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ACCOUNT NO. CLOTH COLOR CHARGING INFORMATION i. Snr STUBBING HAND SEW THRU SEW ; THRU SEW ON’ TAPE HAND ADHESIVE FOREIGN TITLE’ LINES OF LETTERING HEIGHT PICA WRAP SPECIAL WORK AND PREP. JACKSONVILLE, ILL. 62650 LOT AND TICKET NO. HEIGHT RECENT 7, ¢ ECONOMIC CHANGES AND THEIR EFFECT ON THE PRODUCTION AND DISTRIBUTION OF WEHALTIL AND THE WELL-BEING OF SOCIETY BY DAVIS WRLIs Lie Deed. 0. Li MEMBRE CORRESPONDANT DE L’INSTITUT DE FRANCE } CORRESPONDENTE REGIA ACCADEMIA DEI LINCEI, ITALIA ; HONORARY FELLOW ROYAL STATISTICAL SOCIETY, G. B. ; LATE UNITED STATES SPECIAL COMMISSIONER OF REVENUE, AND PRESIDENT AMERICAN SOCIAL SCIENCE ASSOCIATION, ETC, ; NEW YORK D. APPLETON AND COMPANY 1899 eo 0.9 WHOK™Y DEMOTE STORAGE TO D. WILLIS JAMES, THE ENTERPRISING AND SUCCESSFUL MERCHANT THE PUBLIC-SPIRITED CITIZEN, THE WISE AND GENEROUS PHILANTHROPIST, THIS VOLUME IS RESPECTFULLY Medicated BY THE AUTHOR. UR Rone A OB. THE economic changes that have occurred during the last quarter of a century—or during the present generation of living men—have unquestionably been more important and varied than during any former corresponding period of the world’s history. It would seem, indeed, as if the world, during all the years since the inception of civilization, has been working up on the line of equipment for industrial effort—inventing and perfecting tools and machinery, build- ing workshops and factories, and devising instrumentalities for the easy intercommunication of persons and thoughts, and the cheap exchange of products and services; that this “equipment having at last been made ready, the work of using it has, for the first time in our day and generation, fairly begun; and also that every community under prior or existing conditions of use and consumption, is becoming saturated, as it were, with its results. As an immediate consequence the world has never seen anything comparable to the results of the recent system of transportation by land and water; never experienced in so short a time such an expansion of all that pertains to what is called “ business” ; ' and has never before been able to accomplish so much in ne PREFACE. the way of production with a given amount of labor in a given time. Concurrently, or as the necessary sequence of these changes, has come a series of wide-spread and complex dis- turbances; manifesting themselves in great reductions of the cost of production and distribution and a consequent remark- able decline in the prices of nearly all staple commodities, in a radical change in the relative values of the precious metals, in the absolute destruction of large amounts of capital through new inventions and discoveries and in the impairment of even greater amounts through extensive reductions in the rates of interest and profits, in the dis- content of labor and in an increasing antagonism of nations, incident to a greatly intensified industrial and commercial competition. Out of these changes will probably come fur- ther disturbances, which to many thoughtful and conserva- tive minds seem full of menace of a mustering of the bar- barians from within rather than as of old from without, for an attack on the whole present organization of society, and even the permanency of civilization itself. The problems which our advancing civilization is forc- ing upon the attention of. society are, accordingly, of the utmost urgency and importance, and are already occupying the thoughts, in a greater or less degree, of every intelligent person in all civilized countries. But, in order that there may be intelligent and comprehensive discussion of the situation, and more especially that there may be wise re- medial legislation for any economic or social evils that may exist, it is requisite that there should be a clear and full recognition of what has happened. And to simply and comprehensively tell this—to trace out and exhibit in some- PREFACE. vii thing like regular order the causes and extent of the indus- trial and social changes and accompanying disturbances which have especially characterized the last fifteen or twenty years of the world’s history—has been the main pur- pose of the author. At the same time the presentation of whatever in the way of deduction from the record of experi- ence has seemed legitimate and likely to aid in correct con- clusions, has not been disregarded. In the main the following pages are a reproduction of a series of papers originally contributed to and published in “The (New York) Popular Science Monthly,” and in part in “ The (London) Contemporary Review ” (1887 and 1888). These have, however, in great measure been rewritten, care- fully revised, and brought up to a later date. Norwicu, Connecticut, August, 1889. GOWN Deb: Ns TS). I, PAGE Economic disturbances since 1873—Character and universality of such disturbances—Conditions antecedent—Experience of Germany—Of the United States—Effect of crop failures in Europe, 1879-’81—Dis- turbances in Great Britain, France, Belgium, Russia, and Spain— Chronological presentation of industrial experiences—Speculations as to causes—Tendency to magnify local influences—The recognition of a cause universal in its influence necessary to explain a universal phenomenon ° . ‘ ‘ : : - re Il. The place in history of the years from 1860 to 1885 inclusive—New con- ditions of production and distribution—The prime factors of eco- nomic disturbance—lIllustrative examples—The Suez Canal—Influ- ences of the telegraph on trade—Economy in the construction and management of vessels—Disappearance of the sailing-vessel—Revo- lution in the carrying-trade on land—The annual work service of the railroad—The Bessemer steel rail—Future supply of food com- modities—Cheapening of iron—Displacement of labor by machinery —Natural gas—Application of machinery to the production and transportation of grain—Adam Smith and the manufacture of pins— The epoch of efficient machinery production—Influence of labor dis- turbances on inventions—Prospective disturbing agencies—Displ!ace- ment of the steam-engine . ; . , : : nae EH. -Over-production—Periodicity of trade activity and stagnation—Increase in the volume of trade with accompanying decline in profits—De- pression of agriculture in Europe—Changes in the relations of labor and capital—Destruction of handicrafts—Antagonisms of machinery —Experience of British co-operative societies—Influence of improve- ments in production by machinery on international differences in wages—Changes in the details of product distribution—Changes in retail trade—Displacement of the ‘‘ middle-man”’ ‘ : aidd ee CONTENTS. Iv. PAGE Depression of prices as a cause of economic disturbance—Manifestations of such disturbances—Their universality—Average fall in prices since 1867-’77—Methods of determining averages—Cause of the decline— Two general theories—General propositions fundamental to inquiry— Recent production and price experiences of staple commodities—Sugar — Petroleum— Copper—Iron— Quicksilver —Silver—Tin— Tin-plate —Lead—Coal—Coffee and tea—Quinine— Paper and rags— Nitrate of soda—Meat— Cheese—Fish— F reights — W heat—Cotton— W ool— Silk—Jute—Conclusions of the British Gold and Silver Commission 114 Ve Price experience of commodities where product has not been greatly augmented—Handicraft products—Prices of India commodities— Exceptional causes for price changes—Ooral, hops, diamonds, hides, and leather—Changes in supply and demand regarded by some as not sufficiently potential—Divergency of price movements—Evidence from a gold standpoint—Has gold really become scaree ?—Gold pro- duction since 1850—Increase in the gold reserves of civilized coun- tries—Economy in the use of money—Clearing-house experiences— Difference between gold and silver and other commodities in respect to use—Has the fall in prices increased the burden of debts ?@—Curi- ous monetary experiences of the United States . , 5 AD VAL Changes in recent years in the relative values of the precious metals— Subject not generally understood—Former stability in the price of silver—Action of the German Government in 18783—Concurrent de- cline in the price of silver—Action of the ‘‘ Latin Union??—Influ- ence and nature of India ‘‘ Council bills’—Alleged demonetization of silver—Increased purchasing power of silver—Increased product of silver—Economie disturbances consequent on the decline of silver —Increased production of cotton fabrics in India—Industrial awak- ening in India—Relation of the decline in the value of silver to the supply of India wheat—International trade, a trade in commodities and not in money—Economic disturbances in the Dutch East In- dies—Natural law governing the selection and use of metallic money— Experience of Corea—The metal coinage system of the world tri- metallic—The gold standard a necessity of advanced civilization— The fall of prices due to more potent agencies than variations in the volumes or relative values of the precious metals ‘ : » 294 | VII. Governmental interference with production and distribution as a cause of economic disturbance— Economic sequences of the repeal of the Brit- CONTENTS. ue PAGE ish com laws—Extension of commercial frendoatBeanwing pros- perity—Reactionary policy after 1876—Causes influencing to reaction —Commercial policy of Russia—Illustrations of recent restrictive * gommercial legislation—France and Italy—French colonial policy— Revival of the restrictive commercial ideas of the middle ages—Local and trade legislation in the United States—Restrictions on immigra- tion and residence—Retrogression in the comity of nations—Results of tariff conflicts in Europe—The development of trusts—Indications of the abandonment of commercial restrictions in Europe—Extraor- dinary experiences of the beet-sugar production—International con- ference for the abolition of sugar bounties—Experience of France in respect to shipping bounties—Relative commercial importance of dif- ferent European nations—Per capita wealth in different countries— Relative production and prices of iron and steel in the United States and Great Britain—Augmentation of domestic prices by taxes on im- ports—Economical disturbances contingent on war expenditures . 260 VII. The economic outlook—Tendency to pessimistic views—Antagonism of sentiment to correct reasoning—The future of industry a process of evolution—The disagreeable elements of the situation—All transi- tions in the life of society accompanied by disturbance—Incorrect views of Tolstoi—Bencficial results of modern economic conditions —Existing populations not formerly possible—The Malthusian the- ory—Present application to India—lIlustrations of the effect of new agricultural methods on production—No future famines in civilized countries—Creation of new industrial pursuits—Doubtful perpetua- tion of the Government of the United States under old economic conditions—Increase in the world’s supply and consumption of food —Increase in the varieties of food—Low cost of subsistence under attainable conditions in the United States—Savings-bank statistics— Decrease of pauperism—Statisties of crime—Increase in the duration of human life—Extermination of certain diseases—Future of medi- cine and surgery—Unfavorable results of new conditions of civiliza- tion—Increase of suicides—Divorce statistics—Cha.ige in the condi- tion of the British people since 1840—Wealth of Great Brivain—British education and taxation—Present higher vantage-ground of humanity 824 {X. The discontent of labor—Causes for—Displacement of labor—Results of the invention of stocking-making machinery—Increased opportunity for employment contingent on Arkwright’s invention—Destructive influences of material progress on capital—Effect of the employment of labor-saving machinery on wages—On agricultural employments— Extent of labor displaccment by machinery—The cause of Irish dis- xil CONTENTS. PAGE © content not altogether local—Impoverishment of French proprietors— : Is there to be an anarchy of production ?—Effect of reduction of price ; on consumption—On opportunities for labor—Illustrative examples— Influence of taxation on restraining consumption—Experiences of «— - tolls on Brooklyn Bridge—Characteristics of different nationalities in respect to the consumption of commodities—Creation of new industries —KEtfect of import taxes on works of art—Tendency of over-production to correct itself—Present and prospective consumption of iron—Work : breeds work—Pessimistic views not pertinent to present conditions . 364 : X. Discontent of labor in consequence of changes in the conditions of em- ployment—Subordination to method and routine essential to all sys- tematized occupations—Compensations therefrom—Benefits of the capitalistic system of production—Werner Siemens’s anticipations— Discontent of labor in consequence of greater intelligence—Best defi- nition of the difference between a man and an animal—Increase in personal moverment—Change in character of the English, French, and German people—What is socialism ?—Meaning of progressive material and social development—Advance in wages in Great Britain, the United States, and France—Coincident change in the relative number of the lowest class of laborers—Relation of wages to the cost of living—Increase in expenditures for rent—Curious demonstration of the improved condition of the masses—Reduction of the hours of labor—Why wages have risen and the price of commodities fallen— Impairment of the value of capital—Reduction of the rates of interest —Decline in land values . : j ‘ 2 . 896 XI. The economic outlook, present and prospective—Necessity of studying the situation as an entirety—Compensation for economic disturb- ances—Inequality in the distribution of wealth a less evil than equal- ity of wealth—The problem of poverty as affected by time—Tendency of the poor toward the centers of population—Relation of machinery to the poverty problem—Reduction of the hours of labor by legis- lation—Fallacy of eight-hour arguments—The greatest of gains from recent material progress—Increase of comfort to the masses from — decline of prices—Oleomargarine legislation—Difference between wholesale and retail prices—Relation between prices and poverty— Individual differences in respect to the value-perceiving faculty— Characteristics of the Jews—Relative material progress of different countries—Material development of Australia and the Argentine Re- public—Great economic changes in India— Great material progress in Great Britain—The economic changes of the future—Further cheap- ening of transportation—Future of agriculture—Position of the last third of the nineteenth century in history é : : . 427 RECENT ECONOMIC CHANGES. f, Economic disturbances since 1873—Character and universality of such dis- turbances—Conditions antecedent—Experience of Germany —Of the United States—Effect of crop failures in Europe, 1879~81—Disturbances in Great Britain, France, Belgium, Russia, and Spain—Chronological presentation of industrial experiences—Speculations as to causes—Tendency to magnify local influences—The recognition of a cause universal in its influence necessary to explain a universal phenomenon. THE existence of a most curious and, in many respects, unprecedented disturbance and depression of trade, com- merce, and industry, which, first manifesting itself in a marked degree in 1873, has prevailed with fluctuations of intensity up to the present time (1889), is an economic and social phenomenon that has been everywhere recognized. Its most noteworthy peculiarity has been its universality ; affecting nations that have been involved in war as well as those which have maintained peace; those which have a stable currency, based on gold, and those which have an unstable currency, based on promises which have not been kept; those which live under a system of free exchange of commodities, and those whose exchanges are more or less restricted. It has been grievous in old communities like England and Germany, and equally so in Australia, South Africa, and California, which represent the new; it has been a calamity exceeding heavy to be borne, alike by the inhabitants of sterile Newfoundland and Labrador, and of 2 RECENT ECONOMIC CHANGES. the sunny, fruitful sugar-islands of the East and West In- dies; and it has not enriched those at the centers of the world’s exchanges, whose gains are ordinarily the greatest when business is most fluctuating and uncertain.* One of the leading economists and financiers of France, M. Leroy Beaulieu, claims that the suffering has been great- est in his country, humiliated in war, shorn of her territory, and paying the maximum of taxation; but not a few stand ready to contest that claim in behalf of the United States, rejoicing in the maintenance of her national strength and dominion, and richer than ever in national resources. Commenting upon the phenomena of the industrial de- pression subsequent to the early months of 1882, the Director * The poverty in Australia, in 1885, was reported to be more extrenie than at any former period in the history of the colonies; multitudes at Adelaide, South Australia, surrounding the Government House and clamoring for food —the causes of distress assigned being failure of the harvest, drought, and general commercial depression. This depression, especially of the agricultu- ral interests, continued in a marked degree through the year 1885, the ex- ports of the colonies declining thirteen per cent and the imports six per cent as compared with those of the preceding year. With an increase of three per cent in population for the year, the colonial revenues of 1886 also showed a marked decline as compared with 1885. Since 1887, however, business in Australia has greatly improved. ‘‘ The close of the year 1884 brought with it little, if any, improvement, in the material condition of South Africa. Commercial disasters may not have been so frequent as during the previous year, but this may be explained by the fact that trade has reached so low a level that very little room existed for further failures. No new enterprises have been set on foot, and the sus- pension of many of the public works has tended to further reduce the com- mercial prosperity of the country. Consumption has been upon the lowest possible scale, retrenchment universal, and want of employment, and even of food, among the laboring-classes, a grave public difficulty.”’— United States Consul Stumr, Report to State Department, 1885. January, 1885. The price of mackerel in 1884 (Boston) was lower than at any time since 1849; and, in the case of codfish, the lowest since 1838. On the other hand, the price of mackerel in December, 1888, in the same market, was so high as to almost render the consumption of this article of food a mat- ter of luxury. In all countries dependent in a great degree on the production of cane-sugar, the depression of industry in recent years has also been very great, and still (1889) continues. a ois i ECONOMIC DISTURBANCES SINCE 1873. 3 of the United States National Bureau of Labor, in his re- port for 1886, considers the nations involved, in respect to their relations to each other and to severity of experience, to stand in the following order: Great Britain, the United States, Germany, France, Belgium. 'The investigations of the director also indicated a conclusion (of the greatest im- portance in the consideration of causes); namely, that the maximum of economic disturbance has been experienced in those countries in which the employment of machinery, the ° efficiency of labor, the cost and the standard of living, and the extent of popular education are the greatest; and the minimum in countries, like Austria, Italy, China, Mexico, South America, etc., where the opposite conditions prevail. These conclusions, which are concurred in by nearly all other investigators, apply, however, more especially to the years prior to 1883, as since then “ depression” has mani- fested itself with marked intensity in such countries as Russia, Japan, Zanzibar, Uruguay, and Roumania. The business of retail distribution generally—owing, probably, to the extreme cheapness of commodities—does not, moreover, appear to have been less profitable than usual during the so-called period of depression ; in contradistince- tion to the business of production, which has been generally unprofitable. It is also universally admitted that the years immediately precedent to 1873—i. e., from 1869 to 1872—constituted a period of most extraordinary and almost universal inflation of prices, credits, and business; which, in turn, has been attributed to a variety or sequence of influences, such as excessive speculation ; excessive and injudicious construction of railroads in the United States, Central Europe, and Rus- sia (186773); the opening of the Suez Canal (1869); the Franco-German War (1870-71); and the payment of the enormous war indemnity of fifty-five hundred million francs (eleven hundred million dollars) which Germany exacted from France (1871-73). The contemporary comments of 2 - 4. RECENT ECONOMIC CHANGLHS. two English journals, of recognized authority, on the course of events in 1872, constitute also an important contribution to our information on this subject. Under date of March, 1873, the London ‘“ Economist,” in its review of the com- mercial history of the preceding year, says: Of all events of the year (1872) the profound economic changes generated by the rise of prices and wages in this country, in Central and Western Europe, and in the United States, have been the most full of moment. . And the London “Engineer,” under date of February, 1873, thus further comments on the situation : The progress of events during 1872 will not soon be forgotten by engineers. The position assumed by the working-classes, and the un- precedented demand for iron and machinery, combined to raise the cost of all the principal materials of construction to a point absolutely without parallel, if we bear in mind that the advance of prices was not localized, but universal, and that the duration of the rise was not limited to a few months or weeks, but, having extended already over a period of some months, shows little sign at this moment of any sen- sible abatement. Jn 1872 scarcely a single step in advance was made un the science or practice of mechanical engineering. No one had time to invent, or improve, or try new things. The workingman is setting spurs to his employers with no gentle touch, and already we find that every master with capital at stake is considering how best he can dis- pense with the men who give him so much trouble. Of course, the general answer always assumes the same shape—use a tool whenever it is possible instead of a man. The period of economic disturbance which commenced in 1873 appears to have first manifested itself almost simul- taneously in Germany and the United States in the latter half of that year. In the former country the great and successful results of the war with France had stimulated every department of thought and action among its people - into intense activity. ‘The war indemnity, which had been exacted of France, had been used in part to pay off the debt obligations of the Government, and ready capital be- came so abundant that banking institutions of note almost EXPERIENCE OF GERMANY IN 1872-73. 5 begged for the opportunity to place loans, at rates as low as one per cent, with manufacturers, for the purpose of en- _larging their establishments. As a legitimate result, the 7 whole country projected and engaged in all manner of new industrial and financial undertakings. Thousands of new concerns were called into existence, the management of which did not give the slightest attention to sound com- mercial principles. In Prussia alone six hundred and eighty-seven new joint-stock companies were founded dur- ing the year 1872 and the first six months of 1873, with an aggregate capital of $481,045,000. The sudden growth of ‘industries, and the temptations of cities and towns (the sud- den augmentation of which is so striking a feature in the history of Germany after the year 1870), had also induced hundreds of thousands of men and women to desert agri- cultural pursuits and to seek employment in trades. Such a state of things, as is now obvious, was most unnatural, and could not continue; and the reaction and disaster came with great suddenness, as has been already stated, in the fall of 1873, but without anticipation on the part of the multitude. Great fortunes rapidly melted away, industry became paralyzed, and the whole of Germany passed at once from a condition of apparently great prosperity to a depth of financial, industrial, and commercial depression that had never been equaled. In the United States the phenomena antecedent to the crisis were enumerated at the time to be, “a rise of prices, . great prosperity, large profits, high wages, and strikes for higher ; large importations, a railway mania, expanded credit, over-trading, over-building, and high living.” The crisis began on the 17th of September, 1873, by the failure of a comparatively unimportant railway company—the New York and Oswego Midland. On the 18th, the banking- house of Jay Cooke & Co. failed. On the 19th, nineteen other banking-houses failed. Then followed a succession of bankruptcies, until in four years the mercantile failures 6 RECENT ECONOMIC CHANGES. had aggregated $775,865,000; and on January 1, 1876, the amount of American railway bonds in default amounted to $789,367,655. The period of economic disturbance which thus began in Germany and the United States soon extended to France and Belgium; and thereafter, but with varying degrees of severity, to Great Britain (i. e., in the latter months of the succeeding year), to the other states of Europe, and ulti- mately to the commercial portions of almost every country. The testimony before the British Parliamentary Commis- sion (1885-86), however, shows that the depression in Great Britain was not at once universal; but that, on the contrary, production, employment, and profits, at such great manu- facturing centers as Birmingham and Huddersfield, were above the average until 1875. By many writers on this subject, the depression and dis- turbance of industry, which commenced in 1878, are re- garded as having terminated in 1878-79; but all are agreed that they recommenced, with somewhat modified conditions, and even with increased severity, in 1882-’83. about 2°5 cents in 1869 to 1:06 in 1887; or, taking the re- sults on one of the standard roads of the United States (the | New York Central), from 1:95 in 1869 to 0°68 in 1885.* | To grasp fully the meaning and significance of these figures, their method of presentation may be varied by saying that two thousand pounds of coal, iron, wheat, cotton, or other commodities, can now be carried on the best managed rail- ways for a distance of one mile, for a sum so small, that . outside of China it would be difficult to find a coin of equiv- * On certain of the railroads of the United States an even lower average rate of freight has been reported. Thus, for the year 1886 the Michigan Central Railroad reported 0°56 cent as their average rate per ton per mile for that year, - and the Lake Shore and Michigan Southern Railroad 0°55 cent for like service, REVOLUTION IN THE CARRYING-TRADE ON LAND. 41 alent value to give to a boy as a reward for carrying an ounce package across a street, even if a man or boy could be found in Kurope or the United States willing to give or accept so small a compensation for such a service. The following ingenious method of illustrating the same results has been also suggested: The number of miles of railroad in operation in various parts of the world in 1885 was probably about 300,000.* Reckoning their capacity for transportation at a rate not greater than the results actually achieved in that same year in the United States, it would appear that the aggregate railroad system of the world could easily have performed work in 1885 equivalent to transport- ing 120,000,000,000 tons one mile. “ But if it is next con- sidered that it is a fair day’s work for an ordinary horse to haul a ton 6-7 miles, year in and year out, it further appears that the railways have added to the power of the human race, for the satisfaction of its desires by the cheapening of products, a force somewhat greater than that of a horse working twelve days yearly for every inhabitant of the globe.” In the year 1887 the freight-transportation by the rail- roads of the United States (according to Poor’s “ Manual”) was equivalent to 60,061,069,996 tons carried one mile; while the population for that year was somewhat in excess of 60,000,000. The railroad freight service of the United States for 1887 was therefore equivalent to carrying a thou- sand tons one mile for every person, or every ton a thousand miles. The average cost of this service was about $10 per annum for every person. But if it had been entirely per- formed by horse-power, even under the most favorable of old-time conditions, its cost would have been about $200 to each inhabitant, which in turn would represent an expendi- * The world’s railway mileage for January, 1889, was probaly in excess of 850,000 miles. At the same date the telegraph system of the world comprised at least 600,000 miles of length of' line. 49, RECENT ECONOMIC CHANGES. ture greater than the entire value of the then annual prod- uct of the country; or, in other words, all that the peo- ple of the United States earned in 1887 would not pay the cost of transportation alone of the amount of such sery- ice rendered in that year, had it been performed by horse-| power exclusively.* : Less than half a century ago, the railroad was practically unknown.+ It is, therefore, within that short period that. this enormous power has been placed at the disposal of. every inhabitant of the globe for the cheapening of trans- portation to him of the products of other people and coun- tries, and for enabling him to market or exchange to better advantage the results of his own labor or services. As the extension of the railway system has, however, not been equal in all parts of the world—less than thirty thousand miles existing, at the close of 1887, in Asia, Africa, and Australia combined—its accruing benefits have not, of course, been. equal. And while all the inhabitants of the globe have un-. doubtedly been profited in a degree, by far the greater part of the enormous additions that have been made to the world’s working force through the railroad since 1840, have. accrued to the benefit of the people of the United States, and of Kurope—exclusive of Russia, Turkey, and the former | Turkish provinces of Southeastern Hurope—a number not much exceeding two hundred millions, or not a quarter part | of the entire population of the globe. The result of this economic change has therefore been to broaden and deepen : * One further interesting corollary of this exhibit is, that the average re- | turn, in the form of interest and dividends, on the enormous amount of capital which has been actually expended in order that the present railway service in | the United States may be performed, can not be estimated as in excess of four per cent per annum as a maximum. + As late as 1840 there were in operation only about 2,860 miles of railway in America, and 2,130 in Europe, or a total of 4,990 miles. For practical pur- poses, it may therefore be said that the world’s railway system did not then exist; while its organization and correspondence for doing full and efficient work must be referred to a much later period. THE BESSEMER STEEL RAIL. 43 rather than diminish the line of separation between the civilized and the semi-civilized and barbarous nations. Now, while a multiplicity of inventions and of experi- ences have contributed to the attainment of such results under this railroad system of transportation, the discovery of a method of making steel cheap was the one thing which was absolutely esserftial to make them finally possible; inas- much as the cost of frequently replacing rails of iron would have entailed such a burden of expenditure as to have ren- dered the present cheapness of railway transportation utterly unattainable. Note, therefore, how rapidly improvements in processes have followed the discovery of Bessemer, until, on the score of relative first cost alone, it has become eco- nomical to substitute steel for iron in railroad construction. In 1873 Bessemer steel in England, where its price has not been enhanced by protective duties, commanded $80 per ton ; in 1886 it was profitably manufactured and sold in the same country for less than $20 per ton!* Within the same time the annual producing capacity of a Bessemer converter has been increased fourfold, with no increase but rather a diminution of the involved labor; and, by the Gilchrist- Thomas process, four men can now make a given product of steel in the same time and with less cost of material than it took ten men ten years ago to accomplish. A ton of steel rails can now also be made with five thousand pounds of coal, as compared with ten thousand pounds in 1868. “The importance of the Bessemer invention of steel can be best understood by looking at the world’s production of that metal in 1887. * The average price of iron rails in Great Britain for the year 1883 was £5 per ton; stecl rails in the same market sold in 1886 for £4 5s. per ton; and in 1887 sales of steel rails were made in Belgium for £3 16s. ($18.75) per ton, deliverable at the works. The average price of steel rails in Pennsylvania (U.8.) at the works, for 1886, with a tariff on imports of $17 per ton, was $3444 per ton. Since the beginning of 1883 the manufacture of iron rails in the United States has been almost entirely discontinued, and during the years from 1883 to 1888 there were virtually no market quotations forthem. The last recorded average price for iron rails was $4514 per ton in 1882. 44 RECENT ECONOMIC CHANGES, The production of Bessemer steel in the eight chief iron and steel producing countries of the world amounted in that year to 7,269,767 tons, as compared with 6,034,115 tons in 1886, showing an increase of 1,260,094 tons, or twenty per cent. The saving effected by railway companies by the use of Bessemer metal and the additional security gained thereby is shown by the fact that a locomotive on the Great Northern Railway has accomplished, with a moderate train-load of passenger-coaches, a statute mile in fifty seconds, or at the rate of seventy-two miles per hour, and makes a considerable continuous run at a speed of one mile per minute—a rate of railway traveling almost beyond the dreams or anticipations of the renowned George Stephen- son.” The use of steel in place of iron in ship-construction may be said to date from 1878, and the rapidity with which the former has replaced the latter metal is very remarkable. Thus, in 1878 “the per- centage of steel used in the construction of steamships in Great Britain was only 1:09, but in 1887 the percentage of iron used in proportion to steel was only 0-98; or, in other words, in 1878 there was ninety times as much iron as steel used for steamers, but in 1887 there was more than eight times the quantity of steel used as compared with iron for the same purpose, and, as regards sailing-ships, the quantity of steel used in 1887 amounted to practically one half that of iron.”—Address of the President (Mr. Adamson) of the British Iron and Steel Asso- ciation, May, 1888. The power capable of being exerted by the steam-engines of the world in existence and working in the year 1887 has been estimated by the Bureau of Statistics at Berlin as equivalent to that of 200,000,000 horses, representing ap- proximately 1,000,000,000 men; or at least three times the working population of the earth, whose total number of in- habitants is probably about 1,460,000,000. The application and use of steam alone up to date (1889) has accordingly more than trebled man’s working power, and by enabling him to economize his physical strength has given him greater leisure, comfort, and abundance, and also greater opportunity for that mental training which is essential to a higher development. And yet it is certain that four fifths of the steam-engines now working in the world have been constructed during the last quarter of a century, or since 1865. PREVENTION OF FAMINKES, 45 One of the most momentous and what may be called humanitarian results of the recent great extension and cheapening of the world’s railway system and service is, that there is now no longer any occasion for the people of any country indulging in either excessive hopes or fears as to the results of any particular harvest; inasmuch as the fail- ure of crops in any one country is no longer, as it was, no later than twenty years ago, identical with high prices of grain; the prices of cereals being at present regulated, not within any particular country, but by the combined produc- tion and consumption of all countries made mutually acces- sible by railroads and steamships. As a matter of fact, in- deed, the granaries for no small portion of the surplus stock of the world’s cereals are at the present time ships and rail- road-cars in the process of movement to the points of great- est demand for consumption. Hence it is that, since 1870, years of locally bad crops in Europe have generally witnessed considerably lower prices than years when the local crops were good, and there was a local surplus for export.* In short, one marked effect of the present railroad and steamship system of transportation has been to compel a * A century ago every nation of Europe raised in ordinary years enough grain to supply the needs of its own population, and the circulation of food from country to country, and from province to province, was restricted and even generally prohibited. After the middle of the cighteenth century there were indications that the domestic growth of wheat in England was falling below the consumption of the people ; but this unpleasant fact was studiously concealed by the enormously expensive corn laws, which on the one hand artificially stimulated agriculture and kept poor lands in cultivation, and, on the other, restricted through high prices the consumption of bread—and was not openly recognized for nearly half a century later. Subsequently the other mations of Europe, with the exception of Russia and Austria-Hungary, have experienced the same alteration in their food-producing capacity—in part due to natural influences, and in part to artificial factors—which have turned the attention of the people away from the cultivation of cereals into employments that promised to be more profitable; and they have found it cheaper to im- port food than to grow it themselves. So that there are now no countries in Europe save the two above mentioned that have a surplus product of wheat available for export. 46 RECENT ECONOMIC CHANGES. uniformity of prices for all commodities that are essentia to life, and to put an end forever to what, less than half ¢ century ago, was a constant feature of European com. mercial experience, commerce, namely, the existence of lo. cal markets, with widely divergent prices for such commod. ities. How much of misery and starvation a locally deficient harvest entailed under the old system upon the poorer classes, through the absence of opportunity of supplying the deficiency through importations from other countries and even from contiguous districts, is shown by the circumstance that in the English Parliamentary debates upon the corn laws, about the year 1840, it was estimated upon data fur- nished by Mr. Tooke, in his “History of Prices,” that a deficiency of one sixth in the English harvest resulted in a rise of at least one hundred per cent in the price of grain ; and another estimate by Davenant and King, for the close of the seventeenth century, corroborates this apparently ex- cessive statement. The estimate of these latter authorities was as follows: For a deficit There will be a equal to— rise in price of— LAO. on vacidle Voie ey ule 0 slog sw naly ae ari 3-10 LOS a's eileelea's #opakis vBie’aaly oles die betcha og 8-10 BLO. cave calves cases Seca See 16-10 AnLQ She ie ead cbies cnc: terete ss] —————— 28-10 D1O. vecee ss cese cs vilcnwes sucess Et — an 45-10 As late as 1817 the difference in France between the highest and the lowest prices of grain in different parts of the country was 45 francs per hectolitre. In 1847 the aver- age difference was 26 francs. Since 1870 the greatest differ- ence at any time has not been in excess of 3°55 francs. The following table, given on German authority, and represent- ing the price (in silver gulden per hectolitre) of grain for various periods, exhibits a like progress of price equalization between nations : FUTURE SUPPLY OF FOOD COMMODITIES. A] PERIOD. England. France. Belgium. Prussia, MME cs cosas nes 10°25 7°35 6°44 5°65 SC 9-60 761 T3l 5:27 is wsa'ho\x.9, <6 0» 9°15 7°89 7-99 6°41 | 9°40 7°84 9°65 8:07 SO ists s Sleds be 8:80 8°59 9°24 779 —— For grain henceforth, therefore, the railroad and the steamship have decided that there shall be but one market —the world; and that the margin for speculation in this commodity, so essential to the well-being of humanity, shall be restricted to very narrow limits; the speculator for a rise in wheat in any one country finding himself practically in competition with all wheat-producing countries the moment he undertakes to advance prices; while abnormal values in one country or market, or excessive reserves at one center or another, are certain to be speedily neutralized and controlled by the influence of all countries and markets. The movement and prices of wheat for the year 1888 furnish a most remarkable illustration and confirmation of the above statements, and also (as Sir James Caird has pointed out) “of the smoothness (at the present time) of the operations of trade under natural conditions.” During the eleven months of 1888, ending November 30th, Great Britain imported a little more than sixty-seven million hun- dred-weight of wheat and flour. In the corresponding eleven months of 1887 the foreign supply was practically the same. There was, however, a very great change in the sources of supply. Thus, in 1887, North and South America fur- nished forty-nine million hundred-weight out of the sizty- seven million hundred-weight that Great Britain required ; but in 1888 the harvests of America were comparatively meager, and supplied Great Britain with but twenty-nine million hundred-weight, leaving a deficiency of twenty mill- ions to be obtained from other sources. Eastern Europe, and especially Russia, which were favored during the year : 48 RECENT ECONOMIC CHANGES. : 1888 with splendid weather and enormous crops, were able to promptly make good the missing twenty millions; but the market changes and vicissitudes of trade consequent on such an extensive transfer of the British supplies of wheat were something extraordinary. Twenty years ago, had Russia in any one year harvested a surplus of wheat as large as she did in 1888, such surplus, through an inabili- ty to cheaply and promptly move it to a market, would have been not only of little monetary value to the producer, but would probably by its unsalable presence in the country have considerably lowered the market price of so much of the crop as was required for home consumption. Under exist- ing conditions, however, great gairfaccrued to the Russian farmer and to all the interests and nationalities employed in the movements of his product. A demand for shipping for this special trade, which could not at once be fully sup- plied, also occasioned a quick advance in ocean freights in all quarters of the globe, in some instances to the extent of one hundred per cent, and concurrently a revival of the in- dustry of ship-building. On the other hand, this transfer of the wheat-supply of Great Britain represented an im- mense change in the carrying-trade and business of the United States; while the American speculator, recognizing the local deficiency of the wheat-crop for 1888, and assum- ing that the American supply of this cereal was the prime factor in determining its European price, largely advanced. prices (the average price of No. 2 red winter wheat in New York for the six months ending December, 1888, hav- ing been $1.01 per bushel, as compared with 84.2 cents for . the corresponding period of 1887). But in this they were disappointed. The European prices did not materially ad- vance ;* and as a consequence, while the American public suffered, “the British consumer was enabled to eat his loaf * English wheat sold December 25, 1888, at £1 11s. 3d. a quarter, against £1 11s. 2d., or 214 cents a bushel more than at the corresponding date in 1887, and 1s. 10d. less than in December, 1886. INCREASE IN THE WORLD’S PRODUCT OF IRON. 49 at the same price or a less price than he did in the previous year.” And if the consumer was not a student of statistics, he would not have been in the least conscious that it was Russian rather than American grain from which his bread was manufactured. In short, under the system of commer- cial freedom which Great Britain has established, all the farming interests on the earth grow with an eye to the pos- sible advent of the British people as customers; and while the latter, on their part, have so provided themselves with the best equipment for annihilating time and distance, that it is a matter of indifference to them whether the wheat- fields, which for the time being shall have their preference, are located in India, Russia, Dakota, South America, or Australia. The world’s total product of pig-iron increased slowly and regularly from 1870 to 1879, at the rate of about 24 per cent per annum, but after 1879 production increased enor- mously, until in 1883 the advance among all nations was 82:2 per cent in excess of the make of 1870, the increase in the product of the United Kingdom being 43 per cent, and that of other countries 139:1 per cent (Testimony of Sir Lowthian Bell, British Commission, 1886). Such an in- crease (after 1879), justified perhaps at the moment, was far in excess of the ratio of increase in the world’s population, and for a term of years greatly disproportionate to any in- crease in the world’s consumption, and finally resulted, as has been before shown (see Chapter I), in an extreme de- pression of the business, and a remarkable fall of prices. By reason largely of the cheapening of iron and steel, the cost of building railroads has also in recent years been greatly reduced. In 1870-’71, one of the leading railroads of the Northwestern United States built 126 miles, which, with some tunneling, was bonded for about $40,000 per mile. The same road could now (1889) be constructed, with the payment of higher wages to laborers of all classes, for about $20,000 per mile. 5O RECENT ECONOMIC CHANGES. | The power to excavate earth, or to excavate and blast rock, is from five to ten times as great as it was when opera- tions for the construction of the Suez Canal were com- menced, in 1859-’60. The machinery sent to the Isthmus of Panama, for the excavation of the canal at that point, was computed by engineers as capable of performing the labor of half a million of men. | The displacement of muscular labor in some of the cotton-mills of the United States, within the last ten years, by improved machinery, has been from thirty-three to fifty per cent, and the average work of one operative, working one year, in the best mills of the United States, will now, according to Mr. Atkinson, supply the annual wants of 1,600 fully clothed Chinese, or 3,000 partially clothed East Indians. In 1840 an operative in the cotton-mills of Rhode Island, working thirteen to fourteen hours a day, turned off 9,600 yards of standard sheeting in a year; in 1886 the operative in the same mill made about 30,000 yards, working ten hours a day. In 1840 the wages were $176 a year; in 1886 the wages were $285 a year. . The United States census returns for 1880 report a very large increase in the amount of coal and copper produced during the ten previous years in this country, with a very large comparative diminution in the number of hands em- ployed in these two great mining industries; in anthracite coal the increase in the number of hands employed having been 33:2 per cent, as compared with an increase of product of 82°7; while in the case of copper the ratios were 15°8 and 70°8, respectively. For such results, the use of cheaper and more powerful blasting agents (dynamite), and of the steam- drill, furnish an explanation. And, in the way of further illustration, it may be stated that a car-load of coal, in the principal mining districts of the United States, can now (1889) be mined, hoisted, screened, cleaned, and loaded in one half the time that it required ten years previously. The report of the United States Commissioner of La- DISPLACEMENT OF LABOR BY iis area 51 | bor for 1886 furnishes the following additional illustra- | tions : _ “Inthe manufacture of agricultural implements, specific evidence is submitted, showing that six hundred men now do the work that, fifteen or twenty years ago, would have ‘required 2,145 men—a displacement of 1,545. _ “The manufacture of boots and shoes offers some very ‘wonderful facts in this connection. In one large and long- established manufactory the proprietors testify that it would ‘require five hundred persons, working by hand processes, to ‘make as many women’s boots and shoes as a hundred per- ‘sons now make with the aid of machinery—a displacement ‘of eighty per cent. “ Another firm, engaged in the manufacture of children’s ‘shoes, states that the introduction of new machinery within the past thirty years has displaced about six times the amount ‘of hand-labor required, and that the cost of the product has been reduced one half. “On another grade of goods, the facts collected by the agents of the bureau show that one man can now do the work which twenty years ago required ten men. _ “Tn the manufacture of flour there has been a displace- ment of nearly three fourths of the manual labor necessary to produce the same product. In the manufacture of furni- ture, from one half to three fourths only of the old number of persons is now required. In the manufacture of wall- paper, the best evidence puts the displacement in the pro- portion of one hundred to one. In the manufacture of metals and metallic goods, long-established firms testify that machinery has decreased manual labor 334 per cent.” In 1845 the boot and shoe makers of Massachusetts made m average production, under the then existing conditions 0 manufacturing, of 1:52 pairs of boots for aa working Jay. In 1885 each employé in the State made on an aver- we 4:2 pairs daily, while at the present time in Lynn and Haverhill the daily average of each person is seven pairs per 5 59 RECENT ECONOMIC CHANGES, day, “ showing an increase in the power of production in forty years of four hundred per cent.” * The business of making bottles has been arduous. anil unhealthy, with a waste of about thirty-three per cent of the “ melting”; and, although this waste is used afterward, there is a deterioration in its quality from its employment a second time. For many years this specialty of industrial production experienced little improvement; but it finally commenced in the substitution in 1885 of the so-called Siemens “tank” furnace, in place of the old-fashioned “coal” furnace for the melting of glass; one of the for- mer supplanting eight of the latter; requiring four men in place of twenty-eight to feed it, producing 1,000,000 square feet of glass per month, in place of a former product of 115,000 feet, and working continuously, while the coal- furnaces work on an ayerage but eighteen days per month. Such an improvement in the methods of manufacture, as might be expected, revolutionized the former equilibrium, in this department of the glass industry as respects the supply and demand of both labor and product, and occa- sioned serious riots among the glass-workers of Charleroi, in: Belgium, where it was first introduced. ‘The process of: producing the bottle by “blowing ” was not, however, af- fected by the above-noticed improvement; but within the last year (1888) a practical method of producing bottles is reported as having been invented and practically applied in England, which now bids fair to entirely do away with the process of “blowing,” with an accompanying immense in- crease of daily product and a corresponding reduction in the former cost of labor. | The following are other notable results, in what may be termed the minor industries: | In the manufacture of jewelry, one skilled os * Address by Mr. F. W. Norcross, Novenher 1888, before the Boston Boot and Shoe Club. , . CHANGES IN THE MINOR INDUSTRIES. 