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 V o^^A . <-N-~.~-3t, - 3» 'v'' . 
 
 THE 
 
 INDUSTRIAL SITUATION 
 
 QUESTION OF WAGES 
 
 A STUDY IN SOCIAL PHYSIOLOGY 
 
 BY 
 
 ■ ^ 
 
 T.^'bCHOENHOF 
 
 AUTHOR OF '^ DESTRUCTIVE INFLUENCE OF THE TARIFF," ETC. 
 
 X"^ k^ 
 
 
 NEW YORK & LONDON 
 
 G. P. PUTNAM'S SONS 
 
 / 
 

 COPYRIGHT BY 
 
 G. F. PUTNAM'S SONS 
 
 Press of 
 
 G. P. Putnam's Sons 
 
 New York 
 
% 
 
 1 
 
 b'1? 
 
PREFACE. 
 
 The nature of this work needs some explanation. When 1 
 wrote the first chapter I had merely the intention of criticising in 
 the public press the misconceptions under which the great ques- 
 tions of the day were held by the political powers then in control 
 of the machinery of government. Not alone did the government 
 organs show an incomprehensible ignorance of the true elements 
 of price-making in products, but the public press, the legislative 
 authorities, the public speakers, showed the same absence of a 
 correct understanding of the relations existing between the earn- 
 ings of the working classes in different countries and the prices of 
 their product. The fact that the American laborer earns more 
 than the European, is still taken as an indication of our inability 
 to compete in neutral markets, or in our own markets, without the 
 aid of an artificial device known as a protective tariff. In all 
 these discussions it is usually overlooked that the labor-price by 
 the piece is the only price, the only wage value, which concerns 
 us. That the labor-price by the piece may be a relatively low- 
 one, while earnings are high, has seldom been brought out in the 
 reports collected by our official informants. To all students of 
 the productive processes prevailing in the different countries, and 
 of the labor question in general, the facts relating thereto would 
 have been the only valuable contribution the government's organs 
 could have added to the literature of the day. 
 
 My own experience of business gave me sufficient insight into 
 values of merchandise in general and of the operations all pro- 
 ducts have to pass through until they reach the final price paid by 
 the consumer. Direct study of the facts opened the lines which 
 I have followed up in this book. It seemed to me of first import- 
 ance to the formation of correct opinions on the subject at issue, 
 that we should know the methods by which production is carried 
 on here and elsewhere. To this end I deemed it essential to re- 
 
 in 
 
IV 
 
 view the great branches of manufacturing industry, principally the 
 manufacture of textiles and of metals, which, outside of agricul- 
 ture, forms the principal basis of our entire national activity. 
 
 Having once entered upon this work, I felt it incumbent to 
 bring out the close connection which production and distribution 
 have with each other, and to show the importance of leaving the 
 latter as free from restraint as the former. Of not less importance 
 was it to show the difference between the value of the product as 
 paid by the consumer and the price paid to the producer, as con- 
 taining all the elements which contribute to the inequalities exist- 
 ing in society. It is clear, however, that this difference is not to 
 be viewed in the nature of a forced contribution paid by labor to 
 capital, which is the ruling doctrine of socialistic writers ; but as 
 due to various elements of distribution, just as necessary and es- 
 sential to the well-being of the producer as though he conducted 
 these processes himself. The tradesmen of former times were 
 producer and distributor in one person. The nailmaker in the 
 Taunus villages near Frankfort-on-the-Main, of whom I spoke in 
 a previous work, " Destructive Influence of the Tariff," combines 
 the two characters to the present day. What work he finishes 
 during the days of the week he carries on his back into the neigh- 
 boring towns and villages on Saturdays. He is producer, distrib- 
 utor, and carrier, and retains all the profits of middlemen and 
 transportation companies for his own use. Yet few would say 
 that his lot is as good as that of a nailmaker in one of our nail-mills. 
 The great lines of activity which modern development has called 
 into existence, have of course done much to disrupt old organiza- 
 tions of labor. The old landmarks, so dear to those who have 
 been reared within their limits, are ruthlessly destroyed. Myriads 
 of independent and industrious producers are swallowed up by 
 mammoth organizations. Wealth is accumulated by fortunate 
 men who are able to control, in production or distribution, the 
 labor result of thousands and thousands of workers. But it 
 would be useless to proclaim against this great revolution wrought 
 by the wheel of time. Great revolutions bring up disturbances of 
 balances. The world is thrown out of gear, so to say. But we 
 have to get accustomed to changes, necessary results of the evolu- 
 tion of the human mind when freed from all restraints. 
 
That only good can come from this ultimately, though the transi- 
 tion period be never so painful, is clear. To show this by a care- 
 ful analysis of all the organic elements of production and distribu- 
 tion is the aim of these papers, and must henceforth become the 
 principal task of Political Economy. I have attempted to outline 
 the main parts. I have not given more than a mere sketch. I 
 have reserved for a later period the task of following out with 
 greater detail and more scientific precision the lines laid out in 
 Chapter XI. For the present I must confine myself to these nar- 
 rower limits. Many very important features of our development I 
 have not even been able to touch upon. Much remains to be ex- 
 plained ; many are the fallacies yet to be removed. To this pres- 
 ent day the veneration in which capital is held in social physiology 
 is extravagant ; equally extravagant the hatred of capital felt by 
 socialists and labor agitators. In this connection I will only briefly 
 state, that the great cause of misunderstanding lies in the miscon- 
 ception of capital. Capital is usually taken as the employer of 
 labor. The employer, however, is a person entirely independent of 
 capital. He uses capital, either his own, or borrowed capital, or 
 no capital at all, and still he is the employer of labor. As an 
 employer, as an organizer, he earns all the net profits of enter- 
 prise, whether productive or distributive. 
 
 It is therefore evident, that the usual condemnation of capital, to 
 which we are treated with equal frequency from platforms and the 
 labor press, is meaningless ; as meaningless as the self-glorification 
 set up in the opposite camp. The employing classes, however, 
 will appropriate to themselves the profit share of organized labor, 
 so long as the working classes do not possess the proper skill 
 and knowledge to conduct these enterprises to their own and 
 sole benefit. The tendency of modern civilization is in this 
 direction. But so far we can discover only a drift and a 
 world-wide distance. Education and enlightenment are the 
 guides to all great forward movements of society, and will lead 
 in this instance too. But competition is gradually bringing about 
 the improvement in actual conditions, which has been held to 
 be only attainable by extreme measures. 
 
CONTENTS. 
 
 CHAPTER I. 
 Our Industrial Situation. 
 
 PAGE. 
 
 Misleading nature of consular reports. Labor price of product and time- 
 wages different things. Comparison of prices of American and Ger- 
 man mill-products .......... i 
 
 CHAPTER II. 
 
 The Views Entertained at High Quarters Compared with the 
 
 Real Facts. 
 
 Erroneous economic views. Conditions leading to great productiveness . ii 
 
 CHAPTER III. 
 
 Cotton Goods. 
 
 Average productiveness in textile industries of United States, United 
 
 Kingdom and Germany . . . i8 
 
 CHAPTER IV. 
 
 Woollens. 
 
 How intelligent reports on foreign industries ought to be constructed. 
 Greater extent of the factory system in America. Machinery. Re- 
 pressive influence on foreign commerce of the tariff on wool. Increas- 
 ing use of shoddy and cotton in wool fabrics in America in consequence 
 of the tariff on wool .....,.,.. 23 
 
 CHAPTER V. 
 
 Silks. 
 
 The true relationship of values here and abroad. Higher cost of American 
 
 silks due to other causes than higher labor-cost . . . . -32 
 
 CHAPTER VI. 
 
 The Loading and Dyeing of Silks. 
 
 Adulteration of silks. English reports on adulteration. Great superiority 
 of Continental manufacturers over English and American in skill and 
 technical knowledge. Dyeing and finishing ..... 83 
 
Vlll 
 
 CHAPTER VII. 
 Adulteration of Fabrics Largely Due to High Tariff-Taxation. 
 
 PAGET 
 
 Great demand in the United vStates for cheap fabrics. A consequence of 
 the great consuming power of the masses. Germany's and- America's 
 consumption of dry goods contrasted ...... 48 
 
 CHAPTER VIII. 
 
 Production of Textiles in General. 
 
 The importance of the converting industries — principally in America. 
 
 Labor-saving devices peculiarly American . . . . . 58 
 
 CHAPTER IX. 
 
 Iron and Steel. 
 
 How our prices compare with foreign prices. The inroads which steel is 
 making in the puddle-iron industry. A tax upon the material is a tax 
 upon work and wages. Our prices cheaper than foreign prices, if the 
 higher cost of the raw material is deducted. Competition and inven- 
 tion frustrating combination ........ 66 
 
 CHAPTER X. 
 
 Pig-Iron. 
 
 The competitive aspect of its production. The importance of free ore. 
 
 Royalties. The transportation question. Southern iron ... 76 
 
 CHAPTER XL 
 
 The Nature and Composition of Prices. 
 
 The fallacy of the money theory. History of prices. Declining prices 
 and great abundance of money. The true price-making factors. In- 
 fluence of outside facts on prices and English rents .... 84 
 
 CHAPTER XII. 
 
 The True Value of Our Annual Production. 
 
 The share the different classes have in its distributive value. Agriculture. 
 Misstatements. Manufactures. Wrong impressions created by mis- 
 use of statistics. Actual earnings of the producers and the distributive 
 value of the per capita product . . . . . . .97 
 
IX 
 
 CHAPTER XIII. 
 The Wages Question. 
 
 PAGE. 
 
 Increasing productiveness of labor. Reduction of the proportion which 
 labor bears to material in the price of any given material. Cheapen- 
 ing of the cost of the product leading to its greater accessibility to the 
 masses. Increase of the money-earnings of the masses. Reduction in 
 the hours of labor . , . . . . . . . . . io8 
 
 CHAPTER XIV. 
 
 The Influence of Freedom on the Conditions of the Working Classes. 
 
 A historic parallel. Germany in the latter part of the middle ages. On 
 
 guilds and workingmen's associations . . . . . .130 
 
 CHAPTER XV. 
 
 Some Economic Truths Disproven by Facts. 
 
 The fallacy that density of population leads to poverty. The fallacy that 
 great competition for employment results in lessened earnings. 
 French society of the xvii. century compared to the composition of 
 American society of the present time ...... 141 
 
 CHAPTER XVI. 
 
 Application of General Facts to Our Industrial Situation. 
 
 Best European authorities proclaiming American methods superior to any 
 others. Ocular proof in American and European employments of 
 both elements side by side. American characteristics. Great produc- 
 tiveness of labor in general. Universal application of machinery. 
 Profuseness of production, necessarily requiring great consumption and 
 unrestrained outlet for the product . , . . . . .15c 
 
Th 
 
 value of the 
 
CHAPTER I. 
 
 OUR INDUSTRIAL SITUATION — THE ADVANTAGES WHICH CAN BE 
 DERIVED FROM A WELL-ORGANIZED, INTELLIGENT CONSULAR 
 SERVICE. 
 
 The most ardent believer in the doctrine " America for the 
 Americans," will not deny that we are commercially interdepend- 
 ent with Other nations. The closest constructionist of protection, 
 from the supervising architect down to the humble hod-carrier 
 engaged in the construction and maintenance of our Chinese 
 Wall, rnust admit that we must look to other countries as pur- 
 chasers of our surplus products. Of the aggregate of our agricul- 
 tural produce we have, on a fair average, about 20 per cent, to 
 spare. The manufacturing nations of Europe are eager buyers 
 of our raw materials of manufacture, or of our food supplies. 
 The most patriotic American would rather take sometliing in 
 return than burn or destroy this surplus product of our husband- 
 men. Barring the Pennsylvania school, no one, least of all our 
 agriculturists, would consider it good economy. In point of fact, 
 we get as much in return as we send abroad. Our wall-builders' 
 honest intentions to the contrary nothwithstanding, half of our 
 imports consist of manufactured goods. Of twenty articles of 
 manufacture, in i860, under a low tariff of an average of 18 per 
 cent., $180,000,000, and in 1884, under a high tariff of an average 
 of 42 per cent., ^300,000,000, were the aggregate amounts of our 
 imports in the same lines of goods. 
 
 Adding duties and expenses collected on imports to their 
 foreign cost, so as to bring values to our basis of prices in like 
 goods, we were still importing in the fiscal year of 1884 : 
 
 In silk goods, 150 taking 100 as the basis of our manufacture. 
 
 In woollens, 30 " 100 " " " " 
 
 In flax and jute goods, 1,400 " 100 " " " " 
 
 In cotton goods over, 20 " 100 " " " " 
 
 In iron and steel mfcts. over, 25 " ^XQQl^^ 
 
 . -t 
 
At the same time the home industries in these very lines are 
 now going through a period of depression and stagnation, the like 
 of which has not been witnessed at any time before, not even 
 during the darkest time of 1874 to 1879. 
 
 It will be seen from this that we have to consider very earnestly 
 our foreign commercial relations, and that our foreign connec- 
 tions, along with all competing price-making factors, must be 
 studied from all the points of view which our complex economic 
 system presents. We are an integral part of the great world of 
 commerce. A policy of exclusion may form the religious belief 
 of a few fanatical doctrinaires, but as a matter of fact we are as 
 much connected with the outside world as Pennsylvania is linked 
 to Virginia, and Alabama or Ohio to Texas. Industrial changes 
 in Germany, France, or Great Britain do not affect us any less 
 than Pennsylvania pig-iron is influenced by the advent of Alabama 
 iron upon Eastern markets. 
 
 The plain fact, that we are still importing at this time, in the 
 aggregate, of metals and textiles, as much as, and, if counting 
 duties, more by a good sum than the combined imports of Great 
 Britain and Germany amount to in the same goods,^ ought to 
 prove the utter impossibility of creating an exclusive system by 
 
 ^ Imports of 
 
 United States, 
 
 Great Britain, 
 
 Germany. 
 
 Woven textiles, 1884 
 
 Metal mfts. down to pig and bar, 
 1884 
 
 130,000,000 
 47,000,000 
 
 100,000,000 
 40,000,000 
 
 25,000,000 
 16,000,000 
 
 
 $177,000,000 
 
 140,000,000 
 
 41,000,000 
 
 Adding duties collected on these imports, ours exceed by far those of two of 
 our most prominent competitors, one of whom admits all these manufactures free 
 of duty, while the other subjects them to moderate import duties, averaging on 
 the aggregate of imported manufactures about I2|- per cent. 
 
 The account stands then as follows. 
 
 Imports of 
 
 United States. 
 
 Great Britain. 
 
 Germany. 
 
 Woven textiles (millions) 
 Metals ... 
 
 Duties. 
 64. 
 16. 
 
 Total. 
 
 194. 
 
 63. 
 
 Total. 
 
 100. 
 
 40. 
 
 Duties. 
 
 3. 
 I. 
 
 Total. 
 28. 
 17. 
 
 ..Million dollars . . . . 
 
 80. 
 
 257. 
 
 140. 
 
 4- 
 
 45. 
 
any rational or even semi-rational device. On the other hand, we 
 are not alone capable of holding our own in the markets of the 
 world with our agricultural products, but are under-selling and 
 out-stripping pauper countries in their best markets. But what is 
 more striking in this field of economic phenomena, we are in 
 many branches of manufacturing industries the best and cheapest 
 producers, not only able to compete with, but to undersell the 
 most-developed and best-equipped manufacturing nations of the 
 Old World. In the better grades of cotton goods, brands like 
 Wamsutta and New York Mills, we are underselling the British in 
 their own markets. It may be said that the cost of British labor, 
 approximating that of ours in cotton mills, is not a very striking 
 illustration, and that Continental labor being so much cheaper will 
 be more difficult to deal with. To this the answer is, that it is 
 just this low-priced Continental labor which is guarding itself by 
 tariff taxation against the products of high-priced British and 
 American labor. Before the German tariff on cotton goods was 
 raised in 1879, American shirtings were exported to Germany. 
 This, in the teeth of a low rate of wages, and a much longer day 
 of toil, and a lesser restriction in the employment of children than 
 in Great Britain or America up to recent times, when by a system 
 of more rigid factory legislation the employment of children 
 under twelve years in factories was prohibited. The keen eye of 
 trade, governed by facts and prices, had been making use of these 
 chances long before the State Department entered into the busi- 
 ness of reporting things which were known, and of not reporting 
 things which were little known, but very desirable to know. How 
 could it be expected of our prejudiced patriarchs of the old 
 regime, of the Bourbons of protection, in the State or Treasury 
 Department, to understand that the result of low wages can be 
 any thing else but cheap goods and a consequent. flooding of our 
 country with these pauper fabrics, and the only remedy a new 
 addition of taxes ? How could they be expected to understand 
 that the result of high wages and of a high standard of living might 
 be cheap goods and a threatening danger to countries of a low 
 standard of living and correspondingly low wages ? This is so 
 beyond all theories of the very respectable and learned doctors 
 and text-book writers that it could not possibly be true, if, alas, 
 
the facts did not all point that way. Now, I know well enough 
 that facts not in keeping with the theories handed down by- 
 venerable authority are no facts which a good and true disciple 
 of the orthodox school need believe in. I shall therefore bring 
 some very positive proofs and official figures, collected by the best 
 and most reliable authorities. They may not be absolutely 
 correct in all cases, but they are the best that can be had. They 
 are collected by official bureaus, which fact ought to be conclu- 
 sively convincing to protectionist readers at least. ^ 
 
 The rates of weekly wages in cotton factories stand about as 
 follows in the United States, Great Britain, and Germany for 1880 
 and 1881 : 
 
 Massachusetts. 
 60 hours. 
 
 Great Britain. 
 56 hours. 
 
 Germany. 
 66 to 78 hours. 
 
 Men 
 
 Women 
 
 Lads 
 
 56.67 to $10.09 
 4.38 to 4.90 
 2.79 to 2.97 
 
 $5.28 to $8.40 
 3.90 to 4.56 
 2,16 to 3.04 
 
 ^2.38 to 
 2.14 to 
 
 54.09 
 2.38 
 
 These rates would indicate, if taken by themselves, the utter 
 hopelessness of English competition with German cheap labor, 
 and of our competition with either. But the reverse is the case. 
 
 On the one hand, we have a descending rate of wages in the 
 ratio indicated above, and on the other hand, prices of goods in 
 an inverted proportion to the smaller pay of the working people 
 of the different nations compared. I have pointed out these 
 seeming contradictions in "Destructive Influence of the Tariff" 
 and " Wages and Trade " (G. P. Putnam's Sons). But assuming 
 the true theory of wages to be this: i. ''That the standard of 
 living of the working classes determines the rate of wages ; and, 
 2. " That where the standard of living is highest, productive 
 power and invention find highest development, and production is 
 cheapest," this seeming paradox offered above finds easy expla- 
 nation. To be able to bring positive proof for what might other- 
 wise be called fantastic reasoning, I requested a friend in Germany 
 
 * I am not at all a thorough believer in the infallibility of the official fabrics 
 called statistical reports, but I have verified by comparison wherever there was 
 room for doubt. Cogito, dubiio, ergo sum is good doctrine in all that aims at 
 human progress. 
 
to send me a collection of samples of German cotton fabrics, with 
 lowest price quotations. I received them a short time ago. 
 They are from one of the oldest and best-reputed cotton mills 
 of Southern Germany (Mechanische Baumwoll-Spinnerei und 
 Weberei, Ettlingen, Baden). They are well-known brands to me. 
 Some thirty years ago, when an apprentice, I had to handle them 
 so frequently that the numbers and qualities impressed themselves 
 sufficiently upon my mind. The prices are somewhat higher than 
 they were then. The changes which have taken place in the 
 industry here and in Great Britain seemed hardly to have affected 
 the Continent. 
 
 Comparing these samples with our own goods of like quality 
 and finish, and reducing metre, width and length, to our inches 
 and yard measure, and German money to American money, I 
 found them to be about twenty per cent, higher than our own 
 cotton goods, as may be seen from the list of prices of corre- 
 sponding American fabrics. (Both lines of prices reduced to net 
 cash.) 
 
 White Muslin. 
 
 30 in. N. Y. Liberty . . . . 
 33 " Gold Medal . . . . 
 
 32 " Hill 
 
 36 " Barker Mills . . . . 
 36 " Langdon G. B. . . . 
 
 36 " Wamsutta 
 
 36 " Pride of the West . . 
 
 1^ Shrunk 
 
 36 " Dwight Anchor 
 
 Colored Linings. 
 
 26 in. Glazed Cambrics . 
 
 26 " Cambrics 
 
 36 " Silesia 
 
 36 *' " finer . . . . 
 
 Cents per Yard. 
 
 American. 
 
 German. 
 
 4.62 
 
 6.20 
 
 5.40 
 6.40 
 6.88 
 
 7.00 
 7.10 
 
 8.15 
 
 8.50 
 
 9-75 
 10.45 
 
 9.90 
 
 11.75 
 12.00 
 
 7-75 
 8.25 
 
 9.00 
 10.50 
 
 4.12 
 4-50 
 7.25 
 9-50 
 
 4.25 
 
 5.60 
 
 8.50 
 
 10.00 
 
 If any thing, I found our goods purer and better, having more 
 good cotton to the pound than the Ettlingen goods under com- 
 parison. 
 
 In close connection with this I will point to the fact that in 
 
1878 some of the most advanced cotton manufacturers of Markt- 
 Gladbach and neighborhood (the Rhenish Manchester) made an 
 inquiry into the reasons why all their cheap labor and extended 
 hours do not avail against England's opposite policy. They 
 found that long hours are too strong a strain upon the frame of 
 the operative, and that shorter hours are economically the cheap- 
 est. They formed an association to reduce the daily working 
 hours, which at that time yet extended to some fourteen hours, 
 but the movement went to pieces from the opposition it met with 
 from the majority of the cotton manufacturers. 
 
 I found an occasion to make a comparison of a similar nature 
 in metal work lately. A German manufacturer, formerly a resi- 
 dent of the United States, lately visited this country. His factory 
 works are well situated. The communal lands and forests yield 
 such abundant revenue that they not only are sufficient for pur- 
 poses of taxation, but frequently yield a surplus to be divided 
 among the villagers. The women till the small farms and the 
 men work in the factory, except at harvest time. Wages are low. 
 Two marks a day is considered good pay. The works employ 
 five hundred hands and produce annually $200,000 worth of 
 goods. Yet when I received from him a statement 
 
 (i) of the value of materials consumed in this production, 
 
 (2) the amount of wages paid for work, and 
 
 (3) the amount remaining to pay for profit and expenses, 
 
 I found that the percentage allotted to each of these three factors 
 is nearly the same as in like industries of our own. From this 
 it appears that our labor, being paid three or four times as much, 
 must be three or four times as productive as German labor in 
 order to arrive at like results. 
 
 Unless this were so it would be incomprehensible that we export 
 annually from thirty to thirty-five million dollars in metal goods 
 to other countries, where we have to meet this foreign competi- 
 tion on even grounds, besides overcoming the higher cost of our 
 materials; which are tariff-taxed, while the English at least are 
 free. We are sending machinery and locomotives to Liverpool to 
 be shipped from there to Buenos Ayres, etc., pay double freight, 
 and still undersell Great Britain and Germany either in quality, 
 adaptability, or price. 
 
7 
 
 From the foregoing, it appears that if all things were equal, or 
 if the earnings of the working classes alone were to determine 
 prices, we should stand little chance in the markets of the world. 
 But things are not equal. They are not equal in any two coun- 
 tries. Nor do the earnings of the working classes determine 
 prices, but the amount of work which they produce for a certain 
 amount of pay is the determining feature. It would be very 
 interesting for us to know what is equal and what is not — why we 
 excel in some of our industrial enterprises, and why we are far 
 behind in others. It would be of great value to our industrial 
 classes to learn about the modes of production, the kind of power 
 employed, whether hand or steam, etc., and principally the amount 
 of work turned out by a competing industry for any given amount 
 of pay. It would be of interest to know which industries are 
 remunerated by the piece and which industries by the day, etc., 
 etc., or what proportion of each system of pay is borne by each 
 industry. 
 
 It would be interesting to learn to what extent the system of 
 domestic industry has made room for the factory system — in what 
 branches the former or the latter prevails. It would be of interest 
 to learn what number of hands is employed in the different 
 countries to produce the same amount of work, etc., etc. 
 
 We have now an extended Consular Service at our command. 
 The State Department is publishing reports from our consuls 
 at given periods, which contain some very interesting reading 
 matter, but very little which goes to the root of these questions. 
 Some few years ago feeble attempts were made to enlighten the 
 public on these very points. The work on Cotton and Woollen 
 Mills in Europe, Commercial Relations of the United States, No. 
 23, 1882, has some reports which do full justice to this matter. 
 The report of the Consul at Manchester, Mr. Shaw, was as com- 
 plete a piece of reporting as could be expected fron any one sim- 
 ilarly placed. The conclusions to be derived therefrom, however, 
 were so absolute a refutation of all the then orthodox views of 
 American statesmanship, that he soon was persuaded to desist 
 from reporting things not in keeping with the teachings of the 
 holy books of the dominant creed. After this attempt we hear 
 no more such dangerous facts as this, that so far as work and 
 
8 
 
 wages were concerned, our operatives earned more mony than 
 Lancashire operatives, but did considerably more work and pro- 
 duced cheaper goods by the piece ; that this advantage was lost 
 again, however, through the greater cost of coal, machinery, build- 
 ing charges, and taxes, etc. A subsequent report from the same 
 source tried hard to overcome the impression produced, but 
 fortunately this one stands, and what is more, all facts prove it to 
 be correct, and that it is the best piece of reporting that has ever 
 been published by the State Department. It shows what invalua- 
 ble service our consular system can be made to yield to the coun- 
 try if in proper hands, properly directed. In the hands of officials 
 subservient to the priests of the Pennsylvania deity we shall not get 
 more than, for instance, what our consuls in Germany produced. 
 Some, like our Consul- General at Frankfort-on-the-Main, extolled 
 the beauty of the protective system and the great advantages ac- 
 cruing to the empire by its return from free trade to protection. 
 The good man did not tell us that in manufactured goods Germany 
 always had a protective tariff, and that from 1873 to 1879 free 
 trade had only existed so far as cereals, provisions, and pig-iron 
 were concerned. As those were being taxed, a compensating 
 increase of duties on manufactured goods had to be granted. This 
 is the Alpha and Omega of the great protection revival of which 
 so much ado was made by our consuls. 
 
 That German manufacturers do not view the new tariff with 
 the spirit which our consuls would impute to them, is proven by 
 the reports of the German Chambers of Commerce. The manu- 
 facturers consider a tax upon their materials and upon the food of 
 their operatives a burden, and look with dismay upon any threat- 
 ened increase. 
 
 By other representatives of our consular service in Germany, 
 the revival of trade coincident with the inauguration of the new 
 tariff law was made use of as an illustration of the invigorating 
 force of a protective tariff. This is in the line of our home argu- 
 ment, which refers all the ills and woes arising from business stag- 
 nation, panic, etc., of 1884 to the change (a reduction of an 
 average of i per cent.) of the tariff in 1883. The consuls never 
 mention the fact that German manufacturing industries were 
 never more flourishing than from 1872 to 1875-6, the time of the 
 
creation and rule of the same free-trade tariff which (in the eyes 
 of our consuls) had to do service as a destroyer from 1876 to 
 1879. 
 
 What we want to learn is nothing but the truth, the whole truth, 
 however. For this men are required who are capable of seeing 
 the truth, and seeing the whole truth. To see the truth in eco- 
 nomic matters presupposes the training for the subject, an open eye, 
 and an open head. There is a great gap to be filled yet. Neither 
 the government nor the press have so far supplied a want which 
 is daily more keenly felt by all thinking men. I refer to the em- 
 ploying of the honest, unbiassed, fact man. Government statistics, 
 government research, have so far been influenced too much by 
 political or worse considerations. The newspaper office, the 
 editor's chair, is an adjunct of the counting-room. The true 
 and great facts which underlie the creation of prices and condi- 
 tions of product and production, of distribution and consumption, 
 are either touched upon in a meaningless or misleading manner, 
 or are left outside the scope of inquiry. 
 
 Government might be expected to supply this great want in an 
 age when the humblest individual is as eager for the news of the 
 day as only the man of leisure was a generation ago. The thirst 
 for information is second only to that for food and drink. Eco- 
 nomic data, especially of an unerring kind, are looked for with 
 growing interest. The importance of publicity as a corrective to 
 evils arising in the body politic, in the social organism, in the 
 world of trade, manufacture, and commerce, is recognized by all. 
 It is admitted that fullest publicity of corporate management is 
 about the only remedy which, under our present development, we 
 can apply to the many crying abuses which have been practised 
 upon us. To-day the railroads of Massachusetts are those managed 
 with the nearest approach to honesty to its stockholders and fair- 
 ness to the public, mainly by a rigid enforcement of the law gov- 
 erning the publication of accounts ; a clear proof of the impor- 
 tance of publicity given to facts relating to the movements of great 
 interests. The greatest interest which man has in any thing of 
 this world, however, is that centring in his own immediate means 
 of existence. These are prominently dealt with as subject of 
 this treatise. Nothing can be of more interest to workingman or 
 
lO 
 
 capitalist, employer or employe, than a knowledge of the conditions 
 under which foreign countries, with whose labor products we come 
 in daily contact, perform their work. In this we might have ex- 
 pected the fullest aid and information from our foreign office. 
 But alas, what we gleaned from the pages published in monthly 
 volumes was not of that nature. Of course for such work a staff of 
 competent men is required. Whether the spoils system was able to 
 supply this kind of men may be questioned. That this class of 
 men must be selected to fill the principal consulates, cannot admit 
 of any doubt in view of the immense pressure of the commercial 
 and industrial situation. That the services of men of the kind, 
 that could and would do justice to these requirements, could not 
 be secured so long as the iron and wool combination directed the 
 helm, needs no demonstration. To what extent the ruling powers 
 were guilty in spoiling even good material is attested by a United 
 States Senator, who writes to me from Washington : 
 
 " I am glad you are going to write up our consular system. I 
 have information, which I regard as positive, that our consuls do 
 not regard their places as safe unless they send reports such as 
 will please the ' protection element ' at home, and I have seen let- 
 ters from some of them showing how the most valuable parts of 
 their reports were cut out after they reached this country, which 
 facts I intended to lay before the Senate before the close of 
 the last session, but was prevented from doing so by other Sena- 
 tors, friends of these consuls, to whom the letters were written, as 
 they would lose their places if the truth were told. 
 
 " The consular reports for the last two years, at least, have 
 become mere partisan presentations of the virtue of protection." 
 
 The immeasurable benefits which might be derived from a prop- 
 erly organized and directed reporting agency are so pronounced 
 that little need be said in its favor. But good reporting can only 
 be obtained from a thorough mastery of the subject to be reported 
 on. The best results can be guaranteed if done through properly 
 organized government channels, as government can at all times 
 command good services, provided work is not required which 
 militates against the self-respect of those intrusted with it. To 
 suppress truth, to state half truths, to color facts so as to please 
 superiors in office, is not work that ought to be asked of the 
 officers of the republic. 
 
CHAPTER II. 
 
 THE VIEWS ENTERTAINED AT HIGH QUARTERS COMPARED WITH 
 
 THE REAL FACTS LOW WAGES AND LOW LIVING GOING 
 
 HAND IN HAND WITH LOW PRODUCTIVENESS. 
 
 The letter from the late Secretary of State, Mr. Frelinghuysen, 
 on ^' Labor in Europe " recently published, has brought out at last 
 in full the wage statistics of foreign countries, on which the pro- 
 tectionists had been feeding the public for so long a time. The Re- 
 publican Campaign Committees during the fall of 1884 made the 
 freest use of these statistics of labor, supplied by our consular ser- 
 vice, for political purposes in the most misleading manner. We all 
 remember the handbills and cards scattered broadcast all over the 
 country. True as far as the statistics of the earnings of laborers in 
 foreign countries went, the inferences and explanations drawn from 
 them were the reverse of what the figurd? really represented. I 
 called attention at that time to the fact that things were fully as bad 
 as stated ; with the proviso, however, that they were worse where 
 the protective policy had the fullest sway, as in Germany, while in 
 free-trade England, as by the showing of these very campaign re- 
 ports, wages were nearly double those of Germany. 
 
 The letter from the Secretary throws a great deal of additional 
 light upon the subject, so far as statistical facts are concerned. 
 The letter speaks of the especially abject condition of labor in the 
 Taunus and Spessart mountains, in Silesia and Thuringia, where 
 the house-industries are still clung to with a tenacity of which only 
 the very low standard of living and wages can give adequate ex- 
 planation. In " Destructive Influence of the Tariff," and " Wages 
 and Trade," I spoke of those poor toilers, a description of whose 
 destitution and poverty and mode of living would hardly find be- 
 lief among American readers. I feared then I might be suspected 
 of exaggeration. I dwelt as little on these facts as possible. It will 
 always remain an unpleasant piece of work to draw the curtain 
 
 II 
 
12 
 
 from the dark misery of the social problem. The true historian 
 of his time, however, has no alternative left but to state facts. 
 That my facts were not overdrawn is now proved by the State 
 Department in this recent publication. Factory labor is better 
 remunerated than the labor in the house-industries. With what 
 doggedness, however, the working classes cling to the latter system 
 and the quasi-independence and higher social position guaran- 
 teed thereby, is shown by house-industries of Rhenish Prussia and 
 Westphalia, Thuringia, Silesia, etc. 
 
 Alphons Thun, in a work published in 1879 (" Die Industrie am 
 Niederrhein "), gave some very interesting information on the con- 
 ditions of work and the system of labor prevailing at that time in 
 the Lower-Rhine country of Germany. I was surprised at the 
 extent to which the domestic system was still prevailing in this 
 most advanced industrial part of Germany. In the metal indus- 
 tries of Solingen, Iserlohn, Remscheidt, etc., forging, grinding and 
 finishing were nearly all done by different small masters, who take 
 the work from the " manufacturer " and bring it back after each 
 stage to give it to the following procedure. The "manufacturer" 
 gets his samples from the master and takes orders wherever he 
 can find them. The consequence is a system of under-bidding 
 for the markets which presses hard upon the master, who again 
 tries to get even by returning slighted or inferior work. Complaint 
 is made of needles having no eyes, of clasp knives without blades 
 or with blades which don't move, being shipped to foreign coun- 
 tries. The truck system, which existed up to 1849 in its most 
 disgusting and repelling form, being prohibited, there is still a mild 
 type of it virulent now. Usually a cousin or a relative of the 
 manufacturer occupies the position of examiner of work returned 
 by the workman and likewise that of a storekeeper. It depends 
 on the amount of goods taken in lieu of wages whether the work is 
 criticised more or less severely or perhaps rejected altogether. 
 
 In Crefeld, the centre of the German silk industry, the same sys- 
 tem of industrial subdivision prevails — the conditioner, the weaver, 
 the dyer, the finisher, " the manufacturer." Far back into the coun- 
 try the silks go out to the handloom-weaver, who, with his whole 
 family, in busy times, is at work from early morning to late at 
 night, weaving the flimsy thread into all sorts of stuffs. When 
 
13 
 
 work is plentiful, wages and earnings and living are high. From 
 all sides and occupations hands are drawn in to learn the trade, 
 and to be workers and earners after a few weeks of apprentice- 
 ship. Then the weavers accept good material only for the chain ; 
 they are independent and dictate their own terms. But depres- 
 sion shows at once the very reverse, and makes suffering the more 
 intense, as good earnings in the house-industries are apt to tend 
 to increased families, whose members are very early helpers, but 
 very undesirable inmates in hard times. Their stomachs have to 
 be filled, work or no work. Now, the manufacturers pay reduced 
 wages — wh'-- . there is work. Then the whole family go eagerly 
 about in their emaciated condition to finish the work, to obtain 
 the scanty earnings to buy bread. The " manufacturer," how- 
 ever, is exacting now, though he supplies inferior material. By 
 greater skill and harder and better work the master has to over- 
 come and improve its conditions. We hear then of cases of de- 
 ductions and exactions vi^hich would furnish material for a 
 counterpart of " Uncle Tom's Cabin." I read of a case in Viersen, 
 1877, where a velvet weaver had died still in debt to the manufac> 
 turer for an advance on his loom. The widow, who had just 
 recovered from a confinement, finished the piece of velvet, and on 
 returning the same had the full amount of the debt deducted 
 from her pay and was dismissed with just four German pence, 
 about one cent in our money ; four hungry children were awaiting 
 her return. 
 
 Now 1878 is a great distance from 1885 in this time of rapid 
 changes of industrial development, and I had thought that the 
 factory system to some extent might have supplanted the domestic 
 system. But we find in the report of Consul Potter, of Crefeld, 
 published in the Secretary's letter, that ninety per cent, of all the 
 silks and silk goods made in Crefeld are made on hand-looms in 
 the homes of the weavers. 
 
 The report goes on to say : " This is called * home industry,' 
 and its continued existence is threatened by the gradual introduc- 
 tion of power-looms, and, of course, factory centralization. Al- 
 though the hand-weavers of Crefeld are only enabled to maintain 
 existence by long hours and unremitting toil, they will fight for 
 their * house-industry ' to the bitter end, the decrease of wages 
 
14 
 
 and its attendant poverty consequent upon the encroachment of 
 the factory system making the fight all the more bitter." 
 
 Then it goes on describing the idyllic beauty and simplicity of 
 the weaver's home-life. But I pass this by, and will only point 
 out that we have here for the first time an intimation by a consul 
 that there may be differences of working methods which may 
 make a vast difference in the result. Of course he does not say 
 that we may be the gainers in the comparison, but he points to 
 facts at least which ought to have been brought to light long ago 
 by our authorities. 
 
 In the whole mass of information brought out by the State De- 
 partment, we find only one sentence which is an intelligent ex- 
 planation of cause and effect. Mr. Consul Smith, of Mayence, 
 states : " In Germany less is expected of the workingman ; less is 
 paid for, and consequently less is rendered. Conditions there are 
 more fixed, and the demand for promptness of execution not so 
 imperative." 
 
 This seems to cover the problem so far as Germany is con- 
 cerned, and is a fitting answer to the remarks of Mr. Secretary 
 Frelinghuysen in the concluding pages of his letter. He says : 
 ^' It would be a legitimate field of inquiry to ascertain what are 
 the conditions which enable England to manufacture machinery 
 and other products at less price than similar goods can be manu- 
 factured in France, and at prices equal to those in Germany, 
 while the rates of wages paid to the workmen engaged in those 
 manufactories in England are on the whole higher than those paid 
 for similar labor in France, and, as the foregoing table shows, 
 more than double those paid in Germany." And, I may add 
 here, America, paying higher wages than England, is excelling 
 them all in cheapness wherever she has an even chance to meet 
 foreign competition. 
 
 The answer is not very difficult. Man is above all an organic 
 being. From childhood to the grave he does battle for his ex- 
 istence. Every breath of air, every motion of the muscles, is a 
 waste of tissue. His food is only so much matter added to his 
 system necessary to re-create what is constantly subjected to dis- 
 integration. It is the fuel necessary in creating the working 
 power which we see turned into labor and production. A half- 
 
15 
 
 fed or under-fed body can no more produce full results than an 
 engine not sufficiently supplied with fuel or a horse half starved. 
 If we applied the same rules to the labor question, which no one 
 in his right senses would disregard, in these two other categories, 
 we should meet with less crudeness in the treatment of the whole 
 subject. 
 
 An Englishman eats more and better food than a German, and 
 he does more and better work than a German, An American eats 
 more and better food than a German or an Englishman, and he 
 does more and better work than a German, Frenchman, or 
 Englishman. 
 
 I will give the bill of fare of a family of three in a village in the 
 Taunus, near Frankfort-on-Main, as witnessed by the author of 
 *' Ftinf Dorfgemeinden auf dem hohen Taunus" (Five Village Com- 
 munities on the High Taunus) during his stay of three days with 
 that family. 
 
 Saturday : Breakfast, coffee and bread with jam ; dinner, po- 
 tatoes and coffee ; afternoon, coffee and bread with jam ; supper, 
 potato-cake and coffee. 
 
 Sunday : Breakfast, same as above ; dinner, rice soup with 
 potatoes and one pound of soup meat ; afternoon, bread with jam ; 
 supper, potato-cake and coffee. 
 
 Monday : Breakfast, same ; forenoon, bread and cheese ; din- 
 ner, potato soup and bread ; supper, potatoes and coffee. 
 
 I find full corroboration of this by many authors as the rule in 
 other districts, and — no wonder — the small earnings would hardly 
 permit of more sumptuous feeding. 
 
