year ending July 1, 1885, and perhaps five per cent more were idle a part of such time ; or, for a just estimate, seven and a half per cent of the whole number of such estab- lishments were idle, or equivalent to idle, during the year named. . . . Making allowance for the persons engaged in other occupations, 998,- 839 constituted " the best estimate " of the possibly unemployed in the United States during the year ending July 1, 1885 (many of the unem- ployed, those who under prosperous times would be fully employed, and who during the time mentioned were seeking employment), that it has been possible for the Bureau to make. ... A million people out of employment, crippling all dependent upon them, means a loss to the consumptive power of the country of at least $1,000,000 per day, or a crippling of the trade of the country of over $300,000,000 per annum. — Report on Industrial Depression, United States Bureau of Labor, 1886. 1886. The present crisis has a much more general character than any of the crises which have preceded it ; because it is a part of an abrupt transformation in the production and circulation of the whole world. For the same reason, it is destined to last longer.— M. Leroy Beaulieu, Remie des Deux Mondes, 1886. Summarizing very briefly the answers which we received to our questions and the oral evidence given before us, there would appear to be a general agreement among those we consulted : SPECULATION AS TO CAUSES. 19 a. That the trade and industry of the country are in a condition which may be fairly described as depressed. b. That by this depression is meant a diminution, and, in some cases, an absence of profit, with a corresponding diminution of employ- ment for the laboring-classes. c. That neither the volume of trade nor the amount of capital invested therein has materially fallen off, though the latter has in many cases depreciated in value. d. That the depression above referred to dates from about the year 1875, with the exception of a short period of prosperity enjoyed by certain branches of trade in the years 1880 to 1883. — Report of British, Commission, December, 1886. There is one condition revealed— i. e., by the statistics of 1885-'86 — that is very noticeable ; which is, that prices in general touched the lowest point in a quarter of a century. There were those who sup- posed that the shrinking processes had been arrested in the preceding year, and yet the figures for 1885-'86, in nearly all departments of business, show lower prices than the previous year. — Report of the Chamber of Commerce, Cincinnati, 1886. It is of interest to note how few, relatively, of the staples, raw ma- terials or finished products, have left the year 1886 with any special gain in price as compared with one year or with two years ago, and it is even more striking to enumerate the list of those which show actu- ally no gain at all, or a loss in price. — Bradstreet's Journal, January, 1887.^ Wheat, oats, sugar, butter, tobacco, and petroleum were lower in price at the close of 1886 than at the close of 1885. Corn, oats, pork, lard, and cotton were lower at the close of 1876 than at the beginning of 1^5.— Ibid. For conditions of trade for the year 1887 and 1888, see Chapter IV. It is almost unnecessary to say that a subject of such transcendent importance, and affecting so intimately the material interests alike of nations and individuals, has nat- urally attracted a great and continually increasing attention throughout the whole civilized world, entailing at least one notable result, namely, that of a large and varied contribu- tion to existing economic literature. Thus, state commis- sions for inquiring into the phenomena under consideration have been instituted by Great Britain, the United States, 20 EECENT JECONOMIC CHANGES, France, Italy, and the Dominion of Canada, all of which have taken evidence and reported more or less voluminously ; the report of the Koyal British Commission (1885-'86'), comprising five folio volumes of an aggregate of about 1,800 pages; while the books, pamphlets, magazine articles, and reviews on the same subject, including investigations and discussions on collateral matters regarded as elements or results of the economic problem (such as the wide-spread ferment and discontent of labor, and the changes in the monetary functions of gold and silver), which have ema- nated from individuals or commissions, have been suffi- ciently numerous to constitute, if collected, a not inconsid- erable library. In all these investigations and discussions, the chief ob- jective has been the recognition or determination of causes ; and most naturally and legitimately, inasmuch as it is clear that only through such recognitions and determinations can the atmosphere of mystery which to a certain extent envel- ops the phenomena under consideration be dispelled, and the way prepared for an intelligent discussion of remedies. And on this point the opinions or conclusions expressed have been widely and most curiously different. Nearly all investigators are agreed that the wide-spread and long-con- tinued " depression of business " is referable not to one but a variety of causes, which have been more or less influential ; and among such causes the following are generally regarded as having been especially potential : " Over-production " ; " the scarcity and appreciation of gold," or " the deprecia- tion of silver, through its demonetization " ; " restrictions of the free course of commerce " through protective tariffs on the one hand, and excessive and unnatural competition occasioned by excessive foreign imports contingent on the absence of "fair" trade or protection on the other; heavy national losses, occasioned by destructive wars, especially the Franco-Prussian "War; the continuation of excessive war expenditures ; the failure of crops ; the unproductive- CURIOUS DIVERSITY OP OPINIONS. 21 ness of foreign loans or investments ; excessive speculation and reaction from great inflations ; strikes and interruption of production consequent on trades-unions and other organi- zations of labor ; the concentration of capital in few hands, and a consequent antagonizing influence to the equitable difiusiou of wealth; "excessive expenditures for alcoholic beverages, and a general improvidence of the working-class- es." A Dutch committee, in 1886, found an important cause in " the low price of German vinegar." In Germany, in 1886-'88, the continuance of trade depression has been assigned in a great measure to the " inflammable condition of international affairs," and to " looming war " ; although the great decline in the price of beet-root sugar, and the " immigration of Polish Jews," are also cited as having been influential. In the investigations undertaken by committees of Con- gress in the United States, the causes assigned by the various witnesses who testified before them were comprised under no less than one hundred and eighty heads ; and an almost equal diversity of opinion was manifested by the witnesses who appeared before the Eoyal (British) Commission.* The special causes to which a majority of the Commission itself attached any great degree of importance, stated in the order presented by them, are as follows : 1. Changes in the distribution of wealth — i. e., in Great Britain ; 2. Natural tendency to diminution in the rate of profit consequent on the progressive accumulation of capital ; 3. Over-produc- tion ; 4. Impairment of agricultural industry consequent on bad seasons, and the competition of the products of other * The Birmingham Chamber of Commerce attributed it in great part to German and Belgian competition, to foreign import duties on home-manu- factured goods exported abroad, and exorbitant railway rates ; the Hartlepool Chamber to foreign competition ; Manchester, the same ; Leeds, " to foreign tariffs " ; Liverpool, to a loss in a once large re-export trade in cotton ; 'Wol- verhampton, to changes in the hours of labor resulting from the operation oi the Factory, "Workshop, and Education Acts, and the action of the various trades-unions. . 3 22 RECENT ECONOMIC CHANGES. soils which can be cultivated under more favorable condi- tions; 5. Foreign tariffs and bounties and the restrictive commercial policies of foreign countries ; 6. The working of the British Limited Liability Act. In addition to these special causes, others of a general character were mentioned ; such as "the more limited possibilities of new sources of demand throughout the world, and the larger amount of capital seeking employment " ; " the serious fall in prices " ; " the appreciation of the standard of value " so far as con- nected with the fall of prices and foreign- competition. A respectable minority of the commission also included, in the list of principal causes, the effect of British legislation, regu- lating the hours and conditions of labor on the cost of pro- duction as compared with other countries ; and the discrimi- nations given by British railways to foreign producers in the conveyance of goods. It would seem as if one could not acquaint himself to any considerable extent with the great body of literature on this subject of the recent depression of trade, without be- coming impressed with the tendency of many writers and investigators of repute, and of most of the persons who have given testimony before the commissions of different countries, to greatly magnify the influence of purely local causes. "The real and deep-seated cause of all our dis- tress," says the " Oxford Prize Essay " for 1879, "is this : the whole world is consuming more than it has produced, and is consequently in a state of impoverishment, and can not buy our wares." Nearly all British writers dwell upon the immense losses to British farming capital, contingent upon deficient crops since 1875, and the decline in the value and use of arable land in the United Kingdom, and concurrent decline in the price of agricultural produce, due to foreign competitive supplies, as prime factors in accounting for trade depression ; while, throughout much of the testimony given before the British Commission by. British manufacturers and mer- TENDENCY TO MAGNIFY LOCAL INFLUENCES. 23 chants, the injurious influence of hostile foreign tariffs on the exports of British manufactures, and the competition of foreign manufactures in the British home market, are con- tinually referred to as having been especially productive of industrial disturbance. In France, the principal assigned causes are, excessive speculation prior to 1873, followed by bad crops ; the great falling ofE in the production of wine through the destruction of vineyards by the phylloxera ; * a serious depression of the silk-trade industry ; the disap- pearance of sardines and other fish from the coast of Brit- tany ; excessive taxation ; excessive increase in manufactured products ; and restricted markets due to the competition of foreign nations paying less wages. In Italy a succession of bad crops, a disease among the silk-worms, and a stagnation of the silk industry, are prominently cited ; in Denmark, bad harvests, a disturbed state of internal politics, an altera- tion in the metallism of the country in 1873, and general over-production of manufactured products, are popularly assigned as sufficient causes; and in Germany, in recent years, to fears of international disturbances and decline in the prices of beet-root sugar. Excessive taxation upon trade and industry, as a leading cause of trade depression, has also found strong advocacy, and the evidence brought forward is certainly impressive. The annual burden of taxation in Europe for military and * A writer in tlie " Eoonomiste Frangais " (1888) estimates the total loss to Fracoo from the ravages of the phylloxera since 1875, when this scourge of the French vineyards first made its appearance, .it the enormous sum of 10,900,000,000 francs, or about $2,000,000,000 ; a sum nearly dou ble the amount of the war indemnity of 1871. This estimate is based upon French official statistics giving the aggregate area of vineyards destroyed in the country about 2,500,000 acres, and, on the assumption that, in addition to the acreage of vines thus utterly destroyed, the extent of vineyards more or less infested with the phylloxera amounts to about 500,000 acres, malting thus together 3,000,000 acres. This calamity has followed very closely upon the losses of the war, which, in addition to the indemnity, were very great ; and has also been concurrent with a great increase m public expenditures and in national taxation every year since that period. 24 RECENT ECONOMIC CHANGES. naval purposes at the present time is estimated as at least £300,000,000 ($1,000,000,000). In France, the complaints as to the pressure of taxation on industry are universal. The imperial taxation in 1884 was reported at £130,000,000 ($600,000,00Q) on a population of 37,000,000. Local tax- ation in France is also very heavy, the octroi duties for Paris alone for the year 1884 having amounted to 139,000,000 francs ($27,800,000), in addition to vi'hich were other heavy municipal taxes, as, for example, on carriages, horses, cabs, dogs, market-stalls, funerals, clubs, canals, the keeping of shops, and other commodities and occupations. — Testimony of J. A. Crowe, British Commission. In Italy, according to the British consul-general at Flor- ence (British Commission), the income-tax in 1884 was , above- thirteen per cent, and tlie land-tax in some instances as high as twenty-five per cent upon the gross rental. These are independent of local taxation, included in which is the octroi, which is also described as " very onerous, and, not being confined to articles of food only, have raised a quan- tity of small internal barriers, which, in a minor degree, re- place the customs barriers of the several small states into which the country was formerly divided." In respect to Great Britain, the British Commission, as the result of their investigations into this matter, says : " Of the fact of the increase, especially of local taxation, there is no doubt. At the same time it will probably be found that, relatively to the population and wealth of the country, the burden of taxation is now far lighter than in any previous periods." The published opinions of certain persons of note on the subject are also worthy of attention. Mr. Alfred Eussel Wallace, in his book entitled " Bad Times," London, 1885, expresses the opinion that among the most efficient causes for the current depression of trade are " wars and excessive armaments, loans to despots or for war purposes, and the accumulation of vast wealth by individuals." THE RECOGNITION OF A CAUSE UNIVERSAL. 25 Dr. Wirth, of Vienna, finds a like explanation in the ex- cessive conversion, or rather perversion, of private wealth for public purposes. Dr. Engel, of Berlin, regards the mill- ions wasted in war by France and Germany, from 1870 to 1871, and continued and prospective expenditures for like purposes, as culminating causes of almost universal business calamities ; while, in the opinion of Prof. Thorold Rogers, the scarcity and consequent dearness of gold have been the factors of chief importance. (^ But side by side with all the theories that the " depres- sion " has been occasioned by the destruction or non-pro- duction of vast amounts of property by wars, bad harvests, strikes, loss of capital by employment' in worthless enter- prises, the conversion of an undue amount of circulating cap- ital into fixed capital, and extravagant consumption, should be placed the facts that statistics not only fail to reveal the existence of any great degree of scarcity anywhere, but, on the contrary, prove that those countries in which depression has been and is most severely felt are the very ones in which desirable commodities of every description — railroads, ships, houses, live-stock, food, clothing, fuel, and luxuries — ^have year by year been accumulating with the greatest rapidity, and offered for use or consumption at rates unprecedented for cheapness. If lack of capital, furthermore, by destruction or perversion, had been the cause, the rate of profit on the use of capital would have been higher ; but the fact is, that the rate of profit on even the most promising kinds of capital during recent years has been everywhere exceptionally lowT?' Another notable tendency among investigators is to as- sign to clearly secondary causes or results, positions of primary importance. Thus (general) over-production,* or an amount * No term has been used more loosely in the discussion of this subiect of trade depression than that of " over-production." The idea that there can be such a thing as a general production of useful or desirable eommodities in excess of what is wanted is an absurdity ; but there may be, as above stated, an amount of production in excess of demand at remunerative prices, or, what 26 RECENT ECONOMIC CHANGES. of production of commodities in excess of demand at remu- nerative prices, finds greater favor as an agency of current economic disturbance than any other. But surely all nations and people could not, with one accord and almost concur- rently, have entered upon a course of unprofitable produc- tion without being impelled by an agency so universal and so irresistible as to almost become invested with the charac- ter of a natural law ; and hence over-production obviously, in any broad inquiry, must be accepted as a result rather than a cause. And so, also, in respect to " metallism " and the enactment of laws restrictive of commerce ; for no one can seriously suppose that silver has been demonetized or tariffs enacted inadvertently, or at the whim and caprice of individuals, with a view of occasioning either domestic or international economic disturbances ; but, on the contrary, the only reasonable supposition is, that antecedent condi- tions or agencies have prompted to action in both cases, by inducing a belief that measures of the kind specified were in the nature of safeguards against threatened economic evils, or as helps to, at least, local prosperity. And as crop failures, the ravages of insects, the diseases of animals, the disappearance of fish, and maladministration of govern- ment, are local and not necessarily permanent, they must all clearly, in any investigation, be regarded as secondary and not primary agencies. In short, the general recognition, by all investigators, that the striking characteristic of the eco- nomic disturbance that has prevailed since 1873 is its univer- sality, of necessity compels a recognition of the fact that the agency which was mainly instrumental in producing it could not have been local, and must have been universal in its in- fluenae and action. And the question of interest which next presents itself is. Can any such agency, thus operative and thus potential, be recognized ? Let us inquire. is substantially the same thing, an excess of capacity for production ; or the term may be properly used to indicate a check on the distribution of products consequent on the existence of such conditions. II. The place in history of the years from 1860 to 1885 inclusive— New conditions of production and distribution — The prime factors of economic disturb- ance — Illustrative examples — The Suez Canal — Influences of the telegraph on trade — Economy in the construction and management of vessels — Dis- appearance of the sailing-vessel — Eevolution in the carrying- trade on land — The annual work service of the railroad — The Bessemer steel rail — Future supply of food commodities — Cheapening of iron — Displacement of labor by machinery— Natural gas — Application of machinery to the production and transportation of gi'ain — Adam Smith and the manufacture of plus — The epoch of efficient machinery production — Influence of labor disturbances on inventions — Prospective disturbing agencies — Displace- ment of the steam-engine. When the historian of the future writes the history of the nineteenth century he will doubtless assign to the period embraced by the life of the generation terminating in 1885, a place of importance, considered in its relations to the in- terests of humanity, second to but very few, and perhaps to none, of the many similar epochs of time in any of the cent- uries that have preceded it ; inasmuch as all economists who have specially studied this matter are substantially agreed that, within the period named, man in general has attained to such a greater control over the forces of Nature, and has so compassed their use, that he has been able to do far more work in a given time, produce far more product, measured by quantity in ratio to a given amount of labor, and reduce the eifort necessary to insure a comfortable sub- sistence in a far greater measure than it was possible for him to accomplish twenty or thirty years anterior to the time of the present writing (1889). In the absence of sufficiently complete data, it is not easy, and perhaps not 28 EBCJKNT ECONOMIC CHANGES. possible, to estimate accurately, and specifically state the average saving in time and labor in the world's work of pro- duction and distribution that has been thus achieved. In a few departments of industrial effort the saving in both of these factors has certainly amounted to seventy or eighty per cent ; in not a few to more than fifty per cent.* Mr. Edward Atkinson, who has made this matter a special study, considers one third as the minimum average that can be accepted for the period above specified, f Other authorities are inclined to assign a considerably higher average. The deductions of Mr. William Fowler, Fellow of University College, London, are to the effect that the saving of labor since 1850 in the production of any given article amounts to forty per cent ; J and the British Koyal Commission * According to the United States Bureau of Labor (report for 1886), the 'aiu in the power of production in some of the leading industries of the [Jnited States " during the past fifteen or twenty years," as measured by the displaoe- nent of the muscular labor formerly employed to effect a given result (i. e., imount of product) has been as follows : In the manufacture of agricultural mplements, from fifty to seventy per cent ; in the manufacture of shoos, sighty per cent ; in the manufacture of carriages, sixty -five per cent ; in the nanufaoture of machines and machinery, forty per cent ; in the silk-manu- :'aoture, fifty per cent, and so on. t In a print-cloth factory in Now England, in which the conditions of pro- luotion were analyzed by Mr. Atkinson, the product per hand was found by lim to have advanced fi-om 26,531 yards, representing 3,382 hours' work in 1871, to 32,391 yards, representing 2,695 houra' work, in 1884 — an increase of ;wenty-two- per cent in product, and a decrease of twenty per cent in hours of abor. Convei-tcd into cloth of tbeir own product, the wages of the operatives n this same mill would have yielded them 6,205 yards in 1871, as compared vith 9,737 yards in 1884— an increase of 56-^ per cent. During the same leriod of years the prices of beef, pork, flour, oats, butter, lard, cheese, and vool in the United States declined more than twenty-five per cent. A like investigation by the same authority of an iron-furnace in Pennsvl- 'ania showed that, comparing the results of the five years from 1860 to 1864 vith the five years from 1875 to 1879, the product per band advanced from 776 ons to 1,219 tons ; that the gi-oss value of the product remained about the lame ; that the number of hands was reduced from seventy-six to seventy- me ; and that consumers gained a benefit of reduction in price from $27.95 ler ton to $19.08. t " Wages have greatly increased, but the cost of doing a given amount of THE PLACE IN HISTOKY OP THE YEARS 1860-'85. 29 (minority report, 1886) characterizes the amount of labor required to accomplish a given amount of production and transport at the present time as incomparably less than was requisite forty years ago, and as " being constantly reduced." But be this as it may, out of such results as are defi- nitely known and accepted have come tremendous industrial and social disturbances, the extent and effect of which — and more especially of the disturbances which have culmi- nated, as it were, in later years — it is not easy to appreciate without the presentation and consideration of certain typical and specific examples. To a selection of such examples, out of a large number that are available, attention is accordingly next invited. Let us go back, in the first instance, to the year 1869, when an event occurred which was probably productive of more immediate and serious economic changes — industrial, commercial, and financial — than any other event of this century, a period of extensive war excepted. That was the opening of the Suez Canal. Before that time, and since the discovery by Vasco da Gama, in 1498, of the route to India by the Cape of Good Hope, all the trade of the Western hemispheres with the Indies and the East toiled slowly and uncertainly around the Cape, at an expenditure in time of from six to eight months for the round voyage. The con- tingencies attendant upon such lengthened voyages and service, as the possible interruption of commerce by war, or failure of crops in remote countries, which could not easily be anticipated, required that vast stores of Indian and Chi- nese products should be always kept on hand at the one spot in Europe where the consumers of such commodities could speedily supply themselves with any article they re- quired; and that spot, by reason of geographical position work has greatly decreased, so that five men can now do the work which would have demanded the Jabor of eight men in 1850. If this be correct, the savingoflabor is forty percent in producing any given article." — Appreciation of Gold, William Fowlee, Fellow of Uniiiersity College, London, 1886. 30 RECENT ECONOMIC CHANGES. and commercial advantage, was England. Out of this con- dition of affairs came naturally a vast system of warehousing in and distribution from England, and of British banking and exchange. Then came the opening of the canal. What were the results? The old transportation had been per- formed by ships, mainly sailing-vessels, fitted to go round the Cape, and, as such ships were not adapted to the Suez Canal, an amount of tonnage, estimated by some authorities as high as two million tons, and representing an immense amount of wealth, was virtually destroyed.* The voyage, in place of occupying from six to eight months, has been so greatly reduced that steamers adapted to the canal now make the voyage from London to Calcutta, or vice versa,*m less than thirty days. The notable destruction or great im- pairment in the value of ships consequent upon the con- struction of the canal did not, furthermore, terminate with its immediate opening and use ; for improvements in marine engines, diminishing the consumption of coal, and so ena- bling vessels to be not only sailed at less cost, but to carry also more cargo, were, in consequence of demand for quick and cheap service so rapidly effected, that the numerous and expensive steamer constructions of 1870-'73, being unable to compete with the constructions of the next two years, were nearly all displaced in 1875-'76, and sold for half, or less than half, of their original cost. And within another decade these same improved steamers of 187o-'76 have, in turn, been discarded and sold at small prices, as unfit for the service of lines having an established trade, and replaced with vessels fitted with the triple-expansion engines, and saving nearly fifty per cent in the consumption of fuel. And now " quadruple-expansion " engines are beginning to * " The canal may therefore he said to have given a death-hlow to sailin<;- vcasela, except for a few special purposes." — From a paper by Charles Mau;- niao, indorsed by the "London Economist" aa a merchant of eminence and experience, entitled to speak with authority, read'before the Indian Section of tlie London Society of Arts, February, 1876. ECONOMIC INFLUENCE OP THE SUEZ CANAL. 31 be introduced, and their tendency to supplant tlie " triple expansion " is " unmistakable." In all commercial history, probably no more striking illustration can be found of the economic principle, that nothing marks more clearly the rate of material progress than the rapidity with which that which is old and has been considered wealth is destroyed by the results of new inven- tions and discoveries.* Again, with telegraphic communication between India and China, and the markets of the Western world, permit- ting the dealers and consumers of the latter to adjust to a nicety their supplies of commodities to varying demands, and with the reduction of the time of the voyage to thirty days or less, there was no longer any necessity of laying up great stores of Eastern commodities in Europe ; and with the termination of this necessity, the India warehouse and distribution system of England, with all the labor and all the capital and banking incident to it, substantially passed away. Europe, and to some extent the United States, ceased to go to England for its supplies. If Austria wants any- thing of Indian product, it stops en route, by the Suez Canal, at Trieste ; if Italy, at Venice or Genoa ; if France, at Marseilles ; if Spain, at Cadiz. How great has been the disturbance thus occasioned in British trade is shown by the following figures : In 1871 the total exports of India were £57,556,000, of which £30,737,000 went to the United Kingdom ; but in 1885, on a total Indian export of £85,- 087,000, the United Kingdom received only £31,882,000. During the same time the relative loss on British exports to India was less than a million and a half sterling. As a rule, also, stocks of Indian produce are now kept, * "In the last analysis it will appear that there is no such thing as fixed capital ; there is nothinjt useful that is very old except the precious metals, and all life consists in the conversion of forces. The only capital which is of permanent value is immaterial — ^the experience of generations ajid the devel- ment of science." — Edward Atkinson. 32 RECENT ECONOMIC CHANGES. not only in the countries, but at the very localities of their prbduction, and are there drawn upon as they are wanted for immediate consumption, with a greatly reduced employ- ment of the former numerous and expensive intermediate agencies.* Thus, a Calcutta merchant or commission agent at any of the world's great centers of commerce contracts through a clerk and the telegraph with a manufacturer in any country — it may be half round the globe removed — to sell him jute, cotton, hides, spices, cutch, linseed, or other like Indian produce, f An inevitable steamer is sure to be in an Eastern port, ready to sail upon short notice ; the merchandise wanted is bought by telegraph, hurried on * In illustration of ttis curious point, attention is asl^ed to the following extract from a review of the trade of British India, for the year 1886, from the " Times," of India, published at Bombay : " What the mercantile commu- nity " — 1. e., of Bombay — " has suffered and is suffering from, is the very nar- row margin which now exists between the producer and consumer. Twenty years ago the large importing houses held stocks, but nowadays nearly every- thing is sold to arrive, or bought in execution of native orders, and the bazaar dealers, instead of European importers, have become the holders of stocks. The cable and canal have to answer for the transformation ; while the ease with which funds can be secured at home by individuals absolutely destitute of all knowledge of the trade, and minus the capital to work it, has resulted in the diminution of profits both to importers and to bazaar dealers." t Familiar as are the public generally with the operations of the telegraph and the changes in trade and commerce consequent upon its submarine exten- sion, the following incident of personal experience may present certain feat- ures with which they are not acquainted: In the winter of 1884 the writer journeyed from New York to Washington with an eminent Boston merchant engaged in the Calcutta trade. Calling upon the merchant the same evening, after arrival in Washington, he said : " Here is something, Mr. , that may interest you. Just before leaving State Street, in Boston,, yesterday forenoon, I telegraphed to my agent in Calcutta, ' If you can buy hides and gunny-bags at — price, and find a vessel ready to charter, buy and ship.' When I aiTived here (Washington), this afternoon (4 p. m. ), I found awaiting me this telegram from my partner in Boston, covering another from Calcutta, received in answer to mj dispatch of the previous day, which read as follows : ' Bides and gunny- bags purchased, vessel chartered, and loading begun.'' " Here, then, as an every-day occurrence, was the record of a transaction on the other side of the globe, the correspondence in relation to which traveled a distance equivalent to the entire circumference of the globe, all completed in a space of little more than twenty-four hours ! CHANGES IN EAST INDIAN COMMEKCE. 33 board the ship, and the agent draws for the price agreed upon, through some bank with the shipping documents. In four weeks, in the case of England, and a lesser time for countries intermediate, the shipment arrives ; the manu- facturer pays the bill, either with his own money or his banker's ; and, before another week is out, the cotton and the jute are going through the factory ; the linseed has been converted into oil, and the hides in the tannery are being transformed into leather. Importations of East Indian produce are also no longer confined in England and other countries to a special class of merchants ; and so generally has this former large and special department of trade been broken up and dispersed, that extensive retail grocers in the larger cities of Europe and the United States are now reported as drawing their supplies direct from native dealers in both China and India. Another curious and recent result of the Suez Canal construction, operating in a quarter and upon an industry that could not well have been anticipated, has been its effect on an important department of Italian agriculture — namely, the culture of rice. This cereal has for many years been a staple crop of Italy, and a leading article of Italian export — the total export for the year 1881 having amounted to 83,598 tons, or 167,196,000 pounds. Since the year 1878, however, rice grown in Burmah, and other parts of the far East, has been imported into Italy and other countries of Southern Europe in such enormous and continually increasing quan- tities, and at such rates, as to. excite great , apprehensions among the growers of Italian rice, and largely diminish its exportation — the imports of Eastern rice into Italy alone having increased from 11,957 tons in 1878 to 58,095 tons in 1887. For France, Italy, and other Mediterranean ports east, the importation of rice from Southern Asia (mainly from Burmah) was 152,147 tons in 1887, as compared with about 30,000 tons in 1878. That the same causes are also exerting a like influence 34 EBCENT ECONOMIC CHANGES. ■ upon the marketing of the cereal crops of the United States is shown by the circumstance that the freight rates on the transport of grain from Bombay to England, by way of the Suez Canal, declined from 32-5 cents per bushel in 1880, to 16-2 cents in 1885; and, to the extent of this decline, the ability of the Indian ryot to compete with the American grain-grower, in the markets of Europe, was increased. How great was the disturbance occasioned in the general prices of the commodities that make up Eastern commerce by the opening of the Suez Canal, and how quickly prices re- sponded to the introduction of improvements in distribution, is illustrated by the following experience : The value of the total trade of India with foreign countries, exclusive of its coasting-trade, was estimated, at the time of the opening of the canal in 1869, at £105,500,000 ($537,500,000). In 1874, however, the value was estimated at only £95,500,000, or at a reduction of ten per cent ; and the inference might natu- rally have been that such a large reduction as ten millions sterling (150,000,000) in five years, with a concurrent in- crease in the world's population, could only indicate a reduc- tion of quantities. But that such was not the case was shown by the fact that 350,000 tons more shipping (mainly steam, and therefore equivalent to at least 500,000 more tons of sail) was employed in transporting commodities be- tween India and foreign countries in 1874 than in 1869 ; or, that while the value of the trade, through a reduction of prices had notably declined during this period, the quanti- ties entering into trade had so greatly increased during the same time, that 350,000 tons more shipping were required to convey it. In short, the construction of the Suez Canal completely revolutionized one of the greatest departments of the world's commerce and business ; absolutely destroying an immense amount of what had previously been wealth, and displacing or changing the employment of millions of capital and thousands of men; or, as the London "Economist" has ECOKOMY IN MARINE CARRIAGES. 35 expressfed it, " so altered and so twisted many of the existing modes and channels of business as to create mischief and confusion " to an extent sufficient to constitute one great general cause for a universal commercial and industrial de- pression and disturbance. The deductions from the most recent tonnage statistics of Great Britain come properly next in order for considera- tion. During the ten years from 1870 to 1880, inclusive, the British mercantile marine increased its movement, in the matter of foreign entries and clearances alone, to the extent of 22,000,000 tons ; or, to put it more simply, the British mercantile marine exclusively engaged in foreign trade did so much more work within the period named ; and yet the number of men who were employed in effecting this great movement had decreased in 1880, as compared with 1870, to the extent of about three thousand (2,990 ex- actly). What did it? The introduction of steam hoisting- machines and grain-elevators upon the wharves and docks, and the employment of steam-power upon the vessels for steering, raising the sails and anchors, pumping, and dis- charging the cargo ; or, in other words, the ability, through the increased use of steam and improved machinery, to carry larger cargoes in a shorter time, with no increase — or, rather, an actual decrease — of the ^number of men employed in sail- ing or managing the vessels. Statistical investigations of a later date furnish even more striking illustrations to the same effect from this in- dustrial specialty. Thus, for 1870, the number of hands (exclusive of masters) employed to every one thousand tons capacity, entered or cleared of the British steam mercantile marine, is reported to have been forty-seven, but in 1885 it was only 27'7, or seventy per cent more manual labor was required in 1870 than in 1885 to do the same work. In sailing-vessels the change, owing to a lesser degree of im- provement in the details of navigation, has been naturally smaller, but nevertheless considerable ; twenty-seven hands gg REUJSJST JiUUJN UiVliU unAiNU-Jia. being required in 1885 as against thirty-five in 1870 for the same tonnage entered or cleared.* Another fact of inter- est is, that the recent increase in the proportion of large vessels constructed has so greatly increased the efficiency of shipping, and so cheapened the cost of sea-carriage, to the advantage of both producers and consumers, that much business that was before impossible has become quite pos- sible. Of the total British tonnage constructed in 1870, only six per cent was of vessels in excess of two thousand tons burden ; but in 1884 fully seventeen per cent was of vessels of that size, or larger. Meanwhile, the cost of new iron (oi steel) ships has been greatly reduced ; from 190 per ton in .1872-'74 to 165 in 1877, $57 in 1880, while in 1887 first-class freighting screw- steamers, constructed of steel, fitted with triple compound engines, with largely increased carrying capacity (in comparison with former iron construction) and consequent earning power, and capable of being worked at less expense, could have been furnished for $33.95 per ton.f * The official statistics do not show in the British mercantile marine whether the economy of labor which was effected prior to 1886 has continued to be progressive ; inasmuch as the totals for 1886-'88 include Lascars and Asi- atics under Asiatic articles of agreement ; allowing for this, however, the pro- portion of men employed to every one thousand tons of shipping was consid- erably smaller in the years 1886-'87 than in 1884-'85. * + The following is a copy of a circular issued in October, 1887, by the rep- resentatives in New York of a well-known iron-ship-building firm at Newcas- tlc-on-Tyne, England : " Inviting your attention to the inclosed particulars of two steel screw freight steamers building to our order, by the well-known builders, Messrs. , of Newcastle-on-Tync, we beg to give you some additional details : " The contract price is £34,250 each, which is just about £6 17s. (six pounds seventeen shillings sterling) a ton dead-weight capacity, and including all expenses up to time of delivery, will not exceed £7 a ton dead weight, or at present rate of exchange, $33.95 American money. " Thus it will bo seen that as regards the cost of these vessels, while of large carrying capacity and consequent earning power, and fitted as they will be with engines of the newest type and with all modem appliances which have been tried and found conducive to quick and economical working (while avoiding all innovations of an experimental character), the present price of ECONOMY IN CONSTRUCTION OF VESSELS. 37 Prior to about the year 1875 ocean-steamships had not been formidable as freight-carriers. The marine engine was too heavy, occupied too much space, consumed too much coal. For transportation of passengers, and of freight hav- ing large value in small space, they were satisfactory ; but for performing a general carrying-trade of the heavy and bulky articles of commerce they were not satisfactory. A steamer of the old kind, capable of carrying three thou- sand tons, might sail on a voyage so long that she would be compelled to carry twenty-two hundred tons of coal, leaving room for only eight hundred tons of freight ; whereas, at the present time, a steamer with the compound engines and all other modern improvements, can make the same voyage and practically -reverse the figures — that is, carry twenty-two hundred tons of freight with a consumption of only eight hundred tons of coal. The result of the construction and use of compound engines in economizing coal has been illus- not over £7 per ton, dead- weight capacity, as against £12 to £13 a few years ago, renders the difference in values relatively even greater than appears at first sight." A brief examination of what is embraced in the construction of these ves- sels is not u little interesting and instructive, especially to those who recall what was deemed but a comparatively few years ago the very best conditions for ocean steam navigation : Triple-expansion engines — three cylinders— of the latest and most approved type. Horse-power, 1,700. Propeller shifting blades and spare set ; each part of engines interchangeable. Two double-ended steel boilers, in the corrugated furnaces, to work at one hundred and fifty pounds pressure. Four steam winches of most approved pattern and large power. Steam steering-gear forward, and powerful hand-gear aft. Patent Btockless anchors, working direct into hawser nipes, effecting great saving in time, labor, and gear. Water-ballast in double bottom. Lighthouses on forecastle. Decks of steel throughout ; height, seven feet, nine inches, being the suitable height for passengei-s, horses, and cattle. Ventilation of holds specially provided through automatic exhaustion by means of the funnel. Hatches of large dimensions capable of taking in locomotives or other large pieces of machinery. Six steel bulkheads, with longitudinal bulkheads throughout holds and between decks. Coal consumption, twenty-two tons per day. Coal-bunkers sufficient for forty days' steaming ; outfit in sails, steel hawsers, oil and water tanks, loading and discharging gear, cutlery, plate, china, and glass, and optician's stores— all of the best makers and full supply. 4 38 RECENT ECONOMIC CHANGES. trated by Sir Lyon Playfair, by the statement that " a small cake of coal, which would pass through a ring the size of a shilling, when burned in the compound engine of a modern steamboat would drive a ton of food and its proportion of the ship two miles on its way from a foreign port." * Another calculator, says the London " Engineer," has computed that half a sheet of note-paper will develop sufficient power, when burned in connection with the triple-expansion en- gine, to carry a ton a mile in an Atlantic steamer. How, under such circumstances, the charge for sea-freights on articles of comparatively high value has been reduced, is shown by the fact that the ocean transport of fresh meats from New York to Liverpool does not exceed 1 cent {^d.) per pound ; and including commissions, insurance, and all other items of charge, does not exceed 2 cents (Id.) per pound. Boxed meats have also been carried from Chicago to London as a regular business for 50 cents per 100 pounds. In 1860 6d. (12 cents) per bushel was about the lowest rate charged for any length of time for the transportation of * An interesting example of the comparative economy of the old and more modem style of oscillating marine engines was lately furnished by an instance quoted by Mr. J. W. T. Harvey, before the Engineerijig Section of the Bristol (England) Naturalists' Society. The Juno was originally worked with a je; condenser; after a time this was replaced by a surface condenser, and finally the engines were compounded. Thus we have the same vessel working under three different conditions, and any alteration of coal consumption must be due to the ohansres in her machinery. The engines originally worked at thirty pounds per square inch, and indicated 1,605 horse-power ; they drove the vessel at 14"1 knots, using ninety-two tons of coal per voyage. Subsequently new boilers and a surface condenser were fitted to the ship, the pressure being thirty pounds ; the same horse-power and speed were then maintained with a consumption of eighty-two and abalf tons of coal per voyage — a saving of nine and a half tons, or nine per cent. As competition in the carrying-trade became keener, this coal consumption could not be afforded, and it was determined to compound the engines as inexpensively as possible. This was done, and the engines now gave 1,270 horse-power, or 335 horse-power less than before, and drove the ship at 13-4 knots, or O'T knot slower, on a consumption of forty- nine tons of coal per voyage. The coal consumption per horse-power, there- fore, varird under the three conditions as 100, 91, 67. The consumption per voyage varied as 100, 91, 53. DISAPPEARANCE OP THE SAILING-VESSEL. 39 bulk grain from New York to Liverpool, and for a part of that year the rate ran up as high as IS-^d. (37 cents) per bushel. But for the year 1886 the average rate for the same service was 2id. (5 cents) per bushel ; while in April, 1888, the rate on grain from New York to Liverpool by steam declined to as low a figure as ^d. per bushel of 60 pounds ; fc?. to Antwerp, and ^d. to Glasgow. It seems almost need- less to add that these rates were much below the actual cost of carriage. In like manner, the cost of the ocean trans- portation of tea from China and Japan, or sugar from Cuba, or coffee from Brazil, has been greatly reduced by the same causes. The above are examples on a large scale of the disturb- ing influence of the recent application of steam to maritime industries. The following is an example drawn from com- paratively one of the smallest of the world's industries, pros- ecuted in one of the most out-of-the-way places : The seal- fishery is a most important industrial occupation and source of subsistence to the poor and scant population of New- foundland. Originally it was prosecuted in small sailing- vessels, and upward of a hundred of such craft, employing a large number of men, annually left the port of St. John's for the seal-hunt. Now, few or no sailing-vessels engage in the business ; steamers have been substituted, and the same number of seals are taken with half the number of men that were formerly needed. The consequence is, a diminished opportunity for a population of few resources, and to obtain " a berth for the ice," as it is termed, is considered as a favor. Is it, therefore, to be wondered at, that the sailing-vessel is fast disappearing from the ocean ; * that good authorities estimated in 1886 that the tonnage then afloat was about twenty-five per cent in excess of all that was needed to do * The statistics of the world's shipping show that in 1885 there wore 25,766 sailing-vessels, of 11,216,618 tons ; in 1886 there were 25,155, of 10,411,- 807 tons ; and in 1887 there were 23,310, of 9,820,492. The decrease in two years was therefore 1,396,123, or 12-4 per cent. 4-0 RECENT ECONOMIC CHANGES. the then carrying-trade of the world ; and that ship-owners everywhere were unanimously of the opinion that the de- pression of industry was universal ? [During the year 1888, from causes that must be regarded as ex- ceptional (and which will be hereafter noticed), an increased demand for shipping acoommodation suddenly sprang up, and which, not Deing readily supplied, was foUowed by an almost continued advance in freight rates, until in many directions— i. e., in the Russian grain and Eastern trade— the rise was equal to one hundred per cent advance upon the rates current in 1887 and the early months of 1888. This condition of afEairs in turn gave a great impulse to ship-building, especially in Great Britain, where the construction for 1888 amounted to 903,687 tons, as against 637,000 in 1887 ; an extent of annual in- crease that, except in two instances, has never been exceeded. The additional tonnage thus supplied proving in excess of the world's de- mand, the advance in freights in 1888 was in a great measure lost in the first six months of 1889.] Great, however, as has been the revolution in respect to economy and efficiency in the carrying-trade upon the ocean, the revolution in the carrying-trade upon land during the same period has been even greater and more remarkable. Taking the American railroads in general as representative of the railroad system of the world, the average charge for moving one ton of freight per mile has been reduced from about 3-5 cents in 1869 to 1-06 in 1887 ; or, taking the re- sults on one of the standard roads of the United States (the New York Central), from 1-95 in 1869 to 0-68 in 1885.* To grasp fully the meaning and significance of these figures, their method of presentation may be varied by saying that two thousand jjounds of coal, iron, wheat, cotton, or other commodities, can now be carried on the best managed rail- ways for a distance of one mile, for a sum so small, that outside of China it would be difficult to find a coin of equiv- * On certain of the raih'oads of the United States an even lower average rate of freight has been reported. Thus, for the year 1886 the Michigan Central Saih'oad reported 0'56 cent as their average rate per ton per mile for that year, and the Lake Shore and Michigan Southern Eailroad -65 cent for like service. REVOLUTION IN THE CARRYING-TRADE ON LAND. 41 alent value to give to a boy as a reward for carrying an ounce package across a street, even if a man "or boy could be found in Europe or the United States willing to give or accept so small a compensation for such a service. The following ingenious method of illustrating the same results has been also suggested : The number of miles of railroad in operation in various parts of the world in 1885 was probably about 300,000.* Eeckoning their capacity for transportation at a rate not greater than the results actually achieved in that same year in the United States, it would appear that the aggregate railroad system of the world could easily have performed work in 1885 equivalent to transport- ing 120,000,000,000 tons one mile. " But if it is next con- sidered that it is a fair day's work for an ordinary horse to haul a ton 6-7 miles, year in and year out, it further appears that the railways have added to the power of the human race, for the satisfaction of its desires by the cheapening of products, a force somewhat greater than that of a horse working twelve days yearly for every inhabitant of the globe." In the year 1887 the freight-transportation by the rail- roads of the United States (according to Poor's " Manual ") was equivalent to 60,061,069,996 tons carried one mile ; while the population for that year was somewhat in excess of 60,000,000. The railroad freight service of the United States for 1887 was therefore equivalent to carrying a thou- sand tons one mile for every person, or every ton a thousand miles. The average cost of this service was about $10 per annum for every person. But if it had been entirely per- formed by horse-power, even under the most favorable of old-time conditions, its cost would have been about $300 to each inhabitant, which in turn would represent an expendi- * The world's railway mileage for January, 1889, was probaly in excess of 350,000 miles. At the same date the telegraph system of the world comprised at least 600,000 miles of length of line. 42 RECENT ECONOMIC CHANGES. ture greater than the entire value of the then annual prod- uct of the country; or, in other words, all that the peo- ple of the United States earned in 1887 would not pay the cost of. transportation alone of the amount of such serv- ice rendered in that year, had it been performed by horse- power exclusively.* Less than half a century ago, the railroad was practically unknown, f It is, therefore, within that short period that this enormous power has been placed at the disposal of every inhabitant of the globe for the cheapening of trans- portation to him of the products of other people and coun- tries, and for enabling him to market or exchange to better advantage the results of his own labor or services. As the extension of the railway system has, however, not been equal in all parts of the world — less than thirty thousand miles existing, at the close of 1887, in Asia, Africa, and Australia combined — its accruing benefits have not, of course, been equal. And while all the inhabitants of the globe have un- doubtedly been profited in a degree, by far the greater part of the enormous additions that have been made to the world's working force through the railroad since 1840, have accrued to the benefit of the people of the United States, and of Europe— exclusive of Eussia, Turkey, and the former Turkish provinces of Southeastern Europe — a number not much exceeding two hundred millions, or not a quarter part of the entire population of the globe. The result of this economic change has therefore been to broaden and deepen * One further interesting corollary of this exhibit is, that the average re- turn, in the form of interest and dividends, on the enormous amount of capital which has heen actually expended in order that the present railway service in the United States may be performed, can not be estimated as in excess of four per cent per annum as a maximum. + As late as 1840 there were in operation only about 2,860 miles of railway iu America, and 2,130 in Europe, or a total of 4,990 miles. For practical pur- poses, it may therefore be said that the world's railway system did not then exist; while its organization and correspondence for doing full and efficient work mu.st be referred to a much later period. THE BESSEMER STEEL BAIL. 43 rather than diminish the line of separation between the civilized and the semi-civilized and barbarous nations. Now, while a multiplicity of inventions and of experi- ences have contributed to the attainment of such results under this railroad system of transportation, the discovery of a method of making steel cheap was the one thing which was absolutely essential to make them finally possible ; inas- much as the cost of frequently replacing rails of iron would have entailed such a burden of expenditure as to have ren- dered the present cheapness of railway transportation utterly unattainable. Note, therefore, how rapidly improvements in processes have followed the discovery of Bessemer, until, on the score of relative first cost alone, it has become eco- nomical to substitute steel for iron in railroad construction. In 1873 Bessemer steel in England, where its price has not been enhanced by protective duties, commanded $80 per ton ; in 1886 it was profitably manufactured and sold in the same country for less than $20 per ton ! * Within the same time the annual producing capacity of a Bessemer converter has been increased fourfold, with no increase but rather a diminution of the involved labor ; and, by the Gilchrist- Thomas process, four men can now make a given product of steel in the same time and with less cost of material than it took ten men ten years ago to accomplish. A ton of steel rails can now also be made with five thousand pounds of coal, as compared with ten thousand pounds in 1868. " The importance of the Bessemer invention of steel can be best understood by looking at the world's production of that metal in 1887. * The average price of iron rails in Great Britain for tliB year 1883 was £5 per ton ; steel rails in the same market sold in 1886 for £i 5s. per ton ; and in 1887 sales of steel rails were made in Belgium for £3 16s. ($18.75) per ton, deliverable at the works. The average price of steel rails in Pennsylvania (U. S.) at the workg , for 1886, with atariff on imports of $17 per ton, was $34X per ton. Since the beginning of 1883 the manufacture of iron rails in the United States has been almost entirely discontinued, and during the years from 1883 to 1888 there were virtually no market quotations for them. The last recorded average price for iron rails was $453^ per ton in 1882. 44 - RECENT ECONOMIC CHANGES. The production di Bessemer steel in the eight chief iron and steel producing countries of the world amounted in that year to 7,369,767 tons, as compared with 6,034,115 tons in 1886, showing an increase of 1,360,094 tons, or twenty per cent. The saving effected by railway companies by the use of Bessemer metal and the additional security gained thereby is shown by the ia,ot that a locomotive on the Great Northern Railway has accomplished, with a moderate train-load of passenger-coaches, a statute mile ini^fifty ^(^conds, or at the rate of seventy-two miles per hour, and makes a considerable continuous run at a speed of one mile per minute — a Bate of railway traveling almost beyond the dreams or anticipations of the renowned George Stephen- son.'' The use of steel in place of iron in ship-construction may be said to date from 1878, and the rapidity ^ith which the former has replaced the latter metal is very remarkable. Thus, in 1878 " the per- centage of steel used in the construction of steamships in Great Britain was only 1-09, but in 1887 the percentage of iron used in proportion to steel was only 0'93 ; or, in other words, in 1878 there was ninety times as much iron as steel used for steamers, but in 1887 there was more than eight times the quantity of steel used as compared with iron for the same purpose, and, as regards sailing-ships, the quantity of steel used in 1887 amounted to practically one halt that of iron." — Address of the President {Mr. Adamson) of the British Iron and Steel Asso- ciation, May, 1SS8. The power capable of being exerted by the steam-engines of the world in existence and working in the year 1887 has been estimated by the Bureau of Statistics at Berlin as equivalent to that of 300,000,000 horses, representing ap- proximately 1,000,000,000 men ; or at least three times the working population of the earth, whose total number of in- habitants is probably about 1,460,000,000. The application and use of steam alone up to date (1889) has accordingly more than trebled man's working power, and by enabling him to economize his physical strength has given him greater leisure, comfort, and abundance, and also greater opportunity for that mental training which is essential to a higher development. And yet it is certain that four fifths of the steam-engines now working in the world have been constructed during the last quarter of a century, or since 1865. PREVENTION OF FAMINES. 45 One of the most momentous and what may be called humanitarian results of the recent great extension and cheapeniiigi.^y occasion for the people of any country/ indulging iri^''€iuife;\excessive hopes or fears as to the results of any narticvftar .^rvest ; inasmuch as the fail- ure of wras in a^^ne e^ufiwy is no longer, as it was, no later thariMwenty ye5()fs''4^o,»4dEntical with high prices of grain; the {i^feas of cd^ls heiag at present regulated, not within any partiltri!.o. the war of competition in which such industrial enterprises are usually engaged is mainly carried on by a greater and greater extension of the market supply of their products. An illustration of this is afiorded in the recent history of the production of copper. When in 1885 the United States produced and put on to the market seventy-four thousand tons, as against forty thousand tons in 1882, the world's prices of copper greatly declined. A large number of the smaller producers were compelled to suspend operations, or were entirely crushed ; but the great Spanish and other im- portant mines endeavored " to ofEset the diminution of profit on the unit of quantity " by increasing their i^roduction ; and thus the price of copper continued to decline until it reached a lower figure than ever before known in history. Under such circumstances industrial over-production — manifesting itself in excessive competition to effect sales, and a reduction of prices below the cost of production — may be- come chronic ; and there appears to be no other means of avoiding such results than that the great producers should come to some understanding among themselves as to the prices they will ask ; which in turn naturally implies agree- ments as to the extent to which they will produce. Up to this point of procedure no exception on the part of society can well be taken. But such an agreement, once perfected and carried out, admits of an almost entire control of prices and the establishment of monopolies, in the management of which the rights of the public may be wholly ignored. So- ciety has practically abandoned — and from the very necessity of the case has got to abandon, unless it proposes to war against progress and civilization — the prohibition of indus- trial concentrations and combinations. The world demands abundance of commodities, and demands them cheaply ; and experience shows that it can have them only by the employ- ment of great capital upon the most extensive scale.* The * Adam Smith, in his " Wealth ef Nations," publislied in 17T6, in dis- THE " TRUST " PROBLEM. 75 problem, therefore, which society under this condition of affairs has presented to it for solution is a difficult one, and twofold in its nature. To the producer the question of importance is, How can competition be restricted to an ex- tent sufficient to prevent its injurious excesses? To the consumer. How can combination be restricted so as to secure its advantages and at the same time curb its abuses ? Another cause of over-production is undoubtedly due to an agency which has never before in the history of the world been operative to the extent that it is at present. With the great increase of wealth that has followed the increased control over the forces of nature and their utilization for production and distribution, there has come a desire to con- Invert this wealth into the form of negotiable securities paying dividends or interest with regularity, and on the recipiency of which the owner can live without personal exertion or risk of the principal. Hence a stimulus for the undertaking of new enterprises which can create and market such secu- rities ; and these enterprises, whether in the nature of new railroad, manufacturing, or mining corporations, once de- veloped, must go on producing and selling their products or services with or without a profit in order to meet their obli- gations and command a share of previously existing trade. Production elsewhere as a consequence, is, interfered with, displaced, and in not a few cases, by reason of better condi- tions, permanently undersold. And the general result is appropriately recognized by the term " over-production." Furthermore, in anticipation of such consequences, the tendency and the interest of every successful manufacturing cussing the effect of legislation and corporate regulations in limiting compe- tition, clearly recognizes the tendency of combinations to advance prices, and the difficulty of limiting or preventing their influence by statute enactments. "People of the same trade," he says, "seldom meet together, even for merri- ment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." He, however, admitted that it was "impossible to prevent such meetings hy any law whish cither could be executed or would be executed with liberty and justice." 76 EECENT ECONOMIC CHANGES. combination is to put the prices of its jDroducts down to a figure where it will not pay for speculators to form new com- petitive stock companies to be bought ofE or crushed by it. For, if it did keep up high profit-assuring prices, one of two things would eventually happen : either new factories would be started ; or the inventive spirit of the age would devise cheaper methods of production, or some substitute for the product they furnished, and so ruin the first combination beyond the possibility of redemption. And hence we have here another permanent agency, antagonistic to the mainte- nance of high and remunerative prices. But although such is substantially a correct general exposition of the recent course of industrial events, and although all the agencies concerned in reducing the time and labor necessary to effect a given result in the world's work have undoubtedly acted" to a certain extent and in all cases in unison, the diversity of method, under which the supply in excess of remunerative demand, or the so-called over-production, has been specially effected, is not a little curious. Thus, in the case of crude iron and steel, cotton fabrics and textiles generally, coal, most articles of metal fabrication, ships, and the like, the increase and cheapened supply have been brought about mainly through improve- ments in the machinery and economy of production ; while in the case of wlieat, rice, and other cereals, wool, cotton- fibers, meats, and petroleum, like results have been mainly occasioned by improvements in the machinery and economy of distribution. On the other hand, in the case of copper, tin, nickel, silver, quicksilver, quinine, and some important chemicals, over-production, in the sense as above defined, has been almost entirely due to the discovery or develop- ment of new and abundant natural sources of supply. It is also not to be overlooked that other factors, which can not properly be included within the sphere of the influence of recent discoveries and inventions, have also powerfully con- tributed to bring about the so-called johenomenon of over- CHANGES IX CONSUMPTION OF COMMODITIES. 77 production. Thus the changes in the consumption of some commodities is entirely dependent upon the increase in the tastes and intelligence of the masses. In the case of wheat, there is some evidence to the efEect that the consumption of those who eat wheat bread habitually does not indefinitely expand with increasing means, but, on the contrary, that it decreases with the ability to procure a greater variety of food. It is also undeniable that the culture of the manual laborers of the world has not advanced concurrently, in re- cent years, with the increased and cheapened production of such articles. Many things, consequently, have been, as it were, showered upon these classes which they do not know how to use, and do not feel that they need, and for which, therefore, they can create no market. A man who has long been contented with one shirt a week is not likely to wish to use seven immediately, even if he can buy seven for the price that he formerly paid for one, and his wife takes pleasure in doing his washing. Experience shows that the extremely high wages which were paid in Great Britain and in Belgium in the coal and iron business from 1868 to 1873 did nothing to permanently raise the standard of living among the laborers directly con- cerned. They spent their increased earnings in expensive food, and even in wines of high cost and quality ; and did not make the slightest attempt to improve their style of living in respect to dress, furniture, or dwellings. That a continuance of such wages would eventually give the " coal " and " iron " miner the wants and habits of merchants and professional men, is possible ; but it would require consider- able time — probably more than one generation — to effect it. " The comforts accessible to the workingman, and which he makes use of and considers necessaries, have certainly been greatly multiplied during the last hundred years ; but they have become necessaries very slowly, and anybody who un- dertook to furnish many of them even fifty years ago would probably have been ruined in the experiment." /j-g EBCBNT ECONOMIC CHANGES. One of the inevitable results of a supply of product or service in excess of remunerative demand (i. e., over-pro- duction) is a decline of price ; and as the power of produc- tion and distribution has been increased in an unexampled degree since 1873 (as has been already shown), the prices of nearly all the great staple commodities of commerce and consumption have declined within the same period (as will be hereafter shown) in manner altogether without precedent in all former commercial history. That this experience has been altogether natural, and what might have been expected under the circumstances, will appear from the following considerations : If production exceeds, by even a very small percentage, what is required to meet every current demand for con- sumption, the price which the surplus will command in the open market will govern and control the price of the whole ; and if it can not be sold at all, or with difficulty, an intense competition on the part of the owners of accumulated stocks to sell will be engendered, with a great reduction or annihi- lation of all profit. Mr. John Bright, of England, inone of his recent speeches, relates the following incident of per- sonal experience : " I know," he said, " a company manu- facturing chemicals of some kind extensively, and one of the principal persons in it told me that in one of those high years, 1873, 1873, and 1874, the profits of that concern were £80,000, and he added that when the stock-taking and its results were communicated to the leading owner in the busi- ness, he made this very wise observation : ' I am very sorry to hear it, for you may depend upon it in the years that are to come we shall have to pay the whole of it back ' ; and in speaking to me of it he said, ' It is quite true, because for several years we have been able to make no dividend at all.' Well, why was that ? The men who were making so large incomes at that time reinvested their money in increasing their business. Many of the concerns in this trade doubled their establishments, new companies were formed, and so OVERSTOCKED MARKETS. 