53 paid at the rate of two and a half to three dollars per day, and working according to ante-machine methods in use a few years ago, could make up three dozen pairs of sleeve- buttons per day. Now, one boy, paid five dollars per week, and working on the most modern machinery, can make up nine thousand pairs in a day. In gold (or imitation gold) chain-making, the United States now exports the cheapest grade of such jewelry produced by machinery to Germany, where cottage hand-labor, in the same vocation, can be had for a pittance, and finds a ready sale for them as against German manufacturers. In connection with a new (1889) issue of notes by the Bank of France, for which superiority over anything of this kind heretofore achieved is claimed, and which engray- ers and chemists believe can not be imitated except at such an expenditure of time and money as would effectually check all effort in this direction, it is also added that they have been produced in a twentieth part of the time spent on those which are now being withdrawn from circulation. Nothing has had a greater influence in making possible the rapidity with which certain branches of retail business are now conducted, as compared with ten years ago—more especially the sale of groceries—than the cheap and rapid production of paper bags. At the outset, these bags were all made by hand-labor; but now machinery has crowded out the hand-workers, and factories are in existence in the United States which produce millions of paper bags per week, and not unfrequently fill single orders for three mill- ions. Paper sacks for the transportation of flour are now (1889) used to the extent of about one hundred millions per annum ; and to this same extent have superseded the use and requirement of cotton sacks and of barrels. With ma- chinery have also come many improvements: square bags that stand up of themselves, and need only when filled from a&measure to have the top edges turned over to make the package at once ready for delivery. A purchaser can now BA. RECENT ECONOMIC CHANGES. also take his butter or lard in paper trays that are brine and grease proof; his vinegar in paper jars that are warranted not to soak for one hour; a bottle of wine wrapped in a cor-. rugated case that would not break if he dropped it on the pavement, and his oysters in paper pails that will hold water overnight. A few years ago, to have furnished gratuitously these packages, would have been deemed extravagance ; but now it is found to pay as a matter of business. . The increase in the producing capacity of the United States in respect to the manufacture of paper during the years from 1880 to 1887 inclusive, was also very striking, namely : in number of mills, twenty-five per cent; in prod- uct, sixty-seven per cent; in value of product, twenty-seven | per cent. The reduction in the prices of paper in the United States under such circumstances has been very great, and since 1872, for all qualities, full fifty per cent.* | The sobriquet of an apothecary was formerly that of a) pill-maker; but the modern apothecary no longer makes pills, except upon special prescriptions; inasmuch as scores) of large manufactories now produce pills by machinery ac-| cording to the standard or other formulas, and every apoth- ecary keeps and sells them, because they are cheaper, better, and more attractive than any that he can make himself. Certain branches of occupation formerly of considerable} importance under the influence of recent improvements seem to be passing out of existence. Previous to 1872, nearly all the calicoes of the world were dyed or printed with a col- oring principle extracted from the root known as madder ; — * In 1880, according to the census, there were 692 paper-mills in the United States, prone 904,216,000 pounds of paper annually, valued at $55,109 1914, Tn 1887 there were 866 mills, with an annual product of 1,514,469,000 pounds, valued at $70,000,000. In addition to this annual vl cel paper and manu: factures of paper to the net value of $866,726 were imported. A calculation) of the relative amount of paper consumed per capita in the United States in 188%) gives a total of $1.16 of domestic and 14/,) cent of foreign manufacture. The tariff on the importation of paper for that year was twenty-five. per cent aa valorem on ‘‘ writing,’’ and fifteen per cent on unsized ‘‘ printing”? papers. EXTINCTION OF CERTAIN INDUSTRIES, 55 the cultivation and preparation of which involved the use of thousands of acres of land in Holland, Belgium, eastern France, Italy, and the Levant, and the employment of many hundreds of men, women, and children, and of large amounts of capital; the importation of madder into the United King- dom for the ‘year 1872 having been 28,731,600 pounds, and into the United States for the same year 7,786,000 pounds. To-day, two or three chemical establishments in Germany and England, employing but few men and a comparatively small capital, manufacture from coal-tar, at a greatly reduced price, the same coloring principle; and the former great business of growing and preparing madder—with the land, labor, and capital involved—is gradually becoming extinct ; the importations into Great Britain for the year 1887 having declined to 1,934,700 pounds, and into the United States to 1,049,800 pounds. The old-time business of making millstones—entitled to rank among the first of labor-saving inventions at the very dawn of civilization—is rapidly passing into oblivion, be- cause millstones are no longer necessary or economical for grinding the cereals. The steel roller produces more and better flour in the same time at less cost, and as an inevita- ble consequence is rapidly taking the place of the millstone ‘in all countries that know how to use machinery.* And, as the art of skillfully grooving the surface of a hard, flinty ‘rock for its conversion into a millstone is so laborious, so ‘difficult of accomplishment (four or five years of service be- ‘ing required in France from an apprentice before he is allowed to touch a valuable stone), and to a certain extent ‘so dangerous from the flying particles of steel and stone, humanity, apart from all economic considerations, may well ‘Tejoice at its desuetude. * Under the new system, seventy-four per cent of the wheat goes into flour | and twenty-six per cent into offal or bran, against thirty-three and a third per cent of bran under the old system. 56 RECENT ECONOMIC CHANGKS, With the substitution of steamers for sailing-vessels upon the broad ocean, the former extensive business of sail-making, and the demand upon factories for heavy cloth as material for sails, experienced a notable depression, which in later years has continued and increased, because commerce along coast-lines now no longer moves exclusively by sail, but, largely in barges dragged or propelled by steam. For the four years next previous to 1886 the demand for sails in the United States is estimated to have decreased to the extent of about twenty-five per cent, although the carrying-trade of the country by ocean, coast, and inland waters, has, dur- ing the same time, increased very considerably. | Cotton-seed oil—an article a few years ago absolutely unknown in commerce, and prepared from what was for- merly regarded almost in the light of a waste product, is, now manufactured in the United States, and has come into such extensive use as a substitute for lard, olive, and other oils, for culinary and manufacturing purposes, that its pres-. ent annual production and sale are estimated to be equiva- lent to about 70,000,000 pounds of lard ; and has contributed not only to notably reduce the price and the place of that: important hog-product in the world’s markets, but also to impair the production and depress the price of almost all other vegetable oils—the product of the industries of other. countries. : Another matter of great industrial importance which a very few years ago also was practically unknown is the fuel use in the United States of natural gas, which, during the year 1887, is estimated by the United States Geological Sur- vey to have displaced the use of 9,867,000 tons of coal, hay- ing a value of $15,838,500, as compared with a displacement. of 6,453,000 tons in 1886 and 3,131,000 tons in 1885. The total mileage of pipes for the conveyance of natural gas in 1887 was estimated at about 2,500 miles. In November of the same year the whole number of rolling-mills and steel- works in the United States completed or in the course of FUEL USE OF NATURAL GAS. 57 erection was four hundred and forty-five, of which nearly one fourth used natural gas as fuel. _ One prime factor in the use of this new agency is the small expense attending its application. Thus in one of the large steel-works of Pittsburg, Pa., three men do all the service required in the boiler-room, each one being on duty for eight hours. When coal was used as fuel, the same firm required the services of ninety men in the boiler-room for every twenty-four hours. Another saving is found in a dimin- ished degree of deterioration in the boilers when the gas is carefully used. For household use the advantage of natural gas is equally evident, a single turn of a cock being substi- tuted in place of the former necessarily dirty work of kind- ling a fire when coal was employed. “Natural gas is, however, not now supplied at as cheap rates as a few years ago. It has, too, strange as it may appear, a rival as a cheap and cleanly fuel in water-oil gas produced from petroleum, which is steadily growing in popularity among American iron and steel and a few other manufacturers. It is claimed that this fuel is cheaper than coal, or than gas made from it, and that it possesses all the desirabie qualities of natural gas, and is far safer. This new fuel possesses also the advantage that it can be produced and used where natural gas can not be obtained, and even where coal may be too expensive for use.”— Report of Mr. James M. Swank, 1888, But in respect to no other one article has change in the ‘conditions of production and distribution been productive of such momentous consequences as in the case of wheat. On the great wheat-fields of the State of Dakota, whero machinery is applied to agriculture to such an extent that the requirement for manual labor has been reduced to a minimum, the annual product of one man’s labor, working to the best advantage, is understood to be now equivalent to the production of 5,500 bushels of wheat. In the great ‘mills of Minnesota, the labor of another one man for a year, under similar conditions as regards machinery, is in like manner equivalent to the conversion of this unit of 5,500 58 RECENT ECONOMIC CHANGKHS. bushels of wheat into a thousand barrels of flour, leaving 500 bushels for seed-purposes; and, although the conditions for analysis of the next step in the way of results are more difficult, it is reasonably certain that the year’s labor of one and a half men more—or, at the most, two men—employed in railroad transportation, is equivalent to putting this thou- sand barrels of flour on a dock in New York ready for ex- portation, where the addition of a fraction of a cent a pound to the price will further transport and deliver it at almost any port of Europe.* Here, then, we have the labor of three men for one year, working with machinery, resulting in the producing all the flour that a thousand other men ordinarily eat in a year, allowing one barrel of flour for the average consumption of each adult. Before such a result the question of wages paid in the different branches of flour production and trans- portation becomes an insignificant factor in determining a market; and, accordingly, American flour grown in Dakota, and ground in Minneapolis, from a thousand to fifteen hun- dred miles from the nearest seaboard, and under the au-. spices of men paid from a dollar and a half to two dollars and a half per day for their labor, is sold in European markets at rates which are determinative of the prices which Russian peasants, Egyptian “fellahs,” and Indian “ ryots,” can obtain in the same markets for similar grain grown by * ““ When the wheat reaches New York city, and comes into the possession of a great baker, who has established the manufacture of bread on a large scale, and who sells the best of bread to the working-people of New York at the lowest possible price, we find that one thousand barrels of flour can be converted into bread and sold over the counter by the work of three persons for one year. Let us add to the six and a half men already named the work of another man six months, or a half a man one year, to keep the machinery in repair, and our modern miracle is, that seven men suffice to give one thou- sand persons all the bread they customarily consume in one year. If to these we add three for the work of providing fuel and other materials to the railroad and the baker, our final result is that ten men working one year serve bread to one thousand.” —'‘ Distribution of Products,” Epwarp ATKINSON. — THE MANUFACTURE OF PINS. 59 them on equally good soil, and with from fifteen to twenty cents per day wages for their labor. On the wheat-farms of the Northwestern United States it was claimed in 1887 that, with wages at twenty-five dol- lars per month and board for permanent employés, wheat could be produced for forty cents per bushel; while in Rhenish Prussia, with wages at six dollars per month, the cost of production was reported to be eighty cents per bushel. How much more significantly differences manifest them- selves in the results of mechanical production, when long periods of time are taken for comparison, is illustrated by an exhibit in parallel columns of a statement made by Adam Smith in his “ Wealth of Nations” (first published in 1776, Vol. I, Chapter I), respecting the manufacture of pins, and which then seemed to him as something extraor- dinary, and a similar statement of the present condition of this business, as set forth in an official report to the United States Department of State in the year 1888: “To take an example, there- fore, from a very trifling manu- facture, but one in which the di- vision of labor has been very often taken notice of—the trade of the pin-maker. A workman not edu- cated to this business (which the division of labor has rendered a distinct trade), nor acquainted with the use of the machinery em- ployed in it (to the invention of 'which the same division of labor has probably given occasion), could Scarce, perhaps, with his utmost industry make one pin a day, and certainly could not make twenty. But in the way in which this busi- hess is now carried on, not only the whole work is a peculiar trade, —— “The relative indifference of high day wages when brought side by side with such astonishing re- sults is more apparent yet when we deal with industries where au- tomatic machinery is employed al- most exclusively — screw-making, nail-making, pin-making, ete. In the latter industry the coil of brass wire is put in its proper place, the end fastened, and the almost human piece of mechanism, with its iron fingers, does the rest of the work. One machine makes 180 pins a minute, cutting the wire, flattening the heads, sharp- ening the points, and dropping the pin in its proper place. One hundred and eight thousand pins 60 but it is divided into a number of branches, of which the greater part are likewise peculiar trades. One man draws out the wire, an- other straightens it, a third cuts it, afourth points it, a fifth grinds it at the top for receiving the head. To make the head requires two or three distinct operations ; to put it on is a peculiar business, to whiten the pin is another. It is even a trade by itself to put them into the paper, and the im- portant business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands, though in others the same man will sometimes perform two or three of them. I have seen a small manufactory of this kind where ten men only were employed, and where some of them consequently performed two or three distinct operations. But though they were very poor, and therefore but in- differently accommodated with the necessary machinery, they could, when they exerted themselves, make among them about twelve pounds of pins in a day. There are in a pound upward of four thousand pins of a middling size. Those ten persons, therefore, could make among them upward of forty-eight thousand pins in a day.’— ApAmM SmituH, Wealth of Nations, a. vp. 1776. In other words, in the time of Adam Smith it was re garded as a wonderful achievement for ten men to mak RECENT ECONOMIC CHANGKS. a day is the output of one ma chine. A factory visited by m employed seventy machines. Thes had a combined output per day o 7,000,000 pins, or 800 pins to | paper, 25,000 papers of pins; al lowing for stoppages and neces sary time for repairs, say 20,00! papers. These machines are tende by three men. A machinist wit! a boy-helper attends to the repair ing. It will not materially influ ence the price of pins whether th combined earnings of these fiv men be $7.50 or $10 per diem The difference would amount t one eighth of a cent on a paper o pins. The likelihood is that whe cheaper help is employed a greate number of hands would be em ployed for the same work and th: same output.”—IJnfluences bearin on Production. Report on Tech nical Education to the Unite States State Department, by U. & Consul Schoenhoff, 1888. EPOCH OF EFFICIENT MACHINERY. 61 48,000 pins in a day, but now three men can make 7,500,000 pins of a vastly superior character in the same time. A great number of other similar and equally remarkable experiences, derived from almost every department of indus- try except the handicrafts, might be presented; but it would seem that enough evidence has been offered to prove abun- dantly, that in the increased control which mankind has acquired over the forces of Nature, and in the increased utilization of such control—mainly through machinery—for the work of production and distribution, is to be found a cause sufficient to account for most if not all the economic disturbance which, since the year 1873, has been certainly universal in its influence over the domain of civilization ; abnormal to the extent of justifying the claim of having been unprecedented in character, and which bids fair in a greater or less degree to indefinitely continue. Other causes may and doubtless have contributed to such a condition of affairs, but in this one cause alone (if the influences referred to can be properly considered as a unity) it would seem there has been sufficient of potentiality to account not only for all the economic phenomena that are under discussion, but to occasion a feeling of wonder that the world has accommo- dated itself so readily to the extent that it has to its new conditions, and that the disturbances have not been very much greater and more disastrous. A question which these conclusions will naturally sug- gest may at once be anticipated. Have not these same in- fluences, it may be asked, been exerted during the whole of the present century, and in fact ever since the inception of civilization; and are there any reasons for supposing that this influence has been different during recent years in kind and degree from what has been heretofore experienced ? The answer is, Certainly in kind, but not in degree. The world has never seen anything comparable to the results of the recent system of transportation by land and water, never experienced in so short a time such an expansion of all that 62 RECENT ECONOMIC CHANGES. pertains to what is called business, and has never before, as was premised at the outset of this argument, been able to accomplish so much in the way of production with a given amount of labor in a given time. ‘Thus it is claimed in re- spect to the German Empire, where the statistics of pro- duction and distribution have doubtless been more carefully studied by experts than elsewhere, that during the period from 1872 to 1885 there was an expansion in the railroad traffic of this empire of ninety per cent; in marine tonnage, of about a hundred and twenty per cent; in the general mercantile or commercial movement, of sixty-seven per cent; in postal matter carried, of a hundred and eight per cent; in telegraphic dispatches, of sixty-one per cent; and in bank discounts, of two hundred and forty per cent. Dur- ing the same period population increased about eleven and a half per cent, and from such data there has been a general deduction that, “if one unit of trade was the ratio to one unit of population in Germany in 1872, the proportion in 1885 was more than ten units of trade to one of popula- tion.” But, be this as it may, it can not be doubted that whatever has been the industrial expansion of Germany in recent years, it has been at least equaled by England, ap- proximated to by France, and certainly surpassed by the United States.* | There is very much that contributes to the support of the idea which has been suggested by M. Laveleye, editor of the “ Moniteur des Intéréts Matériels,” at Brussels, that the industrial activity of the greater part of this century has been devoted to fully equipping the civilized countries of { | * A statistical exhibit of the growth of British industrial interests during the reign of Queen Victoria (fifty years), published in 1887, in connection with the ‘* Queen’s Jubilee,’? showed that the production of coal has increased in| Great Britain during this period from 36,000,000 tons to 147,000,000 tons per annum ; and that manufactures had iiorenons in about an equal ratio with the. output of coal—that is to say, had about quadrupled (four hundred per cent), Meanwhile, the population of the United Kingdom increased only thirty-three, per cent. | MODERN RAPIDITY OF INDUSTRIAL DEVELOPMENT. 63 the world with economic tools, and that the work of the future, in this same sphere, must be necessarily that of re- pair and replacements rather than of new constructions. But a more important inference from this same idea, and one that fully harmonizes with and rationally explains the phenomena of the existing situation is, that the equipment having at last been made ready, the work of using it for production has in turn begun, and has been prosecuted so efficiently, that the world has within recent years, and for the first time, become saturated, as it were, under existing conditions for use and consumption, with the results of these modern improvements. Again, although the great natural labor-saving agencies had been recognized and brought into use many years prior to 1870, their powers were long kept, as it were, in abey- ance; because it required time for the instrumentalities or methods, by which the world’s work of production and dis- tribution was carried on, to adjust themselves to new con- ditions; and until this was accomplished, an almost infinite number and variety of inventions which genius had_pro- duced for facilitating and accelerating industrial evolution were matters of promise rather than of consummation. But, with the extension of popular education and the rapid diffu- sion of intelligence, all new achievements in science and art have been brought in recent years so much more rapidly “within the sphere of the every-day activity of the people” —as the noted German inventor, Dr. Werner Siemens, has expressed it—“ that stages of development, which ages ago required centuries for their consummation, and which at the beginning of our times required decades, now complete them- selves in years, and not PU present themselves at once in a state of completeness.” It should also be remembered that fitty years ago the “sciences” were little more than a mass of ill-digested facts or “ unassorted laws,” and that in the departments of physics and chemistry comparatively little had been accomplished 64 RECENT ECONOMIC CHANGKHS, in the way of industrial application and direction. To say, indeed, what the world did not have half a century ago is almost equivalent to enumerating all those things which in their understanding, possession, and common use the world now regards as constituting the dividing lines between ciy- ilization and barbarism. Thus, fifty years ago the railroad and the locomotive were practically unknown. The ocean steam marine dates from 1838, when the Sirius and Great Western—the two pioneer vessels—crossed the Atlantic to New York. Electricity had then hardly got “beyond the stage of an elegant amusement,” and the telegraph was not really brought into practical use before 1844. The follow- ing isa further partial list of the inventions, discoveries, and applications whose initial point of “ being ” is not only more recent than the half-century, but whose fuller or larger de- velopment in a majority of instances is also referable to a much more recent date: The mechanical reapers, mowing and seeding machines, the steam-plow and most other emi- nently labor-saving agricultural devices; the Bessemer pro- cess and the steel rail (1857); the submarine and trans- oceanic telegraph cables (1866); photography and all its adjuncts; electro-plating and the electrotype; the steam- hammer, repéating and breech-loading fire-arms, and rifled and steel cannon; gun-cotton and dynamite; the industrial use of India-rubber and gutta-percha; the steam-excavator and steam-drill; the sewing-machine; the practical use of the electric light; the application of dynamic electricity as a motor for machinery; the steam fire-engine; the tele- phone, microphone, spectroscope, and the process of spectral analysis; the polariscope; the compound steam-engine; the ventrifugal process of refining sugar; the rotary printing- press; hydraulic lifts, cranes, and elevators; the “ regener- ative” furnace, iron and steel ships, pressed glass, wire rope, petroleum and its derivatives, and analine dyes; the in- dustrial use of the metal nickel, cotton-seed oil, artificial butter, stearine-candles, natural gas, cheap postage, and the DISPLACEMENT OF THE STEAM-ENGINE. 65 postage-stamp. Electricity, which a very few years ago was regarded as something wholly immaterial, has now acquired 1 sufficiently objective existence to admit of being manu- factured and sold the same as pig-iron or leather. In short, to one whose present memory and life-experiences do not oxtend over a period of time more extensive than what is represented by a generation, the recital of the economic ex- periences and industrial conditions of the generation next preceding is very much akin to a recurrence to ancient history. It will be interesting also here to call attention to some of the agencies productive of further extensive economic changes which are now in the process of development, or which are confidently predicted as certain to occur in the not very remote future. Thus, notwithstanding the immense service which the steam-engine has rendered to humanity, and its present con- tinuing necessity as a prime factor in all civilization, it is at the same time certain that as a machine it is most imper- fect, inasmuch as the very best steam-engines only utilize about one sixth of the power (work) which resides in the fuel which is consumed in the generation of steam. The entire displacement of the steam-engine as it now exists is, therefore, not only essential to further great material prog- ress, but is confidently expected to happen at no very dis- tant period by those eminently qualified to express an opin- ion on this subject. Thus, at the meeting of the British Association for the Advancement of Science in 1888, the president, Sir Frederick Bramwell, after expressing his belief that the days of the steam-engine for small powers were already numbered, further predicted that those who should attend the centenary of the Association in 1931— ‘Would see the present steam-engines in museums, treated as things to be respected and of antiquarian interest, by the engineers of those days, such as are the open-topped steam cylinders of Newcomen 66 RECENT ECONOMIC CHANGES. and of Smeaton to ourselves, and that the heat-engine of the futur will probably be one independent of the vapor of water.” Indeed, “ th« working of heat-engines, without the intervention of the vapor of watei by the combusion of the gases arising from coal, or from coal and fron water,” he continued, “is now not merely an established fact, but ¢ recognized and undoubted commercially economical means of obtain: ing motive power. Such engines, developing from one to forty horse. power, and worked by ordinary gas supplied by gas-mains, are in most extensive use in printing-works, hotels, clubs, theatres, and even ir large private houses, for the working of dynamos to supply electric light. But, looking at the wonderful petroleum industry, and at the multifarious products which are obtained from the crude material, is it too much to say that there is a future for motor-engines worked by the vapor of some of the more highly volatile of these products—true vapor—not a gas, but a condensable body capable of being worked over and over again? Numbers of such engines, some of as much as four horse-power, are now running, and are apparently giving good re- sults—certainly excellent results as regards the compactness and light- ness of the machinery.” In connection with this subject, the rapidity with which electric motors for stationary power are supplanting the steam-engine should not be overlooked. Thus, in the United States alone it is estimated that between seven thousand and eight thousand such motors for driving ma- chinery were in operation at the close of the year 1888. Notwithstanding, furthermore, the present wide utilization of telegraphy and the telephone as a means of annihilating time and space, there is much to justify the opinion that both of these instrumentalities are really in their infancy, and that it would not be surprising if, before the commence- ment of the twentieth century, the present comparatively cumbersome and slow methods of postal communication should be superseded to almost as great an extent as the locomotive has supplanted the stage-coach or the ocean- steamer the sailing-ship, and that ultimately the business and social correspondence of the people of every highly civil- ized country will be mainly transacted upon an electric basis. How extensive the movement is in this direction CONTINUANCE OF MATERIAL EVOLUTION, 67 may be illustrated by a statement made in the annual re- port (1888) of the Western Union (United States) Tele- graph Company (and which popular opinion indorses), that “there is no business in the country that has developed and is developing such rapid growth and increase as the service of the telegraph.” And in support of this assertion, and as showing how the existing system approximates to universal- ity, the same report states that of this company’s toll rev- enue for the years 188788 about ninety-two per cent was derived from commercial, family, and social messages, and only eight per cent from the press. But the measure of this comparatively small proportion of eight per cent is shown by the fact that the mere “ news” service delivered from its wires for the year in question—counting one delivery at each place served—comprised 740,000,000 words; and if to this aggregate what is known as “special reports” are added, the total amounted to 1,467,000,000 words trans- mitted for publication alone. Speaking generally, moreover, there is no reason for doubting that the wonderful material evolution of recent years will be continued, unless man himself interposes obsta- cles, although the goal to which this evolution tends can not be predicted or possibly imagined. “The deeper the insight we obtain into the mysterious workings of Nature’s forces,” says Werner Siemens, an authority most competent to express an opinion, “ the more we are convinced that we are still standing only in the vestibule of science, that an immeasurable field still lies before us, and that it is very questionable whether mankind will ever arrive at a full knowledge of nature.” One influence which has been more potent in recent years than ever before in stimulating the invention and use of labor-saving machinery, and which should not be over- looked in reasoning upon this subject, has been undoubtedly the increasing frequency of strikes and industrial revolts on 6 68 RECENT ECONOMIC CHANGKS,. the part of the large proportion of the population of all ciy- ilized countries engaged in the so-called mechanical occupa- tions; which actions in turn on the part of such classes have been certainly largely prompted by the changes in the con- ditions of production resulting from prior labor-saving in- ventions and discoveries. As the London “ Engineer” hag already pointed out (see page 4, Chapter I), the remedy that at once suggests itself to every employer of labor on the occasion of such trouble with his employés is, “to use a tool wherever it is possible instead of a man.” And one significant illustration of the quickness with which employ- ers carry out this suggestion is afforded by the well-authen- ticated fact that the strike among the boot and shoe factories of one county in the State of Massachusetts, in the year 1885, resulted in increasing the capacity for production by the same factories during the succeeding year of a fully equal product, with reduction of at least fifteen hundred operatives ; one machine improvement for effecting an oper- ation called “lasting” having been introduced which is ca- pable of doing the former work of from two hundred to two hundred and fifty men, with a force not exceeding fifty men. Another fact confirmatory of the above conclusion is, that all investigators substantially agree that the depression of industry in recent years has been experienced with the greatest severity in those countries where machinery has been most extensively adopted, and least in those countries and in those occupations where hand-labor and hand-products have not been materially interfered with or supplanted. There is no evidence that the mass of the people of any country removed from the great lines of the world’s com- merce, as in China, India, Turkey, Mexico, and the states of Northern Africa, experienced any disturbance prior to 1883, except from variations in crops, or civil commotions; and if the experience of a few of such countries has been different since 1883, the cause may undoubtedly be referred to the final influence of long-delayed extraneous or foreign EXPERIENCE OF HAND-LABOR COUNTRIES. 69 economic disturbances; as has been the case in Mexico in respect to the universal depreciation of silver, and in Ja- pan from an apparent culmination of a long series of changes in the civilization and social economy of that country. There have, moreover, been no displacements of labor, or reduction in the cost of labor or of product, in all those in- dustries in cvvilized countries where machinery has not been introduced or increased; as, for example, in domestic serv- ice, in amusements, carriage-fare, and horse-hire, in hotel charges, in remuneration of authors, artists, teachers, and for legal or medical services, in house-rents; in such depart- ments of agriculture as the raising and care of stock, the growing of cotton, of flax, hemp, and of tropical fibers of like character, or in such mechanical occupations as mason- ry, painting, upholstering, plastering, and cigar-making, or those of engineers, firemen, teamsters, watchmen, and the like. Finally, it is of the first importance to note how all the other causes which have been popularly regarded as having lirectly occasioned, or essentially contributed to, the recent lepression of trade and industry—with the exception of such is are in the nature of natural phenomena, as bad seasons ind harvests, diseases of plants and animals, disappearance Mf fish, and the like, and such as are due to excessive taxa- ion consequent on war expenditures, all of which are local, md the first temporary in character—naturally group them- elves about the one great cause that has been suggested, as equences or derivatives, and as secondary rather than pri- nary in their influence; and to the facts and deductions that re confirmatory of these conclusions, attention is next in- ‘ited. LE GE: Over- production—Periodicity of trade activity and stagnation—Increase - the volume of trade with accompanying decline in profits—Depression agriculture in Europe—Changes in the relations of labor and capital Destruction of handicrafts—Antagonisms of machinery—Experience British co-operative societies—Influence of improvements in producti by machinery on international differences in wages—Changes in the ¢ tails of product distribution—Changes in retail trade—Displacement the ‘‘ middle-man.”’ OVER-PRODUCTION.—The most popular alleged cause | recent economic disturbances, that to which the Royal Cor mission of Great Britain in its final report * (Decembe 1866), and the United States Bureau of Labor + (1886), ha aan ane Rn cence * ‘6 One of the commonest explanations of this depression or absence of pre ss that known under the name of over- production ; by which we understand t production of commodities, or even the existence of a capacity for productic at a time when the demand is not sufficiently brisk to maintain a remunerat! price to the producer, and to afford him an adequate return on his capital. | think such an over-production has been one of the most prominent features the course of trade during recent years; and that the depression under wh: we are now suffering may be partially explained by this fact.’ —British Co mission, majority report. ‘‘ By over-production we understand the production of commodities existence of the agencies of production) in excess, not of the capacity of e sumption if their distribution was gratuitous, but of the demand for export remunerative prices, and of the amount of income or earnings available their purchase in the home market. The depression under which we have long been suffering is undoubtedly of this nature.”—British Commissi minority report. + “ Machinery—and the word is used in its largest and most comprehens sense—has been most potent in bringing the mechanically-producing nati of the world to their present industrial position, which position con tutes an epoch in their industrial development. The rapid development | adaptation of machinery in all the activities belonging to production and tré OVER-PRODUCTION, val issigned a prominent place, and which the “ Trades-Union Jongress of England has by resolution accepted as being, in she opinion of the workmen of England,” the most promi- aent cause, is “ over-production.” In a certain sense there san be no over-production of desirable products so long as wman wants for such products remain unsatisfied. But it 8 in accordance with the most common of the world’s ex- veriences that there is at times and places a production of nost useful and desirable things in excess of any demand at remunerative prices to the producer. This happens, in some nstances, through lack of progress or enterprise, and in others through what may be termed an excess of progress wenterprise. An example of the first is to be found in the sireumstance that in the days of Turgot, the French Minis- er of Finance under Louis XVI, there were at times in sertain departments of France such abundant harvests that vheat was almost unmarketable, while in other and not far- listant sections of the country there was such a lack of food hat the inhabitants perished of hunger; and yet, through he absence of facilities for transportation and communica- ion of intelligence, the influence of bad laws, and the moral nertia of the people, there was no equalization of condi- ortation have brought what is commonly called over-production; so that aachinery and over-production are two causes so closely allied that it is diffi- alt to discuss the one without taking the other into consideration. . . . The irect results, so far as the present period is concerned, of this wonderstl and ypid Biinsion of power-machinery are, for the ania involved, over-pro- ‘uetion, or, to be more correct, bad or injudicious production; that is, that ondition of production of patos the value of which depends upon rains onsumption, or consumption by that portion of the population of the world sready requiring the goods produced.’’