 This under-fed, half-starved German labor is frequently found 
 to produce the saddest results. We find scrofula and hunger 
 diseases to an alarming extent. In the Taunus villages and other 
 districts alluded to, few young men are found strong enough for 
 the army. Italians are employed for the harder work of road- 
 building, they being found stronger. The descendants of the 
 conquerors of Rome, of the giants whose very appearance made 
 Rome tremble, have become so weakened through hereditary 
 anaemia, caused by poor feeding, that for work requiring muscular 
 exertion they must have recourse to the descendants of their 
 ancient foes, who were a byword of weakness to their forefathers. 
 
i6 
 
 Science has endeavored to remove the question from the hazy 
 region of conjectural guesswork. It has been proven that ex- 
 cessive hours and insufficient nutrition are not alone a hindrance 
 to immediate good results, but do infinite harm of a lasting na- 
 ture, in that they sap the best forces of the body. Dr. Jaeger, 
 "Die Menschliche Arbeitskraft," says: '* So long as there is a 
 sufficient quantity of oxidizable matter (fats and sugar) in the 
 body, the albumen in the substance does not suffer from exertion. 
 But as soon as the former is consumed, the albumen is attacked 
 by oxygen to the detriment of the living substance, whose struc- 
 ture is thereby impaired. Upon this rests the damaging influence 
 of over-exertion coupled with under-feeding." " The greater," 
 he says in another place, " the quantity of albumen in the muscle, 
 the greater its excitability in a physiological sense and its elas- 
 ticity, the greater its power of endurance, the higher its natural 
 capacity and rapidity of working power." " Only if there is a 
 sufficiency of recuperation can working and vital power be main- 
 tained" (Dr. Heinrich Frankel, 'The Daily Working Time*). 
 Roscher, Lujo Brentano, and others might be quoted. Roscher 
 says ' " Antiquity has very correctly pictured Heracles, the 
 greatest worker, also as an extraordinary feeder." Lujo Brentano 
 says : "A steady increase of the wants of the workingmen, aside 
 from all other beneficial results, is the safest guaranty of an in- 
 crease of their productive capacity." 
 
 Few, who have given close study to this subject, will deny that 
 Germany's low wages and low standard of living, coupled with 
 excessive hours, are a drawback, and not an advantage to her in- 
 dustrial development. Germany has not yet regained the position 
 which she occupied in the fifteenth century. Neither her indus- 
 trial position nor the general well-being of her working classes is 
 now what it was then. Great national calamities have wrought 
 her ruin. She is manfully battling upwards. But the way to re- 
 gain lost position is not through taxation and low wages. We 
 may admire the plodding patience, the deep sense of duty, the 
 courageous endurance of her working classes, and may draw 
 many a fruitful lesson ; but let us be watchful agai-nst the heresy 
 that low wages mean cheap production. 
 
 In the following pages I shall endeavor to prove, as fully as pos- 
 
17 
 
 sible with the present means of statistical inquiry, that countries 
 whose productiveness of labor has attained the highest potency, are 
 those whose earnings and wages are highest ; and that, inversely, low 
 wages and low productiveness go hand in hand. I shall, to this end, 
 treat the great branches of national industry separately, and re- 
 view the same as they appear under the working methods of com- 
 peting nations. It will be seen that the views formerly expressed 
 on the situation by our consuls to the State Department, were 
 widely divergent from the stern facts of reality. In truth, by the 
 misconception of the true state, the service adds to the difficulties 
 of our position by fortifying the perverted notions of our law- 
 makers with apparently logical support, which, if scrutinized, 
 would prove the reverse of what the consuls attempted to convey. 
 
CHAPTER III. 
 
 COTTON GOODS. 
 
 In "Wages and Trade " I brought out a table of the raw ma- 
 terials consumed in the textile industries of the United States, the 
 United Kingdom, and Germany, and of the number of hands 
 employed in each industry in each of these countries. A division 
 of the amounts consumed by the number of hands employed 
 gave these results : 
 
 PRODUCTIVE CAPACITY OF ONE OPERATIVE IN THE UNITED STATES, GREAT 
 BRITAIN, AND GERMANY, TAKING lOO AS THE UNIT OF THE UNITED STATES. 
 
 
 Cotton. 
 
 Wool. 
 
 Silk. 
 
 United States .... 
 United Kingdom .... 
 Germany ..... 
 
 lbs. 
 
 lOO 
 
 67 
 
 27i 
 
 lbs. 
 100 
 
 77 
 60 
 
 lbs. 
 TOO 
 
 68 
 
 The tables were reprinted by the London Times, and from 
 there found reprint in the press of the United States and 
 Germany. 
 
 Statistics of this kind, however, need some explanation. 
 
 The average reader is apt to take them without questioning their 
 meaning. To the economist they mean, that in wool, 100 lbs. in 
 America may be an entirely different thing from 100 lbs. in Ger- 
 many or England. The same quantity may be counted in a 
 condition not yielding by a good deal what it yields in other 
 countries, as is the case in American wools. In silks a similar 
 objection may be raised against my method of testing national pro- 
 ductiveness by a division of the number of operatives employed in 
 the industry with the pounds of raw silk entering into consumption. 
 The pound of silk may be used in costly fabrics, consuming much 
 time in their production, while other silks may be used for plain 
 
 18 
 
19 
 
 work entailing far less labor, consequently allowing more silk to 
 be handled by the same number of operatives in a given time. 
 None of these objections however can be raised so far as the 
 cotton industry is concerned, or certainly only to a very limited 
 extent. 
 
 The gross statement above, of course, shows in a very striking 
 manner the superiority of American work and organization. The 
 low productiveness of German mill-hands compared to American 
 work, as illustrated above, would be difficult to believe, if we had 
 no other proofs. In a report on the spinners and weavers at 
 Ettlingen by the consul at Mannheim, of which I spoke in a for- 
 mer letter, we find i,ioo persons employed on the premises. 
 Had the consul stated the amount of raw cotton consumed, we 
 could have computed the productiveness of the help. We might 
 have had an explanation why the average weekly earnings of a 
 mill-hand are not more than $2.16 (^2,380 is given as the pay-roll). 
 Standing by itself the statement leaves the impression that pauper 
 labor at $2 a week is a dangerous competitor against New Eng- 
 land labor at the average of $5 a week, as in the census year. 
 But, judging from the size of the mill as known to me, I do not 
 think that an American mill of the same extent would use one 
 half of that number of people and would turn out more goods 
 into the bargain. The great number of people employed in the 
 cotton industry of Germany is rather startling in its meagre results 
 when brought in comparison with the great output of American 
 cotton mills. 
 
 Germany's consumption of raw cotton is about 300,000,000 lbs., 
 with 250,000 people returned as employed in specific cotton in- 
 dustries, while America's consumption in specific cotton industries 
 is 750,000,000 lbs., with only 172,000 workers. 
 
 Cotton, as said before, is an especially suitable field, as this is 
 the only industry in which the nature of the stock is not materially 
 difi^erent in either country, as might be the case in silk or wool, 
 and as factory labor is the labor chiefly employed in it by all 
 manufacturing countries. Germany, however, still has a very 
 large number of small establishments in the cotton industry em- 
 ploying under five hands. These are counted in in the grand total 
 and somewhat modify the above given result. In 1875 there 
 
^u 
 
 were 1,597 spinning establiBhrnenta employing 66,675 l^ands ; of 
 these, however, there were 1,079 eHtablishinents employing only 
 ],477 hands, while 518 factories enii)loyed 65,198 liands. In 
 weaving, 1,108 factories employed 70,437 hands, while there were 
 besides 96,480 establishments returned with 133,052 hands, 'i'he 
 consumption of cotton was at that time not more than 250,000,000 
 lbs., and if we take the 135,635 persons em[)loyed in factories 
 alone as engaged in the work of turning into cloth and yarn the 
 entire 250,000,000 (not counting at all any share in the turning 
 process of this raw material which the 134,529 persons engaged 
 in house industries might have in it), the inoductive capacity of 
 German mill-hands in the cotton factories would not exceed 1,800 
 lbs., against 4,350 lbs., as the yield of American factory opera- 
 tives. In neither of these statements have I included any hands 
 engaged in dyeing, finishing, knitting in hosiery or other small 
 cotton industries, but simply those engaged in the specific cotton 
 industry. 
 
 Comparing dermany':, itroductivencss with that of Massachu- 
 setts in s[)ecific- cotton industry by the ninnber of spindles and 
 looms and the number of hands employed in operating them, we 
 get tlif following results : 
 
 Gerinnny . 
 Massuchusells 
 
 No. ut 
 
 HpilUllt-H. 
 Ouu oilliLltuI 
 
 •1.7"" 
 
 No. of 
 
 limmH, 
 iiou oiuilttJtl 
 
 B4 
 
 Na, of 
 
 litiiuls. 
 
 uau omitled 
 
 No. of 
 
 H|iii)(lleH 
 to luu IiuiuIh 
 
 No. of 
 
 loOIIIH to 
 
 100 tmiutH 
 
 • J'- 
 
 2,740 
 ^.7t>3 
 
 6a 
 
 153 
 
 According to this, 100 operatives operate fully two and one half 
 times as many looms and spindles in Massachusetts as in 
 Germany, and this showing corresi)onds accurately with the rela- 
 tive ])roportion of pounds as given above — viz., 1,800 lbs. meas- 
 uring the productive capacity of a German mill-hand, and 4,350 
 lbs. that of an American. 
 
 To our capacity of competing favorably with England, I have 
 refered in Chapter 1. As to France, she fortifies herself by 
 discriminating duties against our cotton manufacture.s, — a for- 
 midable pi oof of luM incapacity to combat our staples on even 
 terms. 
 
21 
 
 For our comparison, however, the exhibit of Germany is fully 
 sufficient. It is a convincing demonstration of the working 
 capacity of the two kinds of l;d)or : that of the United States, 
 representing the best-paid labor; nnd that of Germany, represent- 
 ing, under like working methods, and considering the necessities 
 of civilized life, the poorest-paid labor in Europe. 
 
 And yet with all these facts before us, of course never clearly 
 broiigiit out, the late Secretary of Slate in his letter says : 
 
 "The textile manufactmcis <>f I'Uuope, in their active competitioa with 
 each other for leading positions in the valuable markets of the United Stales, 
 have brought about an increased production and an annual decrease in the price 
 value of their fabrics, and consequently the increase in the quantities imported 
 is relatively much Jar^^er than in the values. This decrease in price and In- 
 crease in (juantily have Iheir inlhK'iice in regulatinj^ llie wages in our mills, 
 whicli must manufacture fal>rics and phirc Ihem on (Ik- domestic market as 
 cheaply as tlie foreign manufacturers." 
 
 And this is said when we have duties on cotton goods of 40 and 
 fifty per cent., duties more than twice as high as the whole labor cost 
 in cotton goods amounts to, which according to our census is, with 
 all our high-priced labor, 29 labor and 71 material. As the duty 
 is collected on the combined cost of labor and material (assuming 
 that the relative labor proportion in Europe were as high as here), 
 the duty collected would cover the foreign labor cost of 29 by 
 138 or more than four times, counting the duty as 40 per cent., 
 which it frequently exceeds very largely in some fabrics. Uut in 
 goods which we have firmly established here we could remove all 
 duties at once, and we would not import a yard so far as prices 
 are concerned. What wj import now are not any specialties of 
 ours, which we produce on our 11,000,000 spindles when we have 
 work for them. What we do import are goods in which other 
 nations have peculiar adaptation by cheap hand labor, such as in 
 cotton velvets cutting the pile, or in embroideries, laces, curtains, 
 netting, or fme light fabrics, when we have not been able to spin 
 the yarns, though we have tried it by imposing high duties on 
 them, at the rate now, even after the reduction of 1883, of from 
 41.29 to 51.84 per cent. This is protection with a vengeance. 
 England has jjarticular advantages in yarn spinning. The long 
 training of her operatives and especially climatif: jufluctnccs in fine 
 
22 
 
 cotton spinning are recognized by all the world as factors which 
 cannot be circumvented. Germany and France import yarns 
 largely from P'ngland, and use them in weaving their finest fabrics, 
 which we are prevented from doing by a stupid tariff, and are 
 compelled thereby to import the finished article ready made. 
 This we call protection. Prevention would be a more fitting term. 
 No government report can alter this — that our commanding 
 position in the cotton industries of the world is to-day an acknowl- 
 edged fact. Our export trade is growing slowly, and if it is to-day 
 only $12,000,000 against $11,000,000 in i860, a quarter of a cen- 
 tury ago, we have to thank our government for this state of 
 affairs and the preventive measures by statute. Our cotton manu- 
 facturers and operatives have long ago solved the question of free 
 trade and protection. Every shipload of cotton goods consigned 
 to China, every bale going to England or Holland, every case 
 which has to meet in sharp competition *' the pauper labor of Eu- 
 rope," is a most potential argument for free trade and against 
 governmental interposition, an argument which could not be im- 
 proved in its force by the sublimest piece of oratory. 
 
CHAPTER IV. 
 
 WOOLLENS — SHOWING HOW CONSULAR REPORTS OUGHT TO BE 
 CONSTRUCTED, TO BE OF ADVANTAGE TO OUR INDUSTRIES. 
 
 A GENTLEMAN of the very highest authority in textile matters 
 writes to me : " The consular reports, while they give a great deal 
 of valuable information, finally fail of their true purpose because 
 they give no results — that is to say, no clue by which it can be 
 determined how far the rate of wages indicates the cost of labor. 
 For instance, one of the consuls did give the conclusion, and this 
 made his report the only one in a particular volume that was of 
 any real value. Treating the conditions under which a common 
 woollen cassimere is made in Belgium, he gave an exact descrip- 
 tion of the machinery and its cost, which was a little higher than 
 the same machinery would have cost in this country. He gave 
 the product of the machinery, and its kind, which did not vary 
 materially from the product here. He gave the rates of wages, 
 about half what they are in this country, and the condition of the 
 laborers not half as good as in this country. There he might 
 have rested, and his report would then have been as perfect as the 
 rest, but he added the number of laborers required to operate the 
 machinery. This gave the key to the whole condition. There were 
 two and a half working people in that mill to one in New England, 
 and, although the rates of wages were lower, the cost of labor was 
 higher ; still the mill had a huge advantage over New England, 
 for the reason that all the materials used in it were free of duty. 
 A unit could be chosen in every consular district similar to the 
 unit of the common cassimere. For instance, in Lancashire, any 
 specific kind of cloth made in a large way ; in Scotland, the ton 
 of pig-iron or the staple tweed ; in Bradford, a given variety of 
 worsted goods ; in Germany, a dozen stockings or some specific 
 article of woman's dress goods made of wool. Each of these 
 
 23 
 
24 
 
 being fully described, after the manner of the consular report of 
 the woollen mill in Belgium, would give a clue to the actual con- 
 dition and to the actual cost of labor, and would fully explain why 
 the high wages of Great Britain are consistent with a lower cost 
 of goods than can be found anywhere on the Continent." 
 
 The same authority states that under the administration of the 
 State Department under Mr. Evarts forms were prepared by him 
 which covered the above subjects of inquiry, and, if they had 
 been transmitted to our consuls with instructions to report only 
 what came within the reach of the plan laid out, results would 
 have been obtained of a highly satisfactory character. Nothing 
 came of it, however, and the plan referred to was probably pigeon- 
 holed under the succeeding administration. 
 
 As to the specific application to woollens, the turnout of mill 
 hands in France may be of service in this inquiry. I will cite the 
 report of Mr. Consul-General Walker of June, 1882, in Consular 
 Report No. 23. His report is exceedingly valuable, and contains 
 a great deal of useful information, but, the great pity, almost all 
 final points referred to above are left out. Once in a while, how- 
 ever, we get at the number of hands and the quantity of work 
 produced. It is further to be regretted that most of his statistics 
 go back to 1869 and 1870, and are most likely taken from reports 
 of government commissions under the imperial government. 
 As France, however, is not a country of very rapid changes in 
 economic matters, the figures may serve our purpose. 
 
 I. A spinning-mill at Roubaix has 11,000 spindles, 22 self- 
 acting mules ; 250 hands earn Ji 11.76 day wages, or 45 cents, and 
 turn out 600 kos. or 1,344 pounds of carded wool yarn. As there 
 are 30 dyers employed in the establishment sharing in these wages, 
 this yarn is to be taken as dyed. The wool, however, enters the 
 mill in the scoured condition, as there are no washers or scourers 
 enumerated. We have here a statement which permits us to 
 draw comparisons, although we know nothing of the quality or 
 number of the yarn : 220 engaged in spinning 1,344 pounds of 
 yarn (including carpenters, engine-tenders, and firemen) ; 30 en- 
 gaged in dyeing 1,344 pounds of yarn. One hand turns out 6yV 
 pounds of yarn spinning at a cost of 44 cents or 7^ cents a pound, 
 and 44 pounds of dyeing at a cost of 53 cents or i^ cents a pound. 
 
25 
 
 This brings the outlay for labor per pound to about S^ cents a 
 pound, and comprises nothing but simple rough mill labor, without 
 counting the cost of coal, etc., or the labor of employes or overseers. 
 
 From reports like this one we could easily draw conclusions 
 and make comparisons if we knew, for instance, the exact nature 
 of the yarn spun. The machinery used is mostly all English ma- 
 chinery. Neither English nor American spinners would have so 
 vast a force at work to turn out so small a product. 
 
 In dyeing no such force would be required in America as in 
 Roubaix. One of our most skilled dyers, a gentleman who stands 
 at the head of his art in this city, tells me that four dyers and two 
 helpers would dye and make ready for the market with greatest 
 ease i,ooo pounds of yarn a day, and that 1,200 pounds is a fair 
 estimate of a good day's work. The pay here would be $15 a 
 week for the dyers and $10 for the helpers. Let us see how the 
 labor cost of $15 dyeing compares with ^3.18 dyeing : 
 
 Dyeing at Roubaix 1,344 pounds a day, 30 dyers, at a cost of . . $15.92 
 
 Dyeing in America, say 1,200 pounds a day : 
 
 Four dyers, at $2. 50 $10.00 
 
 Two helpers, at $i.66| 3-33— $13-33 
 
 Taking 10 per cent, off Roubaix to reduce the quantity to New 
 York's quota, we have $14.32 against $13.33, ^^ still a small mar- 
 gin in favor of American labor to make up for a possible excess of 
 estimate. Of course, comparisons like this must not be taken as 
 absolutely conclusive in all their details. The French, taking 
 more time, produce better and richer results. The fact, however, 
 that hundreds of thousands of yards of foreign dress goods are 
 imported annually in the gray to be dyed here in American dye- 
 houses shows that we are pretty well advanced in the arts, as the 
 colors we produce in French cashmeres have to sell with the best 
 French — a fact which goes far to prove that it requires not alone 
 good dyeing, but also good materials in the fabric that is to be 
 dyed to insure success. All our tariff stipulations have not yet 
 succeeded in making American wools fit to be used in fine woollen 
 dress goods. They may make a good-enough article as far as it 
 goes, but it is not the soft cashmere that is wanted, and whatever 
 is made here successfully to compete with foreign goods is made 
 of the same foreign, mostly Australian, wools. 
 
26 
 
 2. Take a mill at Elboeuf producing 100,000 metres of plain 
 woollen cloth (reduced to American weight and money) : 
 
 {a) Material: 75,625 pounds of fine German \vool at 8if cents . . $63,062 
 75,625 pounds of other wools at 45|- cts. . . . 34,834 
 
 151,250 pounds shrinks to 121,000 pounds, value . . $97,896 
 Cost of coal . . . . . . . . . . . 3,532 
 
 Cost of other materials . . . . . . . . . 9.107 
 
 Total materials ......... $110,535 
 
 {&) Labor: Washing, dyeing, sorting, etc., of the wool; spinning, 
 weaving (power-looms), fulling, dressing, and finishing 263 hands, 
 annual earnings ......... $41,937 
 
 The average labor per year is $159, against America of $298, in a 
 year of equally full employment. The respective percentages of 
 material and labor, however, stand as follows, taking 100 as the 
 product (no account being taken in either case of expenses, profit, 
 wear and tear, or interest). We have for France, material, 72 J ; 
 labor, 27f ; for America, material, 79 ; labor, 21. In the French 
 mill 263 hands work up 151,000 pounds of wool, or 580 pounds 
 per head, while ours work up 1,640 pounds per head. 
 
 There is, however, this to be said, that the French work up 
 finer stock and put proportionately more work into Elboeuf goods 
 than we put into our general line of woollens ; but both being of a 
 higher grade, it would seem that the two relative degrees (stock 
 and labor) balance each other. Our wool, on the contrary, en- 
 ters in a less-advanced condition into our mills, and would lose 
 considerably in conditioning it for the first processes of manu- 
 facture. On the other hand, however, the French mill uses 
 nothing but pure wool, while our material (taking the whole 
 annual production as our part of this comparison) is very 
 largely increased by the addition of shoddy, hair, cotton, etc., 
 which addition to the bulk would fully compensate for the loss 
 the wool sustains in scouring, and being all worked by the same 
 total of hands in woollen mills would closely bring up the genefal 
 productiveness to the weight in wool quoted as being worked up 
 by an American woollen-mill hand. (Counting all spinning mate- 
 rials used in woollen mills, such as shoddy and cotton used in mixed 
 textiles, and dividing them per capita, 3,406 pounds would indi- 
 cate the productive capacity of American operatives against the 580 
 pounds of fine wool worked by French hands, noted above.) 
 
27 
 
 On the whole, the greater product of an American operative is 
 obvious from both systems of computation, and their larger 
 earnings are fully explained. It may safely be said from 
 what appears from the facts stated, that, throwing all benefits 
 of any doubt into the foreign part of the scales, so far as the 
 labor cost of such woollen fabrics which can be manufactured 
 here is concerned, it does not exceed the foreign-labor cost to any 
 very large extent. Whatever can be done by machinery is fully as 
 cheap. The higher earnings are balanced by larger product. The 
 differences against us in fine all-wool fabrics seem to lie mostly in : 
 
 First. — The greater cost of wools by means of tariff taxation. 
 
 Second. — The greater cost of hand labor, wherever it has to be 
 used extensively to give the finish to the goods. 
 
 When, as in our woollen production, the material counts more 
 than three quarters and mill labor not one quarter of the com- 
 bined value, and this one quarter can be proven to be far more 
 productive than foreign labor, then it is clear that the differences 
 must be looked for in other directions than the higher cost of our 
 labor, which higher labor cost is usually given in explanation of 
 the large importations of woollens taking place all the time under 
 a tariff protection of 75 per cent. The suggestion of Consul 
 Frisbie, at Rheims, in warning against the Cobden Club and its 
 unholy mission, is not at all sufficient to explain the conundrum. 
 Free wool and an average tariff of 25 per cent, would be a far 
 more effective preventative against the danger of foreign woollen 
 inundation than our present 75 per cent, tariff and taxed wool. 
 
 Considering the heavy duty on raw wool — all the way from 
 about 40 to ICO per cent. — while duty-free with all competing 
 nations, we need not go far to find the cause of our inabilities. 
 There is, however, another point which is the strongest argument 
 for free selection of wools all over the globe, unhindered and un- 
 trammelled by any law. First, the influence of soil and climate 
 upon the growth of the fibre. This cannot be transported. 
 Even breeding cannot overcome natural impediments of this 
 kind. 
 
 The alkaline soils of most of our Western Territories give 
 wools which are ill adapted to compete with the soft, elastic 
 staples of other climes. But, aside from this, the nature of wool- 
 
28 
 
 selection is more determined by fashion than any thing else. The 
 industries of all countries are affected by her whims, even those 
 with free wool. How much more we, with a custom-house fine 
 of lo cents on each pound of wool imported and of 20 to 25 cents 
 extra fine on the dirt and grease which has to be washed out of 
 the bulk before the wool can be put on the cards, and for each of 
 which two pounds of dirt and grease full freight has to be paid 
 into the bargain. For the last seven or eight years soft fabrics 
 have been in fashion, and goods made of lustre and combing 
 wools, in which England has always predominated, were in small 
 demand, so that wools of this kind declined considerably. Lincoln 
 hogs, which in 1872 commanded 55 cents, were worth, January, 
 1884, only 19J cents, and now under larger demand are 21 cents. 
 English exports in woollens, worsteds, and yarns, which in 1872 ^ 
 were $190,000,000 had declined in 1880 to $100,000,000, and now 
 for 1884 they have risen again to $120,000,000. While England's 
 trade was declining, Germany and France, who had always had 
 their greatest specialties in soft fabrics, were corresponding 
 gainers. But now we find from both countries complaints of de- 
 pression, which can be largely referred to this changing demand 
 for worsted and hard wool-fabrics. Now, if countries who have 
 the unlimited survey over all the wool fields from Lincolnshire 
 and Sussex, and from Canada to Australia, and can land their 
 wools at their doors at the same price as the English spinner plus 
 the trifling charge of extra carriage, are subjected to this pressure, 
 how much more must our wool manufacturers be suffering, who 
 by stupid laws are limited to our unserviceable staples, or have 
 to pay frequently as high, if not higher, duties on foreign service- 
 able wools than the duty on the fabric amounts to. 
 
 How our wool tariff obstructs trade and at the same time causes 
 our woollen industries to stagnate while they might thrive and pros- 
 per but for the want of foreign wools, has never been more graphic- 
 ally described than by our consul at Sydney, New South Wales, who 
 but gives the views of all those who have studied the situation in 
 which the American woollen industry is placed. I cannot improve 
 the description, than by giving in full his own words on this sub- 
 ject from his letter to the State Department, of Feb. 17, 1885, 
 printed in the March No. of 1885. 
 
 * The heaviest export year. 
 
29 
 
 " The people here complain that it is not just to expect them to 
 purchase goods and wares from the United States, when wool, the 
 chief product of Australasia, is almost excluded from the United 
 States market on account of the protective duties. I believe, 
 however, if a better knowledge of the character of the wools 
 grown here existed in the United States, that the trade would be 
 much larger than it is. 
 
 "The Australasian wools best suited for the United States mar- 
 ket are chiefly of light, sound, shafty fleece. These wools are usually 
 produced in the south and southeastern Riverina districts, in this 
 colony, and in the upper Murray district in Victoria. Austral- 
 asian wools are, as a rule, soft-handling, fine-haired, and silky. 
 These properties are mainly due to climatic influences, although 
 the natural pasturage of the interior has without doubt assisted in 
 developing these characteristics. Some of the high grades of 
 wool grown in the United States compare very favorably with 
 Australasian wools, but, as a rule, the American wools are harsher 
 and are wanting in elasticity and fitting properties. 
 
 " The modification of the present duties on Australasian wools 
 would undoubtedly give a great impetus to the commerce of both 
 countries. The United States would then draw more largely than 
 ever on the colonies for all wools suitable for fine and superfine 
 cloths and ladies' dress goods. There is no question about the 
 American manufacturers being able to produce fine cloths and 
 ladies' dress goods of equal quality and finish to those of the 
 most celebrated mills of Europe, and yet on account of the duty 
 on Australasian wool the American merchants are obliged to im- 
 port the great bulk of these articles from England, France, and 
 Belgium. 
 
 " In the event of the reduction of the duties on Australasian wools, 
 or of the admission of that class of wools peculiar to this country, 
 and not grown in the United States, the American mill-owner 
 would soon be in a position not only to undersell in his own mar- 
 ket all woollen fabrics of a foreign make, but to compete success- 
 fully with other woollen manufacturing countries in the various 
 markets of the world. At the same time the American flock- 
 master would not experience any loss by the change in the tariff, 
 as the wools imported would be of a different quality from those 
 
30 
 
 which he is able to produce. The advantages resulting from such 
 a change would also be very great to Australasia, for there would 
 then be a keener competition than at present for those classes 
 of wool especially adapted to the American markets." 
 
 The whole situation is reflected as in a mirror by this graphic 
 description of Consul Griffith. 
 
 Under such circumstances it will surprise no one that, in spite 
 of our superior working capacity, our woollen industry is a declin- 
 ing one, while the importations of woollens of foreign manufacture 
 have been constantly on the increase. All the facts related above 
 find prominent corroboration by comparing the woollen manufac- 
 ture as illustrated by the census exhibit of 1870 with that of 1880. 
 
 1870. 1880. 
 
 No. of Establishments 2,891 i.ggo 
 
 Sets of Cards . 8,366 5,961 
 
 Lbs. Domestic Wool 154,000,000 177,000,000 
 
 " Foreign Wool 17,311,000 20,48(^000 
 
 " Woollen and Worsted Yarn . 2,573,000 3,900,000 
 
 Lbs. 173,884,000 201,380,000 
 
 Lbs. Cotton Yarn 3,263,000 3,517,000 
 
 " Cotton Warp 1,312,000 17,550,000 
 
 " Cotton "... 17,571,000 24.744,000 
 
 " Shoddy 19,372,000 46,583,000 
 
 Lbs. 41,518,000 92,394,000 
 
 The number of establishments and the number of cards has de- 
 creased within the decade nearly one third. The material con- 
 sumed, expressed in total of pounds, has increased, however, al- 
 most in the same ratio in which the mentioned decrease of cards 
 and establishments has taken place. In 1870 215,000,000 pounds 
 of materials were consumed in 2,891 establishments, employing 
 8,366 sets and 80,053 hands ; in 1880 294,000,000 pounds of ma- 
 terials in 1,990 establishments, employing 5,961 cards and 86,504 
 operatives. 
 
 This would indicate greater economy in management, and greater 
 efficiency of help, as in the former a capacity of 2,688 poimds, 
 and in the latter year of 3,406 pounds per operative is the result 
 of the year's work. Closely scrutinized, however, we observe very 
 serious decline of the industry. The year was one of great pros- 
 
31 
 
 perity, and still the largely protected industry could not give em- 
 ployment to more than 6,000, or 7}-per-cent. above the number of 
 hands engaged in 1870. Meanwhile the population had increased 
 fully 30 per cent. Greater decline, however, is noticeable in the 
 quality of goods produced. While in 1870 to 173,000,000 pounds 
 of wool, 42,000,000 pounds of cotton, cotton warp, and shoddy 
 were used — or wool 80 and cotton and shoddy 20 ; the proportions 
 in 1880 stood: wool 201,000,000 pounds to cotton, shoddy, etc., 
 93,000,000 pounds, — or wool 68 and cotton, shoddy, etc., 32, — 
 clearly proving that woollen manufacture has been protected unto 
 death, making no possible headway against foreign fabrics, a con- 
 sequence of the heavy wool burdens bearing down our manu- 
 facturers. 
 
 Under the high specific duty of ten cents a pound on wool in 
 the grease, on the low foreign wool prices all over the world at the 
 command of foreign manufacturers — a wool duty higher than the 
 whole labor cost amounts to in medium goods, — it would be 
 surprising if our manufacturers could prevent the large importa- 
 tions of foreign fabrics. But with all this burden we are making 
 progress, and some of our heavy woollens and cloakings may fitly 
 be compared to the best productions of foreign makers. What the 
 industry would be with free materials can be imagined from a con- 
 sideration of our progress under all these obstructions. 
 
CHAPTER V. 
 
 SILKS. 
 
 The silk industry of this country is now in a very depressed 
 condition. After years of nursing under the aid of a tariff of 60 
 per cent., lately reduced to 50 per cent,, with free raw materials, 
 we still hear the same complaints of insufficient protection. Raw 
 materials free, a 50-per-cent. tariff wall to keep out the neighbors' 
 boys, and still not happy. Even the 50-per-cent. wall is not con- 
 sidered high enough to protect, because the fellows from the other 
 side have built ladders, called undervaluation, and thus are 
 enabled to throw stones at us and make faces. So goes the story. 
 
 Now let us examine this matter fully, and see if 'there is not a 
 great deal more smoke than fire behind all this outcry. 
 
 Undervaluation is at the bottom of the large importations of 
 silk goods, according to the ruling doctrine advanced in explaining 
 the phenomenon of an importation of $38,000,000 in 1884 (a year 
 of commercial depression) against only $31,000,000 in 1880, the 
 boom year, and $23,000,000 as the average from 1875 to 1879 in- 
 clusive. The reduction of the duty from 60 to 50 per cent. 
 ad valorem is another reason advanced. The pauper labor of 
 Europe is called in also, to do its usual service in the consular 
 offices as well, as with the clairvoyants who have the case in 
 charge in the home offices. And so long as this explanation is 
 always at hand, what use is there in worrying about new remedies, 
 or about possibly other explanations of the sources of the evil ? 
 That not all is going right, we all agree. 
 
 But this answer does not suffice, and I aim to show now that 
 the diagnosis of the doctors of the old school is not correct, and I 
 will try and lay bare the plain facts as they appear to me after a 
 careful study of the case. To meet all objectors on the outset, I 
 will say that I fully understand the gravity of the situation, and 
 that it is now a settled fact that foreign nations have formed them- 
 
 32 
 
32> 
 
 selves into a mutual organization for attack on our tariff wall, and 
 that, in order to hold our markets, they keep selling us all their 
 goods which we are able to use at cost, or less than cost, if need 
 be. I will not for a moment dispute this protectionist credo— of 
 the sinister designs of foreign powers on this republic and its in- 
 dustries. I will admit that they dump all their goods on our 
 shores at a considerable loss. 
 
 In silks, however, they must go a good deal deeper yet, and the 
 losses which they have to sustain to maintain their ground against 
 our silk manufacturers must prove ruinous to them in the end, if 
 the case is at all to be met on these grounds. The true situation 
 is, however, materially different from all these phlegmatic views of 
 indolent self-complacency, fostered by protection. This is the 
 case, and I let the reader judge of the absurdity of all the above 
 referred to assumptions. 
 
 Our own silk industry stands on about this proportion of prices 
 of component parts, according to the Census Report of 1880 : 
 Silk and other spinning material, ^16,700,000 ; wages, ^9,146,000 ; 
 profit and expenses, $6,170,000 ; or, expressed in percentage, 
 52X29X 19. 
 
 Now it is clear that our working methods in the silk industry 
 are different from those employed in Europe. We have it 
 corroborated by good protectionist authority, that of our consuls, 
 that to this very day the home industry is still the ruling mode of 
 production. Power-mills are being introduced gradually, but as 
 yet they have not very materially affected the general state, and 
 cannot be taken into consideration in comparing present and past 
 productive methods as reflecting on the industrial situation. 
 
 In America, on the contrary, the power mill is all but universal, 
 and if there are any drawbacks connected with the application of 
 the American methods to silks they are to be looked for in other 
 directions than in that of the greater labor price of the product. 
 Let us take the district of Crefeld as an illustration, where, 
 according to Consul Potter, 90 per cent, of the work is done by 
 hand-loom weavers. In 1S81 there were 32,000 weavers em- 
 ployed to work up : Raw silk, 431,552 kos. or 966,675 lbs. ; 
 schappe or spun silk, etc., 215,555 ^^s. or 482,843 lbs.; cotton 
 yarn, 940,014 kos. or 2,105,630 lbs. 
 
34 
 
 According to Crefeld price-lists of that time the average cost 
 of these would be : 
 
 966,675 lbs. organzine, at $6.75 . 
 482,843 lbs. silk schappe, at $3.65 
 2,105,630 lbs. cotton yarn, at 50 cents 
 
 ^6,525.056 
 1,762,377 
 1,052,815 
 
 $9,340,248 
 
 This is the cost of the material. 
 
 In the manufacture of these $9,340,248 worth of raw textile 
 material, 25,000,000 marks, or $6,250,000, is paid for labor, inclus- 
 ive of dyeing, spooling, shearing, weaving, and finishing. 
 
 The 32,000 weavers earned 16,000,000 marks, or $4,000,000, an- 
 nually (a prosperous year), or $125 against $250, the annual average 
 of earnings in an American mill. The difference, however, startling 
 as it is on the outset against American labor, has quite another face 
 when we show the relative proportions of material and labor in 
 both countries : 
 
 
 Material. 
 
 Labor. 
 
 Material 
 
 in 100. 
 
 Labor in 
 100. 
 
 America .... 
 Crefeld .... 
 
 $16,700,000 
 9,340,248 
 
 $9, 146,000 
 6,250,000 
 
 64i- 
 60 
 
 35i 
 40 
 
 We have here again the same exhibit which has been proven in 
 almost every case touched by these papers : American earnings 
 more than twice as high as in Europe, and labor cost considerably 
 below the German or other European cost. 
 
 Nor is this the whole case. We are using the silk raw, unspun. 
 Crefeld buys all silk in the organzine and tram ready for the loom. 
 The cost of importation of our silk in the year of comparison 
 was $4.70 a pound. If we compute the relative cost of material 
 and labor upon our American basis and condition, namely, to 
 spin the silk ourselves and get into shape for our looms, we shall 
 have to add about $2,000,000 to the Crefeld labor cost, and take 
 it from the cost of material. We should then have for Crefeld: 
 
 Material, $7,300,000 ; labor, $8,300,000, or material 47 and 
 labor 53 per cent. 
 
 Now, I admit that in a branch like silk, which contains so many 
 kinds of goods, and where Crefeld manufactures so much in half- 
 
35 
 
 silk stuffs, or goods with cotton backs, there is no adequate field 
 of comparison. But there can be no doubt that the labor cost of 
 goods manufactured there is as high as stated, and that we have 
 to pay for it as well as for the materials used when we import 
 them. They may sell them to us at cost, for dark and hidden 
 reasons of their own, but the mere outlays for material and labor 
 have to be refunded to the foreign manufacturer. Now, see how 
 this account comes out. I will show it by means of a diagram : 
 I. Crefeld cost landed here and duty paid. 
 
 lE 
 
 A B 
 
 2. Cost of American silk. 
 
 IE 
 
 A 
 
 B 
 
 D 
 
 In figure i, A is cost of material, expressed by 47; ^ is cost of 
 labor, expressed by 53 ; and C is the duty of fifty per cent, paid on 
 landing in New York. 
 
 In figure 2, A is cost of a like amount of material (being free in 
 both countries), and B is the American labor cost as expressed 
 above, 64IX35 J, and D is theblank space where to fill in all possible 
 " if s " that can be raised against this mode of investigation. 
 Undervaluation would only affect C in i, as A and B have to be 
 remitted in full to the other side, and even if goods would pass 
 the custom-house at one half the price of manufacture (the usual 
 claim of the " experts " is one of a 25 per cent, undervaluation 
 only), the line would be reached midway in C, which would still 
 leave enough of a margin for the American manufacturer equal to 
 the whole cost of his material and wages account. The effect of 
 a 50-per-cent. undervaluation I express by E, equivalent to a full 
 protection of 25 per cent. I will not enter here into a discussion 
 of the relative advantages of the two labor systems in the silk in- 
 dustries. Very material differences do exist, but the effect upon 
 
36 
 
 the cost of production is certainly in favor of the American 
 method so far as the mere money outlay for wages is con- 
 cerned in the process of turning a given amount of raw material 
 of like nature into cloth. Nor is it very material for the purpose 
 of this inquiry to answer the objection which could be raised 
 against the method of arriving at a fair comparison, that of not 
 having the same products under review. It is not and cannot be 
 a matter of controversy, however, that Crefeld's goods, which we 
 find so difficult a match to meet under a 50-per-cent. protection, 
 and as for that, Lyons and Zurich goods as well, are composed on 
 the whole of fully 53 cents' worth of labor for every 47 cents' 
 worth of textile matter we import in manufactured silks, and that, 
 having the raw material, silk, at the same cost as the foreigner, we 
 ought to be able to compete under a much lower rate of duty 
 than our present one. 
 
 But to those who are not satisfied with this wholesale mode of 
 comparison, I will give a more specific example of the labor price 
 ruling in both countries, as paid by the piece. 
 
 I have before me the rate of payment to Crefeld hand-loom 
 weavers, paid for weaving one metre of taffetas 25 inches wide (of 
 4 threads to the centimetre and 32 fine). This price list is from a 
 committee of nine Crefeld masters, and is undoubtedly as reliable 
 as any list can be : 
 
 In 1867 2.50 marks or 60 cents ; in the very prosperous year 
 1872, 2.75 marks or 66 cents ; in 1877 a reduction of 30 per cent, 
 below the rate of 1867, down to 1.75 marks or 42 cents, had taken 
 place. From 1879 to 1881 wages rose again to nearly the old 
 rates, but now, under the depression which is beginning to be very 
 seriously felt, and is assuming more and more calamitous aspects, 
 the rate of pay may be even below that paid in 1877, when 42 
 cents the metre of this 25-inch taffetas, equal to about 39 cents 
 the yard, was paid. For the same count is paid in American mills 
 at this period not more than 20 to 25 cents a yard. This is one of 
 the finest grades, while in lower grades the prices for weaving on 
 power-looms run down to 4 cents a yard. 
 