79 the produce of their manufacture was extended to such a degree that the prices went down and the profits vanished." The recent history of the nail-trade in the United States furnishes also a chapter of analogous experience. From 1881 to 1884 the American nail manufacture was exceed- ingly profitable ; and during those years, as a natural conse- quence, most of the existing mills increased their capacity, and some more than doubled it. New mills also were built East and West, until the nail-producing power of the coun- try nearly doubled, while the consuming capacity increased only about twenty per cent. The further result was that prices were forced down by an overstocked market, until nails were sold at from ten to fifteen per cent below cost, and in some instances mills that " could stand alone " were accused of intentionally forcing down prices in oi-der to bankrupt weaker competitors. In the end prices were in a measure restored by a combination and agreement among manufacturers to restrict production. Another illustration to the same effect is to be found in the present remarkable condition of the milling (flour) in- terest of the United States, which was thus described in an address before the "National Millers' Association" by its vice-president, at their annual meeting at Buffalo, in June, 1888: " A new common enemy," he said, " has sprung up, which threatens our property witli virtual confiscation. . . . Large output, quick sales, keen competition, and small proiits are characteristics of all modern trade. We have the advantage in our business of always being in fashion ; the world requires so much bread every day, a quantity which can be ascertained with almost mathematical accuracy. . . . But our ambition has overreached our discretion and judgment. "We have all participated in the general steeple-chase for pre-eminence ; the thousand-barrel mill of our competitor had to be put in the shade by a two-thousand-barrel mill of our own construction ; the commercial tri- umph of former seasons had to be surpassed by still more dazzling figures. As our glory increased onr profits became smaller, until now the question is not how to surpass the record, but how to maintain our go EECENT ECONOMIC CHANGES. position and how to secure what we have in our possession. ... In the general scramble we have gradually lost sight of the inexorable laws of supply and demand. We have been guilty of drifting away from sound trade regulations until our business has not only ceased to be profitable bat carries with it undue commercial hazard." As prices fall and profits shrink, producers working on insufficient capital, or by imperfect methods, are soon obliged, in order to meet impending obligations, to force sales through a further reduction of prices ; and then stronger competi- tors, in order to retain their markets and customers, are compelled to follow their example ; and this in turn is • fol- lowed by new concessions alternately by both parties, until gradually the industrial system becomes depressed and de- moralized, and the weaker succumb (fail), with a greater or less destruction of capital and waste of product. Affairs now having reached their maximum of depression, recovery slowly commences. Consumption is never arrested, even if production is, for the world must continue to consume in order that life and civilization may exist. The continued increase of population also increases the aggregate of con- sumption ; and, finally, the industrial and commercial world again suddenly realizes that the condition of affairs has been reversed, and that now the supply has become unequal to the demand. Then such producers as have " stocks on hand," or the machinery of production ready for immediate and effective service, realize large profits ; and the realization of this fact immediately tempts others to rush into production, in many cases with insufficient capital (raised often through stock companies), and without that practical knowledge of the detail of their undertaking which is necessary to insure success, and the old experience of inflation and reaction is again and again repeated. Hence the explanation of the now much - talked - of " periods " or " cycles " of panic and speculation, of trade activity and stagnation. Their periodical occurrence has long been recognized, and the economic principles involved PERIODICITY OP PAXICS. 81 in them have long been understood.* But a century ago or more, when such economic changes occurred in any coun- try, the resulting disturbances were mainly confined to such country — as was notably the case in the "Mississippi Scheme" of John Law in France, and the English " South-Sea Bub- ble," in the last century, or the severe industrial and finan- cial crises which occurred in Great Britain in the earlier years of the present century — and people of other countries, hearing of them after considerable intervals, and then vaguely through mercantile correspondence, were little trou- bled or interested. During recent years, however, they have * The theory, more or less widely entertained, that there is some law gov- erning and occasioning the regular recurrence of periods of commercial and financial disaster or prosperity, has thus far not been sustained by investiga- tion. Scarcity and high prices tend to cause increased production and induce speculation ; but the supply of different commodities is governed by different laws, and it would be difficult to name any two classes of products that are controlled by the same natural conditions. In the case of some commodities it requires but a brief time to secure an increased production ; in the case of others, montlis, and even years, are requisite. As respects agricultural pro- ductions, no locality accessible by modern means of transportation is depend- ent on its own supplies, or makes its own prices ; and the influences which afflict one part of the world with disaster bring bountiful supplies to others. Hence it follows that any periodical cause, common in its effects upon all products, is impossible. Neither can it be conceived how periodical changes in prices can result from any possible law of nature, unless it can -be shown that sueh laws exist and operate with uniformity on the human mind and on the development of the human intellect, which has not yet been done. One of the most noted, and at the same time one of the most empirical, attempts to found predictions as to future conditions of business and prices upon past commercial experiences, is embodied in a little book entitled " Benner's Prophe- cies," the work of an Ohio farmer named Beuner, which, first published about 1875, has since passed through several editions and been widely circu- lated and quoted. Its prophecies relate mainly to the prices of pig-iron and hogs, and to the next period of commercial and financial disaster. In the case of pig-iron, it is claimed that the prophecies have been in a measure fulfilled; but in the case of hogs, not one has been. A careful analysis of the book has furthermore proved that it is not of sufficient account or oon-eetness to war- rant any serious attempt at the refutation of its conclusions, which seem to be based on little more than the assumption that what has been in respect to prices will again happen ; and that the cause of periodicity of panics is to be found " in our solar system." 82 RECENT ECONOMIC CHANGES. become less local and more universal, because the railroad, the steamship, and the telegraph have broken down the bar- riers between nations, and, by spreading in a brief time the same -hopes and fears over the whole civilized world, have made it impossible any longer to confine the speculative spirit to any one country. So that now the announcement of any signal success in any department of production or mercantile venture at once fires the imagination of the en- terprising and reckless in every country, and quickly incites ' to operations which without such a stimulus would probably ■ not be undertaken. At the same time, the command through the telegraph of instantaneous information throughout the world of the conditions and prospects of all markets for all commodities has also undoubtedly operated to impart steadi- ness to prices, increase the safety of mercantile and manu- facturing operations, and reduce the elements of speculation and of panics to the lowest minimum. One universally recognized and, to some persons, per- plexing peculiarity of the recent long-continued depression in trade is the circumstance, that while profits have been so largely reduced that, as the common expression goes, " it has not paid to do business," the volume of trade throughout the world has not contracted, but, measured by quantities rather than by values, has in many departments notably in- creased. The following are some of the more notable exam- ples of the evidence that can be offered in confirmation of this statement : The years 1879, 1880, and 1881 for the United States were years of abundant crops and great foreign demand, and are generally acknowledged to have been prosperous ; while the years 1883, 1883, and 1884 are regarded as having been years of extreme depression and reaction. And yet the movement of railroad freights throughout the country great- ly increased during this latter as compared with the former period; the tonnage carried by six railroads centering at Chicago in 1884 having been nearly thirty-three per cent VOLUME OF TRADE AND PRICES. 83 greater than in 1881 ; and the tonnage carried one mile by all the railroads of the United States in 1884 — a year of ex- treme depression — having been 5,000,000,000 in excess of that carried in 1883 ; and this, notwithstanding there was a great falling off, in 1884, in the carriage of material for new railroad construction. Again, the foreign commerce of the United States, measured in dollars, largely declined during the same later, period; but, measured in quantities, there was but little decrease, and in the case of not a few leading ■articles a notable increase. Thus, for the year 1885 the total value of the foreign commerce of the country in mer- chandise was $93,351,921 less than in the preceding year (1884), but of this decrease 190,170,364, according to the estimates of the United States Bureau of Statistics, repre- sented a decline in price. An export of 70,000,000 bushels of wheat from the United States in 1884 returned $75,000,- 000 ; while an export of 84,500,000 in 1885 gave less than $73,000,000. An export of 389,000,000 pounds of bacon and hams in 1884 brought in nearly $40,000,000 ; but shipments of 400,000,000 pounds in 1885 returned but $37,000,000, or an increase of foreign sales of about 11,000,000 pounds was accompanied by a decline of about $3,000,000 in price. In 1877, 216,287,891 gallons of exported petroleum were valued at $44,209,360 ; but in 1886, 303,911,698 gallons (or 87,623,- 000 gallons more) were valued at only $24,685,767, a decline in value of $19,683,000. But the most remarkable example of changes of this character is to be found in the case of sugar. Thus, in 1883 the United States imported 3,023,- 000,000 pounds of sugar, for which it paid $91,959,000. In 1885, 2,548,000,000 pounds were imported, at a cost of $68,- 531,000; or a larger quantity by 525,000,000 pounds was imported in 1885, as compared with 1883, for $23,428,000 less money. The statistics of the recent foreign trade of Great Britain also exhibit corresponding results. For example, the de- clared aggregate value of British exports and imports for 84 EECENT ECONOMIC CHANGES. 1883 were £667,000,000 aa compared with £682,000,000 in 1873, an apparent decline of no little magnitude. But if the aggregate of the foreign trade of Great Britain for 1883 had been valued at the prices of 1873, the total, in place of £667,000,000, would have been £861,000,000, or an increase for the decade of about thirty per cent. Again, the declared value of British imports retained for home consumption for the year 1887 was £302,838,000 ; but had they been valued at the same prices as were paid in 1886, their cost would have been £308,145,000. The saving in the purchases of foreign products by Great Britain in 1887, owing to the fall of prices, as compared with 1886, was, therefore, £5,317,000. On the other hand, if the value of the British exports for 1887, namely, £221,398,000, had been sold on the same terms as in 1886, their value would have amounted to £222,559,000, showing a comparative loss for the year of £1,161,000. Comparing quantities, however, the volume of the British foreign trade for 1887, in com- parison with that of 1886, was about five per cent larger in respect to imports and 4'8 per cent in respect to exports. An explanation of this economic phenomenon of recent years, namely, a continuing increase in the volume of trade, with a continuing low rate or decline in profits, may be found in the following circumstances : One constant result of a decline in prices is an increase (but not necessarily propor- tional or even universal) in consumption. Evidence on this point,- derived from recent experiences, will be referred to hereafter; but the following example illustrates how this economic principle manifests itself even under unexpected conditions : In 1878 sulphate of quinine ruled as high for a time on the London market as $3.96 per ounce, in bulk. In 1887 the quotation was as low as thirty cents per ounce. Quinine is aised mainly as a medicine, and is so indispensable in certain ailments that it may be presumed that its cost in 1878 was no great restriction on its consumption, and that no great increase in its use from a reduction in price was to INCREASE IN MATERIAL CONSUMPTION. 85 be expected, any more than an increase in the use of coffins for a similar reason — both commodities being used to the extent that they are needed, even if a denial of the use of other things is necessary in order to permit of their procure- ment. And yet, that increase in the cheapness of quinine has been followed by a notable increase in its consumption, is shown by the fact that the importation of cinchona-bark — from which quinine is manufactured — into Europe and the United States during recent years has notably increased, 4,787,000 pounds having been imported into the United States in 1887, as compared with an import of 3,580,000 in 1883, the imports of quinine itself at the same time increas- ing from 1,055,764 ounces, valued at $1,809,000, in 1883, to 2,180,157 ounces, valued at $1,069,918, in 1887. The fol- lowing statement also illustrates even more forcibly the ordinary effect of a reduction of price on the consumption of the more staple commodities : Thus, a reduction (saving) of 6cl. (twelve cents) per week in the cost of the bread of every family in Great Britain (a saving which, on the basis of the decline in the wholesale prices of wheat within the last decade, would seem to have been practicable) has been estimated as equivalent to giving a quarter of a million pounds sterling, or $1,250,000 per week, to the whole people of the kingdom to spend for other things. The evidence is also conclusive that the ability of the population of the world to consume is greater than ever be- fore, and is rapidly increasing. Indeed, such a conclusion is a corollary from the acknowledged fact of increased pro- duction — the end and object of all production being con- sumption. Take, for example, the United States, with its present population of sixty-five millions — a population that undoubtedly produces and consumes more per head than any other equal number of people on the face of the globe, and is producing and consuming very much more than it did ten or even five years ago. The business of exchanging the products or services, and of satisfying thereby the wants r 86 EECENT ECONOMIC CHANGES. of such a people is, therefore, necessarily immense, and with the annual increase of population, and with consuming power increasing in an even larger ratio, the volume of such business must continue to increase. And what is true of the United States is true, in a greater or less degree, of all the other nations of the globe. There is, therefore, nothing inconsistent or mysterious in ■ the maintenance or increase in the volume of the world's business contemporaneously with a depression of trade — in the sense of a reduction of profits — occasioned by an intense competition to dispose of commodities, which have been produced under comparative- ly new conditions in excess of a satisfactory remunerative demand in the world's markets. And, apart from this, it is now well understood that the aggregate movement and ex- change of goods is little if any less in times of the so-called " depression of trade " than in times of admitted prosperity. Again, if depression of business does not signify less busi- ness, it can only signify less profits. In fact, a reduction of profits is the necessary consequence of falling prices, since all the calculations, engagements, and contracts of the em- ploying classes, including wages, are based upon the expec- tation that the prices of their products will remain substan- tially unchanged, or no worse than before. If there is a progressive fall of prices without a corresponding fall of wages, profits must fall progressively, and interest also, since the rate of interest is governed by the profits which can be made from the use of capital. N"ow this is exactly what has happened in recent years. Profits and prices of commodi- ties have fallen, but wages have not fallen, except in a few special departments. Consequently the purchasing power of wages has risen, and this has given to the wage-earning class a greater command over the necessaries and comforts of life, and the purchases of all this great class have supple- mented any forced economizing of the employing and well- to-do classes. " The latter are the ones who make the most noise in the newspapers, and whose frequent bankruptcios FAILURE OP CERTAIN ECONOMIC INQUIRIES. 87 most fill the public eye. But they are not those whose con- sumptiou of commodities most swells the tonnage of the railways and steamships. They occupy the first cabin, and their names are the only ones printed in the passenger lists, but the steerage carries more consumers of wheat, sugar, and pork than all the cabins together." The popular sentiment which has instinctively attributed the remarkable disturbance ol trade within recent years to the more remarkable changes which have taken place con- currently in the methods of production and distribution has, therefore, not been mistaken. The almost instinctive efforts of producers everywhere to arrest what they consider " bad trade " by partially or wholly interrupting production has not been inexpedient ; and the use of the word " over-pro- duction," stripped of its looseness of expression, and in the sense as defined by the British Commission (and as hereto- fore shown), is not inappropriate in discussing the economic phenomena under consideration. It would also seem as if much of the bewilderment that is still attendant upon this subject, and the secret of the fruitlessness of most of the elaborate inquiries that have been instituted concerning it, have been due mainly to an inability to distinguish clearly between a causation that is primary, all-sufficient, and which has acted in the nature of unity, and causes which are in the nature of sequences or derivatives. An illustration of this is to be .found in the tendency of English writers and in- vestigators to consider the immense losses which British farming capital has experienced since 18?3, as alone sufli- cient to account for all the disturbances to which trade and industry in the United Kingdom have been subjected dur- ing the same period. That such losses have been extensive and disastrous without precedent, is not to be questioned. Sir James Oaird estimates this loss in the purchasing power of the classes engaged in or connected with British agricult- ure, for the single year 1885, as having amounted to £42,- 800,000 ($314,000,000) ; and as the losses for several preced- 33 RECENT EUUJNUMIU UJrlAiNUJKS. ing years are believed to have been equal or even greater than this, an estimate of a thousand million dollars decline in the value of British farming capital since 1880, from depreciation of land-values, rentals, and prices for stock and cereals, is probably an under rather than an over-esti- mate. Wheat-growing, which was formerly profitable in Great Britain, is reported as not having been remunerative to the British farmer since 1874; a fact that finds eloquent ex- pression in the acknowledged reduction in British wheat acreage from about 4,000,000 acres (3,981,000) in 1869 to 3,317,334 acres in 1887, or more than 40 per cent. And as the English farmers have decreased their production of cereals by reason of the small amount of profit accruing from their labor, the English agricultural laborer has from ne- cessity been compelled to seek other employments, or emi- grate to other countries. [According to a recent report of Major Cragie to the British Farmer's Club, the wages of farm laborers in England after 1860 ad- vanced on th^ average thirty per cent ; but since 1881 the average de- cline in wages " over the farmed surface of England " has been at least fourteen per cent ; and in some sections of the country the whole of the rise in the mean wage of ordinary agricultural labors since 1860 has entirely disappeared. The decline in the rents of farm lands in England in recent years has been estimated by the London " Econo- mist," on the authority of Mr. Clare Read, as not less than thirty per cent, or 10s. per acre on the wheat area— about $8,700,000 yearly. These results may, and probably do, furnish an explanation of the fact that the increase of wheat acreage in Great Britain in 1888 as com- pared with 1887 was 380,708 acres, or 11-8 per cent.] That the agricultural populations of the interior states of Eiirope, which have hitherto been protected in a degree by the barrier of distance against the tremendous cheapening of transportation, are also at last feeling the full effects of its influence, is shown by the statement (United States Oon- sular Reports, 1886) that farming land in Germany, remote DECLINE OF BRITISH AGRICULTURE. 89 from large cities, where the demand for milk and other perishable products is small, can now be purchased for fifty per cent of the prices which prevailed at the close of the Franco-German War in 1870-'71. And yet such startling results, in the place of beings prime factors in occasioning a depression of British trade and industry, are really four re- moves from the origihal causes, which may be enumerated in, order as follows: First, the occupation and utilization of new and immense areas of cheap and fertile wheat-growing land in the United States, Canada (Manitoba), Australia, and the Argentine Kepublic. Second, the invention and ap- plication of machinery for facilitating and cheapening the production and harvesting of crops, and which on the wheat- fields of Dakota (as before pointed out) have made the labor of every agriculturist equivalent to the annual production of 5,500 bushels of wheat. Third, the extension of the system of transportation on land through the railroad, and on sea through the steamship, in default of which the appropria- tion of new land and the invention and application of new agricultural machinery would have availed but little. Fourth, the discovery of Bessemer, and the invention of the compound (steamship) engine, without which trans- portation could not have cheapened to the degree necessary to effect the present extent of distribution. Now, from the conjoined result of all these different agencies has come a reduction in the world's price of wheat to an extent suf- ficient to make its growing unprofitable on lands taken at high rents, and under unfavorable climatic conditions ; and legislation is powerless to make it otherwise. In short, the whole secret of the recent immense losses of the British and to a lesser extent also of the Continental agriculturist, and the depression of British trade and industry, so far as it has been contingent on such losses, stands re- vealed in the simple statement that American wheat sold for export at the principal shipping ports of the United States in 1885 for 56 cents less per bushel than in 90 RECEIN'^T ECONOMIC CHANGES. 1874, 33 cents less than in 1882, and 20 cents less than in 1884* "I have calculated that the produce of five acres of vifheat can be brought from Chicago to Liverpool at less than the cost of manuring one acre ?or wheat in England." — Tes- timony of W. J. Harris, a leading farmer in Devonshire, England, before the British Commission, 1886. * The average value of the wheat exported from thef United States in 1885, aooording to the tables of the United States Bureau of Statistics, was 86 cents per bushel at the shipping ports. This was a decline of 20 cents from 1884, 26i cents from 1883, 82 cents from 1882, 56 cents from 1874, and 61 cents from isn. . The export value of corn was 54 cents in 1885, showing a decline of 7 cents from 1884, 14 cents from 1883, 12 cents from 1882, 30 cents from 1875, and 15 cents from 1872. The export value of oats was 37 cents in 1885, showing a decline of 2 cents from 1884, 13 cents from 1883, 7 cents from 1882, 20 cents from 1875, and 14 cents from 1871. The export price of lard was 7 cents in 1885, showing a decline of 2 cents from 1884, 4 centa from 1883, 6 cents from 1875, 3 cents from 1872, and 9 cents from 1870. How closely the decline in recent years in the export prices of American cereals has been tbllowed by corresponding reductions in the prices of cereals in the markets of Great Britain is exhibited by the following table (published in the British " Farmer's Almanac " for 1886), showing the average prices per quarter of wheat, barley, and oats, in Great Britain for two periods of ten years, commencing with 1865, wth a separate estimate for 1885 : CEREALS. Price per quar- ter. Average for the ten years, 1866-1875. Price per quar- ter. Average for the ten years, 1876-1886. Average price per quarter for 1885. Wheat s. d. 54 7J 39 2 25 lOi s. d. 43 9t 36 5 23 8i 82 10 Barley 30 1 Oats 20 7 Similar tables given by the same authority show the gross value per annum of the product of wheat, barley, oats, beef, mutton, and wool, in Gi'dt Britain, to have been £35,000,000 ($175,000,000) less in 1885 than wei-e the mean re- turns for the ten years 1966-1875. According also to data given in the returns of the British Eegistrar-General, the avei-aare prices of beef by the carcass in the London market were £58 5s. 'id. per ton during the ten years from 1866- 1875, £57 5s. M. for 1876-1885, and £49 17». 6d. for the year 1885. NEW RELATIONS OF LABOR AND CAPITAL. 91 Indian corn can be successfully and has been extensively- raised in Italy. But Indian corn grown in the valley of the Mississippi, a thousand miles from the seaboard, has been transported in recent years to Italy and sold in her markets at a lower cost than the corn of Lombardy and Venetia, where the wages of the agriculturist are not one third of the wages paid in the United States for corresponding labor. And one not surprising sequel of this is that 77,000 Italian laborers emigrated to the United States in 1885. Now, what has happened in the case of wheat and corn has happened also, in a greater or less degree, as respects meats and almost all other food products ; increased sup- plies having occasioned reduction of prices, and reduction of prices, in turn, ruinous losses to invested capital and revo- lutionary disturbances in old methods of doing business. The Bessemer rail, the modern steamship, and the Suez Canal have brought the wheat-fields of Dakota and India, and the grazing-lands of Texas, Colorado, Australia, and the Argentine Eepublic, nearer to the factory operatives in Manchester, England, than the farms of Illinois were before the war to the spindles and looms of 'New England. CHAIfTGES IN THE EeLATIONS OF LaBOR ANT) CAPI- TAL. — Consider next how potent for economic disturbance have been the changes in recent years in the relations of labor and capital, and how clearly and unmistakably these changes are consequents or derivatives from a more potent and antecedent agency. Machinery is now recognized as essential to cheap pro- duction. Nobody can produce effectively and economically without it, and what was formerly known as domestic manu- facture is now almost obsolete. But machinery is one of the most expensive of all products, and its extensive pur- chase and use require an amount of capital far beyond the capacity of the ordinary individual to furnish. There are very few men in the world possessed of an amount of wealth sufficient to individually construct and own an extensive 92 EBCENT ECONOMIC CHANGES. line of railway or telegraph, a first-class steamship, or a great factory. It is also to be remembered that for carrying on production by the most modern and efEective methods large capital is needed, not only for machinery, but also for the purchasing and carrying of extensive stocks of crude mate- rial and finished products. Sugar can now be, and generally is, refined at a profit of an eighth of a cent a pound, and sometimes as low as a six- teenth ; or, in other words, from eight to sixteen pounds of raw sugar must now be treated in refining in order to make a cent ; from eight hundred to sixteen hundred pounds to make a dollar ; from eighty thousand to one hundred and sixty thousand pounds to make a hundred dollars, and so on. The mere capital requisite for providing and carrying the raw material necessary for the successful prosecution of this business, apart from all other conditions, places it, there- fore, of necessity beyond the reach of any ordinary capital- ist or producer. It has been before stated that, in the manu- facture of jewelry by machinery, one boy can make up nine thousand sleeve-buttons per day ; four girls also, working by modern methods, can put together in the same time eight thousand collar-buttons. But to run an establishment with such facilities the manufacturer must keep constantly in stock thirty thousand dollars' worth of cut ornamental stones, and a stock of cuff-buttons that represents nine thousand different designs and patterns. Hence from such conditions have grown up great corporations or stock com- panies, which are only forms of associated capital organized for efEective use and protection. They ar« regarded to some extent as evils ; but they are necessary, as there is apparently no other way in which the work of production and distribu- tion, in accordance with the requirements of the age, can be prosecuted. The rapidity, however, with which such combinations of capital are organizing for the purpose of promoting industrial and commercial undertakings on a scale heretofore wholly unprecedented, and the tendency INDIVIDUALISM IN PRODUCTION. 93 they have to crystallize into something far more complex than what has been familiar to the public as corporations, with the impressive names of syndicates, trusts, etc., also constitute one of the remarkable features of modern busi- ness methods. It must also be admitted that the whole tendency of recent economic development is in the direc- tion of limiting the area within which the influence of com- petition is effective. And when once a great association of capital has been effected, it becomes necessary to have a master-mind to man- age it — a man who is competent to use and direct other men, who is fertile in expedient and quick to note and profit by any improvements in methods of production and variations in prices. Such a man is a general of industry, and corre- sponds in position and functions to the general of an army. What, as a consequence, has happened to the employes ? Coincident with and as a result of this change in the meth- ods of production, the modern manufacturing system has been brought into a condition analogous to that of a mili- tary organization, in which the individual no longer works as independently as formerly, but as a private in the ranks, obeying orders, keeping step, as it were, to the tap of the drum, and having nothing to say as to the plan of his work, of its final completion, or of its ultimate use and distribution. In short, the people who work in the modern factory are, as a rule, taught to do one thing — to perform one and gener- ally a simple operation ; and when there is no more of that kind of work to do, they are in a measure helpless. The re- sult has been that the individualism or independence of the producer in manufacturing has been in a great degree de- stroyed, and with it has also in a great degree been destroyed the pride which the workman formerly took in his work — that fertility of resource which formerly was a special char- acteristic of American workmen, and that element of skill that comes from long and varied practice and reflection and responsibility. Not many years ago every shoemaker was or 94 RECENT ECONOMIC CHANGES. could be his own employer. The boots and shoes passed di- rectly from an individual producer to the consumer. Now this condition of things has passed away. Boots and shoes are made in large factories ; and machinery has been so util- ized, and the division of labor in connection with it has been carried to such an extent, that the process of making a shoe is said to be divided into sixty-four parts, or the shoemaker of to-day is only the sixty-fourth part of what a shoemaker once was.* It is also asserted that " the constant employ- ment at one sixty-fourth part of a shoe not only offers no encouragement to mental activity, but dulls by its monotony the brain of the employe to such an extent that the power ■ to think and reason is almost lost." f * The following is a reported enumeration of the specialties or distinct hranohes of shoemaking at which men, women, and children are kept con- stantly at work in tlje most perfect of the modern shoe-factories, no appren- tices being needed or taken in such establishments ; " Binders, blockers, boot- liners, beaters-out, boot-turners, bottomers, buffers, burnishers, channelers, 'counter-makers, crimpers, cutters, dressers, edge-setters, eyeleters, finishers, fitters, heelers, lasters, levelers, machiue-peggers, McKay stitchers, nailers, packers, parters, peggers, pressers, rosette-makers, siders, sandpaperers, skin- ners, stitchers, stringers, treers, trimmers, welters, buttonhole-makers, clamp- ers, deckers, closers, corders, embossers, gluers, inner-sole-makers, lacers, leather-assoftcrs, riveters, rollers, seam-rubbers, shank-pressers, shavers, slip- per-liners, sole-leather-cutters, sole-quilters, stampers, stiffeners, stock-fitters, strippers, taggers, tipmakers, turners, vampers, etc." •I- The position taken by Prince Krapotkin, who represents to some extent the extreme socialistic movement in Europe, is, " that the division and sub- division of functions have been pushed so far as to divide humanity into castes almost as firmly established as those of old India. First, the broad division into producers and consumers : little-consuming producers on the one hand, little-producing consumers on the other hand. Then, amid the former, a series of further subdivisions— the manual worker and the intellectual worker, sharply separated ; and agricultural laborers and workers in manufactures. Amid little-producing consumers are numberless minute subdivisions, the modern ideal of a workman being a man or a woman, a boy or a girl, without the knowledge of any handicraft, having no conception whatever of the indus- try in which he or she is employed, and only capable of making all day long and for a whole life the same infinitesimal part of something— from the age of thirteen to that of sixty pushing the coal-cart at a given spot of the mine, or making the spring of a pen-knife, or the eighteenth part of a pin. The work- ing classes have become," he says, " mere servants to some machine of a given EMPLOYMENT OF CHILD LABOR. 95 As the division of labor in manufacturing — more espe- cially in the case of textiles — is increased, the tendency is to supplement the employment of men with the labor of women and children. The whole number of employes in the cotton-mills of the United States, according to the cen- sus of 1880, was 173,544 ; of this number, 59,685 were men, and 113,859 women and children. In Massachusetts, out of 61,346 employes in the cotton-mills, 33,180 are males, 31,496 women, and 7,570 children. In the latter State certain manufacturing towns, owing to the disparity in the numbers of men and women employed, and in favor of the latter, are coming to be known by the appellation of " she-totvns." * During recent years the increase in the employment of child- labor in Germany has been so noticeable, that the factory inspectors of Saxony in their official report for 1888 have suggested that such labor be altogether forbidden by the State, and that the hours during which youths between the ages of fourteen to sixteen may be legally employed in fac- tories should be limited to six. description ; mere flesh-and-bone parts of some immense machinery, liaving no idea about how and why the machinery is peri'orming its rhythmical move- ments. Skilled artisanship is swept away as a survival of a past which is con- demned to disappear. For the artist who formerly found ffisthetic enjoyment in the work of his hands is substituted the human slave of an iron slave," etc., etc. * " The tendency of late years is tov/ard the employment of child-labor. We see men frequently thrown out of employment, owing to the spinning- mule being displaced by the ring-frame ; or children spinning yam, which men used to spin. In the weave-shops, girls and women are preferable to men, so that we may reasonably expect that, in the not very distant future, all the cotton-manufacturing districts will be classed in the category of ' she- towns.' But people will naturally say, "What will become of the men ? This is a question which it behooves manufacturers to take seriously into considera- tion, for men will not stay in any town or city where only their wives and children can be given employment. Therefore, a pause at the present time might be of untold value in the future ; for, just as sure as the world goes round, women and children will seek fresh pastures, where work can be found for the husband and father, in preference to remaining in places where he has to play the part of the ' old woman,' while they go to work to earn the means of subsistence." — Wade's Mber and Fabric. 96 RECENT ECONOMIC CHANGES. Another exceedingly interesting and deyeloping feature of the new situation is that, as machinery has destroyed the handicrafts, and associated capital has placed individual capital at a disadvantage, so machinery and associated capi- tal in turn, guided by the same common influences, now war upon machinery and other associated capital. Thus the now well-ascertained and accepted fact, based on long expe- rience, that power is most economically applied when ap- plied on the largest possible scale, is rapidly and inevitably leading to the concentration of manufacturing in the largest establishments, and the gradual extinction of those which are small. Such also has already been, and such will con- tinue to be, the outcome of railroad, telegraph, and steam- ship development and experience ; and another quarter of a century will not unlikely see all of the numerous companies that at present make up the vast railroad system of the United States consolidated, for sound economic reasons, under a comparatively few organizations or companies.* In * " There are in England eleven {rreat companies, but these were formed of two hundred and sixty-two companies, while the six great companies ol France have absorbed forty-eight companies. When the New York Central Eailway was formed in 1853, it consisted of a union of eleven railways. It takes twonty-flve pages in ' Poor's Manual of Saih'oads for 1885' merely to give a list of railways in the United States which have been merged in other lines. This shows in marked manner the tendency toward consolidation. There is no exception. It is a phenomenon common to all countries. " By means of oomhination and concentration of railway property the rail- way business of the country can be conducted most effectively. It is an im- provement in economic methods of large proportions. The experience of the world has demonstrated this so conclusively that it admits of no douht, and a very little rofleotion on the nature of the economic functions of the railw.iy will render it clear to the reader. 'When the general public and the press resist this tendency, or cry out in childish indignation because Mr. Vanderbilt hought the West Shore Eailway in the interest of the New York Central and Hudson Eiver Eailway, they are more foolish than laboring-men who resist the mtroduction of new and improved machinery. The latter have at least the excuse that changed methods of production often occasion the bitterest distress, and injure permanently some few laboring men ; and it is hai'd to appreciate a permanent advantage which must be acquired by severe present suffering. The impulse to such great economies as can he secured by com- DESTRUCTION OP SMALL INDUSTRIES. 97 this respect the existing situation in Great Britain (which corresponds to that in all other countries) has thus been represented : L." Trade after trade is monopolized, not necessarily by large capi- talists, but by great capitals. In every trade the standard of necessary size, the minimum establishment that can hold its own in competition, is constantly and rapidly raised. The little men are ground out, and the littleness that dooms men to destruction waxes year by year^ Of the (British) cotton-mills of the last century, a few here and there are standing, saved by local or other accidents, while their rivals have either grown to gigantic size or fallen into ruin. The survivors, with steam substituted for water-power, with machinery twice or thrice renewed, are worked while they pay one half or one fourth per cent on their cost. The case of other textile manufactures is the same or stronger still. Steel and iron are yet more completely the mo- nopoly of gigantic plants. The chemical trade was for a long time open to men of very moderate means. Recent inventions threaten to turn the plant that has cost millions to waste brick and old lead. Already nothing but a trade agreement, temporary in its na- ture, has prevented the closing of half the (chemical) factories of St. Helen's and Widnes, and the utter ruin of all the smaller owners. Every year the same thing happens in one or another of our minor industries." " The president of one of the largest cotton corporations in New England in a recent annual report stated that ' competition is so sharp that the profits of a mill are generally only the savings made on the general expenses caused by increased production, so that a mill with a small production finds it impossible to live. Unless the smaller cot- ton-mills have a monopoly of some fancy business, they have all gone under or must fail.' " bination is so strong as to be irresistible. It is one of those forces which over- whelm the man who puts himself afrainst them, though they may be guided and directed, will one but put one's self in the stream and move with it." — The Seform of Railway Abuses. Ei.r. " The railroads of the country are rapidly moving toward some great sys- tem of consolidation. . . . The movement is to-day going forward more rap- idly — much more rapidly — under the artificial stimulus given to it by the Inter- state Commerce Act than ever before. The next move will be in the direc- tion of railroad systems of twenty thousand miles, each under one common management." — Speech of Mr. Charles Francis Adams, President Union Jiuafic, before the Commercial Olub, Boston., December, 1888. 98 RECENT ECONOMIC CHANGES. Such changes in the direction of the concentration of production by machinery in large establishments are, more- over, in a certain and large sense, not voluntary on the part of the possessors and controllers of capital, but necessary or even compulsory. If an eighth or a sixteenth of a cent a pound is all the profit that competition and modern im- provements will permit in the business of refining sugar, such business has got to be conducted on a large scale to ad- mit of the realization of any profit. An establishment fitted up with all modern improvements, and refining the abso- lutely large but comparatively small quantity of a million pounds per annum, could realize, at a sixteenth of a cent a pound profit on its work, but 1625. Accordingly, the suc- cessful refiner of sugars of to-day, in place of being as for- merly a manufacturer exclusively, must now, as a condition of full success, be his own importer, do his own lighterage, own his own wharfs and warehouses, make his own ban-els and boxes, prepare his own bone-black, and ever be ready to discard and replace his expensive machinery with every new improvement. But to do all this successfully requires not only the command of large capital, but of business qualifica- tions of the very highest order — two conditions that but comparatively few can command. It is not, therefore, to be wondered at that, under the advent of these new conditions, one half of the sugar-refineries that were in operation in the seaboard cities of the United States in 1875 have since failed or discontinued operations. In the great beef slaughtering and packing establish- ments at Chicago, which slaughter a thousand head of cattle and upward in a day, economies are effected which are not possible when this industry is carried on, as usual, upon a very small scale. Every part of the animal — hide, horns, hoofs, bones, blood, and hair — which in the hands of the ordinary butcher are of little value or a dead loss, are turned to a profit by the Chicago packers in the manufacture of glue, bone-dust, fertilizers, etc. ; and accordingly the great pack- ECONOMY OF LARGE PRODUCTION. 99 ers can afford to and do pay more for cattle than would otherwise be possible — an advance estimated by the best authorities at two dollars a head. Nor does this increased price which Western stock-growers receive come out of the consumer of beef. It is made possible only by converting the portions of an ox that would otherwise be sheer waste into products of value. The following statements have recently been made in California, on what is claimed to be good authority (" Over- land Monthly "), of the comparative cost of growing wheat in that State on ranches, or farms of different sizes. On ranches of 1,000 acres, the average cost is reported at 92^ cents per 100 pounds ; on 2,000 acres, 85 cents ; on 6,000 acres, 75 cents ; on 15,000 acres, 60 cents ; on 30,000 acres, 50 cents ; and on 50,000 acres, 40 cents. Accepting these estimates as correct, it follows that the inducements to grow wheat in California by agriculturists with limited capital and on a small scale are anything but encouraging. The following are other illustrations pertinent to this subject : " It is a characteristic and noteworthy feature of banking in Germany," says the London " Statist," " that the bulk of the business is gradually shifting from the small bankers, who used to do a thriving business, to the great banking companies, leaving quite a number of small cus- tomers almost without any chance to prosper in legitimate operations — concentration of capital and business in the hands of a limited number of powerful customers being the rule of the day." The tendency to discontinue the building and use of small vessels for ocean transportation, and the inability of such vessels to compete with vessels of larger tonnage, is shown by the statement that while a steamer of from 200 to 300 tons requires one sailor for every 19-8 tons, a steamer of from 800 to 1,000 tons requires but one sailor for every 41-5 tons. In like manner, while a sailing-vessel of from 200 to 300 ton§ requires one sailor for every 28-9 tons, a 100 RECENT ECONOMIC CHANGES. sailing-vessel of five times the size, or from 1,000 to 1,600 tons, requires but one sailor for every 60-3 tons. And as it is also claimed that other economies in the construction of the hull or the rigging, and in repairing, are concurrent with the reduction of crews, it is not difficult to understand why it is that large vessels are enabled to earn a percentage of profit with rates of freight which, in the case of small vessels, would inevitably entail losses. It was a matter of congratulation after the conclusion of the American war in 1865, that the large plantation sys- tem of cotton-raising would be broken up, and a system of smaller crops, by small and independent farmers or yeo- manry, would take its place. Experience has not, however, verified this expectation ; but, on the contrary, has shown that it is doubtful whether any profit can accrue to a cultivator of cotton whose annual crop is less than fifty bales. " Cotton (at the South) is made an exclusive crop, be- cause it can be sold for cash — for an actual and certain price in gold. It is a mere trifle to get eight or nine cents for a pound of cotton, but for a bale of 450 pounds it is $40. The bale of cotton is therefore a reward" which the anxious farmer works for during an entire year, and for which he will spend half as much in money before the cotton is grown, besides all his labor and time. And the man who can not make eight or ten bales at least has almost no object in life, and nothing to live on." — Bradstreefs Journal. About fifteen years ago the new and so-called " roller process " for crushing and separating wheat was discovered and brought into use. Its advantages over the old method of grinding by millstones were that it separated the flour more perfectly from the hull or bran of the berry of the wheat, gave more flour to a bushel of wheat, and raised both its color and strength (nutriment). As soon as these facts were demonstrated, the universal adoption of the roller mills and. the. total abolition of the stone mill§ became only a EXPERIENCE OF THE MILLING INDUSTRY. 101 question of time, as the latter could not compete with the former. The cost of building mills to operate by the roller process is, however, much greater than that of the old stone mills. Formerly, from $25,000 to $50,000 was an ample capital with which to engage in flour-milling in the United States, where water-power only was employed ; but at the present time from 1100,000 to $150,000 is required to go into the business upon a basis with any promise of suc- cess, even with a small mill ; while the great mills of Min- neapolis, St. Louis, and Milwaukee cost from $250,000 to $500,000 each, and include " steam " as well as water-power. The consequence of requiring so much more capital to partici- pate in the flour business now than formerly is that the smaller flour-mills in the United States are being crushed, or forced into consolidation with the larger companies, the latter being able, from dealing in such immense quantities, to buy their wheat more economically, obtain lower rates of freight, and, by contracting ahead, keep constantly run- ning.* At the same time there is a tendency to drive the milling industry from points in the country to the larger cities, and central grain and flour markets where cheap freights and large supjplies of wheat are available. As might have been anticipated, therefore, the ililwaukee " Directory of American Millers," for 1886, shows a decrease in the number of flour-mills in the United States for that year, as compared with 1884, of 6,812, out of a total in the latter year of 35,079, but an increase at the same time in capacity for flour production. These new conditions of milling have been followed by a movement in England for the consolida- tion in great cities of the flour-mills and bakeries into single establishments, where the bread-making of the whole com- * What has happened in this business in the United States is true also of Great Britain. In both countries the new system of milling and the concen- tration of the business in great establishments has led to over-production, undue competition, and minimized profits ; and in both countries great milling syndicates or trusts have been formed to regulate production and prices. 8 102 RECENT ECONOMIC CHANGES. munity may be done in immense ovens, under the most sci- entific conditions, and at a material saving in cost. The improvements in recent years in the production of sugar from the beet, and the artificial encouragement of this industry in the continental states of Europe through the payment of large bounties, has in turn compelled the large producers of cane-sugars in the tropics to entirely abandon their old methods of working, and reorganize this industry on a most gigantic scale as a condition of continued exist- ence. Thus, for example, although the business of cane- sugar production was commenced more than three hundred years ago on the island of Cuba, the grinding of the cane by animal or " wind " power, and the boiling and granulat- ing by ancient, slow, and wasteful methods, was everywhere kept up until within a very recent period, as it still is by small planters in every tropical country. But at the pres- ent time, upon the great plantations of Cuba and some other countries, the cane is conveyed from the fields by a system of railroads to manufacturing centers, which are really huge factories, with all the characteristics of factory life about them, and with the former home or rural idea connected with this industry completely eliminated. In these facto- ries, where the first cost of the machinery plant often repre- sents as large a sum as $300,000 to 1250,000, with an equally large annual outlay for labor and other expenses, all grades of sugar from the " crude " to the " partially refined " are manufactured at a cost that once would not have been deemed possible. In Dakota and Manitoba the employment on single wheat estates of a hundred reapers and an aggre- gate of three hundred laborers for a season has been regarded as something unprecedented in agricultural industry; but on one sugar estate in Cuba — " El Balboa " — from fifteen hundred to two thousand hands, invariably negroes, are employed, who work under severe discipline, in watches or re- lays, during the grinding season, by day and night, the same as in the large iron-mills and furnaces of the United States CO-OPERATION AND THE LABOR PROBLEM. 103 and Europe. At the same time there are few village com- munities where a like number of people experience the same care and surveillance. The male workers occupy quarters walled and barricaded from the women, and the women from the men. There is in every village an infirmary, a lying-in hospital, a physician, an apothecary, a chapel, and priest. At night and morning mass is said in chapel, and the crowds are always large. There is of a Sunday less re- straint, though ceaseless espionage is never remitted. On these days and in parts of holidays there is rude mirth, ruder music, and much dancing. This picture is given somewhat in detail, because it illustrates how all-pervading and tremendous are the forces that are modifying society everywhere, in civilized, partially civilized, and even barbar- ous countries, conjointly with the new conditions of produc- tion and consumption. The experience of the co-operative societies of Great Britain — the inception and practical working -of which have been hopefully looked upon as likely to furnish a solution of the labor problem — as recently detailed by Mr. Thomas Hughes (" Tom Brown "), does not, moreover, seem likely to constitute any exception to the general tendency of great aggregated capital, employed in production or distribution, to remorselessly disregard any sentiment on the part of the individual workman in respect to his vocation, and to crush out or supersede all industrial enterprises of like character that may be compelled to work at relative disadvantage by reason of operating upon a smaller scale, or inability to em- ploy a larger aggregate of capital. This experience, as re- lated by Mr. Hughes at a recent congress (1887) of the co- operative societies of Great Britain, has been as follows : Co-operation in Great Britain, so long as it has confined itself to distribution — that is, to the purchase of commodi- ties at the lowest rates at wholesale and without the inter- vention of middle-men, and their subsequent sale to mem- bers of the societies at the minimum of cost and profit — 104 EECBNT ECONOMIC CHANGES. has been a very great success ; but co-operation in produc- tion, so far as it has been attempted by these same societies, appears to have succeeded only by abandoning co-operation in the original and best sense of the term. For example, some of the great and most successful co-operative distribu- tion societies of England, in order to increase their divi- dends, have recently undertaken to manufacture a portion of the goods which they require, and thus secure for them- selves the profits they have heretofore paid to the manu- facturers; and, with this view, the manufacture of boots and shoes has been commenced on a large scale by two of the largest of such societies in Glasgow and Manchester respectively — the English society employing a thousand operatives, and disposing of goods to a present aggregate value of more than a million dollars per annum. " These manufacturing enterprises have not, however, been con- ducted on co-operative lines. . . . The work-people in their factories are not co-operators. They do not share in the profits of the business. They receive simply the market rate of wages." They are on just as bad terms with their co-operative employers as they would be with individual capitalists, and they have endeavored to better their condi- tion by entering upon strikes ; or, in other words, the great Co-operative Distribution Society managers in Great Britain, finding that it was essential to their success as manufactur- ing producers, have adopted without scruple all the methods and rules that prevail in similar establishments which have been incorporated and are managed solely with a view to the profit of their individual capitalists or stockholders." But this is not the whole story. Besides these great wholesale co-operative distribution societies which have en- gaged in manufacturing, there are a large number of smaller and weaker similar societies in Great Britain which are also attempting to manufacture the same description of goods for the profit of their more limited circle of members, and these last now complain that they are absolutely unable to EQUALIZATION OP WAGES. 105 withstand the competition of the larger wholesale societies, which, purchasing labor at the lowest rate in the open market, denying any participation of profit to their work- men, and working upon the largest scale, are enabled to produce and sell cheaper. " So that all the disastrous effects of unlimited and unscrupulous competition, for which co- operation was expected to be a cure, are showing themselves among the co-operators, and another example is to be added to the record of modern economic experience, of the strong industrial and commercial organizations devouring the weak." An element of international character and importance, growing out of the improvements in production through machinery, should also not be overlooked. "Whatever of advantage one country may have formerly enjoyed over another by reason of absolute or comparative low wages, is now, so far as the cost of machine-made goods is concerned, through the destruction of handicrafts and the extended use and improvements in machinery, being rapidly reduced to a minimum. For, apart from any enhancement of cost by taxes upon imports, there is at present but very little difference in all countries of advanced civilization in the cost of machinery, of the power that moves it, or of the crude materials which it converts into manufactures. The ma- chine, therefore, which enables the labor of one man to dis- pense with the cheap labor of ten men, practically reduces any advantage which the manufacturer in France, Germany, or other countries, paying nominally low wages, has hereto- fore had over the manufacturer of England or of the United States, to the simple difference in the cost of the labor of the operative who manages the machine in different places ; and all experience shows that the invariable poncomitant of high wages, conjoined with the skillful management of ma- chinery, is a low cost of production. Attention is next asked to the econoinic — industrial, commercial, and financial— disturbances that have also re- 106 KECBNT ECONOMIC CHANGES. suited in recent years from changes, in the sense of improve- ments, in the details of the distribution of products; and as the best method of showing this, the recent course of trade in respect to the practical distribution and supply of one of the great articles of commerce, namely, tin-plate, is selected. Before the days of the swift steamship and the telegraph, the business of distributing tin-plate for consumption in the United States was largely in the hands of one of the great mercantile firms of New York, who brought to it large en- terprise and experience. At every place in the world where tin was produced and tin-plate manufactured they had their confidential correspondent or agent, and every foreign mail brought to them exclusive and prompt returns of the state of the market. Those who dealt with such a firm dealt with them under conditions which, while not discriminating un- favorably to any buyer, were certainly extraordinarily favor- able to the seller, and great fortunes were amassed. But to-day how stands that business ? There is no man, however obscure he may be, who wants to know any morning the state of the tin-plate market in any part of the world, but can find it in the mercantile journals. If he wants to know more in detail, he joins a little syndicate for news, and then he can be put in possession of every transaction of impor- tance that took place the day previous in Cornwall, Liver- pool, in the Strait of Sunda, in Australia, or South America. What has been the result ? There are no longer great ware- houses where tin in great quantities and of all sizes, waiting for customers, is stored. The business has passed into the hands of men who do not own or manage stores. They have simply desks in offices. They go round and find who is going to use tin in the next six months. They hear of a railroad-bridge' which is to be constructed; of a certain number of cars which are to be covered ; that the salmon- canneries on the Columbia Eiver or Puget's Sound are likely to require seventy thousand boxes of tin to pack the catch ECONOMIC EXPERIENCES OP TIN-PLAtE. 107 of this year, as compared with a requirement of sixty thou- sand last year — a business, by the way, which a few years ago was not in existence — and they will go to the builders, contractors, or business-managers, and say to them : " You will want at such a time so much tin. I will buy it for you at the lowest market price, not of New York, but of the world, and I will put it in your possession, in any part of the continent, on a given day, and you shall cash the bill and pay me a percentage commission " — possibly a fraction of one per cent ; thus bringing a former great and compli- cated business of importing, warehousing, selling at whole- sale and retail, and employing many middle-men, clerks, book-keepers, and large capital, to a mere commission busi- ness, which dispenses to a great extent with the employment of intermediates, and does not necessarily require the pos- session or control of any capital.* Let us next go one step farther, and see what has hap- pened at the same time to the man whose business it has been not to sell but to manufacture tin-plate into articles for domestic use, or for other consumption. Thirty or forty years ago the tinman, whose occupation was mainly one of handicraft, was recognized as one of the leading and most skillful mechanics in every village, town, and city. His * During the year 1887 oue of the oldest, most extensive, and successful firms in the Uuited States (New York) engaged in the importation and sale of teas — owning their own vessels, having their own correspondents m China, and possessed of extensive capital — retired from business, and gave to the public the following reason for so doing, namely, " a conviction that in the present condition of the tea-market it was impossible for a fii-m to do sufficient business to guarantee a commensurate return in form of profit for the volume of monetary outlay and the anxiety and care of management." It was also stated that the conditions of the tea-importing business were now such as not to allow of successful operations on a large scale, involving as formerly the carrying of large quantities of the commodity itself, which deteriorates rapidly with age, and demands for profitable handling a rise of value unknown to the present market. Jobbers, also, it was found, who once bought of houses like the firm in question, now purchase direct from the foreign growers, and thereby deprive the large importer in his own market of a very necessary ele- ment of patronage. 108 RECENT ECONOMIC CHANGES. occupation has, however, now well-nigh passed away. For example, a townsman and a farmer desires a supply of milk- cans. He never thinks of going to his corner tinman, be- cause he knows that in New York and Chicago and Phila- delphia, and other large towns and cities, there is a special establishment fitted up with special machinery, which will make his can better and fifty per cent cheaper than he can have it made by hand in his own town. And so in regard to almost all the other articles which the tinman formerly made. He simply keeps a stock of machine-made goods, as a small merchant, and his business has come down from that of a general, comprehensive mechanic to little other than a tinker and mender of pots and pans. Where great quantities of tin-plate are requ/red for a particular use, as, for example, the canning of salmon or lobsters, of biscuit, or of fruit and vegetables, the plates come direct from the manufactory to the manufacturer of cans or boxes, in such previously agreed-upon sizes ajid shapes as will obviate any waste of material, and reduce to a minimum the time and labor necessary to adapt them to their respective uses. And by this arrangement alone, in one cracker (biscuit) bakery in the United States, consuming forty thousand tin boxes per month, forty men are now enabled to produce as large a ' product of boxes in a given time as formerly required fifty men ; and, taken in connection with machinery, the labor of twenty -five men in the entire business has become equivalent to that of the fifty who until recently worked by other methods. And what has been thus aflBrmed of tin- plate might be equally affirmed of a gi-eat variety of other leading commodities ; the blacksmith, for example, no longer making, but buying his horseshoes, nails, nuts, and bolts ; the carpenter his doors, sash, blinds, and moldings'; the wheelwright his spokes, hubs, and felloes; the harness- maker his straps, girths, and collars ; the painter his paints ground and mixed, and so on; the change in methods of distribution and preparation for final consumption having CHANGES IN RETAIL DISTRIBUTION. 