— Report of the United States Commis- oner of Labor, 1886, pp. 88, 89. * This experience of France in the last quarter of the eighteenth century is »peating itself at the present day in China, General Wilson, in his recent Study of China’? (1887), states that ‘‘ over ten million people died from star- ation about ten years ago in the provinces of Shansi and Shensi alone, while undance and plenty were prevailing in other parts of the country. Every "9, RECENT ECONOMIC CHANGES, An example of the second, intensified to a degree neve before experienced, is to be found in the results of the im provements in production and distribution which have bee made especially effective within the last quarter of a cent ury. A given amount of labor, operating through machin ery, produces or distributes at least a third more product 61 the average, in given time, than ever before. Note the nat ural tendency of human nature under the new conditions The machinery which thus cheapens and increases produc is, as a rule, most costly, and entails a like burden of inte1 est, insurance, and care, whether it is at work or idle; an the possessor of it, recognizing this fact, naturally desires t convert outlay into income by utilizing it to the greates extent possible. Again, a man who has learned by experi ence that he can dispose of a certain amount of product 0 service at a profit, naturally reasons that a larger amoun will give him, if not a proportionally greater, at least a large aggregate profit; and as the conditions determining deman are not only imperfectly known, but to a certain extent in capable of exact determination, he discards the idea of an risk, even if he for a moment entertains it, and pushes in dustrial effort to its maximum. And as this process is gen eral, and, as a rule, involves a steady increase in the improve and constantly improving instrumentalities of productio and distribution, the period at length arrives when the in dustrial and commercial world awakens to the fact tha there is a product disproportionate to any current remunel ative demand. Here, then, is one and probably the best ex planation of the circumstance that the supply of very man of the great articles and instrumentalities of the world’s us and commerce has increased, during the last ten or fiftee years, in a far greater ratio than the contemporaneous ir effort was made to send food into the stricken regions, but owing to the enti absence of river and canal navigation, as well as of railroads, few of the su fering multitudes could be reached.’’ A NEW ECONOMIC FEATURE, 73 erease in the world’s population, or of its immediate con- suming capacity. Another interesting feature of the situation, and one which has been especially pointed out by Prof. Lexis, of Géttingen, is, that ‘“ over-production” in recent years has resulted largely from the establishment of many new indus- trial enterprises whose capacity for production far exceeds any concurrent market demand ; as is especially exemplified in the case of the manufacture of iron. ‘ When the con- ditions of production are favorable, each of these establish- ments strives to bring to market a quantity corresponding to its actual power of production; and even if this can not be done, the recognition of tendencies and possibilities re- sults in causing a depression of prices, under which the less favored undertakings can earn no profit, or, indeed, suffer loss.” It was formerly a general assumption that, when price no longer equaled the cost of production and a fair profit on capital, production would be restricted or sus- pended; that the less favored producers would be crowded out, and by the relief thus afforded to the market normal prices would be again restored. But this doctrine is no longer applicable to the modern methods of production. Those engaged in great industrial enterprises, whether they form joint-stock companies or are simply wealthy individu- als, are invested with such economic powers that none of them can be easily pushed to the wall, inasmuch as they ean continue to work under conditions that would not per- mit a small producer to exist. Examples are familiar of joint-stock companies that have made no profit and paid no dividends for years, and yet continue active operations. The shareholders are content if the plant is kept up and the working capital preserved intact, and even when this is not done, they prefer to submit to assessments, or issue pref- erence shares and take them up themselves rather than go into liquidation, with the chance of losing their whole capi- tal. Another feature of such a condition of things is, that V4 RECENT ECONOMIC CHANGES. the war of competition in which such industrial enterprises are usually engaged is mainly carried on by a greater and greater extension of the market supply of their products. An illustration of this is afforded in the recent history of the production of copper. When in 1885 the United States produced and put on to the market seventy-four thousand tons, as against forty thousand tons in 1882, the world’s prices of copper greatly declined. A large number of the smaller producers were compelled to suspend operations, or were entirely crushed; but the great Spanish and other im- portant mines endeavored “ to offset the diminution of profit on the unit of quantity” by increasing their production; and thus the price of copper continued to decline until it reached a lower figure than ever before known in history. — Under such circumstances industrial over-production— manifesting itself in excessive competition to effect sales, and a reduction of prices below the cost of production—may be- come chronic; and there appears to be no other means of avoiding such results than that the great producers should come to some understanding among themselves as to the prices they will ask ; which in turn naturally implies agree- ments as to the extent to which they will produce. Up to this point of procedure no exception on the part of society can well be taken. But such an agreement, once perfected and carried out, admits of an almost entire control of prices and the establishment of monopolies, in the management of which the rights of the public may be wholly ignored. So- ciety has practically abandoned—and from the very necessity of the case has got to abandon, unless it proposes to war against progress and civilization—the prohibition of indus- trial concentrations and combinations. The world demands abundance of commodities, and demands them cheaply; and experience shows that it can have them only by the employ- ment of great capital upon the most extensive scale.* The * Adam Smith, in his *t Wealth of Nations,’’ published in 1776, in dis- THE “TRUST” PROBLEM. 15 problem, therefore, which society under this condition of affairs has presented to it for solution is a difficult one, and twofold in its nature. To the producer the question of importance is, How can competition be restricted to an ex- tent sufficient to prevent its injurious excesses? To the consumer, How can combination be restricted so as to secure its advantages and at the same time curb its abuses ? _ Another cause of over-production is undoubtedly due to an agency which has never before in the history of the world been operative to the extent that it is at present. With the great increase of wealth that has followed the increased control over the forces of nature and their utilization for production and distribution, there has come a desire to con- yert this wealth into the form of negotiable securities paying dividends or interest with regularity, and on the recipiency of which the owner can live without personal exertion or risk of the principal. Hence a stimulus for the undertaking of new enterprises which can create and market such secu- rities; and these enterprises, whether in the nature of new railroad, manufacturing, or mining corporations, once de- veloped, must go on producing and selling their products or services with or without a profit in order to meet their obli- gations and command a share of previously existing trade. Production elsewhere as a consequence, is, interfered with, displaced, and in not a few cases, by reason of better condi- tions, permanently undersold. And the general result is appropriately recognized by the term “ over-production.” Furthermore, in anticipation of such consequences, the tendency and the interest of every successful manufacturing cussing the effect of legislation and corporate regulations in limiting compe- ‘ition, clearly recognizes the tendency of combinations to advance prices, and the difficulty of limiting or preventing their influence by statute enactments. People of the same trade,” he says, ‘‘ seldom meet together, even for merri- ment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.’? He, however, admitted that it was ‘‘impossible to prevent such meetings by any law which either could be executed or would be executed with liberty and justice.” r6 RECENT ECONOMIC CHANGES, combination is to put the prices of its products down toa figure where it will not pay for speculators to form new com- petitive stock companies to be bought off or crushed by it. For, if it did keep up high profit-assuring prices, one of two things would eventually’ happen: either new factories would be started; or the inventive spirit of the age would devise cheaper methods of production, or some substitute for the product they furnished, and so ruin the first combination beyond the possibility of redemption. And hence we have here another permanent agency, antagonistic to the mainte- nance of high and remunerative prices. But although such is substantially a correct general exposition of the recent course of industrial events, and although all the agencies concerned in reducing the time and labor necessary to effect a given result in the world’s work have undoubtedly acted to a certain extent and in all cases in unison, the diversity of method, under which the supply in excess of remunerative demand, or the so-called over-production, has been specially effected, is not a little curious. Thus, in the case of crude iron and steel, cotton fabrics and textiles generally, coal, most articles of metal fabrication, ships, and the like, the increase and cheapened supply have been brought about mainly through improve- ments in the machinery and economy of production ; while in the case of wheat, rice, and other cereals, wool, cotton- fibers, meats, and petroleum, like results have been mainly occasioned by improvements in the machinery and economy of distribution. On the other hand, in the case of copper. tin, nickel, silver, quicksilver, quinine, and some important chemicals, over-production, in the sense as above defined. has been almost entirely due to the discovery or develop ment of new and abundant natural sources of supply. It i also not to be overlooked that other factors, which can no’ properly be included within the sphere of the influence o' recent discoveries and inventions, have also powerfully con. tributed to bring about the so-called phenomenon of over CHANGES IN CONSUMPTION OF COMMODITIES. ‘77 production. Thus the changes in the consumption of some commodities is entirely dependent upon the increase in the tastes and intelligence of the masses. In the case of wheat, there is some evidence to the effect that the consumption of those who eat wheat bread habitually does not indefinitely expand with increasing means, but, on the contrary, that it decreases with the ability to procure a greater variety of food. It is also undeniable that the culture of the manual laborers of the world has not advanced concurrently, in re- cent years, with the increased and cheapened production of such articles. Many things, consequently, have been, as it were, showered upon these classes which they do not know how to use, and do not feel that they need, and for which, therefore, they can create no market. A man who has long been contented with one shirt a week is not likely to wish to use seven immediately, even if he can buy seven for the price that he formerly paid for one, and his wife takes pleasure in doing his washing. Experience shows that the extremely high wages which were paid in Great Britain and in Belgium in the coal and iron business from 1868 to 1873 did nothing to permanently raise the standard of living among the laborers directly con- cerned. They spent their increased earnings in expensive food, and even in wines of high cost and quality; and did not make the slightest attempt to improve their style of living in respect to dress, furniture, or dwellings. That a continuance of such wages would eventually give the “ coal ” and “iron” miner the wants and habits of merchants and professional men, is possible; but it would require consider- able time—probably more than one generation—to effect it. “The comforts accessible to the workingman, and which he makes use of and considers necessaries, have certainly been greatly multiplied during the last hundred years; but they have become necessaries very slowly, and anybody who un- dertook to furnish many of them even fifty years ago would probably have been ruined in the experiment.” rg RECENT ECONOMIC CHANGES. One of the inevitable results of a supply of product or service in excess of remunerative demand (i. e., over-pro- duction) is a decline of price; and as the power of produc- tion and distribution has been increased in an unexampled degree since 1873 (as has been already shown), the prices of nearly all the great staple commodities of commerce and consumption have declined within the same period (as will be hereafter shown) in manner altogether without precedent in all former commercial history. That this experience has been altogether natural, and what might have been expected under the circumstances, will appear from the following considerations : If production exceeds, by even a very small percentage, what is required to meet every current demand for con- sumption, the price which the surplus will command in the open market will govern and control the price of the whole; and if it can not be sold at all, or with difficulty, an intense competition on the part of the owners of accumulated stocks to sell will be engendered, with a great reduction or annihi- lation of all profit. Mr. John Bright, of England, in one of his recent speeches, relates the following incident of per- sonal experience: “I know,” he said, “a company manu- facturing chemicals of some kind extensively, and one of the principal persons in it told me that in one of those high years, 1872, 1873, and 1874, the profits of that concern were £80,000, and he added that when the stock-taking and its results were communicated to the leading owner in the busi- ness, he made this very wise observation: ‘ I am very sorry to hear it, for you may depend upon it in the years that are to come we shall have to pay the whole of it back’; and in speaking to me of it he said, ‘It is quite true, because for several years we have been able to make no dividend at all.’ Well, why was that? The men who were making so large incomes at that time reinvested their money in increasing their business. Many of the concerns in this trade doubled their establishments, new companies were formed, and so OVERSTOCKED MARKETS. "9 the produce of their manufacture was extended to such a degree that the prices went down and the profits vanished.” The recent history of the nail-trade in the United States furnishes also a chapter of analogous experience. From 1881 to 1884 the American nail manufacture was exceed- ingly profitable; and during those years, as a natural conse- quence, most of the existing mills increased their capacity, and some more than doubled it. New mills also were built Fast and West, until the nail-producing power of the coun- try nearly doubled, while the consuming capacity increased only about twenty per cent. The further result was that prices were forced down by an overstocked market, until nails were sold at from ten to fifteen per cent below cost, and in some instances mills that “could stand alone” were accused of intentionally forcing down prices in order to bankrupt weaker competitors. In the end prices were in a measure restored by a combination and agreement among manufacturers to restrict production. Another illustration to the same effect is to be found in the present remarkable condition of the milling (flour) in- terest of the United States, which was thus described in an address before the “National Millers’ Association” by its vice-president, at their annual meeting at Buffalo, in June, 1888 : “ A new common enemy,” he said, “has sprung up, which threatens our property with virtual confiscation. . . . Large output, quick sales, keen competition, and small profits are characteristics of all modern trade. We have the advantage in our business of always being in fashion ; the world requires so much bread every day, a quantity which ean be ascertained with almost mathematical accuracy. ... But our ambition has overreached our discretion and judgment. We have all participated in the general steeple-chase for pre-eminence; the thousand-barrel mill of our competitor had to be put in the shade by a two-thousand-barrel mill of our own construction; the commercial tri- umph of former seasons had to be surpassed by still more dazzling figures. As our glory increased our profits became smaller, until now the question is not how to surpass the record, but how to maintain our 80 RECENT ECONOMIC CHANGES. position and how to secure what we have in our possession. ... In the general scramble we have gradually lost sight of the inexorable laws of supply and demand. We have been guilty of drifting away from sound trade regulations until our business has not only ceased to be profitable but carries with it undue commercial hazard.” As prices fall and profits shrink, producers working on insufficient capital, or by imperfect methods, are soon obliged, in order to meet impending obligations, to force sales through a further reduction of prices; and then stronger competi- tors, In order to retain their markets and customers, are compelled to follow their example; and this in turn is fol- lowed by new concessions alternately by both parties, until gradually the industrial system becomes depressed and de- moralized, and the weaker succumb (fail), with a greater or less destruction of capital and waste of product. Affairs now having reached their maximum of depression, recovery slowly commences. Consumption is never arrested, even if production is, for the world must continue to consume in order that life and civilization may exist. The continued increase of population also increases the aggregate of con- sumption; and, finally, the industrial and commercial world again suddenly realizes that the condition of affairs has been reversed, and that now the supply has become unequal to the demand. Then such producers as have “stocks on hand,” or the machinery of production ready for immediate and effective service, realize large profits; and the realization of this fact immediately tempts others to rush into production, in many cases with insufficient capital (raised often through stock companies), and without that practical knowledge of the detail of their undertaking which is necessary to insure success, and the old experience of inflation and reaction is again and again repeated. Hence the explanation of the now much- talked - of “periods” or “cycles” of panic and speculation, of trade activity and stagnation. Their periodical occurrence has long been recognized, and the economic principles involved PERIODICITY OF PANICS. 81 in them have long been understood.* But a century ago or more, when such economic changes occurred in any coun- try, the resulting disturbances were mainly confined to such country—as was notably the case in the “ Mississippi Scheme” of John Law in France, and the English “ South-Sea Bub- ble,” in the last century, or the severe industrial and finan- cial crises which occurred in Great Britain in the earlier years of the present century—and people of other countries, hearing of them after considerable intervals, and then vaguely through mercantile correspondence, were little trou- bled or interested. During recent years, however, they have * The theory, more or less widely entertained, that there is some law gov- ering and occasioning the regular recurrence of periods of commercial and financial disaster or prosperity, has thus far not been sustained by investiga- tion. Scarcity and high prices tend to cause increased production and induce speculation; but the supply of different commodities is governed by different laws, and it would be difficult to name any two classes of products that are controlled by the same natural conditions. In the case of some commodities t requires but a brief time to secure an increased production; in the case of others, months, and even years, are requisite. As respects agricultural pro- luctions, no locality accessible by modern means of transportation is depend- snt on its own supplies, or makes its own prices; and the influences which filict one part of the world with disaster bring bountiful supplies to others. Hence it follows that any periodical cause, common in its effects upon al] oroducts, is impossible. Neither can it be conceived how periodical changes n prices can result from any possible law of nature, unless it can be shown hat such laws exist and operate with uniformity on the human mind and on the development of the human intellect, which has not yet been done. One f the most noted, and at the same time one of the most empirical, attempts to und predictions as to future conditions of business and prices upon past ‘ommercial experiences, is embodied in a little book entitled ‘‘ Benner’s Prophe- ‘ies,” the work of an Ohio farmer named Benner, which, first published ‘bout 1875, has since passed through several editions and been widely circu- ated and quoted. Its prophecies relate mainly to the prices of pig-iron and togs, and to the next period of commercial and financial disaster. In the case f pig-iron, it is claimed that the prophecies have been in a measure fulfilled; ut in the case of hogs, not one has been. A careful analysis of the book bas urthermore proved that it is not of sufficient account or correctness to war- ant any serious attempt at the refutation of its conclusions, which seem to be vased on little more than the assumption that what has been in respect to rices Ag again happen; and that the cause of periodicity of panics is to be ound ‘‘in our solar system.”? 89 RECENT ECONOMIC CHANGES. become less local and more universal, because the railroad the steamship, and the telegraph have broken down the bar. riers between nations, and, by spreading in a brief time thi same hopes and fears over the whole civilized world, hay made it impossible any longer to confine the speculatiy spirit to any one country. So that now the announcemen of any signal success in any department of production o mercantile venture at once fires the imagination of the en terprising and reckless in every country, and quickly incite to operations which without such a stimulus would probably not be undertaken. At the same time, the command throug! the telegraph of instantaneous information throughout th world of the conditions and prospects of all markets for al commodities has also undoubtedly operated to impart steadi ness to prices, increase the safety of mercantile and manu facturing operations, and reduce the elements of speculation and of panics to the lowest minimum. One universally recognized and, to some persons, per plexing peculiarity of the recent long-continued depressioi in trade is the circumstance, that while profits have been s largely reduced that, as the common expression goes, “1t ha not paid to do business,” the volume of trade throughou the world has not contracted, but, measured by quantitie rather than by values, has in many departments notably m creased. The following are some of the more notable exam ples of the evidence that can be offered in confirmation 0 this statement : The years 1879, 1880, and 1881 for the United State were years of abundant crops and great foreign demand, an are generally acknowledged to have been prosperous; whil the years 1882, 1883, and 1884 are regarded as having bee years of extreme depression and reaction. And yet th movement of railroad freights throughout the country grea’ ly increased during this latter as compared with the forme period; the tonnage carried by six railroads centering ¢ Chicago in 1884 having been nearly thirty-three per cel VOLUME OF TRADE AND PRICES. 83 greater than in 1881; and the tonnage carried one mile by all the railroads of the United States in 1884—a year of ex- treme depression—having been 5,000,000,000 in excess of that carried in 1882; and this, notwithstanding there was a great falling off, in 1884, in the carriage of material for new railroad construction. Again, the foreign commerce of the United States, measured in dollars, largely declined during the same later period; but, measured in quantities, there was but little decrease, and in the case of not a few leading articles a notable increase. Thus, for the year 1885 the total value of the foreign commerce of the country in mer- chandise was $93,251,921 less than in the preceding year (1884), but of this decrease $90,170,364, according to the estimates of the United States Bureau of Statistics, repre- sented a decline in price. An export of 70,000,000 bushels of wheat from the United States in 1884 returned $75,000,- 000; while an export of 84,500,000 in 1885 gave less than $73,000,000. An export of 389,000,000 pounds of bacon and hams in 1884 brought in nearly $40,000,000; but shipments of 400,000,000 pounds in 1885 returned but $37,000,000, or an increase of foreign sales of about 11,000,000 pounds was accompanied by a decline of about $3,000,000 in price. In 1877, 216,287,891 gallons of exported petroleum were valued at $44,209,360 ; but in 1886, 303,911,698 gallons (or 87,623,- 300 gallons more) were valued at only $24,685,767, a decline n value of $19,683,000. But the most remarkable example of changes of this character is to be found in the case of sugar. ‘Thus, in 1883 the United States imported 2,023,- )00,000 pounds of sugar, for which it paid $91,959,000. In ‘885, 2,548,000,000 pounds were imported, at a cost of $68,- 31,000; or a larger quantity by 525,000,000 pounds was mported in 1885, as compared with 1883, for $23,428,000 ess money. The statistics of the recent foreign trade of Great Britain so exhibit corresponding results. For example, the de- flared aggregate value of British exports and imports for "7 84 RECENT ECONOMIC CHANGKS. 1883 were £667,000,000 as compared with £682,000,000 in 1873, an apparent decline of no little magnitude. But i the aggregate of the foreign trade of Great Britain for 188; had been valued at the prices of 1873, the total, in place o £667,000,000, would have been £861,000,000, or an increas for the decade of about thirty per cent. Again, the declared value of British imports retained fo home consumption for the year 1887 was £302,828,000; bu had they been valued at the same prices as were paid i 1886, their cost would have been £208,145,000. The savin; in the purchases of foreign products by Great Britain i 1887, owing to the fall of prices, as compared with 1886 was, therefore, £5,317,000. On the other hand, if the valu of the British exports for 1887, namely, £221,398,000, ha been sold on the same terms as in 1886, their value woul have amounted to £222,559,000, showing a comparative los for the year of £1,161,000. Comparing quantities, however the volume of the British foreign trade for 1887, in com parison with that of 1886, was about five per cent larger i respect to imports and 4°8 per cent in respect to exports. An explanation of this economic phenomenon of recen years, namely, a continuing increase in the volume of trad with a continuing low rate or decline in profits, may be foun in the following circumstances: One constant result of decline in prices is an increase (but not necessarily propoi tional or even universal) in consumption. Evidence on th point, derived from recent experiences, will be referred t hereafter; but the following example illustrates how th economic principle manifests itself even under unexpecte conditions: In 1878 sulphate of quinine ruled as high for, time on the London market as $3.96 per ounce, in bulk. I 1887 the quotation was as low as thirty cents per ounce Quinine is used mainly as a medicine, and is so indispensab in certain ailments that it may be presumed that its cost j 1878 was no great restriction on its consumption, and thi no great increase in its use from a reduction in price was | | f < | INCREASE IN MATERIAL CONSUMPTION. 85 be expected, any more than an increase in the use of coffins for a similar reason—both commodities being used to the extent that they are needed, even if a denial of the use of other things is necessary in order to permit of their procure- ment. And yet, that increase in the cheapness of quinine has been followed by a notable increase in its consumption, is shown by the fact that the importation of cinchona-bark ‘from which quinine is manufactured—into Europe and the United States during recent years has notably increased, 4,787,000 pounds having been imported into the United States in 1887, as compared with an import of 2,580,000 in 1883, the imports of quinine itself at the same time increas- ing from 1,055,764 ounces, valued at $1,809,000, in 1883, to 2,180,157 ounces, valued at $1,069,918, in 188%. The fol- lowing statement also illustrates even more forcibly the ordinary effect of a reduction of price on the consumption of the more staple commodities: Thus, a reduction (saving) of 6d. (twelve cents) per week in the cost of the bread of every family in Great Britain (a saving which, on the basis of the decline in the wholesale prices of wheat within the ‘ast decade, would seem to have been practicable) has been ostimated as equivalent to giving a quarter of a million counds sterling, or $1,250,000 per week, to the whole people of the kingdom to spend for other things. _ The evidence is also conclusive that the ability of the ropulation of the world to consume is greater than ever be- ‘ore, and is rapidly increasing. Indeed, such a conclusion ‘sa corollary from the acknowledged fact of increased pro- luction—the end and object of all production being con- umption. ‘Take, for example, the United States, with its resent population of sixty-five millions—a population that tmdoubtedly produces and consumes more per head than wy other equal number of people on the face of the globe, nd is producing and consuming very much more than it lid ten or even five years ago. The business of exchanging | rhe products or services, and of satisfying thereby the wants } 86 RECENT ECONOMIC CHANGES. of such a people is, therefore, necessarily immense, and with the annual increase of population, and with consumin; power increasing in an even larger ratio, the volume of sucl business must continue to increase. And what is true 0 the United States is true, in a greater or less degree, of al the other nations of the globe. ‘There is, therefore, nothin; inconsistent or mysterious in the maintenance or increas in the volume of the world’s business contemporaneoush with a depression of trade—in the sense of a reduction 0 profits—occasioned by an intense competition to dispose 0 commodities, which have been produced under comparative ly new conditions in excess of a satisfactory remuneratiy demand in the world’s markets. And, apart from this, iti now well understood that the aggregate movement and ex change of goods is little if any less in times of the so-calle “ depression of trade ” than in times of admitted prosperity Again, if depression of business does not signify less busi ness, it can only signify less profits. In fact, a reduction 0 profits is the necessary consequence of falling prices, sine all the calculations, engagements, and contracts of the em ploying classes, including wages, are based upon the expec tation that the prices of their products will remain substan tially unchanged, or no worse than before. If there is progressive fall of prices without a corresponding fall ¢ wages, profits must fall progressively, and interest also, sinc the rate of interest is governed by the profits which can b made from the use of capital. Now this is exactly what he happened in recent years. Profits and prices of commod ties have fallen, but wages have not fallen, except in a fe special departments. Consequently the purchasing powe of wages has risen, and this has given to the wage-earnin class a greater command over the necessaries and comfort of life, and the purchases of all this great class have suppl mented any forced economizing of the employing and wel to-do classes. ‘ The latter are the ones who make the mo: noise in the newspapers, and whose frequent bankruptei be FAILURE OF CERTAIN ECONOMIC INQUIRIES, 87 most fill the public eye. But they are not those whose con- sumption of commodities most swells the tonnage of the railways and steamships. They occupy the first cabin, and their names are the only ones printed in the passenger lists, but the steerage carries more consumers of wheat, sugar, and pork than all the cabins together.” The popular sentiment which has instinctively attributed the remarkable disturbance of trade within recent years to the more remarkable changes which have taken place con- currently in the methods of production and distribution has, therefore, not been mistaken, The almost instinctive efforts of producers everywhere to arrest what they consider “ bad trade” by partially or wholly interrupting production has not been inexpedient; and the use of the word “ over-pro- duction,” stripped of its looseness of expression, and in the sense as defined by the British Commission (and as hereto- fore shown), is not inappropriate in discussing the economic phenomena under consideration. It would also seem as if much of the bewilderment that is still attendant upon this subject, and the secret of the fruitlessness of most of the elaborate inquiries that have been instituted concerning it, have been due mainly to an inability to distinguish clearly between a causation that is primary, all-sufficient, and which has acted in the nature of unity, and causes which are in the nature of sequences or derivatives. An illustration of this is to be found in the tendency of English writers and in- vestigators to consider the immense losses which British farming capital has experienced since 1873, as alone suffi- sient to account for all the disturbances to which trade and industry in the United Kingdom have been subjected dur- ing the same period. That such losses have been extensive md disastrous without precedent, is not to be questioned. Sir James Caird estimates this loss in the purchasing power of the classes engaged in or connected with British ‘agricult- ure, for the single year 1885, as having amounted to £42,- 300,000 ($214,000,000) ; and as the losses for several preced- i 88 RECENT ECONOMIC CHANGES. ing years are believed to have been equal or even greater than this, an estimate of a thousand million dollars decline in the value of British farming capital since 1880, from depreciation of land-values, rentals, and prices for stock’ and cereals, is probably an wader rather than an over-esti- mate. Wheat-growing, which was formerly profitable in Great Britain, is reported as not having been remunerative to the British farmer since 1874; a fact that finds eloquent ex- pression in the acknowledged reduction in British wheat acreage from about 4,000,000 acres (3,981,000) in 1869 to 2,317,324 acres in 1887, or more than 40 per cent. And as the English farmers have decreased their production of cereals by reason of the small amount of profit accruing from their labor, the English agricultural laborer has from ne- cessity been compelled to seek other employments, or emi- grate to other countries. [According to a recent report of Major Cragie to the British Farmer’s Club, the wages of farm laborers in England after 1860 ad- vanced on the average thirty per cent; but since 1881 the average de-| cline in wages “ over the farmed surface of England” has been at least fourteen per cent; and in some sections of the country the whole of the rise in the mean wage of ordinary agricultural labors since 1860! has entirely disappeared. The decline in the rents of farm lands in England in recent years has been estimated by the London “ Kcono- mist,” on the authority of Mr. Clare Read, as not less than thirty per cent, or 10s. per acre on the wheat area—about $8,700,000 yearly. These results may, and probably do, furnish an explanation of the fact| that the increase of wheat acreage in Great Britain in 1888 as com pared with 1887 was 280,708 acres, or 11:8 per cent. ] : That the agricultural populations of the interior states of, Europe, which have hitherto been protected in a degree by the barrier of distance against the tremendous cheapening of transportation, are also at last feeling the full effects of its influence, is shown by the statement (United States => sular Reports, 1886) that farming land in Germany, se | a tg ‘eames | DECLINE OF BRITISH AGRICULTURE. 89 from large cities, where the demand for milk and other perishable products is small, can now be purchased for fifty per cent of the prices which prevailed at the close of the Franco-German War in 1870-71. And yet such startling results, in the place of being prime factors in occasioning a depression of British trade and industry, are really four re- moves from the original causes, which may be enumerated in order as follows: First, the occupation and utilization of ss new and immense areas of cheap and fertile wheat-growing land in the United States, Canada (Manitoba), Australia, and the Argentine Republic. Second, the invention and ap- plication of machinery for facilitating and cheapening the production and harvesting of crops, and which on the wheat- fields of Dakota (as before pointed out) have made the labor of every agriculturist equivalent to the annual production of 5,500 bushels of wheat. Third, the extension of the system of transportation on land through the railroad, and on sea through the steamship, in default of which the appropria- jion of new land and the invention and application of aew agricultural machinery would have availed but little. Pourth, the discovery of Bessemer, and the invention of the compound (steamship) engine, without which trans- oortation could not have cheapened to the degree necessary io effect the present extent of distribution. Now, from she conjoined result of all these different agencies has come vreduction in the world’s price of wheat to an extent suf- icient to make its growing unprofitable on lands taken at ugh rents, and under unfavorable climatic conditions; and egislation is powerless to make it otherwise. In short, the vhole secret of the recent immense losses of the British ind to a lesser extent also of the Continental agriculturist, imd the depression of British trade and industry, so far is it has been contingent on such losses, stands re- vealed in the simple statement that American wheat sold ‘or export at the principal shipping ports of the United States in 1885 for 56 cents less per bushel than in 90 RECENT ECONOMIC CHANGES. 1874, 32 cents less than in 1882, and 20 cents less than i 1884.* ““T have calculated that the produce of five acres 0 wheat can be brought from Chicago to Liverpool at less that the cost of manuring one acre for wheat in England. "Tes tumony of W. J. Harris, a leading farmer in Devonshire England, before the British Commission, 1886. * The average value of the wheat exported from the United States in 1885 according to the tables of the United States Bureau of Statistics, was 86 cent; per bushel at the shipping ports. This was a decline of 20 cents from 1884 262 cents from 1883, 382 cents from 1882, 56 cents from 1874, and 61 cents fron 1871 | The export value of corn was 54 cents in 1885, showing a decline of 7 cents from 1884, 14 cents from 1883, 12 cents from 1889, 30 cents from 1875, and li cents dom 1872. The export value of oats was 87 cents in 1885, showing a decline of 2 cents from 1884, 13 cents from 1888, 7 cents from 1882, 20 cents from 1875, and 1 cents from 1871. The export price of lard was 7 cents in 1885, showing a decline of 2 cents from 1884, 4 cents from 1883, 6 cents from 1875, 3 cents from 1872, and 9 come from 1870. | How closely the decline in recent years in the export prices of American cereals has been followed by corresponding reductions in the prices of cereals in the markets of Great Britain is exhibited by the following table (published in the British ‘‘ Farmer’s Almanac”? for 1886), showing the average prices pel quarter of wheat, barley, and oats, in Great Britain for two periods of ten years, commencing with 1865, with a separate estimate for 1885: / I Price per quar- Price per quar- CEREALS. le ter raed | then i 1866-1875. 1876-1885. | Ss. ad. Ss. dad. 8. d. Wheat ogee papa 54 "7h 43 9% 82 10 Barleyias sec oes eee 39 2 86 5 380 1 Oates vet. eal kenvas 25 104 22 8} 20 7 my Similar tables given by the same authority show the gross value per annum of the product of wheat, barley, oats, beef, mutton, and wool, in Great Ba to have been £35,000,000 ($175,000,000) less in 1885 than were the mean re-, turns for the ten years 1866-1875. According also to data given in the returns, of the British Registrar-General, the average prices of beef by the carcass in the London market were £58 5s. 7d. per ton during the ten years from 1866- 1875, £57 5s. 8d. for 1876-1885, and £49 17s. 6d. for the year 1885. NEW RELATIONS OF LABOR AND CAPITAL. 91 Indian corn can be successfully and has been extensively raised in Italy. But Indian corn grown in the valley of the Mississippi, a thousand miles from the seaboard, has been transported in recent years to Italy and sold in her markets u% a lower cost than the corn of Lombardy and Venetia, where the wages of the agriculturist are not one third of jhe wages paid in the United States for corresponding labor. And one not surprising sequel of this is that 77,000 Italian aborers emigrated to the United States in 1885. Now, what has happened in the case of wheat and corn 1as happened also, in a greater or less degree, as respects neats and almost all other food products; increased sup- gies having occasioned reduction of prices, and reduction if prices, in turn, ruinous losses to invested capital and revo- utionary disturbances in old methods of doing business. The Bessemer rail, the modern steamship, and the Suez Janal have brought the wheat-fields of Dakota and India, ind the grazing-lands of Texas, Colorado, Australia, and he Argentine Republic, nearer to the factory operatives in Manchester, England, than the farms of Illinois were before he war to the spindles and looms of New England. CHANGES IN THE RELATIONS OF LABOR AND CapPI- ‘AL.—Consider next how potent for economic disturbance 1ave been the changes in recent years in the relations of abor and capital, and how clearly and unmistakably these yhanges are consequents or derivatives from a more potent nd antecedent agency. Machinery is now recognized as essential to cheap pro- luction. Nobody can produce effectively and economically vithout it, and what was formerly known as domestic manu- acture is now almost obsolete. But machinery is one of he most expensive of all products, and its extensive pur- hase and use require an amount of capital far beyond the apacity of the ordinary individual to furnish. There are ery few men in the world possessed of an amount of wealth ufficient to individually construct and own an. extensive a 99 RECENT ECONOMIC CHANGHS, line of railway or telegraph, a first-class steamship, or a grea factory. It is also to be remembered that for carrying o1 production by the most modern and effective methods larg capital is needed, not only for machinery, but also for thi purchasing and carrying of extensive stocks of crude mate, rial and finished products. 4 Sugar can now be, and generally is, refined at a profit o: an eighth of a cent a pound, and sometimes as low as a six teenth ; or, in other words, from eight to sixteen pounds 0: raw sugar must now be treated in refining in order to make a cent; from eight hundred to sixteen hundred pounds tc make a dollar; from eighty thousand to one hundred ané sixty thousand pounds to make a hundred dollars, and so on, The mere capital requisite for providing and carrying the raw material necessary for the successful prosecution of this business, apart from all other conditions, places it, there. fore, of necessity beyond the reach of any ordinary capital. ist or producer. It has been before stated that, in the manu- facture of jewelry by machinery, one boy can make up nine thousand sleeve-buttons per day; four girls also, working by modern methods, can put together in the same time eight thousand collar-buttons. But to run an establishment with such facilities the manufacturer must keep constantly in stock thirty thousand dollars’ worth of cut ornamental stones, and a stock of cuff-buttons that represents nine thousand different designs and patterns. Hence from such conditions have grown up great corporations or stock com- panies, which are only forms of associated capital organized for effective use and protection. 'They are regarded to some extent as evils; but they are necessary, as there is apparently _ no other way in which the work of production and distribu- tion, in accordance with the requirements of the age, can be prosecuted. The rapidity, however, with which such combinations of capital are organizing for the purpose of promoting industrial and commercial undertakings on a scale heretofore wholly unprecedented, and the tendency INDIVIDUALISM IN PRODUCTION. 