 Though spooling and shearing are paid separately in Crefeld, as 
 well as here, yet there are a number of auxiliary operations wnich 
 are performed in the house-industry by the weaver, while in 
 
37 
 
 American mills they are an extra charge. In the house-industries 
 they are performed by the weaver's children in his narrow house, 
 or by children hired for the purpose at a slight weekly outlay. 
 
 Making all these allowances, and adding them on to the labor 
 cost of American silk weaving, we do not yet come up to the price 
 paid to a silk weaver in Crefeld at times of depression even.' 
 
 The mere labor cost in the finished product of a pound of silk, 
 spun, dyed, woven, and finished into pieces of goods of the 
 same purity, will cost less in the United States than in Crefeld. 
 The work account of a Crefeld " manufacturer " stops when the 
 piece is delivered to him by the finisher, ready for shipment. 
 That of the American manufacturer, however, is increased by the 
 extra expense account. The Crefeld "manufacturer" has no fixed 
 charges, such as mill buildings, machinery, fuel, foremen, and super- 
 intendents, except the necessary help for the delivery of silks and 
 examination of the returned goods in the various stages. All 
 these charges the American has to add to his labor account. But 
 the wear and tear of machiner}^, the interest charge, superintend- 
 ing, and so forth, can be expressed by ten per cent, of the whole 
 cost, and if added to the labor price, would only extend the line 
 parallel to that of Crefeld labor in our diagram. 
 
 Under conditions of depression referred to, a Crefeld weaver 
 would consider 8 to lo marks for his weekly earnings a very satis- 
 factory result, while under stated prices and full employment Ameri- 
 can weavers make weekly wages from $8 to $io. It is clear from 
 this that the pauper-labor theory is not suihcient to explain the 
 price differences which undeniably exist. Of like standing would 
 be the undervaluation theory as a means of explaining these 
 discrepancies. That they do exist is a matter of record in our 
 custom-houses. We collect annually round $20,000,000 on round 
 $40,000,000 of imported silk goods, an unfailing proof that our 
 manufacturers cannot compete in a great variety of fabrics. 
 
 What seems more pertinent causes have to be looked for in 
 another direction, and of these I shall speak more at length in 
 the following pages. 
 
 ' See Appendix. 
 
CHAPTER VI. 
 
 THE LOADING AND DYEING OF SILKS. 
 
 From Great Britain we hear a like wail of distress in the silk 
 industry. The pauper-labor cry is used as much there as here. 
 Macclesfield and Spitalsfield, as well as Coventry, have never been 
 renowned for paying very high wages to their poor silk weavers, 
 not for the last twenty-five years at least. Besides, more of the 
 silk work is done on power-looms than in Germany, or France 
 either. The rate of wages is a lower one than in most other Eng- 
 lish industries — cottons and woollens. With these advantages, 
 though not protected by any tariff, the British silk industry ought 
 to hold its own at least. But instead of this, the industry is rap- 
 idly declining — I might say, fast dying out. The net imports of 
 raw silk (deducting exports from imports) were on an average : 
 
 Lbs. 
 
 For 1861-65, annually 5,500,000 
 
 " 1871-75, " 3,700,000 
 
 " 1879-83, " 2,500,000 
 
 The decline in the number of operators employed in the in- 
 dustry is greater yet. Improved productive methods have made 
 it possible to do with considerably less help for the same amount 
 of product than in the high tide of prosperity. 
 
 The imports of foreign silk manufactures have increased in the 
 ratio in which the imports of raw silk have declined. They were : 
 
 For 1865 /7, 260,000 
 
 " 1S71-75 ........ averaged, 10,400,000 
 
 " 1879-83 " 12,000,000 
 
 The British Government, alive to the interests of commerce 
 and manufacture, has instituted an inquiry through the Royal 
 Commissioners on Technical Instruction. The third volume of 
 their report has been published recently, containing a very valu- 
 able paper by Mr. Thomas Wardle, of Leek, on the condition of 
 the British silk industry. As the prominent features of our own 
 
 38 
 
39 
 
 situation are reflected by the picture drawn in Mr. Wardle's paper, 
 I will introduce his statement, so far as it bears on the subject. 
 
 Mr. Wardle lays the difference, where it properly ought to be 
 put, upon the weighting of silks, as also the technical superiority of 
 foreign dyers and finishers. Silk, as a fibre, is largely hygroscopic 
 — that is to say, it absorbs moisture, atmospheric moisture, to a 
 very large degree. Up to thirty per cent, of its weight can be 
 absorbed without showing the moisture. As early as 1759 a silk- 
 drying establishment was organized in Turin, so as to give a 
 guaranty that the silk buyer does not spend his money for water 
 instead of silk. Crefeld and Elberfeld organized in 1844 a joint- 
 stock company, which was placed under public control, and whose 
 officers are under oath to determine and declare the real condition 
 and weight of each bale of silk, determined after fully drying 
 sample skeins taken from the bale, and adding an allowance of 
 eleven per cent, as the admissible degree of moisture of honest 
 commercial silk. Similar establishments are to be found now in 
 every large silk centre, guaranteeing the net weight of silk. Now, 
 considering this to be the nature of silk in its pure, unadulterated, 
 natural condition, let us see how man improves the gift of nature, 
 to make a little go a great ways, and here I let Mr. Wardle have 
 the floor : 
 
 " I do not wish to be misunderstood as an apologist, still less an 
 advocate, for this lamentable weighting of silk, but it will be my 
 duty to describe things as they have been, as they are, and as they 
 are sure to continue, until commercial procedure is reformed. 
 
 *' There has been a great deal of nonsense talked about this 
 question, and it is quite time that it was put upon its true basis, 
 and facts and uses explained and left to speak for themselves. 
 
 "For the English dyers I must say this : They are not fraudu- 
 lent ; they, from the necessity of their vocation, declare their 
 dyes and their weighting upon each invoice, and they, in order to 
 obtain a livelihood, are bound to do the bidding of the manufac- 
 turers. Whatever fraud there is, lies in selling the combined 
 product as silk. 
 
 " With regard to the weighting of silk in England in past and 
 present times, I may say that I, as a dyer, never knew the time 
 when silks were not weighted in some degree. This is but the 
 
40 
 
 experience of every English dyer at least a century past. The 
 difference between English and Continental weighting is in 
 degree only, English silks having always been weighted to a much 
 less extent than foreign ones. 
 
 " It is often said that English goods wear well, because they are 
 always of pure dye, and that French goods wear badly, because 
 they are of weighted dye. This is not wholly the truth, and 
 explanation is needed. 
 
 " As is well known, silk contains a gum or varnish to the extent 
 of about one fourth of its weight. This has to be discharged 
 with boiling-soap solution for silk threads intended for the warp 
 of a black-dyed fabric. Each pound is thus reduced in weight to 
 twelve ounces. To this residue of twelve ounces it has been 
 usual, from time immemorial, with occasional exceptions, to add 
 from one ounce to four ounces of weighting matter, to raise it up 
 again as near to its original weight as has been found desirable by 
 the manufacturer in shaping the price and quality of his goods. 
 The woof, or shute, being for the most part hidden or covered by 
 the warp threads, did not of necessity require to be lustrous, and 
 so another method of dyeing was and is resorted to. The silk is 
 dyed upon the gum in the unboiled-off state — /. e.^ the gum is not 
 discharged ; silk so dyed absorbs weighting matter easily, and the 
 usual proportion was from four ounces to eight ounces of addi- 
 tion, thus making each pound of silk return from the dyer weigh- 
 ing twenty ounces to twenty-four ounces, but in some cases, as for 
 narrow goods, very much heavier. Such dyes are technically 
 known as souples — /. ^., the weighting matter added being for the 
 most part in combination with the external gum or ' silk gelatine,' 
 and not with the filbroine or silk proper. 
 
 " Now, it is a fact beyond dispute that black-dyed silk, without 
 weighting matter, is not so permanent in color as when weighting 
 matter is used, and the reason is easily explained. A good black 
 on silk, in fact the best black, is formed, as in ink, by the union of 
 iron salt and tannic acid. Tannic acid has the property of uniting 
 itself with the. filbroine or silk fibre and forming part of its sub- 
 stance, and by so joining itself adds its weight to that of the silk. 
 Black dyes without tannin are all more or less unstable. A good 
 fast black, unweighted and proof against light, acids, and alkalies, 
 
41 
 
 has yet to be discovered. Therefore a pure and unweighted 
 black cannot be recommended for any fabric where permanence 
 of color or durability of dye is wanted. 
 
 " The process of weighting has been so handled and developed 
 that dyers in both France and Germany have no difficulty now, by 
 the use of tin, etc., in making their maximum weights up to 40 
 ounces per pound on boiled-off silk, to 120 ounces per pound in 
 souples, and even to 150 ounces per pound on spun silk. 
 
 "I have a piece of so-called black silk ribbon of French dye, the 
 warp of which is weighted to 24 ounces per pound, that is, the 
 net 12 ounces of silk made into 24 ounces, and the shute weighted 
 to the frightful extent of 100 ounces per pound, that is, one pound 
 of silk made into 100 ounces. This is scandalous, and no French 
 silks should be allowed to be imported without the loading being 
 declared or the adulteration heavily taxed. It is high time this 
 was done, and its effect would be to give the English manufactur- 
 ers a chance. 
 
 " The skill of the French in weighting their silks has been one 
 of the chief causes of the decline of the English silk industry. 
 They are at present producing weighted blacks vastly superior in 
 appearance to the old-fashioned English dyes, and yet considera- 
 bly more than quadrupled in weight to the degree of loading. 
 
 " I think this suggestion cannot too stringently be acted upon. 
 It is necessary the public should know what it is they are buying, 
 and this has become impossible as matters now stand in silk 
 goods, because the art of deception has become a corollary with 
 the scientific skill and development of weighting. 
 
 " If the weighting matter were as apparent in the goods as cot- 
 ton or wool when mixed with silk, the articles would declare them- 
 selves, and the reasons for the proportionate cheapness would be 
 at once apparent ; but the effort has been so successfully made to 
 incorporate with the silk such excessive proportions of loading, 
 that the weighting matter is no longer distinguishable from the 
 silk itself, inasmuch as, as I have already said, it appears to exist 
 not merely in contrast with, but in actual combination with the 
 silk fibre, and to partake of all the qualities which silk possesses, 
 except that of strength, for I should observe that the strength of 
 the silk fibre decreases in proportion to the augmentation of 
 
42 
 
 weighting matter. Even the removal of the natural gum, or, as 
 the French more properly term it, grh^ of silk by boiling off de- 
 creases its strength, and to add to the boiled-off fibre any adven- 
 titious matter further augments this loss of strength. 
 
 '* The wife of a friend of mine lately bought a dress in London 
 — a black silk faille, of French manufacture — for which she was 
 charged 20s. per yard. In a month the fabric was completely 
 disorganized or cut between sleeve and bodice, although it had 
 only been worn a few times. This was simple robbery, for silk 
 absolutely unweighted would not have cost half as much. I ex- 
 amined the warp and weft of this fabric, and found the former to 
 be weighted to 20 ounces per pound, and the latter to 32 ounces 
 per pound." 
 
 I have made so full an extract from Mr. Wardle's statement, as 
 it gives so impressive an explanation of the causes which operate 
 against the successful competition of English as well as American 
 manufacturers with French silks. To the bad-wearing qualities 
 of many foreign black silks, the female member of every house- 
 hold who owns a black-silk dress can testify. The heaviest, 
 apparently best qualities frequently break the soonest. Ameri- 
 can silks are known to wear better. Nor is this the charac- 
 ter of broad goods alone. When black-silk fringes were used 
 in ornamentation, American fringes were fully twice as high in 
 price as German fringes of the same style and pattern. But 
 for every thing that required solidity, and where the price war- 
 ranted their application, American fringes were given the pref- 
 erence. Indeed, they were the only ones that could be used. So 
 well was this known to buyers of ladies' cloaks that their first ob- 
 ject of examination was the fringe. The foreign fringe snapped 
 off, or rather fell off like singed paper in response to any not over- 
 rough trial of its strength, while the threads of an American 
 fringe could no more be broken than if they had been linen twist 
 of the same thickness. 
 
 Colored silks are not much weighted, but yet the weighting can 
 be practised to nearly 100 per cent, of the boiled-off silk. The 
 greatest difficulty is in black silks. Plain colored silks are hardly 
 any more imported, American silks having driven them from the 
 market. With such an immense stretch as is offered in the ab- 
 
43 
 
 sorbing quality of silk, it is easy to see how much more the pound 
 of pure silk can be made to yield in yards or ounces of stuff goods 
 than the shining, hypocritical surface tells the buyer. The diffi- 
 culty and even impossibility of detection to any thing near the full 
 extent of the adulteration is admitted. The manipulation, dyeing, 
 loading, and finishing is practised as a perfect science abroad, to 
 which not our most skilled adepts have been able to aspire. It 
 will be readily understood from what has been said heretofore, 
 that it is not a difficult matter to load silks twice as high and pre- 
 serve the appearance, as our foreign competitors, with more skilful 
 handling, are practically able to do. Under such treatment of 
 silks our diagram of the relative cost of silk in Crefeld and Amer- 
 ica will make a different showing. 
 
 (i) Crefeld silk landed here and duty paid, if silk is of condition 
 and quality of American silk. 
 
 
 ^B. 
 
 
 A B 
 
 (2) Cost of American silk goods. 
 
 (3) Crefeld silk duty paid, if silk is reduced to one half the 
 American purity, and under the same proportions of material and 
 labor as in No. i. 
 
 ABC 
 
 [A, cost of material ; B, labor ; C, duty.] 
 
 In 3, the relationship of material (A) and labor cost {B) is the 
 same, 47 and 53, as in the diagram given on a previous page on 
 silks ; but the value of the material does not come to more than 
 one half of our own. The cheaper silk matter is made to show up 
 so skilfully that these silks, not one half as valuable, are frequently 
 
44 
 
 preferred to our own on account of their finish, greater softness, 
 and better color. 
 
 And, as to this, the words of Mr. Wardle are as appropriate in 
 our case as in that of Great Britain : 
 
 " In looking to the future we must admit that the manufacturer 
 will have to learn his trade, from the rudiments to the highest in- 
 tricacies of his loom, and must be, like the French manufacturer, 
 skilled in the manipulation of his material, and not a mere capi- 
 talist, but a teacher of his work-people ; the dyer must be a man 
 of liberal education, well grounded in the history and practice of 
 his art, a well-trained chemist, and able to personally conduct all 
 and any of the complicated processes for which he is responsible, 
 and which he must thoroughly understand. The finisher, too, must 
 throw his antiquated notions aside with his antiquated machin- 
 ery, and by knowledge of mechanics and chemistry help to turn 
 out the dyed and woven goods in that perfection of style and 
 pleasing finish which distinguishes all Continental silks." 
 
 This may not so fully apply to us so far as machinery is con- 
 cerned, but who would say that the other strictures do not suit 
 our case ? The progress we have made from recent beginnings is 
 indeed wonderful. No one who has examined American silk 
 goods, those especially of the better medium grades, can fail to 
 recognize their value. 
 
 No one who has examined the workings and organization of an 
 American silk mill can fail to perceive what the results would be, 
 if in other price-making factors than those controlled by the applica- 
 tion of machinery to the art, we were equals of our foreign com- 
 petitors. One cannot fail to discover, faultless as the work of the 
 weaver may appear, that a great deal has to be brought yet into 
 the art to give our silks, in most instances, the softness, the mel- 
 lowness, which make French fabrics, perhaps of inferior value, so 
 tempting to the touch and the eye of the buyer. To make an in- 
 ferior fabric look and feel equal to one of higher cost is indeed an 
 art in which only great skill and experience will succeed. Not 
 that we do not attempt to make cheap goods, in silks as well as in 
 other textiles, but they show more the imprint of incapacity than 
 where a full supply of good and honest material meets the work- 
 man half-way in his attempt to produce a sightly fabric. 
 
45 
 
 Success cannot be reached except through workmen skilled and 
 practised, and through masters understanding all the details of 
 their lines. To this we must aspire through close study of all the 
 subdivisions of the work, and not be content with the aid of 
 superintendents, imported to do what ought to be the work of the 
 owner of the establishment. The great textile industries of 
 Europe are all the time introducing not only new chemical pro- 
 cesses, but also new spinning materials into their fabrics. The 
 Ramie fibre plays a not unimportant factor in silk manufacture. 
 And, indeed, whoever has seen the fine silky threads in their 
 combed condition cannot deny that it is a subject worth studying. 
 
 The Dry Goods Bulletin^ of this city, time and again for several 
 years now, has called the attention of manufacturers to the import- 
 ance into which this fibre has of late grown in Europe. 
 
 Only recently I had an opportunity to examine a sample collec- 
 tion of fabrics made of Ramie fibre, sent on exhibition from Europe. 
 Materials of pure Ramie had the brilliancy of silk, and half-and- 
 half fabrics were difficult to detect from all silks. 
 
 A chemical analysis of a piece of black silk of foreign origin 
 made by Mr. John Dean, of Brooklyn, an expert of silks, revealed 
 the following items as component parts of " original silk." I give 
 his own description of his investigation as published in the Dry 
 Goods Bulletin^ after having satisfied myself of the accuracy of 
 his tests. 
 
 " Chemistry and the microscope show up what so-called silks 
 are composed of. With them no lacquard sham can pass for the 
 genuine article. 
 
 " Having obtained samples of black silks from various places of 
 business in your city and this, and having put them to these uner- 
 ring tests, with this communication you will receive the results. 
 
 "Exhibit marked No. i is a sample of black gros-grain, $1.50 
 per yard, said to be all pure silk, heavy and rich-looking, and has 
 every appearance that it would stand any amount of hard wear and 
 so give the wearer satisfaction. Chemistry shows it to be adulter- 
 ated 700 (seven hundred) per cent., containing only sufficient silk 
 to make the two surfaces ; while the microscope reveals the fact 
 that the woof is not silk at all, but ramie. 
 
 " No. 2 is the ramie fabric with silk extracted in one part. 
 
46 
 
 " No. 3. is the same again after having its various adulterations 
 extracted. You will kindly notice that the little silk in the warp is 
 a different color to the woof ramie. 
 
 '' No. 4 is still the same reduced to a carbon. 
 
 " As near as I can judge, this imported fabric is composed of : 
 
 Silk fibre 12.50 
 
 Ramie ............ 6o.oa 
 
 Oxide of iron ........... lo.oo 
 
 Logwood, oil, and other matter . . . . . . . 17.50 
 
 Total 100.00 
 
 " Exhibits marked 5, 6, 7, and 8 have the adulteration extract 
 extracted, which shows how little silk is used to make a heavy 
 fabric. 
 
 " No. 9 is strictly pure in warp, but woof or weft is heavily 
 loaded. 
 
 " Exhibit No. 10 is a sample of which America can justly feel 
 proud ; it is not only home-made, but strictly pure in warp and 
 weft ; the dye used, just sufficient (12 per cent.) to make it black, 
 was the very best. 
 
 " Exhibit marked 10 A had the same chemical used upon it 
 as exhibit marked 2 ; you '11 notice the silk only is destroyed in 
 this case (jo A). * Had much more been used,' to use an Irish ex- 
 pression, * there would have been nothing left but the hole to send 
 you.' 
 
 *' Exhibits marked 10 B and 10 C are still the same fabrics, 
 simple tests only having been applied. 
 
 " Exhibit II is the carbon of No. 10 (please notice contrast be- 
 tween this and exhibit 4). 
 
 " Exhibit 12, sample of satin with its silk face removed. 
 
 '' Now, sir, how long could such a fabric as No. 2 wear ? No 
 wonder that good-souled old lady, Mrs. Public, sometimes gets in 
 a tantrum, and gives way to anger, and says silk don't wear, and 
 wonders iJbhy. 
 
 " The fact is, Mr. Editor, she is too fond of a bargain when silk 
 is concerned. She demands and insists upon having a dollar for 
 fifty cents. I know not what manufacturers of other textile fabrics 
 can do, but if it is tried on silk manufacturers the old lady will^^/ 
 left every time." 
 
47 
 
 Mr. Dean lays bare the root of the whole evil in this latter re- 
 mark ; to the discussion of which point we shall devote the 
 following chapter. 
 
 But applying the philosophy of this investigation to our case, 
 it will appear that it would naturally lead to better results if our 
 manufacturers went to work to obtain all the technical instruction 
 necessary to their art, such as the nature and treatment of fibres, 
 colors, and finishing processes, than to trust to outside aid. 
 
 The attention which the governments of Germany, France, and 
 England are giving to these matters, the technical schools which 
 are being established, the scientific training which is offered to all 
 who prepare for the competitive contest of nations, show that we 
 must not trust to the aegis of our goddess too blindly if we wish to 
 maintain our grounds. 
 
CHAPTER VII. 
 
 ADULTERATION OF FABRICS LARGELY DUE TO HIGH TARIFF 
 TAXATION — GREAT DEMAND IN THE UNITED STATES FOR 
 CHEAP FABRICS — A CONSEQUENCE OF THE GREAT CON- 
 SUMING POWER OF THE MASSES. 
 
 It will hardly do to paint a gloriole of superior morality around 
 the heads of our manufacturers, as we find done frequently in our 
 public prints, when explaining the greater purity of American 
 silks. The silk manufacturer is not made of different stuff than 
 the woollen manufacturer. It has been shown in a previous 
 chapter " on woollens," from the aggregate of our product, how we 
 have advanced in a brief decade in the practice of adulteration of 
 materials, the purity of which is of far greater importance to the 
 millions for health and comfort than that of any other fabric. Yet 
 adulteration is practised to an extent which, to my knowledge, no 
 other country has yet shown, in its exported woollens at least. What 
 is proven in the abstract by statistical comparison is fully known 
 in the concrete by actual experience in life to buyers of dry goods. 
 With the reduction in price of known standard woollen fabrics a 
 diminution in the quality and fineness of the wool or the closeness 
 of the heft has gone hand in hand to a large extent. Frequently 
 in mixed fabrics we observe a gradual reduction of the wool per- 
 centage and an increase of shoddy and cotton, until finally little is 
 left to vouchsafe the application of the name of woollen to an article 
 shornof all but its name. Some exceptions of brands, whose manu- 
 facturers rigidly adhere to the standard quality which built up the 
 great reputation of their staple, show by the great success amid 
 the general decline that the public is not slow to detect any hide- 
 and-seek game. I will admit that the high price of our wools, 
 compared to European prices, and the keen competition for our 
 limited markets, force our woollen manufacturers to such prac- 
 
 48 
 
49 
 
 tices ; but, if any thing, it proves that like conditions create like 
 effects, whether here or abroad. What our wool duties force 
 upon our wool manufacturers our silk duties largely force upon 
 foreign silk manufacturers — adulteration to cheapen their fabrics 
 in order to beat our high tariff. Our cotton goods show that 
 where there is an abundance of cheap materials at hand our 
 manufacturers prefer at least to produce pure fabrics, and excel 
 herein their foreign competitors. It would, though, be futile to 
 say that the art of filling cottons with clay and sizing is not prac- 
 tised by our industries in the cheaper imitations of better grades 
 of their American competitors. It is, however, clear to all judges 
 that while we excel in pure, unadulterated American cotton goods 
 all nations, in cheap fabrics, where sizing is intended to give body 
 to the material, we are wofully behind. This art is nowhere so 
 fully understood as in England, and nowhere so poorly practised 
 as in the United States.' 
 
 It is easier to manufacture pure, unadulterated fabrics than 
 where mixing of uncongenial materials would at once show the 
 
 ' England has built up an immense export trade more through the art of the 
 finisher and other means of giving cheap fabrics a sightly appearance than by 
 any other method. There is no secret made of this fact. If the barbarians of 
 Asia and South America are eager buyers of thin fabrics, made hetivy by the 
 admixture of clay, barytum, and starch, beautified by the decking out of the 
 pieces with chromos and gold-tinsel bands, John Bull is willing enough to let 
 them have the goods just as they want them. He knows that the preacher 
 would be out of place in the dry-goods trade. He spends none of his valuable 
 time in trying to convince his customers that the pure unadulterated fabric, such 
 as we make it, is really the cheaper one. He studies their tastes and desires, 
 which are mostly based on customs, grown up with the country or on climatic 
 influences, and meets their deriiands and tastes. He aspires to nothing higher. 
 Starting from these premises it is, however, somewhat mystifying to observe the 
 " I-am-holier-than-thou " mien of Mr. Wardle, when he declaims against the 
 dishonest silk manufacturers of the Continent. What they do in silks, the 
 English have been practising for a half a century in cottons. If the English 
 are not skilful enough to adulterate silks to the extent the Continentals are 
 practising it, and give the goods the same appearance, the Con tinentals have never 
 been able to do the thing in cottons as gracefully as the English do the trick. 
 The latter, however, have this in their favor, that they sell the stuff for what it 
 is worth and no more, as can be learned from the average prices of exported 
 bleached cottons. (But this is also due, not to a greater degree of morality 
 inherent in our cousins beyond the sea, but to the fact that the buyer of cotton 
 
50 
 
 attempted substitution, unless covered by the most skilful manipu- 
 lation. A perfect dyeing and finishing of an inferior article often 
 necessitates more skill and outlay than fabrics of superior quality 
 require. This is a far more prominent reason, why we attempt less 
 to adulterate, than principles of higher morality. 
 
 I can say this the more freely, without fearing to touch any 
 sensibility, as I do not at all share in the common outcry raised 
 against so-called adulteration or cheapening of fabrics by the ad- 
 mixture of other than the genuine material. 
 
 It is wrong to make shoddy cloth and sell it for all wool, if such 
 is possible, which I doubt. It is wrong to make starched cotton 
 cloth and sell it for pure cotton, if such is possible, which I doubt. 
 It is worse to make loaded and adulterated silk and sell it as pure 
 silk, because the adulteration is more difficult to detect and deceit 
 
 goods knows to discriminate between cotton and clay. He seems to be well 
 posted. An easy matter in cottons but rather difficult in silks.) 
 
 Following is a list taken from the Board of Trade Reports of 1884 giving 
 
 EXPORTS OF BLEACHED COTTON, VALUE AND PRICES. 
 
 
 
 
 Price per yard 
 
 Countries. 
 
 Yards. 
 
 £. 
 
 in American 
 cents. 
 
 United States .... 
 
 53,000,000 
 
 1,468,000 
 
 1325 
 
 France ..... 
 
 50,589,000 
 
 1,023,000 
 
 9.80 
 
 Germany ..... 
 
 48,757,000 
 
 823,000 
 
 8.25 
 
 Belgium and Holland . 
 
 107,000,000 
 
 1,580,000 
 
 7-25 
 
 All other European States incl. 
 
 
 
 
 Turkey ..... 
 
 503,000,000 
 
 6,164,000 
 
 6 
 
 Egypt 
 
 124,000,000 
 
 1,236,000 
 
 4.84 
 
 Central and South Am. States and 
 
 
 
 
 W. India 
 
 642,000,000 
 
 7,848,000 
 
 4.88 
 
 China and Japan .... 
 
 440,000,000 
 
 4,700,000 
 
 5-17 
 
 British India .... 
 
 1,792,000,000 
 
 17,650,000 
 
 4.75 
 
 A trade which has to depend on the masses of the people, as in cotton goods, 
 has to adapt itself to the purchasing powers of those for whom it caters. 
 The clear understanding of this plain principle seems to be at the bottom of 
 England's success. There is no room for sentiment in the brani of the British 
 trader. 
 
 There is little doubt that the want of adaptation to the customs, habits, and 
 necessities of foreign nations has been one of the main causes of backwardness 
 of extending our trade in cotton goods beyond the 10 or 12 millions between 
 which points it has been oscillating during the last five years. It had been the 
 same figure in i860. The British exports of cotton goods within this time 
 varied between the sums of 350 and 380 million dollars. 
 
51 
 
 is easier practised. But even in this branch we begin to under- 
 stand the case, and the public has the remedy of rejection at hand. 
 The prices at which these adulterations and imitations are sold in 
 the market show clearly that the scrutinizing price-regulator is 
 actively at work in giving the true level to fraud and deceit. But 
 aside from the bad feature of selling an inferior article at the high 
 price of the genuine article, which, however, cannot be practised 
 for a very long period, or of the equally bad feature of forcing 
 inferior woollens or shoddy goods upon our customers at prices of 
 genuine pure woollens (largely due to the government tax on genu- 
 ine wool), this adulteration of fabrics is nothing more than a rec- 
 ognition of the commercial situation created by the democratic 
 organization of our civilization. All our industries are bent on 
 gaining the largest possible markets among the millions. Few of 
 our capitalists, manufacturers, or merchants would care to embark 
 in any enterprise where they could not feel sure that they could 
 gain the patronage, the custom of the great masses of the people, 
 the millions of bread-winners with small incomes. They recog- 
 nize the comparatively small value of the trade of the few wealthy 
 who use the finer fabrics. They know the great purchasing power 
 of the collective incomes of the poorer classes. No nation can 
 show so great a proportion of its people engaged in useful occu- 
 pations. No nation can show so great a proportion of its labors 
 ing people earning sums of money which in Europe would be 
 considered fair incomes of the middle classes. This, of course, 
 creates great purchasing power, which is freely exercised. There 
 is a spirit of " I-am-as-good-as-you " about, which happily cannot 
 be crushed even by momentary depression. Even if silks are high, 
 they are bought nevertheless. On a Sunday our working girls 
 are as well dressed as anybody, and if a 50-per-cent. tariff makes 
 silks too costly in the pure state, they have to be satisfied with the 
 substitute. This cheapening of fabrics is simply the attempt to 
 meet the capacity of the slender purses of our millions. The 
 nearest remedy against adulteration would be an abolition of 
 duties, which would bring the pure article within the reach of the 
 less pecunious classes who share in the annual consumption of a 
 hundred millions of silk goods — American value, adding duties 
 paid the government. High duties upon the material are a pre- 
 
52 
 
 mium upon adulteration at home. High duties upon fabrics are 
 a premium upon adulteration abroad. We cannot escape from 
 this result of our fiscal system. We cannot eat our pudding and 
 have it too. Our people love to be well dressed. 
 
 If our government removes from their reach the genuine thing, 
 which their love of the beautiful would prefer to have, why, they 
 have to take the nearest thing they can get, the imitation. 
 
 The cheapening of fabrics, through any new process or means of 
 reducing the price, at once increases the consumption in a most 
 unexpected manner. Cotton embroideries, made in Switzerland 
 and Saxony on so-called Swiss machines, have been imported 
 formerly in limited quantities. The great profits made originally 
 by the manufacturers, however, caused so many machines to be 
 built, the competition became so keen, that where 38 centimes 
 was the average for a hundred stitches in St. Gall for 1875, ^^^ 
 same work is done now for 25 c, and in dull times as low as 
 20 c. To meet the demand for cheap and showy trimmings, 
 necessarily arising in a country of a social organization like ours, 
 some American houses in response thereto have opened branches 
 there, and have their embroideries made to suit their trade. They 
 use cheaper materials, copy or have designed rich patterns used in 
 high-cost goods, and by reducing the number of stitches employed 
 in the more costly work obtain effects nearly similar to that, 
 but at considerably less price, and are enabled thereby to outsell 
 their competitors. They have built up an immense trade within 
 the last years, selling cheap goods at moderate prices and moder- 
 ate profits. The outcry of fraud had also been raised against 
 these importers, — the easiest explanation given to new facts, not 
 studied usually by those in possession of an old-established trade. 
 But to-morrow is the deadly foe of to-day, as to-day is of yester- 
 day. Though we all suffer decline and death in this truism, yet 
 it is the cradle of all growth and progress. 
 
 Competitive forces are so keen and active to-day that they de- . 
 molish in the briefest time the most gigantic structures of wealth 
 and trading power. To fight and obstruct them is like the fight 
 of the elephant and the locomotive. 
 
 In the case cited above the United States Treasury Department 
 had come to the aid of the old-established importing houses on 
 
53 
 
 whom the new system has had the most injurious effect. The tra- 
 ditional policy of the United States Government for the last twenty- 
 five years has been to increase prices by legislation and executive 
 action. It cannot surprise, therefore, that superficial observers 
 should only see fraud and undervaluation in any introduction of 
 goods, at prices cheaper than the official mind can explain, into 
 the trade centres of this country. My most careful inquiry into 
 the practices of the importers of embroideries has not enabled me 
 to detect more than this perfectly legitimate and natural design 
 of competitive forces. 
 
 Now, this cheapening of an article of luxury has been the cause 
 that the importations of embroideries have more than doubled in 
 value, and perhaps quadrupled in bulk, within the last six or eight 
 years— all clearly in response to the great consumptive capacity 
 of the poorer classes of our population. 
 
 The great power of absorption of textile fabrics by the Ameri- 
 can people, taken per capita, can best be shown by comparing 
 Germany's home consumption of textile fabrics with those of 
 America. I have to arrive at the result in a roundabout way. Ger- 
 many has no census enumeration of manufacturing industries as we 
 have it. In taking the value of raw material as the basis of calcula- 
 toin, we can, however, get at the relative total values of production. 
 I propose to take the English export value of the material and add 
 ICG per cent, as the cost of manufacture. This is to cover the 
 labor cost, general manufacturing expense, rent, taxes, interest, 
 and manufacturer's profit. It is somewhat in excess of our own 
 manufacturing cost of the aggregate of our textile, industries, 
 which stand as follows : ^ 
 
 Carpets . . . • • 
 Cotton goods .... 
 Mixed textiles .... 
 
 Silk goods 
 
 Wool hats, woollens, and worsteds 
 Cordage and twine 
 
 Totals 
 
 Material. 
 
 $19,000,000 
 
 113,700,000 
 
 37,200,000 
 
 22,400,000 
 
 127,500,000 
 
 9,300,000 
 
 $529,100,000 
 
 Labor. 
 
 $6,800,000 
 45,600,000 
 13,300,000 
 
 9,100,000 
 33,400,000 
 
 1,500,000 
 
 $109,700,000 
 
 Product. 
 
 $31,800,000 
 
 211,000,000 
 
 66,200,000 
 
 41,000,000 
 
 203,000,000 
 
 12,500,000 
 
 $565,500,000 
 
 Or, addition to cost of material, 72 per cent. 
 
54 
 
 The difference between this and the assumed percentage addi- 
 tion of loo will cover part of distributing expense not contained 
 in the above. Both countries being treated alike, the result will 
 not be affected very materially. 
 
 a. AMERICAN CONSUMPTION OF TEXTILES. 
 
 I. — Manufacturing, 1880 : 
 
 Cotton, 961,000,000 pounds, at 14 c 
 
 Flax, hemp, sisal, jute, etc., 100,000,000 pounds, at 8 c. 
 Silk, raw, 2,900,000 pounds, at $4.75 
 
 Clothing wool, 260,000,000 C 210,000,000 pounds), at 25 c 
 Carpet wools, 36,000,000 pounds, at 15 c. . 
 
 5134,540,000 
 
 8,000,000 
 
 13.775,000 
 
 52,500,000 
 
 5,400,000 
 
 Total $214,215,000 
 
 I count no other mill supplies, dye-stuffs, etc., but simply textile 
 raw materials in the above. These other items amount to a total 
 of $42,000,000, and would bring our material cost (all of which is 
 first count, as I have eliminated all duplications) equal to foreign 
 cost of $256,000,000, or : 
 
 Manufactured value of ....... $512,000,000 
 
 From this we have to deduct exports : 
 
 Cotton goods, cordage, etc., say ..... 
 
 Leaving .... 
 We have to add now foreign imports 
 Cotton manufactures 
 Flax, hemp, jute, etc. 
 Silk manufactures . 
 Woollen manufactures 
 
 14,000,000 
 $498,000,000 
 
 $30,000,000 
 25,500,000 
 32,300,000 
 34,000,000 
 
 Total 
 
 5121,800,000 
 
 Or, all textiles, home- and foreign-made .... $619,800,000 
 
 This represents first cost, and does not include distributive, 
 fiscal, or other expense than that included in manufacturing cost. 
 Per capita of population it represents $620 divided by 50, equals 
 $12.40 ; or, for each group of three, according to the census, it 
 equals $37.20. 
 
 ^ American vi^ools, as rendered to mills, shrinking more than German wools 
 valued at 25 c, in our account will have to be reduced 20 per cent, to bring 
 them at a par with German wools. The census figures for all wools consumed 
 in our mills, both foreign and domestic, are taken as $84,000,000. The differ- 
 ence of $32,000,000 may fairly be taken as expressing the difference in the cost 
 between foreign and American manufacturers. 
 
55 
 
 Now let us see how Germany is situated : 
 
 b. — Germany's consumption of textiles. 
 
 I. — Manufacturing, 1880 : 
 
 Cotton, 300,000,000 lbs., at 14c $42,000,000 
 
 Flax, hemp, jute, etc., 247,000,000 lbs., at 8c. . . 19,760,000 
 
 Silk, 5,100,000 lbs., at $4.75 24,225,000 
 
 Wool, 190,000,000 lbs., at 25c. . . . . . 47,500,000 
 
 Spinning materials . . .... $133,485,000 
 
 To this we have to add 20 per cent, for mill supplies, etc., as 
 
 in a, or 26,000,000 
 
 II. — Excess of imports of yarns over exports, according to the 
 Statistical Year-Book of the German Empire, 1 88 1, 
 140,000,000 marks, or 34,000,000 
 
 $193,485,000 
 As we import all our spinning materials raw, or almost wholly 
 so, while Germany uses large quantities of foreign yarns, it will be 
 seen that the addition of 100 per cent, to represent the cost of 
 manufacture is excessive in this instance. Intending, however, 
 to throw all the benefits of the doubt to the German side, as I 
 wish to show our superiority as consumers of textiles, I will not 
 go into closer scrutiny of this item. We have now, therefore, a 
 German textile production of round $380,000,000, against $512,- 
 000,000 of ours, on the basis of materials of an equality of cost, 
 and not on the basis of taxed materials and fabrics, raising Ameri- 
 can valuation. But while we have to draw on foreign supply to 
 the extent of 25 per cent, of our total product to fill our home 
 demand, Germany has a large part of her smaller product over 
 for export. 
 
 Production . $380,000,000 
 
 III. — Excess of German exports over imports of textile fabrics 
 — Statistical Year-Book, 1881 : 
 
 Exports .... marks 675,000,000 
 
 Imports . . . . . . 104,000,000 
 
 571,000,000 
 
 Clothing, millinery, etc., amounting in excess 
 of imports to 95,000,000. As about one 
 third of this sum expresses labor and 
 profits, etc., engaged in converting the 
 material, we have to deduct, say . , 35,000,000 
 
 And have left, .... marks 536,000,000 
 
 To deduct as excess of exports, or . . . . . . 127,000,000 
 
 Which leaves for consumption at home ..... $253,000,000 
 
56 
 
 The population at 45,000,000 is $253 divided by 45 equals 
 $5.62 per capita, which per group of 3 gives $16,86 for Germany, 
 against $37,20 for America.^ In other words, our higher standard 
 of living, and consequent greater productiveness, enables our 
 working people to consume by nearly two and a half times more 
 of textiles than people of a lower standard of living and lower 
 productiveness. A cardinal point in this discussion is that great 
 productiveness finds its natural equation in the greater consuming 
 power of the people. Great consuming power of the masses 
 naturally leads to great productive power. Both supplement 
 each other. 
 
 If the consuming power of the American were not greater than 
 that of the German people, then the home product and imports of 
 textiles of 1880 would be sufficient to cover a nation of 110,000,000 
 people instead of 50,000,000. 
 
 50,000,000 X 1,240 
 
 — ^ —- —^— = 110,320,000. 
 
 562 
 
 If the German people had the consuming capacity of the 
 
 American people, then Germany could find a market at home for 
 
 $558,000,000 of dry goods, instead of $253,000,000, her present 
 
 consumption. 
 
 253,000,000 X 1,240 
 
 — = 558,220,000 
 
 The wealthy and well-to-do classes of all countries stand on 
 about an equality as regards the consumption of dry goods. The 
 
 ^ This is the first value. The distributive value, of course, is considerably 
 higher. The annual outlay of the consumer for dry goods would be, according 
 to our method adopted in chapter XII., as follows in America : 
 
 As above in A $620,000,000 
 
 Duty on imported dry goods and textile fibres . . . . 67,000,000 
 
 Increased cost of domestic raw material on acct. of protection . 35,000,000 
 Increased cost on this raw material and other increase on acct. 
 
 of protection .......... 50,000,000 
 
 And 15 $^ for wholesaler's gross profit ..... 115,000,000 
 
 '• 20^ '* retailer's «« 178,000,000 
 
 And we have a gross value of ...... .$1,065,000,000 
 
 as the annual outlay of our consuming millions for dry goods. Boots and 
 shoes, and the additional expense for converting into clothing either by manu- 
 facturers, seamstress, or tailor, is not included in this. 
 