109 been equally radical in almost every case, though varying somewhat in respect to particulars. ^The same influences have also to a great degree revolu- tionized the nature of retail trade, which has been aptly de- scribed as, " until lately, the recourse of men whose charac- ter, skill, thrift, and ambition won credit, and enabled them to dispense with large capital." Experience has shown that, under a good organization of clerks, shopmen, porters, and distributors, it costs much less proportionally to sell a large amount of goods than a small amount, and that the buyer of large quantities can, without sacrifice of satisfactory profit, afford to offer to his retail customers such advantages in respect to prices and range of selection as alm'ost to pre- clude competition on the part of dealers operating on a Smaller scale, no matter how otherwise capable, honest, and diligent they may be. \The various retail trades, in the cities and larger towns of all civilized countries, are accord- ingly being rapidly superseded by vast and skillfully organ- ized establishments-\and in Great Britain and Europe by co-operative associanons — which can sell at little over whole- sale prices a great variety of merchandise, dry-goods, manu- factures of leather, books, stationery, furs, ready - made clothing, hats and caps, and sometimes groceries and hard- ware, and at the same time give their customers far greater conveniences than can be offered by the ordinary shop-keeper or tradesman. In London, the extension of the " tramway " or street-railroad system is even advocated on the single ground that the big stores need quicker access to their branch establishments, in order to still further promote the economy of goods distribution. /The spirit of progress conjoined with capital, and hav- ing xn view economy in distribution and the equalization'of values, is therefore controlling and concentrating the busi- ness of retailing, in the same manner as the business of wholesale distrihution and transportation, and of production by machinery, is being controlled and concentrated, and all 110 RECENT ECONOMIC CHANGES. to an extent never before known in the world's experience. And in both wholesale and retail operations the reduction of profits is so general that it must be accepted as a perma- nent feature of the business situation, and a natural result of the new conditions that have been noted. Keeping economy in distribution constantly in view as an essential for material progress, the tendency is also every- where to dispense to the greatest extent with the " middle- man," and put the locomotive and the telegraph in his place. Retail grocers, as before shown, now buy their teas directly of the Chinaman, and dispense with the services of the East Indian merchant and his warehouses. Manufact- urers deal more directly with retailers, with the result, it is claimed, of steadying supply and demand, and preventing the recurrence of business crises. The English cotton-spin- ner at Manchester buys his raw cotton by cable in the in- terior towns of the cotton-growing States of North America, and dispenses with the services of the American broker or commission-merchant. European manufacturers now send their agents with samples of merchandise to almost every locality in America, Asia, and the Pacific islands, where commerce is protected and transportation practicable, and offer supplies, even in comparatively small quantities, on better terms than dealers and consumers can obtain from the established wholesale or retail merchants of their vicin- ity. A woolen manufacturer, for example, prepares a set of patterns for an ensuing season, sends his agent around the world with them, and makes exactly as many pieces as his customers want, not weaving a single yard for chance sale. A great importing house will take orders for goods to be delivered two or three months afterward, and import exactly what is ordered and no more. Rent, insurance, handling, and profits are thus minimized. Before the days of railroad extension, country buyers used to have to come to the cen- ters of trade in spring and fall to lay in their supplies ; now they come every month, if they wish, to assort a stock which CHANGE IN GOODS DISTRIBUTION. HI is on an average much less heavy than it used to be, and can be replenished by the dealer at very short notice by tele- graph to the manufacturer, whether he resides at home or beyond an ocean. The great dry-goods houses of the large commercial cities are in turn reducing their storage and becqming mere sales-rooms, the merchandise marketed by them being forwarded directly from the point of manu- facture to that of distribution. A commission house may, therefore, carry on a large business, and yet not appear to the public to be extensively occupied. One not inconsider- able gain from such a change in goods distribution accrues from a consequent reduction in the high rates and aggre- gates of city fire insurances. From these specimen experiences it is clear that an almost total revolution has taken place, and is yet in progress, in every branch and in every relation of the world's indus- trial and commercial system. Some of these changes have been eminently destructive, and all of them have inevitably occasioned, and for a long time yet will continue to occa- sion, great disturbances in old methods, and entail losses of capital and changes of occupation on the part of individuals. And yet the world wonders, and commissions of great states inquire, without coming to definite conclusions, why trade and industry in recent years have been universally and ab- normally disturbed and depressed. There is one curious example in which improvement is being sought for at the present time, though what at first seems to be retrogression. With the great extension and perfecting of the railway system, and the consequent great reduction in the cost of merchandise carriage through its agency, it has been generally assumed that thei'e was no longer any necessity for long lines of canals, or profit in their maintenance and operation ; and, as a matter of fact, many canals of expensive construction in England and the United States have been absolutely abandoned. But at the present time there is a tendency — especially in Europe — to 112 RECENT ECONOMIC CHANGES. return to the use of inland navigation — canals and rivers — ^for the purpose of still further cheapening transporta- tion. There is no question that goods can be carried much cheaper by water than by rail. The original cost per mile • of an ordinary canal in England has been estimated at not more than one fourth the cost of building a railway in that country; and the expense of managing and main- taining a canal in good workable order is not in excess of one fifth of the charges of a corresponding railway company. The average canal charges in England are, therefore, only about one half as much as railway rates for the same descrip- tion of traffic ; and, for the transportation of imperishable goods, when the time occupied in transit is not a prime factor, cheapness of carriage, in these days when keen com- petition is reducing the margin of profit on the production of commodities to a minimum, has become more than ever a matter of the first importance. The attention of English commercial men and manufacturers is, accordingly, largely directed at the present time to the necessity of again using and improving existing inland water-ways, and of construct- ing additional canals, as a means of transporting merchandise at lower rates than those charged by railways ; and one prac- tical outcome of this interest has been the chartering and constructive commencement of an immense ship-canal be- tween Liverpool and Manchester, which, it is predicted, " will effect a sort of revolution in the Lancaster cotton- trade," and the inception of which, moreover, was signifi- cantly opposed by all the railway companies with which the canal is likely to come into competition. Propositions for the construction of other important British ship-canals, as from ShefiBeld to the Humber, and with a view of cheapening transportation from Birmingham, are also under consider- ation. It is also to be noted that a very considerable num- ber of the British canals, that have been kept up and not allowed to become useless, continue to pay good, and, in a few REVIVAL OF CANAL TRANSPORTATION. 113 cases, large dividends ; and that the price of their stocks is often largely in excess of their par value. In 1880 the French Government, acting upon the as- sumption that the canals and river transportation of France were likely to be crushed out by railway competition, ex- empted the former from all taxation. The result has been, that the total tonnage moved (per kilometre) upon the ca- nals and rivers of France increased sixty-three per cent between 1880 and 1887, while during the same period the transportation by the main lines of the French railway sys- tem fell off to the extent of nearly thirteen per cent. The French railways are, accordingly, demanding a reimposition of the tolls taken off the canal and river traffic in 1880. In the United States the resuscitation of the decayed ca- nal system of transportation has not as yet been considered as desirable, and probably because the average charges for railroad freight service is considerably below the average rates of any other country in the world ; although other nations have nominally cheaper labor and far denser popu- lations. IV. Depression of prices as a cause of economio disturbance — Manifestations of such disturbances — Tbeir universality — Average fall in prices since 186V- '77 — Methods of determining averages — Cause of the decline — Two gen- eral theories — General propositions fundamental to inquiry — ^Kecent pro- duction and price experiences of staple commodities — Sugar — Petroleum — Copper — Iron — Quicksilver — Silver — Tin — Tin-plate — Lead — Coal — Coffee and tea — Quinine — Paper and rags — Nitrate of soda — Meat — Cheese — Fish — Freights — Wheat — Cotton — Wool — Silk — Jute — Conclusions of the British Gold and Silver Commission. Depression" of prices has, to a large extent, been ac- cepted as a prime cause of the "economic disturbance" which has prevailed since 1873. Indeed, Mr. Eobert GiflEen, the well-known English economist and officer of the British Board of Trade, in an article contributed to the " Contempo- rary Review," June, 1885, does not hesitate to express the opinion that " it is clearly unnecessary to assign any other cause for the gloom of the last year or two " ; and, continu- ing, he further says : " The point to which I would draw special attention is, that . . . the most disastrous characteristic of the recent fall of prices has been the descent all round to a lower range than that of which there had been any previous experience. It is this peculiarity which— more than anything else— has aggravated the gloom of merchants and capitalists during the last few years. Fluctuations of prices they are used to. Merchants know that there is one range of prices in a time of buoy- ancy and inflation, and quite another range of prices in times of dis- credit. By the customary oscillations, the shrewder business people are enabled to make large profits, but during the last few years the shrewder, as well as the less shrewd, have been tried. Operations they ventured on when prices were falling to the customary low level have failed disastrously, because of a further fall which is altogether with- DEPRESSION OP PRICES. US out precedent. The change is more like a revolution in prices than anything which usually happens in an ordinary cycle of prosperity and depression in trade.'' Here, then, is a description of the extent of the recent fall in prices, and its influence in producing and aggravating the gloom of merchants and capitalists, by one well compe- tent to appreciate and describe what has happened. The point of novelty and most significance, however, in Mr. Gif- fen's statement is, not that a depression of prices has been productive of gloom and a depression of business — for no fact is better recognized than that nothing is more produc- tive of gloom to the industrial and mercantile community owning or carrying stocks of merchandise than losses experi- enced or anticipated through a fall in prices ; but that the recent fall in the prices of the great staple commodities of the world has been in extent and character without prece- dent in the world's history.* A further fact of the highest importance, and one that is not disputed, is, that no peculiarity of currency, banking, * " Many who discuss this question, and whose opinions generally com- mand deference, appear scarcely to realise the enormous extent of the fall, and it is only by means of very extensive statistics and of a comparison of various periods that a clear insight into the details and a broad view of the whole can be gained." — Atigustos Saueebeoz's Journal of the Statistical Society/ of London, September, 1886. " It is hardly possible to gain an adequate conception of the change in the condition of man except through the development of the system of prices. We may compare Abraham, in the first recorded monetary transaction, buying the field of Ephron for four hundred shekels of silver, ' current money of the merchants,' with his latest descendants the Eothsehilds, bringing the enter- prises of nations and of kings to the tribunal of the money market. The prices of com and mutton were matters of small concern to the men of Abra- ham's day. They made their own arrangements for food independent of their neighbors' wants. They planted their fields, tended their flocks and defended them, and according to their success in these pursuits did they and their children have much or little to eat. But now in Rothschild's time each minute want of Jew or Gentile is conceived on a money scale. It is attain- able, or impossible, according to its price. Almost eveiy action of a very large part of mankind is controlled by considerations of price." — Congested I'rices, by M. L. ScnnnEK, Jr., Chicago, 1883. 116 EBCENT ECONOMIC CHANGES. or standard of value, or form of government, or incidence and degree of taxation, or military system, or condition of land tenure, or legislation respecting trade, tariffs, and boun- ties, or differences in the relations between capital and labor in different countries, have been suflBcient to guard and save any nation from the economic disturbances or trade depres- sion which has been incident to such changes in prices. The question which here naturally suggests itself, as to what in general has been the extent of the recent fall in prices, is perhaps best answered from the basis of English figures, by M. Augustus Sauerbeck, who, as the result of an. exhaustive inquiry into the price movements of thirty-eight leading articles of raw produce since 1818-'27 (communi- cated to the Statistical Society of London and published in the journal of their " Proceedings " for September, 1886, and March, 1887), has arrived at the following conclusions : There was a persistent decline in the average prices of gen- eral commodities in England from the beginning to the middle of the present, century ; or, more exactly, to 1849. Erom thence there was an advance, which culminated in 1873. But leaving out of consideration a remarkable specu- lative period from 1870 to 1874, coincident with the Eranco- German War and the payment of the war indemnity by Erance, during which period prices rose with great rapidity from 1870 to 1873, and fell in the succeeding year (1874) below their average starting-point in 1870, the decline of prices may be regarded as having been continuous from 1864 to 1886. Compared with the aiverage prices of general commodities from 1867-'77, the period from 1878-'85 shows a depreciation of eighteen per cent. But if the average prices of 1885 alone be taken, the decline from the average for 1867-'77 is twenty-eight per cent ; or, continuing the comparison through 1886 and embracing a somewhat larger number of articles, the average depreciation, in the opinion of M. Sauerbeck, has amounted to thirty-one per cent. Fur- thermore, the average level of prices for 1886, according to AVERAGE DECLINE IN PRICES. HI the tables of M. Sauerbeck, was considerably below the aver- age for the year 1848, which in turn appears to have been the lowest previous point for the century subsequent to 1820. Many similar inquiries, embracing in some instances a much larger number of articles than were selected by M. Sauerbeck, have been instituted in recent years by other in- vestigators in England, France, Germany, and the United States ; and while there is much of agreement as respects results in a majority of cases, no figure representing the average decline during the periods under investigation would probably be universally accepted as every way satisfactory and conclusive. For example, an analysis of the exports and imports of the United Kingdom for the years 1873 and 1883 respectively, according to the returns of the British Board of Trade — ^prices and quantities being taken into con- sideration — has led the London " Economist " to the follow- ing conclusions : In respect to articles of food, which con- stitute nearly two thirds of British imports, and which being of the most staple nature and least subject to wide varia- tions of supply and demand are the most steady in price, the valuation — the quantities compared being the same — for 1873 was about fifteen per cent higher than in 1883. Of ratv materials for manufacture, which constitute the bulk of other British imports, the valuation for 1873 was higher than in 1883 to the extent of about thirty per cent. On the other hand, an analysis of the exports of the United Kingdom, consisting chiefly of what may be called commer- cial articles — manufactures, metals, etc. — which are more directly dependent upon the fluctuations in commercial con- ditions, speculation, supply and demand, etc., and which, therefore, are always far more sensitive to depreciatory con- ditions than are food products, or even raw materials, for the latter can be carried for an improvement in prices where manufactures can not, showed a valuation in 1873 higher by about forty-eight per cent than 1883. As the values compared in these analyses embrace the transactions of the 118 RECENT ECONOMIC CHANGES. leading commercial nation in every kind of commodity and with all the countries of the world, they probably reflected with approximative accuracy the condition and changes of univer- sal values in all markets for the period under consideration. A similar analysis of British imports and exports for the years 1885 and 1886 (also instituted by the " Economist")' furnished evidence, almost in the nature of a demonstra- tion, of the continued tendency of prices to decline during the' two (later) years mentioned, and also of the continued universality of such tendency. Thus, looking first at ex- ports, it appears that there was an increase during the year 1886 in the quantities of British and colonial commodities exported of 6-02 per cent, as compared with similar aggre- gates for 1885 ; or Great Britain sent out 106,020 pounds, tons, or other quantities in 1886, in place of 100,000 in 1885. Comparing, however, the sum which the quantities actually exported in 1886 would have cost at the prices of 1885, a decline in price is indicated of 6-34 per cent ; or while send- ing away 106,030 pounds, tons, or other quantities in 1886, as compared with 100,000 in 1885, Great Britain received back in money value only $93,660 for the same quantities which in the previous year brought $100,000. A similar examination of British imports for 1886 also brought out the further interesting fact that the average decline in the prices of the goods imported was almost pre- cisely the same as in prices of goods exported. The increase in quantities of imports was less than one per cent ; or the country brought in 100,796 pounds, tons, or other quanti- ties, in place of every 100,000 in 1885. But the decline in prices was 6'373 per cent ; so that the country paid only $93,637 for the same quantities for which it paid 1100,000 in the previous year. The decline in the general range of prices for the year 1886, as compared with 1885, and as measured again by the actual exports and imports of the greatest exporting and importing nation of the world, would therefore appear to have been in excess of six per cent ; and PRICES FROM 1860 TO 1888. 119 this decline would seem to have occurred during the same period in all those countries in which Great Britain dealt as a seller equally with those in which she dealt as a buyer ; or, in other words, this decline was practically universal. An investigation of American prices, instituted by Mr. "William M. Grosvenor, in which quotations of some two hundred staple articles were compared, and the quantities of the same which the same amount of money (gold) would purchase were also taken into account, led to the conclu- sion that the general average of prices iu New York, at the close of the year 1885, was 77-43 as against 100 in 1860. During the year 1888 there was a considerable expansion and improvement in trade throughout the world, and a sig- nificant advance in the prices of many great staple commodi- ties — cereals and meats excepted. In the case of twenty- two selected commodities, this advance, calculated according to the index system of the London " Economist," was a trifle over two per cent (2-150). Such an evident lack of elas- ticity in prices, coincident with a decided improvement in trade, would seem to show that the causes, whatever they may be, which occasioned the marked depression of prices since 1873 was still influential and operative down to the close of the year 1888.* * The following table, according to Mr. Robert Giffen, represents the com- parative wholesale prices of leading commodities on the English market for January, 1873, 1879, 1883, 1885, and for December, 1888 : ARTICLES. Scotch pig-iron, per ton Coals, per ton Copper, Chili bars, per ton . Wheat, Gazette average, per qr Beef, prime small, per 8 lbs. Cotton, midland, per lb Wool, per pack Sugar, Muscovado, per owt. Coffee, Ceylon, per cwt Pepper, black, per lb Saltpeter, per owt 1873. 1879. 1883. 1885. 127s. 43.S. 47s. 8d. 41s. 9d. 30s. 19s. 17s. 6d. 18s. m. 57^. 651. 481^^. 55s. lid. 39s. Id. 40s. id. 34s. lid. 5s. Sd. is. 9d. 6s. 5s. id. lOd. 5%d. "S^l/ied. Sd. m. ni. \2l. 111. 21s. Sd. 16s. 16s. ed. 10s. 80s. 65s. rss. Sd. 71s. Id. ii4 In the Brazos alluvial region of Texas, which ranlis among the first of cotfon-produoing regions, the relative increase in cotton product and population between 1870 and 1880, according to the United States census, was 1'8 to 1. In what is termed the "oak-upland" regions of North Carolina, the product of cotton in 1880 had increased over that of 1870 in the ratio of 4'5 to 1, or this region in 1880 produced more cot- ton than the product of the entire State in either 1870 or 1860. " This re- markable result," according to the special United States census report on cotton for 1880, " was due mainly to the introduction and general use of com- mercial fertilizers, which not only increase the crop, but hasten its maturity from two to three weeks, and so bring into the cotton belt a strip of plateau country, whose elevation of from 800 to 1,200 feet had placed, it just beyond the climatic range of the cotton-plant. This change is in no respect due to altered relations of labor." In truth, there was no one thing in which the American advocates of slavery were more mistaken than in the assumption that slave labor was cheap labor. 222 RECENT ECONOMIC CHANGES. CIRCULATION. Jan. 1, 1879. Jan. 1, 1889. Total. Gold coin and bullion. . . 1378,810,126 32,495,550 9,121,417 71,021,162 823,791.674 846,681,016 1,051,420,945 1704,608,169 315,186,190 10,865,287 76.889,983 233;660,037 846,681,016 1,687,890,622 Inc. 1426,398,043 " 392,690,640 Silver bullion Fractional silver National-bank notes. . . . 1,748,830 5,863,831 Dec. 90,131,647 Total currency issues . . . Inc. 636,469,677 Of this large increase of $636,469,677, $578,637,368, in coin and paper, were in the hands of the people ; and $57,832,309, in bullion, coin, and paper, in the national Treasury.* It thus appears that, while there has been an increase in the population of the United States during the period of ten years under consideration of about thirty per cent, the increase in the precious metals and paper available for cir- culation during the same time was 60*05 per cent ; while of coin and paper in active use among the people and banks the increase was 69'6 per cent, or much more than double the rate of increase in population. Now, as during this same period there was a great and universal decline in the prices of commodities in the United States (as elsewhere), the interesting question arises, How do these experiences harmonize with the theory that the volume of circulating medium controls prices, and that the movement of the precious metals puts down prices in the event of a reduction of the supply, and puts them up in the event of an increase of supply ? Note, further, that the increase of gold and sil- ver coin and bullion in the United States during the ten years, from 1879 to 1889, was $726,600,000, while the paper circulation diminished. Nor can it be maintained that the fall in the value of silver bullion has affected this circula- tion, since, for all purposes of internal circulation, silver and its paper representatives have had the same efficiency and * New York "Financial Chronicle," February 9, 1889. MONETARY EXPERIENCE OP THE UNITED STATES. 223 exchangeable value as existed before the depreciation of sil- ver bullion. The availability of silver coin for the settle- ment on the part of the United States of international bal- ances has been alone affected ; and this, so long as there has been an adequate supply of gold, is an immaterial factor. It would, therefore, seem that the above exhibit furnishes the most complete refutation of the theory that changes in the supplies of the precious metals account for the fall in the prices of commodities.* * It will add to the understanding of this important eoonomio experience to note the arguments brought forward in the United States in disproof of the above conclusion — the facts, as stated, being indisputable. It has been claimed, in the first instance, that as the United States has a vast quantity of products to sell — the prices of which are regulated by the prices which the surplus of such products will command in foreign markets — the home prices of the same can not escape conformity to the universal cost ; or, in other vrards, that the influence of the local inflation of currency that has taken place in the United States has been thus neutralized. But the market value of all the products of the United States are not regulated by foreign demand ; and, of such exceptions, not one can be -iorces of Nature, and a wonderful sub- ordination and use of the same having greatly increased and cheapened the abundance of all useful and desirable things, the majority of the world's legislators and statesmen have seemed to have considered it incumbent upon them to neu- tralize and defeat the beneficent results of such abundance. And the most comforting assurance that progress will not continue to be made in this same direction, is to be found not so much in the intelligence of the masses or their rulers, as in the circumstance that existing restrictions on commerce can not be much further augmented without such an im- pairment of international trade as would be destructive of civilization. As the existing restrictions on commercial intercourse within recent years have not been all imposed at one time, but progressively, and as their influence has accordingly been gradual, the world does not, however, seem to have as yet fully appreciated the extent to which the exchange of products between nations has been thereby interrupted or destroyed. But, as the case now stands, Russia practically prohibits her people from any foreign purchases of iron and steel, and in fact seems to desire to limit exchanges of her products for the products of all other nations to the greatest extent possible. Germany, by repeated enactments since 1879, has imposed almost prohibitory duties on the importation of wheat ; a measure directed, in the first in- stance, against Russia, as a means of retaliation for the per- ILLUSTRATIONS OP TRADE RESTRICTIONS. 317 \ secution of German landed proprietors in Poland, but which has severely damaged the German steam flour industry, and benefited no one. Austria imposes heavy tariS rates on the import of almost all German manufactures. Belgium pre- vents the importations of cattle and meats ; Austria, Russia, Germany, France, Belgium, and Holland, of sugar ; France, of pork and pork products ; Brazil, of rice ; w^hile trade be- tween Italy and France has been interrupted to almost as great a degree as mutual governmental action will admiL The imports of Russia, as before pointed out, decreased forty-three per cent in the four years from 1883 to 1887 ; and in the case of no one of the Continental states of Europe has the condition of their foreign trade in recent years been regarded as satisfactory. For the year 1888 there was a decline in the exchanges of every such state with foreign countries ; or, what is the same thing, there was a greater restriction to each one of them of markets for the indus- trial products of their own people. The avowed policy of the United States has for years been to prohibit or obstruct trade on the part of her citizens, in respect to many articles, with the citizens of all foreign countries ; and with this example, and in part from a spirit of retaliation, there can be no doubt that the objective of much of the restrictive commercial legislation of other countries in recent years has been the United States — a policy which has notably affected the agricultural supremacy of the latter country in the world's markets ; the exports from the United States, comparing 1888 with 1881, of cattle, having declined 24-5 in quantity and nineteen per cent in value ; of hog-products, 43-3 in value ; and, of dairy products, over fifty per cent in value. The decline in the value of the exports of the United States to France has been especially noteworthy, namely, from a value of $99,000,000 in 1880 to $40,000,000 in 1886, and 137,780,000 in 1888. Great Britain alone of all the nations, in increasing her territorial possessions, does not take to herself any com- 318 RECENT ECONOMIC CHANGES. mercial privileges which she does not readily and equally share with the people of all other countries. In all discussions as to the expediency of imposing taxes on imports with a view of protecting domestic industries, the question as to the amout of indirect taxation thereby actu- ally entailed through augmentation of prices on the con- sumers of protected products constitutes a most important and interesting feature. Many estimates of the incidence and extent of such taxes — which consumers pay, but which the Government does not receive — have from time to time been made, especially in the United States ; but in the ab- sence of sufficiently precise and unquestionable data they have not been generally regarded as satisfactory, and as a reality are often even unqualifiedly denied. The publicar- tion during the year 1888, under the auspices of the Ameri- can Iron and Steel Association, of a complete collection of the statistics of the iron and steel industries of the United States, for many years down to the close of 1887, embracing both production and prices, with the concurrent prices of British iron and steel from 1830 to 1887,* affords, however, data so exact, as to permit the relative prices or cost of iron and steel to the consumers of these metals in the United States and Great Britain for the years from 1878 to 1887 inclusive, to be clearly exhibited ; and the amount of indi- rect taxation paid by the people of the former country in the form of increased prices contingent on the duties levied on their importations of iron and steel, to be computed with undoubted accuracy. The average annual consumption of iron and steel in the United States, in one form or another, during the ten years 1878 to 1887 inclusive, was 6,000,000 tons of 2,000 * " A Collection of Statistics to tlie Close of 1887, relating to the Iron and Stool Industries of the United States ; to which is added much Valuable Sta- tistical Information relating to the Iron and Steel Industries of Great Britain, etc.," by James M. Swank, General Manager of the American Iron and Steel Association^ Philadelphia^ 180S, 8vo pp. 2i. PRICES OF IRON IN THE UNITED STATES. 319 pounds each, or a fraction less than thirty per cent of the world's entire product of iron. For the year 1887 the con- sumption was more extraordinary — ahout 9,270,000 tons, or a fraction less than forty per cent of the world's product ; the domestic product of pig-iron amounting to 7,187,000 tons. The average product of pig-iron in Great Britain for the same period, 1878 to 1887, was a little less than 8,400,000 net tons ; and her product for 1887 corresponded very closely to the average of the whole period. It there- fore appears that the consumption of iron and steel in the United States for the ten years in question, was equal to seventy-five per cent of the average product of Great Brit- ain in that period ; and at the present time is nearly equal to her entire product. As no other country than Great Britain exports any quantity of iron and steel that bears any important proportion of the present total consumption of the United States, nearly every other country importing more iron than it exports, it would be obviously impossible, therefore, for the United States to procure their necessary supply of th.ese metals, except from their own mines. From 1878 to 1887 inclusive, the average price of an- thracite foundry pig in Philadelphia was $21.87 per ton. For the same period, the average (home) price of " Scotch " pig was $12.94 ; or, making an ample allowance for freights, a fraction under $15 per ton when landed in the United States. Deducting this from the price of anthracite foundry iron, as above stated, there was a disparity in price on all the pig-iron consumed in the United States during the ten years named, of seven dollars per ton in excess of the average concurrent market price of pig-iron in Great Britain. If objection is made to the quality of iron above selected for examination, a comparison of the relative prices of the higher grades will aiford results even more significant. Thus, from 1878 to 1887, the average price of the best rolled bar-iron in Philadelphia was $50.30 per ton of 2,240 pounds. The average price in England of the best Staffordshire 320 RECENT ECONOMIC CHANGES. marked bars was $35.48 — a difiference of $14 per ton. And here it may be noted that the disparity in the prices of iron in the United States and Great Britain becomes greater, the- higher we rise in the qualities considered. But taking the m illinium, or only the average difference between the price of anthracite foundry and Scotch pig, namely, seven dol- lars, and applying it to the aggregate consumption of the United States from 1878 to 1887—60,000,000 tons— it fol- lows that the American consumers of iron in these ten years paid $420,000,000 in excess of the cost of like quantity to the consumers of Great Britain. Again, the aggregate consumption of steel in the United States — domestic and foreign — during the ten years from 1878 to 1887, was over 20,000,000 tons ; or at an average of 2,000,000 tons per annum. Taking here, again, the lowest form of steel — namely, steel rails — for the purpose of ex- hibiting the difference in the average price or cost of the American and the British product of steel, it will be found that the average price of steel rails in the United States, during the period named, was forty-four dollars per ton, and in Great Britain thirty dollars. With this difference in price, the increased cost of the ten years' consumption of steel by American consumers was $280,000,000. But, as a difference of seven dollars per ton in the comparative price of the iron used for making steel has been already allowed in these computations, the consumption of steel in the United States can only be properly charged with half the disparity in the price of rails above noted, or $140,000,000. Taking, therefore, the lowest grades of iron and steel as the basis for estimating the disparity in the cost of these products in the United States and Great Britain respect- ively, the conclusion is warranted that the excess of cost of iron and steel to the consumers in the United States, in the ten years from 1878 to 1887, was $560,000,000, or at an average of $56,000,000 per annum. On a separate compu.tation, made in the same way for A BURDEN OF INDIRECT TAXATION. 321 the year 1887, the data being derived from the source be- fore mentioned, the disparity of the cost or price of the iron and steel consumption in the United States for that year, in comparison with the prices paid in Great Britain, rises to $80,000,000. The total aggregate revenue derived by the Federal Gov- ernment during the fiscal year ending June 30, 1887, from the duties levied on the importation of iron-ores, pig-iron, and all manufactures of iron and steel, was $20,713,000. In collecting this amount of revenue, which constituted less than one fifth per cent of the excess or surplus revenue of that year, the United States was, therefore, subjected to an additional tax of 160,000,000, which was ultimately paid by the consumers of iron and steel. Doubtless the diiierence was largely absorbed in the cost of assembling the material, and by charges contingent on the making of iron and steel in furnaces and rolling-mills which are either out of date or out of place, and was therefore not in the nature of a bounty. Finally, the entire capital invested in the iron industry of the United States in 1880 — including iron and coal mines and. the manufacture of coke — according to the census data of that year, could not have been in excess of $341,00.0,000. The price paid, therefore, by the consumers of iron and steel in the United States, in order to sustain the iron-furnaces and rolling-mills of the country for ten years (which indus- tries, as before observed, can not be displaced or destroyed by any possible foreign competition), paying wages some- what less on the average than those paid to outside labor, has been about sixty-five per cent in excess of the entire capital invested. '[The magnitude of the economic disturb- ances, in the way of arresting local development and chang- ing the course of the world's exchanges, occasioned by the continuous imposition of such a burden of taxation on an industry which may be regarded as the foundation of all industries, has passed into histor^ What economic dis- 322 RECENT ECONOMIC CHANGES. turbances will be contingent on the discontinuance of such taxation, pertain to the future.* The Ecokomic Distubbances since 1873 contibt- GENT ON War Expenditures are not different in kind from those of former periods, but much greater in degree. This subject has been so thoroughly investigated and is so well understood, that nothing more need be said in this connection than to point out that the men in actual service at the present time in the armies and navies of Europe are in excess of 4,000,000, or about one to every fifteen of all the men of arms-bearing age — all consumers and no producers. The number of men in reserve, who are armed, subject to drill, and held ready for service at any moment, is about 14,250,000 in addition. Including the reserves, the present standing armies and navies of Europe require the services of one in every five of the men of arms-bearing age, or one in every twenty-four of the whole population. It is also estimated that it requires the constant product of one peas- ant engaged in agriculture, or of one operative engaged in manufacturing in the commercial and manufacturing states of Europe, to equip and sustain one soldier ; that it requires the labor of one man to be diverted from every two hundred acres ; and that a sum equivalent to $1.10 shall be deducted from the annual product of every acre. The present aggre- gate annual expenditure of Europe for military and naval purposes is probably in excess of a thousand million dollars. We express this expenditure in terms of money, but it means work performed : not that abundance of useful and desira- ble things may be increased, but decreased ; not that toil may be lightened, but augmented. As to the ultimate outcome of this state of affairs — os- tensibly kept up for the propagation or promotion of civili- * For a more detailed exhibit of the relative production and prices of iron and steel in the United Slates and Great Britain, and of the extent to which the duties on imports augment the price of these metals in the former coun- try, reference is made to the Appendix. WAR EXPEXMTURES. 303 zation — there is an almost perfect agreement of opinion among tliose who have studied it ; and that is, that the exist- ence and continuance of the present military system of Con- tinental Europe is impoverishing its people, impairing their industrial ■ strength, effectually hindering progress, driving the most promising men out of the several states to seek peaceful homes in foreign countries, and ultimately threat- ening the destruction of the whole fabric of society. The contrast between ancient and'^odern war, limiting the comparison of results to human suffering, is very great ; but in respect to the destruction of values it is not great. Carthage is not now destroyed ; but taxation, debt, interest, national- reputation, and private losses represent a vast and perhaps greater amount of devastation. Recent authori- ties estimate the debt of Europe in 1865-'66 to have been £2,640,000,000 ; and that it had been increased in 1887 — mainly by reason of war expenditures — to £4,684,000,000 ($22,364,000,000), entailing an annual burden of interest of £313,640,000 (11,038,000,000).* It is a somewhat popular idea that, as the perfection of machinery for taking away human life makes war, or the preparation for war, every year more costly, the burden on the different nations will eventually become too heavy to be borne, and thus compel a general disarmament. Experience, unfortunately, does not favor any such conclusion. Nations seem always to be able to raise money for war, when they can not for other purposes ; and the classes upon whom the burdens of war rest are not the ones who initiate it. The result of increas- ing war burdens may not, therefore, presage disarmament and peace, but an ultimate terrible social struggle " between the classes and the masses." * " Les Debtes publiques Europ^enes," M. Neymarck, Paria. VIII. The economic! outlook— Tendency to pessimistic views— Antagonism of senti- ment to correct reasoftifl^— The future of industry a process of evolution —The disagreeable elements of the situation— All transitions in the Ufo of society accompanied by disturbance — Incorrect views of Tolstoi— Benefical results of modern economic conditions- Existing populations not formerly possible— The Malthusian theory— Present appUcation to India — Illustrations of the effect of new agricultural methods on produc- tion — No future famines in civilized countries — Creation of new industrial pursuits — ^Doubtful perpetuation of the Government of the United States under old economic conditions — Increase in the world's supply and con- sumption of food — Increase in the varieties of food — Low cost of subsist- ence under attainable conditions in the United States — Savings-bank statistics — Decrease of pauperism — Statistics of crime — Increase in the duration of human life — Extermination of certain diseases — Future of medicine and surgery — Unfavorable results of new conditions of civiliza- tion — Increase of suicides — Divorce statistics — Change in the condition of the British people since 1840 — Wealth of Great Britain — British education and taxation — Present higher vantage-ground of humanity. The predominant feeling induced by a review and con- sideration of the numerous and complex economic changes and disturbances that have occurred since 1873 (as has been detailed in the foregoing chapters), is undoubtedly, in the case of very many persons, discouraging and pessimistic. The questions which naturally suggest themselves, and in fact are being continually asked, are: ^s mankind being made happier or better by this increased knowledge and application of the forces of nature, and a consequent in- creased power of production and distribution? Or, on the contrary, is not the tendency of this new condition of things, as Dr. Siemens, of Berlin, has expressed it, " to the destruc- tion of all of our ideals and to coarse sensualism; to aggra- vate injustice in the distribution of wealth; diminish to THE ECONOMIC OUTLOOK. 325 individual laborers the opportunities for independent work, !ind thereby bring them into a more dependent position; and, finally, is not the supremacy of birth and the sword about to be superseded by the still more oppressive reign of inherited or acquired property ? " What many think, but hesitate to say, finds forcible ex- pression in the following extract from a letter addressed to the author by a large-hearted, sympathetic man, who is at the same time one of the best known of American journal- ists and leaders of public opinion. After referring to his great interest in the exhibit that has been made of the ex- traordinary economic disturbances since 1873 and their elfect on persons, production, distribution, and prices, he says: " But what a deplorable and quite awful picture you suggest of the future ! The wheel of progress is to be run over the whole human race and smash us all, or nearly all, to a monstrous flatness ! I get up from the reading of what you have written seared, and more satisfied than ever before that the true and wise course of every man is to get somewhere a piece of land, raise and make what he can for himself, and try thus to get out of the crushing process. It seems to me that what we call civilization is to degrade and incapacitate the mass o^ men and women ; and how strange and incongruous a state it is \f At the same time these masses of men are thrown out of their accustomed employments by the introduction or perfection of machinery — at that very time the number of women and children employed in factories rapidly increases; an unprecedented cheapness of all necessaries of life is coincident with an intensification of the bitter struggle for bread and shelter. It is a new form of slavery which, it seems to me, projects itself into view — universal slavery — not patriarchal, but mer- cantile, n get yearly more tired of what we call civilization. It seems to me a preposterous fraud. It does not give us leisure ; it does not enable us to be clean except at a monstrous cost ; it affects us with horrible diseases— like diphtheria and typhoid fever— poisoning our water and the air we breathe ; it fosters the vicious classes- the poli- ticians and the liquor-sellers— so that these grow continually more formidable ; and it compels mankind to a strife for bread, which makes us all meaner than God intended us to be. Do you r(3ally think the ' game pays for the candle ' ? " 22 326 RECENT ECONOMIC CHANGES. From another, occupying high position as an economic thinker and writer, come also these questions : " What are the social and political results to follow the sweeping reconstruction of our material prices and our labor system ? Are we not unconsciously, and from the sheer force of these new elements, drifting fast into a form of actual socialism — if not exactly such as the doctrinaire reformers preach, yet a form which in respect to material interests swallows up individualism in huge combinations ? Does not the economizing of the new methods of production necessitate this tendency? And, if so, to what sort of social reconstruction is it likely to lead? Does it mean a future of industrial kings and industrial slaves? How far does the new situation harmonize with current aspirations of labor? Are these aspirations a reflex effect of the new conditions of industry?" • To form now any rational opinion concerning the pres- ent and future influences of the causes of the recent and existing economic disturbances, and to be able to return any intelligent answers to the questions and impressions which they have prompted or created, there is clearly but one prac- tical, common-sense method to adopt, and that is to review and analyze the sociological sequences of these disturbances so far as they have been developed and determined. A review in which sympathetic sentiments are allowed to pre- dominate is not, however, what is needed ; but rather one which will array and consider the facts and the conclusions which can fairly be deduced from them, apart, if possible, from the slightest humanitarian predisposition. The sur- geon's probe that trembles in sympathy with the quivering flesh into which it penetrates, is not the instrumentality best adapted for-niaking a correct diagnosis. Such a review it is now proposed to attempt, and in enter- ing upon it the first point worthy of attention is, tliat with the exception of a change unprecedented in modern times —in the relative values of the precious metals— all that has occurred differs from the world's past experience simply in degree and not in Und. We have, therefore, no absolutely unknown factors to deal with ; and if the record of the past INDUSTRIAL AND SOCIAL EVOLUTION. 327 is not as perfect as could be desired — for it is only within a comparatively recent period that those exact statistics which constitute the foundations and absolute essentials of all correct economic reasoning have been gathered — it is, never- theless, sufficiently so to insure against the commission of any serious errors in forecasting the future, of what in respect to industry and society is clearly a process of evolu- tion. This evolution exists in virtue of a law of constant acceleration of knowledge among men of the forces of nature, and in acquiring a capacity to use them for increas- ing or supplementing human effort, for the purpose of in- creasing and cheapening the work of production and distri- bution. There is, furthermore, no reason for doubting that this evolution is to continue, although no one at any one time can foretell what are to be the next phases of development, or even so much as imagine the ultimate goal to which such progress tends. The ignorance, prejudice, and selfishness of man may operate in the future, as in the past and at present, in obstructing this progress ; but to entirely arrest it, or even effect a brief retrogression, would seem to be utterly impossible.* That many of the features of the situation are, when considered by themselves, disagreeable and even appalling, can not be denied. When one recalls, for example, through what seemingly weird power of genius, machinery has been summoned into existence — machinery which does not sleep, does not need rest, is not the recipient of wages ; is most profitable when most unremittingly employed — and how no one agency has so stimulated its invention and use as the op- position of those whose toil it has supplemented or lightened — the first remedial idea of every employer whose labor is discontented being to devise and use a tool in place of a * Those persons whose business renders them most conversant with pat- ents are the ones most sanguine that nothing is likely to occur to interrupt or oven check, in the immediate future, the progress of invention and dis- covery. 328 BECENT ECONOMIC CHANGES. man ; * and how in the place of being a bond-slave it seems to be passing beyond control and assuming the mastery; when one recalls all these incidents of progress, the follow- ing story of Eastern magic might be almost regarded in the light of a purposely obscured old-time prophecy : A certain man, having, great learning, obtained knowledge of an in- cantation whereby he could compel inanimate objects to work for him, commanded a stick to bring him water. The stick at once obeyed. But when water sufficient for the man's necessities had been brought, and there was threat- ened danger of an oversupply, he desired the stick to stop working. Having, however, omitted to learn the words for revoking the incantation, the stick refused to obey. Thereupon, the magician in anger caught up an axe, and, with a view to diminish or destroy the power of the stick to perform work, chopped it into several pieces; whereupon, each piece immediately began to bring as much water as one had formerly done ; and in the end not only the magician but the whole world was deluged and de- stroyed. * The following is one striking illustration in proof of this statement : After the reaping-machine had been perfected to a high degree, and had come into general use in the great -wheat-growing States of the Northwest, the farmer found himself for ten or iifteen days during the harvest period at the mercy of a set of men who made his necessity for binding the wheat con- currently with its reaping, their opportunity. They began their work in the southern section of the wheat-producing States, and moved northward with the progress of the harvesting : demanding and obtaining $2, $3, and even $i and upward, per day, besides their board and lodging, for binding; making themselves, moreover, at times very disagreeable in the farmere' families, and materially reducing through their extravagant wages the profits of the crop. An urgent demand was thus created for a machine that would bind as well as reap ; and after a time it came, and now wheat is bound as it is harvested, without the intervention of any manual labor. When the sheal's were first mechanically bound, iron wire was used as the binding material ; but when a monopoly manufacturer, protected by patents and tariffs, charged what was regarded an undue price for wire, cheap and coarse twine was sub- stituted ; and latterly a machine has been invented and introduced, which binds with a wisp of the same straw that is being harvested. IS CIVILIZATION A FAILURE? 329 The proposition that all transitions in the life of society, even those to a better stage, are inevitably accompanied by human suffering, is undoubtedly correct. It is impossible, as an old-time writer (Sir James Stewart, 1767) has re- marked, to even sweep a room without raising a dust and occasioning temporary discomfort. But those who are in- clined to take discouraging and pessimistic views of recent economic movements, seem not only to forget this, but also to content themselves with looking mainly at the bad results of such movements, in place of the good and bad together. So it is not difficult to understand how a person like the Eussian novelist Tolstoi, a man of genius, but whose life and writings show him to be eccentric almost to the verge of insanity, should, after familiarizing himself with peasant- life in Russia, come to the conclusion that " the edifice of civil society, erected by the toil and energy of countless generations, is a crumbling ruin." But the trials and vicis- situdes of life as Tolstoi finds them among the masses of Kussia are the result of an original barbarism and savagery from which the composite races of that country have not yet been able to emancipate themselves ; coupled with the existence of a typically despotic government, which throt- tles every movement for increased freedom in respect to both person and thought. But these are results for which the higher civilization of other countries is in no way re- sponsible and can not at present help, but the indirect influ- ence of which will, without doubt, in time powerfully affect and even entirely change. No one, furthermore, can fa- miliarize himself with life as it exists in the slums and tene- inent-houses of all great cities in countries of the highest civilization ; 'or in sterile Newfoundland, where all Nature is harsh and niggardly ; or in sunny Mexico and the islands of the West Indies, where she is all bountiful and attractive, without finding much to sicken him with the aspects under which average humanity presents itself. But even here the evidence is absolutely conclusive that matters are not worse, 330 RECENT ECONOMIC CHANGES. but almost immeasurably bettef, than formerly ; and that the possibilities for melioration, through what may be termed the general drift of affairs, is, beyond all comparison, greater than at any former period- The first and signal result of the recent remarkable changes in the conditions of production and distribution, which in turn have been so conducive of industrial and so- cietary disturbances, has been to greatly increase the abuu- tiance and reduce the price of most useful and desirable commodities. If some may say, "What of that, so long as distribution is impeded and has not been correspond- ingly perfected?" it may be answered, that production and distribution in virtue of a natural law are correlative or reciprocal. fWe produce to consume, and we consume to produce, aiw the one will not go on independently of the other; and although there may be, and actually is, and mainly through the influence of bad laws, more or less extensive maladjustment of these two great pro- cesses, the tendency is, and by methods to be hereafter pointed out, for the two to come into closer and closer harmony. ) ISText-iu order, it is important to recognize and keep clearly in view in reasoning upon this subject, what of good these same agencies, whose influence in respect to the future is now regarded by so many with alarm or suspicion, have already accomplished. A hundred years ago the maintenance of the existing population of Great Britain, of the United States, and of all other highly-civilized countries, could not have been possi- ble under the then imperfect and limited conditioris of pro- duction and distribution. Malthus, who in 1798 was led by his investigations to the conclusion that the population of the world, and particularly of England, was rapidly pressing upon the limits of subsistence, and could not go on increas- ing because there would not be food for its support, was en- tirely right from his standpoint on the then existing economic THE MALTHUSIAN THEORY. 331 conditions ; * and no society at the present time, no matter how favorable may be its environments in respect to fertility of land, geniality of climate, and sparseness of population, is making any progress except through methods that in Malthus's day were practically unknown. The Malthusian theory is, moreover, completely exemplifying itself to-day in India, which is densely populated, destitute in great degree of roads, and of the knowledge and use of machinery. For here the conditions of peace established under British rule are proving so effective in removing the many obstacles to the growth of population that formerly existed, that its in- crease from year to year is pressing so rapidly on the means of subsistence, that periodical famines, over large areas, and accompanied with great destruction of life, are regarded as so inevitable that the creation of a national famine fund by the Government has been deemed necessary, f * '-Malthus made no prediction in the strict sense of the word. He had drawn out from experience that the human race tended to increase faster than the means of subsistence ; its natural increase being in geometrical ratio, and the increase of its means of subsistence an arithmetical one ; so that population had been kept down only in past times by war and famine, and by disease as the consequence of famine. He was bound to anticipate that a continuance of the process would expose the race once more to the operation of these natural cheelis, or to a descent of the masses in the scale of living, or to both of these evils. That the new experience has been different from the former one, and that owing to various causes the means of subsistence have increased faster than the population, even when increasing at a Malthusian rate, is no disproof surely of the teaching of Malthus. His statistical inquiries into the past re- main as valuable as ever." — " Sortie General Uses of Statistical Knowledge," BoBEET GiFFEN, Royol Statistical Society of England, 1885. + The present condition of India constitutes one of the most curious and interesting economic and social problems of the last quarter of the nineteenth century. While the general average of the population for the whole country is 184 to the square mile, there are districts in India in which a population, to be counted by tens of millions, averages from 300 to 400 to the square mile, and others in which a population, to be counted by some millions, rises to 800 and even 900 to the square mile. These latter probably constitute the most densely-populated districts of the world, the population of the most densely-peopled country of Europe — namely, Belgium — averaging 480 to the square mile. The total population of India is estimated at 268,174,000. Under the old-time system of native rulers, frequent wai-s, consequent on for- 332 RECENT ECONOMIC CHANGES. Under different circumstances the correctness of the ideas of Malthus are also being demonstrated in Japan. Eecent investigations by Prof. Rein, of the University of Bonn, Germany, show " that with an area about the same as the State of California (157,000 square miles), and with only one tenth of such area practically available for cultiva- tion, Japan supports a population of 36,000,000 almost en- tirely from her own product. Making due allowance for ■vyhat may be eked out of the nine tenths taken up by for- est, desert, and mountain, it appears that the incredible number of 3,560 inhabitants are supported from each square mile of cultivated land, or four to the acre. It is well known eign invasions and uitemal race antagonisms, with accompanying famines and epidemic diseases, materially restricted the growth of population. But under the conditions of peace, with protection for lile and property, which have been attendant in late years on British rule, the population of India is increasing so rapidly — nearly one per cent per annum — and so disproportionately to the amount of new and fertile soil that can be appropriated, as to leave but little margin, under existing methods of cultivation, for increasing the means of subsistence for the people. Much new soil has been put under cultivation during the last century of British rule, and a quarter of a million of square miles of cultivable waste yet remains to be occupied ; but the fact that the national revenues from the taxation of land have not increased to any extent in recent years is regarded as proof that land cultivation is not increasing in proportion to the growth of population, and that the limits of agricultural pro- duction are approaching exhaustion. An annual increase of one per cent on the present population of India means at least 20,000,000 more people to feed in ten years, and upward of 40,000,000 in twenty years ; and the problem to which the British Government in India has now before it, and to which it Ls devoting itself with great energy and intelligence, is, in what way, and b^ what means, can the character and habits of the people — especially in respect to theii- methods of agriculture— be so developed and changed that "their in- dustry can become more efficient on practically the same soil!" Much has been already done in the way of increasing and cheapening, through roads, canals, and railroads, the means of transportation, and in promoting irriga- tion and education, and especially the use of new tools and methods for culti- vating the soil. But so many are the obstacles, and so great is the moral iner- tia of the people, that, although remarkable progress has been made, the prospect seems to be that, " from decade to decade, larger and larger masses of the semi-pauperized, or wholly pauperized, will grow up in India, requiring state intervention to feed them, and threatening social and financial difficulties of the most dangerous character." MALTHUSIAN PRACTICE OF FRANCE. 333 that this can be done on a small scale, but its application to a nation is marvelous." Nothing is wasted in Japan; everything is utilized, and all arable land has been brought to the highest state of cultivation. But as the existing pop- ulation is disproportionate to the maximum product that can be obtained from the land under the most favorable cir- cumstances, there is already no margin left above the cost of a very frugal living ; and no further large increment of population under present agricultural conditions is consid-, ered possible. France, also, at the present time, according to Yves Guyot — one of the leading French economists and states- men — " is Malthusian in practice though not in doctrine," and he thus illustrates it : " The virtue of frugality has been preached to the Frenchman, and the howrgeois has put this virtue in practice. He has labored, only to be able the sooner to rest. The man who is honored has long been the man who ' does nothing.' In order to attain this dignity, the iour- geois lived scantily, and sought in economy a security for the future. Stinginess was the bourgeois's virtue. Logically enough he stinted himself or children as in everything else. Little by little the peasant proprietors and large farmers perceived and adopted the bourgeois system. They began with scraping together a few crowns to buy a morsel of land. Then, foreseeing the partition of this land, and dread- ing its attendant expenses, which would have swallowed up at a single gulp all the fruits of their toil, they effected a further saving— in chil- dren — and contemptuously left it to the poorest classes to burden themselves with large families. We give the proof of this assertion ! The increase of population is slower in France than anywhere else. The birth-rate of Prance is eighty per cent lower than in England and Prussia. For every one hundred persons in England and France re- spectively in 1801, there were in 1878 two hundred and twelve in Eng- 'land, and in France only one hundred and forty-two !" — "Principles of Social Hconomy,'' by Yves Guyot {English translation by C. H. Leppington, London, 188i). Illustrations confirmatory of the assertion that the food resources of half a century ago would be inadequate for the support of the existing population of the leading civilized 334 RECENT ECONOMIC CHANGES. countries are familiar, but the following are so striking as to warrant renewed presentation : All the resources of the population of the United States, as they existed in 1840, would have been wholly inadequate to sow or harvest the present average annual corn or wheat crops of the country ; and, even if these two results had been accomplished, the greater proportion of such a cereal product would have been of no value to the cultivator, and must have rotted on the ground for lack of any means of adequate distribution; the cost of the transportation of a ton of wheat, worth twenty-five dollars at a market, for a distance of a hundred and twenty miles over good roads, and with good teams and vehicles, entirely exhausting its initial value. Fifty years ago corn (maize) was shelled in the United States by scraping the ears against the sharp edge of a frying-pan or shovel, or by using the cob of one ear to shell the corn from another. In this way about five bush- els in ten hours could be shelled, and the laborer would have received about one fifth of the product. The six great corn States are Illinois, Indiana, Missouri, Iowa, Ohio, and Kansas. They produce more than one half the corn raised in the country. These States, by the census of 1880, had 3,056,770 persons engaged in agriculture, and it would have been necessary for this entire community to sit astride of shovels and frying-pans for one hundred and ten days out of three hundred and sixty-five to shell their corn-crop for the year 1880 by the old processes. In 1790, before the grain-" cradle " was invented, an able-bodied farm -laborer in Great Britain could with a sickle reap only about a quarter of an acre of wheat in a day ; at the present time a man with two horses can cut, rake, and bind in a day the wheat-product of twenty acres. Forty years ago a deficient harvest in any one of the countries of Europe entailed a vast amount of suffering and starvation on their population. To-day the deficiency of CONDITIONS OF FAMINE. 335 any local crop of wheat is comparatively of little conse- quence, for the prices of cereals in every country readily accessible by railroad and steamships are now regulated, not by any local conditions, but by the combined production and consumption of the world ; and the day of famines for the people of all such countries has passed forever.* The extent to which all local advantages in respect to the supply and prices of food have been equalized in recent years through the railway service of the United States, is demonstrated by the fact that a full year's requirement of meat and bread for an adult person can now be moved from the points of their most abundant and cheapest production, a thousand miles, for a cost not in excess of the single day's wages of an aver- age American mechanic or artisan. The same conditions that one hundred, or even fifty, * It 19 not a little difficult to realize that the causes which were operative to occaBion famines a Inmdred years ago in Western Europe, and which have now apparently passed away tbrever, are still operative over large portions of the Eastern world. The details of the last great famine in China, which ocoun'ed a few years ago, indicate that over five million people died of starva- tion in the famine district, while in other portions of the empire the crops were more abundant than usual. The trouble was, that there were no means of transporting the food to where it was needed. The distance of the famine area to the port of Tientsin, a point to which food could be and was readily transported by water, was not over two hundred miles ; and yet when the foreign residents of Shanghai sent through the missionaries an important contribution of relief, it required fifteen days, with the employment of all the men, beasts, and vehicles that could be procured, to effect the transportation of the contribution in question over this comparatively short distance. Relief to any appreciable extent to the starving people from the outside and pros- perous districts was, therefore, impracticable. Consul H. M. Jewett, in writing to the United States Department of State, in June, 1887, on the great distress by reason of deficiency of food and threatened famine at that time in Asia Minor states, that while certain districts were greatly suffering for want of grain, an oversupply in other districts was wholly unavailable for lack of facilities for railroad transportation ; a condition of affairs identical with what prevailed in France during the last half of the eighteenth century. Contra,st these experiences with the fact that when Chicago burned up in 1871 a train loaded with relief contributions from the city of New York, over the Erie Eailroad, traversed nearly a thousand miles and reached its destination in twenty-one hours after the time of departure. 