93 hey have to crystallize into something far more complex han what has been familiar to the public as corporations, ith the impressive names of syndicates, trusts, etc., also onstitute one of the remarkable features of modern busi- ess methods. It must also be admitted that the whole andency of recent economic development is in the direc- ion of limiting the area within which the influence of com- etition is effective. And when once a great association of capital has been ffected, it becomes necessary to have a master-mind to man- ge it—a man who is competent to use and direct other men, rho is fertile in expedient and quick to note and profit by ny improvements in methods of production and variations aprices. Such a man is a general of industry, and corre- ponds in position and functions to the general of an army. What, as a consequence, has happened to the employés? foincident with and as a result of this change in the meth- ds of production, the modern manufacturing system has een brought into a condition analogous to that of a mili- ary organization, in which the individual no longer works 3 independently as formerly, but as a private in the ranks, beying orders, keeping step, as it were, to the tap of the tum, and having nothing to say as to the plan of his work, f its final completion, or of its ultimate use and distribution. n short, the people who work in the modern factory are, as tule, taught to do one thing—to perform one and gener- lly a simple operation ; and when there is no more of that ind of work to do, they are in a measure helpless. The re- it has been that the individualism or independence of the roducer in manufacturing has been in a great degree de- woyed, and with it has also in a great degree been destroyed ae pride which the workman formerly took in his work— aat fertility of resource which formerly was a special char- eteristic of American workmen, and that element of skill aat comes from long and varied practice and reflection and sponsibility. Not many years ago every shoemaker was or 94 RECENT ECONOMIC CHANGKS. could be his own employer. The boots and shoes passed di. rectly from an individual producer to the consumer. Noy this condition of things has passed away. Boots and shoe: are made in large factories; and machinery has been so util. ized, and the division of labor in connection with it has beer carried to such an extent, that the process of making a sho is said to be divided into sixty-four parts, or the shoemaker of to-day is only the sixty-fourth part of what a shoemaker once was.* It is also asserted that “the constant employ. ment at one sixty-fourth part of a shoe not only offers nc encouragement to mental activity, but dulls by its monotony the brain of the employé to such an extent that the powe1 to think and reason is almost lost.” + * The following is a reported enumeration of the specialties or distinc branches of shoemaking at which men, women, and children are kept con. stantly at work in the most perfect of the modern shoe-factories, no appren: tices being needed or taken in such establishments: ‘* Binders, blockers, boot liners, beaters-out, boot-turners, bottomers, buffers, burnishers, channelers counter-makers, crimpers, cutters, dressers, edge-setters, eyeleters, finishers fitters, heelers, lasters, levelers, machine-peggers, McKay stitchers, nailers packers, parters, peggers, pressers, rosette-makers, siders, sandpaperers, skin: ners, stitchers, stringers, treers, trimmers, welters, buttonhole-makers, clamp: ers, cleckers, closers, corders, embossers, gluers, inner-sole-makers, lacers leather-assorters, riveters, rollers, seam-rubbers, shank-pressers, shavers, slip per-liners, aolevienthersatals sole-quilters, stampers, stiffeners, hatin: fitters strippers, taggers, tipmakers, turners, vampers, etc.?? + The position taken by Prince Krapotun who represents to some exten the extreme socialistic movement in Europe, is, ‘‘ that the division and sub- division of functions have been pushed so far as to divide humanity into caste: almost as firmly established as those of old India. First, the broad divisior into producers and consumers: little-consuming producers on the one hand little-producing consumers on the other hand. Then, amid the former, : series of further subdivisions—the manual worker and the intellectual worker sharply separated; and agricultural laborers and workers in manufactures Amid little-producing consumers are numberless minute subdivisions, thi modern ideal of a workman being a man or a woman, a boy or a girl, withou the knowledge of any handicraft, having no conception whatever of the indus: try in which he or she is employed, and only capable of making all day lon; and for a whole life the same infinitesimal part of something—from the age 0 thirteen to that of sixty pushing the coal-cart at a given spot of the mine, 0! making the spring of a pen-knife, or the eighteenth part of a pin. The work: ing classes have become,’’ he says, ‘* mere servants to some machine of a giver EMPLOYMENT OF CHILD LABOR. 95 As the division of labor in manufacturing—more espe- cially in the case of textiles—is increased, the tendency is to supplement the employment of men with the labor of women and children. The whole number of employés in the cotton-mills of the United States, according to the cen- sus of 1880, was 172,544; of this number, 59,685 were men, and 112,859 women and children. In Massachusetts, out of 61,246 employés in the cotton-mills, 22,180 are males, 31,496 women, and 7570 children. In the latter State certain manufacturing towns, owing to the disparity in the numbers of men and women employed, and in favor of the latter, are coming to be known by the appellation of “ she-towns.” * During recent years the increase in the employment of child- Jabor in Germany has been so noticeable, that the factory inspectors of Saxony in their official report for 1888 have suggested that such labor be altogether forbidden by the State, and that the hours during which youths between the ages of fourteen to sixteen may be legally employed in fac- tories should be limited to six. description ; mere flesh-and-bone parts of some immense machinery, having no idea about how and why the machinery is performing its rhythmical move- ments. Skilled artisanship is swept away as a survival of a past which is con- demned to disappear. For the artist who formerly found esthetic enjoyment in the work of his hands is substituted the human slave of an iron slave,” etc., etc. * «The tendency of late years is toward the employment of child-labor. We see men frequently thrown out of employment, owing to the spinning- mule being displaced by the ring-frame ; or children spinning yarn, which men used to spin. In the weave-shops, girls and women are preferable to men, so that we may reasonably expect that, in the not very distant future, all the cotton-manufacturing districts will be classed in the category of ‘ she- towns.’ But people will naturally say, What will become of the men? This is a question which it behooves manufacturers to take seriously into considera- tion, for men will not stay in any town or city where only their wives and children can be given employment. Therefore, a pause at the present time might be of untold value in the future; for, just as sure as the world goes round, women and children will seek fresh pastures, where work can be found for the husband and father, in preference to remaining in places where he has to play the part of the ‘ old woman,’ while they go to work to earn the means of subsistence.”’—Wanr’s Fiber and Fabric. 96 RECENT ECONOMIC CHANGES. Another exceedingly interesting and developing featur of the new situation is that, as machinery has destroyed th handicrafts, and associated capital has placed individua capital at a disadvantage, so machinery and associated capi tal in turn, guided by the same common influences, now wa upon machinery and other associated capital. Thus thi now well-ascertained and accepted fact, based on long expe rience, that power is most economically applied when ap plied on the largest possible scale, is rapidly and inevitabh leading to the concentration of manufacturing in the larges establishments, and the gradual extinction of those whicl are small. Such also has already been, and such will con tinue to be, the outcome of railroad, telegraph, and steam ship development and experience; and another quarter of : century will not unlikely see all of the numerous companiei that at present make up the vast railroad system of thi United States consolidated, for sound economic reasons under a comparatively few organizations or companies.* I | * “There are in England eleven great companies, but these were forme of two hundred and sixty-two companies, while the six great companies 0, France have absorbed forty-eight companies. When the New York Centra Railway was formed in 1853, it consisted of a union of eleven railways. I takes twenty-five pages in ‘ Poor’s Manual of Railroads for 1885’ merely t give a list of railways in the United States which have been merged in othe lines. This shows in marked manner the tendency toward consolidation There is no exception. It is a phenomenon common to all countries. | ‘* By means of combination and concentration of railway property the rail way business of the country can be conducted most effectively. It is an im provement in economic methods of large proportions. The experience of thi world has demonstrated this so conclusively that it admits of no doubt, and ; very little reflection on the nature of the economic functions of the railway) will render it clear to the reader. When the general public and the pres: resist this tendency, or ery out in childish indignation because Mr. Vanderbil bought the West Shore Railway in the interest of the New York Central anc Hudson River Railway, they are more foolish than laboring-men who resis the introduction of new and improved machinery. The latter have at leas the excuse that changed methods of production often occasion the bitteres distress, and injure permanently some few laboring men; and it is hard t appreciate a permanent advantage which must be acquired by severe presen suffering. The impulse to such great economies as can be secured by com: . DESTRUCTION OF SMALL INDUSTRIES. 97 this respect the existing situation in Great Britain (which corresponds to that in all other countries) has thus been represented : “Trade after trade is monopolized, not necessarily by large capi- talists, but by great capitals. In every trade the standard of necessary size, the minimum establishment that can hold its own in competition, is constantly and rapidly raised. The little men are ground out, and the littleness that dooms men to destruction waxes year by year. Of the (British) cotton-mills of the last century, a few here and there are standing, saved by local or other accidents, while their rivals have either grown to gigantic size or fallen into ruin. The survivors, with steam substituted for water-power, with machinery twice or thrice renewed, are worked while they pay one half or one fourth per cent on their cost. The case of other textile manufactures is the same or stronger still. Steel and iron are yet more completely the mo- nopoly of gigantic plants. The chemical trade was for a long time open to men of very moderate means. Recent inventions threaten to turn the plant that has cost millions to waste brick and old lead. Already nothing but a trade agreement, temporary in its na- ture, has prevented the closing of half the (chemical) factories of St. Helen’s and Widnes, and the utter ruin of all the smaller owners. Every year the same thing happens in one or another of our minor industries.” “The president of one of the largest cotton corporations in New England in a recent annual report stated that ‘competition is so sharp that the profits of a mill are generally only the savings made on the general expenses caused by increased production, so that a mill with a small production finds it impossible to live. Unless the smaller cot- ton-mills have a monopoly of some fancy business, they have all gone under or must fail.’ ” bination is so strong as to be irresistible. It is one of those forces which over- whelm the man who puts himself against them, though they may be guided and directed, will one but put one’s self in the stream and move with it.””— The Reform of Railway Abuses. Ety. _ “The railroads of the country are rapidly moving toward some great sys- tem of consolidation. . . . The movement is to-day going forward more rap- ly—mueb more rapidly —under the artificial stimulus given to it by the Inter- e Commerce Act than ever before. The next move will be in the direc- mn of railroad systems of twenty thousand miles, each under one common U anagement.”’—Speech of Mr. Cuartes Francis Apams, President Union Pacific, before the Commercial Club, Boston, December, 1888. 98 RECENT ECONOMIC CHANGES. Such changes in the direction of the concentration 0 production by machinery in large. establishments are, more over, in a certain and large sense, not voluntary on the par of the possessors and controllers of capital, but necessary 0 even compulsory. If an eighth or a sixteenth of a cent; pound is all the profit that competition and modern im provements will permit in the business of refining sugar such business has got to be conducted on a large scale to ad. mit of the realization of any profit. An establishment fittec up with all modern improvements, and refining the abso. lutely large but comparatively small quantity of a millior pounds per annum, could realize, at a sixteenth of a cent ¢ pound profit on its work, but $625. Accordingly, the sue. cessful refiner of sugars of to-day, in place of being as for. merly a manufacturer exclusively, must now, as a condition of full success, be his own importer, do his own lighterage, own his own wharfs and warehouses, make his own barrels and boxes, prepare his own bone-black, and ever be ready to discard and replace his expensive machinery with every new improvement. But to do all this successfully requires not only the command of large capital, but of business qualifica- tions of the very highest order—two conditions that but comparatively few can command. It is not, therefore, to be wondered at that, under the advent of these new conditions, one half of the sugar-refineries that were in operation in the seaboard cities of the United States in 1875 have since failed or discontinued operations. In the great beef slaughtering and packing establish- ments at Chicago, which slaughter a thousand head of cattle and upward in a day, economies are effected which are not possible when this industry is carried on, as usual, upon a very small scale. Every part of the animal—hide, horns, hoofs, bones, blood, and hair—which in the hands of the ordinary butcher are of little value or a dead logs, are turned toa profit by the Chicago packers in the manufacture of glue bone-dust, fertilizers, etc.; and accordingly the great pach ECONOMY OF LARGE PRODUCTION. 99 ers can afford to and do pay more for cattle than would otherwise be possible—an advance estimated by the best authorities at two dollars a head. Nor does this increased price which Western stock-growers receive come out of the consumer of beef. It is made possible only by converting the portions of an ox that would otherwise be sheer waste into products of value. The following statements have recently been made in California, on what is claimed to be good authority (‘ Over- and Monthly”), of the comparative cost of growing wheat nthat State on ranches, or farms of different sizes. On ranches of 1,000 acres, the average cost is reported at 924 sents per 100 pounds; on 2,000 acres, 85 cents; on 6,000 veres, 75 cents; on 15,000 acres, 60 cents; on 30,000 acres, 0 cents; and on 50,000 acres, 40 cents. Accepting these ‘stimates as correct, it follows that the inducements to grow vheat in California by agriculturists with limited capital md on a small scale are anything but encouraging. The following are other illustrations pertinent to this ubject: “It is a characteristic and noteworthy feature of anking in Germany,” says the London “ Statist,” “ that the mlk of the business is gradually shifting from the small ankers, who used to do a thriving business, to the great anking companies, leaving quite a number of small cus- omers almost without any chance to prosper in legitimate perations—concentration of capital and business in the ands of a limited number of powerful customers being the ule of the day.” _ The tendency to discontinue the building and use of mall vessels for ocean transportation, and the inability of ich vessels to compete with vessels of larger tonnage, is 10wn by the statement that while a steamer of from 200 ) 800 tons requires one sailor for every 19:8 tons, a steamer £from 800 to 1,000 tons requires but one sailor for every 15 tons. In like manner, while a sailing-vessel of from 00 to 300 tons requires one sailor for every 28:9 tons, a 8 e 100 RECENT ECONOMIC CHANGES. sailing-vessel of five times the size, or from 1,000 to 1,60( tons, requires but one sailor for every 60°3 tons. And as 1 is also claimed that other economies in the construction oi the hull or the rigging, and in repairing, are concurrent with the reduction of crews, it is not difficult to understanc why it is that large vessels are enabled to earn a percentage of profit with rates of freight which, in the case of smal. vessels, would inevitably entail losses. It was a matter of congratulation after the conclusior of the American war in 1865, that the large plantation sys: tem of cotton-raising would be broken up, and a system 0: smaller crops, by small and independent farmers or yeo. manry, would take its place. Experience has not, however verified this expectation; but, on the contrary, has show1 that it is doubtful whether any profit can accrue to ¢ cultivator of cotton whose annual crop is less than fifty bales. “ Cotton (at the South) is made an exclusive crop, be cause it can be sold for cash—for an actual and certain pric in gold. It isa mere trifle to get eight or nine cents for ¢ pound of cotton, but for a bale of 450 pounds it is $40. Th bale of cotton is therefore a reward which the anxious farmel works for during an entire year, and for which he will spenc half as much in money before the cotton is grown, beside all his labor and time. And the man who can not maki eight or ten bales at least has almost no object in life, anc nothing to live on.”—Lradstreet’s Jowrnal. About fifteen years ago the new and so-called “ rolle: process” for crushing and separating wheat was discoveret and brought into use. Its advantages over the old metho of grinding by millstones were that it separated the flow more perfectly from the hull or bran of the berry of th wheat, gave more flour to a bushel of wheat, and raised botl its color and strength (nutriment). As soon as these fact were demonstrated, the universal adoption of the roller mill and the total abolition of the stone mills became only : { EXPERIENCE OF THE MILLING INDUSTRY. 101 question of time, as the latter could not compete with the former. ‘I'he cost of building mills to operate by the roller process is, however, much greater than that of the old stone mills. Hormerly, from $25,000 to $50,000 was an ample sapital with which to engage in flour-milling in the United States, where water-power only was employed; but at the oresent time from $100,000 to $150,000 is required to xo into the business upon a basis with any promise of suc- ess, even with a small mill; while the great mills of Min- 1eapolis, St. Louis, and Milwaukee cost from $250,000 to $900,000 each, and include “steam” as well as water-power. Che consequence of requiring so much more capital to partici- vate in the flour business now than formerly is that the maller flour-mills in the United. States are being crushed, w forced into consolidation with the larger companies, the atter being able, from dealing in such immense quantities, o buy their wheat more economically, obtain lower rates of reight, and, by contracting ahead, keep constantly run- ung.* At the same time there is a tendency to drive the ailling industry from points in the country to the larger ities, and central grain and flour markets where cheap reights and large supplies of wheat are available. As might ave been anticipated, therefore, the Milwaukee “ Directory f American Millers,” for 1886, shows a decrease in the umber of flour-mills in the United States for that year, as ompared with 1884, of 6,812, out of a total in the latter ear of 25,079, but an increase at the same time in capacity wr flour production. These new conditions of milling have 2en followed by a movement in England for the consolida- on in great cities of the flour-mills and bakeries into single itablishments, where the bread-making of the whole com- reerenecrre Rte yy yt a a _* What has happened in this business in the United States is true also of ‘eat Britain. In both countries the new system of milling and the concen- ition of the business in great establishments has led to over-production, due competition, and minimized profits ; and in both countries great milling ndicates or trusts have been formed to regulate production and prices, oxi 102 RECENT ECONOMIC CHANGES, munity may be done in immense ovens, under the most sei entific conditions, and at a material saving in cost. The improvements in recent years in the production 0 sugar from the beet, and the artificial encouragement of thi industry in the continental states of Europe through th payment of large bounties, has in turn compelled the larg producers of cane-sugars in the tropics to entirely abandor their old methods of working, and reorganize this industry on a most gigantic scale as a condition of continued exist ence. Thus, for example, although the business of cane sugar production was commenced more than three hundrec years ago on the island of Cuba, the grinding of the can by animal or “ wind” power, and the boiling and granulat ing by ancient, slow, and wasteful methods, was everywher kept up until within a very recent period, as it still is b, small planters in every tropical country. But at the pres ent time, upon the great plantations of Cuba and some othe countries, the cane is conveyed from the fields by a systen of railroads to manufacturing centers, which are really hug factories, with all the characteristics of factory life abou them, and with the former home or rural idea connecte with this industry completely eliminated. In these facto ries, where the first cost of the machinery plant often repre sents as large a sum as $200,000 to $250,000, with an equall large annual outlay for labor and other expenses, all grade of sugar from the “crude” to the “ partially refined” ar manufactured at a cost that once would not have bee deemed possible. In Dakota and Manitoba the employmer on single wheat estates of a hundred reapers and an ager gate of three hundred laborers for a season has been regarde as something unprecedented. in agricultural industry ; br on one sugar estate in Cuba— El Balboa ”—from fiftee hundred to two thousand hands, invariably negroes, al employed, who work under severe discipline, in watches or 1 lays, during the grinding season, by day and night, the sam as in the large iron-mills and furnaces of the United Stat CO-OPERATION AND THE LABOR PROBLEM. 13 and Europe. At the same time there are few village com- munities where a like number of people experience the same sare and surveillance. ‘The male workers occupy quarters walled and barricaded from the women, and the women from the men. ‘There is in every village an infirmary, a lying-in hospital, a physician, an apothecary, a chapel, and priest. At night and morning mass is said in chapel, and the crowds are always large. ‘There is of a Sunday less re- straint, though ceaseless espionage is never remitted. On these days and in parts of holidays there is rude mirth, cuder music, and much dancing. This picture is given somewhat in detail, because it illustrates how all-pervading und tremendous are the forces that are modifying society averywhere, in civilized, partially civilized, and even barbar- us countries, conjointly with the new conditions of produc- sion and consumption. The experience of the co-operative societies of Great Britain—the inception and practical working of which have een hopefully looked upon as likely to furnish a solution af the labor problem—as recently detailed by Mr. Thomas dughes (“Tom Brown”), does not, moreover, seem likely 0 constitute any exception to the general tendency of great iwgregated capital, employed in production or distribution, 0 remorselessly disregard any sentiment on the part of the ndividual workman in respect to his vocation, and to crush ut or supersede all industrial enterprises of like character hat may be compelled to work at relative disadvantage by eason of operating upon a smaller scale, or inability to em- loy a larger aggregate of capital. This experience, as re- ated by Mr. Hughes at a recent congress (1887) of the co- perative societies of Great Britain, has been as follows: Jo-operation in Great Britain, so long as it has confined self to distribution—that is, to the purchase of commodi- tes at the lowest rates at wholesale and without the inter- ention of middle-men, and their subsequent sale to mem- ers of the societies at the minimum of cost and profit— a ameeeiniinin eit 104 RECENT ECONOMIC CHANGES. has been a very great success; but co-operation in produe- tion, so far as it has been attempted by these same societies, - appears to have succeeded only by abandoning co-operation in the original and best sense of the term. For example, some of the great and most successful co-operative distribu-' tion societies of England, in order to increase their divi- dends, have recently undertaken to manufacture a portion of the goods which they require, and thus secure for them- selves the profits they have heretofore paid to the manu- facturers; and, with this view, the manufacture of boots and shoes has been commenced on a large scale by two of the largest of such societies in Glasgow and Manchester respectively—the English society employing a thousand operatives, and disposing of goods to a present ageregate value of more than a million dollars per annum. “ These manufacturing enterprises have not, however, been con- ducted on co-operative lines. . . . The work-people in their factories are not co-operators. “hey do not share in the profits of oe Ua They receive simply the market rate of wages.” They are on just as bad terms with their co-operative employers as they would be with individual capitalists, and they have endeavored to better their condi- tion by entering upon strikes; or, in other words, the great Co-operative Distribution Society managers in Great Britain, finding that it was essential to their success as manufactur- ing producers, have adopted without seruple all the methods and rules that prevail in similar establishments which have been incorporated and are managed solely with a view to the profit of their individual capitalists or stockholders.” But this is not the whole story. Besides these great wholesale co-operative distribution societies which have en- gaged in manufacturing, there are a large number of smallel and weaker similar societies in Great Britain which are als¢ attempting to manufacture the same description of good for the profit of their more limited circle of members, anc these last now complain that they are absolutely unable i i) he . ‘af, | & EQUALIZATION OF WAGES. 105 withstand the competition of the larger wholesale societies, which, purchasing labor at the lowest rate in the open market, denying any participation of profit to their work- men, and working upon the largest scale, are enabled to produce and sell cheaper. “So that all the disastrous effects yf unlimited and unscrupulous competition, for which co- yperation was expected to be a cure, are showing themselves ymong the co-operators, and another example is to be added 30 the record of modern economic experience, of the strong ndustrial and commercial organizations devouring the weak.” An element of international character and importance, growing out of the improvements in production through machinery, should also not be overlooked. Whatever of idvantage one country may have formerly enjoyed over mother by reason of absolute or comparative low wages, is now, so far as the cost of machine-made goods is concerned, through the destruction of handicrafts and the extended ise and improvements in machinery, being rapidly reduced oaminimum. For, apart from any enhancement of cost xy taxes upon imports, there is at present but very little lifference in all countries of advanced civilization in the cost yf machinery, of the power that moves it, or of the crude materials which it converts into manufactures. The ma- shine, therefore, which enables the labor of one man to dis- yense with the cheap labor of ten men, practically reduces iny advantage which the manufacturer in France, Germany, yr other countries, paying nominally low wages, has hereto- ‘ore had over the manufacturer of England or of the United states, to the simple difference in the cost of the labor of ihe operative who manages the machine in different places ; ind all experience shows that the invariable concomitant of uigh wages, conjoined with the skillful management of ma- shinery, is a low cost of production. Attention is next asked to the economic—industrial, sommercial, and financial—disturbances that have also re- 106 RECENT ECONOMIC CHANGES. sulted in recent years from changes, in the sense of improye-| ments, in the details of the distribution of products; and as the best method of showing this, the recent course of trade in respect to the practical distribution and supply of. one of the great articles of commerce, namely, tin-plate, is selected. Before the days of the swift steamship and the telegraph, the business of distributing tin-plate for consumption in the United States was largely in the hands of one of the great mercantile firms of New York, who brought to it large en- terprise and experience. At every place in the world where tin was produced and tin-plate manufactured they had their confidential correspondent or agent, and every foreign mail brought to them exclusive and prompt returns of the state of the market. Those who dealt with such a firm dealt with them under conditions which, while not discriminating un- favorably to any buyer, were certainly extraordinarily favor- able to the seller, and great fortunes were amassed. But to-day how stands that business? There is no man, however obscure he may be, who wants to know any morning the state of the tin-plate market in any part of the world, but. can find it in the mercantile journals. If he wants to know. more in detail, he joins a little syndicate for news, and then. he can be put in possession of every transaction of impor-. tance that took place the day previous in Cornwall, Liver- pool, in the Strait of Sunda, in Australia, or South America. What has been the result? There are no longer great ware- houses where tin in great quantities and of all sizes, waiting for customers, is stored. The business has passed into the hands of men who do not own or manage stores. They haye simply desks in offices. They go round and find who is going to use tin in the next six months. They hear of a railroad-bridge which is to be constructed; of a certain number of cars which are to be covered; that the salmon- canneries on the Columbia River or Puget’s Sound are likely to require seventy thousand boxes of tin to pack the catch eter 7 ss ECONOMIC EXPERIENCES OF TIN-PLATE, 107 wf this year, as compared with a requirement of sixty thou- ‘and last year—a business, by the way, which a few years io was not in existence—and they will go to the builders, ontractors, or business-managers, and say to them: “ Pee vill want at such a time so much tin. I will buy it for you t the lowest market price, not of New York, but of the vorld, and I will put it in your possession, in any part of he continent, on a given day, and you shall cash the bill nd pay me a percentage commission ”—_nossibly a fraction if one per cent; thus bringing a former great and compli- ated business of importing, warehousing, selling at whole- ale and retail, and employing many middle-men, clerks, ,00k-keepers, and large capital, to a mere commission busi- Less, which dispenses to a great extent with the employment f intermediates, and does not necessarily require the pos- ession or control of any capital.* Let us next go one step farther, and see what has hap- ened at the same time to the man whose business it has een not to sell but to manufacture tin- -plate into articles or domestic use, or for other consumption. Thirty or forty ears ago the tinman, whose occupation was mainly one of andicraft, was recognized as one of the leading and most mbination. 1384 RECENT ECONOMIC CHANGHS. time, to vigorously compete with the Russian product in the world’s markets, there seems no probability that any ad- vance in price is likely to occur in the immediate future. CoprEer.—This metal touched the lowest price on record in 1886, Lake Superior copper in New York falling from twenty-five cents per pound in 1880 to nine and four fifth cents in May, 1886; and in the case of only a very few commodities is the connection between a decline in price and an increase of production and supply so well established and so significant. ‘T’he increase in the copper product of the world is estimated by Mr. Sauerbeck to have been ninety-seven per cent in the thirteen years from 1873 to 1885, inclusive; while according to the report of the United States Geological Survey, 1886, the increase from 1879 to 1885 was nearly forty-seven per cent (46°8). ‘The countries which have most notably contributed to this increased prod- uct have been the United States, Spain, and Portugal; the increase in the case of the former having been from 23,000 tons in 1879 to 74,053 tons in 1885; and in that of the latter, from 32,677 tons to 45,749 in the same period. As in all other like cases, the disturbing effect on the industries involved—mining and smelting—contingent on this rapid and remarkable fall of prices, was very great, and in all quarters of the world. In Montana, the Montana Copper Company, with an annual product of 8,000,000 pounds of pure copper, entirely suspended operations; and the Ana- conda Company, with an annual product of 36,000,000 pounds, shut down twenty out of twenty-eight furnaces, and discharged most of its hands at the mine. In Chih, pro- duction during the year 1885 was diminished to the extent of about ten per cent. In Germany the great Mansfield mine, which reported gross profits in 1884 of 5,675,000 marks, sustained a loss in the operation of 1885 of 653,388 marks; and its managers sought relief by petitioning the Imperial Government for the imposition of a higher tarifi on the imports of copper into the empire. For the years ip ae COPPER. 135 1881-83 the great San Domingo mine.in Portugal paid annual dividends of twelve and a half per cent; in 1885 the annual rate was reduced to three and three fourths per cent. It is important to note, as throwing light on this phe- nomenal decline in the price of a great staple commodity, that while the increase in the product of copper was admitted to be immense and primarily influential, three other agen- cies may be regarded as having concurrently contributed to this result : The jirs¢ is, that there has been a reduction in the cost of mining, smelting, and marketing copper at the principal mines of the world, owing to improved processes, and re- duced rates of transportation contingent on railroad con- struction. In the case of the Lake Superior mines, this re- duction has been very remarkable; thus, in one of the lead- ing mines, $5.50 per ton was paid in 1867 for stamping and washing ; in 1876 the same processes cost only 83-89. per ton, and in 1885 the expense had been still further reduced to 47-31c. Between 1876 and 1885, in like manner, the cost of manipulating the rock was reduced from 3-45c. per ton to 1‘95c. For the same concern the cost of refined copper per pound at the mine was stated at 15-42c. in 1876 and 83¢. in 1885; and since then there has been further prog- ress in the application of economical methods. The annual report of the “Tamarack” (Lake Superior) Com- pany for the year ending June, 1888, shows the total cost of its annual product of over 10,000,000 pounds of refined copper at the mine to have been 3:9%c. per pound. The ad- dition of charges for smelting, freight, commission and office expenses brought up the total cost per pound of re- fined copper, laid down in New York and sold, to 53c. per pound. This is probably as cheap as any company pro- duces; and in comparison with 1867, or even with 1876 or 1885, the cheapness of the processes appears phenomenal. Second. The recent discovery and rapid development of 136 RECENT ECONOMIC CHANGES. new and rich mines in Montana, Arizona, the Dominion of Canada, and elsewhere, have engendered a feeling in the metal-trade that the supply of copper is practically illimit- able. Third. During the year 1886 the previous decline in prices was intensified by the circumstance that the con- sumption of copper in Europe fell off 14,000 tons below the average for the two preceding years—a result attributed mainly to the dullness of ship-building, and the various metal industries. In short, the great decline in the price of copper sub- sequent to 1880 and down to 1887 was mainly a normal movement, and any advance in its price since then has been in defiance of the conditions of production. The state of affairs for the producers of copper up to the close of the year 1887 was therefore a gloomy one; re- lieved only by the circumstance that the low price of this metal tended to enlarge the sphere of its uses, and although the visible supply of copper had not fallen off materially, it was being generally recognized that consumption was gradually gaining on production, and that the stocks of raw material in the hands of smelters and manufacturers, and of finished goods in the hands of dealers and consumers, were very greatly reduced. The opportunity thus pre- sented was seized upon, in the autumn of 1887, by the Société des Métaux of France to “corner” the copper market, and advance prices. At the outset it is probable that no very extensive operations were contemplated, but the movement soon acquired such an impetus that those who initiated it were able to perfect, and for a time success- fully carry out, a scheme for the control of the price and supply of copper which hardly finds a parallel in modern commercial experience. In the short space of three months the syndicate advanced the price of copper more than one hundred per cent—Chili bars, which sold in London on the Ist of October, 1887, for £39 15s. per ton, being quoted THE COPPER SYNDICATE. 137 on the 1st of January, 1888, at £85; at the same time the market price of the shares of many of the principal copper- mining companies were greatly advanced; from seventy to one hundred per cent, and to even higher premiums. These high prices for copper naturally stimulated its production everywhere throughout the world; new mines, which the completion of new lines of railroad had brovght within easy reach of the market being opened, while old mines, which the competition of stronger companies had kept partially undeveloped, were worked to their utmost capaci- ty; the total mining output increasing from 224,000 tons in 1887 to 255,000 in 1888. Indeed, for the latter year the world’s aggregate production is believed to have surpassed the world’s aggregate consumption to the extent of 80,000 tons, or one third of the year’s product. Two other influ- ences also virtually contributed to greatly increase the sup- ply of copper. Old and scrap copper, unavailable at eight and nine cents per pound, became important at sixteen cents; and large quantities were collected and pressed upon the market. Consumers also strove for the greatest economy of material under the higher prices; dispensed with the use of copper altogether in many cases, and in others substi- tuted different materials, especially zinc and iron. Under such circumstances the syndicate in March, 1889, finding itself not only with an immense stock of ‘metal which it could not sell at the current prices which it had established, but also under obligations to take at a high price all that the leading mines of the world could continue to produce for a lengthened period, broke down, and carried with it to ruin the Société des Métaux of France, and also one of the largest banking institutions of that country—the Comptoir d’Escompte—the price of copper falling in less than thirty days from £80 per ton to £35 and £40 per ton, or to about the point before the advance under the operations of the syndicate began. Iron.—Sir Lowthian Bell, recognized as one of the best 138 RECENT ECONOMIC CHANGES, ~ authorities on the production of iron and steel, in his testi mony before the Royal British Commission on the Depressio1 of Trade in 1885, estimated the increase in the world’s pro duction of pig-iron from 1870 to 1884 at eighty-two pe cent. ‘The tables of the American Iron and Steel Associa tion, prepared by Mr. James M. Swank, indicate an increas in the pig-iron product of the world, from 1870 to 1886 in. clusive, of about one hundred per cent. All authorities ar therefore substantially agreed that the increase in the pro. duction of this commodity within the period mentioned wa; not only far in excess of the increase of the world’s popula. tion in general, but also of the increase of the population oj the principal iron-producing countries. This abnormal aug: mentation of product was not, however, equally distributed over all the years from 1870 to 1886. From 1870 to the end of 1879 it was very small, averaging, according to Mr Bell, but about two and a quarter per cent per annum; but after 1879 the production of iron increased all over the world in a most rapid and most extraordinary manner—the product of 1880 over 1879 having been thirty per cent greater in Great Britain, thirty-six per cent in the United States, and thirty-two per cent in Belgium, while in all other iron-producing countries the increase in production was also very notable. The years 1881, 1882, and 1883 were also characterized by continual extraordinary production ; so that at the end of the latter year the annual product of the world was about fifty per cent (49-9) greater than in 1879; the increase in Great Britain and the United States for i same period having been forty-one and sixty- -seven per cent respectively. Attention is next asked to the price experiences of iron subsequent to 1870. In Great Britain the average prices from 1870 to 1876 rated high, and for part of the time— from 1872 to 1876—might Bel fairly characterized as extrayva- gant, and even as famine prices. In the United States prices were also well maintained until after 1875, and the PRODUCTION AND PRICE OF IRON. 139 ason for a lack of greater correspondence between British 1d American pig-iron prices for the period in question is ndoubtedly due to the fact that the depression of trade, hich commenced in the United States in 1873 and pre- uiled with great severity in 1874 and 1875, did not mani- st itself to a corresponding extent in Great Britain until 376. After 1877 prices continued to decline in both coun- ies, but not to a greater extent than might have been ex- scted, considering the extreme depression of trade which ud then become almost universal; and some descriptions ‘ British iron, as “ Staffordshire bars,” were even higher in 379 than in 1870. In 1880 there was a marked advance the price of iron, both British and American, but after le enormous increase in the world’s product in the years 380-’82 had been experienced the prices of iron began to cline in an extraordinary manner; and in the case of me varieties touched in 1885-’86 the lowest figures ever corded. T’hus, American anthracite pig, which sold in ebruary, 1880, for $41 per ton, declined almost continu- isly until July, 1885, when the low point of $173 was ached; while in Great Britain, Cleveland pig, which sold r £4 1%s. 1d. in 1872, and £2 5s. in 1880, declined to £1 )s. 9d. in 1886. The decline in Bessemer steel rails in the nglish market was from £12 1s. 1d. in 1874 to less than fin 1887. In the United States, Bessemer steel rails, hich commanded $58 per ton at. the mills in 1880, fell to 18.20 at the close of the year 1884, reacting to $394 in arch, 1887. _ Reviewing, specifically, the causes which contributed to e above-noted extraordinary decline in the prices of iron, e following points are worthy of notice : _ First. The testimony of Sir Lowthian Bell shows that reign countries have within recent years, and contrary to rmer experience, increased their production of iron in a r greater ratio than Great Britain, which was formerly the uef factor in the world’s supply; and, in consequence, 140 RECENT ECONOMIC CHANGES, a have become formidable competitors with Great Britain, no’ only in their own territories, but also in neutral markets New fields of iron-ore have been discovered in Germany France, and Belgium, very analogous in point of characte to those which by discovery and development, about thx year 1850, in the north of England, led to the subsequen great and rapid increase of British iron production. Second. The power of producing iron with a giver amount of labor and capital, and the number of establish. ments with great capacity for production, have, in recen‘ years, greatly increased. *For example, the average produc per man of the furnaces of Great Britain, which for 187( was estimated at 173 tons, is reported to have increased t 194 tons in 1880, and 261 tons in 1884, or fifty-one pe cent.