57 
 
 great divergence in our two examples is mainly due to the greater 
 purchasing power of our working people. If there were no other 
 proof, these tables alone would be sufficient to prove that the 
 well-being of the working classes is the only sure fundament of a 
 nation's lasting and solid prosperity. To the enhancement of 
 this all intellectual forces must apply themselves. Raise their 
 standard, and all else will be raised by natural gravitation. The 
 capitalist, the employer, the merchant, the professional man, all 
 in turn find increased prosperity from this greater ability to 
 consume, inherent in our working people. But this greater con- 
 suming power cannot be maintained, far less increased, by taxing 
 the dollar of the workingman,^ but, on the contrary, by the elimi- 
 nation of all taxes, public, corporate, or private, so far as possible, 
 therefrom. 
 
CHAPTER VIII. 
 
 PRODUCTION OF TEXTILES IN GENERAL — THE IMPORTANCE OF 
 THE CONVERTING INDUSTRIES LABOR-SAVING DEVICES. 
 
 Next to the agricultural interest, that of textile industries 
 is of the greatest importance commercially and economically. If 
 for no other reason than as employer of labor, it would be well 
 worthy of the most earnest attention of the statesman. In con- 
 nection with foreign affairs, the importance of the textile industries 
 is apparent at a glance when their large proportions are taken 
 into view, as illustrated by their position in foreign trade and 
 commerce. 
 
 I88I. 
 
 General exports. 
 
 Exports of textiles. 
 
 Percentage of 
 
 textiles to general 
 
 exports. 
 
 Great Britain . 
 United States . 
 Germany . 
 France 
 
 $1,123,000,000 
 884,000,000 
 715,000,000 
 658,000,000 
 
 $590,000,000 
 
 15,000,000 
 
 197,000,000 
 
 165,000,000 
 
 52i 
 
 27i 
 
 25 
 
 We are not very great exporters of textiles (our share in the 
 combined export trade of $967,000,000 of the four principal 
 commercial nations of the world not being more than $15,000,000.) 
 but as if to compensate for this shortcoming, we make up for the 
 difference as importers of textiles, where we hold the first rank : 
 
 Great Britain (1881) 
 United States (1881) 
 United States (1884) 
 Germany (188 1) . 
 France (1881) 
 
 General net 
 imports. 
 
 51,900,000,000 
 642,000,000 
 667,000,000 
 712,000,000 
 950,000,000 
 
 Imports of textiles, 
 
 including apparel, 
 
 etc. 
 
 $98,000,000 
 
 113,000,000 
 
 130,000,000 
 
 90,000,000^ 
 
 48,000,000 
 
 Percentage of 
 
 textiles to general 
 
 exports. 
 
 i7i 
 
 I2i 
 
 5 
 
 ^ Including $65,000,000 of yarns. 
 58 
 
59 
 
 Nearly one fifth of all our imports are textile manufactures, and 
 
 when we deduct from the imports of textiles all yarns, as we do 
 
 not import any, while they form a very large part of the textile 
 
 imports of Germany and France, then our imports in textiles 
 
 nearly equal the imports of these three nations combined : 
 
 i88r. 
 
 Great Britain $96,000,000 
 
 Germany 35,000,000 
 
 France 36,000,000 
 
 $167,000,000 
 
 The United States in 1884 imported, excluding yarns, $128,- 
 000,000, which is equal to the combined imports of Great Britain 
 and Germany, or nearly four times the imports of either Germany 
 or France. 
 
 THE IMPORTANCE OF THE CONVERTING INDUSTRIES. 
 
 But there is a new and very important adjunct of the dry-goods 
 business connected with this trade now, which from its magnitude 
 deserves prominent mention : that of ready-made clothing for 
 men and women. Speaking of the wholesale branch of this 
 business alone, including shirts, millinery, etc, I doubt that there 
 is any industrial branch in this country which gives employment 
 to so great a number of people. Commercially this trade is not 
 of less importance. It may safely be said that of all heavy woollens 
 manufactured in this country, three fourths at least are converted 
 by the wholesale clothing trade. It is an equally safe estimate to 
 state that of all heavy woollens manufactured for ladies' cloaks, 
 nine tenths are consumed in the manufacturing industry of cloaks. 
 Of shirtings, flannels, and muslins it would be difficult to estimate 
 proportions, but the immense quantities consumed in the ladies' 
 underwear manufacture, in that of men's shirts and kindred 
 manufacturing industries, can safely be measured by hundreds of 
 millions of yards. It is, therefore, fit to speak in this connection 
 of these industries, industries of recent growth only, the children 
 of the sewing-machine, so to speak. 
 
 The annual sales from first hand amount to fully $300,000,000, 
 all of which is consumed at home. Though it may safely be 
 asserted that this branch of the dry-goods trade is more developed 
 
6o 
 
 in the United States than in any foreign country, yet our exports 
 are nil, while the exports of foreign nations are largely composed 
 of made-up clothing, etc., hats and caps, shirts, millinery goods, 
 etc. 
 
 Exports of general 
 dry goods exclus- 
 ive of yarns. 
 
 Exports of made- 
 up dry goods. ^ 
 
 Per 
 
 cent. 
 
 Great Britain 
 Germany . 
 France 
 
 $500,000,000 
 165,000,000 
 158,000,000 
 
 $50,000,000 
 21,000,000 
 22,000,000 
 
 10 
 13 
 14 
 
 For manufacturing purposes the sewing-machine is employed 
 perhaps as universally in Germany, France, and England as in 
 America, yet it would not be a rash assertion to maintain that the 
 factory organization in the United States, including the power 
 employed, is far more complete in this branch than elsewhere. 
 Though I am not able to make comparisons from personal obser- 
 vations, yet there are many indications to prove that we use even 
 in steam-power factories far less help for a given amount of work 
 than the French do. For instance, one of the greatest French 
 authorities, M. Leroy-Beaulieu, in his book, " Le Travail des 
 Femmes au XlXme Siecle," has given some very interesting details 
 on this very modern subject. The number of basters and finishers 
 employed in a white-goods factory, preparing the materials for the 
 machine operator, sounds astonishing to an American. He speaks 
 of the co-operation of four persons for one machine as an ordin- 
 ary method of work. The forewoman of the firm of Godillot & 
 Cie., at Paris, a house employing about 1,000 people and using 
 steam as a motive power, told M. Beaulieu of ten to twelve per- 
 sons required for one machine to prepare and to finish the work. 
 He adds, however, that this is not the ordinary proportion, and 
 that every thing depends on the material and the skill of the opera- 
 tor. So far as wages are concerned, they seem liberal compared 
 with the usual rates paid for women's work in Europe. What he 
 says in a general view is attributable to the United States to a 
 greater degree yet : " When we enter into an inquiry on the influ- 
 
 ' Not counting hosiery or knit goods. 
 
6i 
 
 ence of the sewing-machine on wages, we may present this as an 
 almost certain fact ; it is indisputable that the machine-operators' 
 pay is higher than the hand-sewers' wages were ever before." 
 After one month's apprenticeship the firm of Godillot pay their 
 operators 3 francs 50 centimes, or 66 cents, a day. The firm of 
 Hayem gives 3 francs, or 57 cents, as the average, but 5 francs to 
 6 francs, or from 95 cents to $1.14, for their best operators. 
 Basters and finishers get 2 francs to 2 francs 50 centimes, or 38 to 
 47 cents, or, as the highest attainable rate, 3 francs to 3 francs 
 25 centimes, or 57 to 6^ cents for 11 hours' work in the factory. 
 These wages seem high compared to the 2 francs, or 38 cents, 
 which M. Beaulieu states as the average of female wages in Paris, 
 ■or even the higher rate of 2 francs 78 centimes, or 52 cents, the 
 average for the same class of workers, according to a report of a 
 parliamentary commission by M. Ducarre, Deputy of the Rhdne 
 Department. 
 
 Mr. Edwin Chadwick states the weekly wages of an English 
 operator as ranging from $3.84 to |6 (16 to 25 shillings). 
 
 Daul, "Die Frauenarbeit," gives $2.14 to $3.24 as the weekly 
 earnings of German machine operators. 
 
 In American white-goods factories finishers get about $5 a 
 week, while machine-operators (entirely piecework) earn from $6 
 to $8. The baster is a thing of the past. The finest work is made 
 and completed exclusively by machine work, except a few finish- 
 ing stitches by hand sewers. While in French factories an average 
 of four hands to one machine is counted, the proportion in an 
 American factory would hardly be expressed by a reversal of the 
 figures, hardly one finisher or extra hand being required to four 
 machines, and this only in the finest work, the cheaper kinds being 
 done entirely by machine. 
 
 CHEAPNESS OF AMERICAN WORK. 
 
 The manufacturers of other countries would be astonished if 
 they could look into our factories and examine how we manage to 
 produce such heaps of work at such trifling expense by the piece. 
 A look at our tool chest might explain the secret to them. The 
 hemmers, the folders, the binders, the corders, the tuckers, the 
 rufflers, the plaiting machines, the puffers, the guages, the edge- 
 
62 
 
 folders, etc., etc., are all of American invention. With their aid 
 and a proper division of labor, all the work is accomplished with 
 such rapidity and cheapness that we have no difficulty in finding 
 a market in Canada. Of course this applies only to plain work — 
 that is to say, goods made entirely of American cotton goods. As 
 there is, however, a great deal of embroidery and other fine im- 
 ported material — such as laces, fine muslins, nainsooks, etc. — used 
 in all such work, and as we have to give to the government and 
 to the fetich of protection four yards of these for every ten yards 
 used, of course this whole trade falls to the ground. 
 
 The subdivision of labor in this branch of industry, it will be 
 readily understood, is practised to the minutest details. The in- 
 vention of new machinery and improved appliances is about as 
 rapid as the American manufacturer is quick to discard his old 
 machines and make room for the new better thing, if it materially 
 cheapens the product. The Pacific Tucking Company own a 
 machine arrangement by which they can do tucking at a far lower 
 rate than manufacturers can do it in their own steam-power fac- 
 tories. The consequence is that every manufacturer sends his 
 material to the company's factory, to have his tucking done there 
 at the very small price of twenty-five cents for a hundred yards, 
 including cotton for sewing and manufacturer's profit. 
 
 Of course the efficiency of an operator counts for a great deal. 
 The highest earnings at the same rates by the piece are made by 
 those who turn out the best and neatest work. Their work needs 
 no mending or overhauling. They are the most profitable to the 
 employer, and no manufacturer who understands his business 
 would not rather have fifty operators who earn $io than loo op- 
 erators who earn $5 a week. Nor would he grudge them their 
 earnings, because they are the cheapest to him in the end, as is 
 very apparent : 
 
 1. From the saving of machinery and space. 
 
 2. From the saving in expense of superintendence and examina- 
 tion, and, 
 
 3. From the better work, assuring a higher selling price for the 
 product. 
 
 The difficulty is not so much in the insufficient earnings to afford 
 a decent living to our working classes, as in the short time and 
 
63 
 
 lack of employment. The half-time, the weeks without work 
 which follow a few months of extreme activity in each season, 
 are equally dreaded by the employers and employed. Larger 
 markets would be a great relief to both. They would add so many 
 additional weeks in the year's earnings, without in the least neces- 
 sitating any deduction of the operators' pay by the week or by the 
 piece. 
 
 The question may be raised whether our foreign competitors 
 may not possess the same means and labor-saving tools. To this 
 there is a twofold answer : First, it does not appear that when 
 machinery is used, it is made to yield the same results ; and, sec- 
 ondly, many of our most advantageous appliances and machines 
 are entirely unknown to them, as evidenced by the imported fabrics 
 of foreign manufacture. 
 
 An American manufacturer of knit shirts and drawers has lately 
 returned from a European trip. He found no difficulty in making 
 a market for his goods in London. Of course this only applies 
 to cotton goods, or goods with a very slight admixture of a cheap 
 wool ; the higher wool grades would be excluded by virtue of the 
 wool tax. He found by comparison that one of his operators on a 
 cylindrical knitting machine turns out about as much work as 
 four machines in Chemnitz, Saxony. " Of course," he said, " I 
 can afford to pay my operators a dollar against the twenty to 
 thirty cents a girl gets in Chemnitz." 
 
 The improvements we are making in every kind of machinery 
 would be a very interesting topic, but would lead me to occupy 
 more space than I intend giving to this subject at present, but 
 explains fully how our operators can make comparatively high 
 earnings coupled with low labor cost. 
 
 I will describe one machine of American invention to illustrate 
 this fully. Ladies' cloaks of plush, velvet, damassee, etc., lined 
 with quilted satin, have been very fashionable for the last few 
 years. I have examined a great many imported garments of this 
 kind, mostly of Berlin manufacture. I have examined the linings 
 and found them all quilted with the sewing-machine of a single 
 needle. We, on the contrary, use quiltmg machines, driven by 
 steam-power, which are able to quilt the material, of from eighteen 
 to thirty-six inches in width, right through. The machine has 
 
64 
 
 seventy-two needles, which all operate at the same time, and can 
 do the work in diamond, zigzag, wavy line, or escallop patterns. 
 In a yard of thirty-six-inch quilting are about one hundred yards 
 of stitching, counting the exact space over which the stitches run. 
 So far as the direct labor cost of this work is concerned, it is not 
 more than four fifths of a cent, as one operator can do a thousand 
 yards a week at a salary of eight dollars. Imagine how long it 
 would take a single-needle machine operator in Berlin to turn out 
 a thousand yards of quilting, and how much it would cost even at 
 the low wages of one mark or twenty-four cents a day ; our work, 
 besides greater cheapness, having the merit of much greater regu- 
 larity and beauty. 
 
 The machine described here does the work on the running 
 length of the cloth. It would not be appliable to the quilting of 
 petticoats, which are cut in gores to form a conical-shaped skirt. 
 Another American invention, not used in Europe either, supplies 
 this want. It is a quilting machine, where as many as thirty 
 needles, simultaneously sewing, are set so that the size of the upper 
 stitch is smaller than the lower stitch, so that the quilting comes 
 out in perfect proportion all the way up to the end of the pattern. 
 In this way a rounding is formed in conformity with the shape of 
 the skirt. Sewing cotton, wadding, etc., included, this work costs 
 from $1 to $3 a dozen according to the depth of the work. In the 
 highest-cost pattern are thirty lines of quilting, equal to sixty lines 
 of straight sewing. As there are thirty yards of straight sewing in a 
 dozen skirts, there are nearly eighteen hundred yards of sewing for 
 less than $2, or ten yards of single sewing for less than one cent. 
 Through the inventive spirit of our people difficulties are over- 
 come which at first sight seem almost insurmountable. 
 
 Another machine of American invention, of even greater im- 
 portance in the matter of dress manufacture both for men and 
 women, is the button-hole machine. Even this is not known in 
 Europe, if we may judge from the many cheap garments imported 
 from Berlin. If anywhere, it might find employment there in 
 ladies' cloaks and jersey waists, exported in large quantities to 
 America. But all button-holes which I have seen in imported gar- 
 ments are hand-made, and as to that, mostly very poorly made. 
 American-made button-holes are all machine-made and generally 
 
65 
 
 very solid and closely worked. The price by the piece is very 
 low. For a good-sized button-hole, including the sewing silk, we 
 pay now forty cents a hundred. A very recent invention is a 
 button-hole machine which automatically marks and cuts the but- 
 ton-hole, and which can do the whole work, including the silk, for 
 twenty cents a hundred button-holes. At this rate it would be a 
 very difficult task for a Berlin hand button-hole maker to compete 
 at one mark, or twenty-four cents, a day with an American but- 
 tonhole maker at $1.25 to $1.50 a day. Of not less importance 
 and ingenuity are machines which sew on buttons or stitch eye- 
 lets, etc. 
 
 But this might be followed ad infinitum^ were it my object to 
 write a history of labor instead of pointing out the difference in 
 the methods and the relative productiveness of labor in competing 
 nations. It seems to me that I have sufficiently demonstrated the 
 point, that ouv labor cost is relatively cheaper, our productiveness 
 greater, than \hat of other countries, and that price differences 
 against us ar*' not in the labor cost, but in that of the material. 
 
CHAPTER IX. 
 
 IRON AND STEEL. 
 
 No review of the industries of our country would be com- 
 plete without an inquiry into our position in the world of iron and 
 steel. Here more than anywhere else the productive methods and 
 other intermediate opportunities are of far greater importance as 
 price-makers than the accidental amount of wages paid here or 
 there as compensation for a day of labor. And yet if we were to 
 judge of the relative positions from official data, we should have 
 little else to stand upon than the often repeated quotations of the 
 weekly or yearly earnings, the kind of food consumed by the 
 working classes, etc., etc. For any thing directly relating to the 
 composition of prices of the product of labor, we should be not wiser 
 than before examining the contents of the blue books. Fortunately, 
 however, there is a great deal of outside information on this great 
 question of the price regulator of iron, by far the most valuable of 
 all metals, especially so in the cruder forms of iron and of steel. 
 
 So far as the metal is concerned, in its last stage of finish and 
 usefulness to man little need be said. It is sufficient that we have 
 conquered the world's markets for our clocks, our sewing-ma- 
 chines, our agricultural machines, and motors of all kinds, loco- 
 motives, engines, hardware, tools, etc., etc. On the materials 
 which we consume in the construction of these articles we have 
 to pay duties, if they are imported, ranging from 45 to 75 per 
 cent. The materials of American production even now under 
 the great depression in the iron and steel industries, are 25 to 
 33 per cent, higher than in England or Germany. We pay our 
 help twice and three times the weekly and, when fully employed, 
 yearly wages paid in Germany, and still we invade their own 
 country of cheap labor. The further our manufactures are re- 
 moved from the crude material and fabric, the more labor is 
 put into the work, the easier is the contest and victory for us. 
 How we do it is too well known to an American reader to require 
 
 66 
 
67 
 
 long explanation. We build machines to do the work which in 
 cheap-labor countries is mostly done by hand or with primitive 
 tools, or with tools and machines slowly progressing to a higher 
 stage. We construct special machines for each part of a new ma- 
 chine, or a tool, or a fire-arm, as soon as we find out that there may 
 be demand enough to promise a return of, and a profit on, the 
 outlay. It can never more be a question of how we can control 
 the home market. This could not be wrenched from us any more 
 than our home market in wheat by German or British wheat. 
 The question is how to extend our foreign market, how to give 
 increased employment to our machine-shops and foundries. No 
 reduction of wages would be required, as we are now able to 
 compete with the world under the great oppression of higher 
 iron and steel prices. What we need is simply a reduction in 
 the prices of crude iron to the basis of foreign iron prices, as 
 nearly as can be expected from our position as producers of 
 pig-iron, on which point I shall treat in another chapter. These 
 higher prices of the crude and raw material are now matters of 
 much graver importance than at the time when we had not suffi- 
 ciently advanced in manufacturing industries to supply our own 
 wants. Then it was simply a question with us whether we should 
 find it good economy to tax Peter to pay Paul. But now, when 
 our productive capacity has outgrown our own markets, when we 
 produce in nine months what we can barely consume in a year, 
 then we can safely say that any measure increasing the cost of ma- 
 terials beyond their normal price is taxing Peter and robbing Paul. 
 When we have arrived at such a stage of our history, then such 
 a tax system ceases to be "protection," and begins to be a direct 
 tax upon labor and capital — upon labor and the laborer's earnings, 
 pure and simple. 
 
 HOW OUR PRICES COMPARE WITH FOREIGN PRICES. 
 
 That the tax on the cruder forms of iron is a burden upon our 
 industries, will be contested by few. Even the very pets of pro- 
 tection, the Bessemer-steel producers, will admit it, not volun- 
 tarily to be sure, but when confronted by figures. It would be 
 too inconsistent to admit now that they could do without protec- 
 tive tariffs, when two years ago they grew frantic and saw destruc- 
 
6S 
 
 tion and ruin in the work of Congress reducing the duty from $28 
 to $17. But what is the condition to-day ? The British price of 
 Bessemer-steel rails is ^4 15^'., or $22.75, ^^^^ on board. The 
 American price on board cars at the mill has been as low as $26, 
 a difference of from $3 to $4 a ton. 
 
 Sure, it would cost this much alone in freight and commission 
 to land a ton of English rails and lay them down on the wharf 
 in New York, even under most depressed freight rates, if there 
 were not a cent of duty to be paid. But in slavish subser- 
 viency to the fetich of protection, the owner of the steel-works 
 insists on the continuation of the present system of tariff taxation, 
 and he willingly submits to the differences against himself as com- 
 pared to the charges of the foreign producers, as will be seen from 
 this balance-sheet : For the production of a ton of Bessemer steel 
 it takes about ij- tons of iron, according to our Census report. 
 This includes Spiegel-eisen, which has to be imported, and pays a 
 duty of $6.72 a ton. But as not more than about ^^ of Spiegel- 
 iron is used, we will call all the iron pig-iron. Now the present 
 price of Scotch pig-iron is £2 2s., or $10.50, a ton, while the 
 cheapest grade of American iron could not be brought to the Bes- 
 semer converter for less than $16 a ton. At ij tons at $5.50, 
 or i^ tons, according to Mr. J. Lowthian Bell in Iron and Steely 
 there would be a charge of $6.60 against the American manufac- 
 turer for iron and 50 cents for his fuel, if the works are well situ- 
 ated, or in all $7.10, in favor of the foreign works. 
 
 Were our raw iron as cheap as it is to the foreign steel-maker, 
 we could certainly produce Bessemer steel at $20 a ton, and un- 
 dersell Great Britain or Germany by three to four dollars, and 
 be just as well off as under present conditions, when we have to 
 bear an extra charge of $7.10 on our materials. 
 
 Under this condition of affairs, as illustrated by the hard, irre- 
 pressible facts of indisputable prices, it would be a waste of time 
 and effort to discuss with our protectionists their stock argument 
 of the higher rate of wages. True, the rate of wages is higher, 
 the earnings are higher, but the product is cheaper than anywhere 
 in the world, if the higher cost of the material is eliminated from 
 the computation of prices. This is conclusively proven by the 
 above, and needs no further comment. 
 
69 
 
 Ably supported by our protectionists, who insist, as a ground- 
 work of national prosperity, upon the necessity of an even taxing 
 all around, and thus prevent us from sending our steel rails to 
 South and North American countries, the English and Continental 
 steel-makers have entered into an agreement not to sell their rails 
 ■ below a certain price. They were compelled to this by the ruin- 
 ous competition which had forced the price down to ^4 ^s., a 
 figure slightly above the one at which we are selling rails now in 
 protected America (the material being calculated on the basis of 
 the foreign material cost). 
 
 The London Economist, in its trade review of 1884, says on this 
 topic : " Under the influence of severe competition the price of 
 steel rails was forced to about ^^4 per ton (^4 55. being the 
 lowest reported quotation) in the month of January, and immedi- 
 ately thereafter an arrangement was come to among the principal 
 makers of this country and the Continent by which the price was 
 advanced from ;^4 15^. to ;^5 5^., with an understanding that the 
 orders received were to be apportioned among the different 
 makers. So far this arrangement appears to have worked satis- 
 factorily, although the volume of business has been small, and it is 
 no secret that some large buyers are holding back in the hope that 
 this combination may be broken through, and it is certain the 
 advance in price must have tended to restrict business." We 
 might as well have our share in this parcelling out of the trade of 
 the world in steel rails, or, by a sort of Battle of Dorking, not 
 dreamed of when the book of that name was written, force in open 
 competition the trade of the Continent. 
 
 Our preventive tariff, however, insists that we shall not send 
 our steel abroad when half our steel-works are idle, and when, 
 without any tariff, not a ton of rails could be landed here even if 
 the price of foreign rails were £,4, or $3 to $5 less than the 
 present European combination price. 
 
 THE INROADS WHICH STEEL IS MAKING IN THE PUDDLE-IRON 
 
 INDUSTRY. 
 
 The changes which are constantly going on in the world of iron 
 and steel are of a nature which would hardly permit using figures 
 of prices and of methods of two or three years ago for arguments 
 
70 
 
 or conclusions of to-day. An invention, an improvement, thought 
 out in the quiet study of the scientist, is apt to throw out of work 
 and earnings thousands of helpless and industrious workers, to 
 confiscate or make worthless millions and tens of millions of 
 capital, and bankrupt and wreck a life-time of anxious, intelligent 
 leadership. Such a change has taken place and is taking place in 
 the iron trade. The rapidity with which improvement follows im- 
 provement in the process of manufacturing steel by the Bessemer, 
 open hearth, and other processes, almost defies recording. The 
 iron puddler is especially suffering from this inroad, and when we 
 examine the rapid advance in the production of steel, coupled 
 with a great decline in prices, we can well imagine that great dis- 
 placement must run parallel with this extension, and that a decline 
 in the iron industry cannot be attributed to foreign competition, 
 but must be sought in the inroads of science and thought upon the 
 domain of action and matter. Now, in this realm, no country can 
 wrest the laurel from America. If once placed on an even foot- 
 ing with her competitors, she will be the arbiter of the world's 
 markets. 
 
 TABLE SHOWING THE NUMBER OF TONS OF BESSEMER AND BASIC 
 STEEL PRODUCED BY AMERICA, GREAT BRITAIN, AND GERMANY. 
 
 
 Bessemer SteeL 
 
 Basic Steel, 
 
 
 America. Great Britain. 
 
 Germany. 
 
 1884 
 
 1 
 1,538,355 1,300,000 
 
 
 1883 . 
 
 
 
 
 
 1,654,627 1 1,553.380 
 
 970,000 
 
 1882 . 
 
 
 
 
 
 1,696,450 
 
 1,673,000 
 
 993,000 
 
 I88I . 
 
 
 
 
 
 1,374,000 
 
 1,780,000 
 
 865,000 
 
 1880 . 
 
 
 
 
 
 983,000 
 
 
 
 1878 . 
 
 
 
 
 
 732,000 
 
 
 
 1876 . 
 
 
 
 
 1 526,000 
 
 
 
 1874 . 
 
 
 
 
 192,000 
 
 
 
 1872 . 
 
 
 
 
 120,000 
 
 500,000 
 
 
 New employments, for which puddled iron has been in use 
 formerly, are found daily for steel. 
 
 "Iron rails have been displaced by those of steel, and the 
 
71 
 
 puddling furnaces thus laid idle have found employment in fur- 
 nishing plates for shipbuilders. But, whereas, in 1877 the tonnage 
 of vessels built of steel was 1,118, in t88i it had risen to 71,538. 
 Has the puddler before long to see his occupation in connection 
 with shipbuilding follow the example of the rail trade ? . . . 
 And many other, we may say most other, trades .for which 
 puddled iron is now used, in the course of time will be supplied 
 from the Bessemer converter or from the open-hearth furnaces." 
 (J. Lowthian Bell, in Iron and Steel.) 
 
 In America the iron nail is beginning to be displaced by the 
 steel nail, which can be made as cheaply as the iron nail. So will 
 a great many other industries, fence-wire making, structural iron, 
 etc., follow suit, and gradually the age of iron will be gliding into 
 an age of steel. The greater durability of steel would alone 
 suffice to make it preferable to iron, when once we have adapted 
 our mills to its production and transformation. There is, how- 
 ever, a decline of consumption to be expected from this greater 
 durability of steel. This, again, will be balanced, after perhaps 
 some transitory suffering, by the more extended use found for 
 steel than heretofore for iron — steel sleepers for railroad building 
 being one of the new uses, for instance. Many others will follow, 
 and finally, I may venture to say, steel will perhaps become a very 
 formidable opponent of our lumbermen, and prove a very benefi- 
 cent factor in the preservation of our forests. 
 
 A TAX UPON THE MATERIAL IS A TAX UPON WORK AND WAGES. 
 
 The present low prices of iron and steel prove fully that our 
 manufacturers and workmen need not fear foreign competition, 
 not under severe pressure from equally depressed markets in 
 Europe, had we free trade in all forms of Iron. Our greatest 
 pressure upon profit and wages is sustained from home compe- 
 tition in markets limited to the home demand. 
 
 I will show the disproportion of tariff charges upon iron prices 
 of to-day, when comparing them to foreign prices, and taking J3 
 as a sum covering freight and charges under very lowest freight 
 rates of dull markets. The prices are the lowest quotations of 
 the year. 
 
72 
 
 
 Lowest 
 
 Amer. price 
 
 of 1885. 
 
 English 
 price. 
 
 Ft. 
 
 Duty. 
 
 English 
 
 price in 
 
 New York. 
 
 Bessemer steel, ton 
 
 $26 00 
 
 $23 00 
 
 $3 00 
 
 $17 GO 
 
 $43 00 
 
 Bar iron, medium 
 
 
 
 
 
 
 Staffordshire, /^6 
 
 
 
 
 
 
 to £6 lo 
 
 
 30 GO 
 
 3 00 
 
 2G GO^ 
 
 53 00 
 
 Am.erican, ij^ to if 
 
 
 
 
 
 
 cents a pound . 
 
 39 20 
 
 
 
 
 
 Scotch pig-iron . 
 
 
 10 50 
 
 2 00 
 
 6 72 
 
 19 22 
 
 American No. 2 . 
 
 $17 to $18 
 
 
 
 
 
 No. 3 . 
 
 $16 to $17 
 
 
 
 
 
 Gray Forge iron . 
 
 $15 00 
 
 
 
 
 
 Now I will also show the differences between American and 
 British iron and steel prices, if the difference in the prices of the 
 material entering into each ton of product is deducted from the 
 cost : 
 
 
 
 
 V-I><-1 
 
 vm 
 
 •w 1 
 
 V- 1 1 I 
 
 
 a 
 
 
 
 
 
 
 be 
 
 (u hflcu vj 
 
 
 tc 
 
 
 <n 
 
 00 
 
 
 15 COsJJ 
 
 
 c ° 
 
 
 O-M 
 
 
 
 
 >- i^-a 
 
 
 a 
 
 S-c 
 0^ 
 
 a 
 ^.2 
 
 
 
 ased c 
 
 h over 
 
 mater 
 
 erorg 
 t than 
 tonaf 
 ting 
 es. 
 
 
 to rt 
 
 tn c3 
 
 (U 1 
 
 <U (U 
 
 (U-tf ^ 
 
 ^ en f- ^ 
 
 
 Cm 
 
 C 
 
 h bfi 
 
 h 3 
 
 i-, in 
 
 c! Ocn == 
 
 
 " 
 
 0-^ 
 
 
 
 
 
 In one ton of Besse- 
 
 
 
 
 
 
 
 mer steel . 
 
 H 
 
 2 
 
 3 
 
 $6 60 
 
 $0 50 
 
 $7 10 
 
 — $4 10 
 
 In one ton of finished 
 
 
 
 
 
 
 
 bar iron . 
 
 li 
 
 2 
 
 6 18 
 
 I 50 
 
 7 68 
 
 + 1 52 
 
 One ton of pig-iron 
 
 
 
 
 
 
 + 6 00 
 
 The nearer we come to the cruder forms, pig-iron, the nearer is 
 the price to the foreign price inclusive of duty and freight. The 
 difference here is barely $2 between the duty-paid price of foreign 
 pig-iron and American pig-iron, while in bar iron there is a differ- 
 ence of $14, and in steel rails of $17, in our favor against the 
 foreign duty-paid price ; both of these, however, have to pay $7 
 more for their pig-iron than the Scotch or English puddling iron- 
 men and steel-makers have to pay. 
 
 Most of our iron-men would object to a lowering of duties. 
 
 ^ This is the average ; the rates are from -^ to i^ cents a pound. 
 
73 
 
 They will say, if steel or higher grades of iron are nearly as cheap 
 as foreign iron, we maybe content and leave well enough alone and 
 keep foreign iron out forever. They think of the golden harvest 
 of 1879 to 1881, when prices jumped up from the lowest rates to 
 the extent of the full duty and highest freight rate, a clear 100 
 per cent, over previous prices. And this is undoubtedly the real 
 cause of their persistent opposition to a thorough tariff reform. 
 Such violent fluctuations and changes may be very pleasing to 
 the iron-men, but are sources of great annoyance and loss to all 
 the multitude of trades and manufactures who are dependent on 
 these cruder forms as their material of manufacture. Every ex- 
 porter and export manufacturer knows how difficult it is to form 
 and maintain foreign connections on account of these fluctuations 
 in the price of our raw materials. Many very profitable connec- 
 tions established in the years of 1875 to 1879 were lost in the 
 boom years, and had to be made over again after the boom had 
 spent its force and when foreign trade was again considered good 
 enough to help us out in our depression. 
 
 Staple prices may not build up fortunes very rapidly, but they 
 are a necessary foundation to a solid prosperity, and more apt to 
 give us lasting happiness and contentment than the big fortunes, 
 lost almost as quickly as they are made. Any one who knows 
 any thing of the real nature and composition of prices must be 
 aware that prices have always to fall back upon their true level, 
 and that a rapid rise will be followed by a violent fall. 
 
 Price regulation cannot be maintained under the free play of cojji- 
 petitive forces. 
 
 Now, to counteract these natural conditions, combinations to 
 hold up prices are resorted to by the steel-makers. They resolve 
 to limit the output and distribute production pro rata among the 
 different plants. But when limited demand closes accustomed 
 markets, decreased production follows as a natural consequence, 
 combination or no combination. But still every one strives for 
 the greatest share of possible business. Price regulation in 
 times of depression is therefore easier ordained than maintained. 
 Besides this, new factors will always come into play which 
 will overthrow the finest schemes and machinations of the 
 
74 
 
 combining forces. So, for instance, among all forms of iron 
 steel is beginning to crowd out iron more and more, as has been 
 said above. This is made very apparent by the last statement of 
 file American Iron and Steel Association. While all other iron 
 blanches report a lessened production, the product of the first 
 half of 1885 was 763,000 tons of Bessemer-steel ingots, an in- 
 crease of 40,000 over the first six months of 1884. The produc- 
 tion of steel rails for the same two periods however were 523,251 
 against 452,446 tons, a falling off of 70,000 tons. The difference 
 went into other manufactures for which puddled iron had been 
 used formerly, bars, plates, nails, etc. In all 300,000 tons went 
 into other uses than rails from a six-months' production. This 
 new use has been of recent date and of constant growth. During 
 the last half of 1884 the excess of the amount of ingots produced 
 over the amount of rails was 200,000 tons, or 100,000 tons less 
 than the difference in production during the first half of the 
 present year, a fact which shows the growing demand for Bessemer 
 steel for purposes other than rails. All this ought to have assisted 
 in maintaining prices, but instead of this, they have been declining 
 to the time the combination was formed. But even this powerful 
 organization will not be able to do more than pass resolutions, so 
 long as the demand is not great enough to justify an advance. 
 The present advance is only nominal, and large contractors could 
 easily place contracts at old prices. All this in consequence of 
 more works being in operation, all eager to keep running, than 
 even the newly created demand can find employment for. Com- 
 binations of this sort are like combinations of railroad lines in 
 times of decreasing business demands, they are broken by the 
 contracting parties as soon as made. They are made for the pur- 
 pose of being broken, each one thinking the others will adhere to 
 the bargain, and he deriving increased business from a concession. 
 This is the unalterable result of business depression. The reverse, 
 of course, follows times of increased activity. 
 
 But another and far more powerful factor is the other point at 
 work in price reduction, alluded to before — /. ^., the influence 
 of the mind — that is, of new inventions, on price-making. A new 
 process of steel-making, the Clapp-Griffith, is coming into use, 
 which seems to revolutionize the steel trade the same as the new 
 
75 
 
 steel-making process has neutralized a good share of the existing 
 iron plant. Aside of the cheaper cost of erection, this new process 
 has the great advantage by removing with great ease the silicon, to 
 enable the use of our Southern and other cheap American ores for 
 steel-making. It is calculated that the cost of converting pig-iron 
 into steel at the blast furnace is three to four dollars a ton. Un- 
 der such circumstances it will be readily admitted that there is 
 not much room for kite-flying in prices. Open markets for our 
 products would be a far more powerful stimulant to prosperity 
 than anxious, timid exclusion. Open markets would give more 
 expansion to the labor and profit share in the product, than even 
 sanguine observers imagine. 
 
CHAPTER X. 
 
 PIG-IRON THE COMPETITIVE ASPECT OF ITS PRODUCTION. 
 
 Pig-iron holds to-day the key to the whole situation. For the 
 last twenty years pig-iron was king. Pig-iron rules as completely 
 our national destiny as cotton was in supreme control of our gov- 
 ernment before the war of secession. The claims of pig-iron 
 have always been of the most pretentious kind. It has always 
 been considered a kind of sacrilege to inquire into the validity of 
 these claims. I have therefore endeavored to bring under com- 
 parison the territorial and other influences bearing on the produc- 
 tion of pig-iron here as well as abroad. 
 
 The principal reason advanced for the maintenance of the high 
 duties on foreign iron has been the labor cost. It has been held 
 that we can never make iron as cheaply as other nations. That 
 we have not been able in the past, is indisputably in evidence. 
 That we are making as cheap iron now in Alabama as can be 
 made anywhere in England or Germany, is a complete refutation 
 of the plea of the higher labor cost against us in the production 
 of iron. The direct labor cost per ton of pig-iron has always 
 been so small a percentage of the whole cost of iron, that it ought 
 to have been apparent from the beginning of the controversy that 
 there were entirely different causes to account for this higher 
 price than direct labor cost at the furnace or at the mines. This 
 labor cost is a given quantity at both ends of the line here and 
 abroad, easily traceable, and a comparison will show that the dif- 
 ferences, if any do exist, are of so trifling a nature that they would 
 be more than balanced by transportation expenses and charges on 
 foreign iron at ever so low a freight rate. But at the present time 
 even this price difference of labor does not exist. 
 
 Mr. Abram S. Hewitt informs me that at the works of his firm 
 the present actual outlay for labor in a ton of pig-iron is $1.40, 
 without any allowance for incidental expenses. The report of the 
 
 76 
 
77 
 
 Bureau of Statistics of 1872, page 539, gives the cost of pig-iron 
 production in the United States from 1850 to 1871. Omitting 
 the years of inflation we have the following data for labor : 1850, 
 $2.22 ; i860, $1.87 ; 1861, $1.97 ; 1863, $2.07 ; from then pro- 
 gressively rising until the maximum was reached in 1873 at $5.11. 
 But this rising scale was proportionate to a general rise in pig-iron 
 both as to selling price and wages all over the world ; Scotch pig- 
 iron being quoted in England with average wages of miners : 
 
 Price of Scotch pig-iron. Miners' wages. 
 
 In i860 at 53s. 6d., or $12.87, per day at 3s. 6d.,or$.84 
 
 In 1873 at 117s. 3d,, or 28.12, per day at 9s. I id., or 2.38 
 
 But how does the labor cost of the present time on pig-iron 
 compare to that of foreign low-priced labor ? The daily average 
 wages of men employed at the blast furnaces in Rhenish Prussia 
 in 1878, were 2s. 'j^d., or 63c. Mr. J. Lothian Bell, in " Manu- 
 facture of Iron and Steel," gives an account of a blast furnace in 
 Rhenish Prussia, which is worked by 117 men, who were paid 
 collectively ^^5,581, or ^47 14^. per head, or $228.96. Their 
 average yearly production for that year is given as 132I- tons, 
 which makes the labor cost per ton come up to $1.66. 
 
 Speaking of the output of German furnaces, Mr. Lowthian Bell 
 may be quoted. He says in this connection : " None of these 
 figures, however, are any approach to what is done by the work- 
 men at the Cleveland furnaces, and illustrates what has been 
 already observed in these pages, that well-paid and well-fed men 
 are not always more expensive to the employer than badly-paid 
 labor. As a matter of fact I have rarely found the wages on a 
 ton of the furnace produce to amount to less than what I have 
 found it to be in Cleveland." For every 20s. earned by blast 
 furnacemen in the Cleveland iron district, Mr. Bell found the 
 earnings in Westphalian iron-works to be from i2i'. to 135-. 
 
 For Birmingham, Ala., the labor cost of producing a ton of iron 
 was given to me by Mr. Lindley Vinton, President of the Vinton 
 Iron- Works, at Indianapolis, who had just returned from a trip to 
 the Southern iron district, as $1.66 a ton at the Sloss furnace at 
 Birmingham, Ala. This is a general estimate of the cost. The 
 men working at the furnace, are paid from 75 cents to $1 a day. 
 
78 
 
 but there are 200 to 250 employed at a production of 150 to 180 
 tons a day. These figures are supplied by one of the firm. Averag- 
 ing the numbers given, we arrive at this result : 225 men at 87 J 
 cents, divided by 165 tons, equal to $1.20, or at the most favorable 
 productive situation of cheap labor, a saving of 20 cents a ton over 
 labor in the Lehigh Valley. The furnace-owners, however, claim 
 $1.66 as their cost, or 26 cents above the Lehigh Valley cost. 
 