336 EECENT ECONOMIC CHANGES. years ago limited the supply of food, and made it confess- edly inadequate to meet the demands of a population in- creasing in a greatly disproportionate ratio, also limited the opportunities for employment to such increasing numbers apart from agriculture. Nearly and probably fully one half of all those who now earn their living in industrial pursuits, do so in occupations that not only had no existence, but which had not even been conceived of, a hundred years ago. The business of railroad construction, equipment, and oper- ation, which now furnishes employment, directly or indi- rectly, to about one tenth of all the population of the United States engaged in gainful occupations, was wholly unknown in 1830. /Apart from domestic or farm service little oppor- tunity existed for women to earn a livelihood by labor at the commencement of the present century ; but at the pres- ent time more than three million women in the United States are engaged in nearly every kind of labor pursued by i men, from tilling the prairies of the West to preaching-^a I vast multitude that every year grows greater. / The existence of the present populations of Europe and the United States — nay, more, the continuance and progress of civilization itself — has therefore been made possible solely through the invention and use of the same labor-sav- ing machinery which not a few are inclined to regard as likely to work permanent injury to the masses in the future. It is still easy to avoid all trouble arising out of the use of labor-saving machinery by going to the numerous countries — many of which are rich in the bounties of Nature — which do not possess it. But these are the very countries to which no person of average intelligence desires to go. Restless and progressive humanity generally believes also that the continued betterment of the race is largely condi- tioned on the extension of free government based on popu- lar representation and constitutional safeguards; and also on the successful continuation of the experiment under such conditions which was entered upon by the people of fihe CONDITIONED EXISTENCE OF THE UNITED STATES. 337 United States just a hundred years ago. But the Govern- ment of the United States, under its existing Constitution, has been made possible only through the progress which man has made in recent years in his knowledge and control of the forces of nature. Without the perfected railroad and telegraph systems, the war for the maintenance of the Federal Union under the existing Constitution could not probably have been prosecuted to a successful conclusion ; and even if no domestic strife had intervened, it is more than doubtful whether a federation of numerous States, sovereign in many particulars— floating down the stream of time like an elongated series of separate rafts, linked together — could have been indefinitely perpetuated, when the time necessary to overcome thfe distance between its extremities for the mere transmission of intelligence amounted to from twenty to thirty days.* In every highly civilized country, where accurate investi- gations have been instituted, the consumption of all the substantial articles of food, as well as of luxuries, has, within recent years, been largely and progressively increasing ; and as the consumption of rich and well-to-do people in such countries remains almost stationary, inasmuch as they have always been able to have all they desired of such articles, it is reasonable to infer that this result has been mainly due to the annually increasing ability of the masses to consume. In Great Britain, where this matter has been more thor- oughly investigated than in any other country, the facts re- vealed (as will be presently shown) are most extraordinary. In the (iase of the population of Paris, M. Leroy-Beaulieu also reports a wonderful iiicrease in the consumption of food-products since 1866, and states that, if the ravages of the phylloxera (vine-pest) could be checked, and the price * When the battle of New Orleans vraa fought, in 1815, more than twenty- two days elapsed before the Government at Washington received any informa- tion of its ooeurrenoe. 338 RECENT ECONOMIC CHANGES. of wine reduced, the cost of living for the whole of France would be less than it has ever been during the last half- century. In the United States the increase in the con- sumption of such pure luxuries as spirits and tobacco is increasing in a greater ratio than population. In 1888, the consumption of distilled spirits was 1-33 gallons per capita. The consumption of beer has increased from 6-68 gallons per capita in 1878 to 8-36 gallons in 1880, 10-18 gallons in 1883, and 12-48 in 1888. The increase in the consumption of tobacco in recent years has also been enormous. In 1868 the recorded consumption was about 1-30 pounds per capita of manufactured tobacco and 16-7 cigars per capita each year, with no consumption of cigarettes. In the ten years ending with 1878, notwithstanding the general depression in business in the later year, the consumption on the whole more than doubled, rising to 2-31 pounds per capita of manufactured tobacco and 40-5 cigars per capita, besides 3-5 cigarettes for each inhabitant. In the ten years ending in 1888, the con- sumption of manufactured tobacco increased about fifty per cent, or to 3-23 pounds per capita; of cigars, more than fifty per cent, or 61-4 for each inhabitant ; and of cigarattes, from 3-5 to 29-7 for each person. In these figures, therefore, is to be found a demonstration that the ability of the masses in the United States in recent years to satisfy their desires has materially increased, and that the condition of the working-people has at all events been far removed from pri- vation. I Great improvements have been made during the last ten oivtwenty years in the breeding of live-stock and its eco- nomical management, whereby a greatly increased product of animal food can be obtained from a given^umber with comparatively little increased labor or expense. ) In the mat- ter of dairy produce, recognized authorities itfTJngland esti- mate that the average increase in the yield of milk per cow in that country has been at least forty gallons per annum since 1878 ; and this for the 3,500,000 cows in milk, owned INCREASED PRODUCTION OP FOOD. 339 by British farmers, " means 140,000,000 extra gallons of milk over and above what the same animals yielded in 1878 ; and at 6d. per gallon would amount to an extra return of no less than £3,500,000 for the United Kingdom, or £1 per cow. If made into cheese, it would mean an increase of 62,500 tons." In the case of both cattle and sheep, it is entirely practicable to get the same weight of meat in an animal at two or three years of age as was formerly obtained at four or five years ; and improvement in this early matur- ity in turn means that the quantity of meat made by the same number of animals is very much greater than formerly. Furthermore, not only has the supply of food increased, but the variety of food available to the masses has become greater. Nearly all tropical fruits that will bear transporta- tion have become as cheap in non-tropical countries as the domestic fruits of the latter, and even cheaper ; and the in- creased consumption thus induced has built up new and extensive branches of business, and brought prosperity to the people of many localities that heretofore have had no markets for any products of their industry.* The knowledge gained in recent years respecting the wonderful fecundity of fish, and the conditions for their favorable breeding and preservation, is so complete, that the claim has been made that the world might be fed from the ocean alone, and that an acre of the sea properly cultivated is capable of yielding more food than ten acres of arable land. Thirty or forty years ago fish in its most acceptable form — namely, fresh — was only available to consumers living in close proximity to the ocean ; but now, fish caught on the waters of the North Pacific, and transported more than * In the seven years from 1880 to 1887 the importation of bananas into the United States increased forty-told. In that same year twenty-six steamers per month, together with a large number of sailing-vessels, were engaged in this business ; and in the city of New Orleans more than five hundred people found employment in the mere handling of this single article of fruit. 340 RECENT ECONOMIC CHANGES. two thousand miles, are daily supplied fresh to the markets of the Atlantic slope of the United States, and sea-products of the coast of the latter, transported two thousand miles, are regularly furnished in a fresh condition to British markets. During the whole period from 1870 to 1888 the world's consumption of luxuries — of tea, coffee, and fermented liquors — has gone on increasing, and shows only a certain retardation of the rate of progress, and not a positive decline, even in the specially bad years. One point of immense and novel importance in helping to a conclusion as to whether the race under the conditions of high civilization is tending toward increased comfort and prosperity, or toward greater poverty and degradation, is to be found in the fact which recent investigators have deter- mined, namely : that in the United States the daily wages paid, or the daily earning capacity of a healthy adult worker, in even the most poorly remunerated employments, is more than sufficient, if properly expended, to far remove the individual recipient from anything like absolute want, suffer- ing, or starvation. Thus, in the case of fifty-nine adult female operatives in a well-managed cotton-mill in Maryland, the per capita cost of subsistence, with a bill of fare em- bracing meats, all ordinary groceries and vegetables, milk, eggs, butter, fish, and fruit, has been found to be not in excess of twenty cents per day, including the cost of the preparation of the food and its serving. In Massachusetts^ where the results were derived from the six months' board- ing of seventeen men and eight women (three servants), the men being engaged in arduous mechanical employments, and consuming comparatively large quantities of meat, the daily cost of the subsistence of each individual was twenty- eight cents per day. In the jails of Massachusetts the- average daily cost of the food of the prisoners and of thef employes of the prisons for the year 1883— bread of the best quality, good meats, vegetables, tea, rye-coffee, being fvu-' POSSIBLE COST OP SUBSISTENCE. 342 nished liberally — was a trifle over fifteen cents per day for each person.* In the State of Maine the average cost of the food (raw- material) of the convicts in the State-prison, for the seven years next preceding November, 1887, was 11-63 cents per day; the quality of the food being very good (including meat or fish, milk, coffee, and molasses every day), and the quantity supplied to each person being limited only to his or her eating capacity. In one of the best conducted almshouses of Connecticut, the condition of which was carefully investigated by the writer in 1887, the sum of 17,000 per annum, exclusive of interest on the plant and extraordinary repairs, was found to be sufficient to maintain an average of sixty-five inmates, mainly adults, in a building of modern construc- tion, scrupulously clean, thoroughly warmed and ventilated, with an abundance of good and varied food, clothing and medical attendance, or at an average daily expenditure of about thirty cents per capita. The average weekly cost of the patients in the six establishments for the care of the insane in Massachusetts for the year 1887 was $3.50 for each patient. The evidence, therefore, is conclusive that "an ample and varied supply of attractive and nutritious food can be furnished in the Eastern portions of the United States — and probably in Great Britain also — at a cost not exceeding twenty cents per day, and for a less sum in the Western sec- tions of the country, provided that it is Judiciously pur- chased and economically served " ; and the legitimate infer- ence from these results is, that the problem of greatest * These results are due to the lahorious and careful investigations of Mr. Edward Atkinson, of Massachusetts, and were first published in 1884, under the title of "The Distribution of Products." Together with the results of similar investigations conducted by Mr. Robert Giffen, of England, they rank among the most important and valuable contributions ever made to economic and social science. 23 342 RECENT ECONOMIC CHANGES. importance to be solved in the United States and in Great Britain, in the work of ameliorating the condition of the honest and industrious poor is (as Mr. Atkinson has ex- pressed it), to find out how to furnish them with ample and excellent food as cheaply as it is supplied to the inmates of our prisons and almshouses. The facts in regard to the general increase in the deposits of savings-banks, and the decrease in pauperism, are also entitled to the highest consideration in this discussion. In the United States the aggregate deposits in such banks were probably about 11,500,000,000 in 1888 as compared with $759,946,000 in 1873-'74 ; an increase of nearly one hundred per cent in fourteen years, while the increase of population during the same period was probably not in excess of thirty- six per cent.* A rapid increase in recent years in the savings-bank deposits of most of the countries of Europe is also reported. In Great Britain the increase between 1875 and 1885, as regards deposits, was forty per cent, and in the number of depositors over fifty per cent. ; while the increase in population during the same period was about ten per cent. The capital of all the " trustee " and " postal " savings-banks in Great Britain in May, 1889, was £106,502,- 300 ($517,659,892). But, besides these savings-banks, there are in Great Britain a number of institutions for the pro- *The development of the savings-bank system in the United States up to the year 1888 has been confined almost entirely to the Eastern and Middle States ; and in that yeai- such banks were in full operation in only ten States, and only partially so in three other States. These thirteen States' were Maine, New Hampshire, Vermont, Massachusetts, Ehode Island, Connecticut, New York, New Jersey, Pennsylvania, Maryland, Ohio, Wisconsin, and Minne- sota. The deposits in these banks, furthermore, by no means represent the entire result of the provident savings of the people of the United States. Life-insurance takes a not unimportant share of the sa\'ings of the people, building and loan associations attract some, and cheap and easy investments in real estate doubtless take their share of savings. Still, the fact remains that, as shown by the territorial distribution of the savings-banks, a very considerable field for the extension of the system in the United States stJl). continues open. SAVINGS-BANK DEPOSITS. 343; motion of thrift, which have no exact counterpart in the United States, and which also hold large amounts of the savings of the people ; as railway savings-banks, incorporated provident building societies (with £53,000,000 of funds in 1887), friendly societies, etc., and in all of which the deposits are rapidly increasing. Savings-banks, it may also be men- tioned, have been established in connection with the schools of Great Britain ; and the number of schools having such arrangements in 1887 was reported at 2,235. The statistics of the " postal savings-banks " of Great Britain, institutions: not known in the United States, but which seem to find special favor with the British people, are especially worthy of notice. Their increase from 1878 to 1887 has been from 5,831 to 8,720 in number, from 1,892,756 to 3,951,761 in depositors, and from £30,411,563 to £53,974,000 in credits to accounts. " Despite all fluctuations in trade, the deposits in these banks have gone on steadily increasing year by year ; and that this has been due to greater thrift among the working-classes, and not to the growth of a larger class of accounts, is proved by the fact that the average amount to the credit of each depositor was decidedly less in 1888 than in 1878. Or, to put it in another way, the depositors have in- creased in number nearly one hundred and nine per cent, while the deposits have increased by only seventy-seven per cent." The aggregate capital of all the savings-banks and provi- dent institutions of Great Britain in 1888 was probably about £215,000,000, or considerably in excess of one thou- sand millions of dollars. Switzerland and Sweden and ISTorway lead all the nations of Europe in the ratio of savings-deposits to the population —the increase, comparing 1860 with 1881, having been from the ratio of 4-3 to 35-5 in the former, and in the case of the latter from 6-8 to 18-1. In Prussia, where the savings- banks are used almost exclusively by the poorer classes, the deposits are regularly increasing, and for 1887-'88 were larger than in any previous year. 344 RECENT ECONOMIC CHANGES. The percentage increase in deposits and depositors in France and Italy in recent years has also been large, and far in excess of any percentage increase in their population. The aggregate savings-deposits in yarious institutions and societies for the Continent of Europe, in 1885, was estimated at £338,000,000 ; or, including Great Britain, £538,000,000 ($3,614,000,000). It is clear, therefore, from these data, that the habit and the power of saving have greatly, increased in recent years in all highly civilized countries and are still increasing. There are no statistics of national pauperism in the United States, and general conclusions are based mainly on the returns made in the eight States of ]S"ew York, Penn- sylvania, Ohio, Illinois, Massachusetts, Wisconsin, and Michigan. A report made by the standing committee of the various State boards of charities to the National Conference of Charities in 1887 was, that "except for the insane, who are everywhere constantly accumulating beyond their due ratio to the whole population, there has never been for a period of five years any increase in the proportion of pau- pers to the population ; while for longer periods there has generally been a decrease in the number of the poor as com- pared with the whole population " ; and this, too, notwith- standing the very great obstacles which stand in the way of all public and private effort for the checking of pauperism in a country like the United States, " which annually receives such armies of poor from.European countries, and at home permits intemperance to breed so much of pauperism, espe- cially in cities." In England, where the population, between 1875 and 1885, increased in a larger proportion than in any previous decade, there was no increase but a very steady decrease of pauperism ; or, from an annual average number of 952,000, or 4-3 per cent of the whole population in 1870-77 to 787,000, or three per cent of the population for 1880-84. For the year 1888 the number relieved in England and PAUPERISM AND CRIME. 345 Wales was 2-7 per cent of the population. For Scotland, the corresponding figures are much the same; although the Scotch administration of the poor is totally inde- pendent of that of the English. In short, there is no evidence that pauperism is increasing in England and Scot- land with their recent marked increase in population, or that the people are less fully employed than formerly ; but the evidence is all to the contrary. In Ireland, the experi- ence has been different. " Here, there has been an increase in pauperism, accompanied by a decline in population," the number of paupers in receipt of relief, on the 1st of January, 1887, being returned as 113,341, as compared with 106,717 in 1885.* Prussia, with a marked increase in population, returned a decrease in the number of paupers receiving relief from cities and towns from 3-87 per cent of the whole number in 1884, to 3-65 per cent in 1885. Crime in Great Britain is diminishing in a remarkable manner. A diminution is also reported in Italy. In the United States, while crime has diminished in a few States, for the whole country it has, within recent years, greatly increased. In 1850 the proportion of prison inmates was reported as one to every 3,448 of the entire population of the country ; but in 1880 this proportion had risen to one for every 855. These results are believed to be attributable in the Northern States mainly to the great foreign immigra- tion, and, in the Southern, to, the emancipation of the negroes. Finally, an absolute demonstration that the progress of mankind, in countries where the new economic conditions have been most influential in producing those disturbances and transitions in industry and society which to many seem fraught with disaster, has been for the better and not for * " The Material Progress of Great Britain " ; address before the Economio Section of the British Association, 1887, by Eobeit Giffen. 346 RECENT ECONOMIC CHANGES. the worse, is to be found in the marked prolongation of hu- man life, or decline in the average death-rate, which has occurred within comparatively recent years in these same countries. Thus, the average annual death-rate in England and Wales, during the period from 1838 to 1875, was 22-3 per thousand. From 1876 to 1880, it was 30-08. But, for the six years from 1880 to 1887, the average has not exceeded 19-3 ; which means that about 500,000 persons in England and Wales were alive at the close of the year 1886 who would have been dead if the rate of mortality which prevailed be- tween 1838 and 1875 had been maintained.* The average annual death-rate of the city of London for the decade be- ginning in 1860 was 24-4 per thousand. In the following ten years it declined to 23-5. But for the year 1888 it was only 18-5 per thousand ; a rate lower than any previously recorded within the metropolitan area, and which entitles London to the claim of being the healthiest of all the world's great cities. In Vienna, Austria, the death-rate has decreased since 1870 from 41 to 21 per thousand ; a result that has been sequential to the introduction into the city of an improved supply of good water, and to the extensive con- struction of new and improved houses — fifty-eight per cent of all the houses of Vienna having been built since 1848. The average death-rate for the whole United States, for the census year ],880, was between 17 and 18 per thousand; which is believed to be a less mean rate than that of any 'European country except Sweden. The results of the most recent and elaborate investiga- tions on this subject, communicated, with data, by M. Va- ■ chee, to the " Bulletin de ITnstitut International Statis- tique," Eome, 1887, are, that the mortality of Europe has diminished from twenty-five to thirty-three per cent, and * It is also to be noted that by far the larger proportion of the increased ■ duration of human life in England Is lived at useful ages, and not at the de- pendent ages of either childhood or old age. DECREASE OF MORTALITY AND DISEASE. 347 that the mean duration of life has increased from seven to twelve years, since the beginning of this century. This esti- mate of the rate of improvement for all Europe is higher than the English data would alone warrant, but may be cor- rect. At the same time it is well recognized that through the absence of reliable data it is impossible to speak with certainty as to the decrease in mortality, or as to the expec- tation of life in any country, except in respect to the last forty or fifty years. Now, while improved sanitary knowledge and regulations have contributed to these results, they have been mainly due to the increase in the abundance and cheapness of food- products, which in turn are almost wholly attributable to recent improvements in the methods of production and dis- tribution. But, whatever may have been the causes of these changes, they could not have occurred without an increase of vitality among the masses. Again, if civilization is responsible for many new dis- eases, civilization should be credited with having stamped out, or greatly mitigated, not a few that a century ago were extremely formidable. Plague and leprosy have practically long disappeared from countries of high civilization. For the five years from 1795 to 1800 the average annual number of deaths from small-pox in the city of London was 10,180 ; but for the five years from 1875 to 1880 it was only 1,408. Typhus and typhoid fevers are now known to be capable of prevention, and cholera and yellow fever of complete terri- torial restriction. Typhus fever, once the scourge of Lon- don, and especially of its prisons, is said to have now entirely disappeared from that city. Anaesthetics have removed the pain attendant upon surgical operations; and the use of antiseptics has reduced the mortality contingent upon the same in the larger hospitals ; or, taking the experience of Germany as the basis of comparison, from 41-6 in 1868 to 4-35 per cent in 1880. According to Mr. Edwin Chadwick, " in the larger schools of the districts of the poor-law union 348 RECENT ECONOMIC CHANGES. of Great Britain ... the chief diseases of children are now practically abolished. These institutions may be said to be children's hospitals, in which children, orphans of the low- est type from the slums, are taken in large proportions with developed diseases upon them, often only to die from con- stitutional failure alone. Yet in a number of these separate schools there are now no deaths from measles, whooping- cough, typhus, scarlatina, or diphtheria, . . . while the gen- eral death-rate of the children in these schools is now less than one third of the death-rates prevalent among the children of the general population of the same ages." The science and practice of medicine and surgery are, furthermore, " undergoing a revolution of such magnitude and importance that its limits can hardly be conceived. Looking into the future in the light of recent discoveries, it does not seem impossible that a time may come when the cause of every infectious disease will be known ; when all such diseases will be preventable or easily curable; when protection can be afforded against all diseases, such as scar- let fever, measles, yellow fever, whooping-cough, etc., in which one attack secures immunity from subsequent con- tagion ; when, in short, no constitutional disease will be in- curable, and such scourges as epidemics will be unknown. These results, indeed, may be but a small part of what will follow discoveries in bacteriology. The higher the plane of actual knowledge the more extended is the horizon. What has been accomplished within the past ten years as regards knowledge of the causes, prevention, and treatment of dis- ease far transcends what would have been regarded a quarter of a century ago as the wildest and most impossible specula- tion."— Peof. Austin Flint, M. D., The Forum, Decem- ber, 1888. Dealers in ready-made clothing in the United States as- sert that they have been obliged to adopt a larger scale of sizes, in width as well as in length, to meet the demands of the average American man, than were required ten years DISEASES OF CIVILIZATION. 349 ago ; and that in the case of clothing manufactured for the special supply of the whole population of the Southern sec- tions of the country, this increase in size since the war, at- tributable almost entirely to the increased physical activity of the average individual, has been fully one inch around the chest and waist. Varieties of coarse clothing, as the brogan shoe and cotton drills, which before the war were sold in immense quantities in this same section of the coun- try, have now almost passed out of demand, and been super- seded by better and more expensive products. The Ameri- can is, therefore, apparently gaining in size and weight, which could not have happened had there been anything like retrogression, or progress toward poverty on the part of the masses. On the other hand, there are certain sequences of the new conditions of civilization pertaining to individual and societary life which are less ilattering and promising. In the same ratio as the facilities for the production and distri- bution of commodities have been expanded and quickened, the necessity of untiring attention to business, as a pre- requisite for success, has been increased, and the intensity of competition stimulated. The forces of business life are no longer subject to the control of the man of business. Having subordinated the lightning to the demands of busi- ness, business must go at lightning speed. " The electric message is superseding the leisurely letter. There is now no quiet waiting for foreign correspondence. The cable announces a bargain struck on another continent, and the same day, before the goods have been even shipped, the cargo is sold and the transaction ended." If one trader keeps himself in instantaneous contact through the tele- graph with markets and customers, all must do the same, or be left behind in the struggle for success. Thus dominated by new conditions, the merchant and financier of to-day has been rendered almost as much of a machine as the worker in the factories, whose every movement has been automatic, 350 EBCENT ECONOMIC CHANGES. or subordinate to the physical forces acting through ma- chinery ; and one result of the continuous mental and nerv- ous activity which modern high-tension methods of business have necessitated, coupled with the high living and the fre- quent use of alcoholic stimulants to which such activity leads, has been to increase (if not create) a class of diseases which may be regarded as diseases of civilization, and which have in turn entailed a rapidly increasing mortality. Thus, the statistics of the Health Department of the city of New York show that, comparing 1870 and 1887, the death-rate from " Bright's disease " increased from 890 to 2,375 per annum, or nearly threefold ; and in the case of " heart-dis- ease," from about 700 to 2,020 per annum — an increase again of nearly threefold ; and an increase in both cases in far greater ratio than any increase of the population of the city.* Besides the causes of death above enumerated, there is also a very serious mortality arising from what is com- monly but vaguely denominated " nervous exhaustion," di- rectly referable to the same influences under consideration. The accepted statistics for the European nations also show that the rate of suicide is increasing. In Prance and Ger- many it has gone on increasing steadily through good years and bad years indifferently, until it is now more than fifty per cent greater than it was in 1870. In England the rate reached a maximum in 1879, but was, nevertheless, higher in 1888 than in 1870-'75. The marriage-rate during recent years is also reported as declining in all the countries of Europe except Italy, but not to a very notable extent. The statistics of divorce in the United States, recently collected by the order of the Federal Government, show an increase largely in excess of the percentage growth of population. Thus, the increase in the population from 1867 to 1886 is estimated at about sixty per cent, while the number of di- * The population of the city of New York was, in 1868, about 750,000; in 1870, 942,000; in 1880, 1,206,000; and in 1887, about 1,460,000. CHANCES FOR BUSINESS SUCCESS. 351 vorces for the last year of the period exceeded that for the first year by 156-9 per cent. There has also been an increase in the. proportion of divorces to the number of married couples. One curious commercial or societary phenomenon, and one which, in view of the statement before submitted, may seem paradoxical, should not be overlooked in this connec- tion — and that is, that notwithstanding the tendency of ex- isting conditions to concentrate trade and manufactures in the hands of a few, with large capital and special facilities, and to crowd out the smaller and weaker establishments, the number of persons engaging in trade — taking the ex- perience of the United States as a guide — increases every year in a more rapid rate than population. This in turn is counteracted in part, but not wholly, by an increase in the number of failures, and the annual retirement of a much greater number of persons or firms with the losses of a part or the whole of their invested capital — 240,000 firms regis- tered at one of the leading mercantile agencies having ceased to exist in 1888, as against 10,679 that failed. QBut for the frequency of disasters, therefore, the proportion of the population of the United States seeking to get a living by trading rather than by direct production would be soon so great. as to actually endanger the public welfar^ The explanation of this phenomenon undoubtedly is, that the temptations to a commercial life, without adequate training or capital, are of constantly increasing strength, while the amount of capital and of trained skill required to insure success also tends to increase. The number of those who try such a life and fail each year consequently enlarges.* * * There has long been a substantial agreement among those competent to form an opinion that ninety per cent of all the men who try to do business on their own account fail of success. Investigations recently instituted by Mr. Joseph H. Walker in a comparatively old city (Worcester), in the long-settled State of Massachusetts, have led to the following interesting conclusions : Of every hundred men in business in that place in 1845, twenty-five were out of 352 RECENT ECONOMIC CHANGES. The steady drift of population, not only in the United States but in all countries in which railroads are numerous and the art of reading widely diffused, from the country to towns and cities, is undoubtedly one of the sequences of the recent changes in economic conditions, and, as suggestive of the impoverishment of rural sections, and discontent with agricultural pursuits, is popularly regarded as an unhealthy social phenomenon ; although, as will be hereafter pointed out (see page 433), such a conclusion may not be wholly warranted. \ln the State of Massachusetts, the proportion of all the people gathered in cities and towns of more than eight thousand inhabitants has risen from less than one twentieth a hundred years ago, and but little over a third in 1850, to quite two thirds (66-4 per cent) when the last State census was taken in 1885. In the State of New York, with a population in 1880 of 5,082,000, one third of the' whole number is massed in two cities — New York and Brooklyn — while, as in Massachusetts, two thirds of the whole is gath- ered in places with over eight thousand inhabitants. In England not only are farms lying vacant in great numbers, business in five years, fitly in ten years, and sixty-seven in fifteen years ; and most of these disappearances mean simply faitoes. That wealth does not, as a'rule, in the United States long remain in the families of those who acquire it would also seem to be shown by these investigations. Out of seventy-five manufacturers in 1850, only thirty died or retired with property ; and only six of the sons of the seventy-five now have any property, or died leaving any. There were one hundred and seven manufacturers in 1860, of whom sixty died or retired with property, but only eight of the sons of the one hundred and seven now have any property, or died leaving any. In 1878 there were one hundred and seventy-six individuals engaged in ten of the leading manufacturing industries of the city in question, but only fifteen of this number were themselves the sons of manufacturers. Going back to an earlier generation, the above proportion was found to be essentially main- tained ; but the fact was not so striking when so many branches of manu- facturing industry were new, as they now appear. Of the one hundred and seventy-six manufacturers of 1878, moreover, no less than one hundred and sixty-one commenced their career as journeymen ; a fact illustrative of what seems to be almost in the nature of an economic axiom, namely, that the capi- talists of to-day are tiicmselves the workingmen of twenty-five years ago, as the workingmen of to-day will be the capitalists of twenty-five years hence. DECLINE IN RURAL POPULATIONS. 353 owing to the fall in agricultural prices, but the supply of farm-labor is rapidly diminishing, in the face of a marked and steady advance in wages and greatly increased induce- ments in the shape of improved cottages. There is, in fact, an exodus from the soil throughout the whole of Great Britain. In France, the same movement of the agricultural population toward the towns exists, and is regarded with a feeling akin to alarm. According to M. Baudrillard, there is a positive diminution of population in fifteen of the rich- est and most prosperous agricultural departments of France, but an increase in the population of their towns. The young men, and especially the young women, will not live on the farms if they can help it. Agriculture offers greater inducements than ever in the shape of higher wages and better food and lodging, but these have little or no effect on the rising generation. This disinclination for farm-life is, he thinks, to be accounted for in the same way as the small number of children to a marriage. " Moral progress," he says, "has not marched abreast with material progress." Everywhere the aspirations of the rural classes are out of proportion to their intelligence and resources. The rise of wages has created a crowd of more or less factitious wants, which are difficult to meet and which keep alive a constant sense of privation. Education has created in the farming man an intellectual curiosity, which it is hard to satisfy, and which keeps him constantly in mind of his isolation, of the loneliness and dullness of his life. One effect of this state of things in France is the influx from Italy and Belgium of a very low grade of laborers, whom the farmers are only too glad to hire to prevent their fields lying waste, but who are anything but a wholesome addition to the French popula- tion. In fact, in every country, wherever we find the na- tives abandoning in disgust the cultivation of the soil, we find a lower grade of labor, a less civilized man, who asks for less and is content with less, taking their places. Evidently, the contribution of greatest value that could 354 RECENT ECONOMIC CHANGES. be made to the discussion of this subject, would be to spread before us an exhibit of the exact results of the experience of a country and a people where, under average, or not too favorable conditions, the recent changes in industrial and social life, consequent upon the new methods of production and distribution, have operated most influentially. Such an exact exhibit can not be made ; but the experience of Great Britain, where economic data have been gathered and re- corded during the last fifty years with an exactness and completeness not approached in any other country, furnishes a most gratifying and instructive approximation. To the record of this experience, attention is next requested. During the last twenty-five or thirty years, the aggregate wealth of Great Britain, as also that of the United States and France, has increased in an extraordinary degree. In Great Britain the increase from 1843 to 1885 in the amount of property assessable to the income-tax is believed to have been one hundred and forty per cent, and from 1855 to 1885 about one hundred per cent. The capital subject to death duties (legacy and succession taxes) which was £41,- 000,000 in 1835, was £183,930,000 in 1885 ; an increase in fifty years of nearly three hundred and fifty per cent. An estimate of the total income of the country for 188(5 was £1,270,000,000 ; and of its aggregate wealth, about £9,000,- 000,000, or $45,000,000,000.* Have now the working-classes * In France, notwithstanding the indemnity of over a thousand millions of dollars paid to Germany in 1872-"r3, and a total governmental expenditure, in addition to all ordinary but most heavy annual expenses since then, of Y,710,000,000 francs ($1,540,000,000), with enormous losses in recent years contingent on the vine-disease, had crops of cereals, and disastrous specula- tions, like the Panama Canal, copper syndicate, and the like, the savings of the French people are still so large that the supply of new capital for every enterprise that promises security or profit continually tends to exceed der mand. Conclusive evidence of the rapid and enormous increase in the wealth of the United States is claimed to be aiforded by the rapid increase in the amount of property annually made subjeoc to fire-insurance. Thus, the amount of fire risks outstanding in 1888 was reported as more than $900,000,- 000 in excess of the aggregate for the previous year ; and, as there is no reason IMPROVEMENT OF THE MASSES. 355 of Great Britain gained in proportion with others in this enormous development of material wealth ? Thanks to the labors of such men as the late Dudley Baxter and Leone Levi, David Chadwick, and Eobert GifEen, this question can be answered (comparatively speaking for the first time) with undoubted accuracy. Fifty years ago, one third of the working masses of the United Kingdom were agricultural laborers ; at present less than one eighth of the whole number are so employed. Fifty years ago the artisans represented about one third of the whole population ; to-day they represent three fourths. This change in the composition of the masses of itself im- plies improvement, even if there had been no increase in the wages of the different classes. But, during this same period, the "money" wages of all classes of labor in Great Britain have advanced about one hundred per cent, while the pur- chasing power of the wages in respect to most commodities, especially in recent years, has been also very great. Among the few things that have not declined, house-rent is the most notable, a fact noticed equally in Great Britain and France, although in both countries the increase in the num- ber of inhabited houses is very large ; the increase in the item of houses in the income-tax assessments of the United Kingdom between 1875 and 1885 having been about thirty- six per cent.* But high rents, in the face of considerable building, are in themselves proof that other things are cheap, and that the competition for comfortable dwellings is great. for supposing that property in 1888 was tetter insured than in 1887, the only means of aooounting for this great increase in the volume of insurance business is, that there ivas substantially that amount of new wealth added to the coun- try on which insurance was desired. It would seem to be further obvious that this gain could not be in the value of land (for land, as it can not be de- stroyed by £ro, is not insured), but must have consisted in new buildings and personal property of a perishable nature. 1 * The houses built in Great Britain since 1840 have been estimated in value at double the amount of the British national debt. 356 RECENT ECONOMIC CHANGES. The Government of Great Britain keeps and publishes an annual record of the quantities of the principal articles imported, or subject to an excise (internal revenue) tax, which are retained for home consumption per head, by the total population of the kingdom. From these records the following table has been compiled. Prom a humanitarian point of view, it is one of the most wonderful things in the history of the latter half of the nineteenth century : Per capita consumption of different commodities {imported or sub- ject to excise taxes) hy the population of Great Britain. ARTICLES. Bacon and hams lbs. Butter " Cheese " Currants and raisins " Eggs No. Rice lbs. Cocoa " Coffee " Wheat and wheat- flonr " Raw sugar " Refined sugar " Tea " Tobacco '• Wine gals. Spirits (foreign) " Spirits (British) " Malt bush, Beer (1881) gals. 1840. 1886. 0-01 11-95 1-05 7-17 0-92 5-14 1-45 4-02 3-63 28-12 0-90 10-75 0-08 0-41 1-08 0-86 • 42-47 185-76 15-20 47-21 None. 18-75 1-22 4-87 0-86 1-42 0-25 0-36 0-14 0-24 0-83 0-73 1-59 1-64* 27-78 26-61 1887. 11-29 8-14 5-39 4-34 29-87 7-69 0-43 0-79 220-75 52-95 20-25 4-95 1-44 0-37 0-23 0-72 26-90 During all the period of years covered by the statistics of this table, the purchasing power of the British people in respect to the necessities and luxuries of life has therefore been progressively increasing, and has been especially rapid since 1873-'76. Converting this increase in the purchasing power of wages into terms of money, the British workman can now purchase an amount of the necessaries of life for 28s. 5d., which in 1839 would have cost him 34s. Oid.\ But * 1879. t David Chadwick, British Association, 1887. EQUALIZATION OP WEALTH IN GREAT BRITAIN. 357 this statement falls very far short of the advantages that have accrued to him, for wages in Great Britain, as before stated, are fully one hundred per cent higher at the present time than they were in 1839. The impression probably prevails very generally in all countries that the capitalist classes are continually getting richer and richer, while the masses remain poor, or become poorer. But in Great Britain, where alone of all countries the material (i. e., through long-continued and systematized returns of incomes and estates [probate] for taxation) ex- ists for scientific inquiry, the results of investigations dem- onstrate that this is not the case. In the case of estates, the number subjected to legacy and succession duties within the last fifty years has increased in a ratio double that of the population, but the average amount of property per estate has not sensibly augmented. If, therefore, wealth among the capitalist classes has greatly increased, as it has, there are more owners of it than ever before ; or, in other words, wealth, to a certain extent, is more diffused than it was. Of the whole ntimber of estates that were assessed for probate duty in Great Britain in 1886, 77'5 per cent were for estates representing property under £1,000 ($5,000). In the matter of national income, a study of its increase and apportionment among the different classes in Great Britain has led to the following conclusions: Since 1843, when the income-tax figures begin, the increase in national income is believed to have been £755,000,000. Of this amount, the income from the capitalist classes increased about one hundred per cent, or from £190,000,000 to £400,- 000,000. But, at the same time, the number of the capital- ist classes increased so largely that the average amount of capital possessed among them per head increased only fifteen per cent, although the increase in capital itself was in excess of one hundred and fifty per cent. In the case of the " up- per " and " middle " classes, the income from their " work- 24 358 RECENT ECONOMIC CHANGES. ing " increased from £154,000,000 to £320,000,000, or about one hundred per cent ; while, in the case of the masses (i. e., the manual labor classes), which have increased in popula- tion only thirty per cent since 1843, the increase of their incomes has gone up from £171,000,000 to £550,000,000, or over two hundred per cent. Between 1877 and 1886 the number of assessments in Great Britain for incomes between £150 ($750) and £1,000 ($5,000) increased 19-36 per cent, while the number of assessments for incomes of £1,000 and upward decreased 3"4 per cent.* What has happened to all that large class whose annual income does not reach the taxable limit (£150) is sufficiently indicated by the fact that while population increases pauperism diminishes. Thus, in the United Kingdom, during the last fifty years, the general result of all industrial and societary move- ment, according to Mr. Giffen, has been, that " the rich have become more numerous, but not richer individually; the ' poor ' are, to some smaller extent, fewer ; and those who remain ' poor ' are, individually, twice as well off on the aver- age as they were fifty years ago. The poor have thus had almost all the benefit of the great material advance of the last fifty years." * The following table sliows how wealth Ib distributed in the different classes of income-tax-payers in Great Britain under Schedule D, which com- prises incomes from profits on trades and employments : "In 1887 the number of assessments of incomes from £150 to £500 was 285,754, and in 1886 it was 347,031, shjowing an increase of 21-4 per cent ; of incomes between £500 and £1,000, the numbers were, in 1877, 32,085, and in 1886, 32,033, no increase at all ; of incomes between £1,000 and £5,000, the numbers were, in 1877, 19,726, and in 1886, 19,250, a decrease of 2-4 per cent ; and of the incomes over £5,000, the numbei-s were, in 1877, 3,122, and in 1886, 3,048, a decrease of 2-3 per cent. It results that from these figures the increase of the income-tax during times of depression and daring ordinary times, during the times which we have been going through and which have not been times of great prosperity, there has been a most satisfactory increase in the incomes below £500, while no similar increase is seen in the incomes between £500 and £1,000, and upward."— Me. Goschen, " On the Distribu- tion of Wealthy" Boyal Statistical Society of England, 1887. BRITISH KATIONAL SCHOOL SYSTEM. 359 The following further citations from the record of the recent economic experiences of Great Britain are also strongly confirmatory of the above conclusions : The amount of life-assurance in the United Kingdom exceeds that of any other country ; having risen from £179,- 900,000 ($873,314,000) in 1856 to £436,600,000 ($2,073,- 376,000) in 1885. The record further shows a very rapid increase in the number of policies issued, while the average amount of the policies continues small ; the meaning of which clearly is, that a larger number of people are not only continually becoming provident, but able to insure them- selves for small amounts. The amount of savings invested in the co-operative stores of Great Britain, in which her working-classes are especially interested, was estimated in 1888 to be adequate for the handling of a retail business exceeding a hundred million dollars per annum. The changes in the relations of crime and of educational facilities during the last fifty years of the history of the British people, which have occurred and are still in progress, are in the highest degree encouraging. In 1839 the num- ber of criminal offenders committed for trial was 54,000 ; in England alone, 24,000. Now the corresponding figures (1887) were. United Kingdom, 18,305 ; England, 13,293. In 1840 one person for every 500 of the population of the British Islands was a convict ; in 1885 the proportion was as one to every 4,100. As late as 1843 there was no national school system in England, and there were towns with populations in excess of 100,000 in which there was not a single public day-school and not a single medical charity. Now education has be- come one of the principal cares of the nation. In 1884 the number of attendants upon schools in the United Kingdom was reported at 5,350,000. In 1887 the number in attend- ance upon schools, for the support of which grants of money are made by Parliament (and which correspond to the pubr 360 RECENT ECONOMIC CHANGES. lie schools of the United States) was 4,019,116, an increase over the preceding year of 103,801. The amount of such parliamentary grants for 1887 was — including Ireland— $34,617,965 ; increase over 1886 of $1,431,005. If we gauge the efficiency of the British educational system in 1887 with what it was in 1870 by the number of teachers employed, the results are equally remarkable. In 1870 there were only 12,467 certificated and 1,262 assistant-masters, while in 1887 there were 43,628 certificated and 18,070 assistant-masters engaged in teaching in the elementary schools. The amount of money expended in erecting, enlarging, and improving " voluntary " schools in Great Britain, which came under the inspection of the Government since 1870, amounts to £6,000,000 ($29,160,000). One illustration of the effect of this greater attention to education upon the masses of the people of Great Britain is found in the fact that, while in 1855, 35-4 per cent of the persons contracting marriage signed the register with their mark, in 1885 only 12-9 per cent did so. The change which has taken place in the relations of the Government of Great Britain to the national life of its people is also very remarkable. Thus, at the commencement of the present century the British Government annually appropriated and spent about one third of the national in- come ; now it expends annually about one twelfth. But for this greatly diminished expenditure the masses of the people now receive an immensely greater return than ever before : in the shape of increased postal and educational facilities, safer navigation, greater expenditures for the maintenance of the public health and public security, greater effort for preventing abuses of labor, etc. Another notable thing is the extent to which the poorer classes of Great Britain have been relieved from immediate burdens of taxation. The taxes which they have to bear, as is the case in the United States, fall primarily on commodities, and are included in national accounts under the heads of customs and excise. RECENT PROGRESS OP THE BRITISH PEOPLE. 361 In 1836 the receipts per head of population from these sources were 30s. Qd., and in 1886 24s. M. But of these rev- enues the largest proportion is derived from the taxes on Kquors and tobacco, which are pure luxuries ; and if such taxes be deducted and allowed for, the taxation of Great Britain through her excise and customs, which was 15s. M. per head on the necessaries or semi-necessaries of life in 1836, was not more than 5s. per head in 1886. Again, with an increase in population from 37,800,000 in 1855 to 36,300,000 in 1885, or thirty per cent, and without a single additional acre of land to place them upon, the physical, intellectual, and moral condition of the British people has steadily improved ; the consumption of spirits, in illustration, having declined in Great Britain, during the last decade, to an extent sufficient to materially afiect the national income.* Between 1881 and 1888 the national debt of Great Britain was reduced by the sum of 1302,846,940 ; or from $3,830,722,305 to $3,527,- 875,365. The general conclusion from all these facts, as Mr. Giffen has expressed it, is, that what " has happened to the working- classes in Great Britain during the last fifty years is not so much what may properly be called an improvement, as a revolution of the most remarkable description." And this progress for the better has not been restricted to Great Brit- ain, but has been simultaneously participated in to a greater or less extent by most if not all other countries claiming to be civilized. So far as similar investigations have been in- stituted in the United States, the results are even more favorable than in Great Britain. If they have not been equally favorable in other than these two countries, we have a right to infer that it has been because the people of the * The decline in the British revenues from taxes on "home "and "for- eign " spirits, from 18Y6 to 188T, was £4,140,000(821,000,000); whereas, if consumption had kept pace with the growth of population, there would have been an increase during this same period of over £2,000,000. 362 RECENT ECONOMIC CHANGES. former have not only started in their career of progress from a lower level of civilization and race basis than the latter, but have had more disadvantages — natural and artificial — than the people of either G-reat Britain or the United States. The average earnings per head of the people of countries founded by the Anglo-Saxon race are confessedly larger than those of all other countries.* But some may say : This is all very interesting and not to be disputed. But how does it help us to understand better, and solve the industrial and social problems of to-day, when the cry of discontent on the part of the masses is certainly louder, and the inequality of condition, want, and suffering is claimed to be greater than ever before ? In this way : The record of progress in Great Britain above described is indisputably a record that has been made under circum- stances that, if not wholly discouraging, were certainly un- favorable. It is the record of a country densely populated and of limited area, with the ownership, or free use of land, restricted to the comparatively few; with (until recent years) the largest national debt known in history ; with a heavy burden of taxation apportioned on consumption rather than on accumulated property, and the reduction of which, a participation in constant wars and enormous military and naval expenditures have always obstructed or prevented ; with a burden of pauperism at the outset, and, indeed, for the first half of the period under consideration, which almost threatened the whole fabric of society ; and, finally, with a long-continued indisposition on the part of the governing classes to make any concessions looking to the betterment * A recent British authority makes the highest average earnings per head in any country to be in Australia, namely, £43 4s. Next in order, he places the United Kingdom, with an average per capita earning capacity of £35 4«. ; then the United States, with an average capadty of £2T 4s. ; and next, Can- ada, with an average of £26 18s. For the Continent of Europe the average is estimated at £18 Is.— Sie Eiciiakd Teuple, ^^ Journal of the Boyal Statistical Society," September, 1884, p. 476. HIGHER VANTAGE-GROUND OP HUMANITY. 363 of the masses, except under the pressure of influences which they had little or no share in creating. And yet, without any "violent specifics," or radical societary changes, and apart from any force of statute law, except so far as statute law has been an instrumentality for making previously existing changes in public sentiment effective ; but rather through the steady working of economic laws under con- tinually increasing industrial and commercial freedom, the working masses of Great Britain, " in place of being a de- pendent class, without future and without hope, have come into a position from which they may reasonably expect to advance to any degree of comfort and civilization." Now, with humanity occupying a higher vantage-ground in every respect than ever before ; with a remarkable increase in recent years in its knowledge and control of the forces of nature — the direct and constant outcome of which is to increase the abundance of all useful and desirable commodi- ties in a greater degree than the world has ever before ex- perienced, and to mitigate the asperities and diminish the hours of toil — is it reasonable to expect that further progress in this direction is to be arrested ? Is the present genera- tion to be less successful in solving the difficult social prob- lems that confront it than were a former generation in solving like problems which for their time were more diffi- cult and embarrassing ? If the answer is in the negative, then there is certainly small basis for pessimistic views re- specting the effect of the recent industrial and social tran- sitions in the future. But, in view of these conclusions, what are the reasons for the almost universal discontent of labor ? IX. The discontent of labor— Causes for— Displacement of labor— Results of the invention of stocking-making machinery — Increased opportunity for em- ployment contingent on Arkwright's invention — Destructive influences of material progress on capital — Effect of the employment of labor-saving machinery on wages — On agricultural employments — Extent of labor displacement by machinery — The cause of Irish discontent not altogether local — Impoverishment of French proprietors — Is there to be an anarchy of production ? — Effect of reduction of price on consumption — On oppor- tunities for labor — Illustrative examples — Influence of taxation- on restrain- ing consumption — Experiences of tolls on Brooklyn Bridge — Character- istics of different nationalities in respect to the consumption of commodi- ties — Creatiou of new industries — Effect of import taxes on v?orks of art • — Tendency of over-production to correct itself — Present and prospective consumption of iron — Work breeds work — Pessimistic views not pertinent to present conditions. A The causes of the almost universal discontent of labor, wnich has characterized the recent transitions in the world's methods of production and distribution, and which, inten- sified by such transitions, have been more productive of disturbances than at any former period^(for, as previously shown, there are really no new factors concerned in the ex- periences under consideration), would seem to be mainly these : 1. The displacement or supplanting of labor through more economical and effective methods of production and distribution. 2. Changes in the character or nature of employments consequent upion the introduction of new methods — ma- chinery or processes — which in turn have tended to lower the grade of labor, and impair the independence and restrict the mental development of the laborer. THE DISCONTENT OP LABOR. 355 3. The increase in intelligence, or general information, on the part of the masses, in all civilized countries. To a review of the character and influence of these sev- eral causes, separately and in detail, attention is next in- vited. And, first, as to the extent and influence of the dis- placement of labor through more economical and effective methods of production and distribution. Of the injury thus occasioned, and of the suffering attendant, no more pitiful and instructive example of recent date could be given than the following account, furnished to the United States De- partment of State,* of the effect of the displacement of hand-loom weaving in the city of Chemnitz, Saxony, by the introduction and use of the power-loom : In 1875 there were no less than 4,519 of the so-called " master- weavers" in Chemnitz, each of whom employed from one to ten Jour- neymen at hand-loom weaving in his own house. The introduction of machinery, however, imposed conditions upon these weavers which they found the more difficult to meet the more the machinery was im- proved. The plainer goods were made on power-looms, and work in the factories was found to be more remunerative. Instead of giving work to others, they were gradually compelled to seek work for them- selves. The independent " master " soon fell into ranks with the de- pendent factory-hand, but as he grew older and his eye-sight failed him he was replaced by younger and more active hands, aud what once promised to become a well-to-do citizen in his old age now bids fair to become a burden upon the community. Those who had means of pro- curing the newer Jacquard contrivance, or even the improved "leaf " or "shaft-looms,'' managed to eke out a subsistence ; but the prospects of the weavers who have learned to work only with the hand-looms are becoming more hopeless every day. Now, while such cases of displacement of labor appeal most strongly to human sympathy, and pre-eminently con- stitute a field for individual or societary action for the pur- pose of relief, it should be at the same time remembered * Report of United States Consul George C. Tanner, Chemnitz, December, 1886. 366 RECENT ECONOMIC CHANGES. that the world, especially during the last century, has had a large experience in such matters, and that the following points may be regarded as established beyond the possibility of contradiction : 1. That such phases of human suffering are now, always have been, and undoubtedly always will be, the inevitable concomitants of the progress of civilization, or the transitions of the life of society to a higher and better stage. They seem to be in the nature of " growing-pains," or of penalty which Nature exacts at the outset, but for once only, whenever mankind subordinates her forces in greater degree to its own will and uses. 2. That it is not within the power of statute enactment to arrest such tran- sitions, even when a large and immediate amount of human suffering can certainly be predicated as their consequent, except so far as it initiates and favors a return of society toward barbarism ; for the whole progress in civilization consists in accomplishing greater or better results with the same or lesser effort, physical or mental. 3. All experience shows that, whatever disadvantage or detriment .the intro- duction and use of new and improved instrumentalities or methods of production and distribution may temporarily entail on individuals or classes, the ultimate result is always an almost immeasurable degree of increased good to man- kind in general. In illustration and proof of this, attention is asked to the following selection from the record of a great number of well-ascertained and pertinent experiences : The invention of the various machines which culmi- nated in the knitting or weaving of stockings by machinery in place of by hand, occasioned great disturbances about the commencement of the present centui-y among a large body of operatives in the counties of Leicester and Nottingham, in England, who had been educated to old methods of stock- ing-making and were dependent upon the continued prose- cution of them for their immediate livelihood. The new stocking-frames as they were introduced were accordingly destroyed by the handicraft workmen as opportunity favored DISPLACEMENT OP LABOR BY MACHINERY. 367 (over one thousand in a single burst of popular fury), houses were burned, the inventors were threatened and obliged to fly for their lives, and order was not finally restored until the military had been called out and the leading rioters had been arrested and either hanged or transported. Looking back over the many years that have elapsed since this special labor disturbance (one of the most notable in history), the first impulse is to wonder at and condemn what now seems to have been extraordinary folly and wrong on the part of the masses, in attempting to prevent by acts of violence the supersedure of manual labor engaged in making stockings through the introduction and use of ingenious stocking- making machinery. But, on the other hand, when one remembers the number of persons who, with very limited opportunity for any diversity of their industry, and with the low social and mental development incident to the period, found themselves all at once and through no fault of their own deprived of the means of subsistence for themselves and their families, and are further told by the historian of the period * that, from the hunger and misery entailed by this whole series of events, the larger portion of fifty thousand English stocking-knitters and their families did not fully emerge during the next forty years, there is a good deal to be set down to and pardoned on account of average human nature. The ultimate result of the change in the method of making stockings and its accompanying suffering has, how- ever, unquestionably been that for every one person poorly fed, poorly paid, badly clothed, and miserably housed, who at^ the commencement of the present century was engaged in making stockings on hand-looms or in preparing the ma- terials out of which stockings could be made, one hundred at least are probably now so employed for a third less num- ber of hours per week, at from three to seven times greater * " History of tbe Machine-wrought Hosiery Manufactures," by William Felkin, Cambridge, England, 1867. 368 EBCENT ECONOMIC CHANGES. average wages, and living under conditions of comfort that their predecessors could hardly have even anticipated.* The following positive statistical data, derived from an- other department of textile industry, will also show that in these statements there is nothing of assumption and over- estimate, but rather a failure to present the magnitude of the actual results. Thus, Arkwright invented his cotton- spinning machinery in 1760. At that time it was estimated that there were in England 5,300 spinners using the spin- ning-wheel, and 2,700 weavers ; in all, 7,900 persons engaged in the production of cotton textiles. The introduction of this invention was opposed, on the ground that it threatened the ruin of these work-people ; but the opposition was put down (in some instances by force), and the machine brought into practical use. Note next what followed. In 1787 — or twenty-seven years subsequent to the invention — a parlia- mentary inquiry showed that the number of persons actually engaged in the spinning and weaving of cotton had risen from 7,900 to 320,000, an increase of 4,400 per cent. In 1833, including the workmen engaged in subsidiary in- dustries, such as calico-printing, this number had increased to 800,000 ; and at the present time the number who di- rectly find employment in Great Britain in manufacturing cotton is at least 2,500,000. In strong contrast also with the report of the pitiful dis- tress of the displaced hand-loom weavers of Saxony comes this other statement from many sources: That in all the great manufacturing centers of Germany, and especially in * The wages of the stocking-knitters in LeicesteTshiro in the early years of this century were among the rery lowest paid in any branch of industry in Great Britain, and did not exceed on an average six shillings a week. In 1880 the wages paid iirst-olass operatives (men) in the hosiery -factory of the late A. T. Stewart, at Nottingham, England, were iis. 5d. per week, and for girls of similar capabilities 16s. 6d. Within more recent yeare further improve- ments in machinery, by creating a disproportion between the supply of the labor of framework-knitters and the demand for it, has again greatly disturbed the condition of the work-people in this branch of industry in England. LAW OF THE DESTRUCTION OF CAPITAL. 