* Between the years 1885 and 1888 the number o: furnace-stacks in the five States of Ohio, Michigan, Indiana Illinois, and Wisconsin, was reduced from 1389 to 1384, bu the product of the remainder during the same time nearly) doubled. Third. The substitution of steel for iron has resulted ir a notable diminution of the consumption of iron for the at: tainment of a given result, or, in other words, more work i: * The claim has been made that as the decline in the prices of iron ii recent years has been greater than the improvement in the efficiency of th labor engaged in producing iron, the inference is warranted that some othe influence than the increased efficiency of labor must have come in to occasio such decline. A comparison of the prices of the standard varieties of iron i 1870 and 1887, shows, however, some very curious correspondences betwee! the reduced prices and the reported degree of increase in the efliciency ¢ labor within the same period. Thus, in the United States anthracite pig iron, which sold at an average in 1871 of $35 per ton, had an average price i 1885 of $18. Cleveland bars, which commanded £6 19s. in 1870, sold for £ 10s. in 1887. At the same time nothing is more certain than that a great man, other considerations than immediate labor cost enter into and determine ql market prices, not only of iron, but of all other commodities. In the case 0 American whens for example, the evidence is indisputable that its cost in th Liverpool imarlese has been reduced to the extent of thirty cents a bushel i i the years from 1870-’72 to 1887, from causes wholly independent of the off ciency or wages of the men who produced it. CHANGES IN THE MANUFACTURE OF IRON. 141 attainable from a less weight of material. Sir Lowthian Bell, in his testimony before the Royal British Commission, stated that a ship of 1,700 tons requires seventeen per cent less in weight of pig-iron, in being built of steel rather than of iron, and is capable of doing seven per cent more work. Again, the quantity of pig-iron requisite for keeping a railroad in repair will depend greatly upon the state in which iron enters into construction; rails of steel, for example, haying a far greater durability than rails of iron. * A further example of recent economic disturbance con- sequent upon changes in the manufacture of iron—charac- terized by the Secretary of the British Iron Trade Associa- ‘ion, in his report for 1886, as “one of the most remarkable of modern times ”—is to be found in the rapid disuse of the system invented about one hundred years ago by Henry Jort for converting pig-iron into malleable iron by the so- alled process of “puddling.” Twenty years ago the use of * Opinions, as yet, vary greatly as to the comparative durability of iron nd steel rails. In the testimony given before the British Royal Commission, Mr. I, T. Smith, manager of the Barrow Steel Company, gave it as his opin- on that the life of a steel rail is three times that of an iron rail, adding, ‘‘ My eason for saying so is, that I know that upon the London and Northwestern tailroad, where steel rails have been now in use more than twenty years, they onsider it so.”’ Sir Lowthian Bell also, in testifying before the commission, on the effect on he iron-trade of Great Britain trom the expected longer duration of steel rails, ays: ‘‘ Assuming iron rails to last twelve and steel rails twenty-four years, astead of the railways now in existence in the United Kingdom requiring 65,648 tons annually for repairs, 232,824 tons will suffice for the purpose. though this only involves the saving of a comparatively small weight of ig-iron, it means less work for remelting and for our rolling-mills, say to the xtent of 4,000 to 5,000 tons per week.’? The difference in duration of iron and eel rails is not, however, in itself a complete measure of the amount of pig- ‘on required for renewals, This arises from the fact that an iron rail splits up nd becomes useless long before the actual wear, as measured by the diminu- on of weight, renders it unsafe, which often happens when the loss of weight oes not exceed four per cent of the original weight. Steel rails, on the other and, go on losing weight until they are trom ten to twenty per cent lighter 1an when they were laid down, before becoming unsafe. 142 RECENT ECONOMIC CHANGES. this process was almost universal, to-day it is almost a th that has past; and the loss of British capital invested puddling-furnaces which have been abandoned in the | years from 1875 to 1885 is estimated to have approxima £4,667,000, or $23,333,000, involving in Great Britain al! a displacement or transfer of workmen to other branches industry during the same period of about 39,000. After 1883 the production of iron in all iron-produce: countries was for a time notably restricted; the product the United States, for example, declined from 4,595,( tons in 1883 to 4,044,000 tons in 1885, and that of Gr Britain from 8,490,000 tons to 7,250,657 tons in the e responding years; and as the decline in prices continu and subsequently reached its extreme in 1885-’86, it | been urged that some other influences than excessive p duction must have been influential.* This paradoxical ¢ cumstance admits, however, of sufficient explanation. J years 1884, 1885, and 1886 were years of almost unpre dented business depression, restricting necessarily the u and demand for iron for industrial purposes; while at 1 same time the capacity of every iron-producing country supply its domestic requirements was greater than ever | fore. Under such conditions Great Britain, which produ about one half of all the iron and steel that is made Europe, and more than any other country except Belgin depends on foreign markets to take its surplus of th products, found more difficulty than ever before in disp: ing of such surplus. The fact that the unsold stocks pre ing upon the markets of the United States and of Euro continued to accumulate during the years 1884 and 18: when production was restricted and declining, would sec also to be equivalent to a demonstration that no other inf ence than over-production could have operated at that peri to occasion a continual decline in prices. Thus, in 18 * ¢ Financial Chronicle’? (New York), January 21, 1888. ul OVER-PRODUCTION OF IRON. 143 he unsold stock of all kinds of pig-iron in the United States in the hands of the makers was only 141,674 tons; in (881, 210,876; in 1883, 533,800; and in 1884, 593,000 tons the report of the American Iron and Steel Association yeing authority); while for the United States and Great Britain, conjointly, Sir Lowthian Bell reports the unsold tocks on hand at 1,874,000 tons in 1878, and 2,404,000 in [884—an increase in these years of 528,000 tons. At the lose of 1885 the stock of unsold pig-iron in Great Britain lone amounted to 2,491,000 tons—exactly fifty per cent arger than the stock on hand at the close of 1882, and the argest that had, up to that time, ever been held in Great Britain at the close of any one year. The unsold stock at he close of 1887 was, however, 2,616,000 tons, or 125,000 arger than in 1886. In consequence of increased demand occasioned by ex- ensive railroad constructions, the reduction in production yf pig-iron which commenced in the United States in 1884 erminated in 1885-’86, since when production has aug- mented in a manner almost without precedent, namely, ‘orty per cent in 1886 in excess of 1885, thirteen per cent n 1887 in excess of 1886, and eleven per cent in 1888 in ex- sess of 1887, the product for 1888 having been the largest nthe experience of the country. The causes influencing she increase in iron production in the United States in [88586 not having been concurrently operative in Europe, she revival there of this industry was somewhat later; but ‘or the United Kingdom the production for 1887 was about sight and a half per cent over that in 1886, while for all sountries during the same period the increase has been esti- nated at 9°6 per cent. With increased demand for iron, prices in the United States quickly advanced—i. e., from $17.75 per ton for an- thracite pig in July, 1885, to $21.50 in January, 1887. As production increased, however, prices, in harmony with pre- vious experiences, again declined, and in the first six months 144 2ECENT ECONOMIC CHANGES. of 1889 American pig-iron generally ruled at lower figure than at any former period. QUICKSILVER.—LExcepting petroleum and quinine, th decline in price of this metal seems to have been greater i recent years than that of any other leading commodity—. e from £26 per flask (the highest) on the London market i 1874, to £5 2s. 6d. (lowest) in 1884; and from $118 (high est) to $26 (lowest) on the San Francisco market during th same period—a decline of 77:9 per cent. The explanatio: of this movement of price is to be found mainly in the en cumstance that California, which furnishes nearly one hal of the world’s supply of this metal, increased her productio from 30,077 flasks in 1870 to 79,684 in 1877; and althougl as the result of low prices, many of the rabies of Californi subsequently suspended operations and none paid dividend in 1885, the generally increased supply of quicksilver, couple: with its diminished use in the reduction of silver-ores—con sequent on the introduction and use of cheaper processes— prevented any material augmentation in its price unt 1886-’87, when the price advanced in the latter year t £11 5s. per flask in London and to $50 in San Francisco. SILVER.—The decline in the average annual price o bar-silver per standard ounce in pence upon the Londo market has been from 594 in 1873 to 41 in May, 1888 (th last being the lowest figure in all history), a decline in valu in relation to gold in fifteen years of about thirty per cen‘ Notwithstanding this great decline in price, the annual pre duction of silver during this same period has steadily aug mented, or from $64,000,000 in 1873.to $95,000,000 in 188( $122,000,000 in 1885 and $135,000,000 in 1887, an increas in fifteen years of one hundred and eleven per cent. Suc a lar ge and constantly increasing product of silver, while it price is declining, suggests a limitless apple | * The figures here given are those reported by the Dirsctce of the Mint« the United States, the value of silver being taken at the coining rate in tl United States of silver dollars of $41.56 to the kilogramme. PRICE EXPERIENCES OF TIN. 145 Tin.—The production and price experiences of this netal during the last quarter of a century have been very urious. ‘The world’s consumption of tin from 1860-64 onstantly tended to be in excess of production, and prices ose from £87 per ton (the lowest figure) in 1864 to £159 (the ighest) in 1872. In this latter year the mines of Australia egan to produce very largely, and in a short time afforded , supply equal to one third of the world’s current consump- ion. Under such circumstances the price of tin rapidly leclined, and in October, 1878, touched £52 10s., the lowest rice ever known in history, a decline of sixty-six per cent. Subsequently the product of Australia declined and that f the “Straits” of Malacca did not materially increase, vhile that of England (Cornwall) and other countries re- nained nearly stationary. Meantime the consumption of in throughout the world continually increased, so that wrices advanced concurrently—i. e., from £52 10s. on the London market in 1879 to £105 in May, 1887. Recogniz- ng this tendency of price movement, a French syndicate— he Société des Métaux—undertook to control the mar- cet-supply of the metal with a view of still further advanc- ng prices, and for a time were so successful that in Decem- yer, 1887, “ Straits ” tin was quoted in London at £167 15s. As a consequence of such inflation, every pound of tin that ‘ould be collected was placed on the market, and, as at the ame time consumption was greatly checked, stocks accu- nulated to an unprecedented amount, the year 1887 closing with a visible market-supply full fifty per cent greater than welve months previous. The syndicate was, nevertheless, snabled for some time to maintain prices at an extremely high evel; but in May, 1888, the receipts of tin from the “ Straits ” aaving for the previous five months been increased by upward wt 107,000 hundred-weight over the receipts of the corre- sponding period of the preceding year, its ability to do so seased. The conditions of supply and demand were too much against it, and in two days the advance in price 146 RECENT ECONOMIC CHANGKS. which it had taken six months to engineer was lost, tin di clining on the London market within that time from £16 ($830) per ton to £77 ($485), or over forty per cent. Subs quently an even lower quotation of £76 per ton was reache Tin PLatTes.—Owing to a tendency of consumption t exceed production, tin plates in common with tin ruled: what were termed “famine” prices in 1874, and for som years previous; the average price for “coke” plates bein from 26s. to 27s. per box. After 1875, prices decline about fifty per cent; or during the year 1887 to 12s. 1}d. t 13s. per box. This remarkable and steady decline during period of fifteen years is as clearly and certainly understoo as in the case of tin, above noticed, and is referable t three causes: First, the reduction in the cost of the mets tin. Second, to improvements in the manufacture of iror and the extensive substitution of steel (plates) in place ¢ charcoal and puddled-iron plates. Third, to new process of manufacture and tinning ; a modern tin-plate mill turr ing out every twenty-four hours more than double th product of old-fashioned mills, without any increase i expenditure for motive power or labor. Supply and cor sumption alike under such circumstances have increased t an enormous extent, and the tin-plate trade, instead « being a minor industry of the world, as was formerly an not remotely the case, has become one of great magnitude. These changes in the conditions of production and pric * An attempt on the part of Germany to break in upon the almost comple monopoly of the manufacture of tin plates enjoyed by Great Britain, by in posing a heavy duty on their importation, has been singularly unsuccessft_ domestic (German) production and exports having diminished, and impor increased, as will appear from the following table: YEAR. Production. | Imports. Exports. Tons. Tons, Tons. BBG cease ceo detd wee nu) & yay salah i ataecatg arent 4,892 5,798 186 | "hoy (ce ae eg \ ocean A & mile Mile Bits sk ce cae 8,582 5,307 1,696 . NICKEL AND LEAD. 147 brought, however, nothing of prosperity to the British tin- plate manufacturing industry; and the period under con- sideration was characterized by very many failures on the part of (South Wales) producers. NICKEL, not many years ago, was a scarce metal of lim- ited uses, and commanded comparatively high prices. Lat- terly the discovery of new and cheaper sources of supply haye tended to throw upon the market an amount in excess of the world’s present average yearly consumption—esti- mated at between 800 and 900 tons—and, as a consequence, there has been “over-production, and unsatisfactory prices to dealers.” ‘There is, moreover, little prospect that prices in respect to this metal will ever revive—one mine in New Caiedonia (Pacific Ocean) alone being estimated as capable of producing two or three thousand tons annually, if re- quired; while the discovery of new deposits of ore is fre- quently reported. LEAD experienced a decline, comparing the highest market prices in New York, in January, 1880 and 18835, re- spectively, of about thirty-nine per cent. The world’s produc- tion of lead since 1876 has increased very rapidly ; especially in the United States; the total annual product of which has advanced from 42,540 tons in 1873, to 143,957 in 1883, and 180,555 in 1888. One marked result of this increase has been that the United States, in place of being as formerly a large consumer of foreign lead, now imports but a compara- tively insignificant quantity, namely, 7,035,000 pounds in 1888 as compared with 72,423,000 pounds in 1873. Rich and extensive mines of lead have also in recent years been discovered and worked in Australia. The decline in the price of lead, above noted, occasioned the suspension or bankruptcy of many English lead-mining companies, and during the year 1885 much distress from this cause was reported as existing among English lead- miners. The following is an example of another economic disturbance contingent on changes in the production and 11 148 RECENT ECONOMIC CHANGHS, price of lead: Formerly the domestic supply in the United States of white-lead and of all paints, the basis of which is oxide of lead, was derived almost exclusively from mann- factories located upon the Atlantic seaboard ; but with the discovery and working of the so-called silver-lead mines of the States and Territories west of the Mississippi, and the production of large quantities of lead as a product residual. or secondary to silver, the inducements offered for the manufacture of white-lead and lead-paints, through local reductions in the price of the raw material and the saving of freights, have been sufficient to almost destroy the forme: extensive white-lead and paint business in the Hastern sections of the United States, and transfer it to the Western. At present the lead produced in silver-mining consti- tutes a large proportion of the world’s supply of lead; and most of the mines of lead which do not produce a consid. erable amount of the more precious metal have been aban- doned; “or, in other words, lead is now produced as a valuable by-product in the mining of silver.” At the same time the industrial employment of lead is diminishing. other metals having taken its place—especially in the con- struction of pipes—to such an extent that the main use of lead is now for small projectiles, and for the making ol paint. Coau.—The decline in the export prices of British coal comparing the average for 1867-77 with 1886, was about thirty-three per cent. In the United States, although het present annual production of coal is one fourth that of the world, nothing reliable in the way of average prices for a se- ries of years can be given; inasmuch as, through combina- tions of coal-owners and railways, and by reason of frequent labor troubles among miners, the price of coal in recent years has rarely been determined by natural conditions anc has fluctuated greatly from year to year. ‘Thus, on the 1st 0! January, 1876, 1881, 1882, and 1885, respectively, the pric of mining 100 bushels of coal on the railroads entering int PRODUCTION AND PRICES OF COAL. 149 the city of Pittsburg, Pa., was $2.50, $3.50, $4.00, and $3.00; and the price of coal at. Pittsburg, Pa., on the cor- responding dates, per 100 bushels, was $5.50, $7.00, $7.50, and $5.50. Again, the decline in the average annual price of anthracite coal (by the cargo at Philadelphia), comparing 1870 with 1880, was thirty-eight per cent; but, as between 1870 and 1886, it was only 6-6 per cent. According to the returns of the United States Geological Survey, there was a gain in the production of coal in the United States for the year 1886, as compared with the ag- gregate product of 1885, of 1,785,000 short tons, but a loss in value at the point of production of $4,419,420. For the succeeding year, 1887, on the other hand, there was a gain of 16.333,000 tons over the product of 1886, and a gain in value of $26,483,000. The increase in the production and also of the consump- tion of coal within recent years constitutes one of the most remarkable features in economic history. The increase in the product of the five chief coal-producing countries of the world—Great Britain, the United States, Germany, France, and Belgium—from 1870 to 1886 inclusive, has been in ex- cess of eighty per cent: Great Britain increasing her prod- uct from 109,000,000 gross tons in 1870 to 159,351,000 in 1885, and 169,935,000 in 1888; and the United States from 38,468,000 tons in 1870 to 97,000,000 in 1885, 111,000,000 for 1887, and 123,000,000 in 1888, or eleven per cent in excess of the product of 1887. In Germany, the increase reported was from 36,041,000 tons in 1873 to 59,000,000 in 1883. In 1870 the average output of coal per miner in the British 20al-mines—counting in all the men employed—was 250 ons, an amount never before reached. In 1879 this average iad increased to 280 tons per man ;* and in 1884, according ee * See testimony of assistant-keeper (Meade) of the mining records of 3reat Britain, “‘ Second Report of the British Commission on Depression of [rade,”? 1886, p. 887, 150 RECENT ECONOMIC CHANGES. to Mr. J. 8. Jeans, Secretary of the British Iron Association, was 353 tons,* and for the United States 374 tons. For Germany, the increase was from 261 tons in 1881 to 269 tons in 1883; and in Belgium, for corresponding years, from 165 tons to 173 tons per miner, while for 1887 the average product of each coal-mining hand, according to M. Harzé, chief of the Administration of Mines, reached 244 tons, or 15 tons more than in 1886. Concurrently with the enormous increase in the produe- tion of coal and greater efficiency and economy in mining, very much has been done to reduce the amount of coal for- merly used to effect industrial results; for example, at blast- furnaces, coal was formerly used for heating the boilers that furnished steam for blowing, hoisting, etc., and for heating the air which was blown into the stacks. Now, a well- ordered set of blast-furnaces does not use a single ounce of coal except what goes in to melt the ore. The whole of the heat used to produce the steam required in connection with the furnace, and for heating the stoves for making the hoi blast, is obtained from the gases which rise to the top of the stacks in the process of smelting the iron, and which for. merly was all thrown away. The following short table based on official statistics, from the London “ Economist,’ October, 1888, shows the progressive economy in the usi of coal for the production of pig-iron in Great Britai during the short space of the three years 1885, 1886, an 1887: se See YEAR. Pig-iron. Coal used. | Per cent of coal ! Tons. Tons. NOSE ede Sl Salas ame ene cree ie ane 7,559,518 | 15,804,188 202 \ ROBE pic! Sch Eo eee ag 7,009,754 | 14,249,715 903. | TSB ats: obs ek Me eS | 7,415,469 | 15,287, pan 205 | f * Journal of the Royal Statistical Society,’’ 1884, pp. 621, 622. + Testimony of J. D. Ellis, chairman of John Brown & Co., Shefliel British Commission, 1886. | ECONOMY IN THE USE OF COAL. 151 ' ‘The displacement of finished iron by steel, which is rap- ‘idly taking place, also tends to reduce the consumption of ‘coal; while in the manufacture of gas, and in all steam ap- ‘pliances—more especially in marine locomotion—it is well ‘known that great economies in the use of coal have been | effected, whereby it is possible to do a far greater amount of ‘work with a given quantity of fuel than was the case five or ten years ago. In the United States a new agency has come ‘in, namely, natural gas, which has been largely influential ‘in displacing the use of coal. For the year 1886 the amount ‘of coal thus displaced was estimated by the United States Geological Survey at 6,453,000 tons, valued at $6,847,000, while for 1887 the displacement was about fifty per cent greater, or 9,867,000 tons, having a valuation of $15,838,000. ‘Furthermore, it should not be overlooked that the cost of transporting coal, which constitutes a most important ele- ‘ment in determining its price at the point of consumption, has been subject, both by sea and land, to very great reduc- tions. - That the world’s consumption of coal during the period under consideration has progressively and enormously in- ‘creased, and is still increasing, is not to be questioned, and, in the absence of any reliable data for ascertaining the rela- tions between the production and consumption of this com- modity, great latitude of opinion ‘on this point is permis- sible; but, at the same time, the fact that competition for the supply of coal in all the markets of the world has been and is exceedingly keen, goes far to justify the current be- lief of the trade everywhere that production has for years been augmented at a greater rate than the demand war- ranted. In addition, the further facts that new, extensive, and readily accessible coal-fields have been and are continu- ally being discovered, that the supply of coal is regarded as practically inexhaustible, and that the slightest increase of demand is sufficient to speedily stimulate production, would ‘of themselves seem to forbid the assumption that any cause 152 RECENT ECONOMIC CHANGES. except change in supply and demand could have been influ ential in determining the recent price experiences of coal. CorrEE AND 'TEA.—The decline in recent years in th prices of each of these great staple commodities has bee: almost as remarkable as has been the case with sugar— coffee having touched the lowest prices ever known in com merce in the early months of 1886, the price of “ ordinary, or “exchange standard No. 5,” having been seven and ; half cents in January of that year in the New York market while, according to Mr. Giffen, of the British Board o: ‘Trade, the decline in the price of tea, comparing 1882 witl 1861, has been greater than that of sugar, or, indeed, o almost any other article. In both cases the decline woulc seem to find a sufficient explanation in a common expres sion of the trade circulars, “ Our supplies have far outrur our consumptive requirements.” In the case of coffee, the total imports into Europe and the United States, comparing the receipts of the year 1885 with 1873, showed an increase of fifty-seven per cent; while the increase in the crops of Brazil, Ceylon, and Java during the same period has been estimated at fifty-two per cent. Subsequently to January, 1886, the price of coffee, owing to a partial failure of the Brazil crop, rapidly advanced two hundred per cent; “or- dinary ” or “ exchange standards” haying been sold in New York in 1886 at twenty-two cents, the highest point in the history of American trade, unless possibly during the war, when entirely abnormal circumstances controlled prices. From these high prices there was a subsequent disastrous re- action and extensive failures. The advance in average prices was, however, maintained in 1887, and for so long a time that the reduction in the world’s consumption during that year was very great, and for Europe was estimated at the large figures of 77,000 ewts., or over 1,000,000 bags of “ Brazil”; while in the United States the reduction was believed to have been equivalent to two pounds per head of the popula- tion, or double the total annual consumption of Great Britain, iil COFFEE AND TEA. 153 In the matter of the supply of tea, the total exports from China and India increased from 234,000,000 pounds in 1873 to 337,000,000 pounds in 1885, or forty-four per cent; the exports from India having increased from 35,000,000 pounds in 1879 to 68,000,000 pounds in 1885; 98,000,000 in 188%, and 113,000,000 in 1888.* In this latter year the imports of Indian and Ceylon tea into Great Britain for the first time on record exceeded the imports of Chinese teas; and herein we have another striking example of the inability of unskilled labor, or labor following old processes, even at ex- treme low wages, to contend against intelligence and ma- chinery; inasmuch as the English planter in India by skillful cultivation and careful manufacture with machinery is now able to place in Hurope a tea of good quality, and greater strength, at a price which the Chinaman, with his old methods, producing an inferior article, can not afford. SULPHATE oF QUININE, a standard chemical prepa- ration, used extensively all over the world for medicinal purposes, affords another illustration of extraordinary de- clining price movements in recent years, which are thor- oughly capable of explanation. In 1865 the highest price of sulphate of quinine in the English market was 4s. 4d. ($1.07) per ounce, which gradu- * The British Chancellor of the Exchequer, Mr. Goschen, in his budget speech for 1887, calls attention to the following curious incident of financial disturbance growing out of a change in the quality of tea, which, in turn, has been contingent on a change in the locality or country of its production: ‘“ Whereas, ten years ago,’ he said, ‘‘ we (Great Britain) received 156,000,000 pounds of tea from China and 28,000,000 pounds from India, or 184,000,000 pounds altogether, in 1886 we received 145,000,000 pounds trom China and 81,000,000 pounds from India. In the transfer of consumption of tea from the tea of China to that of India, we have to put up with a loss of reveuue owing to the curious fact that the teas of India are stronger than the teas of China, and therefore go further, so that a smaller quantity of tea is required to make the same number of cups of tea.””?, Mr. Goschen further called attention to the fact that ‘‘ the fallin the price of tea and sugar (in Great Britain) has been 80 great, that whereas in 1866 a pound of teaand a pound of sugar would have cost 2s. 6d. and in 1876 2s. 14d., in 1886 they would have cost only 1s. 73d., or 8d. less than they would have cost in 1866 with all the duties taken off.” 154 RECENT ECONOMIC CHANGES. ally advanced to 9s. 6d. in 1873, reacting to 6s. 9d. in 1876. In the subsequent year, owing to an interruption in the ex- portation of cinchona-bark from South America by civil war in New Granada, and by low water in the Magdalena River, the price advanced to the unprecedentedly nti fig- ure of 16s. 6d. ($4.70) per ounce, receding to 18s. in 1879, and 12s. ($3) in 1880. In 1883 identically the same article sold in Europe for 3s. 6d. (80 cents) per ounce, in 1885 for 2s. 6d., and in 1887 to 1s. 6d. (30 cents) or less. The history of the influences that have occasioned such results is as follows: Formerly all cinchona-bark from which quinine is manufactured came from the forests of the north- ern states of South America; and as the cinchona-trees were not under any system of cultivation, and as the meth- ods of collecting their barks were wasteful and destructive, reasonable apprehensions began to be entertained, as far back as 1855, that the supply of this most important natural product would ultimately, and at no distant day, be ex- hausted. Moved by such considerations the English and Dutch Governments determined, therefore, to attempt the cultivation of the cinchona-trees in India and Java, and the effort has proved exceedingly successful. The first in- stallment of seeds and plants reached Ceylon and Java from South America in 1861, and the first export of bark, con- sisting of but twenty-eight ounces, took place in 1869. After: that the Hast Indian product gradually but enormously in- creased—Ceylon, for example, exporting 6,925,000 pounds in’1882-’83 ; 11,500,000 pounds in 1883—’84; and 15,235,000 pounds in 1885-’86. From Java the orn have been much smaller, but for 1887 were in excess of 2,200,000 pounds. As the world had never before been supplied to such an extent with bark, its price rapidly declined ; and as the cost of quinine is mainly determined by the cost of the crude material from which it is manufactured, its extraor- dinary price reduction followed, as has been pointed out. Two other circumstances contributed to such a result: the PAPER AND RAGS. 155 first is, that while cinchona-barks from South America—the woduct of indigenous trees—yield on an average not over wo per cent of quinine, the bark of the cultivated tree in he Hast Indies is reported to yield from eight to twelve yer cent. A given quantity of bark, therefore, goes much urther in producing quinine than formerly. Secondly, wing to the recent discovery and employment of new and nore economical processes, more quinine can now be made 4 less cost in from three to five days than could have been ffected by old methods in twenty days. PAPER AND Raas.—aA quarter of a century ago, or less, aper was made almost exclusively from the fibers of cotton nd linen rags; and with an enormous and continually in- reasing demand, paper and rags not only rapidly increased n price, but continually tended to increase, and thus greatly timulated effort for the discovery and utilization of new ibrous materials for the manufacture of paper. These efforts ave been so eminently successful that immense quantities of lp suitable for the manufacture of paper are now made rom the fibers of wood, straw, and various grasses, and so heaply that the prices of fair qualities of book-paper have eclined since the year 1872 to the extent of fully fifty per ent, While in the case of ordinary “news ” the decline has een even greater. Rags, although still extensively used, ave, by the competitive supply of substitute materials, and consequent comparative lack of demand, been also greatly heapened, and the cotton rags sold in 1887 for a lower rice in the London market than ever before recorded. The returns of the American Paper-Makers’ Association chibit the following changes that have taken place in this epartment of industry in the United States, comparing 1¢ years 1880 and 1888: Increase of capital employed, from 46,000,000 to $80,000,000; of product, from 451,000,000 8. to 1,200,000,000 ; of wages, from an average of $1.13 to 1.50 per day. On the other hand, the average value of a ound of paper declined from 6-09c. in 1880 to 3-95c. in 156 RECENT ECONOMIC CHANGES, 1888; and the per cent of labor per pound, from 94 cent to 77 in the same period. In other words, while the cos (wages) of labor has increased thirty-two per cent, the cost ¢ labor per pound of paper has decreased twenty-two per cen Nitrate oF Sopa.—The recent price experiences ¢ nitrate of soda (Chilian saltpeter) have been very curiou: The supply of this article, which corresponds to the mor valuable nitrate of potash (true saltpeter), is practically lim ited to one locality on the earth’s surface—a rainless, dese1 track—in the province of Tarapaca, which formerly belonge to Peru, but has recently been annexed to Chili. It i cheaply and plentifully obtained, at points from fifty t ninety miles from the coast, by dissolving out the nitrat salt from the desert earth, which it impregnates, with wate) and concentrating the solution by boiling to the point wher the nitrate separates by crystallization. Up to the year 184 it was an article so little known to commerce that only 6,00 tons were annually exported; but as its value as a fertilizin agent in agriculture, and as a cheap source of nitrogen 1 - the manufacture of nitric acid, became recognized, the de mand for it rapidly increased until the amount exported i 1883 was estimated at 570,000 tons, or more than a thousan million pounds. To meet this demand and obtain the profi resulting from substituting skillful for primitive methods o extracting and marketing the nitrate, foreign capital, main! English, extensively engaged in the business. railroad fifty-nine miles in length constructed to the port ¢ Iquique on the sea-coast, for the transportation of coal, pre visions, and other material wp, and the nitrate as a retur freight down. So energetically, moreover, was the wor. pressed, that at the last and most complete establishmen constructed under English auspices, the business, employin when in full operation six hundred men, was prosecute NITRATE OF SODA. 157 mremittingly by night (by the agency of the electric light) 3 well as by day. ‘The result was exactly what might have yeen anticipated. The export of nitrate, which was 319,000 ons in 1881, rose to 570,000 tons in 1883; and prices at he close of 1883 declined with great rapidity to the extent yf more than fifty per cent, or to a point claimed to be yelow the cost of production. Such a result, threatening he whole business with disaster, led to an agreement on the art of all the interests concerned, to limit from June, 1884, o January, 1887, the product of every establishment to wenty-five per cent of its capacity. But, notwithstanding hese well-devised measures, prices were not immediately estored to their former figures, the average price per cwt. n London having been 10s. in 1886, as compared with an werage of 14s. for 1867-77. Since 1887 the increase in the lemand for this commodity, especially by the growers of eet-root on the Continent, has been very marked; and the vorld’s consumption is estimated to have advanced from 02,000 tons in 1887 to 645,000 in 1888. The world’s total upply increased, however, during the same period in a rreater proportion, namely, from 507,000 tons in 1887 to 15,000 tons in 1888. The almost certainty that the con- umption of nitrate of soda is to continue increasing, and he knowledge that its supply is or can be thoroughly con- rolled, gave rise in 1888 to great speculation in the shares the various producing companies, and advanced their ices to very high figures. This experience of nitrate of oda seems especially worthy of notice, because it constitutes nother example of a great and rapid decline in the price f a standard and valuable commodity in the world’s com- nerce, and for which—all the facts being clearly understood -it is not possible to assign any other cause than that of roduction in excess of any current demand for consump- ion, and which in turn has been solely contingent on the mployment, under novel conditions, of improved methods or overcoming territorial and climatic difficulties. 158 RECENT ECONOMIC CHANGES. Concurrently with the fall in the price of nitrate soda, saltpeter, or nitrate of potash, also notably declin from 28s. 3d. in 1880 to 21s. in 1887 (for English refined a fact which seems to find a sufficient explanation in tl circumstance that nitrate of soda can be used to a certa extent as a substitute for nitrate of potash, and that the e port of the latter from India, the country of chief suppl increased from 352,995 cwt. in 1881 to 451,917 cwt. in 188 or thirty-six per cent. igs The decline in the prices of many chemicals, due-to ir provements in methods and to excess of production, h also been very great in recent years—the decline in soda-as from 1872 having been fifty-four per cent, while bleachin, powders (chloride of lime) declined from £10 in 1873 to 4 15s. in 1878, reacting to £9 in 1887; but declined to £7 18 in 1888. During 1888 the supply of salt—the crude materi out of which soda is manufactured—having passed under t] control of an organization or “ trust,” the price of salt, ar consequently the price of soda-ash, materially advanced. Cau tic soda in 1887 touched, however, the lowest price on recor MuaAts.—The price of meats, according to the statisti of English markets, exhibits no material decline, compari the average prices of 1867-77 and of 187885. But durir the years 1885 and 1886 the decline was very considerabl and extended also to most other animal products. The pe centage of fall in the carcass prices of different kinds ar quantities of meat in London, as given by the Londc “Economist” of November 27, 1885, was, in comparisc with the prices for 1879, as follows: For inferior beef, fort three per cent; prime beef, eighteen per cent; prime mu ton, thirteen per cent; large pork, twenty-two per cen middling mutton, Eanes -seven per cent. In November, 1887, Mr. W. E. Bear, of England, a lished the following estimates of the meat-supply — hon and foreign—of the population of the United Kington f the years 1877 and 1885, respectively : PRODUCTION AND PRICES OF MEATS. 159 Year. Population. Total meat-supply. NR ei gRhe as b aivk so p00 8s 33,446,000 30,800,000 cwt. a gan otis te a 36,331,000 36,460,000 “ Increase of population, 8°6 per cent. SS supply, 18 7 The decline in the average export price of salt beef in - the United States was from 8:2 cents per pound in 1884 to 6 cents in 1886 (twenty-six per cent); of salt pork from 8:2 cents to 5-9 cents (twenty-seven per cent); of bacon and hams from 9°6 cents to 7°5 cents; and of lard from 9°4 cents to 6:9 cents. In the case of lard-oil an exceptionally great decline in price in recent years—i. e., from an average of 94 cents per gallon (Cincinnati market) in 1881-82 to a mini- mum of 48:8 cents in 1886, is claimed to be due mainly to the large production and more general use of vegetable oils —cotton-seed oil in the United States, and palm and cocoa- nut oils in Europe. The effect of the increased quantity and cheapness of these vegetable oils has been especially marked in England, France, Italy, and Germany; and has also undoubtedly influenced the price of tall@, the decline of which in English markets, comparing the average prices of 186777 with those of 1886, having been thirty-one per cent, while in the United States the price for 1884~’85 was the lowest on record. ; The immediate cause of this decline in the price of/ | meats in the United Kingdom and on the Continent of. / ‘Europe was undoubtedly the new sources of supply of live animals and fresh meats that have been opened up to Europe, and especially to Great: Britain, from extra-Kuropean coun- tries: the value of the imports into Great Britain from North America of live animals having increased from $1,085,000 in 1876 to $22,980,000 in 1885; of fresh meat from $1,950,- 000 to $11,820,000; and of fresh meat from Australia and the river Plate (transported through refrigeration) from $880,000 in 1882 to $5,850,000 in 1885; a total increase of from $3,025,000 in 1870 to $40,650,000 in 1885. The abil- 160 RECENT ECONOMIC CHANGES, ity of the three countries named to increase their exports « meat during such a brief period to such an enormous exten constitutes of itself a demonstration of increased produc and of the diminished price that is the invariable accon paniment of a surplus seeking a market.* All these cour tries, moreover, coincidently with their increased exports ¢ meats, increased their stocks of cattle, sheep, and pig) Thus, in the United States the increase in the number cattle between 1870 and 1880 was sixty-six per cent; + 1 Australia, between 1873 and 1883, forty-three per cent while the recent increase in the Argentine States is believe: to have been in a greater ratio. In respect to sheep, alsc their number increased in the United States from 33,783, 000 in 1875 to 50,626,000 in 1884; in Australia, from 5%, 144,000 in 1873 to 83,369,000 in 1883, and 97,900,000 iy 1887; while in the Argentine States the number at presen is estimated to be nearly as great as in all Australia. It is probable that the number of cattle in Europe ha not increased in recent years, and may have declined, al though there are no recent accepted statistics on this point “The Continent of Europe, however, as a whole,” accordins to the London “ Economist” (October 15, 1887), “supplie itself with beef and spares a surplus for the United King dom. It is true that a few countries (of the Continent) im * A statement of the late Neumann-Spallart—a recognized authority— that “the total international trade in meat of all kinds had only increase from 1,946,000,000 marks in 1877 to 1,954,000,000 in 1884,”’ has been regardec by some writers as constituting proof that the decline in the price of meati during these years could not have been occasioned by any increased supply If, however, the greatly inereased quantity of meat which a given amount 0 money (gold) represented in 1884 over 1877 is taken into consideration, thc deductions from Mr. Spallart’s figures are capable of a very different interpre. tation. | | | + In the United States there has been since 1883 a marked decline in the value of prairie cattle on the hoof, which in the main has resulted from over- supply. In 1888 the receipts at the Union Stock Yards, at Chicago, were 230,000 head in excess of what had ever been received before. Besides, there was a large visible unmarketed supply. : } led | FROZEN-MEAT TRADE. 161 jort small quantities of beef in one form or other, but there sanet surplus.” Commenting on this subject, an elabo- ate report on “Cattle and Dairy Farming,” issued by the Jnited States State Department in 1887, also thus sums up he situation: ‘It would seem as if the cattle, meat, and lairy producers of the world (that portion at least which osrosecutes advanced agriculture) look to the British markets or the consumption of their surplus products.” And, in onfirmation of this conclusion, the same report makes the ollowing exhibit of the manner in which the exports of ‘cattle and their products” from the United States in 1885 vere distributed according to value: “To the United King- lom, $54,250,000; to all the other countries in Europe, 33,200,000; to all the countries outside of Europe, $4,108,- 16.” And what is true of the distribution of the exports if the surplus meat products of the United States in recent ears has been equally true of those of Australia, Canada, nd the “river Plate.” Or, in other words, the admitted ‘reat increase in the export of cattle and cattle products, as vell as of other meats from all these countries in recent ears, has practically sought but one market, namely, that f Great Britain. As bearing on the future meat-supply of Europe, it is mportant here also to call attention to the rise and devel- pment of a comparatively new industry, namely, “ the rozen-meat trade.” In 1860, 400 carcasses of frozen mut- on were imported from Australia into Great Britain; in 888 the importations from Australia and the river Plate yere close on to 2,000,000 carcasses. One establishment in Vew Zealand—* The Canterbury Freezing Company ”—has, tis stated, contracted with ship-owners for the transporta- ion of frozen mutton to London for the years 1889 and 890 at a rate not exceeding one penny per pound. This eduction in the charge for freight has been rendered possi- ile by a change in the conditions of trade. At one time mly from 10,000 to 12,000 carcasses could be carried in 162 RECENT ECONOMIC CHANGES, each ship; now the average would be between 24,000 ai 30,000 carcasses to each vessel. The London charges a reckoned at 4d. per lb.; in New Zealand they are slight under 3d.; the total, therefore, will not exceed 2d. per! This, on the minimum price of 34d. in London, will gi the farmer 1}d. per lb., in addition to skin and fat. T Argentine States of South America are also largely engag in the exportation of frozen meats, and, under the stimul of a bounty offered by the Government, the business promis to assume large proportions. CHEESE.