 But still, though the labor cost is nearly the same, Southern iron 
 is now the great arbitrator and leveller of prices in the Eastern 
 markets, and at a cost of $3.75 to $4.50 for transportation to the 
 North, it can be landed cheaper at Northern points than Pennsyl- 
 vania iron. 
 
 The labor cost need hardly be considered then either in iron mak- 
 ing or in mining. I could prove with equal facility that the dif- 
 ferences of cost of mining a ton of coal, iron ore, or limestone are 
 of an equally trifling nature in different countries or in the different 
 sections of this country. 
 
 The principal cause of the great price difference is the distance 
 or proximity of the iron, coal, and limestone beds, which nowhere 
 are better situated for purposes of cheap iron-making than in 
 the Southern States, and perhaps nowhere so poorly situated for 
 purposes of cheap iron-making as in most of the Northern States. 
 This close neighborhood of all elements necessary in the produc- 
 tion of iron saves a great item of expense, that of transportation of 
 either one or the other of the materials. 
 
 THE IMPORTANCE OF FREE ORE. 
 
 Now, if our iron were ever so cheap — and it can be made in the 
 South for $9 a ton — it would not be of use to us in steel-making 
 unless we have a full and free supply of foreign ore, or foreign 
 pig-iron, for mixing. The ores of the United States are too rich in 
 phosphorus for Bessemer-steel-making, and they have to be mixed 
 with fully one third of carbonaceous ores, mostly from the Mediter- 
 ranean, to make them available for steel-making. Although Great 
 Britain has an inexhaustible supply of ores, yet she has only few of 
 the character wanted for steel-making. Many mines are not 
 worked or worked to a lesser extent, while ore importation is in- 
 creasing in proportion as steel-making is extending. 
 
79 
 
 British imports of iron ore in 1884 were 2,728,672 tons, valued 
 at pf 2,111,890, or $10,100,000, being $3.70 a ton. It does not 
 cost one half that money to bring a ton of English ore to the 
 furnace, nor of Southern ore to a Southern furnace. A Cleveland 
 (England) miner earns ^s. ^d. (the rate of 1882) for a day of eight 
 hours* work, in which he mines five tons, which is about 25 cents 
 a ton. In the Southern mines near Birmingham, Ala., the mining 
 expense of a ton of 50-per-cent. ore is 21 cents, clearing 8 cents, 
 royalty 25 cents, and transportation to the furnace 25 cents, in 
 all $1.04. In Western Germany the output is about two tons, a 
 day of ten hours, per miner, for which he gets about 3 marks 40 
 (or 81 cents), which brings the labor cost up to 40 cents a ton. 
 
 Of course the labor cost varies widely with the nature and 
 depth of the mine, the hardness of the rock, and the width of the 
 vein. But even taking the highest rates paid here, it must be 
 evident that the labor cost would not materially affect our iron 
 miners were iron admitted duty free. So long as we circumscribe 
 our industries by making them dependent in their materials on 
 the cost of transporting the ores, etc., to badly situated furnaces, 
 we cannot hope of ever gaining a position of lasting improvement. 
 If we have to carry our ores from 500 to 1,000 miles of inland 
 transportation to the furnace, as we have to do with many of them, 
 where one ton at least is waste, but has to carry its transportation 
 expense all the same, of course furnaces situated that way will be 
 run down by others better situated. This is absolutely indepen- 
 dent of any foreign competition. The forcible intervention of facts 
 will bring this about. But it is wasteful to chain every industry 
 to this forced situation, of upholding prices by government's 
 action. 
 
 That the tariff on ores does not help the miner under any 
 circumstances will be seen from this, that in the last year, which 
 was a year of low prices in this country and of low production, we 
 still imported 550,000 tons of iron ore. 
 
 We imported likewise 94,000 tons of Speigeleisen, 
 and 197,000 " of pig-iron 
 
 Total . , 291,000 " at a duty of $6.80 or $1,980,000. 
 
 This tax, including that on ore, of J2, 392, 000 is laid directly on 
 
8o 
 
 the Bessemer-steel industry, consuming these foreign materials, 
 which we have to import, duty or no duty, so long as we keep on 
 steel-making. Now to lay a duty upon ores or coal under such 
 circumstances is simply barbarous. 
 
 Ores cannot be produced by any labor process. They are a 
 gift of nature. They canuot be improved or changed in their 
 nature, if they do not possess the qualities and properties required 
 in the process of working them into desired materials. The per- 
 sistent imposition of a tax in the face of all these facts is a case of 
 prevention of national activity by governmental interference. 
 
 Good ores are not so plentiful in the world that we need fear 
 being flooded with them from abroad if we removed the duties. 
 The demand for them is too great all over the world. They are 
 becoming more and more inaccessible to low labor cost on account 
 of the gradual exhaustion of the surface layers. They would 
 command the same, possibly higher prices, if we admitted all ores 
 duty free. They would be a very important addition to our own 
 working materials, which would be in so much better demand by 
 the free admission of the foreign mixing material. As it is, our 
 iron-makers in Pennsylvania and other Northern States are the 
 greatest sufferers. They are frequently dependent in their sup- 
 plies on rapacious railroad monopolies, who, if they are not con- 
 trolled by competing lines in their charges, are only too eager to 
 apply the principle of railroading, '' to charge what the traffic is 
 worth." Of what importance this feature of cheap freight rates is 
 in iron-making may be seen from this, that the iron-maker of 
 Germany has a decided advantage over his English competitor, 
 though his labor cost is higher, from the lowness of freights and 
 the almost entire absence of royalties, as the mines are state 
 property. In the Northern States the royalty at the present time 
 of depression in the iron business is about 50c. a ton. In Ger- 
 many coal and iron lands are state property. The royalty paid on 
 the former by the colliery owner is 2 per cent. ; hence if the sell- 
 ing price is $1.50 per ton the royalty would not be more than 3c. 
 Iron ore pays no royalty. The relative positions of the principal 
 iron states as to royalties in a ton of pig-iron on ore and coal is, 
 according to Lowthian Bell : Great Britain, Cleveland district, 
 78c. ; Scotland $1.44 ; Cumberland $1.50 ; Germany 12c. ; France 
 
8i 
 
 i6c. ; Belgium 30c. to 96c. In the Northern States of America the 
 combined royalties would not be much different from those of 
 Scotland. Pennsylvania iron-masters are beginning now to extend 
 their operations to the Southern mining lands, buying lands and 
 erecting furnaces. With the best modern appliances, cheap 
 mining lands, no freights so to speak, iron will be made at prices 
 as low as in any foreign country. The plan is now under con- 
 sideration to raise capital for the purpose of extending water com- 
 munication so as to enable carrying the furnace product direct to 
 Mobile Bay. This advent of cheap American iron must neces- 
 sarily break down all tariff walls, as the duty cannot possibly any 
 longer protect but only debar home iron from the extended use it 
 would find if foreign irons necessary for mixing, as mentioned 
 above, could be had as free and cheap as they can be landed. 
 
 It is with iron as with wool. Unless the ores have the neces- 
 sary requisites for making this or that kind of iron, this or that kind 
 of steel, or for mixing with other kinds of ores to produce a 
 desired kind of iron or steel, their value decreases in proportion 
 to the difficulties placed in the way of reaching the combination 
 material. Nowhere can ores be found in one spot which combine 
 all qualities required by our complex industrial exigencies. The 
 whole question of pig-iron making resolves itself into one of inter- 
 mediate charges from the mines to the furnace. Labor must not 
 be drawn into this question. It has nothing to do with it. It has 
 been shown that the labor cost of this crude product on each 
 item is nearly equal in most countries. It has been shown that 
 where labor is paid highest by the day the output is largest, and 
 that the difference is equalized thereby. 
 
 We have to discover what is different, and we have not far to 
 reach in pointing it out. Indeed we have done this above, and 
 have only to draw the final conclusion. 
 
 I. ROYALTIES. 
 
 For Germany we can trace back as far as the fourteenth cen- 
 tury, that the feudal lord holding fief under the empire claimed 
 royalty from those using the mines. Every individual could work 
 them who paid his dues, and was in turn protected in his rights 
 acquired thereby. The present German (Prussian) law seems to 
 
82 
 
 have sprung from a self-developed Bergrecht — the law governing 
 the working of mines, — based on the principle that mining-lands 
 are a trust held for the community at large, and not a piece of 
 property at the mercy of any single individual. The German law 
 makes it impossible to the speculator to capitalize the soil, print 
 shinplasters, and call them millions or hundreds of millions of 
 marks or dollars. The law makes it impossible to victimize the 
 poor innocents, who pay their well-earned money in exchange for 
 finely lithographed papers, to find out soon enough that they 
 have been the dupes of confidence operators. By the time the 
 public discovers how they have been swindled, the operators who 
 started the enterprise have usually cleared the field. 
 
 The German law makes it equally impossible to operators to 
 buy up the mining lands of a whole region for a trifling sum, and 
 clap a high tax on every ton of coal or ore that is taken from the 
 soil, as is the practice in America — a tax often higher than the 
 whole labor cost of taking the stuff to the surface amounts to. 
 Were the coal and iron lands the property of the State, a charge 
 of lo cents would more than supply the State of Pennsylvania 
 with all the revenue needed for its government, and give the 
 people iron and coal so cheaply that the manufacturers would not 
 need tremble at the great enigma which every new development 
 presents to them. In close connection with this is : 
 
 2. THE TRANSPORTATION QUESTION, 
 
 which in Germany is also largely to the advantage of the pro- 
 ducer In this country, on the contrary, the companies who own 
 the mines — Reading, Lackawanna, etc. — in most cases own the 
 transportation lines which bring the coal to the furnace. Unless 
 prevented by parallel lines, the charges are frequently so high that 
 they make profitable manufacturing at times impossible. Phila- 
 delphia, the high-school of protection, is now raising a cry of dis- 
 tress against what it calls unjust discrimination. But all protection 
 or legislation benefiting the few is unjust discrimination, and — 
 Philadelphia ought not to complain. 
 
 The high royalties and the excess of transportation charges, 
 based on excessively watered valuation of mine- and railroad- 
 property paid by some of our furnaces, would more than cover the 
 
83 
 
 labor cost contained in a ton of pig-iron. Our Southern pig-iron 
 furnaces, which are free from these grasping charges, will find this 
 to be their sole advantage. We are paying high taxes on the very 
 essence of profitable manufacture, cheap raw materials, to enrich 
 mine-owners and transportation companies. It is gross injustice 
 to tax the millions, to close the gates to foreign commerce, in 
 order to enrich the projectors of gigantic financiering operations. 
 The protective tax abolished, the force of competition would press 
 these private tax-gatherers to the wall, not labor. To an extent 
 this will ensue even now, through the introduction -of Southern iron, 
 which under intelligent and economical management can be sold 
 with a profit at $io, and at Jg even under close pressure, instead 
 of $15, the lowest price at which Northern iron (Grey Forge) is 
 sold now. 
 
 Though it cannot be used readily for Bessemer steel, on account 
 of being too rich in phosphorus, yet for merchant and other forms 
 of iron it does excellent service. It can be used with equal 
 advantage in the production of Clapp-Griffiths steel and in the 
 Thomas-Gilchrist process. 
 
 *' If the South should engage in the manufacture of Bessemer 
 steel to a greater extent than it has yet done at Wheeling it would 
 probably employ the Thomas-Gilchrist process, which requires 
 that pig-iron should be high in phosphorus, that the work of elimi- 
 nation in the converter may be completely successful ; or it would 
 employ the Clapp-Griffiths process, which is said to permit the 
 presence in the steel itself of a large percentage of phosphorus 
 without detriment to its quality, a result which is only rendered 
 possible by the rigorous exclusion of silicon." 
 
 These are the words of Mr. Swank, the Vice-President of the 
 American Iron and Steel Association, taken from the latest 
 reports. Connecting this with what was said above, we can safely 
 say that our whole protective system has outlived itself, that 
 from the highest to the lowest form of iron, from the machine to 
 the ore, every form is vitiated by parasitical undergrowth. Health 
 and vigor are thus prevented from getting the mastery in an other- 
 wise strong organism. 
 
CHAPTER XL 
 
 THE NATURE AND COMPOSITION OF PRICES. 
 
 We have now closely followed the methods of production of 
 different nations. We know the part the producing classes take 
 in the making of the product. This knowledge gained, however, 
 does not yet give a full insight into the nature and composition of 
 prices. We see prices of commodities rise and fall without any 
 great reference to tangible facts. At this present time especially 
 we live in a period of declining prices. Economists are engaged in 
 attempts to find solutions. The explanation which finds most 
 favor, is the money view of the problem. Mr. Goschen, of Eng- 
 lish fame as a financial genius, was, to my knowledge, the first 
 to take in hand the task to give an explanation of the decline 
 in prices in general and especially so in British estates. He did 
 not have to go very far in search for this explanation, as he had it 
 all ready at hand. It is the lessened output of gold. He attributes 
 the decline of prices in all commodities directly to the decrease in 
 the output of gold. Mr, Giffen, the Secretary of the British Board 
 of Trade, has lately taken up the same side of the argument. The 
 high esteem in which such writers are held, of course, elevates their 
 reasoning at once into a kind of stock-in-trade argument of writers 
 on that question in England, Germany, and America. A theory 
 so easily handled as the money theory, with all the accessories 
 which this term may imply, including fiat money, silver money, 
 gold money, interchangeable, redeemable, non-redeemable money, 
 of course is always a safe refuge for theory-builders. If history 
 however were ever studied with a view of bringing out facts, 
 it would be very hard work with builders of theories to find 
 material for their thesis. But a man enamoured with a theory is 
 never very materially interfered with if facts go against him. Mr. 
 Goschen might have found out that it took fifty years and more in 
 Europe until the very rapid addition to the world's stock of pre- 
 cious metals by the discovery of America made a perceptible im- 
 
 84 
 
■ 85 
 
 pression on prices. Mr, Goschen, however, is able to trace a recent 
 severe decline of prices to a lessened production, which is of no 
 later date than the last few years. But by actual measurement we 
 find that the decrease in the metallic output is so insignificant that 
 the effect could certainly not be immediately observable. 
 
 Before proceeding further let me state the facts as to the produc- 
 tion of precious metals during the last fifty years : 
 
 THE world's production OF GOLD AND SILVER FROM 1831 
 
 TO 1881. 
 
 
 Mulhall. 
 
 
 Gold. 
 
 Silver. 
 
 1831-40 .... 
 1841-50 .... 
 1851-60 .... 
 1861-70 .... 
 1871-80 .... 
 I88I 
 
 $140,000,000 
 
 370,000,000 
 
 1,360,000,000 
 
 1,275,000,000 
 
 1,150,000,000 
 
 100,000,000 
 
 $270,000,000 
 335,000,000 
 390,000,000 
 530,000,000 
 830,000,000 
 80,000,000 
 
 
 $4,395,000,000 
 
 $2,435,000,000 
 
 For the last ten years Mr. Burchard, the director of the United 
 States mint, sets down the world's product and that of the United 
 States as follows (millions $) : 
 
 
 
 
 Gold. 
 
 
 
 
 Silver. 
 
 
 U.S. 
 
 World. 
 
 
 U.S. 
 
 World. 
 
 1874 . . . 
 
 33-5 
 
 II3.5 
 
 1874 . . 
 
 37-3 
 
 82.0 
 
 1875 . 
 
 
 
 33-5 
 
 II3-5 
 
 1875 
 
 
 
 31.7 
 
 82.0 
 
 1876 . 
 
 
 
 39-9 
 
 114.0 
 
 1876 
 
 
 
 38.7 
 
 98.0 
 
 1877 . 
 
 
 
 46.9 
 
 114.0 
 
 1877 
 
 
 
 39-8 
 
 81.0 
 
 1878 . 
 
 
 
 51.2 
 
 119.0 
 
 1878 
 
 
 
 45-3 
 
 94.9 
 
 1879 . 
 
 
 
 38.9 
 
 108.7 
 
 1879 
 
 
 
 40.8 
 
 96.1 
 
 1880 . 
 
 
 
 36.0 
 
 106.4 
 
 1880 
 
 
 
 39-2 
 
 96.7 
 
 I88I . 
 
 
 
 34.7 
 
 103.4 
 
 1881 
 
 
 
 43-0 
 
 102.0 
 
 1882 . 
 
 
 
 32.5 
 
 98.7 
 
 1882 
 
 
 
 46.8 
 
 IIO.O 
 
 1883 . 
 
 
 
 30.0 
 
 94.0 
 
 1883 
 
 
 
 46.2 
 
 II4.2 
 
 Totals 
 
 
 
 377-0 
 
 1,084.0 
 
 Total 
 
 s . 
 
 
 408.8 
 
 957.0 
 
86 
 
 The recent decline in the production of gold from the largest, 
 the decade of 185 1 to i860, is 28J per cent., and from that of the 
 decade immediately preceding, only i6f per cent. In estimating 
 the future yield not sufficient weight is given to new fields likely 
 to be opened, or to larger returns of old ones under more scientific 
 management. So, for instance, Russia, which gave to the world 
 during the fifteen years of 1868 to 1882 at the average rate of 
 ;£'4, 4,00,000 a year, produced in 1881 ;£^5, 940,000. What Central 
 and South America, traversed by railroads and diffused with new 
 life-blood by thus opening its immense tracts, would yield to the 
 future, is merely conjecture. As a matter of speculation it can 
 have no bearing on the present situation. I simply make mention 
 of it to show that a gold famine is not necessarily threatening us 
 even as a remote possibility. So far as the present situation is 
 concerned as a price-making factor it will be seen that the last- 
 named year has given us (in one single year) two thirds as much 
 gold as was the output of the whole decade of 1831 to 1840. 
 
 It must be remembered all the time that gold is not eaten up 
 like the year's crop of food, or worn off like our fibre products. 
 The gold stock is cumulative, and the findings of to-day are simply 
 an addition to the findings of yesterday. 
 
 Hence the slight decrease in gold production does not give the 
 careful economist any right to base general conclusions upon the 
 fact, the more as the possible influence upon prices, if such were 
 to be admitted for the sake of the argument, is more than counter- 
 balanced by increased silver production. Silver, I may be an- 
 swered, is demonetized in many countries, and thus a severe strain 
 is put on gold. Silver, however, is still the great circulating 
 medium of the world, excepting Great Britain, Germany, and the 
 United States, where, in the latter country, it is held as a reserve 
 for a limited amount of paper circulation. Silver is held at the 
 present day as part of the reserves of the banks of France in about 
 equal part to gold, two to one of gold of the Bank of the Nether- 
 lands, in like proportion by the Bank of Austro-Hungary, and of 
 Russia to a similar degree. But even in Great Britain the esti- 
 mated amount circulating is in but a slightly smaller proportion to 
 gold than in 1848. Mulhall estimates the ratio of gold to silver 
 for 1848 as ;^55,ooo,ooo to ;£^ 11,000,000, and for 1880 at ^^124,- 
 
87 
 
 000,000 to ;^ 19,000,000. All of which is to prove that silver is 
 yet a very important factor as a circulating medium, and that its 
 effect upon prices has to be counted likewise when the delinquency 
 of gold is being taken to task. 
 
 It will thus be seen that the production of precious metals for 
 the twenty years previous to 1850 was $1,100,000,000, and for the 
 thirty years succeeding 1850 was $5,500,000,000. Besides all this 
 vast increase of treasure we have yet to take into account the in- 
 crease in the excess of paper money not covered by specie reserves, 
 estimated for 1850 as $450,000,000, and for 1880 as $2,150,000,- 
 000, an increase in round numbers of $1,700,000,000, which gives 
 us a grand total increase in circulating mediums of say p£^ 1,500,- 
 000,000 sterling or $7,500,000,000 in round numbers. There is 
 another factor to be remembered : the extension of the banking 
 system, through which checks are assuming the functions of 
 money, making it so much less of an indispensable necessity ; 
 stocks, bonds, bills of exchange, etc., all serving as money in 
 effecting clearances between nations and nations, and checks ful- 
 filling the same mission between individuals of the same nation to 
 a far greater degree than at the time gold diggings were begun in 
 California and Australia. But I will waive this point and simply 
 return to our money increase, equal in amount, dollar for dollar, 
 to the increase of the foreign commerce of all Europe and the 
 United States twice over, and behold, what an inflation we have 
 before us ! Ought not, according to the price theory of Mr. 
 Goschen and his disciples, prices be away up in the skies ? They 
 would be rather so if prices were only partially as much influenced 
 by the amount of gold or silver as is usually assumed to be the 
 case. But how does the case stand ? How do prices compare 
 with say fifty years ago, when precious metals were indeed scarce 
 and less by $7,000,000,000 (less what has been destroyed by 
 abrasion, etc.) than at the present time ? Is there any foundation 
 for any of these time-honored assumptions ? Have we not before us 
 a repetition of the puzzle which upset so many scientific minds at 
 the time, namely, why water does not increase in weight when fish 
 are put in ? It will be remembered that a very plain matter-of- 
 fact man proved the puzzle to be a hoax. Experiment proved that 
 the weight was actually increased to the extent of the weight of the 
 
fish put in the dish of water. So it will be found with the nature 
 of prices when we trace them back, say fifty or a hundred years, 
 and compare them with recent periods. Most people are satisfied 
 if they look back a few years, note the change which has taken 
 place, ascribe any reason readily at hand as the explanation of a 
 phenomenon which may perhaps be as transitory as the real cause 
 be remote from the one selected. If such explanation once has 
 gained currency among the scribes, we hear the thing repeated with 
 the same amount of thought as is expressed by the Buddhist priest 
 in turning the crank of his prayer-mill. Many causes given in 
 explanation of phenomena are borrowed from reasoners whose 
 deductions might have been correct emanations of the data of 
 their day. But how wonderful have been the changes wrought by 
 the development of our age ? How great the miracles created by 
 the inventive genius of man ? The work of ages is moulded in 
 years. Distances are absolutely neutralized, and the whole world 
 as to neighborhood is like adjoining villages of a hundred years 
 ago. And with all this thought-like exchange of intelligence and 
 commodities made possible by this rapid advance of events, the 
 slow and measured philosopher is still satisfied if he can patch up 
 a threadbare theory so as to serve in covering a world-wide change. 
 Most reasoners fail so formally in their science because they lose 
 sight of the fact that phenomena are born and fed by a multitude 
 of causes, which have to be explained and understood in order to 
 give weight and substance to deductions and theories based thereon. 
 Without this, let us say, universality of investigation, false theories 
 arise which may dazzle perhaps for the moment, but they will dis- 
 appear after having created the mischief which necessarily and 
 absolutely must follow in their wake. 
 
 Now as to prices, how do they appear under the glare of com- 
 parison ? We have to take English prices and make allowance 
 for fiscal changes so as to bring them as near as possible to a net 
 basis. Take wheat, the most important commodity and the one 
 most reliably quoted. From 1765 to 1791 (previous to the time 
 when a new corn law was enacted putting a heavy duty on wheat 
 when below 50^.), for a period of twenty-five years, wheat averaged 
 53^. the quarter, the lowest and highest prices being ^6s. in 1779 
 and 59^-. in 1773. I will not bring here the years following before 
 
89 
 
 the abolition of the corn laws, when prices were ranging from 605. 
 to I20J'. Artificially advanced by corn laws, and under the influ- 
 ence of famine, war, and scarcity, they would not be properly 
 brought in here. I will commence with 1845. The average 
 prices of five-yearly periods were as follows : 
 
 1846 to 1850 
 
 I85I " 1855 
 1856 " i860 
 I86I " 1865 
 
 52J. 
 
 1866 to 1870 
 
 S6s. 
 
 1871 " 1875 
 
 SS-s-. 
 
 1876 " 1880 
 
 48J. 
 
 1881 " 1884 
 
 48J. 
 42s. 
 
 In December, 1884, wheat was 30^. 5^. This price was not 
 reached for the last one hundred and twenty-four years. 
 
 This, however, takes us back into the period of low prices, 
 which ruled in England for fifty years back of 1764. But even 
 then we only count ten years when wheat was ^os. or under. 
 From 1646 to 1715 the average price of wheat was 44s. the quarter. 
 
 Mulhall compares prices of 1845-50 and 1883 of sixteen articles : 
 
 Coffee 
 
 100 
 
 82 
 
 Leather 
 
 100 
 
 139 
 
 Copper 
 
 100 
 
 80 
 
 Meat 
 
 100 
 
 145 
 
 Cotton 
 
 100 
 
 89 
 
 Sugar 
 
 100 
 
 60 
 
 Cotton-cloth 
 
 100 
 
 92 
 
 Tallow 
 
 100 
 
 III 
 
 Cotton-yarn 
 
 100 
 
 100 
 
 Tea . 
 
 100 
 
 76 
 
 Flax 
 
 100 
 
 68 
 
 Timber 
 
 100 
 
 108 
 
 Iron . 
 
 100 
 
 79 
 
 Wheat 
 
 100 
 
 77 
 
 Lead 
 
 100 
 
 83 
 
 Silk 
 
 100 
 
 126 
 
 The price of raw silk has gone down considerably since 1883. 
 A smaller demand, caused by changing fashion, has brought this 
 about. A price comparison of to-day with 1847 is given on page 
 
 91- 
 
 Meat and leather are the only articles which show a marked 
 
 increase. Timber and tallow come next, but the rise is so small 
 that, in comparison to declines ranging from eight to forty per 
 cent, on ten of the most important articles of consumption named 
 in the above list, they can be passed over, as not very mate- 
 rial, for briefness' sake. The great rise in meat, however, has to 
 be dwelt upon more fully. In perhaps no other article of food 
 have the fields of supply been so extended beyond those in exist- 
 ence before the advent of the era from which our inquiry starts — 
 that previous to the great gold-finds and the abolition of the corn 
 
90 
 
 laws in England, — as in that of meat. From America and Australia 
 immense stores are shipped to Great Britain both in live and dead 
 meat. 
 
 Canada and the Argentine Republic are getting more and more 
 into line as purveyors of the British markets, not mentioning 
 the many countries of Europe, who are still shipping not unim- 
 portant quantities to foreign, mostly English, markets. The 
 imports for 1883 are, by the Board of Trade reports : 
 
 In living animals ...... ^11,978,000, whereof the 
 
 United States supplied ;i^3,700,ooo 
 
 And in dead meats ...... ^16,202,000, whereof the 
 
 United States furnished ^4,500,000 
 
 Or a total of ;,^28, 180,000 or $140,000,000 
 
 The total importation in 1868 was ;£6, 000, 000 or about ^ of the 
 present time. The extent meat production has taken in the 
 United States during the last ten years is so great, that figures 
 compared with those of previous decades would make those of 
 say 1850 appear quite out of proportion, even if divided pro 
 capita. Outside of the $100,000,000 we export in living animals, 
 provisions, and lard, all our immense production is consumed at 
 home. If the consuming power were not greater than say 1850, 
 meat prices would be much below those of that period, while on 
 the contrary they show a very formidable increase. The con- 
 suming capacity of the poorer classes has risen in the ratio in 
 which the quantity produced has increased beyond the ratio of 
 increase of population, multiplied by the price increase. If the 
 consuming power and producing power had kept even step, the 
 price would not have increased. The price increase shows dis- 
 tinctly that the consuming power is still ahead of the supply. The 
 indications, however, are that production will keep on increasing, 
 and that price decline of meat will be chronicled shortly as surely 
 as the wheat decline is now one of the staying forces. 
 
 The consumption of meat in France has nearly doubled since 
 1840, while it has more than trebled in Great Britain. This 
 makes it certainly clear that the rise in the price of meat, etc., is 
 due to the perfectly natural cause of supply, insufficient for the 
 greatly increased demand, and not to causes adduced by subli- 
 mated theory. 
 
9T 
 
 The increase in the price of leather and tallow can be traced to 
 the same source : greater power of consumption of the working 
 classes. The working classes are far better supplied with boots 
 and shoes than in the former price-era mentioned above. 
 
 Comparing prices given by Tooke, (" History of Prices ") for 
 1847, with price quotations of my own research from ruling 
 (English) market quotations, we find the average to be this : 
 
 In the two periods. 
 
 1847. 
 
 1885. 
 
 Copper cakes, per ton ..... 
 
 $458.00 
 
 $238.00 
 
 Bar iron, per ton 
 
 
 
 
 
 48.00 
 
 31.00 
 
 Lead, pigs, per ton . 
 
 
 
 
 
 gi.oo 
 
 52.00 
 
 Tin, bar, cwt. 
 
 
 
 
 
 24.00 
 
 16.00 
 
 Cotton, American, lb. 
 
 
 
 
 
 0.12 
 
 o.iof 
 
 Silk, Italian 
 
 
 
 
 
 5.00 
 
 4-30 
 
 Refined sugar, bonded, cwt. 
 
 
 
 
 
 7-68 
 
 3-84 
 
 Tea 
 
 
 
 
 
 0.60 
 
 0.30 
 
 Wool, English . 
 
 
 
 
 
 0.48 
 
 0.22 
 
 Wheat, quarter . 
 
 
 
 
 
 16.75 
 
 7.92 
 
 Wheat, bushel . 
 
 
 
 
 
 2.10 
 
 0.99 
 
 [I have changed English money quotations to American, as the reader is more 
 used to them.] 
 
 There is no doubt that if all other things had remained the 
 same, the enormous increase in circulation would have brought 
 up prices to a greatly higher basis. That prices are not higher, 
 but far below the price era of 1845 to 1850 — not by any means 
 one of high prices, — makes it certain that other things did not 
 remain the same, but underwent such changes that thereby not 
 alone were obliterated all effects of the large additions to the 
 existing mediums of exchange, but that they contributed largely 
 to a still lower scale of prices from that ruling when money was 
 comparatively a scarcity. I have simply mentioned raw materials 
 and food products. Manufactures, it is well known, are on the 
 whole cheaper yet, as the application of labor-saving machinery 
 has been even more potential in price-making in this line of 
 human industry than in the production of simpler articles. That 
 we had intermediate periods of higher prices, is a known fact. 
 They were, however, traceable to causes which by their presence 
 and disappearance always proved to a certainty that it was not 
 
92 
 
 the plethora of money which caused price increase. It would be 
 useless to count them up here. The wars of the last thirty years 
 were such terrific destroyers of property and commodities that they 
 alone would suffice to explain to a very large measure the oscil- 
 lating nature of prices. But that the tendency has been a down- 
 ward one, instead of a rising one, is so clearly proven by the 
 above that it would be a waste of words to add any thing further 
 to the proof. That this has been so, proves sufficiently, that there 
 are far more powerful factors at work in price-building than cur- 
 rency or the precious metals. It remains now to mention what in 
 effect are the main tentatives in the construction of prices, when 
 it will be seen that nothing less than the whole social fabric is 
 tributive to and dependent on price-making and its factors. 
 Though there may be a multitude of causes, yet we can only be 
 concerned in those of a general and therefore permanent influence. 
 
 1. Land and its tenure, including natural forces. 
 
 2. Production and its methods. 
 
 3. Transportation. 
 
 4. Taxation and laws. 
 
 5. Currency and money. 
 
 6. Interest and capital. 
 
 7. Distribution and profits. 
 
 That prices and price-making influences cannot be considered 
 from the narrow standpoint of a community or a nation, but of 
 the world at large, can be illustrated by two examples. The 
 doom of English and Irish landlordism is a foregone conclusion, 
 pronounced and decided upon, not by a committee of foolish 
 terrorists and dynamiters, but by the peaceable settlers upon free 
 and cheap lands at 5 to 10,000 miles distant from the manorial 
 estate. I may be answered that this detrimental influence is 
 caused by the free access of foreign grains to British markets, 
 which the Prussian junker is trying to overcome by laying a tax 
 upon foreign food supplies. The possibility that the British peo- 
 ple will ever submit again to a tax on their food in order to secure 
 the permanency of a land-holding aristocracy is not very promis- 
 ing. Farming, it can be shown, is as profitable in England as any- 
 where, provided it be freed from its encumbrances. But, like any 
 other industry, farming cannot carry two profits when competing 
 
93 
 
 nations are satisfied to carry it on with one profit. The plea of 
 the small rate of interest which the rent yields to the landlord — 
 2 J- per cent. — we need not consider, knowing that valuation has 
 been more than quadrupled, and a rent of 2J per cent, is to-day 
 one of 10 per cent, on the valuation of fifty years ago, and on the 
 product of the same acre. 
 
 Mr. Wm. J. Harris, M.P., has lately contributed to the London 
 Economist a paper on '* The Saleable Value of the Produce of 
 English Farms." He gives a detailed account of the value of 
 English farming. 
 
 VALUATION OF THE SALABLE PRODUCE OF THE SOIL OF ENG- 
 LAND AND WALES. 
 
 "Wheat — Bushels. 
 
 England 2,530,711 acres, at 
 
 29 bushels . . . 73,390,619 
 
 Wales . . 77,611 acres, at 
 
 24 bushels . . . 1,862,664 
 
 2,608,322 75,253,283 
 
 Deduct seed (2 bushels per 
 
 acre) .... 5,216,644 
 
 Barley — 
 
 England . . 1,808,408 
 
 acres, at 35 bushels . . 63,294,280 
 Wales . . 129,856 
 
 acres, at 29 bushels . . 3,765,824 
 
 70,036,639 at \s. 3^. per bushel ;^ 14, 882, 785 
 
 67,060,104 
 
 Deduct seed (3 bushels per 
 
 acre) .... 5,814,792 
 
 Oats- 
 England . . 1,620,264 
 
 acres at 44 bushels . . 71,291,616 
 
 Wales . . . 249,204 
 
 acres at 35 bushels . . 8,722,140 
 
 61,245,312 at 4J-, per bushel . 12.249,062 
 
 80,013,756 
 
 Deduct seed (4 bushels per 
 
 acre) .... 7,477,872 
 
 72,535,884 at 2^-. Sfl'. per bushel . 9,670,195 
 
 Beans, peas, and rye — 692,000 acres, at £"1 per acre . . . 4,844,000 
 Straw used for feeding cattle, or sold, from 6,400,000 acres, at £i 
 
 per acre, the rest used on the farm as bedding and thatch . 6,400,000 
 
 Turnips . . . 1,542,612 acres, at ;^6 per acre . . 9,255,672 
 
94 
 
 Potatoes . . . 401,000 acres, at £11 per acre 
 Mangolds . . . 302,069 acres, at ^ 9 per acre 
 
 Carrots . . . 12,080 acres, at £\o per acre 
 
 Vetches, trefolium, etc. 389,000 acres, ^\. £ ^ per acre 
 Clover, sainfoin, and j 1,755,000 acres for hay, £^ per acre 
 
 rotation grasses 
 
 Permanent pasture 
 
 Hops, flax, etc. . 
 Feed on 
 
 \ 1,100,000 acres not for hay, £2 per acre 
 4,523,000 acres for hay, £/i, \qs. per acre 
 
 10,060,301 acres not far hay, ^^2 ioj. per acre 
 
 71,000 acres, computed at 
 8,000,000 acres waste land, 3^. per acre 
 
 Orchards, market gardens, etc., about 246,000 acres, ;i^20 per acre 
 
 Deduct for feed of work horses used solely in agriculture, 
 847,592, at ;^20 per horse per annum 
 
 4,812,000 
 2,934,541 
 120,800 
 1,945,000 
 8,775,000 
 2,200,000 
 18,103,500 
 
 25,150,775 
 2,000,000 
 1,200,000 
 4,920,000 
 
 129,463,330 
 
 16,951,840 
 
 112,511,490 
 . 6,500,000 
 
 ;^I 19,000,000 
 ;^I 19,000,000 
 
 To this must be added from other sources 
 
 Which gives a total product of . . . 
 
 From this gross product ..... 
 
 Are to be deducted first, the following burdens : 
 
 Local rates applying exclusively to agricultural 
 land in England and Wales, including edu- 
 cation rate, whether it be levied by volun- 
 tary rate or otherwise .... 
 
 Tithes 
 
 Land tax, redeemed and unredeemed 
 
 Income tax, schedule B, deducting abatements, 
 say ........ 
 
 Legacy, succession, and probate duties affecting 
 agricultural incomes ..... 
 
 Stamps on deeds affecting agricultural incomes 
 
 2. Labor of 870,000 agricultural laborers, not 
 
 counting 40,000 women, averaging 15s. a 
 week ....... 
 
 3. Incomes from the value of land, according 
 
 to schedule A, of the income tax 
 
 Leaving the farmer's income 
 
 besides what means of support he derives directly from the farm for himself 
 and family. 
 
 From this sum ;^4,ooo,ooo must come off for manure purchased, 
 besides all outlays for repairs, living, etc., while ;£^ 43,000,000 go 
 to the small number of landholders. This showing is a plain but 
 unanswerable argument against the possibility of maintaining the 
 English land system any longer. With all the love of the British 
 people for the show business, and their willingness to pay a big 
 round sum for the privilege of possessing a great titled nobility^ 
 
 ;^7,ooo,ooo 
 
 
 4,000,000 
 
 
 1,700,000 
 
 
 480,000 
 
 
 900,000 
 
 
 500,000 
 
 
 ;^I4, 580,000 
 
 
 34,700,000 
 
 
 43,000,000 
 
 92,293,000 
 
 . . • 
 
 ;^27,000,00O 
 
95 
 
 the price they pay annually is rather in excess of the value of this 
 rare piece of archeological curiosity. The current of undisturbed 
 competitive forces is all drifting toward the interest of the pro- 
 ducing classes. The free access of foreign-grown food into Great 
 Britain, through the means produced by modern invention, must 
 necessarily lead to the distribution of the income of class A, for 
 the benefit of the farmer and the agricultural laborer. The com- 
 petitive forces of the near time are so severe, that not more than 
 one profit can maintain where formerly two and three were charged 
 on the product. 
 
 That the influences referred to, which the outside world exer- 
 cises upon prices, cannot be guaranteed against by taxation and 
 protection for any long period, can be shown by my second exam- 
 ple, that of the woollen industry in the United States. 
 
 Here we had a system of protective taxation spun out to the 
 finest point by all parties interested in the production of wool 
 and in the manufacture of woollens ; yet there is no industry in 
 the country so completely disorganized and disrupted as this 
 dearest of all our nurslings. There were twenty years of the full 
 application of the artificial device. But what are the results ? The 
 infant is absolutely confined to the nursery, while foreign manu- 
 factures are brought here, increasing in value and bulk every year. 
 The price-making factor operates so powerfully in Australian 
 wools that wools outside of the United States have become so 
 much cheaper than our wools that the fabrics made of foreign 
 wools in foreign countries can be landed cheaper, duty paid, in 
 this country than we can make them here. In consequence, not 
 only American woollens but American wools have been becoming 
 a drug in our markets, all because the sun and the soil and other 
 conditions are more favorable to sheep-farming in Australia and 
 the Plata country than in the United States. 
 
 A clear understanding of the nature and influence of the men- 
 tioned causes on prices must make it apparent that those nations 
 are most favored in the exchanges of the world who give these 
 influences fullest consideration. A nation who would make every 
 one of the named subdivisions subservient to the great idea that 
 every burden on any of them is a burden upon the whole, arid 
 principally upon the laborer who has to carry them all, would be 
 
96 
 
 the first to reap the fruits of unexampled prosperity of all its 
 individual members. Every commodity offered for exchange 
 contains all the elements of prices. Every price-making element 
 is contained in the smallest unit as well as in the whole quantity of 
 national production. Wherever people are oppressed, it is through 
 the uneven distribution of burdens on either one or the other or 
 on all the price-making elements, and inquiring into their bearing 
 upon prices must therefore be the first task of political economy, 
 which above all must be one of the exact sciences or nothing. 
 
CHAPTER XII. 
 
 THE TRUE VALUE OF OUR ANNUAL PRODUCTION THE SHARE 
 
 THE DIFFERENT CLASSES HAVE IN ITS DISTRIBUTIVE VALUE, 
 
 The question may be raised : What is the possible limit of the 
 earning capacity of the individual, if all employed in useful 
 and gainful labor were remunerated alike in money of the day, 
 upon the basis of valuation and productiveness of the year 1880 ? 
 To arrive at a clear understanding upon this, is the more import- 
 ant, in view of the vague estimates upon which so much of the 
 criticism of the day is based, and from which so much agitation is 
 evolved. 
 