369 the cities of Chemnitz (where the hand-looms are being rapidly displaced), in Crefeld, Essen, and in Diisseldorf, the standard of living and of comfort among the masses is far higher than at any former period._ Writing from Mayence under date of January, 1887, United States Commercial Agent J. H. Smith reports that, " although business is in an unsatisfactory state, it does not seem to affect the working- man greatly. Wages remain pretty much the same, and few discharges of hands take place. The stagnant state of the market only serves to make the necessaries of life cheaper, and to enhance the purchasing power of the labor- er's money." United States Consul-General Eaine, at Berlin, during the same month, also reported that " wages in Germany show a rising tendency"; that workingmen with permanent work, and wages unchanged, are deriving marked advantages from the low prices of provisions ; and that, although the population of Germany has experienced an increase of three millions since 1879, " no lack of work was noticeable." The readiness with which society comprehends the suf- fering contingent on the relentless displacement of labor by more economical and effective methods of production and distribution, and the overmastering feelings of sym- pathy for individual distress thereby occasioned, cause it to generally overlook another exceedingly interesting and important involved factor, and that is the relentless im- partiality with which the destructive influences of material progress coincidently affect capital (property) as well as labor. It seems to be in the nature of a natural law that no advanced stage of civilization can be attained, except at the expense of destroying in a greater or less degree the value of the instrumentalities by which all previous attainments have been effected. Society proffers its highest honors and re- wards to its inventors and discoverers ;. but, as a matter of fact, what each inventor or discoverer is unconsciously try- ing to do is to destroy property, and his measure of success 370 RECENT ECONOMIC CHANGES. and reward is always proportioned to the degree to which he effects such destruction. If to-morrow it should be announced that some one had so improved the machinery of cotton-manufacture that ten per cent more of fiber could be spun and woven in a given time with no greater or a less expenditure of labor and capital than heretofore, all the existing machinery in all the cotton-mills of the world, representing an investment of millions upon millions of dollars, would be worth little more than so much old iron, steel, and copper; and the man who should endeavor to resist that change would, in face of the fierce competition of the world, soon find himself bankrupt and without capital. In short, all material progress is effected by a displacement of capital equally with that of labor ; and nothing marks the rate of such progress more clearly than the rapidity with which such displacements occur. There is, however, this difference between the two factors involved : Labor displaced, as a condition of progress, will be eventually absorbed in other occupations; but capital displaced, when new ma- chinery is substituted for old, is practically destroyed. It has previously been pointed out that the great and signal result of the recent extraordinary material progress has been to increase the abundance and reduce the price of most useful and desirable commodities. But this statement applies to capital, as a commodity, in common with other commodities; and here comes in another very significant and, from a humanitarian point of view, a most important result, or perhaps rather a " law " (pointed out years ago by Bastiat, and in proof of which evidence will be presently submitted), that, " in proportion to the increase of capital, the relative share of the total product falling to the capitalist is diminished, while, on the contrary, the laborer's share is relatively increased. At the same time all progress, from scarcity to abundance, tends to increase also the absolute share of product to both capitalist and laborer, inasmuch as there is more to divide." INPLCTENCB OP MACHINERY ON WAGES. 371 Again, it is a singular anomaly that, while an increasing cost of labor has been the greatest stimulant to the inven- tion and introduction of labor-saving machinery, labor em- ployed in connection with such machinery generally com- mands a better price than it was able to do when similar results were effected by more imperfect and less economical methods. Perhaps the most remarkable illustration of this is to be found in the experience of the American manufact- ure of flint-glass, in which a reduction, since 1870, of from seventy to eighty per cent in the market price of such articles of glass table-ware as goblets, tumblers, wine-glasses, bowls, lamps, and the like, consequent upon the adoption of methods greatly economizing labor and improving quality, has been accompanied by an increase of from seventy to one hundred per cent in wages, with a considerable reduction in the hours of labor.* M. Poulin, a leading French manufact- urer at Eheims, has recently stated that the results of in- vestigations in France show that during this century the progress of wages and machinery has been similar — the wages in French wool-manufactories, which were one franc and a half per day in 1816, being (in 1883) five francs; while the cost of weaving a meter of merino cloth, which was then sixteen francs, is now If. 45c. " In Nottingham," says Mr. Edwin Chadwick, the distinguished English econo- mist,! " ^'hs introduction of more complex and more costly machinery for the manufacture of lace, while economizing ^ labor, augmented wages to the extent of over one hundred per cent. I asked a manufacturer of lace whether the large machine could not be worked at the common lower wages by any of the workers of the old machine. ' Yes, it might,' was the answer, ' but the capital invested in the new ma- chinery is very large, and if from drunkenness or misconduct * " Eeport on the Statistics of Wages," by Joseph D. Weeks, " Tenth Census of the United States," vol. xx. t " Employers' Liahility for Accidents to Work-people," by Edwin Chad- wick. 372 RECENT ECONOMIC CHANGES. anything happened to the machine, the consequences would be very serious.' Instead of taking a man out of the streets, as might be done with the low-priced machine, he (the em- ployer) found it necessary to go abroad and look for one of better condition, and for such a one high wages must be given." All factory investigations in Great Britain further show that the lowest rates of wages, as a rule, are paid in establishments using old and imperfect machinery, where the output is necessarily comparatively small and inferior. A remarkable exhibit made in a recent report of the Illinois Central Kailroad, showing the cost of the locomotive service for each year for the past thirty years, is also espe- cially worthy of attention in connection with this subject. From this it appears that the cost per mile run has fallen from 36-52 cents in 1857 to 13-93 cents in 1886 ; a reduction which has been effected wholly by inventions and improve- ments in machinery. But a further point of greater inter- est is, that during this same period the wages of the engi- neers and firemen have risen from 4-51 cents to 5-53 cents per mile run ; or, in other words, the engineers and firemen on the Illinois Central, who in 1857 received seventeen per cent of the entire cost of its locomotive service, received in 1886 nearly forty per cent (39-6) of the total cost. A comparison of the accepted statistics of the cotton- manufacturing industry of the United States for the years 1831 and 1880 warrants conclusions which might properly be designated as extraordinary if they were at all excep- tional. Thus, the number of spindles operated by each la- borer was nearly three times greater in 1880 than in 1831 ; the product per spindle one fourth gi-eater ; the product per laborer employed nearly four times as great ; the price of cotton cloth sixty per cent less ; wages eighty per cent higher ; and the consumption of cotton cloth per capita of the population over one hundred per cent greater. The introduction of machinery in many branches of in- dustry — and more especially in agriculture — while increas- SPECIAL CHARACTERISTIC OP MACHINERY. 373 ing, perhaps, the monotony of employment, has also greatly hghtened the severity of toil, and in not a few instances has done away with certain forms of labor which were unques- tionably brutalizing and degrading, or physically injurious.* In fact, one of the special, if not the special characteristic of machinery is, that it always saves the lowest and crudest forms of labor ; and every invention or machine which re- leases manual labor from inferior kinds of work, or from occupations which can be better supplied by a machine, is a positive gain to society. Another paradox which should not be overlooked in this discussion is, that those countries in which labor-saving machinery has been most extensively adopted, and where it might naturally be inferred that population through the displacement and economizing of labor would diminish, or at least not increase, are the very ones in which population has at the same time increased most rapidly. On the other hand, the reports of U. S. Consul Schoenhof to the State Department (1888) show, that the woolen industry of Ire- land, which by reason of the abundance and cheapness of capable labor-supply ought almost to defy competition, is most unprosperous ; and, in great part, through want of enterprise in the use of machinery ; few mills being thor- oughly equipped in this respect, while in whole districts the weaving of woolen cloth is yet done in cabins upon hand- looms. As a result, the number of people employed in this industry in Ireland is comparatively very small, and at wages only sufficient for the insuring of a most miserable subsistence. Taking all the machinery-using countries into account, * Mowing, reaping, raking maoMnery, winnowing, shelling, and weighing machines, hay-tedders, horse-forks, wheel-han'ows, improved plows, better cultivators, and so on through almost the entire list of farm-tools, have com- bined to make the change in fai-m-work almost a revolution ; and those only who have spent years in farming by old methods can fully realize the extent to which the severity of toU has been lightened to the farmer by the introduc- tion and use of macbineiy. 25 374 RECENT ECONOMIC CHANGES, the number of persons who have been displaced during re- cent years by new and more effective methods of production and distribution, and have thereby been deprived of occupa- tion and have suffered, does not appear to have been so great as is popularly supposed ; a conclusion that finds support in the fact, that, notwithstanding trade generally throughout the world has been notably depressed since 1873, through a continued decline in prices, reduction of profits, and depre- ciation of property, the volume of trade — or the number of things produced, moved, sold, and consumed — on which the majority of those who are the recipients of wages and sala- ries depend for occupation, has all this time continually in- creased, and in the aggregate has probably been little if any less than it would have been if the times had been consid- ered prosperous. In the United States there is little evi- dence thus far that labor has been disturbed or depressed to any great extent from this cause. But there is undoubtedly a feeling of apprehension among the masses that the oppor- tunitieis for employment through various causes — continued large immigration, absorption of the public lands, as well as machinery improvements — are less favorable than formerly, and tend to be still further restricted ; and this apprehen- sion finds expression in opposition to Chinese immigration, to the importation of foreign labor on contract, to the in- crease in the number of apprentices, and in the endeavor to restrict the participation in various employments to mem- bership of certain societies. The reports from many of the large industrial centers of the United States during the year 1887 were to the effect that, while specific results are now attained at much less cost and with the employment of much less labor, the increased demand, owing to a reduction in the price and improvement in the quality of the articles manufactured under the new conditions, has operated not merely to prevent any material reduction in the rates of wages, or in the number of employes, but to largely increase both rates and numbers. The annual investigation made CONDITIONS FOR EMPLOYMENT. 375 by the managers of " Bradstreet's Journal " into the con- dition of the industries of the country for 1887, indicated that in March of that year 400,000 more industrial employes were at work than in 1885. In thirty-three cities the num- ber of employes at work was 992,000 by the census of 1880, 1,146,000 in January, 1885, and 1,450,000 in March, 1887. The change in the average wages received between 1885-87 as compared with 1882-'85, shows a very general increase : from ten to fifteen per cent in woolen goods and clothing ; fifteen in cotton goods, silk goods, and iron-mills ; twelve per cent in the wages of three fourths of the employes of beef- and pork-packing establishments ; twenty per cent in anthracite-coal mining, and the like. In the case of the boot and shoe industry, an opinion expressed by those com- petent to judge is, that while " there has been a reduction in cost and in the number of employes per one hundred cases produced of from fifteen to twenty per cent, the actual number of persons employed has been increased ; and in cases where the wages of old classes of workmen are affected they have been raised." In the United States, notwithstanding the large sup- plementation in recent years of manual labor engaged in agriculture by machinery, and the further fact that certain branches of agriculture have been regarded as un- profitable, no large number of agricultural laborers have been reported as unemployed ; the continually increasing diversity of occupations concurrently opening up to them, in common with all laborers, new avenues for employ- ment. On the Continent of Europe, the grievances of labor, attributable to new conditions of production and distribution, seem to be mainly confined to the agriculturists and to those bred lo handicraft employments; and for both of these classes the outlook is not promising. In Great Britain the number of persons who are in want, for lack of employment, appears to have largely increased 376 RECENT ECONOMIC CHANGES. in receut years.* But as there has been no cessation in the growth of the mechanical industries of the United King- dom, or in her transportation service by land or sea, or in her production of coal and iron,, or in the consumption of her staple food commodities — such growth, although not increasing as it were by " leaps and bounds," as in some former periods (as during the decade from 1865 to 1875), being always in a greater ratio than her increase in popula- tion, f it would seem that any increase in the number of her necessarily unemployed must have been mainly derived from the one branch of her industry that has not been prosperous, namely, agriculture, in which the losses in recent years on the part alike of landlords, tenants, and farm-laborers, from decline in land and rental values, in the prices of farm prod- ucts, and through reduction of wages, has been very great.J * " The one thing which I, and those associated with me, always at once peremptorily refuse to do," said recently an English (London) clergyman whose life is among the poor, " is to try and get men, women, and children work to do. I say at once : ' That is impossible. To get you work would be to deprive some other one of work, and that I can not do,' " the meaning ot which was that every occupation in London, in the opinion of the speaker, was full. t The ratio of increase in the population of the United Kingdom between 1875 and 18S5 was about ten per cent. During the same period the increase in the production of coal was twenty per cent ; in pig-iron, sixteen per cent ; in railway receipts from goods-traffic per head of population, eighteen per cent; in shipping engaged in foreign trade, thirty-three per cent; in con- sumption of tea per head, thirteen and u half per cent ; in sugar per head, nineteen per cent. t ''The agricultural returns for Great Britain tell us that, from 187S to 1884, the quantity of arable land in the country has decreased considerably mora than a million acres. The reason of this is chiefly that landlords hav- ing farms thrown on their hands, and being unable to obtain fi:esh tenants, find it the most economical method to lay down the land in permanent past- ure, which requires the minimum of labor, superintendence, and expenditure to work. This in part explains the forced exodus of the agricultural laborers no longer required to cultivate the land thus laid down. About tw8nty-five laborers are required on an arable fann of one thousand acres, while probably five would be ample on the same quantity of pasture ; and we should have a diminution of twenty thousand laborers from the change of cultivation which has taken place, or, with their families, a population of sixty or eighty thou- DISCONTENT OP IRELAND. 377 Mr. Alfred Russel Wallace inclines to the opinion that twenty thousand English farm-laborers, involving, with their families, a population of from sixty to eighty thousand, were, between 1873 and 1887, obliged to quit their homes, and mostly drifted to the larger cities, in consequence merely of substituting, through the increasing unprofitableness of grain-culture, pasture for arable land. We have in these facts, furthermore, a clew to the cause of the increased discontent in recent years in Ireland. If the Irish tenantry could pay the rent demanded by the land- lords, and at the same time achieve for themselves a com- fortable subsistence, there would be no necessity for extraor- dinary governmental interference on their behalf ; and this was what, prior to the years 1873-'75, the prices of farm products — especially of all dairy products — enabled the bet- ter class of Irish tenants to achieve. But, since then, the fall of prices has entirely changed the condition of affairs, and made a reduction and perhaps an entire abolition of the rents of arable land in Ireland an essential, if the Irish ten- ant is to receive anything in return for his labor. A French economist — M. de Grancey — who has recently published the results of a study of Ireland, founded on a personal investi- gation of the country, is of the opinion that, although the population of the island has been reduced by emigration from 8,025,000 in 1847 to 4,852,000 in 1887, it is not now ca- pable of supporting in decency and comfort more than from two to three million inhabitants. The same authority tells us that agricultural distress, occasioned by the same agen- cies, exists to-day in Prance in as great a degree as in Great Britain. The peasant proprietors have ceased to buy land and are anxious to sell it ; and in the department of Aisne, sand, which, from this cause alone, have been obliged to quit their homes, and have mostly driited hopelessly to the great towns." In addition, a large number of farms " are now, and have been for some years, lying absolutely waste and uncultivated."—" Bad Times," Alfred Eussel Wallace, Lojf don, 1885. 378 RECENT ECONOMIC CHANGES. one of the richest in Prance, one tenth oi the land is aban- doned, because it is found that, at present prices, the sale of produce does not cover the expenses of cultivation* Now, if it were desirable ' to search out and determine the primary responsibility for the recent large increase in the number of the English unemployed, or for the distress and revolt of the Irish tenantry, or the growing impoverish- ment of the French and German peasant proprietors, it would be found that it was not so much the land and rent policy of these difEerent countries that should be called to account, as the farmers on the cheap and fertile lands of the American Northwest, the inventors of their cost-reducing agricultural machinery, of the steel rail, and of the com- pound marine engine, which, collectively, have made it both possible and profitable " to send the produce of five acres of wheat from Chicago to Liverpool for less than the cost of manuring one acre in England." Prance, in addition, might regard as a special grievance the invention of analine dyes, which have abolished the cultivation of madder, and deprived whole districts in the valley of the Khone of what was for- merly a most profitable agricultural industry. But, looking into this matter from a cosmopolitan point of view, and balancing the aggregate of good and bad results, how small are the evils which have been entailed upon the agricul- tural laborers in England, Ireland, France, or elsewhere, in consequence of changes in the condition of their labor, in comparison with the almost incalculable benefits that have come, in recent years, to the masses of all civil- ized countries, through the increased abundance and cheap- * M. de Grancey is of the opinion that one of the most fertile sources of Irish misery and degradation is the unauthorized and illegal subletting of farms. He states that he met with cases where from forty-five to fifty per- sons lived in a state of semi-starvation on a farm calculated to yield a com- fortable subsistence to a family of five or six. In each generation, the farm, in despite of special prohibitory clauses in the lease, is divided among the sons. Where there are no sons, subtenants arc found willing to take small parcels of land at the most exorbitant prices. WONDERFUL ECONOMIC PHENOMENA. 379 ness of food, and a consequent increase in their comfort and vitality ! Another matter vital to this discussion may here and next be properly taken into consideration. As the evidence is conclusive that the direct effect of material progress is to greatly increase and cheapen production and to economize labor ; and as there is no reason to suppose that the maxi- mum of progress in this direction has been attained, and every reason to expect that the future will be characterized by like and even greater results progressively occurring, the question arises. Is labor to be continually, and in a degree ultimately, displaced from occupation by progressive econ- omy of production ? Is continual and fiercer competition to effect sales, both of product and labor, in excess of cur- rent demands, likely to produce continued disturbance and unhealthy fall of prices, extensive reductions in wages, and the more extensive employment of the cheaper labor of women and children ? Is society working through all this movement toward what has been called an " auarchy of pro- duction " ? Experience thus far, under what may be termed the new regime of production and distribution, does notj however, fairly warrant any such anticipations. Wages, speaking generally, have not fallen, but have increased ; and, except in Germany, there is little indication of a tendency to in- crease the hours of labor, or encroach upon the reservation of Sunday. Everywhere else, even in Russia, the tendency is in the opposite direction. The extent and rapidity of the increase in the consump- tion of all useful and desirable commodities and services which follows every increase in the ability of the masses to consume, is one of the most wonderful of modern economic phenomena ; and the one thing which, more than any other, augments their aiility to consume, is the reduction in the price of commodities, or rather the reduction in the amount of human effort or toil requisite to obtain them, which the 380 RECENT ECONOMIC CHANGES. recent improvements in the work of production and distri- bution have efEected. Better living, contingent on a reduc- tion of efEort necessary to insure a comfortable subsistence, induces familiarity with better things ; constitutes the surest foundation for the elevation of the standard of popular in- telligence and culture, and creates an increasing desire for not only more, but for a higher grade, of commodities and services. There are, therefore, two lines upon which the consumption of the products of labor is advancing : the one, in which the stimulant is animal in its nature, and de- mands food, clothing, shelter, and fuel, for its satisfaction ; and the other intellectual, which will only be satisfied by an increased supply of those things which will minister to a higher standard of comfort and education. Thus far the world's manual laborers have not kept up in culture with the improved and quickened methods of production ; and therefore in certain departments there is not yet that op- portunity for work that there undoubtedly will be in the future. " There is no good reason why a workingman earning one thousand or fifteen hundred dollars a year, as many do, should not desire as many comforts in the shape of furni- ture, books, clothing, pictures, and the like for himself and his family,, and desire them as intelligently, as the minister, or lawyer, or doctor, who is earning a similar amount." But as abstract conclusions in economic as well as in all other matters are best substantiated and comprehended through practical examples, to examples let us turn. And first as to certain notable instances derived from recent ex- periences, showing how remarkably and rapidly increase of consumption has followed reduction of prices, even in cases where the reduction has been comparatively slight, and a marked increase of consumption could not have been rea- sonably anticipated. Among the staple food articles that have greatly declined in price during recent years is sugar, and this decline has RELATION OF CONSUMPTION TO PRICE. 381 been attended with a large increase in consumption; the decUne in the average price of fair refining sugar in the United States (in bond) having been from 4'75 cents per pound in 1883 to 2-93 cents in 1886 ; while the average con- sumption per capita, which was thirty-nine pounds for the five years from 1877 to 1883, was 49-8 pounds for the five years from 1883 to 1887, and 53-6 pounds in 1888. Com- paring 1885 with 1887, the consumption of sugar in the United States increased over eleven per cent, or largely in excess of any concurrent growth of population. Convert- ing, now, so much of this larger consumption as was due to diminished price (probably more than one hundred million pounds) into terms of acres and labor employed in its pro- duction ; into the ships and men required for its transpor- tation ; into the products, agricultural and manufactured, and the labor they represent, that were given in exchange for it, and we can form some idea of the greater opportuni- ties for labor through larger volume of exchanges, and the increased comfort for those who labor, that follows every reduction in the cost necessary to procure desirable things. In 1887, with an import price of about sixteen cents per pound, the importation of coffee into the United States was 331,000,000 pounds. In 1885, with an average import price of eight cents, the importation was 573,000,000 pounds. Between 1873 and 1885 the coffee product of the world that Went to market, concurrently with this large decline in its price, increased to the extent of fifty-two per cent. Subse- quent to 1885, the price of coffee, by reason primarily of a deficient crop in Brazil, greatly advanced, and consumption declined in the year 1887 to the estimated extent of a mill- ion bags for Europe, and an average of two pounds per head in the United States. With the decline in the volume of exchanges consequent on such a decline in the production and consumption of this commodity, the opportunities for the employment and remuneration of labor must obviously also have been correspondingly restricted. 382 RECENT ECONOMIC CHANGES. Previous to the closing months of the year 1887, there was (as has been before shown) a great reduction in the price of copper, contingent upon an increased product and a surplus offering upon the world's markets. The result was such a general extension of the uses of this metal that the United States Geological Survey estimated that, for the year 1886, the increase in the consumption of copper by the leading American manufactories of copper and brass was in excess of twenty-four per cent ; and that a very nearly equal increase was experienced in the preceding year (1885) ; all of which indicated a large if not a fully proportional in- crease for the periods mentioned in the ojoportunity for labor, at comparatively high wages, in these departments of in- dustry. On the other hand, with a large advance in the price of copper during the latter months of 1887, the opera- tions of the manufacturers of copper and brass all over the world were very greatly restricted. Every reduction in the price of gas has been attended with greatly increased consumption, entailing greater demand for labor in the mining and transporting of coal and other materials, and in service of distribution ; and it is very doubtful whether the apprehensions of impairment of the value of the capital of the gas companies, which are always excited by such reductions, are ever, to any disastrous ex- tent, realized ; while it is the general experience that the profits on the increased demand created by cheaper supply continue to afford to the gas companies reasonable and often equal returns on their invested capital. It seems to be also well established that the extensive introduction and use of the electric light has in no way impaired the aggregate con- sumption of gas. In 1831 the average price of cotton cloth in the United States was about seventeen cents per yard ; in 1880 it was seven cents. This reduction of price has been accompanied by an increase in the annual per capita consumption of the people from 5-90 pounds of cloth to 13-91 pounds ; which in ILLUSTRATIONS OF INCREASED CONSUMPTION. 383 turn represents a great increase in all the occupations con- nected with cotton, from its growth to its transformation into cloth and cloth fabrications ; and the evidence is con- clusive that in all these occupations the share of labor in the progressing augmentations of values and quantities has con- tinually increased ; the advance in the wages of the cotton- mill operatives, during the period under consideration, hav- ing been fully eighty per cent. When, through competition, the companies controlling the submarine telegraph lines between the United States and Europe reduced in 1886 their rates from forty to twelve cents per word, two hundred and twelve words, it was re- ported, were regularly transmitted in place of every one ■ hundred previously sent. Assuming this report to be cor- rect, a comparison of receipts under the new and old rates would give the following results : Two hundred and ten words at twelve cents each, $25.20 ; one hundred words at forty cents each, $40 ; or a reduction in rates of seventy per cent impaired the revenues of the lines to an extent of only thirty-seven per cent. A reduction in 1886 in the postal system of the United States of three cents in the fee for domestic money-orders not exceeding $5 (or from eight to five cents) has operated to increase the use of this service to the remitters of small sums in a very noticeable degree, the average amount of each order issued in 1887 being but $12.72 as against an average of $14.33 in 1866, and larger sums in previous years; while the increase in the number of money-orders issued in 1887 was 16-27 per cent greater than in 1886. The following have been the economic changes within a decade in the business of manufacturing American watches, and the manner in which such changes have affected the welfare alike of owners and employes : " A great reduction in price from which there has been no recovery. Business has invariably, and with scarcely notable friction, adjusted , itself to new conditions ; and save only in exceptional cases 384 EKCBNT ECONOMIC CHANGES. — new companies struggling for a place — the capital in- vested has been fairly remunerative. Best of all, the wages of operatives have been maintained ; for one reason among others, that reductions in rates paid for piece-work have operated to stimulate the intelligence of the workman, so that he devises for his special works methods and appliances which not only increase his speed but his product also, and improve its quality. The great decline in recent years in the price of American watches has not been caused by the importation of foreign watches, but has sprung wholly out of an intense competition between American manufacturers ; and from this and other cauSes the industry has experienced all the vicissitudes incident to the occurrence of what are generally denominated ' hard times.' " The following examples of the increase in the consump- tion of commodities, consequent on reductions of price through abatements of taxation, also indicate how largely the opportunities for labor and of the sphere of exchanges or business can be increased in the future by an extension of this policy : Eeductions in the price of tea in Great Britain, following a progressive reduction in the duties on the imports of this commodity, from 2s. 2id. in 1853 to 6d. (the present rate), have been accompanied by an increase in its annual con- sumption from 58,000,000 pounds in 1851 to 183,000,000 pounds in 1886, or from 1-9 pound per head of the popula- tion to five pounds. A removal in 1883 of the comparatively small tax of one cent on every hundred matches imposed by the United States, is reported to have reduced the price about one half, and to have increased the domestic consumption to the extent of nearly one third. In 1883 a few additions were made to the free list under the tariff of the United States, and among them were in- cluded unground spices, which had been previously subjected to duties, which, although heavy as ad valorem, were in ECONOMIC EXPERIENCE OP THE BOOOKLYN BRIDGE. 385 themselves so small specifically (as five cents per pound each on pepper, cloves, and pimento) that their influence on the consumption of the American people, with their acknowl- edged tendency to extravagance, would not have been gen- erally regarded as likely to be considerable ; and yet the removal of the duties on these commodities, which pass almost directly into consumption, carried up their importa- tions in the following remarkable manner : In the case of pepper, from 6,973,000 pounds in 1883 to 12,713,000 pounds in 1888; pimento, from 1,283,000 pounds to 2,000,000 pounds ; cassia-buds, from 27,739 pounds to 248,000 pounds; cloves, from 989,000 pounds to 1,854,000 pounds ; nutmegs, from 661,132 to 1,246,806 pounds; while the importation and consumption of mace in the country more than doubled and that of cayenne pepper more than trebled during the same period. It is evident, therefore, that the masses of the United States during the continuance of these taxes did not have all the spices they would like, to make their food more palatable and savory ; that trade between the spice-produc- ing countries and the United States was restricted ; and, as all trade is essentially an exchange of product for product, that the labor of the United States gained under the new conditions, either by sharing in the greater abundance of useful things, or through an increased opportunity for labor in producing the increase of commodities that the increase of exchanges demanded. The original cost of the suspension-bridge between the cities of New York and Brooklyn was $15,000,000, entailing an annual burden of interest at five per cent of $750,000. When first opened to public use in September, 1883, the rates of fare were fixed at five cents per ticket for the cars, and one cent per ticket for foot-passengers, no ticket being sold at any less price by packages. The total receipts for the first year (1883-'84) from all traffic sources were $402,- 938, and the total number of car and foot passenger was 11,503,440 ; 5,324,140 of the former and 6,179,300 of the 386 RECENT ECONOMIC CHANGES. latter. The results of the first year's operations were not, therefore, encouraging as to the ability of the bridge to earn the interest on the cost of its construction. During the second year (1884-'85), the rates of fare remaining the same, the increase in the aggregate number of passengers was com- paratively small, or from 11,503,440 to 14,051,630 ; but in February, 1885, the rates of fare were greatly reduced— i. e., tickets for the cars (when sold in packages of ten) from five cents to two and a half, and tickets for promenade (when bought in packages of twenty-five) from one cent to one fifth of a cent. The results of this reduction immediately showed themselves in a remarkable increase for the year of seventy-one per cent in the number of car and foot passen- gers, or from an aggregate of 14,051,630 in 1884-'85 to 25,082,587 in 1885-'86, and this aggregate has gone on increasing to 33,116,810 for the year ending December 1, r887. Concurrently also the bridge receipts from traffic tolls have increased from $565,544.45 in 1884-'85 (the last year of high fares) to 1917,961 for the year ending Decem- ber 1, 1888, with a net profit on the operations of the year sufficient to pay two thirds of the interest on the original investment ; or, the result of the bridge operations since the reductions of the rates for its use has been accompanied by an increased passenger movement — car and foot — of one hundred and thirty-five per .cent, and a gain in receipts of sixty-two per cent. A further analysis of the experiences of the New York and Brooklyn Bridge since its construction also reveals some curious tendencies of the American people in respect to consumption and expenditures. During the first year the bridge was open to the public, the number of foot-passengers paying one cent was 6,179,300, and the number of ear-pas- sengers paying five cents was 5,324,140. The next year, fares remaining unchanged, the number of foot-passengers declined to 3,679,733, and the number of car-passengers in- creased to 11,951,630. In the third year, with a reduction ECONOMIC PECULIARITIES. 387 of foot-fares to one fifth of a cent, the number of foot-pas- sengers declined 440,395, or to an aggregate of 3,339,337 ; while the number of car-passengers (with a reduction of fare from five to two and a half cents) increased 10,130,957, or to 31,843,350. For the year ending December 1, 1887, the number of foot-passengers further declined 574,939, or to 3,664,413, while the number of car-passengers further in- creased 8,097,063, or to 37,940,3i3 ; or to a total aggregate of 30,604,313. In the year ending December 1, 1888, the num- ber of foot-passengers increased 131,135, while the increase in the number of car-passengers was 3,390,970, making the total of the latter 30,331,000. A correct explanation of these curious results may not be possible, but one inference from them that would seem to bo warranted is, that when the American people find their pecuniary ability is abundantly sufficient to enable them to satisfy their desire for certain commodities or services, they will disdain to economize ; and this idea may find illustration and confirmation in another in- cident of recent American experience. Thus, when the great decline in the price of sugars occurred in 1883, the American refiners expected that, whatever of increase of consumption might be attendant, would occur mainly in the lower grades of sugar; but, to their surprise, the actual increase was largely in respect to the higher grades. A leading refiner, who, somewhat puzzled at this result, asked one of his work- men for an explanation of it, received the following answer : "I give my wife fifty cents every Monday morning with which to buy sugar for the week for my family, and, as she finds that fifty cents will now buy as many pounds of the white as we once could get of the yellow sugars, she buys the white." A European workman (certainly a Frenchman) would probably have acted differently. He would have tak- en the same grade as before and got two pounds of addition- al sweetening for his money ; or, more likely, he would have bought the same quantity and quality as before, and saved up the measure of the decline of price in the form of money. 388 RECENT ECONOMIC CHANGES. Another explanation of the bridge phenomenon may be that the average American, who is always in a hurry, may think that, with the privilege of riding for two and a half cents, he can not afford the time to avail himself of the privilege of walking for a payment of one fifth of a cent. Mr. Eobert Giffen, in a review of the " Recent Eate of Material Progress in England " (British Association, 1887), recognizes an evident tendency, as that country increases in wealth, for the numbers employed in miscellaneous indus- tries, and in what may be called " incorporeal functions " — that is, as artists, teachers, and others, who minister to taste and comfort in a way that can hardly be called material — to increase disproportionately to those engaged in the produc- tion of the great staples ; and that, therefore, the production of these latter is not likely to increase as rapidly as hereto- fore. All of which is equivalent to affirming that, in virtue of natural law, the evils resulting from the displacement of labor, through more economic methods of production by machinery, are being gradually and to a large extent counter- acted. No one can doubt that this is the tendency in the United States equally as in England, and it finds one strik- ing illustration in the large number of new products that are demanded, and in the number of occupations that have been greatly enlarged or absolutely created in recent years, in consequence of the change in popular taste, conjoined with popular ability, to incur greater expense. Especially is this true in respect to house-building and house-decora- tion. Ten or fifteen years ago the amount of fine outside work in building constructions — in brick, terfa-cotta, stone, and metal — and on interiors, in the way of painting, paper- hangings, wall-coverings with other materials, fine wood- work, carving, furniture-making, carpet- weaving, draperies for doors and windows, stained glass and mirrors, and im- proved and elaborate sanitary heating and ventilating appa- ratus, was but a very small fraction of what is now required.. POSTAL STATISTICS. 339 A few years ago plain buttons, both as respects form and color, represented the bulk of the demand on the part of the public. Gradually, howeyer, the old style of these goods failed to suit the tastes of the multitude and the require- ments of fashion ; and the button-manufacturers now re- port that four times as many buttons — differing widely in form, material, color, ornamentation, and cost— are manu- factured and sold than the market ten years ago demanded. Nothing, furthermore, is more certain than that all these new departments of industry are to continue progressively enlarging; for all achievements in this direction increase taste and culture, and these in turn create new and enlarged spheres for industrial occupation. How these same influences exert themselves for the ex- tension of the intercommunication of intelligence, with the attendant increased demand for service and materials which represent opportunities for labor, is exemplified in the fol- lowing postal statistics, the result of recent German investi- gation : Thus, for the year 1865 it is estimated that the in-, habitants of the world exchanged about 2,300,000,000 letters ; in 1873, the aggregate was 3,300,000,000 ; in 1885, includ- ing postal-cards, it was 6,257,000,000 ; in 1886, 6,926,000,000, with a larger ratio of increase in the transmission of printed matter, patterns, and other articles ; the whole business givr ing employment to about 500,000 persons, for more than one half of which number there was probably no require^ ment for service under conditions existing in 1873. And to this aggregate should be added the increased number re^ quired to meet the greater requirements for the machinery and service of larger transportation, and vastly larger con- sumption of all the material and service incident to corre- spondence. The experience of the postal service of the United States also, shows that, at all those points where a free delivery of letters has been established, the postal reve^ nues have quickly and greatly augmented — another illustra- tion that every increased and cheapened facility for con- 2U 390 RECENT ECONOMIC CHANGES. sumption brings with it greater demands for service or production. A comparatively few years ago the highly specialized profession of journalism did not exist at all, even in its sim- plest form ; and, even more recently, the specialties of mak- ing and attending to telephones have come into existence without anything in the nature of an antecedent foundation. In fact, no small proportion of the many new applications of science that are constantly made have in view the creation of new wants, rather than the satisfying of old ones. In view, then, of the undoubted tendency, as abundance or wealth increases, for labor to transfer itself, in no small proportions, from lower to higher grades — from the produc- tion of the great staples to occupations that minister to comfort and culture, rather than to subsistence — how im- politic, from the standpoint of labor's interests, seems to be the imposition of high taxes (as in the United States) on the importation of works of art of a high character and large cost, under the assumption that it is desirable to tax all such articles as luxuries, and that it is for the interest of the masses to adopt such a policy ! In illustration, let us suppose a man of wealth to purchase and import a costly and beautiful art product. Having obtained it, he rarely finds a compensating return for his expenditure in an exclu- sive and selfish inspection, but rather in exhibiting it to the public ; and the public go away from these exhibitions with such higher tastes and culture as impel them to desire to have in their life-surroundings, as much that is artistic and beautiful— not the work of one, but of many — as their means will allow ; even if it be no more than a cheerful chromo- lithograph, a photograph, a carpet or a curtain of novel and attractive design, a piece of elegant furniture, or of bronze, porcelain, or pottery. And to supply the new and miscel- laneous industries that are created or enlarged by such de- sires and demands, labor will be, as it were, constantly drained off from occupations in which improved machinery tends to ECONOMIC AXIOMS. 391 supplant it, into other spheres of employment in which the conditions and environments are every way elevating, be- cause in them the worker is less of a machine, and the re- wards of labor are very much greater. The phenomena of the over-production, or unremunera- tive supply at current market prices, of certain staple com- modities, although for the time being often a matter of difficulty and the occasion of serious industrial and commer- cial disturbances, are also certain, in each specific instance, to sooner or later disappear in virtue of the influence of what may be regarded as economic axioms, namely : that we produce to consume, and that, unless there is perfect reciprocity in consumption, production will not long con- tinue in a disproportionate ratio to consumption ; and also that, under continued and marked reduction of prices, con- sumption will quickly tend to increase and equalize, or ac- commodate itself to production. Illustrations of the adua and possible under this head, and of the rapidity with which conditions are reversed and "over-production" disappears, are most curious and instructive. For example, all authorities in 1885 were agreed that the then existing capacity for manufacturing cotton was greatly in excess of the world's capacity for consumption; the season of 1885-86 closing with a surplus of nearly 400,000,000 yards on the British market, for which the manufacturers found no demand. Since that date, however, and with no extraordinary devel- opment of business activity in any country, the world's con- sumption of cotton fabrics has reached a larger total than ever before, and there are probably at the present time (1889) no more spindles in existence than are necessary to supply the current and immediately prospective demand for their products. In the case of sugar, also, an increase in consumption occasioned by low prices, and a notable re- striction of production through the same price influences, reduced an estimated actual surplus of sugar on the. world's markets in October, 1885, of 1,043,956 tons, to 568,188 tons 392 RECENT ECONOMIC CHANGES. in October, 1887, and to practically nothing in January, 1889. The production of very few articles has increased in re- cent years in a ratio so disproportionate to any increase of the world's population as that of iron, and prices of some standard varieties have accordingly touched a lower range than were ever before known. Gloomy apprehensions have accordingly been entertained respecting continued over-pro- duction, and its disastrous influence in the future on the involved capital and labor. To comprehend, however, the possibilities for this industry in the future, it is only neces- sary to have in mind, that in 1882 (and the proportions have not probably since varied) the population of the United States and of Europe (398,333,750), comprising about one fourth of the total population of the world (1,424,686,000), consumed nineteen twentieths of the whole annual produce tion of iron and steel, and that if the population of the world outside of Europe and the United States should in^ crease their annual per capita consumption of iron (which is not now probably in excess of two pounds) to only one half of the average annual per capita consumption of the people of a country as low down in civilization as Kussia, the annual demand upon the existing producing capacity of iron would be at once increased to the extent of over six million tons. And, when it is further remembered that civilization is rapidly advancing in many countries, like India, where the present annual consumption of iron per capita is very small (2-4 pounds), and that civilization can not progress to any great extent without the extensive use of Iron, the possibilities for the enormous extension of the iron industry in the future, and the enlarged sphere of em- ployment of capital and labor in connection therewith, make themselves evident.* * Acoordinj» to a table presented to the British Iron Trade Association by ,Mr. Jeans in i882, and subsequently incorporated in a report submitted by WORLD'S CONSUMPTION OF IRON. 393 As constituting a further contribution to the study of the so-called industrial phenomenon of " over-production " and as illustrating how a greater abundance and cheaper price of desirable commodities, work for the equalization and betterment of the conditions of life among the masses, the recent experience of the article of quinine should not bB overlooked. Owing to greatly increased and cheaper supplies of the cinchona-bark, from which quinine is ex- tracted, and to the employment of new and more economi- cal processes, by which more quinine can be made in from three to five days than could be in twenty under the old system, the markets of the world in recent years have been overwhelmed with supplies of this article, and its price has declined in a most rapid and extraordinary manner, namely : from 16s. 6d. ($4.10) the ounce in the English market in 1877, to 13s. ($3) in 1880 ; 3s. 6d. (84 cents) in 1883 ; and to Is. 'Sd. (30 cents), or less, in 1887. As quinine is a medi- cine, and as the increase in the consumption of medicines is dependent upon the real or fancied increase of ill-health among the masses, rather than on any reduced cost of sup- ply (although, in the case of this specific article, decreased cost has undoubtedly somewhat increased its legitimate con- Sir Lowthian Bell to the British Commission " On the Depression of Trade " ill 1885 (and from which the above data have been derived), the total con- sumption of iron in the above year was 20,567,746 tons. Of this aggregate, the United States and the several countries of Europe, with a population at that time of 398,333,750, consumed 19,057,963 tons, the following five coun- tries, namely, the United States, the United Kingdom of Great Britain, France, Germany, and Belgium, with a population of 174,506,935, consuming 16,259,- 514 tons. The aggregate consumption of iron hy the population of all the other countries of the world at that time (assumed to bo 1,424,686,570) v,'as estimated at 1,509,783 tons, or, deducting the consumption of the population of the British possessions other than in India (as Australia, etc.), at only 888,298 tons, or 1-96 pound per head per annum. The annual per capita con- sumption of different countries in 1882 was reported as follows : The United JKmgdom, 287 pounds ; the United States, 270 pounds ; Belgium, 238 pounds ; France, 149 pounds ; Germany, 123 pounds ; Sweden and Nor^-ay, 77 pounds ; Austrian territories, 87 pounds ; Eussia, 24-06 pounds ; South America and the islands, 13'5 pounds ; Egypt, 7'5 pounds ; India, 2-4 pounds. 394 EECENT ECONOMIC CHANGES. sumption), the problem of determining how a present' and apparently future over-production was to be remedied has been somewhat difficult of solution. But recently the large manufacturers of Europe have made an arrangement to put up quinine (pills), protected by gelatine, and introduce and offer it so cheaply in the East Indies and other tropical countries, as to induce its extensive consumption on the part of a vast population inhabiting malarious districts which have hitherto been deprived of the use of this valuable spe- cific by reason of its costliness. And it is anticipated that by reason of its cheapness it may, to a considerable extent, supersede the use of «opium among the poorer classes living along the Chinese rivers, who it is believed extensively consume this latter pernicious and costly drug, not so much for its mere narcotic or sensual properties, as for the relief it affords to the fever depression occasioned by malaria.* All this evidence, therefore, seems to lead to the con- clusion that there is little foundation for the belief largely entertained by the masses, and which has been inculcated by many sincere and humane persons, who have undertaken to counsel and direct them, that the amount of remunera- tive work to be done in the world is a fixed quantity, and that the fewer there are to do it the more each one will get ; when the real truth is, that work as it were breeds work ; that the amount to be done is not limited ; that the more there is done the more there will be to do ; and that the continued increasing material abundance which follows all new methods for effecting greater production and distribu- * One curious result of the change in the basis of the world's supply of cinohona-hark from South America to the British East Indies has been the almost complete collapse of a formerly large item of the export trade of Co- lombia, South America. Thus, the annual value of cinchona-bark exported by Colombia as recently as the year 1880 was returned at £1,024,V63 ($4,979,- 358) ; but for 1887 the maximum value of its export was not in excess of £8,000 ($38,880). NON-ECONOMIC PACTOKS. 395 tion is the true and permanent foundation for increasing general prosperity. Again : Some pessimists, looking forward to the occupa- tion and highest possible tillage of all the land on the earth's surface, or to the exhaustion of the coal-supply, will per- haps urge that this sanguine view has necessarily its limita- tions. So, too, geologists tell us that all the water on the earth is being gradually absorbed into the mass of the planet, and that ultimate universal aridity is certain ; and some astronomers say that the earth's axis is swinging round so as to bring on another glacial epoch. Bub we are not deal- ing with remote cycles and millennium^, of which we know nothing ; and it is sufficient for the present to alone consider what is now going on in the world, and what we have every reason to believe will continue under substantially the same conditions as now exist. X. Discontent ot labor in consequence of changes in the conditions of employ- ment — Subordination to method and routine essential to all systematized occupations — Compensations therefrom — ^Benefits of the capitalistic sys- tem of production — Werner Siemens's anticipations — Discontent of labor in consequence of greater intelligence — Best definition of the difference between a man and an animal— Increase in personal movement — Change in character of the English, French, and Gennan people — What is social- ism? — Meaning of progressive material and social development — Advance in wages in Great Britain, the United States, and France — Coincident change in the relative number of the lowest class of laborers — ^Eelation of wages to the cost of living — Increase in expenditures for rent — Curious demonsta-ation of the improved condition of the masses — Eeduotion of the hours of labor — Why wages have lisen and the price of commodities fallen — Impairment of the value of capital — Reduction of the ra,t-es of in- terest — Decline in land values. ATTEH^Tioiir is next asked to the second (assumed) cause for the prevailing discontent of labor, namely : Changes in the character or nature of employments con- sequent upon the introduction of new methods — machinery or processes — which it is claimed have tended to lower the grade of labor, impair the independence, and restrict the mental development of the laborer. That such changes have been in the nature of evil, can not be questioned ; but they are not new in character, nor as extensive in number and effect as is popularly supposed. Subordination to routine and method is an essential element in all systematized occupations ; and in not a few employ- ments and professions — as in all military and naval life, and in navigation and railroad work — an almost complete surrender of the independence of the individual, and an un- reasoning mechanical compliance with rules or orders, are KXTREME DIVISION OF LABOR. 397 the indispensable conditions for the attainment of any degree of successful effort. In very many cases also the individual finds compensation for subordination and the surrender of independence in the recognition that such conditions may be but temporary, and are the necessary antecedents for promotion ; and routine and monotony are doubtless in a greater or less degree alleviated when the operative can dis- cern the plan of his work as an entirety, and note its result in the form of finished products. But in manufacturing operations, where the division of labor has been carried to an extreme, where the product of the worker is never more than a fraction of any finished " whole," and where no greater demand is made upon the brain than it shall see to it that the muscles of the arm, the hand, or the finger exe- cute movements at specific times and continuously in con- nection with machinery, there are few such compensations or alleviations ; and the general result to the individual working under such conditions can not, to say the least, be in the line of either healthy mental or physical develop- ment. Happily, however, the number of industries, in which the division of labor and its subordination to machinery has been productive of such, extreme results, is not very large ; the manufacture of boots and shoes by modern ma- chine methods, in which every finished shoe is said to rep- resent sixty-two distinct mechanical employments or prod- ucts, being perhaps the most notable. And yet even here there is not a little in way of compensating benefit to be credited to such a system. Thus, for example, it is stated that "the use of machinery has compelled employes to apply themselves more closely to their work; and, being paid by the piece, has enabled them to make better wages." When shoemaking was a handicraft, " the hours of labor were very irregular ; the workmen, who decided their own hours of labor, working some days only a few hours, and then working far into the night for a few days to make up 398 RECENT ECONOMIC CHANGES. for lost time. It was once customary for shoemakers (in New England) to work on an average fifteen hours a day " ; now the hours of labor in the shoe-factories are not in ex- cess of ten hours. It is also claimed that the introduction of the sewing-machine into the manufacture of boots and shoes has greatly increased the opportunities for the em- ployment of women, at better rates of wages. In the manu- facture clothing, which, in routine and monotony, is analo- gous to the manufacture of boots and shoes, it is generally conceded that the influence of the sewing-machine has been to increase wages, and that, " notwithstanding the constantly growing use of these machines, the number of employes is greater than formerly, owing to the enlargement of the business."* Furthermore, the " collective work which ad- mits of being carried on by the factory principle of great subdivision of labor and by the bringing together of large numbers of people under one roof and one control " does not at present, in the United States, give occupation to more than one in ten of all who follow gainful occupations in the whole country ; while for the other nine the essential elements of industrial success continue, as of old, to be found in individual independence and personal mental capacity; and this experience of the United States will probably find a parallel in all other manufacturing countries. The supersedure of men by women and young persons in textile manufactories, which (as previously noticed) has occurred to such an extent in New England that certain factory towns have come to be popularly designated as " she- towns," at first thought seems deplorable. But, on the other hand, it is certain that such supersedure has been mainly the result of such a diminution of the severity of toil through the improvements in machinery, or such a greater division of labor consequent upon new methods of produc- * " Report on the Statistics of Wages," J. D. Weeks, United States cen- sus, vol. XX. ADVANTAGES OF THE CAPITALISTIC SYSTEM. 300 tion, as have opened up new opportunities for employment to women by making it possible for them to easily do work which, under old systems, required the greater strength and endurance of men ; children, for example, being able to spin yarn on a " ring-frame," which men alone were able to do on a "spinning-mule." And, however such changes may be regarded from the standpoint of the men operatives, the greater opportunity afforded for continuous work at greater wages than could be readily obtained in other occu- pations, is probably not regarded by the women operatives in the light of a misfortune. Experience also shows that the larger the scale on which capitalistic production and dis- tribution is carried on, " the less it can countenance the petty devices for swindling and pilfering," and the neglect and disregard of the health, safety, and comfort of opera- tives, which so generally characterize industrial enterprises on a small scale ; or, in other words, the maintenance of a high standard of industrial and commercial morality is com- ing to be recognized by the managers of all great enterprises as a means of saving time and avoiding trouble, and there- fore as an undoubted and important element of profit. And it is to these facts — the natural and necessary growth of what has been termed the " capitalistic system " — that a re- cent English writer on the condition of the working-classes largely attributes the suppression of the truck (store) sys- tem, the enactment of laws limiting the hours of labor, the acquiescence in the existence and power of trade-unions, and the increasing attention to sanitary regulations; reforms that have reformed away the worst features of the condition of labor as it existed thirty or forty years ago in Great Brit- ain.* The larger the concern, the greater usually the steadi- ness of employment, and the more influential the public opinion of the employed. * " The Condition of the Working Class in England in 1844," by Frederick Engles. 400 RECENT ECONOMIC CHANGES. Dr. Werner Siemens, the celebrated German scientist and inventor, in a recent address at Berlin on " Science and the Labor Question," claimed that the necessity for exten- sive factories and workshops— involving large capital and an almost " slavish " discipline for labor— to secure the maxi- mum cheapness in production, " was due, to a great extent, to the yet imperfect development of the art of practical mechanics " ; and that mechanical skill will ultimately effect " a return to the system (now almost extinct) of independ- ent, self-sustaining domiciliary labor " by the introduction of cheap, compact, easily set up and operated labor-saving machinery into the smaller workshops and the homes of the workingmen. Should the difficulties now attendant upon the transmission of electricity from points where it can be cheaply generated, and its safe and effective subdivision and distribution as a motive force be overcome (as it is not im- probable they ultimately will be), thus doing away with the necessity of multiplying expensive and cumbersome machin- ery — steam-engines, boilers, dams, reservoirs, and water- wheels — for the local generation and application of mechani- cal power, there can be no doubt that most radical changes in the use of power for manufacturing purposes will speedily follow, and that the anticipations of Dr. Siemens, as to the change in the relations of machinery to its operatives, may at no distant day be realized. The third cause which has especially operated in recent years to occasion discontent on the part of labor has been undoubtedly the increase in intelligence or general informa- tion on the part of the masses in all civilized countries. The best definition, or rather statement, of the essential difference between a man and an animal, that has ever been given is, that a man has progressive wants, and an animal has not. Under the guidance of what is termed instinct, the animal wants the same habitat and quantity and quality of food as its progenitors, and nothing more. And the more nearly man approaches in condition to the animal, the more INTELLIGENCE AN ELEMENT OP DISCONTENT. 40I limited is the sphere of his wants, and the greater his con- tentment. A greater supply of blubber and skins to the Eskimo, more " pulque " to the native Mexican, to the West Indian negro a constant supply of yams and plantains with- out labor, and the ability to buy five salt herrings for the same price that he has now to give for three, would, in each case, temporarily fill the cup of individual happiness nearly to repletion. And, among civilized men, the contentment and also sluggishness of those neighborhoods in which the population come little in contact with the outer world and have little of diversity of employment open to them, are proverbial. Now the wonderful material progress which has been made within the last quarter of a century has probably done more to overcome the inertia, and quicken the energy of the masses, than all that has been hitherto achieved in this di- rection in all preceding centuries. The railroad, the steam- ship, and the telegraph have broken down the barriers of space and time that formerly constituted almost insuperable obstacles in the way of frequent intercourse between people of different races, countries, and communities, and have made the civilized world, as it were, one great neighborhood. Every increased facility that is afforded for the dissemina- tion of intelligence, or for personal movement, finds a mar- velously quick response in an extended use. The written correspondence — letters and cards — exchanged through the world's postal service, more than doubled between the years 1873 and 1885 ; while in the United States the number of people annually transported on railroads alone exceeds every year many times the total population of the country, the annual number for the JSTew England States being more than sixteen times greater than their population. Under these powerful but natural educating influences, there has been a great advance in the intelligence of the masses. They have come to know more of what others are doing ; know better what they themselves are capable of doing; 402 RECENT ECONOMIC CHANGES. and their wants have correspondingly increased, not merely in respect to quantities of the things to which they have always been accustomed, but very many articles and services which within a comparatively recent period were regarded as luxuries, are now almost universally considered and de- manded as necessaries. At the same time, the increased power of production and distribution, and the consequent reduction in the cost of most commodities and services, have also worked for the satisfaction of these wants in such a degree that a complete revolution has been effected during recent years in the every-day life of all classes of the people of the great industrial and commercial countries. Let any any one compare the condition of even the abject poor of London, as described in recent publications, with the con- dition of English laborers as described by writers of ac- knowledged authority not more than forty years ago,* and he can not resist the conclusion that the very outcasts of England are now better provided for than were multitudes of her common laboring-men at the period mentioned, f * The condition of agi'icultural laborers in general, and large classes of ar- tisans, in the United Kingdom, forty or fifty years ago, as described by Car- lyle in his " Past and Present " and "• Sartor Eesartus," and by another most reliable English authority, Mr. W. T. Thornton, in his " Over-population and its Eemedy," was so deplorable that it is now diiBoult to realize that it ever existed. t What an enormous stride has been made in the amelioration of the con- dition of the masses of the people of England, taking a moi'e lengthened period into consideration, is strikingly illustrated by the following description, based on authentic data, by Rev. Augustus Jessop, of the condition of the people of the parish of Rougham, in the time of Henry III (1216-1272) : " The people who lived in this village six hundred years ago were living a life hugely below the level of yours. They were more wretched in their pov- erty ; they were incomparably less prosperous in their prosperity ; they were worse elad, worse fed, worse housed, worse taught, worse tended, worse gov- erned ; they were sufferers from loathsome diseases which you know nothing of; the very beasts in the field were dwarfed and stunted in their growth, and I do not believe there were any giants on the earth in those days. The death-rate among the children must liave been tremendous. The disregard of human life wi\s so callous that we can hardly conceive it. There was every- thing to harden, nothing to soften ; everywhere oppression, greed, and fierra- INFLUENCE OP TRAVEL. 493 The widening of the sphere of one's surroundings, and a larger acquaintance with other men and pursuits, have long been recognized as not productive of content.