—American cheese experienced an extraorc nary decline in price from twelve to thirteen cents in 18: to 83 and 104 cents in 1885; and, as the American conti bution of this article of food to the world’s consumptic has constituted in recent years a large factor, the world prices generally corresponded with those of the Americé market. ‘This decline in the United States was due main to two causes: /irst. The establishment of the chees factory, which brought new processes and new machinery- not adapted for economical use by small or individual farm producers—to the business of manufacturing, and so rev lutionized and greatly cheapened production. Second. TI relative prices of butter and cheese in the United Stat after 1880-’81 were so much to the advantage of the latte that large quantities of milk which had previously gone to tl creameries to be made into butter, found their way imi factories to be made into cheese; and for the years 188 1884, and 1885, the annual receipts at New York ci averaged twenty-five per cent in excess of the receipts f 1880. Demand for export at the same time largely fe off, and so assisted in the decline of prices; the sam influences existing in the United States having also appa: ently prevailed to a degree in other cheese-producing cou tries; the amount recognized by the trade as having bee supplied to the great cheese-consuming countries, Gre: Britain, the Continent of Europe, and South America, ha’ CHEESE AND FISH. 163 ng increased from 1880 to 1884 to the extent of fourteen yer cent. Among new sources of cheese-supply in recent years is New Zealand, whose product in large and rapidly increas- ng quantities is becoming a factor in the European market. (he unprofitableness of wheat-culture in many countries is lso undoubtedly turning the attention of their farming lasses to dairy farming in preference, and for this reason he world’s supply of cheese has, and is likely to be, largely ugmented. One proof of this is to be found in the cireum- tance that the Swiss agriculturists—the reputation of whose heese product is proverbial—are complaining of an inability o extend and even hold their existing markets, and are evoting more attention to the raising of cattle with a view o their exportation. VisH.—The years 1884 and 1885 in the United States rere notable for a plethora of all kinds of dry and pickled sh on the one hand, and of extreme low prices of such ommodities on the other; mackerel having touched a lower rice in the Boston market than for any year since 1849, hile for codfish the price was less than at any time since ne year 1838. Subsequently to 1885 the price experiences {mackerel have been most interesting: For some reason ne American fishermen have not been able to catch as any mackerel as formerly; the catch of the New England eet declining from 478,000 barrels in 1884 to 50,000 bar- alsin 1888. Demand in the latter year, accordingly, soon bsorbed the supply; prices advanced several hundred per ant, and at the close of the year 1888 there was not only no ‘ade in salted mackerel, but there was none possible. | Frereuts.—Although a service and not a commodity, ie reduction in recent years of freights, or the cost of ‘ansportation and distribution, may be legitimately in- uded in the first group of price experiences, and here con- dered, as no other one agency has been more influential 1 occasioning a decline in prices. It has, moreover, acted 12 164 RECENT ECONOMIC CHANGES. universally, is without dispute entirely the outcome of ne processes, constructions, and machinery, and has no co! nection whatever with matters pertaining to currency, « standards of value. Its influence has also necessarily man fested itself very unequally, occasioning the greatest pric reductions in the case of articles—like cereals, meats, fiber ores, and all coarser materials—in respect to which tran: portation constitutes the largest element of cost at the pla of consumption; and least in the case of articles—lik textiles, spirits, spices, teas, books, and similar products- where great values are comprised in small bulk. Their vestigations of Mr. Atkinson show, that had the actu: quantity of merchandise moved by the railroads of tk United States in 1880 been subjected to the average rai per ton per mile which was charged from 1866 to 1869, tl difference would have amounted to at least $500,000,0( (£100,000,000), and perhaps $800,000,000 (£160,000,000. more than the actual charge of 1880. Comparing 18¢ with 1885, Mr. Atkinson further shows that, taking a give weight of goods to be moved from Chicago to New Yor! one thousand miles, by the New York Central Railroa fifty-eight per cent of the original value was absorbed i transportation and depreciation of the currency in tl. former year; while in 1885 only twenty per cent was absorbed—the charge per ton per mile having fallen froi 3°45 cents in 1865 to 1°573 cents in 1873, and to 0°68 4 cent in 1885. In 1883 the average rate on all classes of freight, on a classes of railways in the United States, was 1:236 cents p ton per mile. In 1887 it was only a trifle over a cent; reduction in the short space of three years that is little le than marvelous. The fall in price for the carriage of commodities by s¢ has also been as remarkable as the decline in the cost: carriage by land. Freight, on the average, between Caleut’ and England experienced a decline of about fifty per cei PRICE CHANGES IN FREIGHTS. 165 in 1885 as compared with 1875. In the case of India wheat transported to England via the Suez Canal, the de- cline in freights was from 71s. 3d. per ton in October, 1881, to 27s. in October, 1885, or more than sixty-three per cent. Between 1873 and 1885 the tolls and pilotage on the Suez Canal were reduced to the extent of about thirty-three per cent. Freights from New York to Liverpool declined, from 1880 to 1886, as follows (maximum and minimum): On grain, from 94d. to 1d. per bushel; on flour, from 25s. to is. 6d. per ton; on cheese, from 50s. to 15s. per ton; on cotton, from gd. to ;;d. per pound; and on bacon and lard, from 45s. to 7s. 6d. per ton. Ocean freights continued very low until the latter months of 1888. In May of that year, wheat to Antwerp from New York was taken at half a cent per bushel of sixty pounds; a rate which could not have paid for the cost of loading and discharging the cargo. As to the cause of the decline in ocean freights there can be no controversy. Between 1881 and 1883 shipping returned fair dividends on the investment. The ocean shipping of the world, taken as a whole, was operated during 1884, 1885, 1886, 1887, and a great part of the year 1888 without profit. The immediate cause of the change in the situa- tion was an over-production of tonnage. The profits made by cargo-vessels prior to 1883—in some instances very great stimulated ship-building, and multitudes of men having no practical experience became ship-owners. Capitalists large and small readily furnished the money where invest- ment seemed so promising. Fewer sailing-ships and more Steamers were built, largely increasing the capacity for work. In 1875 the business done per ton by British ship- ping, in active employment, was 10,8, tons; in 1886, it was 13, tons. The transition from wood to iron, and from iron to steel, in the construction of vessels; the improve- ments in machinery which largely economize fuel and labor ; and the. bounty system, by which some of the Continental 166 RECENT ECONOMIC CHANGKHS. states of Europe offer a premium on ship-building—haye also been important factors. Low freights have caused ¢ diminished demand for ship-building materials, and this in turn has depressed the prices of materials for construct- ing ships, and cheapened them. Mr. Robert Giffen, in a report to the Royal Commission on Trade Depression, has run an interesting line of com- parison between the imports and exports per head, and the entries of shipping per head, in the United Kingdom since 1855-59. From 1855 to 1874 the values of British imports and exports increased more than the increase of shipping: but after 1874 values increased very slowly, and between 1875-79 declined, while the increase in shipping went on at very rapid rates. TELEGRAPH RatTEs.—The great decline in telegraph rates in recent years, in common with all other agencies that have reduced the expenses of business, has also been an instrumentality of no little potency in influencing a decline of general prices. ‘Taking the experience of the United States as a criterion, the charges for the transmission of dis- ' patches were on the average sixty per cent less in 1887 thap in 1866. For example, the reductions between 1866 and 1887 in the cost of sending ten words from New York to the following various points, was as follows: To St. Louis. from $2.25 to 40c.; to Galveston, Texas, from $5.50 to 5c; to San Francisco, from $7.45 to $1.00; to Washington, from 5c. to 5c. | Attention is next asked to the second group of staple commodities which have experienced a notable decline in price in recent years; and in respect to the causes of which the evidence, although more inferential and circumstantial, through lack of universally accepted data, than in the case of the commodities included in the first group, seems, ney- ertheless, to be sufficiently positive and conclusive. ! WHEAT.—The most important commodity in this group RECENT PRICE EXPERIENCES OF WHEAT. 167 is wheat; the price experiences of which, in recent years, have been as follows: Comparing the years 1875 and 1882, there was no very marked change in the price of wheat in the English market ; the average for the year 1875 having been 45s. 2d. per quarter, and for the year 1881, 45s. 4d. In the United States the average export price was $1.12 per bushel in 1875 and $1.11 in 1881. After 1882 prices de- clined rapidly; the average price of British wheat, which was 45s. 4d. per quarter in that year, falling to 32s. 10d. in 1885, to 31s. 3d. in 1886, and to less than 30s. in 1887, which last quotation was the lowest since average market prices have been officially recorded.* The average price of wheat in the English markets for the decade from 1870 to 1880 was forty-three per cent higher than the average of 1886; and the average prices from 1859 to 1872 were sixty-eight per cent higher than the average of 1886. An analysis of the comparative prices of wheat in the United States furnishes corresponding results: the average price of No. 2 spring wheat having declined in the Chicago market from $1.10 (gold) in 1872 to seventy-six and a half cents in 1586; and sixty-seven cents in July, 1887; a price equivalent to 29s. per quarter in the harbor at Liverpool, or eighty-six cents per bushel, cost, freight and insurance in- eluded. ‘This is about the lowest price ever reported for the United States since wheat has become an exportable product. In seeking for an explanation of such price phenomena, we find a factor at the outset which has undeniably been most (influential, namely, the great reduction in recent years in the ‘cost of the transportation or distribution of all commodi- ties, and more especially of the commodity wheat. Thus, * The Eaton record gave only 26s. 914d. per quarter as the price forthe year | 1761, when reduced to Winchester bushels ; but there is no certainty that the “average for the entire year was even in that one market as low as that, and i ‘still Jess that the price was as low in more than one hundred and fifty Eng- lish market towns as it was in 1886. 168 RECENT ECONOMIC CHANGES. the freight on wheat from New York to Liverpool declined from 94d. per bushel in 1880 to 1d. per bushel in 1886. According to Mr. Edward Atkinson, who has made this matter a special study, the reduction in the cost of the in- land transportation of American wheat a distance of fifteen hundred miles, comparing the rates charged in 1870-72 with those of 1887, was equivalent to a fraction over 11s. per quarter reduction in the delivery cost of such wheat in the English market, and for the reduction in the cost of ocean transportation between the two periods, he estimates 4s. per quarter. In addition, the substitution of sacks cost- ing 13 cents for barrels costing 50 cents (in 1872) is be- lieved to be equivalent to a further reduction, if rated on wheat, of 1s. per quarter; and, finally, for reduction of charges in hauling, elevating, and milling (assuming the wheat to be exported in the form of flour) at least 3s. per quarter more must be allowed; so that, if these estimates of reduction are correct (and they have not been controvert- ed), the American farmer could have sold wheat in Eng- land in 1887 for 34s. per quarter, with as much of profit to himself as 54s. per quarter would have afforeded him in the years from 1870 to 1873 inclusive. In June, 1881, and June, 1886, the prices of Cawnpore wheat at Calcutta were at the same level, namely, 2°9 rupees per maund. The cost of Indian wheat in London in 1881 was 42s. a quarter, and 31s. 6d. in 1886, or 10s. 6d. differ- ence. In 1881 the rate of freight on wheat from India to London was 60s. per ton, and in 1886 30s., a difference of 30s. per ton, or 6s. 6d. per quarter. The decline in freights, therefore, accounts for 6s. 6d. out of the 10s. 6d. per quarter difference between the prices of Indian wheat in London in 1881 and 1886 respectively, leaving 4s. per quarter to be contributed by other agencies. Be- tween 1879 and 1886 the charge for the railway transport of grain between Cawnpore and Calcutta (684 miles) was re- duced to the extent of about 2s. per quarter, which repre- INCREASED SUPPLY OF WHEAT. 169 sented to the purchaser in Calcutta an equivalent reduction in the cost of Indian production, and in the absence of which the Calcutta and European prices would obviously haye been correspondingly increased. A further reduction of 6d. per quarter “is probably owing to a decline, during the same period, in the price of the gunny-bags” in which the wheat is transported ; leaving 3s. 6d. per quarter, which may not unreasonably be referred to and fully accounted for by the extraordinary decline of more than 12s. per quarter, between the years 1880 and 1885, in the export price of American wheat; which, as hitherto, the largest factor in determining the world’s surplus of this com- modity, has also been necessarily the largest factor in deter- mining what shall be the price of this surplus in the world’s market.* Here, then, is an agency which sufficiently accounts for a great part of the recent decline in the price of wheat, and which would have operated all the same, even if the relative values of the precious metals existing in 1870-73 had re- mained unaltered. The next point worthy to be taken into consideration in this inquiry is, that the increase in the supply of wheat- in recent years, in many parts of the world, has been very great. The report of the British Gold and Ce Com- mission (1888) characterizes it “as enormous,” and asserts that it “has been due, ina great measure, to the fact that vast territories consisting, in some instances, of virgin soil, have been opened up by the construction of railways, and have become the means of creating supplies largely in ex- cess of the needs of those engaged in their production.” f ‘Thus, in the United States, for example, the increase was from 250,000,000 bushels in 1872, to 512,000,000 in 1884, * See “First Report of the British Commission ’’—evidence of Henry Waterfield, C. B., Financial Secretary of the India Office, and representing the Government of India, pp. 125, 126. t ‘* Final Report of the British Gold and Silver Commission,” p. 66. 170 RECENT ECONOMIC CHANGES, declining in the succeeding year (1885) to 357,000,000, an recovering to 477,000,000 in 1886. ; : “It is a significant fact, in connection with the rapid increase : population in the United States, and with the decline in proportion rural population, that its wheat-supply of forty years ago should m only have been sustained but increased. In 1849 the product was 4% bushels for each inhabitant: in 1859, 5°5; in 1869, 7-46; in 1879, 9.1( and in 1884, 9:16 per capita. From 1849 to 1884, a period of thirt; five years, the increase of population was 141 per cent, while the iz crease in the production of wheat was 410 per cent.”—Report of United States Department of Agriculture, 1887. The published results of the investigations of Mr. K¢ ward Atkinson, based on the reports of the United State Agricultural Department, also show that the cereal crops ¢ the United States, measured in bushels, increased fror 1873 to 1885 at the rate of nearly one hundred per cen: while the increase of the population of the country dw ing the same period was not in excess of thirty-seven pe cent. In 1881 the Territory of Dakota (U. 8.), comprising ove 150,000 square miles, had not produced a single bushel o wheat for sale. In 1886 its crop was estimated by the U.§ Department of Agriculture at 30,704,000 bushels, or nearl as great as the average annual export of wheat from Indi since 1880, and which export, according to a recognized Eng lish authority (Mr. William EK. Bear), has been primarily re sponsible for the decline in recent years in the world’s ayer age price of wheat. In 1887 the crop was 62,553,000 bush els, or one seventh of the total wheat product of the Unite States in 1886. In 1888 the wheat-crop of this same Terr! tory, owing to a remarkably unpropitious season, decline to 37,948,000 bushels, and was considered a failure; but i it was a failure, it was, nevertheless, 37,000,000 bushels i comparison with a product of not even one marketabl bushel seven years before, and could not afford the slight est reason for inferring that the future wheat product o € a EXPORT OF INDIA WHEAT. 171 Dakota is not to go on increasing from year to year in a continually augmenting ratio. During the same period, Australia and New Zealand, in which a rapid growth of population inevitably tends to di- vert agricultural industry from wool-producing to wheat- growing, largely increased their production of wheat. Previous to 1873 there was practically no trade or move- ment in wheat between Europe and India. The high cost of transportation and the existence of an Indian export- duty of above six per cent made it impossible that there should be any. But with a reduction of freights by sea, fol- lowing the opening of the Suez Canal, and by land, in con- sequence of the construction of railways in India, coupled with a removal of an export duty, the export of Indian wheat commenced and rose to 18,896,000 bushels in 1880, 19,466,000 in 1885, 36,880,000 in 1886, and 41,588,000 in 1887. “There is nothing more remarkable in the history of railway enter- prise than the development of the traffic that has occurred on Indian railways within the last ten years, to go no further back. In 1876 the total quantity of goods-traffic carried on all the railways of India was 5,700,000 tons. In 1885 the quantity was about 19,000,000 tons. In the year 1876 the mileage open was 6,833 miles, so that the volume of goods-traffic carried per mile was about 800 tons. In 1885 the mileage open was 12,376, so that the average volume of traffic carried per mile was over 1,500 tons. (In 1888 the mileage open was 14,383.) The aggregate volume of traffic in the interval had fully trebled, and the average traffic carried per mile open had almost doubled. Notwith- standing these remarkable results, the traffic which has been developed on the railways of India is less, in proportion to the population, than that of any other coyntry in the world. This is especially the case in reference to goods-traffic, which only represents some ‘05 of a ton ‘per head of the population, as compared with three tons per head in ‘Canada, and over seven tons per capita in the United Kingdom. But the goods-traffic of India is likely to develop very rapidly in the future, and especially in agricultural produce, of which only about 4,000,000 tons are now annually transported, as compared with 75,000,000 tons in the United States for less than a fourth of the population —Brad- street's (NN. Y.) Journal. 172 RECENT ECONOMIC CHANGES. In 1878 the Argentine States of South America were not reckoned as a factor to the smallest extent in the world’s wheat-supply; but in 1885 they exported 4,000,000 bush- els of this cereal, and in 1887 over 8,000,000. In the case of Russia her aggregate exports of wheat, comparing the four years from 1873 to 1876 with the four years from 1881 to 1884, increased over thirty-eight per cent; while for the years of 1887-88 her exports amounted to 112,000,000 bushels. In Austria-Hungary the average annual wheat product for the seven years from 1873 to 1880, was 93,000,000 bushels; but for the seven years from 1880 to 1886, inclu- sive, it was 133,000,000 bushels. Finally, it is to be noted that, in very few branches of production, have greater improvements been made and adopted in recent years than in the growing of wheat; the maximum result of which finds expression in the statement, which is well supported by evidence, that in California *. wheat can now be grown at a cost of not over seventy cents per one hundred pounds, or forty-two cents per bushel. | Now while the evidence of the recent great increase In the world’s production of wheat is not and can not be questioned, it is nevertheless claimed that such increase has not been in excess of the increased demand for this cereal for consumption, in consequence mainly of the increase in the world’s wheat-consuming population; and that here, also, some other cause than oversupply must be sought for to explain the phenomenal decline in the price of this com- modity. Such a claim has found, however, but very few advocates, and its discussion involves the employment and comparison of statistical data that are in themselves matters * On many of the large ranches of California steam-plows are used, ane on others gang-plows which turn four to six furrows and are drawn by ‘from eight to fourteen mules. Not unfrequently the plows are run ina straight line for a distance of six or eight miles. A patent machine for sowing seed 1 is employed, by means of which, it is claimed, one man and a team can sow ans hundred acres of grain in a day. ae a PRODUCTION AND PRICES OF WHEAT. ia of controversy. On the other hand, the opinion of nearly all investigators in all countries, who are regarded as authorities on this subject, is in the highest degree in favor of the theory of increased supply. Reference has uready been made to the opinions of the British Gold ind Silver Commission (1888) which was created in great part for the purpose of investigating into the cause of the Jecline of prices. ‘The opinion of the United States De- oartment of Agriculture, as given in the report for 1887, was as follows: “Wheat-growing was stimulated greatly between 1875 and 1880 xy a series of crop failures in Western Europe, causing a demand which never existed before, and may never again. Meantime, the vorld’s production has kept up, with little change or diminution, de- oressing prices, and furnishing cheap bread to consumers, and little wofit to producers; and yet the inquiry is made, Why are prices so ow? In view of these facts, the question needs no answer. It is itterly useless to pretend reduction of area, as some do, where there snone. The influence of over-production on prices in the United states is seen in a comparison of the farm prices of wheat per bushel or the two periods from 1870 to 1880, and from 1880 to 1887, viz., 31.049 and $0.8338 respectively ; showing a reduction of 206 per cent. _ In a communication to the “Journal of the Royal Agricultural Society” of England, of May 1, 1888, Mr Nilliam E. Bear, a recognized authority on agricultural natters, says : “The exports of wheat from India were not considerable until ‘88182, and whether it is merely a coincidence, or more than that, it safact that the average price of wheat in England has been per- aanently below 45s. a quarter only since 1882.” And again, speaking {the relative quantities of wheat imported into the United Kingdom fom 1881 to 1887, he says: “ These figures show that the receipts of ‘heat from India, which in only one previous year had been as much as ive percent of the total foreign supplies, rose to 10:3 per cent in 1881, to fteen per cent in 1885, and to 16:7 per cent in 1886. Surely such Toportions were large enough to account for a great fall of prices, onsidering that they represent receipts from a new source of supply. vnd as we had not felt the want of these new supplies, there was no 174 RECENT ECONOMIC CHANGES, natural demand for them except at the expense of other importir countries ; and as the other countries had prepared to meet our wan to the full, the large surplus from India produced the effect always: be expected from a glut in the markets.” “But the effect of Indian wheat upon prices is more clearly to | estimated by the supply to Europe, which during the six years endit with 1886-87 averaged over 4,000,000 quarters per annum—a vel large quantity to come on top of supplies already ample, and just aft wheat production in the United States had reached its maximum. ( course, the entire fall in the price of wheat is not attributed to tl Indian supply, as the decline in the prices * of commodities has be general. But it is contended that the Indian supply is the princip cause of the excessive drop in the value of wheat.” * Again, during, all the years in which wheat has been d clining or ruling at low prices, there has never been an apprehension for any length of time, on the part of grai merchants and dealers, of any scarcity of its supply in th * The following represents the opinions of other recognized autho. ties : The German economist, Kleser, writing on this subject, says: ‘** Thei quiry whether the cheapness of grain is the result of the specific appreciatic of gold, seems to be superfluous in presence of the fact, for instance, that t export of wheat from India grew from an unrecorded minimum in 1870 to 1] 000,000 ewts. in 1883, asimilar expansion of the trade in cereals having occurr in Russia and the United States.’? See ‘‘ Recent Currency Discussions in Ge many,” “ British Foreign Office Reports,’’ No. 40, p.18. The distinguish French economist, M. Leroy-Beaulicu, as the result of his investigations, h also indorsed, in the ‘‘ Revue des Deux Mondes,’’ the opinion that the eau of the decline in the prices of grain has been unmistakably due to an inerea and cheapening of product, and believes that, even in Europe, the supply food in recent years has increased faster than population. ‘* The decline in the price of English wheat in twelve years has been 2 1d. per quarter, and in the last five years 8s. 8d. per quarter, of eight bushe The principal causes of this large depreciation in prices are the heavy increa in production of wheat in British India, Australasia, and in the United States —Bradstreet?’s Journal, N. ¥., January, 1888. ‘* Prices of breadstuffs have not been fully maintained during the pi week, for reasons previously explained. Somewhat more favorable repo: regarding the growing crops are mentioned as a reason, but the bottom fac the business is that the supply of wheat continues to exceed by many milli bushels the quantity likely to be reguired..—New York Commercial Bui May 21, 1888. LESSON OF THE WHEAT CROP OF 1888. 175 principal markets of the world. During all these years, she complaint, moreover, of the absence of all profit in pro- lucing wheat has been almost universal. Under such cir- sumstances of pressing necessity, it is almost needless to say that producers, aided by speculators, would have speed- ly advanced the prices of this cereal if it had been in their sower; and it is equally clear that the only reason why hey have failed to do so is because the trade everywhere aas recognized that the supply of wheat was sufficient to meet all demands at the current low prices; and that ander such a condition of affairs no material advance in orice was possible. In short, during all the years in which she decline in wheat has been phenomenal, the law of supply and demand has not been violated, and price in the world’s market has conformed strictly to the supply of the world. The experience of the years 1888 and 1889 would also seem to constitute evidence, almost in the nature of a dem- mstration, of the entire accuracy of the opinion which iscribes the recent low prices of wheat mainly to a supply argely in excess of the world’s requirements at prices cur- rent under old conditions of the production and distribu- sion of this commodity. Thus, it is agreed that “the world’s product of wheat for 1888 was far below the aver- we; the crops of the United States, Australia, Canada, and she Argentine Republic being regarded as failures;* and n September, 1888, recognized English authorities pre- licted a deficiency in the world’s supplies for the year, even iter allowing for reserved stocks, of 50,000,000 bushels. But this, and all other like predictions, failed to material- * “The continued depression in the wheat trade under circumstances vhich might have been expected to bring an improvement in prices is dis- leartening and calculated to cause growers to despair of remunerative returns ‘or years to come, as the chances are that it will be a long time before the vorld’s supply will again be as small as it is for the current cereal year.””— Wittiam E. Bear, Bradstreet’s Journal, April, 1889. 176 RECENT ECONOMIC CHANGKHS. ize; for the world’s supply of wheat proved so entirely adequate for meeting all demands that its price move. ments for the cereal year 1888-89 in the London marke: (the representative center of demand) were most incon. siderable; and the year closed with a conceded large unsol¢ surplus. The future supply and price of wheat are matters o: speculation not pertinent to the present inquiry; but onc point belonging to the domain of fact has certainly an im. portant bearing on these problems, and that is, that the ex. traordinary construction of railroads, especially in the Uniteé States, the Argentine Republic, India, and Australia, i making available enormous tracts of land eminently fitted for wheat-culture, which hitherto, by reason of inaccessibil. ity, have practically been non-existent; while improvement; in methods of cultivation have greatly facilitated and cheap. ened production. “ Hach mile of railroad constructed in ¢ new country is a kind of centrifugal pump furnishing fo exportation hundreds of tons of the products of such coun- try.”* The report of the United States Agricultural De: partment for 1889 shows an increase in the extent of culti- vated land in the United States, and consequent expansior of agricultural possibilities, that is certainly akin to the marvelous. Between 1879 and 1888—a period of nine year: —the area occupied by the four principal arable crops o} the country—cotton, corn, wheat, and oats—experienced ar enlargement of 31,000,000 acres; or from 128,000,000 tc 159,000,000 acres. Furthermore, great as is the present wheat product of the United States, Mr. Atkinson has shown that all the land at present in actual use in thai whole country for growing maize or Indian corn, wheat hay, oats, and other food-crops, is less than 300,000 square miles, out of 1,500,000 miles of arable land embraced in its present national domain; and, also, that the present entir. 4 ’ * M. F. Bernard, ‘“ Journal des Economistes.?? FUTURE SUPPLY AND PRICE OF WHEAT. 177 wheat-crop of the United States could be grown on wheat- land of the best quality selected from that part of the area of the State of Texas by which that single State exceeds the present area of the German Empire.* In short, it would seem as if the world in general, for the first time in its history, has now good and sufficient reasons for feeling free from all apprehensions of a scarcity or dearness of bread. But, while from a strictly humani- tarian point of view this is certainly,a matter for congratu- lation, the results, viewed from the standpoint of the interests involved, which embraces a large part of the world’s popu- lation, appear widely different. ‘The effect of the extensive fall in prices of agricultural products during the last decade has been most disastrous to the agricultural interests and population of Europe. It has reduced farming in England and in most of the states of the Continent to the lowest stage of vitality; and, by reason of the complaints of their agriculturists, the customs duties of many countries have been largely increased, and the conditions of consumers greatly modified. In France the position has been taken, by not a few familiar with the situation, that the only pos- ‘sible means of salvation for the agriculture of central Eu- rope will be for France, Germany, Austria, and Italy to sink all political antipathies and jealousies and form an inter- national customs union to exclude all food-products from Russia, Australia, and America. The present agricultural condition of Italy is thus de- picted in a report recently made (1888) to the Agricultural Department of the British Privy Council, by Mr. W. N. * Although the prices of grain have seriously fallen in Russia—about twenty per cent in 1888 below those of 1881—yet, according to a recent report to the British Foreign Office from the British consul at Tanganrog, ‘‘ The present prices of wheat (1888) not only cover the cost of production, but on most ‘estates in wheat-regions yield a moderate profit, owing, no doubt, to the fact that the cost of production is lower in Russia than in any other wheat-growing country, except India.’’ 178 RECENT ECONOMIC CHANGES, Beauclerk, a secretary in the British diplomatic service, He says: “ Agriculture in Italy is in the throes of a severe crisis. Americar competition is strongly felt in the corn-trade, and there are those whc even go so far as to predict that the agricultural population must ret- rograde to the pastoral state, unless things change for the better—a spectacle which might astonish the universe. And with regard to the great question of progress in agricultural production so as to make a stand against the importation from America, and to secure the future existence of the rural poffilation, the verdict of the landholders of Italy is thus given: as long as millions of acres remain unreclaimed and untilled, as long as the majority and the strongest of men are under arms, as long as huge armies entail excessive expenditure, and agri- culture is suffocated with a weight of taxation which absorbs from one third to one half of the returns, and so long as education, credit, and manures are wanting, we can not strive with a reasonable prospect of SUCCESS,” in 1880 forty-four per cent of the entire population of the United States was engaged in agriculture, and less than seven per cent in manufactures; and since the year 1820, or for a period of sixty-six years, the proportion between the agricultural and non-agricultural exports of this country has been remarkably steady, the average for the former for the whole of this period having been about seventy-eight per cent. Up to the present time there has been little tend- ency to change in these proportions; but, if the continued fall of prices of agricultural products in the United States and other countries should compel their farming populations to seek other employments, what other employments are open to them? That the world will ultimately adjust itself to all new conditions may not be doubted; but what of the period pending adjustment ? _ As bearing upon this subject, certain statements recently (1889) published by the United States Agricultural Depart- ment are of the highest interest and importance. From these it appears that Europe is practically the only market that America can have for her surplus wheat. But the RECENT PRICE EXPERIENCES OF COTTON. 179 wheat-crop of Europe, which has not materially declined within the last ten years, and which “represents more than half of all that is grown in the world,” is so nearly sufficient to meet the wants of its people, that “if the surplus of east- arm Kurope should be distributed only in the Continental states, it would nearly supply all their deficiencies, leaving practically only Great Britain to receive the imports of other sontinents, and consume alone the surplus of the wheat markets of the world.” The present average wheat-crop of Europe is estimated ut 1,200,000,000 bushels, and her average annual deficiency if supply, to be made good by foreign imports, at 144,000,- 100 bushels. Of this deficiency the United States, in ordi- lary years, can supply about 100,000,000 bushels; but in 880 the United States, Russia, India, Australia, and the Argentine Republic exported a surplus of 208,987,000 bush- Is, of which the United States contributed sixty-nine per ent. It is obvious, therefore, that with this limitation of narket, any enlargement of the surplus wheat-product of he United States must inevitably reduce its price at home nd abroad. For the other cereal products of the United States the luropean demand is comparatively inconsiderable. The nports of Kuropean countries requiring maize, for exam- le, do not make a sum half as large as the products of sin- le States. The deficiency of France could be supplied by ngle counties, and Germany requires still less. | Corton declined in price, taking the annual reported * rerages of upland middlings in Liverpool, from 9d. per Ib. 1 1873 to 6t§d. in 1880; 53d. in 1883, and 54d. in 1886; 1¢ last being the lowest price on record since 1848, when le average was 41d. The world’s supply of cotton since 1873 has been as fol- WS: 1872-73, 6,366,000 bales; 1882-’83, 10,408,000 bales : a eh a * See Annual Tables of Liverpool Cotton Association, 13 \ 180 RECENT ECONOMIC CHANGES. an increase in ten years of 63:5 per cent. After 1882 ther was a notable decline in the estimated crop of the world but for 1885-86 the aggregate crop is believed to have beei 9,580,000 bales; or an increase in supply in thirteen year of about fifty per cent. For 1886-’87 the estimate wa 9,757,000 bales, and for 1887-’88 10,161,000.* Such an in crease in supply, it seems hardly necessary to say, was ver far in excess of any increase in the total population of th world during the period of years under consideration, anc also in excess of any increase in the population of thos countries of the world that are the principal consumers 0 cotton fabrics. But here, again, as in the case of wheat it is contended that the consumption of cotton has in creased in at least an equal degrce, and tables have bee published showing that the consumption in a series 0 recent years has even exceeded production. Hence th decline in the price of cotton, it is argued, must hay been due to causes other than those contingent on su and demand. That consumption of cotton fabrics has greatly increase can not be questioned. It has followed naturally from th very great increase in the productive power of labor, usin; improved machinery, and a consequent great decline in th prices of such fabrications ; the equivalent of the labor o an operative in the factories of New England haying in creased, for example, from 12,164 yards in 1850 to 19,29) in 1870, and 28,032 in 1884, while the reduction in the pric of standard sheetings from 1850 to 1885 was about ten pe cent, and of standard prints and printing-cloths, during " same period, appr oximately forty per cent. A curious discrepancy in the rates of decline in the pric of raw materials and of the products manufactured {ror them (to which attention has been called in the case of pe troleum) occurs in the price experiences of cotton and ¢o * New York ‘ Financial Chronicle,” September 10, 1887. PRODUCTION AND CONSUMPTION OF COTTON. 181 ion fabrications. Thus, comparing 1855 and 1886, the aver- ige price of the cotton imported into Great Britain was mly five per cent lower in the latter year than in the ormer; but the decline in the average price of the British xports of cotton cloth during the same period was twenty- me per cent.* The agencies that have operated to occasion lecline in the two instances would, therefore, seem to have een altogether different. A comparison of the most reliable statistics of the rorld’s cotton production and consumption for recent years urnishes, however, some information on this subject of a efinite character. Thus, comparing 1872~’73 with 1882- 33, production increased from 6,366,000 bales to 10,408,- 00, or in the ratio of 63°5 per cent; the world’s consump- ion during the same period increasing from 6,425,000 bales ) 9,499,000, or in the ratio of 47-8 per cent. Comparing ne years 1872-73 with 1885-’86, the increase in production as from 6,366,000 bales to 9,580,000, or in the ratio of bout fifty per cent; and of consumption from 6,425,000 ales to 9,371,000, or in the ratio of 45-8 per cent.t _ At the same time every year closes with a visible uncon- med surplus stock of cotton, which varies from about one xth of the estimated year’s consumption (as in 1883-’84) )about one tenth (as in 1887-88). But, as the average ocks carried over from year to year are not as large as mmerly, it is claimed that herein is to be found proof that duction in the price of cotton could not have occurred ‘rough an excess of supply. A consideration, however, of € great changes which have taken place in recent years in conditions of supply and demand in respect to cotton, common with most other stable commodities, deprives e claim of much if not of all significance. Fifteen or renty years ago the means of determining the present and | * Address of Mr. Bertwhistle, Secretary of Lancaster (England) Weavers’ Sociation, 1886. : t © Financial Chronicle,’’? New York, September 15, 1888. | 182 RECENT ECONOMIC CHANGES. prospective supply of the world’s great products were ver} imperfect, and considerable time was required before reli able information could be collected and disseminated ; and in the case of cotton especially it was a matter of doub whether the United States would speedily or ever regai and hold its former relative importance as a producer 0 this commodity. Under such circumstances it was un doubtedly most important, for the stability of production and trade, that great reserves of raw materials should b constantly kept in store, or in sight. But with the marvel ous changes in the facilities for collecting and disseminat ing information which have come in recent years, with th opening of many new sources of supply, with the ability t know from day to day the amount of stock on hand of an article in any quarter of the globe, and its prospective con ditions of supply, the same importance no longer attache to reserve stocks; and, in fact, they are no longer kept 8 great central points of distribution to anything like th same extent as formerly. In the case of cotton the mant facturers of the world have seen the crop of the Unite States increasing at the rate of seventy-six per cent betwee the years 1866 and 1872, forty-nine per cent between 1872 73 and 1885-’86, and they have also learned that not thre per cent of the land of the United States available for th production of cotton has as yet been put under cultivation Improvements in machinery, by which finer yarns and fabri: can be furnished at no greater, or even at smaller cost, tha coarser and less desirable yarns and fabrics were former. supplied; or, in other words, the new ability to supply to considerable extent the popular demand for cotton fabric tions with a smaller relative consumption of cotton, wou also seem to be equivalent to increasing the supply of co ton, or of reducing the necessity of the continued maint nance of the reserve stock at figures that formerly mig) have been regarded as indispensable. | But, as bearing on prices, the decline in the average | | i a INFLUENCE OF RESERVE STOCKS. 183 reserve stocks of cotton carried over from year to year, be the amount of such decline greater or less, has no manner of significance, unless such decline has been regarded by consumers as indicative of prospective scarcity or insuffi- cient supply to meet the demands of immediate or future consumption. There is not, however, a particle of evidence that any such apprehension has, in recent years, existed. In point of fact, the evidence all runs to the effect that the apprehension, in recent years, in the minds of the world’s great consumers of cotton and all the other staple com- modities—sugar, iron, coal, petroleum, copper, lead, etc.—has been of disturbance in their respective industries, from an over-production and increase, rather than from any decrease in the supplies of their crude materials ; and such a frame of mind favors, if it does not directly occasion, low prices.* * The following expression of opinion relative to the supply of cotton, by ‘the “ Manchester Examiner,” England (no mean authority), may also be read with interest in connection with this discussion. Writing under date of January 18, 1888, it says: ‘‘ The invisible supply of actual cotton in spinners’ ‘hands all over the world is now the largest on record for this time of the year '—English spinners alone holding the unprecedented quantity of 350,000 bales, which has been brought about, to a very large extent, by the fear that the ‘small crop estimates put forth in November would prove correct. Besides the ‘invisible supply of actual cotton, spinners hold enormous lines of weekly de- Jiyeries and futures, which means that they can at any time keep out of our market for three months, and buy only retail lots. The question is, will they do so when they see plainly for themselves that this crop is about seven mill- ions, and which means abundance ; and not 6,800,000, which meant searcity ? ,.. The fact of the spinner apparently using less American also tends to show that the spinning qualities of the present American crops, which range now far higher in grade and quality than in years past, must be much better than the previous crops—an important fact when crops are grown from six and a half to seven millions. This has been entirely lost sight of when estimating ‘the prospects of supply and demand for the last three months of the season, ‘and thereby prophesying scarcity, which so far has never yet come off, and which was exemplified again last July, August, and September, by prices falling 1d. per pound in the face of prognos nticated searcity, besides leaving a surplus of 250,000 bales at the end of the season, with the price at 5¢d.”’ _ Commenting on the decline in the American export price of cotton from an average of 9-9 cents in 1886 to 9°5 cents in 1887, the New York ‘*‘ Commercial Bulletin,” October, 1888, says; ‘* This comparison leads to the reflection that ¥ io | ae | a 184 RECENT ECONOMIC CHANGES. It is interesting to recall in this connection that it was the general opinion in 1859 that the American cotton-crop oj the previous year, 1858 (3,994,000 bales), represented a maximum capacity of production, and that a crop of ovei 4,000,000 bales could not be picked, even if grown. Since then the crop of the United States has been in excess of 7,000,000 bales. The condition of the cotton-manufacturing industry of Great Britain (which may be considered as typical of the condition of the same industry in all other countries) during the early months of the year 1889, is also not a little in- structive. The production of cloths was greater than at any former equal period in history, and concurrently the world’s consumption of cotton, judging from the increase in British exports, has been unprecedentedly large. The situa- tion of. British manufacturers, under such circumstances, to quote from the London “ Economist” (May, 1889), is, how- ever, “anything but encouraging ” They “have been experiencing a narrow and unprofitable margin for months, and, at the present time, things are becoming seriously worse. Speaking broadly, the enormous production turned off ean only be got rid of at a comparatively low price, and, notwithstanding the heavy export, it appears to be too large to allow prices to rise.” _ The legitimate inference from all this would, therefore, seem to be that the world, in 1889, had got more cotton cloth (and consequently more raw material) than it could consume, at prices so extremely low for the former, as to _ leave little or no margin of profit to manufacturers working with advantages, as respects cost and product, that a com- paratively few years ago were hardly regarded as possibilities. Woor.—According to the statistics of M. Sauerbeck perhaps a partial loss of the cotton-crop this ‘year may not prove an unmixed calamity, since the enormous increase of yield for which the enlarged acreage had prepared would probably have depressed prices most disastrously for the producer.”’ | PRODUCTION AND PRICES OF WOOL. 185 («Journal of the Statistical Society,” March, 1887), the price of merino wool (Port Philip, Australia, average fleece), comparing the average of the series of years 1867-’77 and 1878-85, declined 10-7 per cent; or, comparing the average’ price of 1867-77 with that of the single year 1886, when wool “was cheaper than at any time within the memory of the present generation,” 27 per cent. Certain fibers classed with wool, and known as “ alpaca” and “ mohair,” and the grade of long-combing English wools known as “ Lincoln,” experienced a much greater decline after 187475, owing to the curious circumstance that a change in fashion in those years almost entirely and suddenly destroyed any demand for the before popular, stiff, lustrous fabrics manufactured from such wools for female wear, and substituted in their place the soft and pliable cloths that are made from the merino wools. A striking illustration of the decline in the price of wool since 1872 is found in the experience of the British colonial wools, mainly the product of Australia. Thus, the total product of such wools during the year 1872 was 743,- 000 bales, and the price realized was £19,690,000 ($95,821,- 385). In 1887 the total product was 1,444,000 bales, nearly double the quantity of that of 1872, but the value showed a slight increase, being only £526,000 ($2,559,779) more than that of 1872, on an aggregate of $98,300,000. It will thus be seen that the increase in production did little to increase the amount of money received by the growers. For making allowance for the circumstance that the proportion of colo- nial wool shipped in the grease is now much larger than it formerly was, it is considered that the increase in quantity from 1872 to 1887 was equal to about eighty per cent; or, in other words, the colonies were obliged to grow eighty per cent more wool in 1887 than they did in 1872 in order to realize the same amount of money.* * Report to the United States Department of State, 1888, by G. W. Giffin, United States consul at Sydney, Australia. | 186 RECENT ECONOMIC CHANGES. ‘I'he increase in the production and world’s supply ¢ raw wools, from the years 1860 to 1885 inclusive, was in ex cess of 100 per cent. According to Mr, Sauerbeck’s table: the increase from 1873 to 1885 inclusive, was 20 per cent according to Messrs. Helmuth, Schwartze & Co., of Lon don, the increase from 1871-75 to 188185 was 23 pe cent, and from 1871-’75 to 1886, 35 per cent.* The wool clip of the United States increased from 264,000,000 pound in 1880 to 329,000,000 in 1885, or 24°6 per cent in six years Taking “ Lincoln hogs” as the standard of English wools their value (January, 1889) was estimated at 104d. pe pound. This price appears startlingly low compared witl that which ruled in 1864, namely, 2s. 6d. per pound; bu in that year the import of wool of all kinds into Englan¢ was only 211,000,000, while for the year 1888 it was not fan short of 650,000,000 pounds. As the increase in the production of wool in recent years has but slightly exceeded the ordinary growth of population, and as the stock of wool on hand in Europe at the end ol the year 1885 was only 180,000 bales, as compared with 207,000 in 1880, it has here also been contended that some influences other than those contingent on supply and de- mand must have been influential in occasioning the decline of prices noted. But every year, nevertheless, has closed with a surplus in excess of any current demand; and it is also to be remembered that when the supply of any com- modity exceeds by even a very small percentage what is * The details of this increase are thus stated by Messrs. Helmuth, Schwartze & Co., of London, in their annual review of the production and consumption of enet for 1887 : “ Making allowance,’’ they say, ‘‘ for the increase of *popu- lation, we find that the principal develope in the supply of wool took place from 1860 to 1868, in which period the consumption rose from 2°03 pounds of clean wool per head to 2:47 pounds, or about 22 per cent. From _ 1868 to 1879 the consumption remained practically unchanged, amounting on the average to 2°41 pounds clean wool per head. It rose to 2°49 pounds for the average of the next four yéars, and was 2°58 in 1884 and 2°66 pounds in 1886. 9 { +) ae ” J INCREASING USE OF SHODDY. 187 required to meet every demand for current consumption —especially in the case of a staple commodity like wool, whose every variation in supply and demand is studied every day, as it were microscopically, by thousands of interested dealers and consumers—it is the price which this surplus will command that governs and fixes the price for the whole; and as this can not be sold readily—as under such circumstances no one buys in excess of present demand, and all desire to dispose of accumulated stocks—the result is a decline of prices, in accordance with no law, and which will be more or less excessive, or permanent, as opinions vary as to the extent of the surplus and the permanence of the causes that have occasioned it.* -Another factor, not to be overlooked, which in recent years has undoubtedly been most influential in depressing ihe prices of wool, has been the increasing use of “ shoddy,” w the product of old woolen rags torn up and reduced to ibers, or even dust; and also of immense quantities of cow md other hair for mixing with wool in the manufacture of abrics. ‘Thus, the import of woolen rags into the United Kingdom, which was only 5,250,000 lbs. in 1855, was re- urned at 80,750,000 lbs. in 1883. In the United States, secording to the census of 1880, the amount of scoured vool that entered into the production of domestic wool- ms during the previous year was returned at 109,725,- 00 Ibs.; of shoddy, 46,583,000 Ibs.; and of the hair of he buffalo and other animals, 4,495,000 lbs.; or, for every 'l Ibs. of wool used, one pound of something that was * Gregory King, in discussing the law of prices more than two centuries go, showed that an increase or diminution in the supply of a necessary of oeial life depresses or raises the price to the consumer in a degree which is w in excess of the quantity in excess or defect. Thus, a deficient supply of heat, taken to be a prime necessary of life, to the extent of five per cent in ie customary demand, will raise the price ten per cent; one of ten per cent lay raise it thirty, one of twenty will double it, and so on. Excess of supply ‘ill lower it, but not in the same ratio, because stocks accumulate in hopes of turn in the market. 188 RECENT ECONOMIC CHANGES. not wool entered into the woolen manufactures of this country. SrLk.—The decline in the price of silk (‘Tsatlee), accord- ing to M. Sauerbeck, from the average price of 186777 to the average of 1886, was about forty per cent; and the average increase in supply of all varieties of silk-fiber, com- paring 1873 with 1885, was reported by the same authority as about twelve per cent. According to the most reliable French statistics, the supply of raw silk—domestic and for. eign—available for the markets of Europe, increased from 21,837,000 lbs. in 1884 to 25,762,000 in 1887, or in the ratic of above seventeen per cent. No relation between the price movements of this commodity and supply and demand, o any other agencies, can, however, be established, which fails to take into account the great increase in the use of the ramie and other fibers and materials within recent years as substitutes for or adulterations of silk in the manufacture o! fabrics. Thus, recent investigations, made under the au- spices of the United States revenue authorities, indicate, thai in the case of the cheaper silks of extensive consumption materials other than silk often enter into their compositior to the extent of even sixty per cent; and that other meth. ods of adulterating silk, formerly but little known, are nov extensively practiced—all of which is equivalent to increas ing the supply of silk for manufacturing, far beyond whai commercial reports respecting the supply of the fiber woulc indicate. JUTE.—Good medium jute declined on the London mar ket from £17 per ton in 1874 to an average of £11 10s. 1 1886, or more than fifty per cent. ‘The increase in export from British India was from 5,206,570 cwt. in 1876 to 10, 348,909 cwt. in 1883, or ninety-eight per cent. Many other commodities, of greater or less importance might be included in this investigation, with a deduction 0 like results; but a further exhibit is not necessary, for iti difficult to see how any one can rise from an examination 0 GOLD AND SILVER COMMISSION. 189 ‘the record of the production and price experiences of the commodities which have been specified, which, it must be ‘remembered, represent—considered either from the stand- point of qualities or values—the great bulk of the trade, ‘commerce, and consumption of the world, without being ‘abundantly and conclusively satisfied that the decline in ‘their prices, which has occurred during the last ten or fif- ‘teen years, or from 1873, has been so largely due to condi- ‘tions affecting their supply and demand, that if any other ‘causes have contributed to such a result, the influence ex- erted has not been extensive; and, further, that if the prices ‘of all other commodities, not included in the above record, had confessedly been influenced by a scarcity of gold, the claims preferred by the advocates of the latter theory could ‘not be fairly entitled to any more favorable verdict than ‘that of “not proven.” The philosophy of the experiences ‘which have been collected and recorded is, that the cost of ‘producing the great staple commodities of the world’s trade ‘and commerce have, in comparatively recent years, through ‘inventions and discoveries, been materially reduced; that ‘this result is a permanent one, and that every attempt to ‘restore the old-time prices—as has been especially shown ‘in the recent price movements of copper, tin, and wheat— results in disaster. ] Notr.—In the year 1886 the British Government created a “com- mission” of persons of eminent qualifications, to “ inquire into the re- cent changes in the relative values of the precious metals,” embracing causes and results. This commission, after devoting nearly two years to their task, calling to their assistance a large number of persons as ‘witnesses, or experts, whom they regarded as qualified to express opin- ions, submitted a “ final ” report in October, 1888, embodying the facts to which their attention had been called; a summary of the argu- ‘ments, on the one side and the other, touching questions in contro- versy; and a marked diversity of conclusions on the part of the several ‘members of the commission. There was, however, an entire unanimity of opinion on some points, which the commission express as follows: _ “We are of opinion that the true explanation of the phenomena 190 RECENT ECONOMIC CHANGES. — | which we are directed to investigate is to be found in a combination of causes, and can not be attributed to any one cause alone. The action of the Latin Union in 1878 broke the link between silver and gold, which had kept the price of the former, as measured by the latter, constant at about the legal ratio; and, when this link was broken, the silver market was open to the influence of all the factors which go to affect the price of a commodity. These factors happen since 1878 to haye operated in the direction of a fall in the gold price of that metal.” Six members of the commission, embracing one half of the whole number reporting, thus further summarized their conclusions, in re- spect to the remarkable fall in recent years in the prices of commodi- ties : : “We think that the fall in the price of commodities may be in part due to an appreciation of gold, but to what extent this has affected prices we think it impossible to determine with any approach to ac- curacy. | “We think, too, that the fall in the gold price of silver has hada tendency operating in the same direction upon prices; but whether this has been effective to any, and if so, to what extent, we think equally incapable of determination. “We believe the fall to be mainly due, at all events, to circumstances independent of changes in the production of, or demand for, the pre- cious metals, or the altered relation of silver to gold. “Ag regards the fall in the gold price of silver, we think that, though it may be due in part to the appreciation of gold, it is mainly due to the depreciation of silver.” In regard to this same problem, the other six members of the com- mission, holding dissentient views, express themselves as follows: “ We are not insensible to the fact that facilities for production are habitually increasing, and the cost of production is constantly becom- ing less. But these factors have always been in operation since the world began; and, while we recognize their tendency to depress the prices of commodities, they are not, in our opinion, sufficient to account for the abnormal fall in prices, which has been apparent since the rupt- ure of the bimetallic par, and only since that time.” V. Price experience of commodities where product has not been greatly aug- mented—Handicraft products—Prices of India commodities—Exception- al causes for price changes—Coral, hops, diamonds, hides, and leather —Changes in supply and demand regarded by some as not sufficiently potential—Divergency of price movements—Evidence from a gold stand- point— Has gold really become scaree ¢—Gold production since 1850 —Increase in the gold reserves of civilized countries—Economy in the use of money—Clearing-house experiences—Difference between gold and silver and other commodities in respect to use—Has the fall in prices in- ereased the burden of debts ?—Curious monetary experiences of the United States. THE question which next naturally suggests itself is, What have been the price movements of such commodities as have not in recent years experienced in any marked degree 2 change in their conditions of supply and demand? Do they exhibit any evidence of having been subjected to any influence attributable to the scarcity of gold ? The answer is, that not only can no results capable of any such generalization be affirmed, but no one commodity can even be named in respect to which there is conclusive evi- dence that its price has been affected in recent years by in- fluences directly or mainly attributable to any scarcity of gold for the purpose of effecting exchanges. In the first place, all that large class of products or services, which are exclusively or largely the result of handi- crafts; which are not capable of rapid multiplication, or of increased economy in production, and which can not be made the subject of international competition—have ex- hibited no tendency to decline in price, but rather the reverse. A given amount of gold does not now buy more, 192 RECENT ECONOMIC CHANGES. but less, of domestic service and of manual and professiona, labor generally than formerly;* does not buy more o amusement; not more of hand-woven lace, of cigars, and 0 flax, which are mainly the products of hand-labor; of cut glass, of gloves, of pictures, or of precious stones. It buy; no more of horses, and other domestic animals; of pepper of cocoa, the cheap production of which is limited to a fey countries, and requires an interval of five years between thy inception and maturing of a crop; of malt liquors, eggs currants, and potatoes; nor also of house-rents, which de pend largely upon the price of land, and which in turn is . influenced by fashion, population, trade, facilities for access and the like. Retail prices generally have not fallen ir proportion to the decline in wholesale prices; and one ex. planation that has been given for such a result is, that retai, trade is more directly and largely dependent on persona. Services. “ Any one who thinks about the subject of gold and prices must be struck with the curious fact that it is in the wholesale dealings in the principal articles of commerce that the fall of prices is shown to hav taken place, and that, at the same time, in these dealings little or n¢ gold is ever used; while, on the other hand, in the dealings (and ir those countries) in which gold is used—such as small retail dealing: and wages, no such fall in prices, or no equal fall, has been proved.”— Sir THomas Farrer, Member of British Gold and Silver Commission * “There is no feature in the situation, which the commissioners have been called to examine, so satisfactory as the immense improvement whic has taken place in the condition of the working-classes during the last twenty years.’’— Report of the Royal (British) Commission on the Depression of Trade 1888. ‘There does not appear to be any evidence that the salaries of clerks anc others, outside of what may be termed the wage-earning classes proper, have decreased ; and, although some house-rents have fallen, it seems questionable whether, as except the more expensive houses, which are inhabited by the wealthy, there has been any general diminution of house-rent.’’— Report of thi British Gold and Silver Commission, Part II, 1888. 4 ‘* Instead of an alleged lowering of the price of labor, we have to i. taking a wide extent, rather a rise in wages.’’—eport of Factory Inspectors Germany, 1886, p. 14, 4 PRICES IN NON-PROGRESSIVE COUNTRIES, 193 How little of change in price has come to the commodi- ies of countries of low or stagnant civilization, that have emained outside of the current of recent progress, is strik- ngly illustrated in the case of a not unimportant article of sommerce, namely, the root sarsaparilla ; which, with a gradually increasing demand, continues to be produced (collected and prepared) in Central America, by the most primitive methods, and without any change in the condi- tions of supply, save, possibly, some greater facilities for transportation from the localities of production to the ports of exportation. Thus, in the case of Honduras sarsaparilla, at New York, which is the principal distributing market of the world, the average price for the best grade was reported as identical for the years 1881 and 1886; while for the “ Mexican,” the average reported for 1881 was eight cents per pound, and for 1886, with much larger sales, from seven to eight and a quarter cents. The very slight decline in recent years in the prices of such of the commodities of India as constitute her staple exports is also an illustration to the same effect.* Now, all of the commodities referred to, including labor * According to Mr. Robert Giffen, in his testimony before the British Gold and Silver Commission, 1886, the general result of a comparison of India prices shows a fall of only two per cent in 1880-84, as compared with 1870-774, or with the period immediately before the fall in silver: The general conclusion appears to me to be that the effect of the present relations between gold and silver have not told appreciably on prices in India, or on the relative progress of her import and export trade.””— Testimony of Sir Lovis Mater, late Under-Secretary of State for India, Member British Gold and Silver Commission, 1886. “Tn India, in the opinion of nearly all the witnesses whom we have ex- amined, the purchasing power of the rupee continues unimpaired, and the prices of commodities measured in silver remain practically the same. We have no evidence to show that silver has undergone any material change in relation to commodities, although it has fallen largely in relation to gold; in other words, the same number of rupees will no longer exchange for the same amount of gold as formerly, but, so far as we can judge, they will purchase as much of any commodity or commodities in India as they did before.””— Final Report British Gold and Silver Commission, p. 95. 194 RECENT ECONOMIC CHANGES. and personal service, and many others which might b specified, whose condition in recent years has not bee: materially influenced by changes affecting their supply an demand, ought to have exhibited evidence, in a decline o prices, of the influence of the scarcity of gold, if any sue! had been exerted ; but they have not, and the onus of show ing why they have not clearly rests upon those who deduc from the evidence of price movements the conclusion tha the standard of price measurements (gold) has appreciated. The record of extreme changes in prices, by reason o circumstances that are acknowledged to have been purel exceptional, is also most instructive, and removes not a fey commodities from the domain of any controverted economi theory respecting monetary influences. Thus, from 1862 t 1870, cotton, owing to war influences, ruled so high—fron seventy to eight hundred per cent in excess of norma prices—that its inclusion in computations, with a view o determining any average of prices, or generalization 0 causes affecting prices during the years mentioned, would without proper allowance, completely vitiate any conclu sions. War and interruption of traffic on the upper Nile hay increased the prices of “gum-Arabic” and of the dru; “senna ’”’ in recent years more than a hundred per cent. Th prices for French and other competing light wines an brandies are much higher than the average for 186667 because the phylloxera has so impaired the production o French vineyards that France has of late years importec more wine than she exports. ‘“ Cochineal ” and “ madder’ have greatly declined in price since 1873, because their us as dye-stuiis has been to a great extent superseded by equiva lent and cheaper coloring-materials derived from coal-tar and within a very recent period the discovery of a methoc of cheaply preparing a chemical preparation from cloves having all the flavoring qualities of the vanilla-bean, ha: already diminished the demand, and bids fair to greatly ae EXCEPTIONAL CHANGES IN PRICES. 195 mpair the price of this heretofore scarce and costly tropical woduct. Certain animal products, notably entering into ,ommerce, have greatly advanced in price in recent years by eason Of a rapid diminution in the number of the animals iffording them, as buffalo-horns, ivory, and whalebone. yory has trebled in price since 1845, and whalebone in- reased from 323 cents per pound in 1850 to 85 cents in 870, and $3.50 in 1886. In October, 1888, according to a circular issued by the ‘Baker’s Guide” at Havana, Cuba, the price of bread in hat city was lower than in any country, either in America x Kurope, where wheat is produced. The reasons assigned or this were the substitution of free for slave labor, and the lepreciation of paper currency in comparison with gold : flour on the date mentioned selling at $13 per barrel in old, and paper money at a reduction of two hundred and orty per cent from gold prices.” The price of manufactured Mediterranean coral—the rade in which is extensive—has been greatly depressed in ecent years by reason of the discovery of new banks of coral n the coast of Sicily, from which the raw material has been btained most cheaply, and in large excessof demand. The msequent decline in prices has, however, opened new iarkets in Africa, where the natives now purchase coral maments in place of beads of Venetian and German manu- icture. _ Hops.—Few commodities have fluctuated more violently | price in recent years, or more strikingly illustrate the gree to which supply and demand predominates over all her agencies in determining price, than the vegetable ‘oduct hops. In 1881 there was an almost universal crop lure, and the highest grade of English hops (Hast Kent) mmanded 700s. per cwt. In 1886 the German Hop- rowers’ Association estimated the quantity grown through- it the world at 93,340 tons, and the annual consumption only 83,200 tons, so that there was an excess of production 14 196 RECENT ECONOMIC CHANGES. over consumption for that year of nearly 10,000 tons. A might have been expected, there was a notable decline i the world’s prices for hops, and the same quality of Hnglis hops which commanded 700s. per cwt. in 1882 sold for 74: in 1887, and in June, 1888, for 68s. Later in the year, wit: unfavorable harvest reports, the price advanced to 147s. Dramonps.—The recent price experience of diamond is in the highest degree interesting. Diamonds were firs discovered in South Africa about the year 1868, and a busi ness of searching (mining) for them immediately spran up. At the outset the mining was conducted by individv als, but, in consequence of the expense, the work graduall and necessarily passed into the control of joint-stock com panies with command of large capital; and it was not unt: 1880 that operations on a great scale were undertaken. Th result of this improved system, conjoined with undergroun mining, was such an increase in the output of diamond that an oversupply to the market and a serious reductio in price became imminent; and the period of 1883-'84 wi in fact one of falling prices and intense competition amon the various producing companies, during which the leadin companies paid little or nothing to their shareholders, an some entirely suspended operations.* Continued disaste was, however, finally arrested through a practical consol dation of all the companies for the purpose of controllin product and prices; and a revival in demand having o curred about the same time, average prices were advance between 1885 and 1887 from 20s. 5d. per carat to 23s. Td The value of the diamonds exported from South Afric * The “‘ Kimberly Central Company ’’—the leading organization—whi from 1880 to 1883 increased its dividend from ten to thirty per cent, pa nothing to its shareholders during 1884 and 1885, and at the close of 1886 w only able to declare a dividend of five per cent. The other great diamon mining company, the ‘‘ De Beers,’”’ was more fortunate, and paid for 1884, 1886 an average of about eight and a half per cent; but most of the compani paid nothing during the same period, and some entirely suspended mining. 7 | PRODUCTION AND PRICES OF DIAMONDS, 197 ace the first discovery of the mines, or from 1868 to 1887, believed to have been between £40,000,000 and £45,000,000 200,000,000 to $225,000,000), of which about £15,500,000 77,500,000) represents the value of the output from 1883 1887. Very curiously, this large export of value—nearly | in the first instance to England—seems to find no dis- ictive place in the columns of British imports, although ey have served in a large measure to enable South Africa pay for her imports of British and other foreign prod- ts. If the export of diamonds from South Africa to urope has aggregated £45,000,000 ($225,000,000) in the ugh, the process of cutting may be regarded as having creased their market value full one hundred per cent, to £90,000,000 (or $437,000,000); a greater value than e yield of the world during the two preceding centuries. ie aggregate weight of the entire diamond product of the uth African mines up to 1887 is estimated at 38,000,000 rats, or over seven and a half tons.* We have, therefore, in this experience, the phenomenon the strangely persistent value of a comparatively useless m, during a period when the prices of most other com- ydities were diminishing by leaps and bounds, as well as 2 extraordinary concurrent absorbent power of the world : a greatly increased product. But the demand for dia- mds latterly is thought not to have kept pace with their sreasing production; and it is said that the stock of dia- i ) * Of this immense product there is good reason for believing that a very '@ proportion found a market in the United States. According to the joms returns, the value of the unset diamonds which were imported inte United States, and paid duty, from 1877 to 1887, inclusive, was in excess 350, 000,000; and it can hardly be doubted that an equal or larger import he form of Missa stones and jewelry escaped during the same period the ‘tizance of the revenue officials. The value of the present annual import ‘recious stones not set—mainly diamonds—is about $10 ,000,000. In 1868 ‘annual value of a corresponding import was about $1,000,000. These , imperfect as they are, afford some indication of the rapt increase in Ith j in recent years among the people of the United States. 198 RECENT ECONOMIC CHANGES. monds in the hands of dealers in 1888 was fully twenty-fiy per cent in excess of their requirements. To meet and net tralize the influence of this condition of affairs, the Sout African diamonds-mining companies have limited produc tion, which for the time has advanced prices. But the ter dency obviously is for diamonds to decline in value; and th wonder, indeed, is that this has not happened at an earlic date. ‘One thing, furthermore, seems certain, and that i that when the breakdown of speculation and prices does oc cur, the consequences will be singular and far-reaching. F< it is to be remembered that for the most part the use of dik monds is a mere whim of fashion, that may change at an time. There is no way of stimulating the demand for then except by lowering prices, and, of course, if prices were ms terially reduced, the wealthy votaries of fashion would it evitably cease to wear diamonds, and would take up som other form of personal adornment.” * The price experienc of diamonds in the near future promises, therefore, to h even more interesting than it has been the recent past. In the United States during recent years there has bee a remarkable decline in the price of hides and in certai descriptions of leather; “‘ Buenos Ayres” hides having sl in May, 1889, at the lowest figures for thirty years, whi the leather-trade generally has been depressed and unsati factory. The agency occasioning the first result is ascribe to the great increase in the supply of domestic hides cons quent upon a notable extension of the American (Wester cattle industry; and, in the case of the second, to an ove production and decline in demand for upper leather, in co: sequence of a change in fashion, whereby lighter grades: foot-wear have supplemented the use of “ leg-boots.” The extreme fluctuation in recent years in the price: certain drugs from well-recognized and unmistakable caus is also worthy of notice. For example, “Turkey opium * London ‘ Economist,’’ March, 1888. PRICES OF DRUGS. 199 a standard article of commerce, which in 1878 commanded 17s. per case in the London market, under the influence of subsequent unusually large crops declined in 1886 to 6s. 6d. for prime qualities. In 1876~’78 there was so little demand for the drug known as “balsam Tolu” that it seemed not unlikely that its production and market supply would en- tirely cease. In later years, however, it was discovered that it could be used for the manufacture of “ chewing-gum ”— an article in extensive use in the United States—and the demand thus occasioned has not only created a greater market than ever before, but the increased production has been attended with a reduction of from sixty to seventy per cent in price. The British Gold and Silver Commission call attention, in their “ Final Report, 1888” (pages 67 and 68), to three other causes of an exceptional character that have doubtless been influential in determining prices in a greater or less degree since 1873, and which are in no way connected with any changes in the relative values of the precious metals. The first is that “the rise in the price of raw products dur- ing the period preceding 1875 exceeded the average rise of the prices of all commodities, while the fall in the prices of raw products since 1875 has been above the average fall. Comparing, therefore, the earlier with the later period, the lower cost of manufacture was in the earlier period counter- acted by the higher cost of raw materials, while in the later period not only was this not the case, but the cost of the raw materials has decreased simultaneously with the dimin- ished cost of manufacture.” The second is that, comparing the years since 1873 with previous periods, “there has been aremarkable freedom from an absorption of the people of the Continent of Europe in occupations of war. Their en- ergies have thus been turned instead to industrial and com- mercial pursuits, which has led to an increase in their power of production.” 7 990 RECENT ECONOMIC CHANGES. | debtors, has been increased, the following statements were made in a memorial signed by ninety-five members of the United States House of Representatives of the Forty-eighth Congress, and presented to the President of the United States in 1885: “Highteen million bales of cotton were the equivalent in value of the entire interest-bearing national debt in 1865 ($2,221,000,000); but it will take thirty-five million bales at the price of cotton now (1885) to pay the remainder of such debt ($1,196,000,000). Twenty-five mill- ion tons of bar-iron would have paid the whole debt ($2,674,000,000) in 1865; it will now take thirty-five million tons to pay what remains ($1,875,000,000) after all‘that has been paid.” The inference, therefore, intended to be conveyed was, that the burdén of the national debt of the United States in 1885, notwithstanding the large payments on the same during the previous twenty years, had really been increased, inasmuch as a greater effort of labor, or an increased amount of the products of labor, was now necessary to liquidate it, than when the purchasing power of gold had not been appreciated through its scarcity; and, as with public debts, so also with private debts, especially such as are in the nature of mortgages on land, or on other product- ive fixed capital. Now, in reply to this it is to be said, first, that the tis assumed for this comparison of prices was, in the case ol cotton, entirely unfair and unnatural—the gold price of this commodity in the year 1865, owing to a scarcity occasioned by war, having been more than two hundred and fifty per cent higher than the average prices in 1860 before the war; while ae price of iron for that same year in the American markets was also inflated on even a gold basis; and, sec- ondly, that no consideration is given or allowance made in the above comparisons for-the results of labor at the two periods of 1865 and 1885; not more, and probably much less, actual labor in 1865- °86 having produced 6,590, 000 bales of cotton in the United States than was required in RATIO OF DEBTS AND ASSETS. 921 360 to produce 3,800,000 bales;* while in the case of ar-iron the proportion of days’ labor to a ton of prod- et has been diminished more than one half since 1865; ad the same is true, also, of that more valuable product f iron, namely, steel. Furthermore, no important prod- et of the United States can be named in which the ibor cost of production has not decreased very much ore than has the gold price of the same between 1865 o4 1885. In short, if the debtor has got more to pay at ie latter than at the former period, it is not the fault fany change in the relations of the precious metals if he as not at the same time got correspondingly more to pay ith. The monetary experience of the United States since 379 has been so especially remarkable, and has such a bear- 1g on the economic problem of the relation of money-supply ) prices, as to entitle it to extended notice. The following ible shows the changes in the circulating media of the nited States—bullion, coin, and paper—since January 1, 379 (when the country resumed specie payments), and anuary 1, 1889—a period of ten years: * The increase in the cotton product of the United States since 1860 has en due mainly to increased use of fertilizers, better tillage, and better con- tions for the employment of labor. In the Brazos alluvial region of Texas, hich ranks among the first of cotton-producing regions, the relative increase cotton product and population between 1870 and 1880, according to the aited States census, was 1°8 to 1. In what is termed the ‘‘ oak-upland”’ gions of North Carolina, the product of cotton in 1880 had increased over at of 1870 in the ratio of 4°5 to 1, or this region in 1880 produced more cot- n than the product of the entire State in either 1870 or 1860. ‘‘ This re- arkable result,’ according to the special United States census report on tton for 1880, ‘‘ was due mainly to the introduction and general use of com- ereial fertilizers, which not only increase the crop, but hasten its maturity mm two to three weeks, and so bring into the cotton belt a strip of plateau untry, whose elevation of from 800 to 1,200 feet had placed it just beyond e climatic range of the cotton-plant. This change is in no respect due to ered relations of labor.’’? In truth, there was no one thing in which the merican advocates of slavery were more mistaken than in the assumption at slave labor was cheap labor. 999, RECENT ECONOMIC CHANGKS. CIRCULATION. Jan. 1, 1879. Jan. 1, 1889. Total. Gold coin and bullion.. .| $278,810,126) $704,608,169| Inc. $426,298.0. Silver dollars.o. 2st yoe 22,495,550; 315,186,190) “ 292,690,6: Silver bullion. 205.502. 9,121,417) 10,865,237) “ 1,748,8; Fractional silver....... 71,021,162 76,889,983} ¢ 5,863,8; National-bank notes....} 828,791.674; 238,660,027] Dec. 90,181,6: Legal-tender notes..... 346,681,016} 846,681,016) = ....... Total currency issues. . .| 1,051,420,945| 1,687,890,622| Inc. 636,469,6' Of this large increase of $636,469,677, $578,637,368, i coin and paper, were in the hands of the people; an $57,832,309, in bullion, coin, and paper, in the nation: Treasury.* } It thus appears that, while there has been an increase i the population of the United States during the period ¢ ten years under consideration of about thirty per cent, th increase in the precious metals and paper available for ci: culation during the same time was 60-05 per cent; while ¢ coin and paper in active use among the people and bank the increase was 69°6 per cent, or much more than doubl the rate of increase in population. Now, as during thi same period there was a great and universal decline in th prices of commodities in the United States (as elsewhere the interesting question arises, How do these experience harmonize with the theory that the volume of circulatin: medium controls prices, and that the movement of th precious metals puts down prices in the event of a reductio of the supply, and puts them wp in the event of an increas of supply? Note, further, that the increase of gold and sil ver coin and bullion in the United States during the te years, from 1879 to 1889, was $726,600,000, while the pape circulation diminished. Nor can it be maintained that th fall in the value of silver bullion has affected this cireula tion, since, for all purposes of internal circulation, silver an' its paper representatives have had the same efficiency ani * New York ‘‘ Financial Chronicle,’ February 9, 1889. a JONETARY EXPERIENCE OF THE UNITED STATES. 293 and at twice the fixed capital invested ‘sugar-refining in the United Kingdom. | Again, the bounty policy developed a large local industry many of the states of Continental Europe, and for a time sid enormous profits to manufacturers and refiners pro- icing for export. During the year 1886 the profits of the vo leading sugar-refiners of France from export.bounties, 302 RECENT ECONOMIC CHANGES, exclusive of their domestic trade, were reported as abc £450,000 ($2,225,000) each; but how much of this ¢} were required to part with in order to force, through redix prices, the sales of their product in other countries, ig, course, not known. It is claimed to have greatly injm the sugar-refining industry of Great Britain; but, on { other hand, it is certain to have given a great impetus the business of manufacturing confectionery, presery fruits, jams, etc., in that country; industries which hs given employment to many more persons than were e occupied in refining sugar.* But there is another side to this picture. Under t influence of an extraordinary and artificial stimulus m¢ sugar has been produced than the world was ready to abso even at the reduced prices which the bounties made possib The price of beet-root, and therefore of all sugar, has ec tinued to decline, until the sugar-industry of Continen: Kurope (with the possible exception of France) has expe enced the severest depression. Many establishments ha closed or passed into bankruptcy, and it is now well und stood that the only profit available to the manufactories that derivable from so much of their product as is export which in the case of Germany represents more than half the annual production. In a recent discussion in the * With the advantage of cheaper sugar than any other commercial nati the ‘‘jam’’ industry has developed in Great Britain to a great extent; a this, too, notwithstanding that Great Britain is a country not especia adapted to the growing of fruits, and in which domestic fruits are, as aru costly. According to Sir Thomas Farrer, about 100,000 tons (200,000,( pounds) of refined sugar was used in this industry in the United Kingdom 1884; employing 12,000 men, or more than double the number employed the British sugar-refineries; and for 1888 the estimate was 150,000 tor With the reduction in the price of jam, consequent on the low cost of sugar, 1 consumption of jam throughout the world has received an enormous impuls and preserves of every kind—more especially orange marmalade—which we formerly regarded as luxuries, are reported as becoming articles of daily 1 in England among the very poorest families, supplanting to a certain exte the use of butter. | EVILS OF THE BOUNTY SYSTEM. 303 ak Reichstag, Deputy Heine opposed the continuance of » present bounty system in that country, upon the ground at it was disastrous to the agricultural laborer, who had mn compelled to sacrifice all his land to the beet- cultiva- 's. These cultivators, who farmed upon a large scale, he vintained, had effected many improvements in labor-sav- ty machinery, and thus reduced the laborer’s wages to a :DiIMUM 5 so that in some districts the laborers were little itter off than serfs. At the same time the people of the gar-producing states of Europe uniformly pay more for at proportion of their own sugars they consume than is ‘id by foreigners on the proportion exported. Deputy olhert, continuing the discussion, is reported as saying: | “Tecan not discern the smallest gain to our country. The profits the system have only been reaped by England. It is German sugar at has enabled England to give sugar to her cattle; it is German pital that has so developed the English manufacture of sweets, that ‘successfully competes with the German manufacturer in the markets the world and in Germany itself. We pay one anda half to two lions sterling to enable England to consume what would probably worked up by our German industry. Gentlemen, I fear that this stem has made us the laughing-stock of our English cousins!” ; (Tn Russia, where the depression is extreme, the manu- cturers have petitioned the Government, but thus far un- cecessfully, to restrict production by law to whatever extent ould be necessary to keep the price up to the point at hich it stood when the domestic product was just sufficient » supply the home market; or, in other words, to permit ‘oduction to continue at oe producer’s discretion, but not » allow him to sell anything over the regulation amount in te home market. ' The disaster which the extreme artificial reduction in cent years in the price of sugars has brought to other reat business interests and to the material prosperity and yen civilization of large areas of the earth’s surface, can ot also well be overstated. In Barbadoes (British West 304 RECENT ECONOMIC CHANGHS. Indies), in February, 1887, it was estimated * that the lo at that time on every ton of sugar produced and export to London was £1 15s.; and in the absence of all profit ¢ what is almost the sole industry of the West Indies, it woul seem as if civilization would disappear from many of #1 islands, as indeed it already has in a great degree from son of them—the island of Tortola, for example, which wa comparatively a few years ago, the seat of a profitable suga: industry. In the Spanish islands of Cuba and Porto Ric poverty 1s reported to be almost universal, save among tl large planters and merchants in the cities; and brigandag has so greatly increased as to be devoid of novelty. Tax on the sugar product of these islands (mainly through e: port duties) have hitherto constituted an important sour of revenue to the Spanish treasury; but latterly the hor Government, as a condition for saving the planters fro ruin, has felt obliged to relinquish most of them. The su; gestion has even been seriously made that, as the tobace crop commands good and increasing prices, the cultivatio of sugar should be abandoned altogether, and the islan¢ converted into tobacco-farms. In Java the situation of th sugar-industry has been so deplorable that, in order to sav it from destruction, with the consequent throwing of half million of Javanese laborers out of employment, and thereb increasing the already large number of Malay pirates, th Dutch ministry, in 1886, decided, besides making advance to planters on their crops, to purchase from their colonise planters five eighths of their production at a price that woul entail a sacrifice on the Dutch treasury of about 40,000,00 francs, or $8,000,000.