 The estimates vary so widely, from $500 to ^2,000 per capita of 
 those employed in productive enterprises, that it is well to estab- 
 lish a correct, scientific basis of earnings. No country is better 
 equipped to give full answer to an inquiry of this sort than the 
 United States. No country possesses so complete a system of 
 census enumeration of necessary data to this end as the United 
 States. It is true much may be desired yet, to supply greater cor- 
 rectness, but the lines covered are the ones necessary for our 
 inquiry, and are covered by our government only. England's 
 census does not give valuations of earnings or production. Com- 
 plete as the Board of Trade reports are in other directions, they 
 do not cover any thing pertaining to this column of national 
 statistics. 
 
 Germany's national statistics are of recent growth, and are less 
 complete than the British. France has at various times under- 
 taken government inquiries by commissioners appointed to that 
 end, and gives us in general outlines enough to make comparisons, 
 though in classification and fulness much is wanted to bring the 
 information up to the work of the United States. We have intro- 
 duced a system of inquiry which, in parallel lines of decades, 
 brings facts and figures to bear upon the situation, which, rightly 
 
 97 
 
98 
 
 understood and cleared from dross, ought not to leave room for 
 much doubt or vagueness in the unit of earnings per capita of 
 those occupied in useful occupations, or of the total of the earn- 
 ings of the nation. 
 
 To arrive at the per-capita share, we have to establish first the 
 sum-total of national earnings. This we can do by taking the dif- 
 ferent divisions of census compilations. In adding them up, 
 taking each as given, many commit the grave error to use the 
 same figures two and three times over and again. Freed from all 
 repetition of the same items, we have the following data as a 
 basis : 
 
 (i) Agricidtiire. — The census figures give " estimated value of 
 all farm productions (sold, consumed, or on hand,) for 1879" as 
 $2,213,402,564. 
 
 Mr. J. R. Dodge, the " Statistician of the Department of Agri- 
 culture, and Special Agent of the Census for the Collection of 
 Statistics in Regard to Agriculture," is, however, not satisfied with 
 this estimate, which, by a tabulated statement, he raises to 
 $3,726,331,422, farm value. I do not wish to enter very closely 
 into the scrutiny of the items. The difference, however, is so 
 beyond all possibility, if the census estimates are to be considered 
 of any value whatsoever, that a few critical side glances are 
 important. 
 
 First, as to valuing the produce. I will show the excessiveness 
 by a few examples. By placing side by side the valuation which, 
 according to Mr. Dodge, is the value on the farm, and the average 
 export price for the year, given by the Bureau of Statistics, which 
 includes all the transportation expense from the farm to the sea- 
 board, all the charges and profits of middlemen, storehousing, 
 etc., we shall see at once the unreliability of these '' official 
 figures." The humorous side of it is apparent, when we state 
 that Mr. Nimmo, the late chief of the Bureau of Statistics, fully 
 endorses the estimate of Mr. Dodge, while at the same time he 
 gives to the public his official statement of the average Export 
 Prices of Domestic Merchandise, 
 
99 
 
 1879. 
 
 Farm value, according 
 
 to Mr. Dodge and 
 
 Mr. Nimmo. 
 
 Export price, according 
 to Mr. Nimmo. 
 
 Wheat, per bushel 
 Indian corn, per bushel 
 Oats, per bushel 
 Rye, '• 
 Cotton, per lb. 
 Wool, 
 Tobacco " 
 
 $1,068 
 .471 
 .297 
 .646 
 .099 
 .29 
 .078 
 
 I have selected for this comparison the most important of our 
 agricultural products, which give food and raiment to our people, 
 and besides this furnish the bulk of our exports. Fancy the 
 happy position of our farmers if their product were not alone 
 shipped to the farthest home market free of all charges of trans- 
 portation, but that every middleman and his assistants, the banker 
 and merchant, were all engaged in a sort of benefit society to the 
 agricultural population, and to that end not alone throw in all 
 their labor free of charge, but besides give him, out of some 
 unexplained fund, a bonus above the export price as below, all 
 for the privilege of being permitted to help " building up the 
 country," as in these items : 
 
 Excess of farm price over export price, according to Dodge and 
 
 Nimmo. 
 
 Oats, per bushel 
 
 Rye, 
 
 Tobacco, per lb. 
 
 $0,063 
 .116 
 .007 
 
 Excess of export price over farm price, as per Dodge and Nimmo, 
 
 Wheat, per bushel ...... $0,117 
 
 Indian corn, per bushel , . . . . .075 
 
 Cotton, per lb. ...... . .001 
 
 Wool " 01 
 
 Or imagine the nearness of the millennium to our rural friends, 
 if their wheat could be brought from Dakotah or Illinois to New 
 York and put on board the steamer, free of all other charges, for 
 ii-fV cents, and Indian corn for 7 J- cents a bushel, and receive the 
 balance in cash. 
 
 Wool, as is well known, in the condition in which we market it 
 would in 1879, averaging the different grades, not have brought 
 
lOO 
 
 28 cents in New York ; far less in the Western States and Terri- 
 tories. The whole concoction is so absurd that it surely would 
 not have been produced had it not been to serve a political end 
 then in view, which, fortunately for the country, was not reached. 
 I have to scrutinize the figures, however, as they have been made 
 the basis of calculations of wealth and incomes by economists of 
 national reputation, who might have been expected to throw more 
 critical acumen on this matter. Unless the foundation of our 
 estimates of wealth-creation is correct, all our superstructures 
 will be as built on sand. 
 
 An item of the table of Mr. Dodge, introduced to swell his total 
 to $3,700,000,000, is meat production on farms — $800,000,000. 
 We have to strike out the most of it. The feed of -cattle, of hogs, 
 etc., is raised on the farm, and counted as farm produce. We 
 cannot count it twice, first as root crops, hay, and corn, and then 
 again as meat. 
 
 It has been doubted by writers of note and experience on agri- 
 culture whether meat-raising on farms is any more profitable than 
 the raising of the feed. To this, however, must be brought in 
 remembrance, that we, at least, could not obtain the price of feed 
 or of other agricultural produce we get now, were it not for the 
 prodigious quantities we consume in stock-raising. But this is 
 the whole advantage our farmers gain from our great meat pro- 
 duction. Nothing more. They cannot sell their corn, which has 
 been fed, nor count both as profit after one has been expended on 
 the other. All the extra profit which can be considered is that 
 derived from stock fed by grazing, which is not counted in the 
 enumeration of annual produce, and I believe butter and cheese 
 production fully compensates for that, and the annual increase 
 and betterment of stocks. 
 
 This latter item, however, would be more than covered by 
 $200,000,000. Farm produce consumed at home and other small 
 crops, perhaps overlooked in the census estimate, might be taken 
 at $300,000,000, to my mind a liberal estimate, which $500,000,000, 
 added to the $2,200,000,000 of the Census Bureau, would be the 
 total possible extent to which we could stretch the figures of the 
 value of our farming products. From our examination of the 
 valuation, etc.* we should judge the estimate of the Census Bureau 
 
lOI 
 
 not to be much below the mark ; but not to appear over-sceptical, 
 
 I will allow for agriculture 
 
 $2,700,000,000 
 To this we must add : 
 
 (2) The annual product of meat and wool produced on ranches 
 
 and the product of fisheries ...... 80,000,000 
 
 (3) Mining production ........ 200,000,000 
 
 (4) Product of forestry . . . . ' . . . . 400,000,000 
 
 (5) Gas a7td petroleum pi'oduction ...... 40,000,000 
 
 (6) Manufacturing ........ 2,000,000,000 
 
 Which gives a grand total of . . . . . . $5,420,000,000 
 
 Manufactures are usually taken from the census reports as 
 representing $5,300,000,000. But we have here a recapitulation 
 of the cost of materials over and over again, and an addition of 
 the same items frequently three and four times, and call it national 
 production. I hold that the whole material cost has to be de- 
 ducted from the account to the extent of $3,396,823,549, leaving 
 about $2,000,000,000 to represent the cost of manufacture. This 
 includes the labor cost, profit, rent of buildings, freight charges to 
 and from the mill, superintendence, interest on loans, and all the 
 incidental charges on manufactures. The cumulative nature of 
 these enumerations may be illustrated by a few examples : 
 
 First Example. — Ready-made Clothing. 
 
 Material counted (i) in clothing. 
 " (2) in cloth. 
 " (3) as wool or cotton. 
 
 Second Example. — Machinery. 
 
 Material counted (i) in machine. 
 
 " (2) in bar iron or steel. 
 " " (3) in pig-iron. 
 
 " " (4) as ore or coal. 
 
 Third Example. — Crackers, 
 
 Material counted (i) in crackers. 
 (2) in flour. 
 " " (3) as corn. 
 
102 
 
 Proof of Multiplication. — First Example. 
 
 Coat . 
 Material = cloth 
 
 Material = wool 
 
 Census product 
 
 represented by 
 
 sales price. 
 
 $5 
 3 
 
 Material. 
 
 Labor. Expenses and 
 
 I profit. 
 
 $1 
 
 + 
 
 + 
 
 = $5 
 
 Now, for a thing whose final market price charged by the pro- 
 ducer is $5, the census enumerates $9 worth of products by this 
 system of progressive arithmetic. The only legitimate material 
 cost is the last item, wool or cotton, and the labor and other ex- 
 pense attending each stage of manufacture, as will be seen from 
 the above arithmetical proof of a correct price compilation. The 
 wool and cotton item has been counted once before under the 
 heading of agriculture. It ought not to reappear under manufac- 
 ture. It stands, then, that only columns three and four are legiti- 
 mate counters in the aggregation of values by manufacturing 
 industries. 
 
 Second Example. 
 
 Machine 
 
 Bar iron and steel 
 
 Pig-iron 
 
 Ore and coal 
 
 Census 
 product. 
 
 $7 
 
 5 
 3 
 
 Material. 
 
 Labor. 
 
 ExptMisos and 
 protit. 
 
 $16 
 
 Here our product in the census grows up to 16 by means of 
 cumulation, while in reality it is sold by the manufacturer for $7. 
 Ore and coal, and labor of manufacture, constitute the only 
 legitimate price elements. Ore and coal, having been counted 
 under the heading of mining, ought to be taken out entirely. 
 Nothing remains then but $6 to represent manufacturing in an 
 item which is now counted as %\(i in our manufacturing industries. 
 
 I need not go into details about my third example. Everybody 
 
I03 
 
 ought to know that in flouring grain is the main item, and, adding 
 a very slight advance for labor and profit, constitutes the cost of 
 flour. Yet our census counts up $505,000,000 as flouring, giving 
 $64,000,000 as the addition to $441,000,000 of material or grain, 
 all of which has been counted in agriculture. 
 
 I have pursued the same analysis in the other items, from 
 which I have deducted all materials, which were contributed by 
 manufacturing industries, where they had been enumerated before. 
 
 To this annual product of $5,420,000,000 ought to be added 
 transportation expense. But as this is usually paid by the re- 
 ceiver and charged upon his goods in the gross profits which he 
 gets from his customers, it would be a multiplication, if I added 
 them here. A great part of the annual product passes from the 
 producer directly through the hands of the retail merchant into 
 the hands of the consumer. But the jobber has also a large share 
 in the distribution of products. If I allow, therefore, two mediums, 
 the jobber and the retailer, to handle the whole annual product, as 
 middlemen between producer and consumer, I believe, I shall 
 more than cover all possible distributive expense laid on the 
 product. As we have already the producer's profit in all of the 
 above items and a great share of other charges, such as transporta- 
 tion, etc., in the item of manufacture, it will be seen that we 
 shall have three profit charges, which is probably all the surcharge 
 which can properly be assumed as constituting the distributive 
 value. The jobber's average profit at 15 per cent, and the re- 
 tailer's average gross profit at 20 per cent.,Vill probably be ad- 
 mitted to cover the total of the possible cost of distribution from 
 the producer to the consumer. 
 
 We will then have a product of ..... . $5,420,000,000 
 
 Wholesale profit 15 per cent. ...... 813,000,000 
 
 Retailers' "20 " . . . . . . . 1,247,000,000 
 
 Add for labor of buildings, dwellings, railroads, etc. . . 200,000,000 
 
 And we have ........ $7,680,000,000 
 
 as the final value of our annual production, paid by the consumer. 
 From this gross product draw their sustenance, according to the 
 census, in round numbers, 17,000,000 persons engaged in useful 
 occupations. Dividing 17 into 7,680 we have $452 as the share 
 of each worker male or female, if each one had an equal share, 
 
I04 
 
 taken from the values of the census year, a year of high prices and 
 full employment. As there are 5,000,000 engaged in ministerial 
 work, professional and other services, deriving their incomes from 
 the 12,000,000 engaged in price-making occupations, the unit 
 would be 7.680 divided by 12, or $640. Incomes, however, are 
 very unevenly distributed. 
 
 Let us examine the various groups who divide this income. 
 
 Group i. — Agriculture. 
 
 Agriculture employs 3,320,000 laborers, to whom, with their fami- 
 lies (each group represents three eaters, of whom only one can be 
 counted as an earner, according to the above census figure), we 
 allot $250 per annum. The average monthly money wages I 
 count as $12, or J144 per annum, and for rations, or board, etc. 
 $106, making a total of $250. 
 
 Multiplied by 3,320,000 this gives us ..... $830,000,000 
 Farmers, gardeners, etc., 4,350.000 at $450 .... 1,957,000,000 
 
 Or $2,787,000,000 
 
 which would about consume the total representing the farm value 
 of agricultural products, including ranch meat and fisheries. 
 The farmer has to pay out of this share his township and local 
 taxes, as well as the improvements on his farms, and having be- 
 sides a larger family than his hired help, to support (the latter 
 mostly being unmarried), it must be seen from this, that the 
 majority of farmers are not in much better condition than the 
 farm laborer. The greater incomes of better situated farmers 
 necessarily reduce the share of the smaller farmers in our average. 
 
 Group 2. — Manufacturings 
 
 Gas, petroleum, and mining production, $2,240,000,000, em- 
 ploys, as per census enumeration, 3,000,000 persons. The annual 
 income of each is, according to the census, about $350, represent- 
 ing a total of $1,050,000,000 with about 250,000 establishments to 
 share in $1,190,000,000 or $4,760 each of apparent profit. It is, 
 however, well known that gross profits and real profits are so far 
 apart that the latter is frequently eaten up by expenses of all sorts, 
 though the former make a formidable item in the gross balance 
 sheet. 
 
I05 
 
 For details on this subject I refer to the report of Carroll D. 
 Wright, of 1883, and his tables on profit and earnings. 2,440 
 establishments were examined, and the number of minus profits, 
 /. e.j loss, where a respectable gross profit is shown on the debit 
 page, is remarkable, though not astonishing to men engaged in 
 active business. 
 
 Out of this gross profit a great number of earners are paid, who 
 are classified in Group 3, Trade and Transportation, such as 
 laborers, book-keepers, clerks, salesmen, etc., engaged by manu- 
 facturers and paid out of their gross profits. 
 
 This covers our $2,240,000,000 of Group 2. 
 
 Forestry^ $400,000,000, I have taken from Mr. Nimmo's and 
 Mr. Dodge's estimate. Very excessive indeed. The material of 
 our lumbering establishments is not quite $200,000,000. Other 
 products of our forests are not of sufficient value to stretch this 
 sum in any possible way to the above sum. But we need not be 
 too close, in consideration of the many items we have already been 
 compelled to deduct from the great columns of wealth, produced 
 by addition and multiplication, and we can proceed to 
 
 Group 3. — Trade and Transportation, 
 
 This swallows up our $2,060,000,000, which I have set down as 
 the gross profit of retail and wholesale traffic. Out of this gross 
 sum all the railroad charges for freight, rent, clerk-hire, etc., con- 
 tained in Class 3 have to be paid. This class contains 1,810,000 
 persons divided as follows : 
 
 Draymen and railroad employes 
 
 Porters, etc. . 
 
 Sailors .... 
 
 Clerks and book-keepers 
 
 Peddlers 
 
 Saloon-keepers 
 
 Traders and Dealers . 460,000 
 
 Bankers and Brokers . 33,000 
 
 480,000 
 
 at 
 
 $500 a 
 
 year 
 
 
 
 or $ro a 
 
 week . 
 
 . 
 
 = 
 
 $240,000,000 
 
 120,000 
 
 at 
 
 $500 a 
 
 year 
 
 = 
 
 60,000,000 
 
 6c, 000 
 
 
 500 
 
 
 =: 
 
 30,000,000 
 
 530,000 
 
 
 600 
 
 
 r= 
 
 318,000,000 
 
 50,000 
 
 
 600 
 
 
 = 
 
 30,000,000 
 
 70,000 
 
 
 700 
 
 
 = 
 
 50,000,000 
 
 493,000 
 
 
 2,700 
 
 
 = 
 
 1,330,000,000 
 
 1,800,000 = $2,058,000,000 
 
 The amount left over for buildings, etc., is distributed between 
 mechanics, masons, bricklayers, carpenters, builders, etc., con- 
 tained in Class 3, which has 3,800,000 persons, while we have 
 
io6 
 
 only 3,000,000 as directly engaged in manufacture and mining. 
 Many of these, however, draw their subsistence from all the four 
 groups of employments footed up in the census of occupations. 
 
 Group 4, — Professional and Personal Service. 
 
 4,074,238, as also of Class 3, bakers, blacksmiths, boot- and 
 shoe-makers, tailors, seamstresses, dress-makers, butchers, cabinet- 
 makers, carpenters, machinists, painters and varnishers, plumbers, 
 etc., not engaged in manufacturing, and consequently not enumer- 
 ated above in Class 2, — in all nearly 5,000,000 persons have to 
 draw their earnings from the other three classes of 12,000,000 
 people directly engaged in the price-making employments. To 
 the support of 1,075,000 domestic servants the wealthier classes 
 only contribute, while 3,000,000 to 4,000,000 of other employ- 
 ments draw their support from all classes alike. Government 
 employes, soldiers, teachers, and all those supported by taxation 
 are, as well, deriving their incomes from the poor as from the rich. 
 
 We cannot follow up this inquiry into all the details which it 
 would be necessary to do, if it were my object to show what each 
 individual's, or groups of individuals', income is from the general 
 product, a task anyhow impossible, as so much of one man's in- 
 come contributes to that of another. My object is to draw an 
 outline of the possible national income, its distributive value, and 
 to show the share each of the price-building elements — not those 
 employed in turn by these, but those directly engaged — have in 
 the distribution of products. Not only have they to support from 
 their incomes all professionals, etc., but the taxes supporting the 
 government of the nation, the State, and township, — all have to 
 be paid from the gross sum stated. These taxes amount to 
 ^600,000,000 annually, and are therefore (being mostly indirect 
 taxes laid on consumption or real estate, meaning rent) a direct 
 tax on every dollar consumed. Taking the annual saving, con- 
 sisting of increase in buildings, railroads, improvement in lands, 
 and what is carried over from year to year in movables, beyond 
 the stock of the previous year, to be $700,000,000, or 10 per cent, 
 then our consumption is round $7,000,000,000, and the tax thereon 
 represents a clean 8 per cent, on every dollar consumed. 
 
 The savings not being taxed, and they fall mostly to the rich, 
 
I07 
 
 it follows that the working classes, eating up most of their income, 
 find it more to their interest to scrutinize their government very 
 closely than the richer classes. The reverse, of course, is usually 
 observed as a rule in society. But the reversion of natural con- 
 ditions and philosophical truth has from time immemorial been 
 one of the clever pieces of legerdemain by which the poorer 
 classes have been made to carry the heaviest burdens. 
 
 Taking the annual income of the working classes to be in 
 round numbers $350 (including all incomes up to $600, in our 
 tabulation), we shall find each contributing $29 — out of his $350 — ■ 
 for purposes of general taxation, interest on public debts, etc. 
 This is not yet taking into account the tax he has to pay on his 
 subsistence of home-made articles, increased in price by virtue of 
 our protective tariff, such as woollen goods and iron, and which 
 we may, at times of low prices, set down as $20 for each bread- 
 earner, representing always three persons. In times of high prices 
 this amount is greatly enhanced. The importance to the working- 
 man of a low rate of taxation and of cheap prices cannot be too 
 earnestly impressed. 
 
 Having outlined a more solid basis than we had heretofore, 
 on which earnings and wealth creation can be computed, we can 
 proceed now to the consideration of more detailed conditions of 
 social physiology, inasmuch as I intend to show by what agencies 
 the lower level of earnings, expressed now by $350, of the work- 
 ing classes, is gradually made to approach the possible limit, now 
 expressed in our figures of $640. The latter expresses all that is 
 produced, all that is divisible, all the distributive value of produc- 
 tion contributed by the price-making elements of society. 
 
CHAPTER XIII. 
 
 THE WAGES QUESTION. 
 
 Like the scarlet thread through the cordage of the British navy, 
 the wages question runs through every problem of modern econ- 
 omy. The essence of discussion among free-traders and protec- 
 tionists is the greater amount of money earnings of the work- 
 ing classes under their respective leaderships. I doubt not that, 
 to-day at least, the defenders of both systems are sincere in their 
 belief that their doctrine is conducive to the greater comfort, the 
 higher earnings, and better living of the working classes. I doubt 
 not that both are sincere in their declaration that the advance- 
 ment of the working classes is the main issue in the war for the 
 propagation of their idea. No other issue would be worth fight- 
 ing for. No one could do successful fighting for any other cause 
 than that of the elevation, the advancement, of the working 
 classes. It is the tendency of the age. It is in the air we 
 breathe, the thought we think ; consciously and unconsciously 
 every thing tends towards this goal. Unconsciously, individually 
 and collectively, we are all working in this age of reason and 
 machinery toward this one great humanitarian aim : the liberation 
 from misery and want, the creation of a new civilization, where 
 the enjoyment of the comforts of life, the intellectual blessings of 
 genius, all the great gifts of nature, will come within the reach of 
 the poor disinherited, who have vainly striven for thousands and 
 thousands of years. I know that in this I am greatly at variance 
 with most of our " friends of the laboring man," and I shall take 
 great pains to prove my position by an array of facts, which will 
 be recognized as conclusive, in establishing : 
 
 That the results of modern development in the industrial world 
 have been : 
 
 1. An increasing productiveness of labor. 
 
 2. A reduction of the proportion which labor bears to material 
 in the price of any given product. 
 
 108 
 
I09 
 
 3- To cheapen thereby the cost of the product, and conse- 
 quently to increase its accessibility to the masses. 
 
 4. To increase largely the money earnings of the working 
 classes ; and 
 
 5. To reduce the hours of labor. 
 
 All these postulates have developed in a progressing ratio during 
 the last hundred years, and if we have lost sight of these facts or 
 were led to a contrary belief, it is only to be ascribed to this, that 
 most investigators are satisfied in reviewing a period of brief dura- 
 tion. Ten, often five years, suffice to build theories upon, which 
 would not stand for a moment were the period of observation of a 
 wider range. We live in our generation, but mankind lives on. 
 But even the life of a generation is marked by economic waves of 
 longer or shorter range, of greater or smaller undulation. It 
 would lead to wrong impressions were we to judge of a whole 
 nation's life and welfare simply from the narrow view which the 
 low descending wave permits to the observer, himself wrapped in 
 its declining sweep. We have to take a broader view and find 
 out whether we have not gradually advanced, even when we be- 
 lieved we had declined, 
 
 I. — INCREASING PRODUCTIVENESS OF LABOR. 
 
 To what extent the productiveness of labor can be improved, if 
 supported by rational and scientific methods, can best be illus- 
 trated by a brief glance at the development of agriculture in 
 modern times. Agriculture being the most rudimentary of all 
 industries, has of course always been singled out for the full dis- 
 play of " natural laws." No " law " has ever been such a godsend 
 to the theorizing mind as the Malthusian law. It is the most 
 perfect lullaby wherewith to sing to sleep the discontent of the 
 poor disinherited agricultural laborer of England — in fact, the 
 laborers of all countries. The population having the tendency to 
 increase in geometrical proportion, while the products of the land, 
 the land being limited, increases only in an arithmetical progres- 
 sion, of course there is always a pressure of population upon sub- 
 sistence. Nothing could be plainer than this. This being a law 
 of nature, the next law of nature to evolve from this is preordained 
 poverty and want. This is equally plain. No contradiction is 
 
1 lO 
 
 possible. No use trying to fight and rebel against a law of 
 nature. 
 
 It would be stale to point out that, under the free play of inter- 
 communication with all countries lying inside the most extended 
 peripheric lines from a given centre, this law of nature could not 
 show its force until all arable soils of the world had come under 
 its sway. But I wish to point out the most important disturbance 
 which this " law " has to undergo from the increasing productive- 
 ness of the soil itself of the land to which this "law" was intended 
 to apply. Thorold Rogers, by his very searching investigation^ 
 has been enabled to show that in the fourteenth century eight 
 bushels was the common average crop of an acre of wheat, from 
 two bushels of seed-corn. This scanty supply necessitated that 
 the sparse population, of two and one half millions, brought all the 
 arable land under cultivation, " Lands now retain unmistakable 
 traces of ancient agriculture, which have not borne grain crops in 
 the memory of man. The exigencies of mediaeval society left 
 little ground which could be available for cultivation for park and 
 pleasure " (" History of Agriculture and Prices in the Fourteenth 
 Century"). This continued to be the case nearly up to the be- 
 ginning of the eighteenth century. Then, under the introduction 
 of rotating crops, new vegetables, root crops, etc., and a better 
 system of husbandry, the proceeds of national husbandry rose to 
 such an extent that at Edward Young's time the population of 
 7,500,000 had enough and to spare for export. The product of 
 an acre of wheat had risen to twenty bushels. Now, within one 
 hundred years from the time of this great traveller and writer on 
 agriculture, the proceeds of an acre of wheat are nearly thirty 
 bushels — 29.85 for England and Wales in 1884 ; from the same 
 soil more than twice as large a population finds a more bountiful 
 subsistence than one hundred years ago. 
 
 1884. 
 
 England and Wales. United Kingdom. 
 Home production. Importation. 
 Cwts. of 112 lbs. Cwts. of 112 lbs. 
 
 Cereals, beans, peas, etc. . 
 
 Potatoes ...... 
 
 112 million. 
 56 " 
 
 128 million. 
 2i " 
 
 
 168 " 
 
 i3oi " 
 
Ill 
 
 A population of 27,000,000 has to feed on this supply, foreign 
 and home-grown. The imports are for the United Kingdom of 
 Great Britain and Ireland, and whatever is imported for the con- 
 sumption of Scotland and Ireland has, therefore, to be deducted 
 from the above total of importations. Vegetables and kitchen- 
 gardening are not included, and it will, therefore, be seen that it 
 is an easy estimate to say that fully 16,000,000 could be supported 
 on the soil of England to-day against not 8,000,000 one hundred 
 years ago, and 2,500,000 five hundred years ago. I have little 
 doubt that under a thorough reform of the land laws of Great 
 Britain and Ireland, and a granting of home rule to the latter 
 kingdom, the United Kingdom could to-day largely increase its 
 productiveness, and could obtain by far the greatest part of its 
 subsistence from its own soil, not speaking of the unknown quan- 
 tity of increasing productiveness. 
 
 Nor are we confined to English agricultural history alone in 
 this proof. France offers the same example. 
 
 Under Henry IV., in the beginning of the seventeenth century, 
 France contained about 12,000,000 of inhabitants. The average 
 yield per hectare was eight hectolitres, or a little over nine bushels, 
 to the acre, including seed-corn. In the beginning of the eigh- 
 teenth century, in the latter days of '^ le Roi Soleil," Louis XIV., 
 France had a population of 19,000,000, and Moreau des Jonnes 
 ("Etat Economique et Social de la France," 1589 to 17 15), in re- 
 viewing the figures of Vauban's tables, proves that the production 
 of cereals per hectare had not increased at all within one hundred 
 years. The average proceeds were nine bushels to the acre. 
 Nearly every third year was a year of scarcity and suffering. It 
 is calculated that in the seventy-five years of the Sun King's time 
 there were twenty-eight years of scarcity and famine. The misery 
 of the people was extreme. Myriads of beggars and starving 
 people, driven from their homes by the merciless tax-gatherer, 
 were wandering through the lands. At the present time the 
 average product per acre of wheat is i^^ bushels, or about 66f 
 per cent, in excess of the period mentioned above. Her popula- 
 tion is 38,000,000, or just double what it was in Vauban's time. 
 Her cereal production of all kinds in 1700 was 93,000,000 hecto- 
 litres or 263,000,000 bushels ; in 1880 it was 284,000,000 hecto- 
 
112 
 
 litres or 804,000,000 bushels (not counting at all her dairying, 
 vegetable culture, and kitchen-gardening, wine-growing, etc., in 
 which her average exports amount to more in value than her 
 average imports in grain), against an import of grain and flour 
 averaging for the ten years from 187 1 to 1880 50,000,000 bushels 
 a year. It will be seen from this that if France concentrated all 
 her agricultural energies on the food supply of her own people, 
 she could support with ease fully twice as many people, upon a 
 reduced territory, as she found hard work to keep above the 
 starvation point one hundred and fifty years ago. 
 
 If we divide her production per capita, then in 1700 her 19,000,- 
 000 had TSyf bushels of grain each, while in 1880 the share of 
 each of her 38,000,000 of inhabitants was 211^9- bushels. 
 
 From all of which it would appear that it is not well to be bound 
 to a theory or a so-called natural law. It is better to look to facts 
 than to remain closed up in our rent theories and wage-fund laws, 
 etc. For while Dame Theory is knitting her strait-jackets and 
 leading-strings, new-grown facts are springing up all around her, 
 and in the vigorous exercise of their youthful powers are apt to 
 destroy the most carefully guarded flower-beds of the old lady. 
 
 Another law, boldly taken hold of by writers who are very out- 
 spoken in their condemnation of tlie Malthusian theory, is that of 
 
 DIMINISHING RETURNS. 
 
 Closely examined, the two look so much alike that they 
 might be taken as twin brothers. Of course if man were to 
 be considered in the same light as a yoke of working oxen, or a 
 hand turning the sod with a stick, as our remote ancestors 
 have done, we would be justified in speaking of diminishing 
 returns. If the soil is left to itself and its own recuperative 
 power, if it is treated with the careless indifference in which our 
 Western wheat-growers extract all that is in the soil, without 
 thinking of returning what is taken from it, to keep up or increase 
 its fecundity, then of course we may speak of diminishing returns. 
 Man, however, is a wonderful being. When hard pressed by 
 necessity, and left free to exercise his faculties^ little doubt needs be 
 entertained, that he will even turn the niggardliness of nature into 
 a prize from the lottery of life. 
 
113 
 
 How true this is can be seen from the example of Holland. 
 There we have a soil almost conquered from the sands of an ever- 
 aggressive sea by incessant toil and watchfulness of man. The 
 soil has been worked from generation to generation with a loving 
 care, which can only be understood by those who have been 
 reared among the small farmers of Europe, the tillers and owners 
 of their land. Now this little stretch of land, cultivated since 
 times immemorial, of the extent of the State of Massachusetts, 
 raises food enough for a population of four millions of people and 
 has enough to spare for export. Her net imports, in agricultural 
 produce, consist of cereals to the amount of 50,000,000 florins, 
 against exports of 75,000,000 florins in garden and dairy produce 
 animals, etc., as in 1880. True, if she had to raise all her bread- 
 crops on her own soil, she might not do quite so well. But by a 
 free exchange of her surplus in such produce in which she has 
 acquired certain facilities, against the produce of more juvenile 
 soils, requiring less labor and outlay, the whole population is sup- 
 plied with food over and above their needs. If the intensity of 
 farming, ruling in the Low Countries, made possible by peasant 
 ownership alone, were applied to the far more fertile soils of 
 England, Wales, and Ireland, not speaking at all of Scotland, then 
 a population of 28 to 30 millions could be easily supplied from 
 her own fields and gardens, while now nearly one half of her 
 needs has to be brought from abroad. The same system of farming, 
 adopted in the United States, would feed 1,000 millions. We do 
 not hear that the Dutch have no moving room. We do not hear 
 as much of over-population, as in far less densely settled countries. 
 We do not hear very much of poor-rates and agricultural paupers, 
 but quite on the contrary of wealth and comfort. Emile de 
 Laveleye says on this subject, in '^ Systems of Land Tenures in 
 Various Countries " : 
 
 ''The farmers of Holland lead a comfortable, well-to-do, and 
 cheerful life. They are well-housed and excellently clothed. 
 They have china-ware and plate on their side-boards, tons of gold 
 at their notaries, public securities in their safes, and in their 
 stables excellent horses. Their wives are bedecked with splendid 
 corals and gold. They do not work themselves to death. On the 
 ice in winter, at the Kermes in summer, they enjoy themselves 
 with the zest of men whose minds are free from care. 
 
114 
 
 '* The Belgian farmer is neither as rich as his Dutch neighbor, 
 nor can he enjoy himself in the same way. * 
 
 " One reason is, that in Holland the townspeople have at all 
 times invested their savings in public securities, and generally left 
 landed property alone, which has thus remained entirely in the 
 hands of the peasants. In Belgium, on the other hand, the nobility 
 have retained large landed property, and capitalists have eagerly 
 bought estates. Hence a good many of the peasants have become 
 mere tenants. 
 
 " To meet with the ideal of rural life, you must look for it 
 in Groningen or in Upper Bavaria." 
 
 Per contra on farming results in Belgium under opposite condi- 
 tions of tenure, we copy the following picture irom. the pen of the 
 same authority : 
 
 *' In my work on the rural economy of Belgium, I made some 
 reflections on the indifferent condition of the Flemish peasants, 
 from which inferences adverse to peasant proprietorship have 
 been drawn. These conclusions are erroneous. The evil arises 
 from the fact that there are too few small proprietors and too 
 many small tenants among the peasantry of Flanders. 
 
 " If you want to find a district in Belgium where the peasants 
 are well-off, you must go to Lower Luxembourg. There the land 
 is divided into a multitude of peasant properties, almost the whole 
 of which are cultivated by the owners themselves. Each of these 
 manages his own farm, and under the shadow of his fruit-trees en- 
 joys in security what he earns by the sweat of his brow. This is 
 a kind of rural opulence, due not to the possession of large capi- 
 tal, but to the abundance of rural produce. No one is rich 
 enough to live in, idleness ; none so poor as to suffer from want. 
 The peasant there is also more enlightened than in Flanders, and 
 more independent. The situation is nearly the same as that of 
 the Canton of Grisons in Switzerland. 
 
 " A few figures will indicate the contrast between Flanders and 
 Luxembourg ; in each of the two provinces I shall select a normal 
 district. 
 
 ** Flanders. — District of St. Nicholas, in the Pays de Waes. 
 
 " Farm laborer's wages, i franc lo centimes per day. 
 
 " Area of land worked \ ^^ 7"^?' ^'jf ^^^Jf «=• 
 
 ( by tenants, 31,089 
 
115 
 
 " Luxembourg. — Bouillon and Paliseal district. Farm laborer's 
 wages, 2 francs per day. 
 
 " Area of land worked \ ^^ owners, 10,699 hectares. 
 Area ot land workea | ^^ tenants, 1,563 
 
 '* Thus, in lower Luxembourg, the laborer's wages are double 
 what they are in Flanders, although most articles of food, es- 
 pecially meat and potatoes, are cheaper in the former province." 
 
 But not only are farm laborer's wages influenced by the tenure 
 of land, but all other wages seem to be higher or lower, according 
 to the predominance of peasant proprietorship on the one hand, 
 or tenant farming and the prevalence of large estates on the other 
 hand. The German census figures recently published bring a 
 tabulation of German landholdings in the different states and 
 provinces of the empire. If we compare this with the general average 
 of wages ruling in the same parts, as prepared with great care by 
 the Statistical Society, Concordia, we can see at once that there is 
 substantial proof for this assertion. Not to weary the reader with 
 a great display of figures, I shall only express the percentage 
 which large holdings, comprising 100 hectares or 247 acres and 
 above, bear to the general acreage of farming land, the number 
 of such holdings, and the general average of weekly wages : 
 
 TABLE OF LARGE LANDHOLDINGS IN GERMANY AND OF WEEKLY 
 
 WAGE-RATES. 
 
 
 
 
 
 Average rate 
 
 States and provinces 
 
 No. of holders 
 
 Average hold- 
 ings of each 
 
 Percentage of 
 large hold'gs 
 
 of weekly 
 wages of 
 working men 
 employed in 
 trades and 
 
 of the empire. 
 
 of 100 hect's 
 and above. 
 
 of this class 
 in hectares. 
 
 to the v^rhole 
 acreage. 
 
 
 
 
 
 factories. 
 
 Silesia 
 
 2,880 
 
 349 
 
 34-5 
 
 '$2.32 
 
 East-Prussia . 
 
 3,199 
 
 292 
 
 38.6 
 
 2.85 
 
 Posen 
 
 2,724 
 
 400 
 
 55-3 
 
 2.90 
 
 Pomerania . . . 
 
 2,876 
 
 390 
 
 57-4 
 
 2.68 
 
 Brandenburg . . 
 
 2,202 
 
 370 
 
 36.3 
 
 2.90 
 
 Saxony, kingdom . 
 
 758 
 
 184 
 
 14. 1 
 
 2.74 
 
 Anhalt 
 
 174 
 
 305 
 
 35.0 
 
 2. 98 
 
 Saxony, Prussia . . 
 
 1,573 
 
 292 
 
 27.0 
 
 3.04 
 
 Hesse-Nassau . . 
 
 287 
 
 170 
 
 6.7 
 
 3-15 
 
 Braunschweig . . 
 
 165 
 
 242 
 
 17.9 
 
 3.28 
 
 Bavaria .... 
 
 594 
 
 163 
 
 2.3 
 
 3.22 
 
 Hanover .... 
 
 623 
 
 187 
 
 6.9 
 
 3.20 
 
 Baden 
 
 83 
 
 160 
 
 1.8 
 
 3.38 
 
 Alsace, Lorraine 
 
 394 
 
 146 
 
 7.3 
 
 3.62 
 
 Wurtemberg . . . 
 
 141 
 
 161 
 
 2.0 
 
 3.60 
 
 Westphalia . . . 
 
 276 
 
 177 
 
 4-8 
 
 3.65 
 
 Rhenish Prussia 
 
 246 
 
 146 
 
 2.7 
 
 3.70 
 
ii6 
 
 2. REDUCTION OF THE PROPORTION OF LABOR TO MATERIAL II» 
 
 THE PRODUCT. 
 
 The great quantities of products of all kinds vainly seeking a 
 market after brief periods of great, and, as it seems, normal 
 activity, which phenomenon is commonly called over-production, 
 shows that the forces which direct the distribution of products and 
 wealth have not kept pace with the development of the produc- 
 tive power of civilized labor, helped by modern invention. This 
 alone would be sufficient to show that labor is far more produc- 
 tive than ever before ; in other words, that it requires less labor 
 than ever before to turn a given material into a given product ; or 
 that the labor part in a given fabric has been a decreasing one. 
 But as this proof may smack somewhat of the theorizing method, 
 I will prove its correctness by historical facts. 
 
 No government has been so industrious, under all sorts of 
 regimes, as the French in appointing commissions and reporting 
 on French labor and production. The woollen industry in France 
 received great animation through Colbert's care and attention. 
 As a manufacturing industry it received a new start through the 
 Minister in 1648. In 1669 he instituted an inquiry through the 
 governors of provinces into the state of these industries. The 
 report on the woollen industry shows that there were 60,440 
 workmen employed in the annual production of 670,540 pieces of 
 cloth at 20 metres or 22 yards, valued at 3 francs the metre, or 60 
 a piece, equal to 40,000,000 francs, or 650 francs the annual 
 product of each workingman. As the price of material and the 
 profit of the master are included in this annual product per hand, 
 the estimate based thereon is certaialy very moderate, of : 
 
 Material 40 per cent, and labor 60 per cent. This is allowing 25 
 
 per cent, for profit and expenses . . . . . .150 francs 
 
 I franc a day, or 19 cents, for wages of 300 days .... 300 " 
 
 Certainly a moderate rate, if we consider that the workingman had 
 to be kept and fed out of this sum, including his family, if he 
 had any, which leaves for raw material ..... 200 " 
 
 650 " 
 
 In 1 81 2 the production had increased to 370,000,000, whereof 
 160,000,000 was raw material, and 210,000,000 labor and profit 
 and expenses, about half and half, which, giving only the material 
 
117 
 
 cost and wages, brings the proportion to : Material, 57 per cent, 
 and labor 43 per cent. 
 
 In 1850 Moreau de Jonnes, in an inquiry on the state of the 
 French industries undertaken under his supervision, reports the 
 following proportions in the woollen industries of that date : 
 
 Total production 413,000,000 fr. 
 
 Raw material . . , 252,000,000 fr. 
 
 Labor and profit, etc 163,000,000 fr. 
 
 of which latter item 51 per cent, goes to labor and 49 per cent, 
 to profit and expense, which makes our count come for 1850 : 
 Material, 75 per cent. ; labor, 25 per cent. 
 