* Writing to his nephew more than one hundred years ago, Thomas Jef- ferson thus concisely expressed the results of his own obser- vation : " Traveling," he says, " makes men wiser, but less happy. "When men of sober age travel they gather knowl- edge, but they are, after all, subject to recollections mixed with regret ; their affections are weakened by being extended over more objects, and they learn new habits which can not be gratified when they return home." Again, as the former few and simple requirements of the masses have become more varied and costly, the individual efEort necessary for the satisfaction of the latter is not relatively less, even under the new conditions of production, thati before, and in many instances is possibly greater. Hence, notwithstanding the large advance in recent years in the average rates of wages, and a greatly increased purchasing power of wages, there is neas. The law of the land was hideously cruel and merciless, and the {^allows aud the pillory — never far from any man's door — were seldom allowed to remain long out of use. The ghastly frequency of the punishment of death tended to make people savage and bloodthirsty. It tended, too, to make men absolutely reckless of consequences when once their passions were roused. ' As well be hung for a sheep as a lamb,' was u saying that had a grim truth in it. The laborer's dwelling had no windows ; the hole in the roof which let out the smoke rendered windows unnecessary. The laborer's fire was in the middle of his house ; he and his wife and children huddled around it, sometimes groveling in the ashes ; and going to bed meant flinging themselves down upon straw. The laborer's only light at night was the smoldering fire. Why should he bum a rush-light when there was nothing to look at ? " Should we like to change with these forefathers of ours, whose lives were passed in the way described, six hundred years ago ? Were the former times better than these ? Has the world grown worse as it has grown older i Has there been no progress, but only decline ? " * Increased facility for communication between Great Britain and the United States has without doubt been a large factor in occasioning the present pro- found discontent of Ireland ; and political subjugation and their existing .land system have been more intolerable to the Irish peasant and artisan, since they hfive been enabled to compare the institutions under which they live with those which their expatriated fellow-countrymen enjoy elsewhere. 404 RECENT ECONOMIC CHANGES. no less complaint than ever of the cost of living ; when (as M. Leroy-Beanlieu has pointed out in the case of France *) the foundation for the complaint is for the most part to be found in the circumstance that a totally different style of living has been adopted, and that society makes conformity with such difEerent style a standard of family respectability. The change in the character of the people of Germany in respect to content since the Franco-German War in 1871, is especially noticeable. Before the war the unpretending, sta- tionary habits of the people tended to make every one con- tented with his lot and averse to social changes. The war, with its excitements and triumphs, and the establishment •of the empire, which was conditioned upon and accompanied by the enactment of a multitude of laws freeing the social life of the people from a multitude of restrictions by which it was formerly bound, effected a complete metamorphosis, and this, coinciding with a brief period of great commercial activity and wild speculation (see pages 4, 5), created a pro- found impression upon the masses of the people, and seems to have changed permanently and in a great degree their former character. Germany before the war was a country of comparatively cheap living and production. To-day it is not. There is, therefore, unquestionably in these facts an ex- planation in no small part of what to many has seemed one of the greatest puzzles of the times— namely, that with un- doubtedly greater and increasing abundance and cheapness of most desirable things, popular discontent with the existing economic condition of affairs does not seem to diminish, but rather to greatly increase. And out of such discontent, which is not based on anything akin to actual and unavoidable poverty, has originated a feeling that the new conditions of abundance should be further equalized by some other meth- * " The Fall in the Price of Commodities ; its Cause and Effect." By Leroy-Beaulieu. — Economists Frangaiae, April, 18S7. WHAT IS SOCIALISM? 403 ods than iatelligent individual efEort, self-denial, and a nat- ural, progressive material and social development (the actu- ality of which is proved by all experience) ; and that the state coald, if it would, make all men prosperous ; and there- fore should, in some way not yet clearly defined by anybody, arbitrarily intervene and effect it. And this feeling, so far as it assumes definiteness of idea and purpose, constitutes what is called "socialism."* As it is important to make clear the full force and meaning of the term " self-denial " and " natural progressive material and social devel- opment," as above used, attention is asked to the following consider- ations : The investigations of Mr. Atkinson show that an increase of five cents' worth of material comfort per day, for every day in the year, to each inhabitant of the United States, would require the annual production and equitable distribution of more than $1,000,000,000 worth of commodities ! In the last analysis, therefore, national pros- perity and adversity are measurable by a difference which is not in ex- cess of the price of a daily glass of beer ; or, if five cents' worth of product for each inhabitant could be added to the capital of the coun- try in excess of the average for each day in the year, such a year, by reason of its increased exchanges and sum of individual satisfactions, could not be other than most prosperous. * Oq this point the Commiasioner of tho Bureau of Labor Statistics of the State of Connectiout, in his report for 1887, speaks as follows : "Necessary wants have multiplied, and society demands so much in the style of living that the laboring-man finds it almost impossible to live as respectably now on his wages as his father did thirty years since upon his. That is, wages have not kept pace with the increasing wants and style of living demanded by soci- ety. The laborer thinks he sees a wider difference between the style in which his employer lives and the way he is compelled to live, than e.xisted between employer and employes thirty years ago. He thinks that this difference is growing greater with the years. Now, as a man's income is, in general, measured by his style of living, he can not resist the conclusion that a larger share of the profits of business goes to his employer than employers received in former years ; that the incomes of employers have increased more rapidly than the wages of employfe. The laboring people are fully ahve to the fact that modem inventions and the like make larger incomes possible and right. They do not complain of these larger incomes, but they do believe most pro- foundly that they are not receiving their fair share of the benefits conferred upon society by these inventions and labor-saving machines. In this belief lies the principal som-ce of their unrest." 27 406 RECENT ECONOMIC CHANGES. Again, the extraordinary and comparatively recent reductions in the cost of transportation of commodities by land and water (in the case of the New York Central and Hudson Kiver Railroad, for exam- ple, from an average of 3-45 cents per ton per mile in 1865 to 0-68 of a cent in 1885), which have reduced the prices of the common articles of food to the masses to the extent of substantially one half, did not involve in their conception and carrying out any idea of benefiting humanity ; but on the contrary those immediately concerned in effect- ing the improvements that have led to such results never would have abated the rates to the public, but would have controlled and main- tained them to their own profit, had they been able. But, by the force of agencies that have been above human control, they have not only not been able to do so, but have been constrained to promptly accept business at continually decreasing rates, as a condition of making any profit for themselves whatever. And what is true of the results of improvements in the transportation of products is equally true of all methods for economizing and facilitating their production. They are all factors in one great natural movement for continually increasing and equalizing abundance. With this analysis of the causes of the prevailing and almost universal discontent of labor, the following other results — industrial and social — which have been attendant upon the world's recent material progress are worthy of consideration by all desirous of fully comprehending the present economic situation, and the outlook for the future. Advance ik" Wages. — The average rate of wages, or the share which the laborer receives of product, has within a comparatively recent period, and in almost all countries — certainly in all civilized countries — greatly increased. The extent of this increase since 1850, and even since 1860, has undoubtedly exceeded that of any previous period of equal duration in the world's history. Mr. GifEen claims, as the result of his investigations for Great Britain, that " the average money-wages of the work- ing-classes of the community, looking at them in the mass, and comparing the mass of fifty years ago with the mass at the present time, have increased very nearly one hundred ADVANCE IX WAGES. 407 per cent.* It is also conceded of this increase in Great Britain that by far the largest proportion has occurred within the later years of this period, and has been concur- rent with the larger introduction and use of machinery. Thus the investigations of Mr. James Caird show, that the advance in the average rate of wages for agricultural labor in England in the twenty-eight years between 1850 and 1878 was forty-five per cent greater than the entire advance that took place in the eighty years next preceding 1850. Mr. GifEeh has also called attention to an exceedingly interesting and encouraging feature which has attended the recent improvement in money-wages in Great Britain — and which probably finds correspondence in other countries; and that is, that the tendency of the economic changes of the last fifty years has been not merely to augment the wages of the lowest class of labor, but also to reduce in a marked degree the proportion of this description of labor to the total mass — " its numbers having diminished on account of openings for labor in other directions. But this diminu- tion has at the same time gone along with a steady improve- ment in the condition of the most unskilled laborers them- selves." So that, if there had been no increase whatever in the average money- wages of Great Britain in recent years, the improvement in the general condition of the masses in that country " must have been enormous, for the simple reason that the population at the higher rate of wages has increased disproportionately to the others." One of the most interesting and unquestionably one of the most accu- rate investigations respecting the range of wages since 1850, * Thi3 statement was flrrt made by Mr. Giffen in 1883. in his inaugural address as President of the Royal Statistical t^ociety of England, and was received with something of popular incredulity. But recurring to the same subject in another communication to the same society in 1886, Mr. Giffen asserts that further investi!;ations show that there is no .iustification whatever for any doubts that may have been entertained as to the correctness of his assertions. 408 RECENT ECONOMIC CHANGES. in the leading industries of Great Britain, was prepared in 1883 by Mr. George Lord, President of the Manchester (England) Chamber of Commerce, which showed that the percentage increase in the average wages paid in eleven of the leading industries of that city between 1850 and 1883 was forty per cent; the increase ranging from 10-30 per cent in mechanical engineering (fitters and turners) to 74-72 per cent in the case of other mechanics and in medium cotton spinning and weaving. At the meeting of the " Industrial Eemuneration Con- ference " at London, in 1885, Sir Lowthian Bell stated that in the chemical manufacturing industries on the Tyne, England, employing nineteen thousand workmen directly, wages had been increased within his own knowledge in the last twenty-five years thirty-seven and a half per cent, while during the same period the average value of the prod- ucts had declined forty per cent. He also added that all the evidence received from France, Germany, Belgium, and Austria goes to prove that while during the last forty years the cost of living in all these countries had been notably augmented (with an accompanying rise of wages) in the United Kingdom under free-trade measures, with a large average rise in wages, the cost of living has sensibly dimin- ished. In the United States, according to the data afforded by the census returns for 1850 and 1880, the average wages paid for the whole country increased during the interval of these years by 39-9 per cent; or in a slightly smaller ratio of increase than was experienced during the same period in the industries of that district of England of which its city of Manchester is the center. The figures of the United States census of 1850 can not, however, be accepted with confidence.^-' * It is at the same time not a little significant that the Commissioner ol'the Massachusetts Bureau of Labor Statistics should have reported in 1884, as die WAGES IN THE UNITED STATES. 409 As respects agricultural labor in the United States, the assertion is probably warranted that, taking into account the hours of work, rates of wages, and the prices of commod- ities, the average farm-laborer is one hundred per cent better off at the present time than he was thirty or forty years ago. In Massachusetts the average advance in the money-wages of this description of labor between 1850 and 1880 was fifty-six per cent, with board in addition. Between 1842 and 1846 the wages of agricultural labor in the United States sank to almost the lowest points of the century. According to the investigations of the Massachusetts Bureau of Labor Statistics, the average advance in general wages in that State from 1860 to 1883 was 28-36 per cent, while the conclusions of Mr. Atkinson are that the wages of mechanics in Massachusetts were twenty-five per cent more in 1885 than they were in I860. A careful investigation instituted by the Bureau of Labor Statistics for Connecticut of the comparative wages paid in the brass, carpet, clock, silk, and woolen industries of that State in 1860 and 1887, and the comparative co&t of the necessaries of life to the operatives at the same periods (see report for 1888), gave the following results : average ad- vance in the wages of males about forty-three per cent, and of females fifty-seven per cent ; decline in the price of staple dry goods, thirty-nine per cent ; of carpets, thirty-six per cent; increase in the average price of groceries and provisions, ten and a half per cent. " There was an average advance in the retail price of such kinds and cuts of meat as are common to the market reports of both dates of thirty- three per cent." Taking the experience of the cities of St.' Paul and Minneapolis as a basis, recent investigations also show a result of his investigations, that while from 1872 to 1883 wages advanced on an average 9 -74 per cent in Great Britain, they declined on the average in Massachusetts during the same period S-41 per cent. 410 EECENT ECONOMIC CHANGES. marked increase in the average wages of all descriptions of labor in the iN'orthwestern sections of the United States, comparing 1886 with 1875, of at least ten per cent. In all railroad-work, the fact to which Mr. GifEen has called atten- tion as a gratifying result of recent, English experience also here reappears — namely, that the proportion of men earning the highest rates of wages is much greater than it was ten years ago, or more skilled workmen and fewer common workmen are relatively employed. A series of official statistics, published in the " Annuaire Statistique de la France," respecting the rates of wages paid in Paris and in the provinces of France in twenty-three leading industries, during the years 1853 and 1883 respect- ively, show that, during the period referred to, the advance in average wages in Paris was fifty-three per cent and in the provinces sixty-eight per cent, the figures being applicable to 1,497,000 workmen out of a total of 1,554,000 ascertained to be occupied in these industries by the French census of 1876.* More recent returns show that for the whole of France, exclusive of Paris, the increase of wages from 1853 to 1884, " pour la petite Industrie," was about sixty-six per cent. Accepting the wage statistics of France (and they are official), it would, therefore, appear that the rise of wages in that country during the years above reviewed was greater than was experienced in either England or the United States. M. Yves Guyot, the eminent French economist, is also the authority for the statement that the average daily wages of work-women in France engaged in the manufacture of clothing, lace, embroideries, laundry-work, and the like, increased ninety-four per cent between the years 1844 and * " On the Comparative EHioiency and Earnings of Labor at Home and Abroad," by J. S. Jeans, " Journal of the Koyal Statistical Society " (G. B.). December, 1884. CHANGES IN COST OF LIVING. 411 1873. In both Prance and England there has been in recent years a very marked tendency in men to abandon trades in which they formerly competed with women, be- cause better channels have been opened to the women for their activities, and consequently the demand for women's labor has become more and more considerable. In the cotton-mills at Miilhausen, Germany, the rates of increase in wages between 1835 and 1880 range between sixty and two hundred and fifty-six per cent, the increase in the later years, as in other countries, having been par- ticularly noticeable. M. Charles Grad, a French economist, has called attention to the fact that in the textile and metal- lurgic industries of Prance it is the lowest class of workmen whose wages have risen most in the last fifty years. One factor which has undoubtedly contributed some- what to the almost universal rise of wages during the last quarter of the century has been the immense progress that has been made in the abolition of human slavery — direct, as well as in its modified forms of serfdom and peonage — which thirty years ago existed unimpaired over no incon- siderable areas 5f the earth's surface, and exerted a powerful iiifluence for the degradation of labor and reduction of av- erage wages to a minimum. Eelation of Wages to the Cost of Living. — All conclusions as to the efEect of changes in the rates of wages in any country are, however, incomplete, unless accompanied by data which permit of a conversion of wages into living ; for, even the places where an advance in money- wages can not be found (if there are any such), the decline in recent years in the price of commodities is equivalent to an advance in wages. In the case of the United States, and for the period from 1860 to 1885, such data have been furnished by Mr. WilUam M. Grosvenor, through a careful tabulation of the ■prices of two hundred commodities, embracing nearly every commodity in common use. Prom these comparisons, that have thus been made available, it appears that, if the pur- 412 RECENT ECONOMIC CHANGES. chasing power of one dollar in gold coin in May, 1860, be taken as the standard— or as one hundred cents' worth — the corresponding purchasing power of a like dollar in the year 1885 was 26-4:4: per cent more. The artisan in Massachusetts in this latter year, therefore, could either "have largely raised the standard of his living, or, on the same standard, could have saved one fourth of his wages." Similar investi- gations instituted in Great Britain (and which had been before made) indicate corresponding results. Another conclusion by Mr. Atkinson would also seem to be incapable of contravention, namely : That the greatly increased product of the fields, forests, factories, and mines of the United States which has occurred during the period from 1860 to 1885 " must have been mostly consumed by those who performed the actual work, because they consti- tute so large a proportion — substantially about ninety per cent — of the whole number of persons by whom such prod- ucts are consumed," and that " no other evidence is needed to prove that the working man and woman of the United States, in the strictest meaning of these words, are, decade by decade, securing to their own use and ehjoyment an in- creasing share in a steadily increasing product." * The report of the Bureau of Industrial Statistics of the State of Maine, for the year 1887, also present some notable evidence of the continued increase in the purchasing power of wages, and show that, taking the experience of a typical American family in that State, deriving their living from manufacturing employments as a basis, as much of food could be bought in 1887 for one dollar as would have cost $1.20 in 1882 and $1.30 in 1877 ; the difEerence being mainly due to reductions in the prices of flour, sugar, molasses, fresh meats, lard, oil, and soap. In a paper presented to the British Association in 1886 by Mr. M. Gr. Mulhall, the increase in the purchasing power * " Century Magaaiine," 1887. PURCHASING POWER OF MOKEY. 413 of money as respects commodities, and its decrease in pur- chasing power as respects labor in England during the pe- riod from 1880-'83 as compared with the period from 183] to 1848, was thus illustrated by being reduced to figures and quantities: Thus in 1880-'83, 117 units of money would have bought as much of grain as 143 units could have done in 1831-'48 ; but, in respect to labor, it would have required 285 units of money to have bought as much in 1880-'83 as 201 units did in 1831-'48. In respect to cattle, the pur- chasing power of money had increased in the ratio of 313 in the latter to 318 in the former period ; but since 1879 the carcass price of dressed meats has notably declined in England : inferior beef upon the London market (in 1885-86) to the extent of forty-three per cent ; prime beef, eighteen per cent ; pork, twenty- two per cent ; mid- dling mutton, twenty-seven per cent. It is also undoubt- edly true, as Mr. John Bright some years since pointed out,* that meat, in common with milk and butter, com- mands comparatively high prices in England, "because our people, by thousands of families, now eat meat who formerly rarely tasted it, and because our imports of these articles are not sufficient to keep prices at a more moder- ate rate." One point of interest pertinent to this discussion, which has for some time attracted the attention of students of so- cial science in England and France, has also been made a matter of comment in the cities of the Northwestern United States, especially in St. Paul and Minneapolis, and is proba- bly applicable to all other sections of the country ; and that is, that expenditures for rent form at present a much larger item in the living expenses of families than ever before, and for the reason that people are no longer content to live in the same classes of houses as formerly ; but demand houses with all the so-called modern improvements — gas and water * Letter to the London " Times," November, 1884. ^14 RECENT ECONOMIC CHANGES. and better warming, ventilating, and sanitary arrangements — which must be. paid for. One of the most striking illustrations or rather demon- strations of the improvement of the condition of the masses in respect to subsistence is afEorded by a comparison of the statistics of pauperism in London for the years 1815 and 1875. In the former year the number of paupers in London was about 100,000. In 1875, although the population of the city in the intervening period had increased threefold, the number of paupers was smaller ; but the cost of main- taining 100,000 paupers in London in 1875 was five times what it was in 1815. At the same time the cost of almost all the essentials for a simple livelihood — bread, sugar, tea, fuel, and clothing — were much cheaper in 1875 than in 1815, and numerous small comforts and conveniences which ma- terially smooth and civilize life, and which sixty years ago were not obtainable by the working-classes, can now be pro- cured at a trifling cost. The pauper, furthermore, does not fix for himself the style of his living, but it is fixed for' him by others ; " and the common rule is, that he shall not live materially better, nor much worse, than he would do if he worked for his living, as a laborer of the lowest class." An examination of the accounts furnishes, however, an ex- planation of this curious societary phenomenon. Thus, " the ideas of what is absolutely or primarily necessary for the decent maintenance of paupers have risen in recent years. The laborers have reached a much higher standard of exist- ence. A much more elevated minimum of wages has been secured. Their numbers have greatly increased, but their welfare has grown in a much higher ratio." And through the agencies which have effected these results the very low- est stratum of society has been gradually and without any direct effort lifted to higher and better conditions — ^a fact, ■from a social and humanitarian point of view, of the great- est importance. Reduction in the Hours of Labor. — Concurrently REDUCTION IN HOUKS OP LABOR. 415 with the general increase in recent years in the amount and purchasing power of money-wages throughout the civilized world, the hours of labor have also generally diminished. In the case of Great Britain Mr. GifEen is of the opinion that the reduction during the last fifty years in the textile, house-building, and engineering trades has been at least twenty per cent, and that the British workman now gets from fifty to one hundred per cent more money for twenty per cent less work. In the United States, the data afforded by tlie census returns of 1880 indicate that in 1830 81-1 per cent of the recipients of regular wages worked in excess of ten hours per day; for 1880, the number so working was about 26-5 per cent. In 1830, 13-5 per cent worked in excess of thir- teen hours. In 1880 this ratio had been reduced to 2-5. For the entire country the most common number of hours constituting a day's labor in 1880 was ten. For Germany, the reports are much less favorable. In Bavaria, according to the German factory reports for 1886, the hours of labor in 24"4: per cent of all industries ranged from eleven hours and a quarter to sixteen hours daily ; in 56-6 per cent from ten to eleven hours, and for the remainder from eleven hours down to five. The extremely short limit was, however, reached only in the exceedingly dangerous and almost fatal trade of quicksilvering the backs of looking- glasses. In breweries the hours of labor seem to be the longest, being never less and often more than sixteen hours. In Prussia, recent official investigations show that in a very large proportion— more than one half — of the factories, and establishments for trade and transportation in the king- dom, there is no cessation of labor on Sunday.* In Russia, * The results of an investigation recently instituted by the Prussian Gov- ernment in consequence of a demand made for an absolute prohibition of Sun- day labor in business occupations in that country, have revealed a curious and apparently an unexpected condition of public sentiment on the subject: Thus from returns obtained from thirty out of thirty -five provinces or departments- 416 EECBNT ECONOMIC CHANGES. an average of twelve hours daily is reported as the normal working hours of most industrial establishments. That the conclusions of Mr. GifEen respecting the gen- eral effect in Great Britain of the increase in wages and reduction in the hours of labor, as above stated, find a cor- respondence in the United States, might, if space permitted, be shown by a great amount and variety of testimony. A single example — drawn from the experience of the lowest class of labor — is, however, especially worthy of record. In 1860, before the war, the average amount of work expected of spade-laborers on the western divisions of the Erie Canal, in the State of New York, was five cubic yards of earth ex- cavation for each man per day ; and for this work the aver- age wages were seventy-five cents per day. At the present time the average daily excavation of each man employed on precisely the same kind of work, and on the same canal, is reported as three and a half cubic yards, at a compensation of from $1.50 to $3 per day. Any review of the recent experiences, in respect to wages containing 500,156 manufacturing establishments and 1,582,591 workmen, it ■was found that 57 '75 per cent of the factories kept at work on Sunday. On the other hand, the larger number of the workmen, or 919,564, rested on Sun- day. As regards trade and transportation, it was found that in twenty-nine provinces (out of tbirty-five), of 147,318 establishments of one sort or another, employing 245,061 persons, seventy-seven per cent were open on Sunday, and flfty-seven per cent of the employes worked on that day. A canvass of the persons naturally most interested in the matter — ^i. u., the workmen — showed, however, that only a comparatively small number were in favor of the pro- posed measure. Thus, for example, of those who were consulted iu the great factories or stores, only thirteen per cent of the employers and eighteen per cent of the employed were in favor of total prohibition. In the smaller indus- tries the proportion was eighteen per cent of the employera and twenty-one per cent of the employed. In trade only foi-ty-one per cent of the employers and thirty-nine per cent of the employed, and in transportation only twelve per cent of the employers and sixteen per cent of the employed, were in favor of total prohibition. (See also page 269.) A "factory bill," introduced as a government measure in the French Chamber of Deputies, in 1888, contained the curious provision that one day of rest should be given weekly to all operatives ; but that the choice of the day should be left discretionary with the employers. WAGES AND COMMODITY PRICES. 417 and hours of labor, would be imperfect that failed to call attention to the fact that the benefits from advances in the one case, and reductions in the other, have accrued mainly to operatives in factories and to artisans and skilled me- chanics, and have been enjoyed in the least degree, and largely not at all, by employes, clerks, book-keepers, copy- ists, etc., engaged in mercantile and commercial operations and establishments. The reason of this is manifestly, that the supply of this latter class of labor has been dispropor- tionately greater than that of the former, and continually tends to be in excess of demand ; and under such circum- stances, although the amount of discontent may be, and un- doubtedly is, very great and well warranted, the organized and aggressive expression of it finds little sympathy on the part of the public. The question has been asked, "Why is it that wages of manual labor have been constantly rising in recent years, while all other prices have been concurrently falling ? or, to put it differently, why is it that over-production, while cheap- ening the product, should not also cheapen the work that produces it ? The answer is, that the price of the products of labor is not governed by the price of labor, or wages, but that wages, or earnings, are results of production, and not conditions precedent. "Wages, as a rule, are paid out of product. If production is small, no employer can afford to pay high wages ; but if, on the contrary, it is large, and measured in terms of labor is of low cost — which conditions are eminently characteristic of the modern methods of pro- duction — the employer is not only enabled to pay high wages, but will, in fact, be obliged to do so, in order to ob- tain what is really the cheapest (in the sense of the most efficient) labor. The world has not yet come to recognize it, but it is nevertheless an economic axiom, that the invari- able concomitant of high wages and the skilled use of ma- chinery is a low cost of production and a large consumption. In the first of the results is to be found the explanation for 418 RECENT ECONOMIC CHANGES. the continually increasing tendency of wages to advance; in the second, an explanation why the supplantation of labor by machinery has not been generally more disastrous.. If, however, it be rejoined that " the comparative poverty of cotton- and woolen-mill operatives, and of women who run sewing-machines," and the like, does not sustain the above explanations, the question is pertinent, Comparative with what ? For low and insufficient as may be the wages of all this class of operatives, they were never, in comparison with other times, so high as at present.* Impairmestt of the Value of Capital eelativbly TO Labor. — While the remuneration of labor has enor- mously increased during recent years, the return to capital has not been in any way proportionate, and is apparently growing smaller and smaller. For this economic phenom- enon there can be but one general explanation ; and that is, that regarding labor and capital as commodities, or better, as instrumentalities employed in the work of production and distribution, capital has become relatively more abun- dant than labor, and has accumulated faster than it can be profitably invested ; and, in accordance with the law of sup- * The not infrequent assertion that " the rich are growing riohei and the poor poorer," and that the rewards of labor are growing less, has been thus recently answered, as far as the labor of machinists in the United States are concerned, hy James Bartlett, a Massachusetts machinist, in a recent public address. Speaking from his own memory of the condition of things in 1842, he said : " The wages of a machinist in shop were $1 to $1.25 a day ; one nabob of a pattern-maker received the great sum of §1.50. They went to work at five o'clock in the morning, and worked till 7.30 at night, with an hour for break- fast and three quarters for dinner. It was several years before we obtained eleven hours a day. It has now been ten hours a day for twenty -five years or more, and we grumble at that, though we get more than twice the wages we did forty years ago ; and we are hoping to get the same or higher pay for working eight hours. I know the condition of the machinist is better than it was when I first joined the guild ; he has better pay, better houses, better education, better living. For my pait, I don't want any more of the good old times. The present time is the best we have ever had, though I hope not the best we shall ever see." IMPAIRMENT IN THE VALUE OP CAPITAL. 419 ply and demand, the compensation for its use — interest or profits — has necessarily declined as compared with the com- pensation paid for labor. The position taken by some investigators and writers of ability is, that the great decline in the value of capital — by reason of an impairment of- the ability of its owners, i. e., through loss of dividends on investments and of profits in business, to purchase and consume the products of labor, and a diversion of capital, from lack of remunerative income- yielding investments, into enterprises not needed and so occasioning over-production — has been a prime and perhaps the main cause of all the economic disturbances in recent years. That such a factor, in common with many others, has been instrumental in occasioning serious disturbances, may not be questioned ; but that its influence has not been in any sense primary would seem evident, when it is con- sidered that the reason why capital has increased and cheap- ened in these latter years is, that mankind, through a larger knowledge and better use of the forces of Nature, has been enabled to produce, and actually has produced, a far greater abundance of almost all material things (or, in other words, a greater abundance of capital) with the same effort than at any former period of its history. Capital, at the outset, greatly contributed to such a development, or, like the wizard in the Eastern fable, it pronounced the incantation which set the natural forces at work ; but the wonderful in- crease and consequent impairment in the value of capital was an after-result, something not anticipated, and the con- tinued progress of which the owners of capital, like the enchanter, now find themselves powerless to check. The saving in the cost of the freight moved on the railroads of every country, comparing 1887 with 1850, and assuming like quantities to have been transported at the different periods, would represent every year more than the original cost of the railroads and their equipment. One efficient cause of this greater abundance of capital 420 RECENT ECONOMIC CHANGES. is, that eTery new invention or discovery produces always as much as, and often a much greater amount, of product on a less amount of capital than was previously invested. The result of material progress is, therefore, to both supplement the need or economize the use of capital, and at the same time increase it. For example, a first-class iron freighting screw-steamer cost in Great Britain, in 18112-74:, $87.48 (£18) per ton. In 1887 a better steamer, constructed of steel, fitted with triple compound engines, with largely in- creased carrying capacity, and consequent earning power, and capable of being worked at much less expense, could have been contracted for $34 (£7) per ton. How rapidly capital has accumulated in recent years under the new con- ditions of production is indicated by the circumstance that, although most of the great loans which have been negotiated within the last twenty-five years have been for the replace- ment of capital unproductively used up, or absolutely de- stroyed in war or military operations, and notwithstanding the immense amount of capital that has also been destroyed during the same period by the replacement of machinery contingent on new inventions, the vacuum thus created has not only been promptly filled, but the competition for the privilege of furnishing further supplies of capital for similar purposes was never greater. Again, as capital increases and competition between its owners for its profitable investment becomes more intense, and as modern methods can bring all the unemployed capital of the world within a few hours of the world's great centers for financial supply, the rate of profit, or interest to be ob- tained by the investor or lender, from this cause, also neces- sarily tends to shrink toward a minimum. Such a minimum will be reached when the returns for the use of capital be- come insufficient to induce individuals to save it, especially in the form of its representative, money, and thus add to the available reserves by which expanding industries can be supported. And to such a minimum the financial world DECLINE IN RATES OP INTEREST. 421 seems to be always moving by the force of laws which no combination of capitalists can resist. To those who are the possessors of large properties, a gradually diminishing rate of return for the nse of capital makes but little difference so far as personal comforts are concerned ; but to the small capitalists the steady reduction in income which has been experienced in recent years means always discomfort, and often misery. A striking illustration of this, derived from actual experience, and contingent on a reduction by the Prussian Government of the interest on its debt to three and a half and three per cent, is thus given by a recent correspondent (1887) of the London " Econo- mist": " This reduction," he says, " struck a heavy blow at the existence of what may be called the ' middle classes ' in Germany — that is, the great number of people who own a -small capital invested in funds, besides carrying on some business or having some other profession. The combined income from both enabled them to live in fair style, making both ends meet by way of carefully regulated expenditure. These classes have formed for over half a century the ' back-bone ' of Germany. They are now gradually disappearing, making room for great wealth on one side and great poverty on the other." The following are other illustrations to the same effect, derived from the recent experience of the United States : In 1877 the average rate of interest received by the Massachu- setts savings-banks was 6-8 per cent., but from that rate it has descended by an almost regular progression to 4-8 per cent in 1887. In 1877 these institutions had $55,881,882 loaned at seven per cent, $48,387,908 loaned at six per cent, 113,758,476 loaned at five per cent, and $2,905,000 loaned at four per cent. In 1887 the amount of seven-per-cent loans was $1,717,827, six-per-cent loans $38,277,441, five-per- cent loans $77,474,331, four-per-cent loans $16,091,983. Such a shrinkage of interest obviously represents an enor- mous reduction in the income of the depositors. The average interest paid on the aggregate funded debts 2B 422 . RECENT ECONOMIC CHANGES. of railroads of the United States for the year 1886 was only 4-77 per cent, while the percentage of dividends on their whole share capital was only 3-04 per cent. An investigation in 1887 by the Bureau of Labor Statis- tics of Connecticut into the details of business establish- ments in that State, having a capital of $48,665,000, employ- ing 38,256 hands, and covering twenty-two distinct lines of industry, showed the aggregate profit over and above all expenditures, on an annual production of $45,500,000, to have been $3,800,000, or 6-15 per cent. In certain classes of manufactures — as bakeries, forging, knit goods, and corset-making — the profits were much larger; but on the great industries of woolen, general hardware, and cotton- duck manufacturing, the profits of the year were less than three per cent on the capital invested.* * Those not familiar with flnauoial experiences can hardly realize the great decline within the last few years in the price and profits of capital. Thus, the average rate of interest in the cities of Boston, New York, Philadelphia, Cin- cinnati, St. Louis, and Chicago, as computed from the record of public trans- actions, from 1844 to 1858, was lO'S per cent. In 1871 the London " Econo- mist" estimated that the average rate of interest on a majority of the foreign and colonial stocks and bonds at that time held in Great Britain, amounting to not less than twenty-eight hundred and fifty million dollars, was equal to six or seven per cent as a minimum. Up to 1871 the United States had not been able to sell any portion of its funded debt, bearing six per cent gold interest in European markets, on terms as favorable as par in gold, United States five-twenty 6s being quoted on the London market in 1870 as low as 87J^. The following is a transcript of the prices of various securities as quoted on the London market in 1871 : German Confederation obligations, five per cents, 87 ; French national defense 6s, 87 ; Massachusetts 5s, 91 ; Georgia 7s, 78 ; Spanish five per cents, secured by a mortgage on the celebrated quick- silver-mines of New Almaden, in addition to the faith of the Government, 76 and 77 ; Italian six per cents, secured by a pledge of the state revenues from tobacco, 87% ; Japanese nine per cents, 89 ; Panama EaUroad seven per cent general mortgage, 93 ; Michigan Central Railroad, first-mortgage sinking-fund, eight per cent, 85; Pennsylvania Sailroad six per cent general mortgage (sterling), 91. To-day the Governments of Great Britain and the United States can readily borrow money at 2X per cent ; all first-class railroad cor- porations at four per cent ; while millions of money have been loaned in recent years on real-estate security in the United States for four per cent, and in Great Britain for three per cent. In Germany the market rate of discount for DECLINE IN LAND VALUES. 423 Decline in Land-Values. — Another interesting and curious feature of the existing economic condition — the direct outcome of the recent radical changes in the meth- ods of production and distribution— has been the decline in the value of land over large areas tof the earth's surface. Thus, in the case of Great Britain, while every other item of national wealth has shown an increase — often most extraordinary — since 1840, the estimated value of land in the United Kingdom since that date, notwithstanding a large increase in population, has heavily decreased.* For- merly Paris obtained its fruit and vegetable supply entirely from lands in its own neighborhood ; and the difference in the cost of transportation gave such lands a marked advan- tage over more distant places. But now the railways bring a considerable period in 1887 was as low as from IJ^ to 1% per cent. Not many years ago the customary rate of inlorest allowed by the savings-banks and trust companies of the United States was six per cent ; now the former for the most part pay but four, and the trust companies but two to three per cent. British consols in November, 1887, paid to the investor S"/],, per cent, while of the best (debenture) railroad stocks of Great Britain none now return as much as four per cent on their current market prices. The dividends of the Imperial (Eeichbank) Bank of Germany, in the four years from 1883 to 1886 inclusive, declined 0'96 per cent, and the average of the private banks of Germany daring the same period, 1'60 per cent ; all of which clearly indicates that the banking business of Germany is becoming less and less profitable. * According to Mr. Mulhall, the English statistician, the following table exhibits the changes in the leading items of wealth in Great Britain since 1840 : [Omitting 6 ciphers.] 1840. 1860. 1887. £21 770 385 1,680 380 23 70 61 710 £348 1,164 582 1,840 460 44 190 105 827 £831 Houses 2,640 1,320 Lands 1,542 Cattle etc . . 414 Shippin" 130 Mercnatidise . 321 Bullion 143 Sundries 1,869 Total £4,100 £5,560 £9,210 424 EECENT ECONOMIC CHANGES. the same commodities from very distant places for the same or a less price, and the value of land in the environs of Paris has naturally declined. Fresh grapes are even now brought in large quantities, in casks or baskets, from Algeria — the climate of which favors the growth of the produce of the vine, but is not favorable to wine-making — to the cooler regions of central and eastern France, where they are manu- factured into wine. In certain of the departments of France the peasant proprietors of land have ceased to buy land and are anxious to sell it ; and in some instances large tracts have been practically abandoned because the sale of the products of the soil, under the competition to which they are exposed by reason of new conditions, does not return the expenses of their, cultivation. In Austria and Germany the competitive supply of agricultural produce from the United States has been so influential, that it is claimed that if the state should wholly discontinue its encouragement of the beet-root sugar-industry by bounties, immense tracts of land would become comparatively valueless. In Portugal, the owners and cultivators of the soil seem to be in a remarkably unfortunate condition. The Portu- guese farmer, despite heavy protective duties, finds himself unable to, successfully contend against the increased import of cereals, mainly from the United States. The industry in olive-oil, formerly flourishing, is languishing, through the alleged extensive use of American cotton-seed oil as a sub- stitute ; while the demand for Portuguese wines, which for a time was increased by the bad vintages of France, is being impaired, and possibly threatened with destruction, by the continually increasing supply in the French markets of cheaper and more suitable wines for mixing purposes from California, the Cape of Good Hope, and Australia. In the Canary Islands, where the soil is most cheap and fertile, and the vegetation of both the tropic and temperate zones flourishes in great luxuriance, the land question has also be- come of as much importance and embarrassment as in less LAND VALUES IN THE UNITED STATES. 425 favored countries. The former great remunerative indus- try of these islands was wine, " canary " ; but this, by the im- pairment of the vines, has become of little account. These islands also formerly constituted a large source of supply to the world of cochineal, for the production of which they have special advantages ; but since the discovery and use of the aniline dyes, this industry has been almost destroyed. Curiously, also, a comparatively extensive export of potatoes from the islands to the Spanish West Indies is diminishing through a competitive exportation of the same vegetable from the United States. So that there seems to be nothing left for the land proprietors and cultivators in this locality to do, except to resort to the method, so much in favor at the present time, of mutually taxing each other for their mutual benefit! Over large portions of the West India Islands, great quantities of excellent land, advantageously situated as regards facility of communication with other countries, under exceptionally healthy climatic conditions, and much of which had been formerly under a high state of cultivation, have been absolutely abandoned, or are in the rapid process of abandonment. In the United States, the decline in the value of land has, in many instances, been also very notable. In the New England States, agricultural land, not remote from large centers of population, can often be bought at the present time for a smaller price than what fifty years ago would have been regarded as a fair appraisal, and even less than the cost of the buildings and walls at present upon it.* Since thelast decennial appraisal of real * III 1887 a house and havn, in good repair, and forty acres of good farming land in the town of Killingsworth, Conn., seventeen miles from the Connucti- cut Eiver, were bought for a church rectory, for $850. " In many places in the very heart of the State of Massachusetts it is as it was in Eden when wo road that ' there was not a man to till the ground.' Thirty miles inward from ■Worcester, the ' heart of the Commonwealth,' there are whole acres which, sixty years ago, sold for twenty-two dollars an acre, that arc now selling for eleven dollars an acre, although railroads and telegraphs stirt the fields, and the fields themselves arc excellent farm-land."— ;.5?"'*"S^''''^ EepubUmn. 426 RECENT ECONOMIC CHANGES. estate in Ohio (in 1880) "there has been a heavy decline; farm property is from 25 to 50 per cent cheaper to-day than it then was." * In Illinois, according to the Eeport of the Bureau of Labor Statistics for 1888, there has been an increase in land- values in that State since 1880 in twenty- five counties, a decrease in twenty counties, while in sixteen counties values have remained unchanged. In one county - — Madison — the value of farm-lands is thought to have depreciated 33 per cent since 1880. The increase in the value of all the lajuds in the State, for the decade 1870-'80, according to the United States census for the latter year — the valuation of 1870 being reduced to a gold basis — was 27 per cent ; but, for the eight years from 1880 to 1888, the net gain in land-values for the whole State is now esti- mated at 6-2 per cent. " In the ten cotton States, the value of agricultural land was in 1860, $1,478,000,000 ; in 1880^ $1,019,000,000, a decrease of $459,000,000. It would re-, quire an addition of 45 per cent of its value in 1880 to raise it to its value in 1860." Meanwhile, the population of these same States has increased 53 per cent. " In 1860, the value per acre of improved land in Georgia was $6 ; in 1886, below $3.50 ; decrease, $2.50. Were the agricultural land divided out among the people, the value per head would have been : in 1860, $150 ; in 1886, $63 ; decrease, $87. f * " Inaugural Address of Governor Foraker," January, 188V. + Report of a committee of citizens of the ten: cotton-growing States (" Sam " Barnett, of Georgia, chairman), " On the Causes of the Depressed Condition of Agriculture, and the Remedies," 1887. XL The economic outlook, present and prospective — Necessity .of studying the situation as an entirety — Compensation for economic disturbances — In- equality in the distribution of wealth a less evil than equality of wealth — The problem of poverty as affected by time— Tendency of the poor toward the centers of population— Eelation of machinery to the poverty problem — Eeductiou of the hours of labor by legislation — Fallacy of eight-hour arguments — The greatest of gains from recent material progress — In- crease of comfort to the masses from decline of prices — Oleomargarine legislation — Difference between wholesale and retail prices — Eelation be- tween prices and poverty — Individual differences in respect to the value- perceiving faculty — Characteristics of the Jews — Eelative material progress of different countries— Material development of Australia and the Argen- tine Republic — ^Great economic changes in India— Great material progress in Great Britain — The economic changes of the future — Further cheapen- ing of transportation — Future of agriculture — Position of the last third of the nineteenth century in history. In the preceding chapters an attempt has been made to trace out and exhibit in something like regular order the causes and the extent of the industrial and social changes and accompanying disturbances, which have especially char- acterized the last fifteen or twenty-five years of the world's history. The questions which connect themselves with, and are prompted by, such an inquiry and exhibit, are nu- merous and relate to widely different subjects. But, of all these, the one of greatest interest and importance is. What has been, and what is likely to be, the effect of these com- plex economic changes — of this recent and unquestionably great material progress — on the mass of mankind ? Has it been, and is it to be in the future, for the better or the worse ? To not a few, as experience abundantly and also unfortu- nately proves, a ready and sufficient answer may seem pos- 428 RECENT ECONOMIC CHANGES. sible ; but most of those who through continued study and reflection have endeavored to qualify themselves for answer- ing, will probably agree that, npon no other one subject, apart from theology, does the line of investigation run so rapidly into deep waters. The more difficult, however, it is to emerge from such depths, the more important is it to lay hold of and put in place whatever may serve as stepping- stones to attain more definite conclusions than are. now pos- sible — conclusions which, while helping continually to more comprehensive views of the situation, will also make all re- medial action on the part of society for acknowledged soci- etary evils, more intelligent, and consequently more effect- ive ; and it is in this direction that the line of most desirable work, and the movement for solving the difficult involved problems, would for the present seem to lie. Entertaining these views, the following deductions, in addition to those which have been incorporated into the preceding pages — which from the outset have been designed to be historical and not controversial — are finally and deferentially sub- mitted. It seems clear that the first and most essential thing for all those who are desirous of determining the extent of the evils which the recent economic disturbances have occa- sioned, and what course of procedure on the part of society and individuals is likely to prove most remedial of them, is to endeavor to understand the situation as an entirety ; and that effort is likely to be ineffectual and disturbance intensi- fied by all discussions and actions that start from any other basis. In fact, one of the remarkable features of the situ- ation has been the tendency of many of the best men in all countries to rush, as it were, to the front, and, appalled by some of the revelations which economic investigators every- where reveal, and with the emotional largely predominating over their perceptive and reasoning faculties, to proclaim that civilization is a failure, or that something ought im- mediately to be done, and more especially by the state, with-. PESSIMISTIC PREDICTIONS. 429 out any very clear or definite idea of what can be done, or with any well-considered and practical method of doing. How humati society is ever to be at any time anything but the product of human character and culture, they never tell us ; but they intimate that if the industrious do not promptly divide more freely with the idle, the frugal with the im- provident, the workers with the drones, there will be trouble —mysterious in its nature, but unknown in amount. The position of the Eussian novelist Tolstoi, before noticed, is a case in point. The distressing picture of what the world has come to during the fifty years of the reign of Queen Victoria, as drawn by the poet Tennyson in his new " Locks- ley Hall," and which Mr. Gladstone has so impressively re- viewed and effectually disapproved, is another. To what a doleful condition mankind is certainly tending, as the result of the unprecedented accumulation of knowledge in the present age, is foretold by Mr. W. H. Mallock, in the fol- lowing assemblage of words, in which mysticism rather than sense is predominant : " For the first time," he says, " man's wide and varied history has become a coherent whole to him. Partly a cause and partly a result of this, a new sense has sprung up in him — an intense self-conscious- ness as to his own position ; and his entire view of himself is under- going a vague change. It is impossible to conceive that this awaken- ing, this discovery by man of himself, will not be the beginning of his decadence ; that it will not be the discovery on his part that he is a lesser and a lower thing than he thought he was, and that his condi- tion will not sink till it tallies with his own opinion of it." On the other hand, it may be confidently asserted that a comprehensive view of the situation will show that not an evil referable to recent economic changes or disturbances can be cited which has not been attended with much in the way of alleviation or compensation, the comparison being between individuals and- classes and society as a whole. Thus, the facts in relation to the wages earned by the poor men and women who work for the sellers of cheap clothing, 430 RECENT ECONOMIC CHANGES. and who seem to be unable to find any more remunerative occupations, are indeed pitiful ; but, if clothes were not thus made cheap, many would be clothed far more poorly than they now are, or possibly not at all. It is not the rich man who buys " slop " coats and shirts, but the man who, if he could not be thus supplied, would go ragged or without them. If the decline in the price of cereals and in the value of arable land has forced many who follow agricult- ural pursuits out of employment, there never was a time in the history of the world when the mass of mankind were fed so abundantly and so cheaply as at present. If the decline in the rates of interest on capital has been a sore grievance to the small capitalists, a reduction in the rate of income from invested property " means in the final analysis that the world pays less than it has before for the use of its machinery, and that labor is obtaining a ' larger ' and capital a ' smaller ' share of the compensation paid for production." Inequality in the distribution of wealth seems to many to constitute the greatest of all social evils. But, great as may be the evils that are attendant on such a condition of things, the evils resulting from an equality of wealth would undoubtedly be much greater. Dissatisfaction with one's condition is the motive power of all human progress,* and there is no such incentive for individual exertion as the ap- prehension of prospective want. If everybody was content with his situation, or if everybody believed that no improve- ment of his condition was possible, the state of the world would be that of torpor, or even worse, for society is so con- stituted that it can not for any length of time remain sta- tionary, and, if, it does not continually advance, it is sure to retrograde, f * " The incentives of progress are the desires inherent in human nature — the desire to gratify the loants of the animal nature, the wants of the intellectual nature, and the wants of the sympathetic nature — desires that, short of infinity, can never he satisfied, as they grow by what they feed on." — Henkt Geoeoe. t The conditions which are naturally iraheddcd, as it were, in human na- INEQUALITY IN DISTRIBUTION OF WEALTH. 43 1 It is a matter of regret that those who declaim most loudly against the inequalities in the distribution of wealth, and are ready with schemes for the more " equal division of unequal earnings" as remedies against suffering, are the ones who seem to have the least appreciation of the posi- tive fact, that most of the suffering which the human race endures is the result of causes which are entirely within the province of individual human nature to prevent; and that, therefore, reformation of the individual is something more important than the refoi-mation of society. Furthermore, " the accumulation of wealth and the centralization of pro- duction and trade in great combinations have never, as a rule, in the United States, been a source of oppression, or of poverty to the non-capitalist or wage- worker " ; and, very curiously, almost every investigation into the wages and employments of the poorer classes shows that their greatest ture, and which war against the realization of the idea of an ultimate equality in the distribution or possession of capital, have been thus clearly and forcibly pointed out by Mr. George Baden Powell, in his " New Homes for the Old Country," published in 1872 after a visit to Australia and New Zealand : " Since the arrival of man in the world there have been perpetual questionings as to why all men are not well off. Why should the good things of this lite be so unequally distributed ? The two great causes, one as powerful as the other, are ciroumstances and talents. But these two opposite causes all through man's life influence each other greatly. Circumstinces call forth peculiar tal- ents which might otherwise be uselessly dormant, and talents often take ad- vantage of peculiar circumstances which might otherwise be overlooked and missed. It is by no moans improbable that as the world grows wiser some means will be found of considerably raising the lowest stage of existence, but it is entirely against the nature of things that all should he equal in every way. Innate pride continually urges men to seek that which is above them, and to many happiness in life is the mere gaining of such successive steps. The essential rule is to work one's own circumstances to the highest point attain- able by means of the talents possessed. These talents may be said to resolve themselves into various capitals, and a man may have capital for the improve- ment of his condition in the form of money, brains, or health and strength — in fact, he may thrive by the possession of ' talents,' whether of gold, of the mind, or of the body. With this fully recognized fact of the diversities of capital, it would seem obviously impossibls for a people to continue long in the humanly imposed possession 0/ equal personal shares in any capital." 4:32 RECENT ECONOMIC CHANGES. oppressors are very frequently the comparatively poor them- selves. To understand the problem of poverty, especially with reference to remedial effects, as it at present exhibits itself, it is necessary to look at it comprehensively from two differ- ent standpoints. Viewed from the standpoint of twenty or twenty-five years ago, or before what may be termed the advent of the " machinery epoch," there is no evidence that the aggregate of poverty in the world is increasing, but much that proves to the contrary. The marked prolonga- tion of human life, or the decline in the average death-rate,' in all countries of high civilization ; the recognized large increase in such countries in the per capita consumption of all food products ; and the further fact that fluctuations in trade and industry, calamitous as they still are, are less in recent times than they used to be, and less disastrous on the whole in their effects on the masses, are absolutely conclu- sive on this point. Great as has been the depression of business since 1873, there is no evidence that it has yet made any impression on the " stored wealth " of the people of the great commercial countries ; and that, slow as is the accumulation of capital, a year probably now never passes in which some addition is not made to the previous sum of the world's material resources. The recognized tendency of the poor to crowd more and more into the great centers of population — drawn thither, undoubtedly, in no small part by the charities which are there especially to be found, and also by the fact that town labor is better paid than country labor — and the contrasts of social conditions, which exhibit themselves more strikingly at such centers than elsewhere, * . * " It might sound paradoxical, but it was nevertheless true, that while those who had means were perpetually trying to get out from London, those who were destitute were always trying to find their way in. There were tens of thousands of men who preferred to live or starve in the streets of London rather than work in comparative comfort in the fields." — Fkedeeio Harrison. Recent investigations have also shown that London, in partioular, .a DRIFT OF POPULATION TO CITIES. 433 Naturally cause popular observation of poverty to continu- ally center, as it were, at its focus of greatest intensity, and create impressions and induce conclusions that broader and more systematized inspections often fail to substantiate.* No proposition, for example, finds a more general accept- ance among the unthinking masses than that a sparse popu- lation always commands higher wages and a higher standard of comfort than a dense one ; and yet there is hardly a proposition in economics which can command so little evi- dence in its favor from the results of experience. " Even in the middle ages it was only the places where population was dense that wages were high, and in modern times the thinner the people on the land the lower is their standard of comfort ; the laborer, for example, in some parts of Austria and Hungary, where labor is scarce, being worse fed than the average of English paupers. The swollen mainly by its births, and that the total increase from immigration into that city, after deducting the emigration from it, is only about 10,000 a year. " London is, in fact, a nation of five millions, and that a nation of five millions should increase by one and a half per cent a year, or ?5,000, is nothing in the present condition of human affairs, when we have neither wars nor famines nor pestilences to create the least surprise among the well-informed. An addition of 7,500 a year to a city of half a million would, indeed, cause scarcely a remai-k." * A chapter from the recent experience of the city of Brooklyn, New York, in respect to pauperism, affords a very striking illustration of this statement. In the five years iiom 1874 to 1878 inclusive, the ntunber of persons who asked and received outside poor relief from the city authorities Increased more than ■fifty per cent, while the increase in the population of the city during the same period was' less than fourteen per cent. The evidence would, therefore, almost seem conclusive that the masses of this city were rapidly becoming poorer and poorer. In the latter year, however, the system of giving outside poor relief was wholly discontinued. It was feared by many that this action would lead to great distress and suffering, and many charitable persons made prepara- tions to meet the demands they expected would be made upon them. Noth- ing of the kind occurred. Not only was the whole number (46,093) drawing aid from the county wholly stopped, but it was also accompanied by a de- creased demand on the public institutions and private relief societies of the city, and a reduction in the number of inmates in the almshouse. The teach- ing of this experience, which has since been elsewhere substantiated, is, there- fore, to the effect that what seem to be unmistakable proofs of increasing pov- erty were merely methods to supplement wages on the gains from mendicancy. 434 RECENT ECONOMIC CHANGES. great increase in the population of England during the last half-cent- ury has been accompanied by an extraordinary rise in wages; and it is in London, where the population is most dense, and not in any decay- ing towns in Great Britain or on the Continent, that wages are the highest. The concentration of energy caused by a thick population more than pays for the extra food consumed, and the fluctuations of wages are caused by the rise and fall in the demand for the article made, not by the rise and fall in the number of those who make it. The absolute and final proof of that is, that in any manufacturing town a time of low wages and a time of complaint about want of em- ployment always go together. It is when a trade becomes brisk and hands crowd in from all less employed places, and the population in- creases every year, that wages are at their highest. In the popular mind the immense importance of a great supply of labor is overlooked, and it is assumed unconsciously that this labor is given without adequate return. That is not so, wages being always highest in the fullest cen- ters of industry. There are districts of England where two masters are seeking one man, and where wages, nevertheless, are under twelve shillings a week, the cause being not any thickness or thinness of popu- lation, but the unprofitableness of growing cereals at present prices. There is, of course, danger of a kind in any great aggregation of popu- lation, because any trade may be suspended, as the cotton industry was, by an unexpected misfortune ; but the danger is political, not economic. If the bulk of the workers of Lancashire had moved away in that famine, the wages of the remainder would not, when prosperity returned, have been perceptibly higher. Population is in one way a cause of trade, just as much as steam-power is ; and, if England had fifty millions, we should probably find her trade proportionately in- creased and wages as high as ever. She would, in fact, have attracted business which without her free command of labor in masses would never have reached her shores. That is the secret, to take a single in- stance, of the great and growing prosperity of Bombay as a city of manufactures — a prosperity which, though it has brought population, has raised and not lowered the average of wages." * One thing which those interested in the discussion of these societary problems need especially to recognize more fully than is generally done is, that, in most of the leading nations, systematic and rigid investigations, in respect to most economic subjects and questions, have now been prose- * London " Economist." NEW FACTOR IN THE PROBLEM OF POVERTY. 435 cuted for a considerable period by governments and indi- viduals ; that the broad general conclusions deducible there- from in respect to mortality, health, wages, prices, pauperism, population, and the like, are not open to anything like rea- sonable doubt or suspicion; and also that the pessimistic views which many entertain as to the future of humanity are often directly due to the exposure of bad social condi- tions which have been made in course of these investigations with the purpose of amending them. During the last quarter of a century, however, the prob- lem of poverty has been complicated by a new factor ; namely, the displacement of common labor by machinery, which has been greater than ever before in one generation or in one country. To what extent the numbers of the helpless poor have been increased from this cause is not definitely known ; but the popular idea is doubtless a greatly exaggerated one. In fact, considering the number and ex- tent of the agencies that have been operative, it is a matter of wonderment tliat these influences in this direction have not been greater. In the United States little or no evidence has yet been presented that there has been any increase in poverty from this cause.* In London, where the cry of dis- * According to the Report of the Bureau of Statistics of Labor for Massa- chusetts for 1887, the whole number of persons of both sexes in that State, who were unemployed at tlieir principal occupation during some part of the year preceding the date of the census enumeration (May 1,1885), was 241,589, of wJiom 178,168 were males and 69,961 were females. Comparing these fig- ures with those of the population in 1885, viz., 1,941,465, it is found that for every 8'04 persons there was one person unemployed for some part of the year at his or her principal occupation, the percentage of unemployed being greater in the case of males and less in the case of females. These conclusions, how- ever, throw no light on the number of persons who were unemployed by rea- son of displacement by machinery ; and are also liltely to mislead, unless suffi- cient consideration is given to the fact that the number of industrial occupations which only admit of being prosecuted during a portion of the year is in every community very considerable. And, as a matter of fact, the investigations iii .question show that tliore were only 882 pei-sons. representing hardly more than one third of one per cent of the whole number of the unemployed in this State, who were returned as having been unemployed during the entire twelve months. 436 RECENT ECONOMIC CHANGES, tress is at ;present especially loud and deep, it is " note-worthy that no measures have yet been taken to ascertain whether that distress is normal or abnormal, and whether it is in- creasing or decreasing."* But even here the opinion, based on what is claimed to be an exhaustive inquiry, has been expressed that, "although the number of those who arc both capable and willing to give fair work for fair pay and are at the same time destitute, is in the aggregate considerable, they yet form but a very small proportion of the unemployed " ; and " that probably not over two per cent of the destitute are persons of good character as well as of average ability in their trades." f " It is by no means settled that we have too much labor; indeed, the evidence is rather the other way. In many agricult- ural districts there are not hands enough left to do the work, and from almost all trades the report comes in that no skilled hand who will do work need now lack employ- ment."! The following additional facts, of a more general nature, are also pertinent to this subject : That wages everywhere have not fallen but advanced, as a sequence to the introduc- tion and use of cheaper and better machinery and processes, proves that labor, through various causes, probably in the main by reason of increased consumption^ — has not yet been supplanted or economized by such changes to an extent suf- ficient to reduce wages through any competition of the un- employed. The multiplicity and continuance of strikes, and the difficulty experienced in filling the places of strikers with a desirable quality of labor, are also evidence that the supply of skilled labor in almost every department of industry is rather scarce than abundant. * " The Distress in London," " Foi-tnightly Review," London, January, 1888. t " The Workless, the Thriftless, and the Worthless," " Contemporary Review," London, January, 1888. i London " Economist," January 26, 1889. ' RELATIONS OF MACHINERY TO WAGES. 437 Again, it is a matter of general experience, that -vvhen in recent years, wages, by reason of a depression of prices, have been reduced in any specialty of production, such reductions have been mainly temporary, and are rarely, if ever, equal to the fall in the prices of the articles produced ; which in turn signifies that the loss contingent on such reductions has been mainly borne by capital in the shape of diminished profits. Notwithstanding all this, it will have to be admitted that the immense changes in recent years in the conditions of production and distribution have considerably augmented — especially from the ranks of unskilled labor and from agri- cultural occupations — the number of those who have a right- ful claim on the world's help and sympathy. That this increase is temporary in its nature, and not permanent, and that relief will ultimately come, and mainly through an ad- justment of affairs to the new conditions, by a process of industrial evolution, there is much reason to believe. But, pending the interval or necessary period for adjustment, the problem of what to do to prevent a mass of adults, whose previous education has not qualified them for taking advantage of the new opportunities which material progress offers to them, from sinking into wretchedness and perhaps permanent poverty, is a serious one, and one not easy to answer. A comprehensive review of the relations of machinery to wages, by those who by reason of special investigations are competent to judge, has led to the following conclusions : When machinery is first introduced it is imperfect, and re- quires a high grade of workmen to successfully operate it; and these for a time earn exceptionally high wages. As time goes on, and the machinery is made more perfect and automatic, the previous skill called for goes up to better work and better pay. Then those who could not at the outset have operated the machinery at all, are now called in ; and at higher wages than they had earned before (al- 29 438 RECENT ECONOMIC CHANGES. though less than was paid to their predecessors), they do the work. Capital in developing and applying machinery may, therefore, be fairly regarded as in the nature of a force ; unintentionally, but of necessity, continually operating to raise all industrial efiort to higher and better conditions : and herein we have an explanation of the economic phe- nomenon, that while the introduction of improved machinery economizes and supplements labor, it rarely or never reduces wages. ( One of the most curious features of the existing economic situation is the advocacy of the idea, and the degree of pop- ular favor which has been extended to it, that a reduction of the hours of labor, enforced, if needs be, by statute, is a " natural means for increasing wages and promoting prog- ress."* i This movement in favor of a shorter day of work is notynowever, of recent origin, inasmuch as it has greatly commended itself to public sentiment in Great Britain and in the United States for many years, and more recently in a smaller degree in the states of Continental Europe. But it is desirable to recognize that the early agitation in further- ance of this object, and the success which has attended it, were based on reasons very different from those which un- derlie the arguments of to-day. Thus, in England and on the Continent, the various factory acts by which the day's labor has been shortened, were secured by appealing to the moral sense of the community to check the overworking of women and children ; or, in other words, most of such legis- lation has thus far been influenced by moral considerations, and has so commended itself by its results that there is probably no difference of opinion in civilized countries as to its desirability. But the form which this movement has of late assumed is entirely diff-erent. It is now economic, and not moral, and its final analysis is based on the assumption * " Wealth and Progress," by George Gunton. D. Appleton & Co., New York. REDUCTION OP HOURS OP LABOR BY STATUTE. 439 that the laborer can obtain more of wealth or comfort by working less. It would seem to need no elaborate argument to demon- strate the absurdity of this position. Production must pre- cede consumption and enjoyment, and the only way in which the ability of everybody to consume and enjoy can be in- creased is by increasing, so to speak, the output of the whole human family. If production be increased, the worker will necessarily receive a larger return ; if diminished, he wiU necessarily get a smaller return. And it makes no difference whether the diminution be efEected by reduction in the hours of work, or by less effective work, or by disuse of labor-saving machinery, or by other obstructive agencies. The result will inevitably be the same : there will be less to divide among the producers after the constantly diminishing returns of capital have been withdrawn. It will doubtless be urged that man's knowledge and control of the forces of Nature have increased to such an extent in recent years that almost any given industrial result can be effected with much less of physical effort than at any former period ; and therefore a general and arbitrary reduction of the hours of labor, independent of what has already occurred and is further likely to occur through the quiet influence of natural agencies, is not only justifiable, but every way practicable. This would undoubtedly be true if mankind were content to live as their fathers did. But they are not so content. They want more, and this want is so progressive that the satisfactions of to-day almost cease to be satisfactions on the morrow. But what " more " of abundance, comfort, and even luxury to the masses has been achieved — and its aggregate has not been small — has not been brought about by any diminution of labor, but has been due mainly to the fact that the labor set free by the i'.tilization of natural forces has been re-employed, as it were, to produce them ; or, in other words, recent material prog- ress is more correctly defined by saying that it consists in 440 RECENT ECONOMIC CHANGES. the attainment of greater results with a given expenditure of labor, rather than the attainment of former results with a diminished expenditure. Whether the present relation of production to consump- tion which it now seems necessary should be maintained, if the present status of abundance, wages, and prices is to be continued and further progress made, can be maintained with a diminished amount of labor, may not at present ad- mit of a satisfactory answer. Production _ in excess of cur- rent demand, or over-production, which has been and still is a feature of certain departments of industry, and which may seem to favor an aflflrmative answer, is certain to be a temporary factor, for nothing will long continue to be pro- duced unless there is a demand for it at remunerative prices from those possessed of means to purchase and consume, and therefore can not be legitimately taken into account in forming an opinion on this subject ; but, other than this, all available evidence indicates that the answer must be yet in the negative. Thus, for example, the latest results of investigation by the Massachusetts Bureau of Labor Statistics show that during the year 1885 all the products of manufacture in that State could have been secured by steady work for three hundred and seven working days of 9-04 hours each, if this steady work could have been distributed equally among all the persons engaged in manufactures. But, to effect such an equitable distribution is at present almost impossible; and if it could be brought about, a reduction of the hours of labor to eight per day in such industries, as has been ad- vocated by not a few, would reduce the present annual prod- uct of Massachusetts to the extent of more than one ninth. Apart, therefore, from the disastrous competition which would be invited from other States and countries where labor was more productive, to expect that under such a re- duction of product the share at present apportioned to the workers, or, what is the same thing, the existing rates of VALUE OP ACCUMULATED PROPERTY. Ul wages could be maintained, seems utterly preposterous. It is not even too much to say that the yery existence of mul- titudes would be endangered, if the present energy of pro- duction were diminished twenty per cent. And in this connection how full of meaning is the following deduction which Mr. Atkinson finds warranted by investigation, namely : " That over a thousand millions' worth of product must be added every year and prices be maintained where they now are, in order that each person in the United States may have five cents more than he now does, or in order that each per- son engaged in any kind of gainful occupation may be able to obtain an increase in the rate of wages of fifteen cents a day. Great and undoubted, therefore, as have been the benefits accruing from machinery and labor-saving inven- tions, the margin that would needs be traversed in order to completely neutralize them by rendering human labor less efficient, is obviously a very narrow one." To which may be added that there is probably no country at the present time where the entire accumulated property would sell for enough to subsist its population on the most economic terms for a longer space than three years. One argument now frequently advanced in favor of the establishment by legislation of eight hours as the uniform standard of a day's labor is worthy of notice, from the curi- ous lack of foresight which it displays. An hour off the day of every workman now employed would, it is said, create a demand, and give room for many additional laborers. A recent writer * estimates that, assuming eleven hours as the average length of the working day in the United States, an eight-hour system, or a uniform reduction of three hours labor a day, " would 'withdraw the product of 28,416,477 hours' labor a day from the market without discharging a single laborer." What would then happen is thus de- scribed : * Gebrgo Gunton.. 442 RECENT ECONOMIC CHANGES. " The commercial vacuum thus produced would, in its effect upon labor and business, be equal to increasing the present demand over one fourth, and create a demand for 3,500,000 additional laborers. To meet this demand, about one sixth more factories and workshops would be needed, besides setting our present machinery in operation ; and a further demand for labor would be created in the mines, forges, furnaces, iron-works, and the various industries that contribute to the building and equipment of the requisite new factories and workshops. . . . Nor is this all. The new demand for labor thus created would necessarily increase the number of consumers, and thereby stiU further enlarge the demand for commodities ; and, according to the popular doctrine of supply and demand, the increased demand for labor, by reducing competition among laborers, must tend to increase wages. " The mass of laborers throughout the country, having three hours a day extra time for leisure and opportunity, and being less exhausted, mentally and physically, will be forced into more varied social rela- tions — a new environment, the unconscious iniluence of which will naturally awaken and develop new desires and tastes that will slowly and surely crystallize into urgent wants and fixed habits, making a higher standard of living inevitable. . . . This increased consump- tion necessarily implies a corresponding increase in production, and consequently an increased demand for labor and higher wages. . . ^ It is therefore manifest that the general and permanent economic effect of an eight-hour system would be to naturally increase the aggre- gate consumption and production of wealth.'' Such reasoning naturally prompts to the asking of a few pertinent questions. . If the beneficial results named are certain to follow a uniform reduction of the hours of labor from eleven to eight in the United States, why arbitrarily limit the- application of this principle ? Why not fix upon four hours as the day's standard ? This would create employ- ment for over 7,000,000 in place of 3,500,000 laborers, and render necessary the erection of more than one sixth more new factoriea and workshops? Why, -in short, if by a reduc- tion of the hours of labor by statute we can infallibly in- crease the production of wealth or abundance, will not the condition of the race be infinitely improved by a general cessation of all tiresome exertion ? Furthermore, those who advance the above argument in favor of a reduction of the THE DAY'S STANDARD OF LABOR. 443 hours of labor by arbitrary legislative enactment, ignore completely the fact, that if each man does an hour's less work a day, he must lose an hour's pay, and that therefore the purchasing power of the men now employed would be reduced by exactly the amount by which that of the now unemployed men would be increased by employment. If it is proposed to overcome this difficulty by incorporating in the statute reducing the hours of labor a further provision, that employers shall pay the same amount for eight hours' service that they formerly had for nine or ten, or what is the same thing, shall pay for " idle time," it may be rejoined that no special legislation can invalidate the economic axiom, "Less work, less pay," without destroying the rights of property, and with it civilization itself. Another point in connection with this subject is worthy of attention. That the efficiency of labor is largely increased by the use of ma- chinery and new inventions can not be questioned. The world would not be what it is but for these improvements. In default of them the present population of the world could not exist, even in a state of savagery. But machinery can not work alone. It is made useful and effective only through the co-operation of human labor — labor of hand and of brain. But if men are to work only four fifths, one half, or one third less number of hours than at present, then the working hours of machinery will be reduced in the same proportion, and the productiveness of labor will be diminished not in proportion to the reduction in the num- ber of hours that are given by hand and brain, but in a much greater proportion. It is possible to even completely neutralize the benefits of all machinery and labor-saving in- ventions by making human effort less efficient. But it may be said that the productive work of machinery will be so increased by new inventions and discoveries as to compensate for any reduction in productive effect likely to follow from any reduction in the hours of labor at present contemplated. This may be in the future, but there is no 444 RECENT ECONOMIC CHANGES. evidence that such a result has been yet attained. Some years ago the State of Massachusetts enacted that the labor of women and children should not exceed ten hours per day. The practical effect of this in textile factories was to cut down the labor of the men operatives to an equal extent. The limit of working-time in such establishments being thus shortened, the speed of the machinery was generally in- creased, and thus, within a few months, in connection with the benefit accruing to the operatives by fewer hours of labor, unquestionably restored the former level of production. But manufacturers now agree that to increase the speed of machinery to an extent sufficient to compensate for any further reduction of working-time is at present impossible.* The course of events, nevertheless, warrants mankind in expecting that the progress which has been made in recent years in diminishing the necessity for long hours of labor will be continued; but such progress will be permanent and productive of the highest good only so far as it is de- termined by natural agencies. If the attempt is made to save the time of the masses by radical and artificial methods, leisure will become license ; but, if they can be taught to save their own time, leisure, as already pointed out, will be opportunity. Finally, in all discussions of this subject, it is of the highest importance to keep steadily in view the one great fact taught us by experience in respect to this subject, which is, that, thus far in the history of industry, all that has been achieved in the way of diminishing the hours of labor has been the result of conditions rather than of legislation. The greatest of the gains that have accrued to the masses through recent material progress has been in the saving of * At the recent meeting of the International Labor Congress, in England, the delegates agreed that, in order to have an eight-hour inile work success- fully, it must be adopted simultaneously by all the countries of Europe, for, in the absence of this general acceptance, the country that maintained the ten- hour system would otitain the work which the others would necessarily lose. NATURAL SERVITUDE. 445 their time ; not so much in the sense of diminishing their hours of labor, as in affording them a greater opportunity for individual self -advancement than has ever before been possible. To clearly comprehend this proposition, it is necessary to keep in view the fact that all men, with the ex- ception of the comparatively few who inherit a competence, are born, as it were, into a condition of natural bondage or servitude. Bondage and servitude to what ? To the neces- sity of earning their living by hard and continuous toil. " In the sweat of thy brow shalt thou eat bread " has been recorded as a divine injunction, and experience shows that a great majority of mankind, as the result of long years of toil, have never hitherto been able to compass much more than a bare subsistence. In countries of even the highest civilization, where the accumulation of wealth is greatest and most equably divided, investigation has also led to the conclusion, that ninety per cent at least of the population are never possessed of sufficient property at the time of their demise to require the services of an administrator. If now, in the course of events, it has become possible, through a greater knowledge and control of the forces of Nature, to gain an average subsistence with much less of physical effort than ever before, what is the prospect thereby held out to the multitude, who, to compass as much, have heretofore been compelled to toil as long as physical strength and years would permit ? The answer is, the certain pros- pect of emancipation from such unfavorable conditions. Thus if eight hours' labor will now give to an individual the subsistence or living, for the attainment of which ten, twelve, fourteen, or even more hours of labor were formerly (but not remotely) necessary, intelligent self-interest would seem to dictate to him to work eight hours on account of subsistence, and then as many more hours as opportunity or strength would permit ; and, out of the gain for all such work not required by necessity, purchase his emancipation from toil before age has crippled his energies ; or, if he pre- 446 EECENT ECONOMIC CHANGES. fers, let him surround himself as he lives, in a continualij increasing proportion, with all those additional elements — ■ material and intellectual — that make life better worth liv- ing. And, through the rapid withdrawals from the ranks of competitive labor, or the increased deinand for the prod- ucts of labor that would be thus occasioned, the number of the unemployed, by reason of lack of opportunity to labor, would be reduced to a minimum. That these possibilities are already recognized and ac- cepted by not a few of the great body of workers, is proved by the fact that the greater the opportunity to work by the piece, and the greater the latitude afforded to workmen to control their own time in connectioii with earnings, the greater the disinclination to diminish the hours of labor.* •■' No man," says a distinguished American, who from small beginnings has risen to high position, " ever achieved emi- nence who commenced by reducing his hours of labor to the smallest number per day, and no man ever worked very hard and attained fortune who did not look back on his working days as the happiest of his life." f * A recent writer, in describing certain factories in New England, where the work is mainly of this character, says : " The days are long for ' piece- work,' and the busy employes arc indifferent to eight-hovir rules. They reserve only light enough to find their way home, and at twilight they take up their line of march. At present they are earning from three to five dollars per day, according to their capacity." But, as illustrating further how labor treats labor, it is added: " The employfe are union men, and they will not allow a single non-unionist to work ; neither will they permit any boy under sixteen or any man over twenty-one years of age to learn the trade." t Another, whose life-experience has teen similar, also thus aptly states the case : " I have often wondered how workers expect to get on upon eight hours a day. I can not do it. 1 have worked year after year twelve hours a day, and I know men in my vocation who have done so fourteen hours — ^not for eight hours' pay, but for fourteen hours' pay. Let a man who is getting day wages for day's work consider how many hours there are in the day. Suppose the day's work is even ten ; allow two for meals — ^that makes twelve ; allow nine for sleep and dressing, that makes twenty-one. There are three hours a day for getting on. That is clear profit. There is room for more profit to himself in those three hours than the profit to the employer on the DECLINE IN PRICES. 447 Probably the most signal feature of the recent economic transitions has been the extensive decline in the prices of most commodities ; and as great material interests have been for a time thereby injuriously affected — commodities at re- duced valuation not paying the same amount of debt as be- fore — the drift of popular sentiment seems to be to the effect that such a result has been in the nature of a calam- ity. Accordingly, a great variety of propositions and de- vices have been brought forward in recent years, and have largely occupied the attention of the public in all civilized countries, which, in reality, had for their object not merely the arrest of this decline, but even the restoration of prices ■to something like their former level ; and in such a cate- gory the attempt to artificially regulate the relative values of the precious metals, the increasing restrictions on the freedom of exchanges, the stimulation of trade by bounties, the formation of "trusts," "syndicates," trade and labor organizations, and the like, may all be properly classed. But all such attempts, as Dr. Barth, of Berlin, has expressed it, " are nothing more than designs to lengthen the cloth by shortening the yard-stick." Decline and instability in prices, if occasioned by temporary and artificial agencies, are to be deprecated ; but a decline in prices caused by greater econ- omy and effectiveness in manufacture, and greater skill and economy in distribution, in place of being a calamity is a benefit to all, and a certain proof of an advance in civiliza- tion. The mere fact, that the general fall of prices which has occurred, has been attended with an almost simultaneous and universal increase in the consumption of the necessa- ries of life and other commodities, is conclusive not only of a great improvement in the condition of the masses, but also that all attempts to retard or reverse this movement by gov- ernmental interference or individual organizations is the ten hours of his working day. Three hours a day is eighteen in the week — nearly the equivalent of two clear days in the week, a hundred days in the year." 448 RECENT ECONOMIC CHANGES. worst possible economic policy. In Great Britain alone the decline in the price of meats and cereals between 1873 and 1886 has been estimated to have resulted in producing an annual saving to each artisan consumer of $1.95 per head in meat and $3.75 per head in wheat, or an aggregate on 25,- 000,000 consumers of $142,500,000 per annum. At the same time, and very curiously, investigations seem to prove that the aggregate consumption of wheat and meats in Great Britain has not in recent years increased ; but such an unexpected result will probably find an explanation in the circumstance that the increased earnings of the masses have been used for the satisfaction of a desire for many commodi- ties which heretofore they could not gratify, rather than fof an increased consumption of breadstufEs and meat products. Judged by their fiscal policies, most governments would also seem to regard a decline in prices, especially in respect to food products, as in the nature of a calamity to their people. With the exception of Great Britain and Holland, nearly every nation — ^pretending to any degree of civilization — has within recent years greatly increased its taxes on its supply of food from without, and more especially on meats and cereals. A comparison of the prices of wheat in Eng- land and France for 1886 shows that French consumers paid during that year alone 6s. 3d. ($1.50) per quarter more than they would needs have done for all the wheat used by them as food in the country, had the free importation of wheat into France been permitted, or about $37,000,000 on their minimum aggregate consumption for twelve months. In March, 1887, an increase in the French duties on the im- portation of wheat further increased its price in France to an average of 9s. 8d. ($2.19) per quarter over the correspond- ing average rates in England ; which difference, for the ensuing twelve months, must have increased the aggregate cost of bread to Frencli consumers by the large sum of $50,000,000., Prance also practically prohibits the importa- tion of meats into her territory. OiiEOMAEGARINE LEGISLATION. 449 In 1885 the registered sales of horse-flesh for human consumption in Paris were 7,662,412 pounds. In 1886 the sales were officially reported as having increased to 9,001,300 pounds, with an accompanying marked diminution in the consumption of pork. Whether there is any necessary con- nection between the two experiences may not be affirmed, but the facts are suggestive. The attempt to crush out of use, by legislation, one of the most brilliant discoveries of the age, namely, the manu- facture of butter from the fat of the ox, equally as whole- some as that made from the fat (cream) of the cow, is a libel on civilization ; and, as depriving the masses of a better article of desirable food at cheaper rates, than very many of them have been accustomed to have, or can now procure, would be fiercely resented by them, if once properly and popularly understood.* As it is, the experience of the United States in attempt- ing to enforce its so-called " oleomargarine laws " well illus- trates the futility of all attempts to permanently benefit one rival commercial interest at the expense of another through the agency of discriminating class legislation. Thus, notwith- standing the enactment of a great amount of legislation re- stricting or prohibiting the manufacture and sale of oleo- margarine by many of the States and the Federal Govern- ment, the report of the United States Bureau of Internal Kevenue for 1888 shows that the manufacture and consump- * A report on the subject of " Oleomargarine," by the Eoyal Health De- partment at Munich, submitted March, 1887, says; " This product is made in great part from such proper ingredients as are useful in nourishment, namely, the fats or greases ; and therefore it is of importance, as it furnishes to the poorer classes a substitute for butter which is cheaper and at the same time nourishing. We think that this want has been supplied in a most satisfactory manner by the manufacture of artificial butter. And it is offered in the markets in a condition superior to natural butter as far as cleanliness and care- ful preparation are concerned." The conclusions of the chemists employed by the United States Internal Eevenue Bureau, as the result of their investiga- tions of this product, are also to the same effect, namely, that it is a wholesome and unobjectionable product. 450 RECENT ECONOMIC CHANGES. tion of this article in response to popular demand is steadily increasing. While the inspection laws of the United States were suflScient to enable its officials to recognize and tax the production during that same year of the great amount of 69,000,000 pounds of oleo-oil — " an article produced for the sole purpose of being used in the manufacture of a butter substitute " — they were not sufficiently potent to allow these same officials to determine the use which was made of more than 27,000,000 pounds of this same product; it having been neither exported nor used in the manufacture of oleo- margarine. No doubt, however, was entertained that it was secretly used for the manufacture of some other food product — such, for example, as cheese. The fact that in no country do the masses ever experi- ence as riiuch of benefit from a fall of prices as they would seem to be fairly entitled to have, owing to the great differ- ence between wholesale and retail rates, and that this difEer- ence is always greatly intensified in the case of the poor who purchase in small quantities, clearly indicates one of the greatest and as yet least occupied fields for economic and social reform. Flour, in the form of bread, costs usually three times more, when distributed to the poorer consumers in cities of the United States, than the total aggregate cost of growing the wheat out of which it is made, milling it into flour, barreling, and transporting it to the bakeries. The retail prices of meats are enhanced in like manner ; and investigation some years ago showed that, when anthracite coal was being sold and delivered in New York city for $4.50 per ton, it cost people on the East and North Rivers, who bought it by the bucketful, from $10 to $14 per ton. While in recent years the cost of nearly all food products in the United States has (as has been already shown) been so greatly cheapened that their competitive supply has reduced the value of land in Europe and impoverished its agriculturists, the results of the investigations of the Labor Bureau of Connecticut prove that the retail cost to WHOLESALE AND RETAIL PRICES. 45I the -wage-earners of that State of most of these articles of food-supply — which on the average represents one half of their wages— has, comparing the prices of 1887 with those of 1860, greatly increased; corn-meal by the barrel, for example, having advanced forty per cent, and butter from thirty-five to fifty per cent. Similar results are noticed in all other countries. Out of every £100 paid by the consumers of milk in London, Sir James Caird estimates that not more than £30 finds its way into the hands of the English dairy farmers who in the first instance supply it. In the case of some varieties of fish — mackerel — the jcost of inland distribution in England has been reported to be as high as four hundred per cent in excess of the price paid to the fishermen. Eggs collected from the farmers in Normandy are sold according to size to Parisian consumers, at an advance in price of from eighty- two to two hundred per cent. The experience of different countries in respect to the difference in the retail and wholesale prices of staple com- modities is not, however, uniform ; the most notable excep- tion perhaps being that American beef, flour, bread, butter, and cheese are, as a rule, sold more cheaply at retail in Lon- don than in New York. The payment of rent is believed by not a few to be the chief cause of social distress, and a continual draught on the resources of the poor, for which no adequate equivalent is returned. And yet investigations similar to those (before noticed) which have demonstrated how small needs be the first cost of the food essentials of a good living, have also led to the opinion that "not much more than half the money that men usually pay for rent would, if expended in the right direction and under easily prepared guarantees, give them possession of good homes, protected in all the rights given by a title in fee simple, and which they could transmit unencumbered to their families." Co-operative associations have done something in the Missing Page PRICES AKD POVERTY. 453 The relation between prices and poverty has long at- tracted attention, and nothing new in the way of theory remains to be offered. Three thousand or more years ago, a certain wise man, who had sat at the marts of trade, and made himself conversant with the nature of wholesale and retail transactions, embodied in the following short and sim- ple sentence as much in the way of explanation of their in- volved phenomena as the best results of modern science will probably ever be able to offer, namely — " The destruction of the poor is their poverty.'''' — Proverbs, 10th chapter, 15th verse. Something in the way of a real contribution to our general understanding of this subject would, however, seem to be found in the recent observation that the value-perceiv- ing sense or faculty is not implanted by Nature in every person, but differs widely in different races and families ; and that " he who has it will accumulate wealth with com- paratively slight exertion, while he who has it not will not gain it, no matter how energetically he labors." * Illustrations of this are familiar to every student and investigator of social science ; but the following one seems especially worthy of record : On the ferries between New York and Brooklyn, the rates of toll were some years ago reduced nearly one half to all who would buy at one time (or at wholesale) fifty cents' worth of tickets. But it was soon noticed that the working-classes, who at morning and evening constituted the bulk of the travel, rarely bought tickets, while they were bought as a rule by those who belonged to banking and mercantile establishments, f * " The Labor-Value Fallacy," by M. L. Soudder. Chicago, 1886. t " No one tamiliar with business life would question the special ability of German Jews in all business which requires a comprehension of finance, as well as in all mercantile pursuits. They do,, no doubt, outstrip Englishmen very frequently, almost as frequently as they outstrip Germans in Berlin or Vienna. In the race for wealth, as a result of trade, they have probably dis- tanced all mankind, and the English bankers can no more contend with the Eothsohilds in London or Paris than the Parsee traders can compete in Bora- bay with the fifreat Jew house of Sassoon. But then, not to mention the spe- 30 454 RECENT ECONOMIC CHANGES. The countries of the world which within the last third of the century have made the greatest material progress are the United States, Australia, and the States- of the Argentine Eepublic. This has been due largely in all these cases to the vast abundance of cheap and fertile land, which has occa- sioned and made possible a great increase in population. Like conditions have been similarly influential in increasing the population of Eussia in a more rapid ratio than in most of the other countries of Europe. The United States, by reason of its great natural resources, and extensive use of machinery and consequent ability to control the supply and the price of many of the great staple articles of the world's consumption — cotton, cereals, meats, tobacco, petroleum, and silver — is at present the great disturbing factor in the world's economic condition. In Australia, the recent increase in population and wealth is extraordinary, and finds a parallel only in the past experi- ence of the United States. During the year 1887 the in- crease of the population of all the colonies, including New Zealand, was three and a half per cent over that of 1886. At the present rate of increase, the inhabitants of Aiistralia at or before the close of the next century will number about 190,000,000 ; and constitute no inconsiderable part of the population of the world. That the increase of wealth in these colonies is also increasing even faster than the increase cial aptitudes of Jews for trading, the result of the unjust persecution of cent- uries which has closed all other careers to them, the Jews are for the most part tauglit husiness very early as a method of making money, hut are not required to put any intellectuality into it. Though often intellectual men, their intellect rarely manifests itself outside their husiness, which they eon- duct with skill indeed, but without any special display of mind. Some of the most successful among them have been very ignorant men, and almost all have succeeded rather by virtue of a sort of faculty of accumulation and atten- tion to the uses of money than by any display of what would bo deemed in- tellectual power in business. They know, as we once heard it described, the ' smell of the markets ' — that is, their tendency toward rising or falling, and they seek carefully for profit ; but it is by business aptitude rather than cult- ure that they achieve their highest results." — London Economist. THE ARGENTINE REPUBLIC. 455 of population, is claimed to be shown by comparing the average amount left by each person dying in Victoria in the years 1872-1876 with similar bequeathed possessions during the years 1877-1881 and 1883-1886, it being assumed that the average amount left by each person dying is equivalent to the average amount possessed by each person living. On ■ this basis, the national wealth amounted to £185 ($899) per head in the five years, 1872 to 1876 ; to £223 ($1,083) in the five years, 1877 to 1881 ; and to £305 ($1,482) in the five years, 1882 to 1886. This wealth, however, is not accumu- lated in the hands of the few, but is tolerably wide-spread ; nineteen and a half per cent of the population having savings- banks deposits. The average rate of wages is also higher in Australia than in any other country. In the Argentine Republic, during the twenty-five years next preceding 1888, the population increased in a ratio nearly double that of the United States ; while the increase in the value of its lauded property since 1882 is estimated at fifty per cent. About forty-five hundred miles of rail- roads were in operation within the territory of the republic on the 1st of January, 1889, with a large number of addi- tional miles under contract. Sleeping-cars now run regu- larly from the Atlantic Ocean to the foot-hills of the Andes ; and the completion of a through line from ocean to ocean, saving five thousand miles of ocean navigation around the extremity of the continent, is a near certainty. In 1878 the exports of wheat, maize, and linseed from the republic were reported as aggregating only 213 tons ; in 1887 the aggregate was 632,700 tons. Patagonia, which is in great part included in the territory of the republic, and which only a few years since appeared in our geographies as a dreary and uninhabitable waste, has developed into the rich- est of pastures, with immense possibilities for supplying the world with meat and other desirable animal products — wool, hides, and skins. The immense change which has taken place in the eco- 4:56 BECENT ECONOMIC CHANGES. nomic condition of India in recent years is also a matter of profound interest and importance. The India of antiquity, so far as its relations to Europe were concerned, has been not unfitly described as a " dealer in curiosities," and, under the rule and administration of the East India Company, " as a retail trader in luxuries." But India under British dominion has become a wholesale exporter of food products, , seeds, and fibers, and is becoming a manufacturer on a large ■ scale on its own account. In 1834 the value of the aggre- gate exports of India was reported at £9,500,000 ($46,170,- 000) ; in 1887 this aggregate had increased to £92,000,000 ($447,000,000).* In 1865 the manufacture — spinning and weaving — of cotton by machinery was very inconsiderable. In 1878-79 the India mill consumption of cotton was only 368,000 bales (of 393 pounds each) ; in 1887-88 it was 815,- 000 bales, an increase in a decade of two hundred and four per cent. The history of commerce can also show no parallel to the recent growth of the export trade of India in the item of cotton yarns of her own manufacture ; and the period may therefore be not far distant when India, if this department of her trade and industry continues to expand, will be under the necessity of importing raw cotton, in place of exporting it, as she has done for centuries. Another interesting feature of this change in economic conditions is, that whereas India, down to a comparatively recent period, insisted upon being paid for her commodities in the precious metals — largely silver — her foreign trade to-day, as is the case with other great com- mercial nations, consists mainly in the interchange of com- modities exclusive of the precious metals, and with the minimum use of money. But of all old countries, England, considered as the rep- resentative of the United Kingdom, leads in all that per- * " Statistical Abstract for the Colonial Possessions of the United King- dom," 188S. PROGRESS OF GREAT BRITAIN. 457 tains to civilization ; and, making allowance for the excep- tional advantages enjoyed by the United States and Aus- tralia, her relative progress has probably been as great as that of any country. In no one of the countries of Europe has the increase of population been greater, and in Italy, Germany, and Russia only has there been an approximate increase ; and this result has been especially remarkable, in- asmuch as for many years England has not had an acre of vir- gin soil to expand upon. In no country of Europe, further- more, has the increase of population been probably so largely accompanied by an increase in comfort as in England. Forty years ago the United Kingdom owned only about one third of the world's shipping. Now it probably owns about seven twelfths, and of the existing steam-tonnage it owned seventy-two per cent (in 1887). In respect to exports and imports — comparisons being made per capita — no other nation approximates Great Britain in its results to an extent sufficient to fairly justify a claim in its behalf to the hold- ing of a second place.* In every movement in recent years toward a material betterment of the masses through reduction of the hours of labor, compulsory education of children, advancing wages, acts regulating the payment of wages, factory and mine inspection, extermination of diseases and reduction of the death-rate, cheap postage, diminishing the risks of ocean navigation as to both life and property, establishing co- operative institutions, and the like, England has led the way. In no other of the leading industrial nations are the deposits of savings-banks and provident associations increas- * " At the present moment the foreign trade of England— imports and ex- ports together, including the transit trade— is in round figures £750,000.000 per annum, about £20 per head of the population. In France the corrcapondr ing figures are £429,000,000, and £12 per head ; in the United States, £306,- 000,000, and £6 per head ; in Gei-many, £488,000,000, and £11 per head ; in Russia, £160,000,000, and £1 10s. per head ; in Austria-Hungary, £143,000,- 000, and £3 10s. per head ; . in Italy, £100,000,000, and £3 10s. per head ; and so of other nations."— Eobekt Giffen, Letter to the London limes, 1884. 458 EECENT. ECONOMIC CHANGES. ing more rapidly, or the benefits of life and health insurance so widely extended, or more attention given or greater com- parative expenditures made in hehalf of education, or so small an amount of crime in proportion to population, or in which pauperism is so rapidly diminishing,* or where greater progress is acknowledged in respect to the equal distribution of wealth. In 1837 the national debt of Eng- land amounted to 19'5 per cent of the national wealth ; in 1880 it amounted to only 8-8 per cent. With the exception of the United States, England is the only other great nation that is reducing its national debt ; and notwithstanding the continuance of an antiquated and unequal system of land tenure, and rigidly defined lines of social organization, Eng- land is the one highly civilized country in which the doc- trines of socialism have made the least progress. Wherever and whenever England now acquires new territory she establishes commercial liberty, and neither claims nor exer- cises any privilege of trade which she does not equally share with the people of all other countries. Under her recent rule India is experiencing an industrial awakening which finds no parallel in her previous history — threatening the supremacy of China in respect to the world's supply of tea, the United States in respect to the supply of wheat, and Lancashire (England) in the manufacture and exports of cot- ton fabrics, f In 1884 Great Britain virtually took possession of Egypt, and from that moment there was initiated, under the management of a body of skilled engineers and practical * " We are prone (in the United States) to bewail the condition of the English laborer und lament the existence of pauperism in England, but the official figures certainly do not warrant much self-gratulation. It may be that English private benefactions far exceed our own in amount, but the fact remains that the English Government aids fewer paupers, proportionately to population, than our own." — Careoll D. Weight. + No country in the world can point to such remarkable figures as India can in her export trade in cotton yarns. In eleven years — i. e., from 1877 to to 1888— the shipments rose from about 7,000,000 pounds to over 113,000,000 pounds. POSSIBLE FUTURE OP SILVER. 459 men, a renovation of the water-supply and irrigation system of the country upon which the life and prosperity of its people depend, and which has already been attended with results of extraordinary beneficence. In Lower Egypt land reclamation is going on at the rate of fifty thousand acres per annum, and in other sections of the Nile Valley at double that amount; giving to a down-trodden and im- poverished race better opportunities than they have had for centuries of supporting themselves by their own labor. Formerly one or two hundred thousand of the wretched fellaheen were annually torn from their homes and forced to labor for months in clearing out the canals of mud and ooze, without pay and with an insufficient supply of the poorest food. Under English management this system of slavery has been practically abolished, and the laborers are now paid wages or allowed to buy their exemption from work for a very small sum. Something of inference respecting the economic changes of the future may be warranted from a study of the past. It may, for example, be anticipated that whatever of eco- nomic disturbance has been due to a change in the relative value of silver to gold, will ultimately be terminated by a restoration of the bullion price of the former metal to the rates (sixty to sixty-one pence per ounce) that prevailed for many years prior to the year 1873. The reasons which warrant such an opinion are briefly as follows : Silver is the only suitable coin medium for countries of comparatively low prices, low wages, and limited exchanges, like India, China, Central and South America, which repre- sent about three fifths of the population of the world, or about a thousand millions of people. Civilization in most of these countries, through the advent of better means of production and exchange, is rapidly advancing — necessitating a continually increasing demand for silver as money, as well as of iron for tools and machinery. Generations also will pass before the people of such countries will begin to economize 460 RECENT ECONOMIC CHANGES. money by the use to any extent of its representatives — paper and credit. Under such circumstances a scarcity, rather than a superabundant supply of silver, in the world's market, is the outlook for the future, inasmuch as a comparatively small per capita increase in _ the use of silver by such vast numbers would not only rapidly absorb any existing surplus, but possibly augment demand in excess of any current sup- ply.* The true economic policy of a country like the United States, which is a large producer and seller of silver, would therefore seem to be, to seek to facilitate such a result, by removing all obstacles in the way of commerce between itself and silver-using countries, in order that, through in- creased traf&c and consequent prosperity, the demand for silver on the part of the latter may be promoted. The great reduction in the cost of transportation of com- modities has been one of the most striking features of recent economic history; and how essential this reduction has been, and is, to the achievement and maintenance of the present conditions of civilization, may be inferred from the circumstance that " it takes an annual movement of about a thousand tons one mile to keep alive each inhabitant of the United States." Produce is now carried from Australia to England, a distance of eleven thousand miles, in less time and at less cost than was required a hundred years ago to convey goods from one extremity of the British Islands to * According to statements submitted to the Eoyal (English) Commission on Trade Depression, " The quantity of pure silver used for coinage purposes, during the fourteen years ending 1884, was about eighteen per cent greater than the total production during that period ; and there are other estimates which place the consumption at a still higher figure. It is to he remembered that the coinage demand is fed from other sources than the annual output of the mines. It is supplied to some extent by the melting down of old coinage. Allowing for this, however, the evidence of statistics goes to show that the coinage demand for the metal is, and has been, sufficient to absorb the whole of the annual supply that is leit free after the consumption in the arts and manufactures has been supplied ; and this conclusion is supported by the fact that nowhere throughout the world has there been any accumulation of un- coined stocks of the metal." — London Economist, FUTURE TRADE OP THE BAST. ^Ql the other. The average cost of transporting each ton of freight one mile on the Pennsylvania Eailroad during the year 1887 was ^% of a cent. At first thought it would seem as if improvement in this sphere of human effort had certainly found a limit ; hut there are reasons for believing that even greater reductions are possible. Apart from im- provements in machinery, and greater economies in operat- ing, very few of the great lines of transportation, especially the railways, have as yet sufficient of business to continuously exhaust their carrying capacity ;* but, when this is effected, and the present ratio of a large class of fixed expenditures to business is thereby diminished, lower rates for freight, from this cause alone, will be permissible; all of which, however, is simply equivalent to reaffirming the old trade maxim, that it costs proportionately less to do a large than a small business. An anticipation of an immense increase in the near future, in the commerce between the countries of the western and eastern hemispheres, owing especially to the introduc- tion into the latter of better methods for effecting exchanges and transmitting information, is certainly warranted by recent experiences. Thus, if the trade between the United Kingdom alone and the leading countries of the East, ex- clusive of India, continues to increase in the next quarter of a century in the same ratio as it has during the last quarter, when commercial facilities were much less than at present, its aggregate value of $190,000,000 in 1860, and $427,000,000 in 1885, will swell to over $1,000,000,000 in the year 1910 ; and, beyond that date, to an amount that must be left to the imagination. That the only possible future for agriculture, prosecuted for the sake of producing the great staples of food, is to be found in large farms, worked with ample capital, especially * During the year 188Y the milea,£te of empty freight-ears on the Chicago, Milwaukee and St. Paul Eailroad was reported at 61,210,749, or more than one third of the total mileage run by loaded freight-oars. 462 EECENT ECONOMIC CHANGES. in the form of machinery, and with labor organized some- what after the factory system, is coming to be the opinion of many of the best authorities, both in the United States and Europe. As a further part of such a system, it is claimed that the farm must be devoted to a specialty or a few specialties, on the ground that it would be almost as fatal to success to admit mixed farming as it would be to attempt the production of several kinds of diverse manu- factures under one roof and establishment. Machinery is already largely employed in connection with the drying and canning of fruit and vegetables, and in the manufacture of wine. In the sowing, harvesting, trans- porting, and milling of wheat, its utilization has reached a point where further improvement would seem to be almost impossible. In the business of slaughtering cattle and hogs, and rendering their resulting products available for food and other useful purposes, the various processes, involving large expenditure and great diversity of labor, especially in " curing," succeed each other with startling rapidity, and are, or can be, all carried on under one roof, and on such a scale of magnitude and with such a degree of economy that it is said that, if the entire profits of the great slaughtering establishments were limited to the gross receipts from the sale of the beef-tongues in the one case and the pigs' feet in the other, the returns on the capital invested and the busi- ness transacted would be eminently satisfactory. It is not, however, so well known that the business of fattening cattle by the so-called " factory system," on a most extensive scale, has also been successfully introduced in the North- western and trans-Mississippi States and Territories, and that great firms have at present thousands of cattle gathered under one roof, and undergoing the operation of fattening by the most continuous, effective, and economic processes. The results show that one laborer can take care of two hun- dred steers undergoing the process of grain-feeding for the shambles, in a systematic, thorough manner, with the ex^ IMPROVED TREATMENT OF CATTLE. 453 p&nditure of much less time and labor per day than the ordinary farmer spends in tending fifteen or twenty head of fattening steers under the disadvantages common upon the ordinary farms. In these mammoth establishments " a steam-engine moves the hay from one large barn to another, as needed, by means of an endless belt, and carries it to a pow- erful machine where it is cut into lengths suitable for feed- ing, and afterward carries the cut hay by other belts to the mixing-room where by means of another machine it is mixed with corn-meal, the corn having been previously shelled and then ground on the premises by power from the same en- gine. Again, the mixed feed is carried automatically to the feed-boxes in the stalls. The same engine pumps the water for drinking, which runs in a long, shallow trough within reach of the steers ; and even the stalls are cleaned by water discharged through a hose, the supply being raised by the engine and stored for use. The steers are not removed from the stalls in which they are placed from the time the fat- tening process is begun until they are ready for transporta- tion to the big establishments above mentioned for system- atic slaughtering. The advantages of such establishments are not, moreover, confined to labor-saving expedients merely. The uniformity of temperature secured through all kinds of weather is equivalent to a notable saving of feed ; for where fluctuations of temperature are extreme and rapid, and not guarded against, " a great deal of the grain which the farmer feeds is ' blown away ' after having been consumed by his stock," in form of vital heat, strength, and growth, which are the products of the conversion of the grain on diges- tion.* * It has "been found that the present usual method adopted on WeBtern farms of feeding grain, especially corn, without previous grinding, is most costly, as the grain in its natm-al condition is imperfectly digested. Another serious objection to the imperfect methods of the ordinary fai-m in grain- feeding is, that the grain is fed in a too concentrated form ; the fact being unknown, or disregarded, that the thrift of the fattening animal dependiJ 464 KECENT ECONOMIC CHANGES. How great a revolution in the business of agriculture is yet to be effected by the cultivation of land in large tracts, with the full use of machinery and under the factory-sys- tem, is matter for the future to reveal ; but it can not be doubted that the shiftless, wasteful methods of agriculture, now in practice over enormous areas of the earth's surface, largely on the intimate admixture of ground grain with coarse forage ; and that hay, also, must be chopped, and more thoroughly intermingled with it, for the attainment of the best results. But the chopping of the hay and straw and the mixing with meal and water are laborious operations, and hence the economy of applying the steam-engine, and thus saving labor in the business of feeding. Another saving is in building materials : the larger the structure in which the machinery , the hay and grain, and the animals are kept, the less the proportionate quantity of lumber needed ; and then, again, in snoh an establishmentj temperature and ventilation, which in ordinary farming are matters that receive little attention, are economically and effectively regulated. An American practical farmer, the owner and manager of seven thousand acres (Mr. H. H , of Nebraska), to whom the writer is indebted for many items of information, communicates the following additional review of this subject from the American (Western) standpoint: "The average "Western farm is now recklessly managed, but capital will come in greater volume and set up processes which will displace these wasteful methods. The revolution is certain, even if. the exact steps can not now be precisely indicated. At present the hay, and much of the grain, and nearly all of the tools and imple- ments, are unsheltered ; and more than fifty per cent of the hay is ruined for a like reason, while the animals themselves (I do not mean now on the wild- stock ranges, but even on the trans-Missouri farms) have no roof over their heads, except the canopy of heaven, with fie mercury going occasionally twenty and even thirty degrees below zero. These wasteful methods in farm- ing are in part promoted by the United States homestead law, and the occu- pation of the hitherto inexhaustible expanse of cheap lands. When the igno- rant, degraded, and impecunious can no longer acquire a hundred and sixty acres upon which to employ their barbarous methods, and when the land already taken up shall have risen from the low prices at which it now stands to fifty dollars or more per acre, a new dispensation will arrive. Neither the cattle, nor the food which the cattle consume, will then be raised by any such methods as now prevail : neither will they be exposed to the elements in winter. True enough, the opening up of other virgin fields in Australia, South America, Africa, and elsewhere, may retard this rise in the value of the land in the western part of our continent, and thus to a certain extent de- lay the passing of the land exclusively into the hands of larger capitalists and better managers ; but it must be considered that not all climates are suitable for energetic, capable farming populations, and likewise that the best forage plants are restricted to temperate latitudes." THE NINETEENTH CENTURY IN HISTORY. 465 are' altogether too barbarous to be much longer tolerated ; and, as the result of such progress, the return of the prices of meats and cereals to their former higher rates, which many are anticipating on account of the increasing number of the world's consumers, may be delayed indefinitely. Possibly in the not very remote future, the world— as its population shows no signs of abatement in its increase — may be confronted with a full occupation of all farming- land and a great comparative diminution of product through an exhaustion of its elements of fertility; but, be- fore that time arrives, improvements may possibly be made in agriculture which will have practically the same effect as an increase in the quantity of land ; or possibly chemistry may be able to produce food by the direct combination of its inorganic elements. CONCLUSION. Finally, a comprehensive review of the economic changes of the last quarter of a century, and a careful balancing of what seems to have been good and what seems to have been evil in respect to results, would seem to warrant the following .conclusions : That the immense material progress that these changes have entailed has been, for mankind in general, movement upward and not downward ; for the better and not for the worse ; and that the epoch of time under con- sideration will hereafter rank in history as one that has had no parallel, but which corresponds in importance with the periods that successively succeeded the Crusades, the invention of gunpowder, the emancipation of thought through the Eeformation, and the invention of ,the steam- engine ; when the whole plane of civilization and humanity rose to a higher level, each great movement being accom- panied by social disturbances of great magnitude and seri- ous import, but which experience has proved were but tem- ■porarv in their nature and infinitesimal in their influence 4,66 EECBNT ECONOMIC CHANGES. for evil in comparison with the good that followed. And what the watchman standing oh this higher eminence can now see is, that the time has come when the population of the world commands the means of a comfortable subsistence in a greater degree and with less of efEort than ever before ; and what he may reasonably expect to see at no very remote period is, the dawn of a day when human poverty will mean more distinctly than ever physical disability, mental inca- pacity, or unpardonable viciousness or laziness. But, in order that this dawning may be hastened, it is of the first importance to recognize that civilized society in re- cent years, and under the new economic conditions which those years have evolved, has become a vastly more compli- cated machine than ever before — so complicated, in fact, that, in order to make it work smoothly, all possible obstruc- tions need to be foreseen and removed from its mechanism. Great armaments; millions of men made soldiers and re- moved from the work of production ; laws interfering with free commercial exchanges between nations — these and many lesser interferences with the free action and interaction of industrial social forces under existing conditions, all tend to destructive irregularities or stoppages of the great ma- chine ; whereby labor is rendered unproductive and discon- tented, want increased, comfort lessened, social inequalities multiplied, the comity of nations discouraged, and the idea of the brotherhood of man, which constitutes the foundation of every system worthy of being called " religious," denied and repudiated. APPENDIX. Exhibit of the Relative Production and Prices of Iron and Steel in the United States and Great Britain, and of the Extent to which the Duties on Imports augment the Prices of these Metals in the former Country. There is probably no standard by which the relative prosperity of nations can be so accurately gauged as by their relative consumption of iron and steel. The use of these metals corresponds to their con- version into rails, engines, machinery, and tools of every kind which lie at the foundation of all the arts of production and distribution. The iron and steel industry is singular in another respect. There is probably no other art about which the statistics are so ample, so complete, and so trustworthy. The United States Census Reports of 1880, by Mr. James M. Swank, upon Iron and Steel ; by Prof. Ra- phael Pumpelly, upon Iron-Ore and Coal Production ; by Mr. Joseph D. Weeks, on the Coke Industry, leave nothing to be desired. They cover every point and are based on the sworn returns of establish- ments, in which the work is conducted in such a systematic way as to afford an absolute and complete picture of the condition of the busi- ness; and year by year statistical abstracts and other publications in the United States and Europe keep up the record of the world's ex- periences to the latest dates. No more important addition to this department of economic literature has, however, been made in recent years than the publication during the year 1888, under the auspices of the American Iron !md Steel Association, of a complete collection of the statistics of the iron and steel industries of the United States for many years down to the close of 1887, embracing both production and prices, with the concurrent prices of British iron and steel from 1830 to 1887 inclusive;* inasmuch as it affords data so exact as to permit * " A Collection of Statistics to tlie Close of 1887, relatinfr to the Iron and Steel Industries of the United States ; to which is added much Valuable Sta- 468 RECENT ECONOMIC CHANGES. the relative prices or cost of iron and steel to the consumers of these metals in the United States and Great Britain, for the period men- tioned, to be clearly exhibited. Taking advantage of the facilities thus afforded, the following ex- hibit, believed to be strictly warranted by the facts, has been prepared and is here submitted ; with the premise that in computing its state- ments of numerical results small fractions have been omitted, on the assumption that, without adding anything essential to completeness in this instance, their inclusion tends to confuse the mind and conse- quently weaken the impi'ession which it is desirable should be made upon the reader. The world's average annual production of pig-iron, from 1878 to 1887, was in round numbers 20,800.000 net tons of 3,000 pounds each.