 The commission appointed by the Corps Legislatif of France 
 in 1872 made its report through M. N. Ducarre, one of its 
 members, and found about the same proportion of material and 
 labor cost as was found by M. Moreau de Jonnes in 1850. 
 
 In 1869 and 1870, from a report of Consul Walker from state- 
 ments made to the Chamber of Commerce, at Elboeuf, two mills, 
 one making fancy and the other plain woollen cloth, had about 
 this proportion : Material, $203,000, or 68 per cent. ; labor, 
 $96,000, or 32 per cent. 
 
 But as Elboeuf makes fine woollen goods which require a 
 greater share of labor, this percentage will represent the highest 
 proportionate cost of labor in the woollen industries in France, 
 which proportion would be largely reduced if the other branches, 
 representing a lower labor cost in the production, would be 
 brought in to bear their ratio. 
 
 The earnings of the working classes have been increased in 
 French woollen industries in the same ratio that the labor cost 
 has been reduced. I shall show hereafter the facts upon which 
 this statement is based. 
 
 Our own woollen manufacture cannot be used to serve as an ex- 
 ample, on account of the very violent fluctuations in the material 
 price caused by tariff legislation, currency fluctuations, and other 
 means of wealth-creating by statute. We may incidentally refer to 
 our woollen industry in i860, when we came nearest to a free raw 
 material basis. Then our material cost was $39,000,000, and labor 
 counted $10,000,000, or in percentages 79J to 2o| — a lower labor 
 cost than in any other country, which, however, may be partially 
 
ii8 
 
 ascribed to a cheaper class of goods being the bulk of our produc- 
 tion, and which require less labor. 
 
 In 1880 our wool prices were so much inflated by the " boom," 
 that I should do little justice to this inquiry by reviewing figures 
 of that year. 
 
 In cotton goods we are far more competent to judge, by compar- 
 ing i860 to 1880, the price of cotton being about the same at both 
 periods. 
 
 Materials 
 
 Labor . . . . 
 
 Proportion material and labor 
 
 $52,000,000 
 22,000,000 
 70 X 30 
 
 PI13, 000,000 
 45,000,000 
 
 72 1x27 f 
 
 All this is the direct labor cost only, and does not cover any 
 general or other mill-expense account. 
 
 Taking our manufacturing production as a whole for each census 
 year of the last four decades, the positions are as follows : 
 
 Millions $ 
 Material. 
 
 Millions 
 Labor. 
 
 Proportion of 
 material to labor. 
 
 1850 
 i860 
 1870 
 1880 
 
 554 
 1,030 
 2,488 
 3,396 
 
 236 
 
 379 
 
 775 
 948 
 
 70 X 30 
 74f X25I 
 76i X 23f 
 78 X 22 
 
 We have here a regularly progressing reduction in labor cost 
 and increasing quantity produced by labor. 
 
 Mr. Edward Atkinson, in a recent publication of a very ingen- 
 iously constructed chart, gives a very clear presentation of decreas- 
 ing cost, of increasing earnings, and of decreasing hours, and of 
 declining rate of profit in the cotton industries. Taking standard 
 cotton-sheeting for his illustration, he shows that the production 
 per hand was, in a particular mill : 
 
 In 1840 . 
 " 1880 . 
 and in 1883 to 1885 
 
 9,600 yds. 
 28,032 " 
 29,604 " 
 
119 
 
 and in money value : 
 
 In 1840 $868 
 
 " 1883 1,973 
 
 and in 1885 1,924 
 
 In 1840. 
 
 Were spindles used 
 And hands employed 
 Or spindles per hand 
 
 12,500 
 
 530 
 
 24 
 
 30,824 
 527 
 
 58 
 
 35.720 
 
 579 
 62 
 
 I may perhaps here recall a statement made in a previous chap- 
 ter, that Germany's productiveness in the cotton industry is given 
 as 2,700 spindles per 100 hands, or 27 per hand, and occupying 
 therefore the position now, which was the standard of the New 
 England mill more than forty years ago. 
 
 That increasing productiveness, meaning greater production, 
 /. <?., more product to go around, consequently greater accessi- 
 bility, in other words, cheapness, has been the result of modern 
 civilized labor, cannot be disputed. That the labor part in any 
 given product has been a decreasing one has been demonstrated, 
 and cannot be a matter of further controversy. The proof that 
 the United States have made greatest progress in this direction 
 has been the subject-matter of these pages. 
 
 3. — THE CHEAPENING OF THE PRODUCT 
 
 has gone hand in hand with the decreasing labor part. The main 
 causes leading to this have been pointed out in Chapter XI. I 
 will give here a few additional examples of facts. A given 
 product, alike in nature and quality at the different periods, is 
 best to serve as a leading example. 
 
 Mr. Atkinson s figures of a certain brand of sheeting : 
 
 1840. 1883. 1883-1885. 
 
 Price per yard . . cents. 9.04 7.04 6.5 
 
 A decline of 28 per cent, within forty-five years in an article 
 which, at both ends of the period, was manufactured by the same 
 processes of mill labor. 
 
 For England I have no data at present. Leone Levi's recently 
 published difference of price of cotton cloth in 1869 to 1883 is in- 
 
I20 
 
 admissible for comparison, as raw cotton in 1869 was 12.33^. in 
 Liverpool, against 5.60^. in 1883. 
 
 While prices of pig-iron in England were ranging in times of 
 peace a hundred years ago from ^^5 tO;^8 a ton ($24 to $38.50), 
 and kept within this circle down to the time of 1836, the present 
 price is ranging from 335-. to 555-., or $8 to $12.50 a ton. 
 
 English pig-lead, which ruled a hundred years ago down to 1836 
 at;!^2o to;£^2 2 (I always exclude periods of war), taken from 
 price quotations in Tooke's " History of Prices," is ruling now at 
 ;^ii.5. 
 
 British bar-iron, 1845 to 1850, ;£8, is 1885, ;£"6. 
 
 In all these annotations I take pains to compare periods of like 
 undisturbed conditions, where only regular influences were acting 
 as price builders. The tendency has been right through to reduce 
 prices by the play of mental forces, which nowhere were under 
 fuller activity than in the United States, and nowhere were greater 
 results achieved in reducing the labor cost and cheapening pro- 
 duction, as shown in cottons and other fields of production, and 
 illustrated heretofore by facts and comparisons. 
 
 4. — INCREASING EARNINGS OF THE WORKING CLASSES. 
 
 It is a common impression that all this great wealth-creating 
 development has benefited only capital, or rather the holder of 
 capital, and that the poor are getting but a small share. That the 
 rich are getting richer, and the poor poorer, is repeated daily by 
 unthinking minds. " Progress and poverty " has been stated 
 only lately as being the Cain's brand upon the brow of our age. 
 That we are far from having reached a satisfactory condition of 
 society, that toil is not sufficiently remunerated, that speculation 
 and monopolizing tendencies find too easy play and arrogate too 
 much of the national product, through legislative connivance, I 
 am too well aware. I have too frequently pointed to these 
 anomalies, that I need to fear to be considered a panegyrist of our 
 present condition. That, however, our age is the best in which 
 man ever lived, is a matter beyond doubt. Of course I speak of 
 Western civilization only, and, especially in this connection, 
 of America, 
 
 The fact alone of the great productiveness of our age, the great 
 
121 
 
 Stores of grains, of dry goods, of all the many means of comfort 
 which have to be consumed by the millions, which have to find a 
 market among the working classes, if they are to be of use at all^ 
 is alone an unfailing sign of the great advantages which the work- 
 ing classes derive from the great abundance of commodities, which 
 is the result of our recent development. 
 
 If there was ever an age worth living in, it is the present one. 
 If there was ever an age in which a solid footing iox progress from 
 poverty was given, it is the present age. If there was ever a 
 country in which the conditions are prepared for the highest 
 attainable well-being of the working classes, it is America. The 
 means are a thand, but it depends on the working classes to use 
 them in the right direction. That this end cannot be reached by 
 any systematized, ready-made doctrine, is too plain to those who 
 have studied the development of the social organism. To those 
 the latter is a living body. Its ills cannot be treated with Ready- 
 Relief Pills. It is a sound organism, and a wise physician trusts 
 more to the recuperative powers of the body, and to the removal 
 from and of dangerous influences, than to drugging, cupping, or 
 bleeding. 
 
 I am far from being an advocate of capitalism, pure and 
 simple, or a great admirer of the Manchester school. If any 
 reforms are to be undertaken in our body politic, however, they 
 must before all be based upon a clear, unalloyed statement of 
 facts, and I mean to give facts. I am not a believer in violent 
 measures of relief. I believe that the quiet undercurrent in a free 
 social organism is constantly moving in an upward direction. All 
 that society or its representative, the State, has to do, is to remove ob- 
 stacles placed in the way of free development of natural forces, and 
 to guard the rights of the individual from aggression or spoliation. 
 
 Now, it is an undeniable fact that capital, unless invested in 
 land or in very carefully selected securities, again based on land, 
 is of a very fleeting, uncertain nature. An absolute creation of 
 labor, as thought is a creation of the brain, its existence would 
 cease inside of an average of two to three years if labor would 
 cease in the work of its reproduction. This is, however, incon- 
 ceivable as the stoppage of digestion in a healthy organism. 
 Capital wastes away much more quickly than it is created, as soon 
 
122 
 
 as labor is thrown out of full employment. This absolute result 
 of non-activity is the secret, unconscious spring which moves 
 capital to seek investment of some kind. This seeking of invest- 
 ment is nothing but an attempt to find some kind of labor which 
 will be able to reproduce the capital, or, as people are in the habit 
 of calling it, the money, put into. any kind of an enterprise. Rail- 
 road-building, mill-building, wholesale killing (as we may call the 
 government business of war-making, for whose payment govern- 
 ment securities are issued) — all are enterprises of this kind, wherein 
 capital finds a grave when they are found to have been unsuccess- 
 ful. Labor, however, is employed to the full extent of the invest- 
 ment, or, to speak in homely terms, as long as the money lasts. 
 If the machinery created is a full necessity, then reproduction of 
 capital will go on ; otherwise it will be considered a thing that 
 was, and is no more. The more abundant capital, the smaller the 
 share of profit, or interest, or dividend, whatever it may be called. 
 This again proves the great competition of capital for labor which 
 is constantly going on, unconsciously of course, and perhaps not 
 recognized by these terms, but this is the true meaning. When 
 work is abundant, then profits are high. Great activity at repro- 
 duction of capital. Then capital, perhaps, gets an undue share. 
 But when the current moves backward, then vce victis. Then we 
 hear of our mining shares. Northern Pacific and West Shore 
 bonds, Washington woollen mills, and all the stocks of iron and 
 steel mills, etc.; then all these schemes tell the story of greed 
 working its own destruction, or of labor being put into enterprise 
 which did not pay. But even in paying, honest, well-organized 
 enterprises, in the best-managed cotton-mills of the country, the 
 tendency of the capital share in the process of production has 
 been a progressively declining one through the large competition 
 of capital for investment or labor. The proportion of the yard 
 price in 1840 requisite in paying for a profit of 10 per cent, on 
 fixed capital of a cotton mill, manufacturing standard sheeting was 
 
 1. 18 cents, 
 
 or of the yard price . . . • T3 per cent. 
 
 In 1883 — 10 per cent, was . . . 0.43 " 
 
 or of the yard price . . . .6 " 
 
 In 1885 — 6 per cent, was . . . 0.25 " 
 
 or of the yard price . . . .4 " 
 per yard of the same sheeting. 
 
123 
 
 In the cotton industries of England the same results of decreas- 
 ing capital earnings are observable. I refer here to a financial 
 statement of sixty-five cotton-spinning establishments of Oldham, 
 in the London Economist of May i6th of this year. They make a 
 showing of an average of 4 per cent, of annual net earnings, 
 against 6 per cent, in 1883. 
 
 PROGRESSIVE RISE IN FRANCE AND ENGLAND. 
 
 For the establishment of the fact of progression of earnings, I 
 will briefly review France, England, and the United States. John 
 Locke ("Journal of Travels in France") in 1677 estimated the 
 income of a French peasant at eight cents a day, hardly enough 
 to keep himself and family in bread. Moreau des Jonnes finds 
 this estimate high, as it applies to one of the best districts. Fr. 
 120, or $24, for 300 working days, was, according to the calcula- 
 tion of this statistician, the whole income of a peasant and wife, 
 both working the farm. Corn prices were higher than to-day. 
 Mme. de Maintenon, writing in 17 16, says that in Bourbonnais 
 1,700 farms were abandoned. As the cause is given that the 
 animals were seized by the tax-gatherers, and that there was noth- 
 ing left to the poor country people to work and to cultivate the 
 soil. In 1840 the income of the farmer was estimated at 32 cents 
 a day, or for the year 456 francs, or over $90. In 1856 Moreau 
 des Jonnes estimated the income at 562 francs, or $112. In 
 manufacturing industries in 1850 the rates of pay were : for men, 
 2 francs, or 38 cents ; for women, i franc, or 19 cents ; and for 
 children, 12 to 14 cents. 
 
 In 1876 the Commission of Inquiry appointed by the National 
 Assembly made this statement through Mr. M. Ducarre : 
 
 TABLE OF DAILY AVERAGE WAGES. 
 
 1853- 
 
 
 187 
 
 [. 
 
 
 Paris 
 
 
 Men 
 
 . 3.82 
 
 fr. 
 
 or 
 
 72 cents. 
 
 4.99 fr- 
 
 or 
 
 95 
 
 cents. 
 
 Women 
 
 . 2.12 
 
 fr. 
 
 or 
 
 40 cents. 
 
 2.78 fr. 
 
 or 
 
 53 
 
 cents. 
 
 Depts. . 
 
 
 Men . 
 
 . 2.06 fr. 
 
 or 
 
 39 cents. 
 
 2,90 fr. 
 
 or 
 
 56 
 
 cents. 
 
 Women 
 
 . 1.07 
 
 fr., 
 
 or 
 
 20 cents. 
 
 1.48 fr. 
 
 or 
 
 28 cents. 
 
 Maurice Block's Annuaire Statistique for 1884 gives this as the 
 average of wages, according to the Mayor's report of the capital 
 cities of the departments : 
 
124 
 DAILY AVERAGE WAGES. 
 
 1853. 
 
 1880. 
 
 Paris 
 Depts. . 
 
 \ Men . . 
 I Women 
 y Men . . 
 I Women 
 
 3.82 fr. 
 2.12 fr. 
 
 2.06 fr., 
 
 1.07 fr.. 
 
 or 72 cents, 
 or 40 cents, 
 or 39 cents. 
 or 20 cents. 
 
 5-59 fr. 
 2.92 fr. 
 
 3-35 fr. 
 1.75 fr. 
 
 or $r.o6. 
 or 56 cents. 
 or 63 cents. 
 or 33 cents. 
 
 which, compared to the wages rate of 1861, shows the continuity 
 of a slow but permanent rise. 
 
 It is well to say in this connection that the frequently quoted 
 Government Report informs us of the otherwise well-authenticated 
 fact, that wages in France rise slowly, but that they never recede 
 from the height once attained. 
 
 For England we have still more complete data of comparative 
 earnings in an increasing ratio. Before establishing the rate 
 of wages paid a hundred years ago, when the good old times had 
 full swing, we have to look at the price of corn. To understand 
 the importance of this, it is necessary to know that, according to 
 Mulhall's calculations, the following percentage is taken for food 
 alone, when wages are as stated below : 
 
 RATES RULING IN" COUNTRIES.^ 
 
 Average wages per week. 
 
 Wages. 
 
 Food. 
 
 Ratio in sur- 
 plus for 
 other exp. 
 
 Great Britain . . . 3ij-. or $7.43 
 
 France 21 " 5.04 
 
 Cicrmany l6 " 3.84 
 
 United States . . . 48 " 11.52 
 
 100 
 100 
 100 
 100 
 
 45 
 
 57 
 
 62 
 
 33 
 
 55 
 43 
 38 
 67 
 
 About 1795 Frederic Eden took down the average earnings of 
 four agricultural families for each of twelve counties, fifty-one 
 families as stated by Thorold Rogers. They are los, gd., or 
 $2.58 per family, in which about two thirds may stand for the 
 
 * It is evident that Mulhall does not sufficiently consider that high earnings 
 conduce to better feeding, as well as to a greater surplus for other purposes. 
 While it is certain that low earnings are first used to supply food and leave 
 only a small surplus for other expenses, as in Germany, it does by no means 
 follow that with increasing earnings the ratio for food should not rise in a far 
 greater degree than given above. 
 
125 
 
 earnings of the head of the family. Robbed of his patrimony- 
 through the various enclosure acts, with corn averaging for the 
 last quarter of the eighteenth century at 51^. (81 j. per quarter 
 being the price in 1795), of course the poor-rates had to make up 
 for the deficiency. 
 
 The weekly wages of agricultural laborers in Northumberland 
 are stated in the Report of the Royal Commission on Agriculture 
 {Leoni Levi, 1885) : 
 
 
 
 Weekly Average price of 
 
 
 
 wages. wheat for five years. 
 
 I85I 
 
 • • • 
 
 1 1 J. 56J. quar. or $1.68 bushel. 
 
 1861 
 
 • • • 
 
 i6s. 6d. 48 " 1.42 
 
 I87I 
 
 • • • 
 
 15 6 55 " 1.65 
 
 I88I 
 
 . 
 
 18 42 " 1.25 
 Present price, 32 " .96 " 
 
 Wages rose with a 
 
 progressive decline of wheat. 
 
 In 1785 
 
 : 
 
 
 Carpenters' wages were 
 
 2s. 6d., or 60 cents a day. 
 
 Bricklayers' 
 
 <( 
 
 2 4 " 57 " 
 
 Masons' 
 
 (( 
 
 2 10 " 68 
 
 Plumbers' 
 
 i ( 
 
 3 3 " 78 
 
 The rate of increase has been about as follows 
 
 
 
 
 
 
 
 (Man- 
 
 
 
 
 
 
 
 chester.) 
 
 
 
 
 
 
 
 hours. 
 
 
 178s- 
 
 1850. 
 
 i860. 
 
 1870. 
 
 1877. 
 
 1883. 
 
 Joiners, week .... 
 
 $3 -60 
 
 $5-76 
 
 $6.72 
 
 $7.68 
 
 $9.26 
 
 $8.72 
 
 Bricklayers, week 
 
 3-42 
 
 6.24 
 
 7.20 
 
 7.68 
 
 10.35 
 
 9.28 
 
 Masons, week .... 
 
 4.08 
 
 5.76 
 
 6.48 
 
 7.20 
 
 8.90 
 
 7.84 
 
 Plasterers, week . 
 
 
 6.24 
 
 6.72 
 
 7.68 
 
 9.12 
 
 8.72 
 
 Laborers, week . . . 
 
 
 4.07 
 
 4-32 
 
 4,90 
 
 5-72 
 
 5-40 
 
 A hundred years ago factory labor was not a whit better paid 
 than other branches, of which I gave quotations above. Taking 
 1765, a year of peace and low corn prices, the weekly wages of 
 weavers were from $1.70 to $2.40 and $2.88 ; for iron-workers, 
 $2.40 ; and Sheffield paid $3.25. At Newcastle, colliers earned 
 $3.60, and at Wakefield, $2.64. 
 
 The average weekly wages of women in textiles were . . $1.02 
 " " " boys .. «< .^ ^ ^2 
 
 " " " girls «' '« . . .62 
 
126 
 
 These rates have grown, to the present time, as follows : 
 
 
 1850. 
 
 i860. 
 
 1870. 
 
 1877. 
 
 1883. 
 
 Iron-puddlers 
 
 Mechanics .... 
 Laborers .... 
 Colliers .... 
 
 $10.80 
 6.72 
 4-32 
 4.70 
 
 $9.60 
 7.20 
 
 4.32 
 6.18 
 
 $9.60 
 7.20 
 4.80 
 5.86 
 
 $10.80 
 
 7.44 
 4.80 
 6.86 
 
 $11.52 
 
 7-44 
 4.80 
 6.30 
 
 Cotton-mills, hours of labor 56I- since 1874, before 60 hours : 
 
 
 1850. 
 
 i860. 
 
 1870. 
 
 1877. 
 
 1883. 
 
 Mule-spinners, male . 
 Piecers, female . 
 Rovers, female . 
 Overlookers, male 
 Strippers and grinders 
 Minders, male 
 
 $9.12 
 1.56 
 1. 81 
 5.28 
 2.40 
 
 10.32 
 
 $9.12 
 
 1.56 
 2.64 
 6,00 
 3.12 
 8.00 
 
 $8.64 
 2.64 
 3-36 
 7.20 
 4-32 
 9.60 
 
 $12.72 
 2.64 
 4.08 
 
 8.38 
 
 5.04 
 11.80 
 
 $9.60 
 2.64 
 
 4-32 
 
 9.12 
 
 5.04 
 
 11.04 
 
 The United States show a like progressiveness in the wage-rates 
 during the period of industrial development dating from 1840, 
 and of farm labor likewise. I shall leave out the years of cur- 
 rency inflation, when wages were higher, but had a much smaller 
 purchasing power than in i860 or 1883. 
 
 To show this fully, I will give a statement of farming rates of 
 labor compiled by Mr. David C. Voorhees, of New Jersey, for the 
 Commissioner of Agriculture, for the last twenty-five years, and 
 also the purchase power of wages expressed in food supply : 
 
 
 Price, 
 
 Bush. 
 
 Rate of wages. 
 
 Year's wages purchase. 
 
 
 Corn. 
 
 Wheat. 
 
 Per year. 
 
 Per day in 
 harvest. 
 
 Corn. 
 Bush. 
 
 Wheat. 
 Bush. 
 
 i860 . . 
 
 $ .75 
 
 $1.40 
 
 $130 
 
 $1.75 
 
 173 
 
 93 
 
 I86I . . 
 
 .60 
 
 1.25 
 
 TOO 
 
 1.50 
 
 167 
 
 80 
 
 1862 . . 
 
 .60 
 
 1.50 
 
 120 
 
 1.50 
 
 200 
 
 80 
 
 1880 . . 
 
 .50 
 
 1. 12 
 
 150 
 
 1.75 
 
 300 
 
 134 
 
 I88I . . 
 
 .47 
 
 1.35 
 
 150 
 
 2.50 
 
 319 
 
 III 
 
 1882 . . 
 
 .60 
 
 1. 18 
 
 150 
 
 2.50 
 
 250 
 
 127 
 
 1883 . . 
 
 .50 
 
 1. 12 
 
 150 
 
 2.50 
 
 300 
 
 134 
 
 1884 . . 
 
 .40 
 
 .75 
 
 150 
 
 2.50 
 
 350 
 
 137 
 
127 
 
 According to the census of 1850 farm hands in New Jersey 
 received 88 cents a day without board. Carpenters' wages in New 
 Jersey were $1.28 ; in the State of New York, $1.38 a day. 
 The yearly average earnings in manufacturing industries for 
 
 1850 were $247 
 
 i860 " 290 
 
 1880 " 347 ; 
 1880, however, was a year of inflation, being the boom year. The 
 greatest proportionate rise in wages is noticeable in 1850-60, when 
 the purchasing power of money in the United States was higher, 
 on the whole, than in 1880. It has been shown lately, through an 
 extended inquiry by Bradstreefs, that a decline from the rates paid 
 in 1883, the highest wage-period of recent years, had taken place, 
 most pronounced in industries which have highest protective 
 tariffs, such as woollens, iron, coal, etc., while such, which by their 
 very essence cannot be influenced either way by tariff legislation, 
 had hardly suffered any wage reduction from the highest rates of 
 1883. This would show again that the natural wage-tendency of 
 our industrial situation is an upward one, or, to say the least, to 
 maintain the standard once obtained, which, however, if forcibly 
 interfered with, as by tariff legislation, must suffer decline. But 
 even this may be considered a transitory condition. That the 
 general movement is an upward one, may be taken from an 
 account of wages taken from the Standard Sheeting Cotton-Mills, 
 from which we have quoted above, showing the increasing pro- 
 ductiveness of labor, decreasing labor cost, and decreasing ex- 
 pense and profit cost. The annual earnings of operatives in these 
 mills, compared with 1840, are as follows : 
 
 Year. 
 
 If paid in sheeting. 
 Yards. 
 
 Year. 
 
 Per hour. 
 Cents. 
 
 1840 
 1883 
 1884-5 . 
 
 1,936 
 4,097 
 4,154 
 
 $175.00 
 287.00 
 270.00 
 
 4.49 
 8.80 
 
 8.37 
 
 5. REDUCTION IN THE HOURS OF LABOR. 
 
 Hand in hand with increasing earnings has gone a corresponding 
 reduction in the hours of labor. It is a very reassuring fact that 
 
128 
 
 the working hours are shortest to-day in countries where wages 
 and productiveness are highest. While the week in England 
 averages 54 to 56 hours, Germany's and France's week still 
 averages 72 hours, with many industries at 78 hours. Switzerland 
 has some time ago adopted a normal working day of 11 hours. 
 The report of the Factory Inspectors for 1882 and 1883 finds 
 much to say on the improvement the act has worked in the con- 
 dition of the working people. As with all innovations of this 
 kind, of course, many manufacturers express disparaging opinions, 
 while a great many more make favorable comment on the results 
 achieved thereby. Massachusetts has fixed 60 hours by statute 
 without having experienced any incursion by competing neighbor- 
 ing States, which still adhere to longer hours. It has been the 
 common experience, wherever tried, that shorter hours enable 
 the workman to put more energy into his work. 
 
 In the early part of this century, in English cotton-factories the 
 week extended to 74 hours ; from 1833 it was reduced to 69 hours. 
 From this it went gradually to 60 hours, and in 1874 to 56^ hours, 
 which may be considered the normal working time of the week in 
 Great Britain, although there are trades where 50 to 52 hours is 
 the rule. 
 
 In the United States the extent of the working day in cotton- 
 mills is quoted by Mr. Atkinson as having been 13 hours in 1840 ; 
 this was by degrees reduced to 11 hours, and since 1883 to 10 
 hours in Massachusetts, with other States beginning to move in 
 the same direction, the State of Rhode Island having adopted a 
 lo-hour day within a month of this writing. In speaking of the 
 building trade and of the normal working day of eight hours in the 
 latter part of the Middle Ages, Thorold Rogers says : " Employers 
 are very likely to discover that the laborer's resistance to an ex- 
 cessively long day was not entirely personal, and that the work 
 might suffer from the workman's weariness and exhaustion." 
 The excellence of the work, lasting through ages, when more re- 
 cent constructions have disappeared entirely, is even a more 
 eloquent proof of the soundness of the economic views of our 
 forefathers, than the voices which are raised from the grave of 
 yellow parchment. 
 
 Germany, then at the head of Europe in commerce and manu- 
 
129 
 
 facture, the economic ruler of the world, the banker and trader of 
 Europe, held to the same rules during its high tide of prosperity. 
 All of which shows that reasonable hours are not at all incompati- 
 ble with great activity and productiveness ; nay, that they are 
 a necessary condition to their achievement. 
 
CHAPTER XIV. 
 
 I. THE INFLUENCE OF FREEDOM ON THE CONDITIONS OF THE 
 
 WORKING CLASSES. 
 
 An Historic Parallel. 
 
 Political economy is called the dismal science. Wrongly so. 
 Under theoretical and dogmatic treatment it may deserve this off- 
 hand dismissal. But when placed in a truer position, that of an 
 historian of the development of the social organism, then the case 
 is different. When by analytical inquiry into the methods of pro- 
 duction and distribution it can be shown that the result of the 
 undisturbed play of social forces has been the one indicated in the 
 head-lines of the five subdivisions of the preceding chapter, then 
 hopefulness must take the place of pessimistic despondency. A 
 science which can lay bare, by inductive investigation, the inner 
 workings of correlative forces in the body politic, and can prove 
 that the ascendancy of democracy has given to the poor more and 
 better food, more and better clothing, and better housing, all 
 coupled with lessening toil and hardship, then such a science 
 ceases to be a dismal one, and assumes the proud position of a 
 comforter and teacher of mankind. 
 
 The powerful influence of these forces upon production wrought 
 by a high standard of living of the working classes can best be 
 shown by an historic comparison. I have often alluded to the 
 small productiveness of Germany. I have shown the small earn- 
 ings and poor living of most of its people. This has not always 
 been so. A glance at Germany during the great Quinto Cento, 
 the last century of the much-abused and misunderstood Middle 
 Ages, gives us a parallel, which brings out our points in strong re- 
 lief and contrast. Economically, commercially, and financially, 
 Germany occupied then the position which England holds to-day. 
 Without a central government which deserves the name, for over 
 two centuries the German towns had to rely on their own re- 
 
 130 
 
131 
 
 sources, and on the manly, sturdy spirit of their citizens to work 
 out their own salvation. Behold what great work they organized 
 and shaped, unaided by any power from without, but much hin- 
 dered, rather. Between the jealousies, the aspirations, and petty 
 wars of the robber-barons and rising dynastic houses, the towns- 
 men had to be prepared continually for bloody work. They did 
 this work, when necessary, very effectively. They were a vaUant, 
 manly race. They had to shape their own destinies. When hard 
 pressed, no one came to their rescue. Within their walls they had 
 to organize a state of their own. One by one they obtained their 
 privileges and rights from the crown until they had gained full 
 freedom, the right of self-government and taxation. The power 
 of the towns soon overawed princes and empires. The Hansa dic- 
 tated laws to all the Northern kingdoms. They made and unmade 
 kings. In the North, from Brugge, Bremen, Liibeck, Hamburg, 
 they carried the commerce of the world to Novgorod, to London, 
 and to Bergen in Norway. The trade of England centred in their 
 hands. With the principal Hansa-house in London, the Stahlhof, 
 which represented their interests in a larger sense, they had their 
 trading-houses and guilds in Lynn, Boston, York, Bristol, Hull, 
 Ypswich, Yarmouth, Norwich, etc. 
 
 These warrior merchants had to keep the waterways free from 
 pirates and the landways from the noble passions of knightly 
 brigands. In the South, Augsburg, Nuremberg, Ulm, Strasburg, 
 Berne, Vienna, etc., transacted the business of exchanging the 
 products of Italy and the Orient with those of Germany and the 
 North. The treasures which poured into German cities are 
 recorded in indelible characters to the present day in the great 
 cathedrals, city halls, guild- and council-houses, and in the pal- 
 aces of some of their private citizens. The wealth of the Welsers, 
 the Fuggers, the Hochstetters, etc., etc., has disappeared ; the great 
 pulsation of vigorous life has fagged away in the centuries of 
 depression and oppression which followed in the wake of the 
 Reformation and counter-reformation and their bloody wars. 
 
 But the great epoch has left us its object-lesson, the work of its 
 free citizens, in the monuments of its architecture, sculpture, 
 painting, wood-carvings, armors, metal-works, all showing the 
 great skill and greatness of conception of workers, masters, and 
 
132 
 
 thinkers. It is hardly necessary to dive into the chronicles of that 
 time for reference, when we have such witnesses before our eyes. 
 The impression which German life made upon foreign travellers, 
 however, is worthy of note in this connection. Pierre de Froissard, 
 writing in 1497, says : 
 
 " We are filled with admiration when we see how enterprising 
 and courageous German merchants are, how they understand to 
 increase their wealth. The prosperity of the cities, the beauty and 
 grandeur of its public and private buildings, and the treasures in 
 the interior of their houses are telling witnesses of this wealth. It 
 is a great pleasure to tarry in these cities and to take part in the 
 public amusements and festivities of the citizens." 
 
 ^neo Sylvio Piccolomini, later Pope Pio II., writes in 1458 : 
 " We say it frankly, Germany was never richer, never more bril- 
 liant than to-day. The German nation is in advance of all others 
 in greatness and power, and one may truly say that there is no 
 people to whom God has vouchsafed as much favor as to the 
 German people. Everywhere in Germany we see cultivated 
 grounds, cornfields, vineyards, flower-gardens, and orchards, in 
 town and country, everywhere fine buildings, pleasant villas, 
 castles upon the hills, and walled cities. . . . To speak the 
 truth, no country in Europe has better and brighter-looking cities 
 than Germany. Their exterior is fresh and new ; it seems, though, 
 as if they had been completed but yesterday. Nowhere else does 
 one find as much liberty as in German cities. The inhabitants of 
 the so-called free states of Italy are, in reality, slaves, in Venice 
 as well as in Florence or Siena. The citizens, with the exception 
 of the few who constitute the government, are treated as slaves ; 
 they can neither use their money as they seem fit nor say what 
 they please, and are subject to the severest exactions. With the 
 Germans, on the contrary, every thing is bright and happy ; no one 
 is threatened in his possessions, every one is safe in his inheritance, 
 and government injures no one except him who injures others." 
 
 The German plebeian townsman had conquered the obstinate 
 resistance of the patrician. The craft guilds played a prominent 
 part in the city government. Every thing partaining to the craft 
 was regulated by the guild in the guild-hall. The workmen were 
 equally free and powerfully organized in trades-unions, which 
 
^33 
 
 frequently extended their organizations over the whole of Ger- 
 many. They carefully guarded the honor and dignity of their 
 craft, and their social position was a high one and jealously guarded 
 by them. In illustration, the journeymen bakers of Colmar : they 
 struck work in 1495, and kept up the contest for ten years, until a 
 decision was rendered by an arbitrator in their favor, and they 
 were put back to their privileged rights, to march in an advance 
 position in the Corpus Christi procession. 
 
 Many cases of a like nature are recorded. We should call 
 them to-day sentimental grievances. But the workingmen's in- 
 sistance on rights of this nature shows that they considered them- 
 selves, and were considered by common consent, equals in every 
 sense of the word, and is evidence of a satisfactory material and 
 pecuniary position. Sentimental grievances are not raised by 
 working people when their condition in life is of a low type. 
 Most disputes, however, were settled to the satisfaction of both 
 parties by the guild or the town-council. Wages were high, con- 
 sidering the great purchasing power of money, the low prices of 
 commodities, and the fulness of board, lodging, washing, etc., all 
 of which were provided in the master's house, and all regulated to 
 the minutest details by agreement of the guild on the one side and 
 the trade-union on the other side. The records of the day furnish 
 evidence of this, which in profuseness leave nothing to desire. 
 Mutuality, the leading principle of feudalism, exercised its power 
 in the relations of masters and workmen, and showed the satis- 
 factory conditions of the latter in the work which they performed, 
 and in the great demand in which German manufactures and Ger- 
 man workmen stood in foreign countries. One Felix Fabri, from 
 Ulm, wrote in 1484 : " If any one desires good work done in 
 metal, stone, or wood, he intrusts it to a German. I have seen 
 German goldsmiths, jewellers, masons, and carriage-makers do 
 wonderful things among the Saracenes ; they excelled Greeks and 
 Italians in skill. The Sultan of Egypt availed himself of the 
 advice, the skill, and the work of a German in the erection of the 
 wall around the harbor of Alexandria, which is the admiration of 
 the whole East." 
 
 Germany's exports consisted largely of German linens, woollen 
 cloths, metal-work of all kinds in gold, silver, bronze, copper, iron, 
 
134 
 
 and steel, wood-work, etc., etc. Over 300,000 pieces of linen were 
 bleached alone upon the bleacheries of Ulm, in Suabia, each year. 
 Ulm has especial natural facilities for bleaching, which gave it 
 great importance in the linen industry up to the present time. 
 But its importance as a linen-manufacturing town can be measured 
 from its own production of over 200,000 pieces annually at the 
 period mentioned. The manufacture of woollen cloth was a great 
 industry in Southern Germany and in the Rhenish provinces of 
 the empire. One of the writers of the time, J. Wimpheling, in De 
 Arte Impressoria^ says : 
 
 " In many Westphalian towns loom touches loom, and it is dif- 
 ficult to estimate how many hundred thousand pieces the guilds 
 produce month after month. The weavers are everywhere as 
 industrious as they are skilled, and stand in high esteem with 
 their fellow-townsmen." 
 
 Division of labor was practised to a large degree ; especially so 
 in the finer arts and crafts ; in metals prominently so. Special 
 parts of an armor were frequently made by a special group of 
 workmen, which explains the skill and perfection which the pieces 
 display that are still in existence. 
 
 The woollen industry was likewise divided into many branches. 
 Those who made woollens of fine Flemish and Italian fleeces were 
 a different guild from those who worked the coarser home-bred 
 wools. There were, besides the weavers, the wool-combers, the 
 cloth-shearers, the fullers, the frame-tenders, the finishers, etc., all 
 organized in separate crafts and trades. This minute subdivision 
 alone explains the great efficiency and productiveness of labor of 
 that great period. Even the dyeing craft was subdivided into 
 black dyers,' fine dyers, madder dyers, etc. 
 
 The standard of living of the workingmen is observable from 
 the many regulations handed down to us as to the food they were 
 entitled to. They seem to have been very lavish in their outlay 
 for clothing, ornaments in gold and silver, etc., etc., which the 
 town-councils often felt themselves called upon to repress, vainly 
 though, by occasional ordinances and proclamations. It appears 
 therefrom that silk and velvet were not uncommon articles of 
 dress among them. The rich gifts which we find recorded as their 
 offering to churches and other pious foundations speak equally 
 
135 
 
 well for their favorable financial conditions. Eating and drinking 
 was granted in profuse quantities. The many disputes over set- 
 tlements of the mooted questions as to quantities, the various 
 dishes and kinds of food that were to constitute the meals, give a 
 full account of the well-living of the working classes. Meat was 
 given twice a day. The workmen frequently obtained two kinds 
 of meat for dinner, with at least half a quart of wine. Many 
 times we find wine twice a day as their portion. One regulation 
 calls " that the meat shall reach two fingers' width over both ends 
 of the plate." Wine, not beer, was the common beverage, and its 
 great consumption by all classes is recorded so frequently by all 
 writers of the time, that this alone might be considered a proof of 
 general well-being. More than all, however, the great consump- 
 tion of meat stands out in solid form as an indicator of the condi- 
 tion of the working classes. It is calculated that in Frankfort- 
 on-Oder the consumption of meat was twelve times as large as in 
 1802. 
 
 We could give like accounts of the favorable condition in which 
 the peasantry and the agricultural population at large was placed. 
 We have numberless records of regulations governing the relations 
 of lords and tenants, masters and servants. The latter's food and 
 pay were as fully and carefully attended to as we found to be the 
 case in reference to town population. Serfdom had almost entirely 
 disappeared, and the sharp edges of feudalism had been smoothed 
 and rounded. All in all, we find a full analogy of the facts 
 brought out by Thorold Rogers regarding England. The state 
 of the working classes, both agricultural and industrial, was as 
 satisfactory in Germany as Rogers found it in England in his 
 survey of the fourteenth and fifteenth centuries. In a recent 
 publication (" Geldwerth und Arbeitslohn im Mittelalter," by 
 Stephan Beissel, Freiburg, 1885) I find a history of prices, wages, 
 and relations existing between master and workmen, from bills and 
 records relating to the building of St. Victor at Xanten, which 
 bring very satisfactory support to Professor Rogers' conclusions, 
 that low prices and high earnings of the working classes go hand 
 in hand. But low prices, in this connection, is only another term 
 for a high rate of productiveness, which necessarily must end in 
 great consumption, or what is the same, high earnings. 
 
136 
 
 German students of the economic history of that age agree that 
 at our time the middle classes do not keep so good a table as was 
 the custom among the working people then. 
 
 Compare this with the present diet of the German working 
 classes, when meat is an almost unknown quantity upon their 
 tables, except an apology of it on Sundays and holy days ; when 
 potatoes, chicory coffee, and rye bread form the almost universal 
 and main articles of food ; then we may well pause and ask our- 
 selves whether declining productiveness does not stand in causal 
 relation with a reduced standard of living. 
 
 When we unfold these facts, then we find a full retort to the 
 exclamation of Prince Bismarck, that Germany is three hundred 
 years behind and cannot be compared to England or America. 
 The German people are of the same stock now as then. They are 
 of the same stock that made England's and America's greatness. 
 But the liberty of action, the freedom of thought, which formed 
 Germany's greatness in the fourteenth and fifteenth centuries, was 
 suppressed by the ascendancy of absolutism and the reversal of 
 the old popular law (Volksvecht) ; while England, not weak- 
 ened by disastrous wars, like the great peasants' war and the thirty 
 years' war, could save itself from the sad fate which overtook 
 Germany's popular rights. 
 