* In 1887 it reached 24,600,000 net tons. The average prod- uct of the United States, from 1878 to 1887 inclusive, was 4,758,000 tons. The average annual import of iron by the United States, from 1878 to 1887 inclusive, in the form of pig, bars, rails, and plates (omitting machinery and hardware), was 1,100,000 net tons. Reasoning from the value of the imports of machinery, hardwax'e, and other manufact- ures of iron and steel during the same period, the average annual im- port of these products for the ten years in question was probably in excess of 225,000 net tons. It is safe to say, therefore, that the consumption of iron and steel in the United States, in one form or an- other, each year for the ten years, 1878 to 1887 inclusive, was about 6,000,000 tons of 2,000 pounds each, or a fraction less than thirty per cent of the entire product of the world. The consumption of the United States for the year 1887 was yet more startling. The domestic product amounted to 7,187,000 tons. The import of rails, bars, plates, and the like, was 1,997,000 tons ; and by estimate from value, the import of machinery, hardware, tools, etc., must have been at least 330,000 tons additional, giving a total con- sumption for the year of 9,500,000 net tons, or a fraction less than forty per cent of the entire product of the world. The pig-iron production of the United States for 1888 was 7,268,- tistical Information relating to the Iron and Steel Industries of Great Britain, etc.," by James M. Swank, General Manager of the AmeHaan Iron and Steel Aasodation, Philadelphia, 1888, 8vo, pp. 24. * In England and Russia 2,240 pounds constitute a ton of pig-iron. In all the Continental countries of Europe, except Russia, the metric ton of 2,204 pounds constitutes the stand.ird. In the United States 2,240 pounds consti- tute a ffross ton, and 2,000 pounds a net ton. APPENDIX. 469 507 net, or 6,489,738 gross tons. For the twelve months ending June 30, 1889, the product was 7,993,903 net, or 7,137,413 gross tons. The average annual product of pig-iron in Great Britain from 1878 to 1887 inclusive was 7,500,000 gross tons, or a little less than 8,400,- 000 net tons. The product of 1887 (7,559,518 tons) corresponded very closel)' to the average of the whole period. It therefore follows from these figures that the consumption of iron and steel in the United States for the ten years — 1877 to 1887 — was equal to seventy-five per cent of the average production of Great Britain during that period, and that it has now (1889) reached such dimensions as to approximate closely to the present entire annual British iron and steel product. Furthermore, as no country other than Great Britain exports iron and steel in quantities proportioned in any important degree to the total consumption of the United States, nearly every other country, with the possible exceptions of Belgium, Sweden, and Norway, importing more iron and steel than it exports, it is obviously impossible for the United States to procure a supply ade- quate to meet its consumption of these necessary metals except in great measure from its own mines and furnaces. It is, however, ap- parent that, until within a very short time, perhaps only since the Southern and Western mines and works have been established, the production of iron in the United States has been conducted at a very great disadvantage. In Pennsylvania and in many other parts of the country, the deposits of iron-ores and of coal are separated by other intervening geological formations, which interpose considerable dis- tances and heavy grades between the points of supply of these mate- rials, while the iron-ores of the Lake Superior region are very far re- moved from the sources of supply of the fuel by which they must be utilized Hence it is not surprising to find by the census figures of 1880, that the difference between the value of the ores and coal at the mines and of coke at the coke-ovens, and the cost of these materials at the iron-furnaces, amounted for that year to over $21,000,000 on a product of pig-iron valued at $89,000,000, a difference of $5.60 per ton ; most of which must have been expended in transporting ores or coal from widely separated mines and in assembling the materials at the points where they could be economically converted. In confirma- tion of this statement, the testimony of Mr. Cyrus Elder, of the Cam- bria Iron Works of Pennsylvania, given in a tract published in 1888 by the Industrial League, and which can be purchased from Mr. James M. Swank at 263 South Fourth Street, Philadelphia, is most valuable. In this publication, after dealing with the question of the transporta- tion of materials, Mr. Elder states that " the books of one of the prin- 31 470 EECENT ECONOMIC CHANGES. cipal steel-rail manufacturing companies for the year 1887 show that the cost of transportation to its works, of the materials used in mak- ing each ton of steel rails, amounted in that year to $12.75," or to an aggregate burden or tax upon the product of the year of $1,591,332.92. Mr. Elder, in his discussion of this subject, also objects to the duty of $11 per ton which the bill reported by the Committee of Ways and Means to the United States House of Representatives of the fiftieth Congress, 1888 (and familiarly known as the " Mills BUI "), proposed to levy on the import of steel rails into the United States, on the ground that it '• does not much more than compensate the American manufact- urer for the excess in cost to him of assem.bling the materials above what is paid by his foreign rivals." The evidence, therefore, is con- clusive that until a recent period about twenty-five per cent of the cost of iron, and more than twenty-flve per cent of the cost of steel in the United States, has consisted in the expense of assembling the ma- terials at the furnaces. But in these latter days the furnaces and mills are being placed where they belong, to wit, at the various points, especially in Alabama, where the materials may be said to assemble themselves — the coal, iron, and limestone lying near the surface in ad- jacent ridges, not separated by heavy grades or excessive distances.* * In this connection the following remarks of Hon. Abram S. Hewitt at the meeting of the British Iron Trade Association, on the 7th of May, 1889 (and printed in the official record of the proceedings of that body), will be read with interest. i Mr. Hewitt said ; " In Carolina there were vast bodies of magnetites, and, if not vei7 near to the coal at present, railways were in course of construction which would bring them within sixty mUes of the best coal in the world. He had Tnade a calculation, and believed that coal and iron could he hvought to- gether to maie pig-iron for Bessemer steel at not exceeding 40«. ($9.74) a ton. He knew that this miglit astonish his hearers, particularly in view of the fact that the American mining industry was dependent upon a duty ;' but they were slow to learn in the United States, and they honestly believed that they needed this protection, and it would go on until they had fried long enough in their own fat to ham to find some other outlet in the marJcets of the world. There was a vast deposit of ore, commencing in Tennessee and thickening until in Alabama, where a great physical eruption must have taken place at one time, a mountain was covered with a flfty-pej-oeut ore, which was, as a rule, in admirable condition to be put into the furnace. It was not low enough in phosphorus for the acid Bessemer, but could be used for the basic process. The coal and the ore were only five miles apart, and about five shillings ($1.25) would deliver at the fm-nace the materials for a ton of iron. Of course, this was a combination which, as far as he knew, did not exist anywhere else in the world, and he supposed he might assume that the only drawback at all APPENDIX. 4.^11 It now becomes interesting to compute the relative price or cost of iron and steel to the consumers of these metals in the United States as compared with those of Great Britain and other countries ; and Mr. Swank's little pamphlet affords all the data necessary for making this comparison, for the years 1878 to 1887 inclusive. This decade includes one year of prices, in the United States, on a slightly depreciated paper basis. Specie payments were not renewed until 1879; and, during 1878, the paper-money price of iron was a very little higher than the gold price. This difference may, however, be legitimately disregarded ; because, if we had the enormous figures of the consumption of 1888 to add to the previous years, omitting 1878, the .results of the following computation would find more than ample confirmation. Thus, in the- period under consideration, 1878 to 1887 inclusive, the average price of anthracite foundry-iron in Philadelphia was $31.87 per ton. During the same period the average price of Scotch pig-iron, as given in Mr. Swank's pamphlet, presumably in Glasgow, was $12.94, reckoning the shilling at twenty-four cents. During the last portion of this decade trans- oceanic freights were very low ; considerable quantities of iron having been even carried as ballast, without charge. . But, even assuming that the freight on pig-iron had been the same as that on manufactures of iron, it would not have exceeded $3 per ton. Adding this to the price in Glasgow gives us a fraction under $15 per ton, as the price of Scotch pig landed in the United States ; and deducting this from the price of anthracite foundry-iron, as above stated, we find a disparity of $7 per ton in the price of all the pig-iron consumed in this country in ten years, as compared with the average price of Scotch pig for the corre- sponding period in Great Britain.* If objection be taken to this comparison, it may be more fair to take a higher grade of iron. For example, during the same period the average price of the best rolled bar-iron in Philadelphia was $50.30 per ton of 3,240 pounds, while the average price in England of the best would be in the higher rate of wages; iwt there was the vast body of negro labor quite available, and he doubted whether the per-diem wage was so much as in England." * '■Scotch pig" is taken as a standard in these comparisons, because it is expedient to restrict their sphere to the statistics furnished in Mr. Swank's valuable report ; and the average prices of no other brands of British pig-iron are given in his tables. If, however, " English pig," which represents the bulk of British production and consumption, and tlie average price of which is less than Scotch pig, had been taken as the British standard, the disparity between the English and American prices of u-on would be much more con- siderable tlian that above indicated. 472 EECENT ECONOMIC CHANGES. Staflordshire, marked bars was $36.48, a difference substantially of $14 per ton. And this disparity in the prices of iron and steel in the two countries becomes greater the higher we go in the grades selected for comparison. But, selecting the lowest grades as the standard,, and applying the difference of $7, between the price of Pennsylvania anthracite " foundry " and " Scotch pig " to the consumption of the United States of 60,000,000 tons in ten years, it will be found that the consumers of iron and steel in the United States paid, in the ten years from 1878 to 1887, $430,000,000 in excess of the cost of a like quantity of iron to the consumers of Great Britain during the same period. In respect to steel, comparison shows the disparity of prices to be even much greater. Thus the production of steel in aU its forms, in the United States, for the ten years under consideration, was 19,127,- 000 net tons. The import of steel during the same time was 859,000 tons. Adding this last amount and a fair allowance for other kinds of steel imported, it becomes apparent that the consumption of steel in the United States in the ten years from 1878 to 1887 was over 20,000,- 000 tons. To determine now the difference or disparity in the prices of steel in the two countries, the lowest form will be again taken as the stand- ard for comparison ; and for so doing Mr. Swank's tables afford the following data : The average price of steel rails in the United States from 1878 to 1887 was $44 per ton. In Great Britain, during the same period, the average was $30 per ton. At these rates the adverse difference in the cost of consumption of 20,000,000 tons of steel in the United States would have been $380,000,000. But as a difference, as respects the cost of the iron used in the making of steel in the two countries of $7 per .ton, has been already allowed, the cost of the consumption of steel in the United States may be properly charged with only one half this disparity, or $140,000,000. Taking, therefore, the lowest grades of iron and steel as a standard in this computation of the disparity of cost or price, from 1878 to 1887, the aggregate excess of cost of iron and steel in ten years, to the con- sumers of the United States, above that paid in Great Britain, has been $560,000,000, or at an average of $56,000,000 per annum ; and on a separate computation, made in the same way, for the year 1887, the disparity in price for the United States rises for that single year to $80,000,000. The revenue derived by the Government of the United States dur- ing the fiscal year ending June 30, 1887, was, on ores and pig-iron, APPENDIX. 473 $3,667,000, and on manufactures of iron and steel $17,046,000; or a total of $20,713,000. It therefore appears that in the process of collecting an amount of revenue, which constituted less than flne fifth part of the excess or surplus revenue of that year, the country was subjected to an addi- tional tax of $60,000,000, which was paid by the consumers of iron and steel in some way. Doubtless this difference was largely absorbed in the cost of assembling the materials, and by charges on the making of iron and steel in those iron-furnaces and rolling-mills which are either out of place or out of date ; and it can not fairly be claimed to have been all a bounty to the owners of the works, whatever part may have gone in that direction. Attention is next asked to the benefit that is popularly supposed to accrue from making iron and steel in the United States in preference to importing it. The conditions of life in the iron and coal mines have been so often described that it is not worth while to here repeat them. The wages paid are low, and the conditions of employment are as bad as they well can be. In the blast-furnaces and the rolling-mills the conditions are somewhat better ; but the work is arduous in the extreme and most exhausting. In the census year 1880, in which it was estimated that the sum paid in wages corresponded to about three fourths time for the full force, the earnings of the skilled and unskilled workmen in all the rolling-mills, blast-furnaces, coke-ovens, and iron and coal mines of the United States averaged $365 each per annum. The number occu- pied in these industries in the census year was a fraction over 205,000 ; the sum of their earnings was $75,000,000. The production of the census year was a little less than the average consumption of the last ten years, and about four sevenths of the consumption of 1887. Since 1880, however, very great improvements have been made in the pro- cesses of conversion of ore and fuel into iron and steel, by the applica- tion of natural gas and by improvements in mechanism. The iron- mines o£ the South have also been opened, where a very much less proportionate quantity of labor suffices for the production of a given quantity of iron than in Pennsylvania. Wages have risen in daily rate, but the cost of labor in a ton of metal has been reduced ; and the sum of the wages has also proportionately diminished in ratio to the value of the product. It may be safe to compute that there are now occupied in this work of making iron and steel for 65,000,000 people about 300,000 men and boys, averaging perhaps $400 a year each in wages, earning altogether $120,000,000. The people of the United 474 RECENT ECONOMIC CHANGES. States therefore paid, in the year 1887, $31,000,000 toward the surplus revenue, and $60,000,000 excess in price, which was distributed among the owners of the mineral lands, the owners of the furnaces, and the operators of the Bessemer process, and also among the railways, for the cost of assembling the materials. In 1880 there were 1,005 iron and steel works, rolling-mills, and blast-furnaces in the United States, whose aggregate capital, accord- ing to Mr. Swank, was $231,000,000. According to Prof. Pumpelly, the capital in the iron-mines of the country for that same year was $62,000,000 ; and from the joint reports of these two census experts it would appear that the aggregate capital invested in all the coal-mines of the country, at the same date, was $248,000,000, of which nearly $200,000,000 stood for the value of the mineral lands or royalties. The proportion of coal and the cost of coking, chargeable to the iron industry, may possibly cover the odd $48,000,000. The entire capital invested in the iron and steel industry of the United States in 1880 was, therefore, about $341,000,000;* and the data above submitted warrant the conclusion that the price paid by the consumers of iron and steel in the United States, in order to sustain these industries for ten years, and to enable the owners thereof to enjoy its profits — pay- ing wages to their employes somewhat less on an average than were paid at the same time to other and outside labor — was about sixty-iive per cent more than the entire capital invested in it. And, as it has been already shown that it would be impossible for any other country to supply the annual requirements of the United States of iron and steel for consumption, it further follows that the payment of $50,000,000 to $80,000,000 per annum by this country to sustain a branch of in- dustry which can not be displaced or destroyed by any possible foreign competition, is clearly unnecessary. It will be also pertinent at this point to consider the probable efEect of the removal of all duties (taxes) now imposed upon the importation into the United States of ores of iron, and upon coal, coke, crude iron and steel, and upon tools, machinery, and implements of every kind made therefrom ; which duties now yield a revenue — not required — of from $20,000,000 to $23,000,000 per annum. The paramount advantage of Great Britain over even Belgium and Germany long since passed away. Her mines of the finer qualities of iron-ore, while they can not be said to be absolutely exhausted, are yet * Blaat-fumaces and rolling-mills, $231,000,000; iron-mines, $62,000,000; coal-mines appurtenant to iron and steel and coke works, $48,000,000 ; total, $341,000,000. APPENDIX. 475 worked under such bad conditions that England is forced to import iron-ores from Spain, from Elba, and from Africa* Her coking coals are also produced under conditions of great disadvantage, which have been thus described in a recent (1886) report by Mr. Joseph D. Weeks to the United States Geological Survey. Referring to the most im- portant British coke district— the " Durham"— from which nearly one half of the coke-supply of Great Britain is derived, he says : " The typical coke of Great Britain, as the McConnellsville is of the United States, is the Durham coke ; it is high in carbon, low in ash, etc. ; the veins are low, the thickest measuring but six feet ; the miner is neces- sarily compelled to lie in a constrained and cramped condition upon his back while working, never standing upright while in the face ; the pits are deep and the mines flery, with all the danger to life and health arising from these conditions. The best coal is obtained from the lower seams." The Durham cokes are furnished at a lower price than any other in Great Britain or in Europe. The average earnings of those who work in them are from seventy cents to f 1.10 per day. The cost of coke in Durham is not given. The price of coke for Bessemer pig in Cardiff, Newport, and Swansea is stated to be $3.51 to $3.57. In South Wales the cost of a ton of coke is given at |1.70, and in Bel- gium at $2.57. At McConnellsville, Pa., the rates of wages are con- siderably higher, but have been somewhat depressed of late by reason of the use of natural gas at Pittsburg. For several years, according to Prof. Pumpelly's investigations, the value of coke at the oven throughout the United States was $1.22 per ton; a striking example of production at low cost — i. e., of coke — with exceptional high wages, owing to the better conditions under which the work is performed. The data for the cost of iron-ore and steel in Great Britain and in the United States, and for the comparison of the rates of wages, are not at *_TIie importation of iron-ores into the chief iron-produciDg countries of Europe dates from about the year 1866, when the Bessemer process had be- come fairly established. In that year Great Britain imported little or no ores, the only European countries receiving supplies of foreign ores being France, Germany, Belgium, and Austria. The aggregate imports of those four countries amounted at that time to nearly 900,000 tons, or about cue sev- enth of the total now imported into the chief iron-making countries from out- side sources. In 1868 the iron-ore imports of Great Britain w^ere returned at 114,435 tons. In 1877 they exceeded 1,000,000 tons. In 1880 they suddenly rose to 2,634,000 tons; and for 1887 they amounted to 3,762,000 tons. That large areas of consumption in the United States also found it profitable to use foreign ores of iron is shown by importation into the country, in the single year 1888, of 1,770,947 tons, notwithstanding a duty on the same of thirty- eight per cent. 476 EECBNT ECONOMIC CHANGES. present available. It is alleged, however, that the abundance of our sup. ply of ores and coal, lying near the surface and in close proximity, will enable the American maniifacturer to pay about double wages, in com- parison with Great Britain, and yet to bring out the iron at the furnace at the same cost, so far as the element of labor in it is concerned. Under the instructions lately given by Congress to the Bureau of the Statistics of Labor, and by means of the investigations which are now in progress, it may be possible at no distant day to be able to compare the cost of production of iron and steel and other crude or partly manufactured materials in the United States in terms of days' labor, or by the quality and intensity of the labor, as well as in terms of price, or by the rate of wages ; the latter being an entirely fallacious standard, seldom of any value in making the comparison of the rela- tive power of one country, as compared with another, to supply goods or wares of any kind. For, as a rule, the rates of wages in all industries to which modern machinery, tools, and inventions have been applied, are in inverse proportion to the cost of the product, so far as it is made up of the wages of labor — the lowest cost being the correlative or complement of the highest rates of wages, where the commerce be- tween several countries, or between the sections of one country with another is free from artificial obstruction. Doubtless a sudden remis- sion of the existing duties now levied by the United States on the importation of iron and steel would result in the suspension of some furnaces — perhaps a considerable number — which are out of date as respects location, construction, and management. Such establish- ments are now kept alive only by the disparity in the price of their products in the markets of the United States and of Great Britain. Concurrently, also, there might be a sudden and excessive demand upon the iron-mines and furnaces of Europe, especially of Great Britain, for their products. But this last could-not be met without altering all the existing conditions of the iron industries of those countries. Miners and metal-workers are not trained in a day ; and those who are in such work would immediately feel the effect of the additional demand and would call for higher wages ; while the disadvantages of production in Great Britain would be rendered even greater, through the necessity of ordering larger and larger supplies of ore from Spain, Elba, and Africa. The supply in Spain being now limited, it could hardly fail to happen that a heavy advance in the price of iron would occur throughout Europe. The sudden appearance of a free customer, whose consumption is already forty per cent of the total production of the world, for any considerable part of the iron and steel supply from other countries, would have an efffeot on the conditions of the work- APPENDIX. 477 men in Europe very greatly disproportionate to the quantity called for. Such an advance in the price of these products on the other side of the ocean would immediately protect all the well-placed iron-fur- naces, mines, and metal-works of the United States. Their control of their own markets would then be established ; stability would be given to the conditions of business, and the American consumers of iron, who outnumber the makers of iron by twenty to one. would be relieved from their present disadvantages in competition with other countries. It is well known and may bo considered a well-established fact that, in almost all the arts of using iron and steel, the people of the United States excel those of Great Britain. Their heavy exports of lo- comotives, of cutlery, axes, sewing-machines, pumps, and the like, bear witness to this fact. The only reason why they have been unable thus far to build ocean steamships has been the disparity between Europe and America in the price of materials. This would be removed for all time by the heavy advance in the price of such materials in Great Britain and on the Continent, which would certainly ensue from the increased demand contingent on the abrogation of import duties under consideration ; and then would follow such a participation by the United States in the commerce and carrying-trade of the world as her natural advantages entitle her to claim and expect. Holding, as her people now do, the paramount position in the production of iron and steel at low cost, but at higher rates of wages than are elsewhere paid for similar service, the time would soon come when all questions of competition in the production and supply of iron and steel would cease. The people of the United States, furthermore, are not subjected to the burden of excessive taxes in ratio to their product, their gross taxes being even much less per capita than those of any other country. They are free from the burden of standing armies, the cost of which is represented only in small measure by the amount paid to support them, but is felt in greatest measure by the withdrawal of men at the most productive period of life to waste their time in camps and bar- racks. They would, accordingly, assume that advantage of position to which they are entitled in the civilized world and for supplying the non-maohine-using nations with every kind of manufactured products which they inay require. It may be held by those who would oppose the remission of all du- ties upon iron, steel, machinery, and the like, that, unless this artificial stimulus of a high tariff had been given to those branches of indus- try in the United States, they would not have been developed to any- thing like the extent which has occurred. This is a pure hypothesis. There is no foundation, in fact, for any such theory. The iron and 478 RECENT ECONOMIC CHANGES. steel industry in the United States is older than the Constitution, and its growth has been coincident with the growth of the country. Doubtless the variations in the tariff, as well as in the demand for railway purposes, have subjected this branch of industry to greater fluctuations than almost any other. Whether or not the product of iron and steel would have been as great as it is now without the inter- ference of the Government is to-day a matter of no consequence. It is a dead issue. The question now is. What is the cost to the people of the United States of this disparity in the price of iron and steel which is due to the maintenance of a tariff — a tariff not for the purpose of build- ing up or starting an infant industry, but for the mere purpose of main- taining the present conditions, whatever they may be ? When viewed in .this light, the cost of the system may prove to be much more than it is worth to the people subjected to its burden, for it is a tax upon productive capital and productive power laid at the very foundation of all industry. The disparity in the price of rails costs every mile of railway in the United States a certain amount of money over and above the cost of laying rails, for example, in India, over which wheat is to be transported that comes into direct competition with American wheat in foreign markets. The people of the United States being deprived of the power to build steamships for ocean service, and the disparity in the price of mate- rials increasing the cost of their railways by ten per cent and of their mills and factories by twenty, and even in some eases by fifty per cent, as compared with the cost of the mills and works of their direct com- petitors in other countries, the latter are thus enabled to supply the non-machine-using nations of the world with the greater part of their necessary goods and wares, and are sending to the United States a constantly increasing proportion of goods and wares for its consump- tion, in spite of the high taxes levied on their importation. The American people are thus subjected to a very heavy and con- tinuous loss. Their power of controlling their home markets is im- paired ; they lose the advantage of their position and of their oppor- tunity to supply the vast non-machine-using countries of the world, containing over a thousand million population, with goods and wares made at high wages and low cost, for the reason that, in consequence of a disparity in the price of the material which lies at the foundation of all arts, they have by their own act given supremacy to Great Britain, in the lower cost of her investments, for meeting this de- mand. INDEX. Aftioa, South, trade depression in, 2. Agnoultural implements, displace- ment of labor in manufacturing, 52 ; labor in England six hundred years ago, 402. Agriculture, British, recent losses of, 87 ; depression of, in Europe, 177 ; future of, 464; disinclination for pursuit of, 353 ; of Europe, four causes for depression of, 89 ; pop- ulation engaged in the United States, 178; Eussian, restrictions on, 280. America, surplus wheat product of, 178. Ansesthetios, reduction of mortality through use of, 347. Anglo-French treaty of 1860, results of, 263. Animal products, curious price changes of, 195. Animals, essential difference from men, 400 ; limitation of wants of, 400. Apothecary, modern, changes in busi- ness of, 54. Argentine States, bounties on export of meat, 309 ; meat product of, 160 ; progress of, 455. Armies of Europe, cost of, 322 ; num- bers of men in, 322. Art, impolicy of taxing, 390 ; stimulus to industrial development, 390. Artists, increased opportunities for employment of, 388. Arts, disappearance of certain, 55. Asia Minor, famines in, 335. Associations, co-operative, 451, 452. Atkinson, Edward, investigations of, 209, 258, 342, 409, 412 ; on the cost (if food, 258, 341 ; on the cultivated land of the United States, 176 ; on the economic v;ilue of a glass of beer, 405. Australia, commercial distress in 1885, 2 ; recent progress of, 454 ; wages of labor in, 362. Bacteriology, discoveries in, 348. Bananas, consumption of, 339. Banking, concentration of, 99. Bank-notes, reduced cost of making, 53. Bank of Franco, gold and silver re- serves in, 211 ; new notes of, 53. Barter, three forms of, 219. Bastiat's law of the distribution of capital, 370. Bear, W. E., on the meat-supjly of the United Kingdom, 15S. Beaulieu, Leroy, on the cost of living in France, 404. Beef-slaughtering, economics in, 97. Beer, economic value of a glass of, 405. Beet-root sugar, bounties, European, experience of, 295 ; production of, 127, 129, 130. Bell, Sir Lowthian, on the prices of iron, 139. 480 RECENT ECONOMIC CHANGES. Bessemer steel, importance of the in- vention, 43. Bessemer steel rails, average prices of, 1883-'86, 43 ; comparative prices in the United States and Great Britain, 320, 472. Bi-metalism, 225. Bi-metallic controversy, relation of, to civilization, 256. Bleaching-powders, recent prices of, 158. Bombay, recent economic experiences of, 434. Boot and shoe industry, displacement of labor in, by machinery, 52. Boot and slioe manufacture, division of labor in. 94. Bottles, displacement of labor in mak- . ing, 52. Bounties, on shipping, 309 ; sugar- production, 126, 128, 295, 299 ; ulti- mate effect on production, 306. Brazil, commercial policy of, 272. Bread, cost of manufacture and distri- bution, 58 ; question of future scar- city, 177 ; reduction in the cost of, in Great Britain, 85. Bridge, Brooklyn, economic experi- ences of, 385. Bright's disease, increase of, 350. British commercial sentiments, change in, 266. British exports and imports in 1887, comparison of volume and values, 84. British industries, growth in fifty years, 62. British people, purchasing power of, 356. British shipping, supremacy of, 313. Brooklyn (N. Y.) su.«ipension-bridge, 335, 386. Bullion, increased facilities for mov- ing, 213. Business, modern conditi..ns of, 107 ; new conditions entailing disease, 350. Butter, artificial, 449. Buttons, changes in manufacture and style, 389 ; cuff, conditions of manu- facture, 92. California, minimum cost of growing wheat in, 98. Canal, Liverpool and Manchester, 112. Canals, in France, recent experience of, 113 ; in the Dnited States, com- parative rates on, 113 ; return to the use of, 112; Suez, economic inftu- ence of, 29. Capital and labor, present relations of, 91. Capital, available, in the world, 217 ; impairment in value of, 418 ; in- vested in sugar-refining, 92. Capitalistic system of production, ad- vantages of, 399 ; law of destruction of, 369. Carpenters of Paris demand protec- tion, 281. Carrying-trade, on land, revolution of, 40 ; on sea, 37. Cattle, new methods of fattening, 463 ; use of sugar for feeding, 301. Century, nineteenth, place in history, 465. Cereals, British, recent decline in the prices of, 90 ; regulation of the prices of, 45 ; world's surplus, where stored, 45. Chadwiok, David, on the laboring- cla.sses of Great Britain, 356. Cheese, improvements in manufacture of, 162 ; recent price experiences of, 162. Chemicals, recent decline in prices of, 158. Chemnitz, condition of labor in, 365. Chewing-gum, price and demand for, 199. Child labor, increase of, 95. Children, reduction of death-rate in British union poor-schools, 348. Chili, deposits of nitrate of soda, 156.' INDEX. 481 China, Coohin, commerce and trade of, 276 ; inferiority, in tea-produo- tion, 153 ; recent famines in, 71, 385. Chinese expulsion from the United States, 286 ; immigration, appre- hension of, Sli. Cigars, increase in consumption of,337. Cinchona-trees, cultivation of, in the East Indies, 154. Cincinnati, market prices for 1884^'87, 201. Circulation, monetary, of the United States, 221-223. Cities, aggregation of population in, 352; tendeneyof population to, 432. Civilization and barbarism, changes in the conditions that deiine, 64. Civilization, high, antagonistic to the use of silver, 255 ; modem, tendency of, 324 ; present, made possible by machinery, 336. Civilizations, money of, varying, 253. Clearing-houses, recent statistics of, 214. Cloth, cotton, reduction in the prices of, 258. Clothes, cheap, purchasers of, 4.S1. Clothing, cheap, benefit of, 430 ; pro- duction of materials for, 268 ; ready- made, increase m sizes demanded , in the United States, 348. Coal, displacement of use by natu- ral gas, 66 ; economy in consump- tion of, 150 ; power evolved from consumption of, under modern con- ditions, 38 ; production in Eussia, 280 ; product of the United States, 149 ; effect of machinery on, 50 ; re- cent production and price experi- ences of, 148 ; reduction in con- sumption of, by ocean-steamers, 38 ; world's product of, 149. Coal-tar colors, economic influence of, 55. Coffee, recent production and price ex- periences of, 152 ; variations in price and consumption of, 380 ; world's annual production of, 152. Coinage of the world, tri-metallio, 254. Coinage, silver, of the United States, 228. Coin, small use of, in bank transac- tions, 214. Coins, use of small, when necessary, 252. Colonial policy of France, 276. Comity of nations, decline in, 285. Commerce, foreign, of European coun- tries, 290; how the telegraph has revolutionized, 32 ; ocean, of the world, how carried, 314. Commercial intercourse of nations, how restricted, 316. Commodities, divergence in price- movements, 200 ; modern condi- tions, for cheap production, 74; per capita consumption of, in Great Britain, 356 ; prices of, and the de- cline in the value of silver, 250 ; sup- ply of, governed by different laws, 31 . Compensations for economic disturb- ances, 430. Competition, social influences of, 452. Connecticut, cost of food in alms- houses of, 341 ; decline in land- values in, 425 ; purchasing power of wages in, 405, 409. Consumption, increase in consequence of reduction of price, 383 ; of com- modities, stioaulants to, 380 ; rela- tions to production, 330 ; relation to price, 379. Co-operation, analysis of, 452. Co-operation and the labor problem, 103, 104. Copper, modern cost of producing, 135; production and price-experi- ences of, 134 ; " syndicate," history of, 137. Copper money, conditions for use of, 253. Coral, decline in prices of, 195. Corea, monetary experiences of, 253. 482 RECENT ECONOMIC CHANGES. Com, exiiort of American, to Italy, 91 ; product of the United States, 334; shelling of, 334. Corn luws, effect of repeal of, 280. Cotton, how bought, 110 ; manufact- ure of the United States, relation of wages and service, 373 ; purchas- ing power of, at different periods, 220 ; recent price-experiences of, 179 ; reserve stocks of, 182; world's supply of, 181. Cotton oloth, relations of price and consumption, 382. Cotton fabrics, recent increased con- sumption of, 180. Cotton-growing, conditions for profit- able, 100. Cotton-mills of the United States, di- vision of employes in, 95. Cotton piece-goods, exports of, to India, 240 ; prices and product, 18fi5-'85, 220. Cotton-seed oil, use of, 159. Countries, average earnings of people of different, 363 ; non-machinery- using, exempt from economic dis- turbances, 68 ; of greatest progress, 454. Cracker-bakeries, consumption of tin- plate by, 108. Credit and capital, effect on trade of the world, 217. Crime, decline in Great Britain, 345, 359 ; increase in the United States, 345 ; recent statistics of, 345 ; rela- tions to education, 359. Crises, financial, of the last century, 81 ; periodicity of, 81. Crop failures in 1879-'81, 6. Cuba, improved production of sugar in, 102. Culture, influence of, on consump- tion, 77. Cycles of panic and speculation, 80. Dakota, wheat product of, 57, 170. Death-rate, decline in, 346. Debtors, relative burdens of, 220. Demonetization of silver, meaning of term, 230. Diamonds, market for, in the United States, 197 ; recent production aad prices, experiences of, 196,' 197; South African supply of, 196; value of, exported from South Africa, 197. Discontent, sooietary, causes of, 407. Diseases, children's, extinction of, 348 ; of civilization, 349, 350. Distress of agricultural laborers in Europe, 376-378. Distribution, modern economies in, 110 ; of products, disturbance in old methods of, 100. Disturbances, economic, since 1873, explanation of, 61 ; industrial, in connection with the invention of stocking making machinery, 367. Dollar, silver, of the United States, experience of, 227. Earnings of people of different na- tionalities, 362. Earth and rock, reduction m the cost of excavating since 1859-'60, 50. East, possible future trade of the, 461. Economic, disturbances since 1873, 1 ; outlook, the, 324, 427 ; peculiarities in the United States, 387. " Economist," London, tables of index prices, 122. Economies, influence of small, 85. Educational system of Great Britain, 359. Egypt, reclamation of, 459. Eight-hour law, 439. Electricity, industrial use of, 66; in- fluence of prospective use on labor conditions, 400 ; relations to trade, 65. Employment of labor, changing con- ditions of, 375. Engines, compound steam, economi- cal results of, 38. England, banking deposits of, in INDEX. 483 1874-1884, 212; depression in, 18; pauperism in, 844; present popu- lation not formerly possible, S30. Europe, development of trade under conditions of free exchange, 268 ; liberal commercial movement in, from 1854-'ro, 261, 262 ; meat, sup- ply of, 161 ; military system of, 828 ; present wheat product of, 179 ; re- actionary commercial policy of, 287, 292 ; recent experience of their mercantile marines, 311. Evolution, illustration of societary re- form through, 362; material, pros- pect of continuance, 67 ; of industry and society, 827. Exchange, evils from fluctuations of, 238 ; iiuctuations in, an invariable accompaniment of trade, 238. Export bounties on sugars, 126-129. Failures in business, ratio of, 351. Famines, prevention of, 45. Farming capital, losses of, in Great Britain, 87. Farm-laborers, English, wages of, 88. Fashion, influence of, on the price of wool, 188. Fish, cultivation of, for food, 339 ; fe- cundity of, 339 ; low prices of, in 1884, 2 ; recent decline in prices of, 163. Flint, Prof. Austin, on progress in the treatment of diseases, 348. Flour, displacement of labor in manu- facture of, 52 ; labor, cost of, under modei-n conditions, 58 ; low cost of ocean transportation, 105 ; manu- facture, new conditions of, 101. Flour-mills and bakeries, consolida- tion of, 101. Food, equalization of prices and sup- ply, 335 ; increase in variety avail- able, 339 ; reduction in the cost of, 258. Foods, increase in consumption of, in the United States, 380. Forces, controlling business life, 849. France, commercial antagonism with Italy, 274; decline of land-value in, 424; depression of agriculture in, 177; depression of industry in 1883-'88, 9 ; exemplification of the Malthusian theory in, 333 ; experi- ence with shipping bounties, 310; food experiences in the eighteenth century, 71 ; indemnity paid to Ger- many, 226 ; monetary condition of, 215 ; slow increment of popula- tion in, 333 ; statistics of wages in, 410 ; taxation in, 24. Freedom, commercial, curious illus- tration of the benefits of, 49 ; effect of, on the masses, 363. Freight rates, great reductions on American railroads, 40. Freights, ocean, reduction of, 38; rail- roads, average rates in the United States, 1883-'87, 164; railroad, de- cline in rates, of, 164; recent price, experiences of, 168, 164. Frenchmen, frugality of, 333. French sugar bounties, 129. Gain, greatest, that has accrued to the the masses, 444. Gas, natural, use of, 56 ; relation ot consumption to price, 382 ; water- oil, advantages of, 57. Georgia, decline in the value of land, 426. German Empire, comparative indus- trial results in, 62. Germany, concentration of banking in- terests in, 99 ; experience with sugar bounties, 129; financial and indus- trial depression in, in 1873, 4; gold and silver bank reserves, 211 ; mon- etary system, change in, 224, 225 ; in 1873, 225 ; old coinage of, 228 ; re- cent social changes in, 404 ; savings- banks in, 212 ; state regulation of in- dustries, 282; Sunday labor in, 269. Gibbs, Mr. H. H., on the formation of prices, 125. •484 RECENT ECONOMIC CHANGES. Giffen, Robert, ooonomio investiga- tions of, 119, 152, 166, 341, 358, 361. Gilchrist-Thomas steel process, 43. Glass-making, American, wages in, 371. Gold and prices, 123. Gold and Silver Commission, British report of, 189, 190. Gold and silver unlike other com- modities, 217. Gold, monetary stock of, 208 ; present annual production of, 210 ; relation to British exports and imports, 212 ; saturation-point of, in exchanges, 254; scarcity theory, 205-208; sta- bility in cost of production, 256 ; two functions of, 220 ; world's an- nual product of, 207, 208. Government relations to national life in Great Britain, 360. Grain-cradle, results of invention of, 334. Grain, local differences in European jirioes, 46 ; variations in prices of, in the seventeenth century, 46. Granoey, M. de, study of Ireland, 377. Great Britain, co-operative societies of, 103 ; cotton-manufacturing in- dustry of,' in 1888, 184; monopoly of tin-plate manufacture, 146 ; na- tional income of, 357 ; present con- ditions of wheat-supply, 49 ; rela- tions of government to national life, 360; statistics of income-taxes in, 354. Grosvenor, William M., on changes in prices, 411. Guild system of the middle ages, re- vival of, 281. Handicraft products, recent price ex- periences of, 191. Handicrafts, destruction of, 96. Hand-labor occupations, permanent . condition of, 68. Hemps, Manila and Sisal, prices of. 204. Hides, decline in prices of, 198. History, extraordinary commercial, 277; place in, of the period from 1860 to 1885, 27. Hog-products of the United States, decline in export of, 317. Holland and the silver question, 249. Hops, recent price experiences of, 195. Horse-flesh, consumption of, in France, 449. Hours of labor, 414, 415. House-decorative industries, 388. Human race, increased power of, through railroad agencies, 41. Hlinois, decline in land-values in, 426. Illiteracy, decline of, in Great Britain, 360. Immigration, restrictions on, 285. Index-number system of prices, 120. India, British exports to, 240 ; In-v dia Council bills, influence of, on price of silver, 229; increased ex- ports of, 240; Malthusian theory e.xemplifled in, 331 ; new indus- tries of, 243 ; periodical famines in, 331 ; population of, 332 ; prod- uce, recent change in the condi- tions of distribution, 31 ; produc- tion of tea in, 153 ; railroad system of, 171 ; reduction of length of voy- age to and from, since 1869,. 29; stability of prices in, 193; sugar production of, 305 ; wheat produc- tion of, 168. Individualism of machinery operatives, 93. Indo-China, commercial experience of, 276. Industrial depression in England, 18 ; recognition of a univereal cause of, 25 ; since 1883, relative severity of, in different countries, 3 ; specula- tion as to causes, 19, 22. Industrial development, modem ra- pidity of, 63. Industrial expansion of Germany, 62. INDEX, 485 Industrial over-production, 73, 74. Industries, iron and steel, of the United States, 318 ; extinction of certain, 54, 55. Industry, artificial, failure of, in Europe, 290. Inflation of business prior to 1873, 3. Intelligence as an element of discon- tent, 401. Interest, reduction in rates of, 421. International balances, economy in settling, 213. Inventions, destructive influence of, 369; of the future, 65. Ireland, causes of discontent in, 377, 403. Iron and steel, comparative cost in the - United States and Great Britain, 320, 467 ; effect of cheapening on railroad construotiou, 49 : enhanced cost of, in the United States, 318, 320. Iron,annual consumption in theUnited . States, 320, 469 ; cause of recent de- cline in prices, 139 ; comparative consumption in the United States and Great Britain, 318 ; decline in the use of the puddling process, 141 ; industry of the United States, capi- tal invested in, 321, 473. Iron, production and price - experi- ences, 137-140 ; production and prices in the United States from 1872 to 1889, 12-14 ; prospective production, 392 ; purchasing power in 1865 and 1885, 221 ; world's con- sumption of, 393 ; world's produc- tion, 138. Iron, pig, increased economy and efficiency of production of since 1860, 28; increase in world's prod- uct, 1870-1883, 49 ; lowest prices in American history, 12. Italian agriculture, how affected by the Suez Canal, 33. Italy, commercial antagonism with 33 France, 274 ; depression of agricult- ure in, 178. Ivory, increase in the price of, 195. Jails of Massachusetts, cost of food- supply for, 340. Jam manufacture in Great Britain, 302. Japan, agriculture of, 332 ; exemplifi- cation of the Malthusian theory in, 332 ; limits of population in, 333. Java, recent calamities of, 250. Jefferson's opinion on the results of traveling, 403. Jewelry, capital invested in manufact- uring, 92 ; economy in manufact- ure of, 52, Jews, business peculiarities of, 453. Journalism, recent development of, 889. Jute, recent product and prices of, 188. Knowledge, influence of increased, 324. Krapotkin, Prince, on the division of labor, 94. Labor and capital, present relations of, 91. Labor, average saving of laborin Eng- « laud since 1880, 29 ; comparative efficiency and earnings in different countries, 410, 411 ; decrease of, in the management of vessels, 35 ; dis- content of, causes for, 364 ; displace- ment of, by machinery, 51, 364; division of, in the manufacture of boots and shoes, 94 ; efficiency of, in iron production, 140; extreme di- vision of, 397 ; foreign contract in the United States, 374; grievances in Europe, 375 ; increased efSciency in cotton manufacturing, 181 ; in cotton - mills of the United States, 50 ; increased productive power in coal-mining, 150 ; reduction of hours by legislation, 438 ; Sunday, in Ger- 486 RECENT ECONOMIC CHANGES. many, 415 ; tendency for transfer to higher grades, 390. Laborers, in Great Britain, improved condition of, 855 ; lowest, change in relative numbers of, 407 ; manual, Blow advance in culture of, 11. Land, area of cultivated, in the United States, 176 ; decline in value and use in France, 378 ; decline in value of, I 423 ; fertile, influence on material progress, 454. Lard, supersedure of by cotton-seed oil, 56. Latin Union, action of, in relation to silver, 227. Lanndi'esses of Paris demand protec- tion, 281.. Law of the use of metallic money, 251. Lead, limited uses for, 148 ; recent production and price-experiences of, 147; world's production of, 148. Leather, recent decline in prices of, 198. Lexis, Prof., on recent price move- ments, 125. Life assurance in Great Britain, 359. Living, reduction in the cost of, 337. Looms, power, displacement of labor by, 365. Losses, occasioned by economic cWnges, 111. Luxuries, increase in consumption of, 33T. Machinery, antagonism with machin- ery, 96 ; counteraction of the evils of labor-displacement by, 388 ; dis- placement of labor by, 51 ; effect of labor-saving, on wages, 371 ; epoch of efficient, 61 ; evolutions of from labor discontent, 327 ; for Panama Canal, labor power of, 50 ; influence of, in equalizing wages, 105 ; inten- sified influence in recent years, 61 ; labor-saving, stimulus to invention of, 68 ; most expensive of all prod- ucts, 91. Mackerel, recent price-experiences of, 163. Madder, destruction of the business of growing and preparing, 55. Maine, purchasing power of wages in, 412. Malthus's views on population, 330. Man, and animals, essential difierence between, 400 ; change in condition of, through prices, 115. Manchester, recent commercial policy of, 266. Mankind, what is to be the future of, 427 ; recent increase in control of the forces of Nature by, 27. Manufactures, tendency to consolida- tion, 96. Manufacturing, modem system of, 93. Marines, mercantile, of Europe, 311. Marriage-rate, decline of, in Europe, 350. Maryland, cost of living in, for oper- atives, 340. Massachusetts, apportionment of pop- ulation in, 352; cost of dietary for prisoners in, 340. Masses, greatest accruing gain of the, 444. Matches, increased consumption through exemption from taxation, 384. Meat, dressed, restrictions on sale of, in the United States, 284 ; frozen, extent of trade in, 161; improve- ments in the production of, 339 ; new sources for supply of, 159. Meats, cost of ocean transport, 38 ; re- cent price-experiences of, 158. Mechanics, practical, imperfect de- velopment of, 400. Medicine, prospective progress in, 348. Merchandise, cost of transporting in the United States, 164; sales by samples, 110. Metals,' precious, change in relative values of, 224; inquiry respecting INDEX. 487 changes in their relative values, 189, 190 ; reduction in the price of, 259. Mexico, silver product of, 235 ; trade of, how affected by decline in sil- ver, 237. Middle-men, disappearance of, 107, 110. Milk, increase in product of, 338. Millennium, the, not an economic fac- tor, 895. Milling, experience in the United States, 79. Mills, flour, increased cost of, 101. Millstones, discontinuance of use of, 55. Minnesota, industrial and social legis- lation of, 287. Money, devices for economizing, 211 ; purchasing power in Kugland at diCFerent pferiods, 413 ; use of, in va- rious civilizations, 253. Money-order postal system, 216. Monopolies, conditions of trade, 74. Mortality, decline in rates of, 347. Nail-trade of the United States, 79. Nations, Increasing antagonism of, 285. Nature, penalty for subordinatmg her forces, 366. . Netherlands, industrial depression in the, 265. New England, abandonment of farm properties in, 352. Newfoundland, economic disturb- ances in, 38. New Orleans, battle of, 337. New York, apportionment of popula- tion in, 352. New Zealand, cheese product of, 163 ; meat product of, 161. Nickel, recent price, experiences of, 147 ; increased supplies of, 147. Occupations, increasing diversity pf. Ocean-freights, recent experiences of, 165. Octroi duties in France, 281. Ohio, land-values in, 426. Oil, cotton-seed, economic influence of discovery of, 56 ; mineral, pro- duction and price, experiences of, 131 ; Standard Trust Company, 132. Oils, vegetable, recent price-experi- ences of, 159. Oleomargarine legislation, 449. Operatives, loss of independence through machinery conditions, 95. Operative, work of, in cotton-mills of the United States in 1840 and 1886, 50. Opium,- recent price movements of, 199; substitutive use of qumlne, 394. Over-production, definition of, 25, 70. Panama Canal, power of machinery employed in excavating the, 50. Panics, periodicity of, 80. Paper bags, economy and use of, 53. Paper, increase in the manufacturing capacity of the United States, 54 ; recent decline in prices of, 155. Paris, municipal taxation of, 24. Patagonia, development- of, 455. . Pauperism, statistics of, 344. Paupers, modem treatment of, 414. Pessimistic views of social progress not warranted, 324, 363. Petroleum, recent price - experiences of, 131. Phylloxera, ravages of, in France, 23. Pills, manufacture, by machinery, 54. Pius, manufacture of, in 1876 and 1888, 59. Plague, extinction of, 347. Poor, are they growing poorer? 418 , British, improvement in condition of, 357; destruction of, through pov- erty, 453 ; of England forty years ago, 402 ; of London, 376. Population, annual movements of, 488 RECENT ECONOMIC CHANGES. 401 ; effect of labor-saving ma- chinery on, 373 ; existing, of Great Britain, not possible a hundred years ago, 330; rural, of France, 352 ; sparse, relation to wages, 343 ; unemployed, statistics of, 435. Portugal, economic situation of, in 1887-'88, 10. Postage, effect of reduction of, in the United States, 383. Postal-money, use of, 216. Postal savings-banks, 342. Postal statistics, economic teachings of, 389. Poverty, new factors in the problem of, 435 ; the destruction of the poor, 453. Price, meaning of the term, .207; re- lation to consumption, 379. Prices, American, general average in 1860 and 1885, 119 ; average, from 1849 to 1885, 116 ; calculation of, by the "index" system, 120; cause of recent decline in, 123 ; curious cause of depression in, 73; desirability of high, 447 ; effect of fluctuations of, on business, 115 ; effect of railroads and steamships on, 46 ; enhance- ment of retail, 450 ; exceptional changes in, 194 ; factors occasioning decline in, 202 ; formation of, on what depends, 124 ; in England in 1872, 4 ; in semi-civilized countries, 103; in the days of Abraham, 115; is decline of, an evil ? 250 ; not regulated by statutes, 75 ; periodical changes in, not due to natural laws, 83 ; permanent decline of, in case of commodities, 188 ; phenomenal re- duction of, 257 ; recent depression of, 114; relation of, to volume of circulating medium, 222 ; retail, recent price -experiences of, 192; two fuhdamental causes influencing, 124. Print-cloths, increased power of pro- duction of, 28. Product, law of division of, between capital and labor, 370. Production, anarchy of, 379 ; average increase in the power of, in recent years, 28 ; concentration of, a neces- sity, 98 ; economic conditions of new methods, 73 ; examples of ex- cessive, 71 ; modern conditions for eoonoinie, 96 ; relations to consump- tion, 330. Production and distribution, new conditions of, 28 ; recent saving of time and labor in, 28. Products, changes in the methods of distribution, of, 106. Profits, destruction of, by excessive production, 78 ; great reduction of, in business, 107 ; reduction of, un- der modem conditions, 255, 418. Property, conditions of transmission of, 352; destroyed by civilization, 369 ; small accumulation of, by the masses, 445. Prophecies, Benner's, 81. Protective duties, recent influence of, on European commerce, 292. Prussia, statistics of savings-banks in, 343. Purchasing power of the people, in what consists, 215. Quicksilver, production and price ex- periences of, 144. Quinine, economic experiences of, 153, 395 ; increased consumption contin- gent on reduction of price, 85 ; new sources of supply of, 154, 155. Eags, recent decline in prices of, 155 ; substitutes for, in paper-making, 155. Railroad construction, numbers em- ployed in, 336 ; recent reduction in the cost of, 49. Ballroad freight service of the United States, cost of, in 1887, 41. Railroad, Illinois Central, relation of INDEX. 489 wages to cost of service, 372 ; serv- ice, world's distribution of, 42 ; system of the world, equivalent work of, in 1885, 41 ; mileage, world's, in 1889, 41. Railroads, American, average freigKt charges of, 40 ; comparatively re- cent use of, 42 ; tendency of, to con- solidate, 96. EaUway system of India, 171. Railways, rapid development of, in India, 171. Reforms, industrial, in Great Britain, 899. Sent, as a, cause of social distress, 451 ; increase in expenditures for, 413. Rents, house, stability of rates for, 192. Retail and wholesale prices, inequality of, 450. Retail trade, revolution of, 109. Rich, are they growing richer ? 418. Roller -process for grinding wheat, 100. ^Rougham, English village of, in the timeofHenry III, 402. Roumania, tariff legislation of, 277. Routine, subordination to, in all sys- tematized employments, 396. Rupee of India, purchasing power of, 245. Russia, abandonment of land by peas- antry, 10 ; civil society in, 329 ; grain-harvest of 1888, 48 ; recent commercial pohcy of, 264; sugar bounties in, 129 ; trade depression in, 10. Sail-cloth, diminished manufacture and use of, 56. Sailing-vessels, decrease in number and use, 39. Saltpeter, decline, in price of, 156, 158. Salt-trust, influence on prices of chem- icals, 158. Sandwich Islands, sugar product of, 300. Sanitary reform, results of, 347. Sarsaparilla, prices of, 193. Sauerhecls:, M., on recent price-experi- ences, 116, 122. Savings-hank deposits in England, 342 ; Europe, 342 ; the United States, 342; Savings-banks of Germany, 212 ; of Massachusetts, rates of interest in, 421 ; statistics of, 342, 344. Saxony, employment of children in, 95 ; hand-loom weavers of, 368. Schools, British, poor-law union, ex- tinction of children's diseases in, 348 ; public free, in the United Kingdom, 359. Sea, as a source of food, 339 ; carriage, recent cheapening of, 36. Seal-fishery of Newfoundland,ohange3 in, 39. Securities, moneyed, rates of interest on, 422. Self-denial, economic illustration of, 405. Servitude, natural, 445. Sheep, recent increase of, 160. "She-towns," 95. Ship-building, effect of excessive, on freight charges, 165. Shipping statistics of Great Britain, 313. Shoddy, use of, 187. Shoemaking, industrial experiences of, 397. Shoes, division of labor in the manu- facture of, 95. Siemens' tank - furnace, industrial economy of, 52. Silk, adulterations of, 188 ; product and prices of, 188. Silver and India wheat, 244, 246, 248. Silver, bar, prices from 1873 to 1888. Silver, bullion, price from 1865 to 1873 ; decline in price of, 144; pro- 490 RECENT ECONOMIC CHANGES. duotion of, 144, 210 ; increase in the product and use of, 232; lowest price of, 227 ; possible future value of, 459 ; sales of, by Germany, 226, 227; unstable equilibrium of, 229. Smith, Adam, description of the pin manufacture in 1776, 60. Socialism, definition of, 405. Societary changes, a factor of discon- tent, 404. Society, civil, Tolstoi's views on, 329 ; highest honors of, 369 ; human, what constitutes ? 430 ; modern, com- plex character of, 466. Soda, nitrate of, recent price-experi- ences of, 156. Soetbeer's tables of prices, 200. Soil, abandonment of cultivation of, 352, 353. Spain, commercial policy of, 265 ; eco- nomic condition of, 10. Speculation, reduction of the elements of, 82. Spices, increased consumption in the United States, 384. Spindles, cotton, increase in revolution of, 204. Spirits, distilled, decline in British consumption, 361. Standard of value, preference for a single, 257. Statistics, the foundation for economic reasoning, 327. Statute enactments, powerless to ar- rest industrial transitions, 366. Steam-engine, future entire displace- ment of, 65. Steam-engines of the world, horse and man power of, 44. Steamers, ocean, comparative efficien- cy of, before and after 1875, 37; screw, modern equipment and cost of, 87. Steel, Bessemer, durability of, 141 ; value of discovery of, 43 ; compara- tive price in the United States and Great Britain, 318 ; consumption of, in the United States, 320 ; sub- stitution of, in place of iron, 44, 140. Stocking-loom, story of invention and use, 366. Strikes, influence on the invention and use of labor-saving machinery, 68. Stuttgart, Chamber of Commerce, re- port on trade, 292. Suez Canal, economic effect of its con- struction, 29. Sugar, beet-root, artificial stimulus to production of, 296-298; bounties, evils of, 302 ; comparative consump- tion by different countries, 308 ; conference, " international," 306, 307; decline in price, 1880-1887, 126; eflfect of bounties on produc- tion and price, 126 ; increase in production of, 128 ; modei'n planta- tion production of, 102; multiple uses of, 301; peculiarities of con- sumption in the United States, 387 ; production of the world, 128 ; profit in refining, 92 ; refining, magnitude of capital invested in, 92 ; Sandwich Islands product, 300 ; small profit in refining, .98. Suicide, increase of, 350 ; statistics of, 350. Sunday labor, 269, Surgery, prospective advances in, 348. Swank, James M., report on the iron and steel industries of the United States, 318, 467. Tallow, recent decline in prices of, 159. Tariff, protective, influence of, in Ger- many, 294 ; recent French, 278. Tariffs of Continental Em-ope, 270, 273 ; taxes on iron and steel im- ports into the United States, 322. Taxation, burden of indirect, 321; INDEX. 491 illustrations of increased consump- tion contingent on reduction or', 384, 385 ; indirect, burden of, 318. Taxes, incidents of indirect, illus- tration of, 318 ; on food, 448 ; on iron and steel in the "United States, 321, 46r. Tea, importation, changes in methods of, 107 ; increased consumption in Great Britain, contingent on tax reductions, 384; recent production and price, experiences of, 153, Teachers, increased opportunity for employment of, 388. Telegraph, influence of, on the con- ditions of business, 32; rates, re- cent reductions in, 166. Telegraphy, future wider utilization of, 66. Telephone, creation of employments hy, 387 ; future utilization of, 66. Textile manufactures, division of la- bor in, 95. Time, economic advantages from the saving of, 445. Tin, production and price-experiences of, 145. . Tin-man, changes in his business, 107. Tin-plate, economy in the manufact- ure of, 108. Tin-plates, improvements in manu- facture of, 146; production and price-experiences of, 106, 146. Tobacco, increase in consumption of, 338. Tolstoi's views on civil society, 329. Tolu, balsam, production, prices, and uses of, 199. Tonnage, ocean, over-supply of, 168 ; statistics of British, 35. Towns, movement of population to- war.d, 353. .Trade, changes in, through the agency of the telegraph, 32; depression of, since 1873, 1 ; emancipation of, from restrictions, 261 ; European, rapid development under commer- cial freedom, 263 ; experiences from 1872 to 1886, 15, 18; foreign, of Europe, recent changes in, 288, 289 ; governmental interference with, 260 : illustrations of the smoothness of, under natural conditions, 47 ; increase in the occupation of, 851 ; influence of fluctuating paper money on, 239 ; international con- ditions of, 247; monopolization of, 97 ; of the world, how carried on, 217; restrictions, logical results of, 280 ; retail, changes in, 109 ; volume of, not contracted by depression in prices, 82. Transportation, effect of reduction of cost of, 460. Travel, educating influences of, 401. Treaty, Anglo-French, of 1860, 261, 262. Trinidad, restrictive tariff' of, 265 ; small retail purchases in, 253. Trusts, formation and extension of, 294 ; origin of, 74 ; problem of, 75, 76. Trust, Standard Oil, 132. United Kingdom, daily exchanges through clearing-houses, 214; in- crease in specific productions, 376. United States, annual increase of busi- ness in, 85 ; conditions of existence in, 337 ; curious monetary experi- ence of, 221 ; decline of its mercan- tile marine, 314 ; financial crisis in 1873, 5 ; gold stock per capita, 215 ; idle population of, in 1885, 18 ; illus- tration of depression of business in 1884-'85, 9 ; increased tariff rates of, 278 ; movement in 1854 for free- dom of trade, 261 ; pauperism in, 344; production and consumption of paper in, 155 ; railroad freight transportation of, in 1887, 41 ; re- cent advance of wages in, 408 ; re- lation of the silver dollar to its 492 RECENT ECONOMIC CHANGES. coinage system, 227 ; relative ex- ports of, 178 ; sugar bounties in, 300 ; the world's disturbing factor, 454 ; use of shoddy in, 187. Value-perceiving faculty, 453. Value, preference for single standard of, 257. Vessel, sailing, disappearance of the, 39. Vessels, economy of construction and management of, 35 ; large, 99 ; small, unfitness for cheap trans- portation, 99. Victoria, colony, wealth of, 455. Vineyards, destruction of, by disease, in France, 23. Volume of circulating media, does it control prices 1 222. Wages, advances in rates of, 406 ; com- parative advance of, in England, France, and the United States, 408 ; curious use of high, 77 ; equahza- tion of, in different countries, 105 ; highest, where paid, 362 ; influence of machinery on, 437 ; in the iron- furnaces of the United States, 321 ; of cotton-mill operatives in Ehode Island in 1840 and 1886, 60; on wheat-farms in the United States and Prussia, 59 ; proportion enter- ing into the cost of pins, 60 ; rela- tion to the cost of living, 404 ; rise of, concurrent with the fall in prices of commodities, 417 ; ijonrcc of pay- ment, 417 ; their relation to money, 253. Wages and machinery, 371-373. Walker, Joseph H., investigations in respect to business success, 352. Wants, creation of new, 389. War expenditures, 322. War, Franco-German, economic re- sults of, 268. Wars, contrast between ancient and modern, 323. Watches, American manufacture of, 383. Wealth, accumulation dependent on value - perceiving faculty, 453 ; equalization of, in Great Britain, 358; influence of protective tariffs on the distribution of, 294; muta- bility of, 352. Wealth of France, 354 ; Great Britain, 354. Wealth of Great Britain, changes in items of, 423. Wealth of the United States, 384. Western Union Telegraph Company, work of, in 1 887-' 88, 67. West Indies, recent experience in sugar production, 130 ; sugar prod- uct of, 301. Whalebone, increase in price of, 195. Wheat, acreage, recent reduction in Great Britain, 88; American, re- duction of export prices of, 89; American, variations in price from 1879-'81, 7; comparative cost of growing under difierent conditions, 98 ; exhaustion of valuC' by trans- portation, 334; extraordinary ex- portations of the United States in 1879-'81, 6 ; future supply of, 176 ; Indian, cause of increased supply, 244 ; labor cost of, in Dakota, 57 ; lowest recorded price of, 167 ; movements and prices in 1888, 47 ; over-production of, 173 ; phenome- nal decline in, 175 ; price increased by taxation, 448 ; product of Eu- rope, 179 ; of the United States, 169 ; recent price - experiences of, 166-176. Women, employment in textile in- dustries, 398; increased opportuni- ties for employment, 336. Woolen industry of Ireland, condi- tion of, 373. Wool, production and prices of, 184., 187. INDEX. 493 ■Wool-prices, how iniiuenoed by the use of shoddy, 187. Wools, Australian, decline in the prices of, 188. "Work, average daily hours of, in 1860, 415 ; limitation by statute, 438. "Work breeds work, 394. Workingmeu, increase in the com- forts of, rr. World, age;regate capital of, 217 ; trade of, how carried on, 217 ; "what it did not have fifty years ago, 64. ZoUverein, German trade, donditions of, in 1870, 262; proposed Euro- pean, 295. THE END. * # ?V^i- :l. » • l^;i