 2. ON GUILDS AND WORKINGMEN's ASSOCIATIONS. 
 
 Not a quarter of a century had elapsed since the Reformation, 
 when the signs of barbarization were visible all over Germany. 
 The decline and decay of art, manufactures, and commerce, of 
 the comfort and well-being of townsmen and peasants, followed in 
 the wake of the social, religious, and political disturbances which 
 agitated Germany all through the sixteenth century. The thirty 
 years' war sealed Germany's doom. Territorially and economi- 
 cally, it left it a waste. Politically, it made it a nonentity. It 
 made an independent sovereign of every little baron, count, or 
 duke. Every one of these opera-bouffe potentates was a miniature 
 copy of the great Louis or his successors. They imitated all the 
 vices of the French court without possessing the refinement which 
 could make them otherwise than loathsome. 
 
 The worst, however, was the fearful oppression which this half 
 
137 
 
 thousand of petty despots heaped upon their subjects in the way 
 of taxation and burdens. Every one of them had his custom- 
 house and his army, if only of two privates, a captain, and a 
 general. A retinue of court officials was a matter of course with 
 each of these mignonette rulers. Always ready to make a bargain 
 with foreign powers, and being more bent on selling their male 
 subjects, as so many heads of cattle, for foreign battle-fields and 
 keeping their harems well stocked, they certainly had no great 
 solicitude for the welfare of their subjects, whom the Westphalian 
 treaty had delivered into their hands. Under such circumstances 
 it cannot surprise that it took fully two centuries till Germany 
 had recovered from the terrible wounds the thirty years' war had 
 inflicted. Under the rule of absolutism and restraint of all kinds, 
 free citizenship could not exist. Despotism has never developed 
 industrial and commercial greatness, but, on the contrary, has de- 
 stroyed this as well as the happiness and well-being of the people, 
 who had enjoyed these blessings under more favored circum- 
 stances. Spain, Italy, Germany, and France under the old regime 
 (not to mention the unspeakable Turk) give lasting examples. 
 
 It is, therefore, impossible to judge the guilds and associations 
 of the fourteenth and fifteenth by those of the later centuries. 
 The former were the natural development of a state of society in 
 which the individual had to seek shelter somewhere from the 
 aggressive power of the mail-clad horsemen. The people had 
 either to be the baron's men or they had to protect themselves by 
 their own means against the baron. The walled bourg or town 
 offered this shelter, of which the country-people availed them- 
 selves with alacrity. They were welcome guests at a time when 
 strong arms were the best friends a man could have. This 
 gradual strengthening of city and town weakened the powers of 
 the lords, and at the same time offered markets, always near, for 
 the produce of the soil. In this wise a gradual pacification, 
 civilization, and general raising of the conditions of all classes 
 had taken place, which happy development culminated in about 
 the latter half of the fifteenth century. The guilds were the re- 
 sult of a strong impulse for self-preservation, as well as a necessary 
 condition for the achievement of great ends in town politics as 
 well as in trade, manufacture, and commerce. The results which 
 
138 
 
 they brought about were in themselves the strongest proofs of the 
 necessity of their existence. The workmen would have been 
 powerless in the hands of their masters, had they not followed 
 their example. The result also shows that their labor-associations 
 w^ere well-timed, as the two centuries of mastership in manufac- 
 ture and commerce amply testify. The admission into the guilds 
 was easy. Workmen were employed, from wherever they came. 
 The fourteenth and fifteenth centuries find workmen, masons and 
 master-masons, stone-cutters, etc., from all countries engaged in 
 the building of St. Victor at Xanten. So was money circulating 
 freely whether coined in Germany or elsewhere. The end of the 
 latter century, however, finds already every thing narrowed down 
 to ''home production." All of which shows the great freedom 
 that had gradually worked through the hard crust of feudalism into 
 the open air, promising greatness and happiness to the people. 
 It was not to be, and it was left to our own time to take up the 
 great work of restoration. 
 
 The guilds, during the succeeding centuries, were gradually de- 
 caying into petrified monopolies. Their whole aim was to exclude 
 new-comers from sharing in the benefits and advantages of their 
 position, to prevent competition by keeping down the number of 
 masters, and to prevent workingmen from asserting their rights by 
 all sorts of legal devices, which the ruling powers were only too 
 ready to supply. 
 
 It cannot surprise, therefore, that the manufacturing industries 
 had declined. Neither can it surprise, that Colbert could not 
 think of better means of raising them again to a higher standard, 
 than state-supservision, the leading remedy for all evils in a politi- 
 cal status, expressed in the device : " V etat c' est moi." The 
 many ordinances and laws promulgated under his administration, 
 the directions given to his factory inspectors, and their reports 
 show the decline of the various industries, as well as the degree 
 of corruption and deceiving practices which had taken hold of 
 the management and curtailed the usefulness of the guilds. 
 
 The sequel proved that nothing short of a total abolition of all 
 guilds and corporations and the grant of absolute freedom to 
 trade, manufacture, and commerce could restore health and 
 growth to industry and commerce. 
 
139 
 
 This opinion had gained ground in the latter part of the 
 eighteenth century. Long before the advent of Adam Smith's 
 " Inquiry into the Nature and Causes of the Wealth of Nations," 
 the Economists prepared the public mind. They had the 
 opportunity of studying from life. They saw on the one hand 
 the bad results of mean, gluttonous monopoly controlling produc- 
 tion, and on the other hand, the equally bad results of gov- 
 ernment's constant interference, regulation, and prescription. 
 Indeed both tended to the same end, that of dwarfing enter- 
 prise and enslaving intellect. 
 
 That Turgot could dare to promulgate his famous and really 
 great conceptions in the form of laws, shows that the public mind 
 had been well saturated with principles of economic truth. 
 Though not all his reform measures were carried through, though 
 many were withdrawn shortly after their publication, yet they 
 were to an extent carried into practice. Of course, he met with 
 fierce opposition from all sides. Not his great measures, how- 
 ever, but the jealousy of his ministerial rivals at court, was the 
 cause of his fall and of the stinted execution of his measures. No 
 one, however, gave a more earnest and honest support to Turgot 
 than Louis XVI. — the best inclined and most unfortunate of all 
 the kings of the house of Bourbon. 
 
 Turgot says : " I know no other means of imparting life to 
 an industry than to give it the greatest amount of freedom and 
 the removal of all taxes which the misunderstood interest of the 
 fiscal administration has heaped upon every kind of merchan- 
 dise." This is the spirit which pervades his reform plans. 
 The freeing of the corn trade, etc., etc., by the laws of 1774 to 
 1776, from all restraints and taxes, is only an indication of the 
 drift of his measures. 
 
 Guilds, monopolies, and police-regulations of industries were 
 removed by the great edict of February, 1776, the year in which 
 Adam Smith's great work made its appearance. Blanqui calls 
 this law the charter of freedom of the working classes. In a 
 memorial to the king, Turgot explains his views on the subject. 
 He says : That the guilds prevent the development of the indus- 
 trial arts, that they oppress the lower classes, that their adminis- 
 tration is a very defective one, and that they increase the price 
 
I40 
 
 of commodities. He finally declares the time to be eminently- 
 favorable for this measure, on account of the revolutionary war 
 just breaking out in the British colonies of North America. This 
 war, he says, will stop the English factories and throw, if we es- 
 tablish a free industrial system, all of their workmen and trade 
 into our hands. 
 
 His solicitude for the poorer classes speaks from this sentence 
 of the law : " We are in duty bound to give to all our subjects 
 the fullest use of all their rights. Before all we owe this guaranty 
 to that class of men who have no other property than that of their 
 labor and their industry. To them the use of this right to its 
 fullest extent becomes the more important, as it is the only source 
 from which they can derive their maintenance." 
 
 That his laws and regulations were partially removed in the 
 succeeding years, and not even fully adopted by the Revolution, 
 that guilds and repressive acts were resorted to again, is not the 
 fault of Turgot. It only shows the difficult, labored, and heavy 
 step in which mankind moves, even when genius has raised the 
 beacon high, to illuminate the way. It does not even show that 
 mankind moves slowly in the path of liberty and progress, but 
 that monopoly and privilege die hard. The death-struggle still 
 goes on. The weapons which freedom wields are, however, too 
 destructive for old, decrepit, and time-worn institutions. The age 
 of steam and electricity cannot possibly be burdened much longer 
 with the rotten machinery of past centuries. 
 
CHAPTER XV. 
 
 SOME ECONOMIC , TRUTHS DISPROVEN BY FACTS. 
 
 The teachings of Malthus, Ricardo, and their followers were 
 based on inverted views. Malthus' conception was that of an 
 insular pedagogue, who could not conceive the continuity of 
 supply to be derivable from soils outside the narrow limits of a 
 country, even if the soil of the country should not yield enough 
 to supply the food for an increasing population. Indeed, economic 
 writers indulge too frequently in the building up of an imaginary 
 social creation. They show how society develops from an agri- 
 cultural to a manufacturing community, how good soils are 
 taken up first by husbandmen, that the poorer soils are taken up 
 successively, and that rents represent only the excess, for a like 
 expenditure, of the product of this land, over the product of the 
 worst land cultivated in the same country. This theory, too, is a 
 necessary outcome of the insular view, of an isolated existence, 
 protected and fortified by corn-laws, of a view based on the immu- 
 tability of vested rights and the unchangeable character of the 
 social organism, the unchangeability of an organism which, if 
 such a term is applicable, is the creation of change. The thouglit 
 of every generation exercises its remodelling or destroying influ- 
 ence on the social organism as handed down from a preceding 
 generation. It would be useless to lose words on this subject. 
 Others have ventilated it sufficiently. I have, in previous chapters, 
 shown the utter inadmissibility of such discouraging teachings. 
 With the battering down of all barriers put in the way of the free 
 admission of corn, the cheapest fields of supply have come to the 
 rescue of starving millions. The whole situation is reversed, since 
 the price of land in Australia and America determines the land 
 tenure in England. When American and Australian wheat can be 
 landed in Liverpool at less than one dollar a bushel, paying the 
 railroads and steamships, and the farmer on his free homestead, a 
 
 141 
 
142 
 
 profit, then it is useless to argue, whether rents are paid as the 
 equivalent of the excess of earnings from good lands over those 
 from poor lands, or whether they are paid on lands because they 
 are nearer the market. The rent-collector will find his occupation 
 gone when outside influences of the kind mentioned, determine 
 the price of corn. Rent cannot be paid for land when free land 
 comes in free competition with rent land. America, helping the 
 English farmer and agricultural laborer to their ultimate libera- 
 tion, however, has derived benefits from the free admission of her 
 produce into England, which hitherto have hardly been recognized 
 to their full extent. The value of an outside market for their 
 surplus is hardly sufficiently appreciated by our agriculturists. 
 Free trade in corn has given cheap bread to England's working 
 people, and has contributed in making Great Britain the world's 
 factory, but has besides raised the American farmer in comfort 
 and wealth. The British price of corn was reduced and the 
 American price was raised by the opening of the grain trade in 
 England. Not so much as the shipping price is concerned, but so 
 far as the money price is concerned which is paid on the farm. 
 Forty years ago nearly the full value of a bushel of wheat would 
 have been exhausted by freight charges from Ohio to the sea-shore. 
 The railroad by opening the country to outside markets has 
 made it possible to take the farmer's surplus to the shipping point 
 at a minimum of expense. After paying the carrying expense, 
 even under the influence of low export prices, he has still more 
 left as his share than at the time when but few railroads existed. 
 The railroads and steamships have thus become levellers of 
 prices, supplying cheap bread to the toilers of America and 
 Europe, and still proving to the farmer a great boon. The rail- 
 road system of this country, and the great extension of steam 
 navigation, would, however, never have found the great growth 
 had it not been for the abolition of the corn-laws of Great Britain. 
 Without the demand of foreign markets for our products, no one 
 would have thought for a moment of building lines after lines of 
 roads and steamships. By having an open market for the surplus, 
 the grower of wheat, of corn, of pork, of agriculture products of 
 all kinds, had gained a decided advantage over the manufacturer. 
 The farmer, by finding a foreign market for his surplus, obtains 
 
143 
 
 the full price for his salable products, less transportation expense, 
 to the full extent of the foreign import price. The latter, by 
 having all sorts of duties, or price increase, on his materials to 
 bear, by means of custom-duties for protection, is debarred from 
 obtaining relief through foreign commerce. Having to unload 
 every thing on limited home markets, he has in times of depression 
 to suffer all the ills which such an economic system entails on 
 him. 
 
 No better demonstration could be found of the great utility of 
 open markets to the producer, than in a comparison of the relative 
 positions of the agriculturists and the manufacturers in protected 
 fields of industry, when burdened by over-supply and closed 
 markets. 
 
 OTHER FALLACIES IN SOCIOLOGY. 
 
 We have, in this inquiry into fallacies of political economy, to 
 meet one of not less importance than those alluded to above. 
 
 Density of population has been considered as going hand in 
 hand with increasing poverty. As a matter of course, it is inti- 
 mately connected with the above doctrines. The whole economic 
 philosophy of the time, slowly fading away, has been based 
 thereon. But there is hardly a branch of the subject more 
 clearly disproven by facts than this. Indeed, the development of 
 our modern states prove the contrary. Not to speak of the older 
 States of the United States, whose most densely populated sec- 
 tions are not yet approaching to any European conditions, but 
 Holland, Belgium, Great Britain, France, Germany, all have in- 
 creased in population more in this century than the most sanguine 
 estimates could have anticipated. Wealth, however, has vastly 
 overreached the rapid growth of population, which has taken 
 place within the last hundred years. The countries most densely 
 populated count among the richest, while the thinly populated 
 countries, countries possessing the richer soil and blessed by 
 nature to a far greater degree, are the poorest. 
 
 A statement of the estimated wealth of the principal countries of 
 Europe shows this conclusively when placed side by side with 
 population. I omit the value of forests and lands, as their increase 
 in value is more due to other influences than wealth-creating ac- 
 tivity. 
 
144 
 
 
 
 
 
 No. in- 
 
 
 Wealth, exclusive of 
 
 Population. 
 
 Rate per 
 
 habitants 
 
 
 Lands and Forests. 
 
 Capita. 
 
 per sq. 
 kilo- 
 
 
 
 
 
 metre. 
 
 Holland .... 
 
 $3,800,000,000 
 
 4,000,000 
 
 $950 
 
 118 
 
 United Kingdom . 
 
 32,000,000,000 
 
 35,000,000 
 
 915 
 
 109 
 
 France .... 
 
 25,000,000,000 
 
 37,000,000 
 
 676 
 
 69 
 
 Germany .... 
 
 20,000,000,000 
 
 45,000,000 
 
 445 
 
 79 
 
 Belgium .... 
 
 2,500,000,000 
 
 5,500,000 
 
 445 
 
 185 
 
 Spain 
 
 4,500,000,000 
 
 ' 16,000,000 
 
 280 
 
 33 
 
 Austria .... 
 
 10,000,000,000 
 
 38,000,000 
 
 263 
 
 59 
 
 Italy 
 
 7,000,000,000 
 
 29,000,000 
 
 241 
 
 95 
 
 European Russia . 
 
 12,000,000,000 
 
 75,000,000 
 
 160 
 
 13.7 
 
 So far as fertility of soil is concerned, of that part of Russia 
 which stretches from a line running from Warsaw and Moscow to 
 the Ural Mountains southward, no other country could show bet- 
 ter means of creating wealth. Not considering at all the northern 
 part of Russia, but counting all her population into the southern 
 half, her density would not be more than 27 against 109 of the 
 United Kingdom, 118 of Holland, and 185 of Belgium, There 
 would be room for 300 millions in the southern half of Russia to 
 give the population the density of Holland, and for a sixfold in- 
 crease of wealth to bring it up to the per-capita rate of Holland. 
 
 If any thing were to be proven by such facts in the nature of a 
 relationship of wealth and population, the exact opposite could be 
 deduced from these figures. I do not, however wish to prove 
 any thing of the kind, or set up a theory of my own. On the 
 contrary, I wish to point out the fallacy of such reasoning as 
 underlies our wealth theories. The utter irrelevancy of such doc- 
 trines must be demonstrated, before we can commence to lay 
 down more rational ideas about the causes which lead to the 
 creation and the accumulation of wealth. 
 
 Neither soil, climate, aspect of the country, rivers, density of 
 population are of account if the one great spring of all blessings is 
 wanting : security from aggression and freedom from restraint. 
 The burden of poverty of states is self-imposed. Narrow selfish- 
 ness has riveted the chains which hold men to poverty and want ; 
 selfishness blinded by greed, not the clear-sighted selfish principle, 
 but its baser aspect as represented by the robber baron's, '^ Stand 
 
145 
 
 and deliver." Enlightened selfishness would understand, that the 
 greatest good to all is the source from which the greatest benefit to 
 the individual must arise. State-craft, making itself the tool of a 
 class, of an interest, of a policy in the interest of a part, no matter 
 how large, must necessarily detract from the happiness of the 
 whole. Without these restraints put on labor, on capital, or exer- 
 tion, every one exercises his fullest capacity to the bettering of his 
 circumstances, and becomes the most formidable instrument in the 
 creation of wealth. This principle, now carried out in proportion- 
 ate degree only, explains the greater or smaller amount of wealth 
 represented in our table of wealth of the different nations. A 
 hundred years have passed since the great master of political 
 economy uttered these memorable words : 
 
 " The uniform, constant, and uninterrupted effort of every man 
 to better his condition, the principle from which public and na- 
 tional as well as private opulence is originally derived, is fre- 
 quently powerful enough to maintain the natural progress of 
 things towards improvement, in spite both of the extravagance 
 of government and of the greatest errors of administration. Like 
 the unknown principle of animal life, it frequently restores health 
 and vigor to the constitution, in spite, not only of the disease, but 
 of the absurd prescription of the doctor." (" Wealth of Nations," 
 book ii., p. 141.) 
 
 " The natural effort of every individual to better his own condi- 
 tion, when suffered to exert itself with freedom and security, is so 
 powerful a principle, that it is alone and without any assistance, 
 not only capable of carrying on the society to wealth and pros- 
 perity, but of surmounting a hundred impertinent obstructions 
 with which the folly of human laws too often encumbers its opera- 
 tions." ('' Wealth of Nations," book iv., p. 221.) 
 
 Though neglected, even spurned, these great principles always 
 come back with increased force after every practical attempt in 
 the opposite direction. The most careful and painstaking inquiry 
 cannot discover any other causes underlying the greater or smaller 
 degree of prosperity, than in the neglect or practice to a greater or 
 smaller degree of this great and broad principle under whose cover 
 the material and ideal progress of the race finds shelter and am- 
 plest room for development. Society is a living organism. Society 
 
146 
 
 must find her own cures for all possible ills which may arise. But 
 these ills will find least room to develop in the body, if treated 
 like those of a healthy organism, instead of a sickly being always 
 to be prescribed for and held under anxious and watchful nursing. 
 
 Freedom, however, is not license. It is not understood, that 
 the depressing and oppressing powers of government, against 
 which the " Economists " of the last century put their energetic 
 protest into their '' laissez faire, laissez passer " should be arro- 
 gated by individuals or corporations. This powerful remonstrance 
 was as outspoken against the fungi of that time, as against the in- 
 terference of an absolute government with individual liberty of ac- 
 tion. To limit these powers to a minimum must always continue 
 to be the solicitude of government. It can never be classified 
 among the prerogatives of a fraction, to rob the people at large of 
 their common rights. The guaranty of the rights of the poorest 
 individual is the essence of the free state. Where they are as- 
 sailed, as a matter of course, the government's function begins. 
 But even here care must be taken lest interference, except against 
 actual violators of laws, should intensify the evil which is to be 
 dealt with, or cause evils of far greater moment to arise. 
 
 I will give an example in our railroads. No other agency, 
 created by government, delegating its rights of eminent domain, 
 has done so much to abuse a privilege and a trust as our 
 railroads. 
 
 Called into existence at a time when only the freest and fullest 
 grants of rights and concessions could have induced the necessarily 
 large investments, to embark into enterprises of a doubtful char- 
 acter. The liberal rules then laid down became in most parts the 
 framework of all future legislation. The State governments re- 
 served but few rights. One of the leading principles was, that all 
 customers were to be treated alike, that an excess of net earnings 
 over a certain percentage was to revert to the State, etc. But how 
 have they been abused ? 
 
 Discriminations in freight rates have been carried to an extent 
 that populous towns, remunerative enterprises, were ruined. In- 
 dividual energy was paralyzed. Gigantic monopolies, fostered 
 and fed by railroad favor, sprang up, destroying all competitors, 
 who were rash enough to stand up against a most daring, un- 
 
147 
 
 scrupulous foe. To charge whatever " the traffic will fetch " was 
 the rule of all lines who had sole command of the field. Great 
 earnings, far beyond the stipulated limit, led to fraud, to the in- 
 vention of " construction accounts," into whose coffers the surplus 
 was loaded. From there to the capitalization of earnings, to the 
 watering of stocks, to the increase of capital share to double and 
 treble the actual outlay. Wealth was created by the happy pos- 
 sessors of the inner control to the extent of tens and hundreds of 
 millions. Valueless stocks and scrips were by misrepresentations 
 raised to par. Once tested, this easy way of pocketing the 
 people's savings was resorted to in another way, namely, by de- 
 pressing the value of stocks so as to make innocent holders sell 
 out at a great loss. Then they were bought in. The next step 
 was to raise their value again by fabricated stories of high earn- 
 ings and misleading financial reports. Great as the loss was all 
 the time to the honest, frugal individual who allowed himself to 
 be caught within the meshes of the immense net, spread over the 
 country, yet, strange to say, the gain to the whole people was 
 greater. The projection and building of railroads became thereby 
 the aim of those who were eager to get control of an inside line of 
 their own. Doubtlessly this sordid greed caused more lines to be 
 built in the short period of five years, from 1879 to 1883, than 
 would have been laid on the soil in fifteen, had actual necessity 
 and honest enterprise commanded their construction. The earn- 
 ings of railroads in consequence of this duplication have sunk to 
 a minimum. Many are bankrupt, others are on the verge of bank- 
 ruptcy, and unless prevented by combination, competition between 
 rival lines is becoming so keen, that net earnings are often entirely 
 out of sight. But the people have a system of railroads which 
 cannot be undone. All the sections are united. The vast agri- 
 cultural stores of the country are carried to the sea-shore at so 
 trifling an expense, that, as stated above, our own husbandmen 
 are growing in prosperity, while Europe's great landholders 
 tremble at the peaceful revolution wrought within a half a gen- 
 eration. In all this I do not propose, but simply depose. I do 
 not propose action or theory, but simply show that the free ex- 
 ercise of competitive action, even when showing itself in its worst 
 and most repelling features, is fully capable of working its own 
 
148 
 
 cure, or at least of bringing out a compensatory advantage to 
 society. 
 
 THE FALLACY OF GREAT COMPETITION OF LABOR RESULTING 
 
 IN SMALL EARNINGS. 
 
 This theory is born by the wage-fund theory, that there is only 
 a certain part of the capital of a country available for the re- 
 muneration of labor, that wages are fixed by the ratio between the 
 number of laborers and the amount of capital devoted to the em- 
 ployment of labor. We have given sufficient space to the refuta- 
 tion of this worn-out theory in Chapter XIII. Wages are paid, 
 high or low, in proportion to the work that is in demand, be there 
 an abundance or a want of capital, as in new countries. Wages 
 are gauged by opportunities offered for work. That they do not 
 depend on density of population, or even on the numbers seeking 
 employment, or competition, when opportunities are plentiful, can 
 be seen by comparing the state and composition of society in 
 France in the XVII. century, and that of our own country in our 
 own time. 
 
 Vauban's tables, mentioned in a previous chapter, give us a 
 statement of the composition of French society towards the end 
 of the XVIL century, which I will introduce here for com- 
 parison : 
 
 Clergy ...... 266,000 
 
 Nobility 250,000 
 
 Privileged classes ..... 516,000 
 
 Government employes, merchants, etc. . . . 2,300,000 
 
 Peasants, farm laborers, etc. ..... 5,200,000 
 
 Journeymen, mechanics, and laborers . . . 8,300,000 
 
 Domestic servants ....... 2,100,000 
 
 Beggars ......... 2,600,000 
 
 19,000,000 
 
 The number of offices created under the old regime was fabu- 
 lous. They gave distinction, and were eagerly sought and paid 
 for by the bourgeois classes. It is not too high to estimate their 
 number — the army and navy, etc. — at 1,000,000. These, domestic 
 servants, beggars, and the privileged classes, all non-producers, 
 deducted from the total, leaves 12,800,000 as belonging to those 
 engaged in useful occupations, or 65 per cent, against 35 per cent. 
 
149 
 
 taken out of competition for employment in useful occupations. 
 Domestic servants, of course, are a very useful class, but it will be 
 readily understood that they do not come within our category. 
 Beggars might have competed for employment, if they could have 
 found it. But their existence to so large an extent shows clearly 
 that the opportunities were wanting, and that they preferred a life 
 of idleness and misery to a life of toil and misery, which was the 
 rule of life of the working classes of the golden age. 
 
 Our own population are all workers. A life of idleness is a 
 source of annoyance to even our wealthiest people. They cannot 
 endure if for any length of time, when withdrawn from active life, 
 partly from habit, general example, and from a total absence of an 
 idle class to lend companionship. 
 
 In a nation of 17,000,000 of actively employed persons we have 
 
 1,000,000 of domestic servants, 
 60,000 clergymen, 
 25,000 soldiers and sailors, 
 115,000 employes of government, or 
 
 1,200,000 
 
 which can at all be called as standing outside of competition, or 7 
 per cent, against 35 per cent, under the old conditions. Still with 
 all this great competitive force, with all this fierce competition 
 going on in this country, with all this great working force con- 
 stantly employed or seeking employment, with all this absence of 
 privileged classes, of army, clergy, and governmental supervisors 
 of every man's action, wages are higher here than in any other 
 country where these elements still exercise a powerful influence in 
 reducing the active force of competitors for employment. But it 
 is just this absence of idlers, this abundance of workers, which 
 creates constantly new opportunities for employment. It is the 
 absence of privileged classes, of armies, of navies, which increases 
 the value of labor and of earnings. And above all it is the great 
 freedom which we enjoy in regulating our internal affairs. It 
 seems almost useless to reassert here, that with such facts before 
 our eyes as the results of freedom, it is almost a thing beyond 
 comprehension that we have not extended as yet the great theory 
 of freedom into the laws governing our external affairs. 
 
CHAPTER XVI. 
 
 APPLICATION OF GENERAL FACTS TO OUR INDUSTRIAL SITUA- 
 TION. 
 
 The following we may set down as prominent characteristics 
 of American industrial life : 
 
 1. Great productiveness of labor in general. 
 
 2. Universal application of machinery. 
 
 3. Profuseness of production, necessarily requiring great con- 
 sumption and an unrestrained outlet for the product. 
 
 Unless this is obtained production will become depressed, 
 which means that the standard of living of the working classes 
 will become reduced, and labor as well as capital lose its pros- 
 perity in the competitive struggle for existence. The abundance 
 of our public lands has so far acted as a safety-valve. Without 
 this natural blessing the pressure would before this have become 
 far more intense. The pressure of limited markets upon our pro- 
 ductive forces would have become unbearable. But even now, 
 with vast areas of unsettled lands, the danger-line is drawing 
 nearer and nearer. The unemployed classes find it more difficult 
 to obtain land upon their terms, except in localities which lie out- 
 side of their means of reaching them. If anywhere, here is the 
 rightful domain of government to exercise its powerful influences. 
 Land is the first and most prominent regulator of the price of 
 labor. Its accessibility to the working classes secured on easy 
 terms under a free government, every other problem will find its 
 own solution. The overabundance of our labor finds its most 
 profitable field there, when our artificial commercial system con- 
 demns vast armies of able workingmen to enforced idleness. The 
 overabundance of our industrial products finds an increasing 
 market in turn, when this surplus labor has found its permanent 
 resting-place again. Then in return a growing demand arises 
 from lessened production in industrial branches and increasing 
 
 150 
 
demand from extended agricultural centres, which demand cannot 
 be filled at once, and we have the " boom." This has happened 
 now three times in periods of seven to eight years during the last 
 twenty years under our present fiscal system : Two to three years 
 of great demand and high prices, followed by four to five years of 
 decline and fierce competitive war among ourselves. We could 
 turn our energies to more fruitful and less mortifying struggles if 
 we were permitted to turn them upon foreign prey. The situation 
 would be changed at once if we were permitted to trade with a 
 thousand millions of people, instead of fifty-six millions, upon 
 equal terms with other nations. This we cannot do successfully 
 as long as there is a tax upon our raw material. 
 
 The labor-cost of American work is so small an item now in the 
 construction of any article, that it is great negligence on the part 
 of our legislators to continue in force statutes that tend to increase 
 the price of materials of manufacture. To obtain markets under 
 those conditions is possible only by pressing down the earnings of 
 working people and of their employers. Both have to suffer, 
 either through intense pressure of home competition or through 
 reductions necessary to counterbalance the higher cost of ma- 
 terial, if they seek foreign outlets for the product of their skill and 
 energy. Take for example the clock manufacture in America. 
 Every thing pertaining to the complex structure of a clock is done 
 on the same premises, even to the making of the machinery which 
 is used in turning every part of the work from the raw material 
 into its proper shape for ultimate use in a clock. The raw material 
 used is pig-iron, block-tin, and copper, lumber, etc., — in short, the 
 crudest forms in which materials are known to the trade. The 
 rapidity of work, the quantities turned out by comparatively little 
 labor, alone explains that very sightly clocks are made and sold at 
 a dollar apiece, of which the direct labor-cost does not exceed 
 twenty-five cents, perhaps. As a great part of their goods is sold 
 abroad, it follows that the labor employed by these works at the 
 highest rates ruling in the United States ($550, according to the 
 census of 1880, while the general average of factory labor is only 
 $350 a year) has to find markets in competition with European 
 labor, which does not earn one third as much per day. Excepting 
 lumber for the frames, perhaps there is not a dollar's worth of 
 
152 
 
 material used in the construction of these goods which could not 
 be bought at eighty cents, and from that down to sixty-five cents, 
 by any German, Swiss, or English concern with whose products 
 Americans have to compete in the world's markets. The same 
 could be said about our sewing- and other machines, tools, imple- 
 ments, fence-wire, and so forth. 
 
 I have lately visited one of our Eastern shoe-factories, and ex- 
 amined the numberless details of work through which the materials 
 have to go, until the last finish is put on a very graceful pair of 
 lady's button-boots. Excepting the cutting of the pieces, every- 
 thing is done by machinery, even to the sewing on of the buttons, 
 one of the latest Yankee inventions. The combined cost of the 
 many operations does not exceed the sum of thirty cents. The 
 factory price per dozen is $15, or say, $1.10 net per pair. This 
 includes packing expenses (wooden case and a paper box in which 
 each pair is packed). They are retailed probably at $1.75, and 
 are good, solid, honest leather goods. No pastework. The earn- 
 ings of the operatives are the average paid for this kind of work, 
 and certainly twice as high as paid in England or anywhere in 
 Europe. As every thing is piece-work, the operatives can earn 
 high wages only when they possess an amount of efficiency and 
 skill, which are acknowledged characteristics of Eastern opera- 
 tives, male or female. The degree of intelligence and nerve 
 power which the faces of the operatives show would hardly be 
 found in any factory outside of America, and is the only answer 
 we can give to the oft-repeated question : How if other nations 
 adopt our methods ? Many an English shoemaker, attracted by 
 the high earnings of operatives in American factories, had to give 
 up the contest, as he could not earn half the wages of an American 
 with the same tools and in the same factory. 
 
 But other nations are slow to adopt our methods. The Berlt?ier 
 Tageblatt of September, 1884, in a long editorial, gives vent to its 
 astonishment at the exposition of an " iron shoemaker " — " der 
 eiserne Schuhmacher " — at the Industrial Exposition of Vienna. 
 The writer dwells upon the fact that there are 250,000 shoemakers 
 in Germany, and that the introduction of machine-shoemaking 
 would displace certainly 200,000 shoemakers, and he consequently 
 deprecates the innovation. 
 
^53 
 
 Now I will not disparage on Germany's great advantages. Her 
 future is as full of promise, as her remoter past, dealt with in a 
 previous chapter, has been great in the fields of enterprise, culture, 
 and labor. With a studious, painstaking mind, assisted by insti- 
 tutions of learning in the fields of technology as well as in other 
 sciences, unsurpassed and unequalled by any nation, her employ- 
 ing classes eagerly push to the foreground. None are more eager 
 students of our practical lessons than the Germans. In the shoe 
 industry her manufacturers come over here, to learn and study 
 our system. Only last summer one of them came over to work 
 his way through a shoe-factory in Lynn. When I asked of a Lynn 
 manufacturer why they were not more guarded in imparting the 
 secrets of their trade to foreigners, he answered : " They cannot 
 do us any harm. If we had our materials free, and they had all 
 our machinery, we could beat them yet with all their cheap labor." 
 Continuing he said : " The trouble with the Germans is, they 
 don't give their labor a fair show. When they introduce machin- 
 ery by which they save in the cost of labor, they right away go to 
 work to cut down the wages. This takes all ambition out of the 
 work, and the result is that they get little ahead. One concern in 
 Koburg has begun to work on a more liberal principle, encour- 
 aging high earnings, with very satisfactory results." 
 
 We find the great practical bearing of this lucid expression of 
 the true philosophy of wages fully corroborated by ocular proofs. 
 Man must see a chance before him, to work his way upward, if he 
 is to employ his capacity to its fullest extent. There must be 
 elbow-room. Fully used to this, American workers, placed side by 
 side with European, show soon enough that they are made of dif- 
 ferent metal. I will give an extract from a recent article of Prof. 
 Dieffenbach, one of the highest German authorities on technical 
 education, in illustration. He says : 
 
 " More surprising still is the influence of North America upon 
 handicrafts, and especially on the whole domain of mechanical 
 technology. Here there is still a very wide difference between 
 Germany and the United States. While our chemical technology 
 has been distinguished by extraordinary advances, in consequence 
 of which our chemical manufacturers have recently conquered a 
 multitude of new markets, our mechanical technology has not 
 developed at the same rate. 
 
154 
 
 " There is a striking difference between the every-day require- 
 ments of the mechanical trades in Germany and America. Com- 
 paring the tools of the American mechanic and the German, we 
 find the difference about as great as that between our axes and 
 hammers and the axes and hatchet of the stone age. By means 
 of an excellently arranged collection, originated by Privy-Coun- 
 cillor Dr. Hartig, Professor of Mechanical Technology, the Royal 
 Polytechnic Institution at Dresden has made an intelligent exhi- 
 bition of the gradual evolution of tools used in working wood, 
 stone, and metals, in spinning and weaving. In this collection the 
 oldest forms attainable are exhibited side by side with the newest, 
 generally American, forms. These latter are not only distinguished 
 by superior elegance and finish, but are handier and more reliable 
 in their work. It is true that this juxtaposition of widely diver- 
 gent forms is not meant to convey the opinion that the new are 
 preferable in every respect, but to lead beholders to reflect upon 
 the possibility of improving the forms hitherto clung to with great 
 tenacity in our workshops, and to show them that such improve- 
 ments, both in durability and effectiveness, can in many cases be 
 accomplished at but slightly increased cost. In many things the 
 United States may serve us as a pattern, and we feel sure that the 
 example given us will not fail to be imitated in the Old World. 
 
 " Sewing-machines, as well as machines for boring, lifting, and 
 sawing, were first given a more practical construction, first brought 
 to perfection, in America. America brought about a complete 
 evolution in the manufacture of leather, the most important after 
 iron. There new and better tanning materials were first intro- 
 duced, and there, too, new animal textures adapted to tanning 
 were discovered, — as, for instance, the skin of the alligator and 
 crocodile, which has so quickly won popular favor. There, too, 
 leather was first split, and the splitting-machine is an American 
 invention. But, above all, America started a revolution in shoe- 
 making, which is now being carried out in the Old World. It 
 embraces the tools used by the ordinary shoemaker, as well as 
 machinery. Among the tools, we mention the edge-trimmer, 
 Dunham edge-trimmer, polishing irons, polishing wheels, and 
 heel-shave. 
 
 " What an American workman is able to accomplish by means of 
 
^55 
 
 these tools, may be seen by an example. The writer of this article 
 spent a portion of 1878 and 1879 in Leipsic, where he became 
 acquainted with a manufacturer of boots and shoes. One day an 
 American applied for work ; he stated that he had come to Ger- 
 many on account of his son, who had a talent for music, and 
 whom he wished to have educated at the Conservatory. He said 
 that he was looking for work in order to pay his son's expenses, 
 and he desired to be allowed to use tools that he had brought over 
 from America. The manufacturer agreed. Now, the American 
 appeared at his place daily, looked neither to the right nor to the 
 left, but attended to his work to the last stroke of the bell. The 
 manufacturer soon noticed that he had obtained a man fully equal 
 to the German hands in thoroughness and skill, and capable of 
 turning out three to four times as much as any other, thanks to 
 his exemplary diligence and his American tools. Wages being by 
 the piece, the man earned more than enough to support himself 
 and his son. 
 
 " In addition, we are tempted to remark that the American self- 
 made man appeared to great advantage. A German family that 
 discovers a pretty voice or some other musical talent in one of the 
 children, does not feel called upon to provide for the cultivation of 
 such gift. It petitions for a scholarship ; it begs the sovereign 
 and wealthy patrons of art for assistance, and believes it to be the 
 duty of all lovers of art to help along the wonderful child, which 
 might, nevertheless, one day do itself and the world better service 
 by plying the needle or knitting stockings. Among us, in Ger- 
 many, great sums of money are spent every year in the education 
 of so-called artists, and yet the expenditure is simply and abso- 
 lutely so much money wasted. What did the American working- 
 man think and do ? He regarded the education of his son as a 
 speculation. I shall, he thought, work a few years longer ; I shall 
 work harder, if need be, but if I am lucky I shall have no cares in 
 my old age, and be under obligation to nobody." 
 
 In this generous recognition of the American's worth. Professor 
 Dieffenbach touches the main-spring of America's success. It is 
 a gift from within^ not from without. The American knows that he 
 is the maker of his own destiny. He aspires to the highest. Free- 
 dom from restraint has developed the highest type in America. 
 
156 
 
 With such productive powers at our command, with the labor- 
 cost reduced to so trivial a sum, the cutting-down process resorted 
 to by manufacturers, as a means of stemming the ruinous tide of 
 competition, is absolutely superfluous. It does not alleviate the 
 evil ; it intensifies it. It cannot make American markets consume 
 more product. It cannot give us foreign markets, so long as our 
 materials are heavily taxed. Our labor, assisted by machinery, is 
 so efficient and cheap now, that with free materials we could 
 advance our labor price, and still be able to undersell European 
 labor in any of the neutral markets of the world. We could add 
 to the yearly earnings of our toiling millions many a week's, nay 
 month's, employment beyond that offered by our circumscribed 
 markets at home. By opening foreign markets to the products of 
 the toil of our workers at home, and thus increasing their earn- 
 ings, we should create the most lucrative colonies that any nation 
 has had in the history of the world. 
 
APPENDIX TO CHAPTER VI. 
 
 The report of the Chamber of Commerce of Crefeld, just pub- 
 lished^ shows clearly that very little change has taken place as yet 
 in the industrial system of the German centre of silk manufac- 
 ture. 
 
 The average number of weavers and looms employed during 
 the years 1882, 1883, and 1884 were as follows : 
 
 
 1882. 
 
 1883. 
 
 1884. 
 
 Velvet and plush, hand, 
 
 17,812 
 
 21,770 
 
 22,085 
 
 " ♦' " power 
 
 299 
 
 651 
 
 1,018 
 
 Velvet ribbons, hand . 
 
 541 
 
 1,003 
 
 484 
 
 " " power . 
 
 72 
 
 159 
 
 68 
 
 Silks and satins, hand . 
 
 16,425 
 
 12,690 
 
 12,987 
 
 " " " power. 
 
 400 
 
 657 
 
 893 
 
 Cut ribbons, hand . . 
 
 58 
 
 80 
 
 \ '° 
 
 " " power . . 
 
 25 
 
 
 Totals 
 
 35,632 
 
 37,010 
 
 37,605 
 
 The advantages derived from the employment of hand-looms in 
 the silk industry are manifold. One of great importance in price- 
 making is the employment of cheaper kinds of silk, while the 
 power-loom requires the best and most expensive grades. This, 
 and the greater facility of changing looms to suit the manifold re- 
 quirements of fashion, the greater ability of the manufacturer to 
 regulate his production according to the demand, and thus putting 
 the burden of depression upon the workingman instead of carry- 
 ing the greatest share himself, as is the case with owners of power- 
 mills, may be given as correlative reasons for the slow progress 
 which the power-mill has made in Europe in the silk industry. 
 
 157 
 
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