+ And since then it seems to have bee’ * “ Barbadoes Agricultural Reporter,’ February, 1887. + ‘* Journal des Fabricants de Sucre,’’ October, 1886. | A further idea of the depression of the sugar-trade in Java may be gaine from the fact that the imports of raw sugar from the island by Holland hav declined—comparing the results of the year 1870 with those of 1885—abot ninety per cent. REACTIONARY SUGAR POLICY. 305 sll established that German beet-root sugar has been and now exported half round the globe, and largely sold in ngapore, the center of the great sugar-producing coun- ies of Asia, at a price which makes its use to the manu- turers of preserved fruits more advantageous than the igars of Java and the other islands of the Indian Archi- alago. In British India, owing to the competition of European ret-sugar, the exports of sugar, comparing 1884 with 387, experienced a decline of 632,439 cwts.; and a similar ompetition as respects Australia has threatened with ruin je developing sugar-industry of these countries. In the land of Madagascar, also, the manufacture of sugar, which as formerly the staple industry, has become so unprofit- ole, that the people have largely abandoned the cultivation ft the cane, and are devoting their labor to the production f tea, tobacco, tapioca, and other tropical products. _ Finally, the states of Continental Europe, in which the urden of taxation is already most grievous, and in most of hich there is a regular and increasing annual deficit, are eginning to feel that they can no longer endure the strain pon their finances which the bounty-paying system to their agar-industries entails, and which has not brought pros- erity to them or the state. In this reaction, Russia has iken the lead, and with the exception of bounties granted or a period of five years on the export of sugars to Persia, asabolished her former general system of bounties; and Il the other states of Continental Europe exhibit unmistak- ble evidences of a desire to follow her example. It is gen- rally agreed in Europe that not only have the fiscal results f the bounty system been wholly unsatisfactory to the everal sugar-producing states, but also that the bounties ave enabled foreign consumers to obtain sugar at less than tsactual cost of production. Competition among the re- mers has compelled them to share their bounties with heir customers, and their own have been compelled to pay 306 RECENT ECONOMIC CHANGES. prices abnormally high, in order that foreigners might bu at prices abnormally low. : Recent investigations have also developed this curio feature of this sugar-bounty question, and that is, that tl country paying the heaviest export bounty does not expo. the greatest quantity. Thus France, with a reported annu: production of 550,000 tons, and paying a much high bounty than Germany, exports twenty-nine per cent of he product; while Germany, with an annual production of abot a lion tons, and paying a much smaller bounty, orga sixty-one per cent of her product. It is furthermore recognized that, while a bounty ur naturally stimulates the production of sugar, it also operate to a like extent in discouraging production where no bount is given; and that, if the bounty system is continued lon enough, it will in a great measure destroy natural productior The great difficulty of the situation, however, is tha much of the sugar-industry that has been called into exist ence artificially would be immediately ruined, with grea loss and suffering to a large number of people, if the bountie were at once discontinued ; and the same result would folloy by the putting an end to any possibility of exporting, if one or all but one, of the states should cease paying bounties and one, like France, should continue to do so. An invitation extended by the British Goverment i 1887, to the various sugar-producing nations, to meet ii conference through their representatives, “with a view 0 arriving at a common understanding for the suppression 0 (export) duties,” was therefore promptly accepted; and it November of that year such a conference assembled i1 London, at which officially appointed delegates from Ger many, Austria, Belgium, Sweden, France, Denmark, Spain Great Britain, Italy, the Netherlands, Russia, and Brazi were present and participated.* The results of the firs * The United States was invited to send delegates, but no action was take CONFERENCE FOR SUPPRESSION OF BOUNTIES. 307 eeting were a unanimous condemnation of the system of wunties; and the adoption of a convention for submission, ith a view of ratification, to the respective governments, of aich the following was the first article: 4 The high contracting parties engage to take such measures as all constitute an absolute and complete guarantee that no open or sguised bounty shall be granted on the manufacture or exportation “sugar.” The conference reassembled in August, 1888, at which eeting a further convention was drafted, embodying ethods for practically enforcing the object of the confer- ice; the main features of which were that the contracting owers should exclude from their territories all sugar and gar products that have been benefited by either open or sguised bounties; such exclusion to be effected, either by rect prohibition, or by the levying of duties in excess of .e bounties; and that beet-root sugars intended for ex- ortation Mioaid be manufactured in bond. ‘To this propo- gon the representatives of England, Germany, Spain, Italy, ad Russia agreed. Of other countries, the United States d not participate; Belgium was not satisfied with the ea of manufacturing in bond for exportation; Austria and rance reserved their concurrence until all other sugar pro- acing and consuming countries agreed to adhere; Den- ark and Sweden refused to sign absolutely; Brazil reserved or freedom of action. . As unanimity of action is clearly essential to the success- ‘l working of any international agreement for the suppres- on of the sugar-bounty system, and as no such agreement is thus far been attained, or seems possible—public opin- nin Great Britain, for example, being apparently very lverse to the indorsement of the recommendations of the titish representatives at the conference—the efforts of the ‘response further than the authorization of the secretary of the legation at ‘ndon to attend the convention, without participation in the proceedings. | 21 308 RECENT ECONOMIC CHANGHKS. conference to effect a result which it had unanimously d, clared was most desirable, appear at present to have bee wholly ineffectual. But as final action on the part of tl states represented in the conference is deferred until Se tember, 1891, further experiences may remove obstacles th; now appear insurmountable.* ‘The fact that the people « Great Britain—which neither imposes taxes nor pays bow ties on sugar—consume more sugar per capita than tk people of any other country in the world—namely, 7 pounds—while the people of those countries which have er deavored to artificially encourage the production and cor sumption of sugar, consume comparatively small amoun per capita—namely, in the case of France, 28 pounds; Ge: many, 203 pounds; Austria, 143 pounds; Russia, 9 pound; Italy, 8 pounds; Holland, 28} pounds; and Spain, 9 pounds—would seem furthermore to amount to a demor stration, that the most certain way of providing for th greatest consumption of sugar, and of speedily relieving th world’s markets of any over-production of this most desirab! commodity, would be for governments to refrain to th greatest possible extent from all interferences with its prc duction and distribution. * The clause of the treaty adopting stringent provisions against the viol: tion of its provisions ‘is a new departure in international agreements, and i exact terms will be fully scrutinized in all countries. The expediency of son compulsion of this nature seems to have been admitted by all the delegate including those of France; but it would seem a question how far the exch sion by us of the sugar, say, of France, would be compatible with our existin treaty engagement to extend to her the most-favored-nation treatment, and is difficult to see how our Government, which has always declined to impos differential duties upon sugar, can now go to such a far greater length in di ferentiating as wholly to exclude the products of some countries while openix our ports freely to sugar from all other quarters. We might as well exeluc from our ports all foreign ships which receive bounties from their government and all the goods which such ships carry. In fact, if once we admit the prit ciple that it is right to fight bounties by customs duties or regulations, \ commit ourselves to a policy of commercial reprisals, and upon such a polic it would, in our opinion, be the height of folly for us to enter.’’—Londo Economist. | { ail big BOUNTIES FOR SHIPPING. 309 To bring up the narrative of this curious chapter in the ‘orld’s economic experience to the present date (1889), it to be added that, owing to a reduction in the produc- on of sugar through the discouragement of the low prices hich the bounty system has occasioned, conjoined with a unfavorable season, and an increasing consumption con- squent on an increasing population, the world finds itself aeatened for a time (1889) with a temporary scarcity of agar. Prices, accordingly, have greatly advanced, with a rospective outlook for another year of increased produc- on, and a repetition of price disturbances in the not-dis- int future. It is also interesting to note that, notwithstanding the xperience of the sugar bounties, the Government of the rgentine Republic, while the sugar convention was pend- ig, determined to appropriate an annual sum of $550,000 ir three years, in order to stimulate the export trade of that vuntry in beef and mutton for the European market. _ BoUNTIES FOR SHIPPING.—The recent experience of rance in attempting to stimulate ship-building and ship- sing, through a carefully-devised system of subsidies and ounties, furnishes another illustration of the effect of gov- ‘nmental interference with the natural course of industries, cond in importance only to that afforded by the experience I sugar. ' Thus, to accomplish the purpose above noted, the French overnment offered in 1881 to give a bounty of twelve dol- rs a ton on all ships built in French yards of iron and bel; and a subsidy of three dollars per ten tons for every ‘ousand miles sailed by French vessels; gnd as they did at desire to put any inhibition on the citizens of France iying vessels in foreign countries and making them French ‘operty, in case they desired to do so, they proposed to ve one half the latter subsidy to vessels of foreign con- ruction bought by citizens of France and transferred to e French flag. 310 RECENT ECONOMIC CHANGHS. At the outset, as was the case with the sugar bounties the scheme worked admirably.’ New and extensive steam ship lines were organized with almost feverish haste, and th. construction of many new and large steamers was promptl commenced and rapidly pushed forward in various Frene] ports, and also in the ship-yards of Great Britain and othe countries. The Government paid out a large amount o money, and it got the ships. In two years their tonnag increased from a little over 300,000 to nearly 700,000 ton for steamers alone; while the tonnage engaged on long yoy ages increased in a single year from 3,600,000 to over 4,700, 000 tons. | It was probably a little galling to the French to find ou after two years’ experience that most of the subsidies pai by the Government were earned by some two hundred iro steamers and sailers, and that over six tenths of these wer built and probably owned in large part in Great Britain so that the ship-yards on the Clyde got the lion’s share ¢ the money. But as all the vessels were transferred to an sailed under the French flag, and were regarded as belong ing to the French mercantile marine, everything seemed t indicate that the new scheme was working very well, an that the Government had really succeeded in building u the shipping of France. But the trouble was that th scheme did not continue to work. The French soon learne by experience the truth of the economic maxim that shi are the children and not the parents of commerce; and thé while it was easy to buy ships out of money raised by tar ation, the mere fact of the ownership of two or three hur dred more ships did no more to increase trade than the pu: chase and ownership of two or three hundred more ploy necessarily increased to a farmer the amount of arable lan to plow; or, in other words, the French found that they ha gone to large expense to buy a new and costly set of tool and then had no use for them. | And, what was worse, they found, furthermore, thi SHIPPING EXPERIENCE OF FRANCE, BLL shille they had not increased trade to any interal extent, shey had increased the competition for transacting what rade they already possessed. The result has been that nany French shipping companies that before the subsidy system were able to pay dividends were no longer able ; fortunes that had been derived from the previous artificial orosperity have melted away, and the French mercantile marine ceased to-grow—only $584,288 being paid out for sonstruction bounties in 1886, as compared with a disburse- ment of $982,673 in 1882.* In fact, the whole scheme proved so disastrous a failure that the late Paul Bert, the eminent French legislator and orator, in a speech in the French Assembly, seriously undertook to defend the French war of invasion in Tonquin on the ground that its continu- ance would afford employment for the new French mercan- tile marine, which otherwise, we have a right to infer, in his opinion would have remained idle. A recent writer— M. Raffalovich—in the “Journal des Economistes,” has also thus summed up the situation. “It may be asserted,” he says, that *the bounty system in France, which was intended to bridge over atemporary depression, has aggravated the situation, and has proved itself to be a source of mischief, not of cure.” The experience of the mercantile marines of Hurope during recent years affords the following curious results: It shows, first, that the payment of bounties has practically availed nothing in arresting the continued decrease in sail- ing-tonnage; second, that in the eight years prior to 1880, French shipping, in its most valuable branch-steamers, in- creased faster than the shipping of any of its Continental competitors ; but after 1880, the increase in the steam ma- rine of Germany, where no bounties were paid, was relatively greater both in number and tonnage of vessels than in * The total amount paid by France for the construction and running of ships is estimated to have been 10,583,965 francs in 1887, and 9,000,000 in 1888. 312 RECENT ECONOMIC CHANGKS. France where large bounties were given after 1881; an was also greater as respects the aggregate tonnage of al vessels—sail and steam. ‘The obvious expectation of th. French Government in resorting to the bounty system fo shipping was that ships built and navigated with the aid o the bounties would carry French manufactures into foreign countries, and thus open new markets for domestic prod ucts. But experience, thus far, has shown that all that ha been effected is a transfer, to some extent, of the carriage 0 goods formerly brought in foreign vessels to French vessels But, on the other hand, the increase of tonnage, under th stimulus of the bounties, beyond the requirements of traffic and the consequent reduction of freights, has entailed “: loss, and not a gain to the French nation; by throwin; upon it the burden of a shipping interest that, but for th Government aid, would have been unprofitable, and which because of such aid, can not conform itself to the demand of trade.” * The experience of Austria-Hungary in attempt ing to find new outlets for their produce, or fresh employ * “ Report on the Mercantile Marines of Foreign Countries,’”’ by Worthing ton C. Ford, U. 8. Department of State, Executive Documents, 1886. A report (1889) to the British House of Commons affords the latest infor mation respecting the payment of bounties in European countries with view to favoring the construction and running of ships. It appears that suel payments are made in France, Italy, and Spain. In France the annual outla: on bounties for construction is officially reported to have been £181,62 ($982,673) in 1882, and £120,224 ($584,288) in 1886. The sums allowed b: France for navigation depend upon the age of the vessel and the material used in construction. The amount of bounties for navigation paid in 188 was 7,578,347 franes. In Italy, for 1887, the following amounts were pai by the Government: namely, for construction of vessels, £4,587 ; for repairs £7,210; for importing coal, £6,931; for navigation—steamers, £44,956 sailing-vessels, £96,289; total, £159,973. In Spain the bounty is 32s. per toi paid to Spanish ship-builders on vessels constructed by them. In Spain, an also in Austria and Belgium, matcrials used in ship-building are exempte from payment of customs duties. No statement, however, is supplied as t the actual or estimated amount of the aid thus afforded to the construction 0 vessels in the three countries last named. Postal subsidies are granted ii almost all European states; but these payments can not be reckoned a bounties. | INCREASE IN BRITISH TRADE, 313 ent for their shipping by the payment of subsidies, has xen analogous to that of France, and equally unfortunate. he steamers of the Austrian Lloyd Company have made ore voyages to the “ Far East” than when unsubsidized ; at the exports of Austrian products have not materially cereased, while the mercantile marine generally of Austria rapidly declining. _ The experience of Great Britain, occcupying, as she has, ie position of being the only country in the world of large coduction and commerce which has not within recent years aposed restrictions on the competitive sale of foreign prod- acts in her markets, is also exceedingly interesting and istructive. That British trade and production have been \jured by attempts in the nature of forced sales on the art of competitors in protected countries to dispose of their irplus products in the English duty-free markets—while ie tariffs of their own countries have shielded them from iprisals—and that from like causes Great Britain has ex- erienced severe foreign competition in neutral markets, here British trade had formerly almost exclusive posses- on, can not be doubted. Thus, the report of the British ommission “On the Depression of ‘Trade and Industry” :886) shows that the importation of foreign manufactured ‘partially manufactured goods into Great Britain has in- veased since 1870, at “a slightly more rapid rate ” than the \erease of its population, having been £1.97 per head in the sriod 1870-74, and £2.35 per head in the period 1880-’84. he extent of the injury to British interests from these anges in the conditions of the world’s trade does not, ywever, appear to have been as great as might have been iticipated, or as is popularly supposed, and very curiously 4s manifested itself in a reduction of profits, rather than iany reduction of the volume of British trade; the value ‘ British exports to the six protectionist ania: of the orld—the United States, France, Germany, Russia, Spain, ad Italy—having been larger during the years 1880-’84 214 RECENT ECONOMIC CHANGES. than in any quinquennial period of British history, with t exception of the period from 1870-74, when British tra is known to have been abnormally inflated. Thus the ay age annual value of British and Irish produce exported France, Germany, Spain, Italy, Russia, and the Unit States was £2 26 per head of her population in 1880-% as compared with $2 06 in 1875-79, and £2 18 | 1865-69. Of the total increase in the shipping trade of t principal maritime nations from 1878 to 1887, one thi occurred in British tonnage; while of the increase in t merchant steam tonnage of different countries, during t same period, nearly two thirds is to be credited to Gre Britain. In the year 1887 the mercantile navy of Gr Britain, while carrying three fourths of the whole of | own immense commerce, carried at the same time one h: of that of the United States, Portugal, and Holland ; nea one half of that of Italy and Russia; and more than o third of that of France and Germany. As the ocean m¢ cantile tonnage of the United States declined between t years 1878 and 1887 in a greater degree than that of a other country, it is very clear at whose expense the ineres in the shipping of other nations was made during tl same period. It is also not a little interesting to note th the countries of the world in which, according to the me recent and accepted statistics, the ratio of wealth and t ratio of foreign commerce to the population are the greate are Holland and Great Britain, the two states that ha emancipated themselves in the greatest degree from all 1 strictions on the interchange of products with foreign r tions—the customs revenue of the former amounting about one per cent on her imports, and that of the latter about five and a half per cent.* In India, also, where the * It is popularly believed that the per capita wealth of the people of t United States, which the census of 1880 fixed at $860—but which, allowi for duplications, is probably not over $500—is greater than that of any otl people. This, however, is not the fact; the ratio of wealth to each inhabit: ae | COMPARATIVE EXPORTS OF EUROPE. 815 ire few artificial: restrictions on the freedom of exchange, nternal trade, manufactures, and foreign commerce have ‘nereased in an extraordinary degree within recent years, and the wages of skilled labor have also, at the same time, aotably advanced. An analysis of the comparative values of the export wvade of the nations of Europe during the five years from 1880-’85—a period of intense struggle for the domination of she world’s markets—affords the following significant re- sults: In cotton and woolen yarns and dry-goods, England strengthened her position; in iron and steel goods, her share of the world’s trade increased from 64:2 to 66°5 per sent; while in machinery her exports were pushed up from 567 to 69°1 per cent. In glass and glass goods England’s percentage remained constant, while that of France and Belgium declined. Germany increased her exports of glass and glassware, and also very largely of paper and slightly of machinery, losing ground in respect to the exportation of iron and steel goods, in common with France and Aus- ria. In leather and leather goods Germany leads, while France appears to be rapidly losing her former supremacy. Apart, however, from their bearing on any particular sountry, a review of all the circumstances connected with the multiplication of restrictions on international commerce, which the majority of civilized nations have united in cre- ating in recent years, fully justifies the British Commission and other European authorities in regarding it as a most ‘nfluential agency in occasioning almost universal economic listurbance. It has been progress backward—progress in the direction of that sentiment of the middle ages, which ‘n Great Britain being $1,245, and in Holland, $1,200. The wealth of Hol- -and, moreover, doubled in the twenty years next prior to 1880, while the yain in population of the country during the same period was comparatively significant. In respect to commerce, the ratio to each inhabitant, in 1880, was $150 in Holland, as compared with $91 for Great Britain, and $32 for she United States. 316 RECENT ECONOMIC CHANGES. held that, as commerce benefited one country only as j injured some other, it was the duty of every country to im pose the most harassing restrictions on its commercial inter course. ‘I'he evidence, furthermore, is overwhelming that as civilization grows more complex, and the use and per fection of machinery increases, all obstacles placed in th way of the freest interchange of commodities have an in creasingly disastrous effect in deranging and destroying in dustry everywhere. Or, in other words, increased knowl edge respecting the forces of Nature, and a wonderful sub ordination and use of the same having greatly increased an cheapened the abundance of all useful and desirable things the majority of the world’s legislators and statesmen hay seemed to have considered it incumbent upon them to neu . tralize and defeat the beneficent results of such abundance And the most comforting assurance that progress will no continue to be made in this same direction, is to be found no so much in the intelligence of the masses or their rulers, a in the circumstance that existing restrictions on commerei can not be much further augmented without such an im pairment of international trade as would be destructive o: civilization. : As the existing restrictions on commercial intercourse within recent years have not been all imposed at one time but progressively, and as their influence has accordingly been gradual, the world does not, however, seem to have as yet fully appreciated the extent to which the exchange ol products between nations has been thereby interrupted o1 destroyed. But, as the case now stands, Russia practically prohibits her people from any foreign purchases of iron and steel, and in fact seems to desire to limit exchanges ol her products for the products of all other nations to the greatest extent possible. Germany, by repeated enactments since 1879, has imposed almost prohibitory duties on the importation of wheat; a measure directed, in the first in- stance, against Russia, as a means of retaliation for the per- ILLUSTRATIONS OF TRADE RESTRICTIONS. 317 cution of German landed proprietors in Poland, but which as severely damaged the German steam flour industry, and snefited no one. Austria imposes heavy tariff rates on the aport of almost all German manufactures. Belgium pre- ents the importations of cattle and meats; Austria, Russia, ermany, France, Belgium, and Holland, of sugar; France, tpork and pork products; Brazil, of rice; while trade be- yeen Italy and France has been interrupted to almost as reat a degree as mutual governmental action will admit. The imports of Russia, as before pointed out, decreased orty-three per cent in the four years from 1883 to 1887; nd in the case of no one of the Continental states of Europe as the condition of their foreign trade in recent years been egarded as satisfactory. or the year 1888 there was a cline in the exchanges of every such state with foreign ountries ; or, what is the same thing, there was a greater estriction to each one of them of markets for the indus- vial products of their own people. The avowed policy of he United States has for years been to prohibit or obstruct rade on the part of her citizens, in respect to many articles, mith the citizens of all foreign countries; and with this xample, and in part from a spirit of retaliation, there can ve no doubt that the objective of much of the restrictive ommercial legislation of other countries in recent years ias been the United States—a policy which has notably flected the agricultural supremacy of the latter country in he world’s markets; the exports from the United States, omparing 1888 with 1881, of cattle, having declined 24:5 in (uantity and nineteen per cent in value; of hog-products, ‘3°38 in value; and, of dairy products, over fifty per cent in lue. The decline in the value of the exports of the United states to France has been especially noteworthy, namely, rom a value of $99,000,000 in 1880 to $40,000,000 in 1886, nd $37,780,000 in 1888. Great Britain alone of all the nations, in increasing her erritorial possessions, does not take to herself any com- 318 RECENT ECONOMIC CHANGES. mercial privileges which she does not readily and equal share with the people of all other countries. In all discussions as to the expediency of imposing tax on imports with a view of protecting domestic industries, tl question as to the amout of indirect taxation thereby act ally entailed through augmentation of prices on the eo sumers of protected products constitutes a most importa and interesting feature. Many estimates of the incidenc and extent of such taxes—which consumers pay, but whic the Government does not receive—have from time to tin been made, especially in the United States; but in the al sence of sufficiently precise and unquestionable data the have not been generally regarded as satisfactory, and as reality are often even unqualifiedly denied. ‘The public: tion during the year 1888, under the auspices of the Amer can Iron and Steel Association, of a complete collection « the statistics of the iron and steel industries of the Unite States, for many years down to the close of 1887, embracin both production and prices, with the concurrent prices « British iron and steel from 1830 to 1887,* affords, howeve data so exact, as to permit the relative prices or cost of iro and steel to the consumers of these metals in the Unite States and Great Britain for the years from 1878 to 188 inclusive, to be clearly exhibited ; and the amount of ind rect taxation paid by the people of the former country i the form of increased prices contingent on the duties levie on their importations of iron and steel, to be computed wit undoubted accuracy. The average annual consumption of iron and steel 1 the United States, in one form or another, during the te years 1878 to 1887 inclusive, was 6,000,000 tons of 2,0C * ¢ A Collection of Statistics to the Close of 1887, relating to the Iron at Steel Industrics of the United States; to which is added much Valuable St tistical Information relating to the Iron and Steel Industries of Great Britai ete.,”? by James M. Swann, General Manager of the American Iron and Ste Associution, Philadelphia, 1888, 8vo pp. 24. : PRICES OF IRON IN THE UNITED STATES. 319 ounds each, or a fraction less than thirty per cent of the -orld’s entire product of iron. For the year 1887 the con- amption was more extraordinary—about 9,270,000 tons, or fraction less than forty per cent of the world’s product ; ae domestic product of pig-iron amounting to 7,187,000 ys. The average product of pig-iron in Great Britain or the same period, 1878 to 1887, was a little less than ,400,000 net tons; and her product for 1887 corresponded ery closely to the average of the whole period. It there- ore appears that the consumption of iron and steel in the Jnited States for the ten years in question, was equal to ayenty-five per cent of the average product of Great Brit- ine in that period; and at the present time is nearly equal 9 her entire product. As no other country than Great sritain exports any quantity of iron and steel that bears ny important proportion of the present total consumption £ the United States, nearly every other country importing aore iron than it exports, it would be obviously impossible, herefore, for the United States to procure their necessary upply of these metals, except from their own mines. From 1878 to 1887 inclusive, the average price of an- hracite foundry pig in Philadelphia was $21.87 per ton. Tor the same period, the average (home) price of “ Scotch” ig was $12.94; or, making an ample allowance for freights, . fraction aes $15 per ton when landed in the United les, Deducting this from the price of anthracite foundry ron, as above stated, there was a disparity in price on all the jig-iron consumed in the United States during the ten years tamed, of seven dollars per ton in excess of the average joncurrent market price of pig-iron in Great Britain. If objection is made to the quality of iron above selected or examination, a comparison of the relative prices of the ugher grades will afford results even more significant. Chus, from 1878 to 1887, the average price of the best rolled yar-iron in Philadelphia was $50.30 per ton of 2,240 pounds. (he average price in England of the best Staffordshire 320 RECENT ECONOMIC CHANGES, marked bars was $35.48—a difference of $14 per ton. An here it may be noted that the disparity in the prices of iro in the United States and Great Britain becomes greater, th higher we rise in the qualities considered. But taking th minimum, or only the average difference between the pric of anthracite foundry and Scotch pig, namely, seven dol lars, and applying it to the aggregate consumption of th United States from 1878 to 1887—60,000,000 tons—it fol lows that the American consumers of iron in these ten year paid $420,000,000 in excess of the cost of like quantity t the consumers of Great Britain. Again, the aggregate consumption of steel in the Unite States—domestic and foreign—during the ten years fron 1878 to 1887, was over 20,000,000 tons; or at an average o 2,000,000 tons per annum. ‘Taking here, again, the lowes form of steel—namely, steel rails—for the purpose of ex hibiting the difference in the average price or cost of th American and the British product of steel, it will be founc that the average price of steel rails in the United States during the period named, was forty-four dollars per ton and in Great Britain thirty dollars. With this difference in price, the increased cost of the ten years’ consumption 0: steel by American consumers was $280,000,000. But, as < difference of seven dollars per ton in the comparative price of the iron used for making steel has been already allowec in these computations, the consumption of steel in the United States can only be properly charged with half the disparity in the price of rails above noted, or $140,000,000. Taking, therefore, the lowest grades of iron and steel as the basis for estimating the disparity in the cost of these products in the United States and Great Britain respect. ively, the conclusion is warranted that the excess of cost of iron and steel to the consumers in the United States, in the ten years from 1878 to 1887, was $560,000,000, or at an average of $56,000,000 per annum. On a separate computation, made in the same way for A BURDEN OF INDIRECT TAXATION. 3821 e year 1887, the data being derived from the source be- re mentioned, the disparity of the cost or price of the iron id steel consumption in the United States for that year, in mparison with the prices paid in Great Britain, rises to 30,000,000. The total aggregate revenue derived by the Federal Gov- mment during the fiscal year ending June 30, 1887, from ie duties levied on the importation of iron-ores, pig-iron, 1d all manufactures of iron and steel, was $20,713,000. In llecting this amount of revenue, which constituted less ian one fifth per cent of the excess or surplus revenue of iat year, the United States was, therefore, subjected to an lditional tax of $60,000,000, which was ultimately paid by 1e consumers of iron and steel. Doubtless the difference as largely absorbed in the cost of assembling the material, id by charges contingent on the making of iron and steel | furnaces and rolling-mills which are either out of date > out of place, and was therefore not in the nature of a ounty. Finally, the entire capital invested in the iron industry ‘the United States in 1880—including iron and coal mines id the manufacture of coke—according to the census data ‘that year, could not have been in excess of $341,000,000. he price paid, therefore, by the consumers of iron and steel 1 the United States, in order to sustain the iron-furnaces id rolling-mills of the country for ten years (which indus- ies, as before observed, can not be displaced or destroyed y any possible foreign competition), paying wages some- hat less on the average than those paid to outside labor, us been about sixty-five per cent in excess of the entire ital invested. The magnitude of the economic disturb- ices, in the way of arresting local development and chang- ig the course of the world’s exchanges, occasioned by the mtinuous imposition of such a burden of taxation on an dustry which may be regarded as the foundation of all dustries, has passed into history. What economic dis- 322 RECENT ECONOMIC CHANGKS. turbances will be contingent on the discontinuance of suc taxation, pertain to the future.* THE Economic DISTURBANCES SINCE 1873 CONTIN GENT ON WAR EXPENDITURES are not different in kin from those of former periods, but much greater in degre This subject has been so thoroughly investigated and is s well understood, that nothing more need be said in thi connection than to point out that the men in actual servic at the present time in the armies and navies ef Europe are i: excess of 4,000,000, or about one to every fifteen of all th men of arms-bearing age—all consumers and no producer; The number ‘of men in reserve, who are armed, subject t drill, and held ready for service at any moment, is abou 14,250,000 in addition. Including the reserves, the presen standing armies and navies of Europe require the service of one in every five of the men of arms-bearing age, or on in every twenty-four of the whole population. It is als estimated that it requires the constant product of one peas ant engaged in agriculture, or of one operative engaged ii manufacturing in the commercial and manufacturing state of Europe, to equip and sustain one soldier ; that it require the labor of one man to be diverted from every two hundre acres; and that a sum equivalent to $1.10 shall be deducte from the annual product of every acre. ‘The present aggre gate annual expenditure of Europe for military and nava purposes is probably in excess of a thousand million dollars We express this expenditure in terms of money, but it mean work performed: not that abundance of useful and desira ble things may be increased, but decreased; not that toi may be lightened, but augmented. As to the ultimate outcome of this state of affairs—os tensibly kept up for the propagation or promotion of civili * For a more detailed exhibit of the relative production and prices of iro and steel in the United States and Great Britain, and of the extent to whic the duties on imports augment the price of these metals in the former coun try, reference is made to the Appendix. bil WAR EXPENDITURES. 323 tion—there is an almost perfect agreement of opinion nong those who have studied it; and that is, that the exist- ice and continuance of the present military system of Con- nental Hurope is impoverishing its people, impairing their dustrial strength, effectually hindering progress, driving e most promising men out of the several states to seek raceful homes in foreign countries, and ultimately threat- ung the destruction of the whole fabric of society. The contrast between ancient and modern war, limiting e comparison of results to human suffering, is very great; it in respect to the destruction of values it is not great. wthage is not now destroyed ; but taxation, debt, interest, tional reputation, and private losses represent a vast and thaps greater amount of devastation. Recent authori- 8 estimate the debt of Europe in 1865-’66 to have been },640,000,000; and that it had been increased in 1887— ainly by reason of war expenditures—to £4,684,000,000 22,264,000,000), entailing an annual burden of interest of 113,640,000 ($1,038,000,000).* It is a somewhat popular ea that, as the perfection of machinery for taking away unan life makes war, or the preparation for war, every ar more costly, the burden on the different nations will entually become too heavy to be borne, and thus compel general disarmament. Experience, unfortunately, does t favor any such conclusion. Nations seem always to be le to raise money for war, when they can not for other Tposes; and the classes upon whom the burdens of war st are not the ones who initiate it. The result of increas- 3 war burdens may not, therefore, presage disarmament d peace, but an ultimate terrible social struggle “ between 2 classes and the masses.” * “ Les Debtes publiques Européenes,”” M. N eymarck, Paris, rae) ra) VIII. | The economic outlook—Tendency to pessimistic views—Antagonism of sen) ment to correct reasoning—The future of industry a process of evoluti| —The disagreeable elements of the situation—All transitions in the || of society accompanied by disturbance—Incorrect views of Tolsto' Bencfical results of modern economic conditions—Existing populatic not formerly possible—The Malthusian theory—Present application India—lUllustrations of the effect of new agricultural methods on prodi| tion—No future famines in civilized countries—Creation of new industr pursuits—Doubtful perpetuation of the Government of the United Sta! under old economic conditions—Increase in the world’s supply and cc sumption of food—Increase in the varieties of food—Low cost of subs; ence under attainable conditions in the United States—Savings-ba statisties—Decrease of pauperism—Statisties of crime—Increase in { duration of human life—Extermination of certain diseases—Future | medicine and surgery—Unfavorable results of new conditions of civili| tion—Increase of suicides—Divorce statisties—Change in the condition} the British people since 1840—Wealth of Great Britain—British educati and taxation—Present higher vantage-ground of humanity. | { TE predominant feeling induced by a review and co sideration of the numerous one complex economic chang and disturbances that have occurred since 1873 (as has be detailed in the foregoing chapters), is undoubtedly, int case of very many persons, discouraging and pessimist The questions which naturally suggest themselves, and fact are being continually asked, are: Is mankind bei: made happier or better by this increased knowledge a’ application of the forces of nature, and a consequent ‘ creased power of production and distribution? Or, on t contrary, is not the tendency of this new condition of thin' as Dr. Siemens, of Berlin, has expressed it, “to the destri: tion of all of our ideals and to coarse sensualism ; to agg’ vate injustice in the distribution of wealth; diminish | THE ECONOMIC OUTLOOK. 325 | dividual laborers the opportunities for independent work, ad thereby bring them into a more dependent position; ad, finally, is not the supremacy of birth and the sword yout to be superseded by the still more oppressive reign of therited or acquired property?” | What many think, but hesitate to say, finds forcible ex- cession in the following extract from a letter addressed to ie author by a large-hearted, sympathetic man, who is at ie same time one of the best known of Der erieen journal- tsand leaders of public opinion. After referring to his eat interest in the exhibit that has been made of the ex- ordinary economic disturbances since 1873 and their fect on persons, production, distribution, and prices, he ys , “But what a deplorable and quite awful picture you suggest of the ‘ture! The wheel of progress is to be run over the whole human ce and smash us all, or nearly all, to a monstrous flatness! I get up ‘om the reading of what you have written scared, and more satisfied ‘an ever before that the true and wise course of every man is to get mewhere a piece of land, raise and make what he can for himself, id try thus to get out of the crushing process. It seems to me that hat we call civilization is to degrade and incapacitate the mass of en and women; and how strange and incongruous a state itis! At ‘esame time these masses of men are thrown out of their accustomed ‘aployments by the introduction or perfection of machinery—at that ‘ty time the number of women and children employed in factories pidly increases; an unprecedented cheapness of all necessaries of fe is coincident with an intensification of the bitter struggle for vead and shelter. It is a new form of slavery which, it seems to me, ‘jects itself into view—universal slavery—not patriarchal, but mer- tile. I get yearly more tired of what we call civilization. It seems mea preposterous fraud. It does not give us leisure; it does not jable us to be clean except at a monstrous cost; it affects us with mrible diseases—like diphtheria and typhoid fever—poisoning our ater and the air we breathe; it fosters the vicious classes—the poli- jians and the liquor-sellers—so that these grow continually more rmidable ; and it compels mankind to a strife for bread, which makes ‘all meaner than God intended us to be. Do you really think the "ame pays for the candle’ ?” 326 RECENT ECONOMIC CHANGES. From another, occupying high position as an economi thinker and writer, come also these questions: “What are the social and political results to follow the sweepin; reconstruction of our material prices and our labor system? Are w. not unconsciously, and from the sheer force of these new elements drifting fast into a form of actual socialism—if not exactly such as th doctrinaire reformers preach, yet a form which in respect to materia interests swallows up individualism in huge combinations? Does no the economizing of the new methods of production necessitate thi tendency? And, if so, to what sort of social reconstruction is it likel to lead? Does it mean a future of industrial kings and industria slaves? How far does the new situation harmonize with curren aspirations of labor? Are these aspirations a reflex effect of the ney conditions of industry?” To form now any rational opinion concerning the pres ent and future influences of the causes of the recent an existing economic disturbances, and to be able to return am intelligent answers to the questions and impressions whic] they have prompted or created, there is clearly but one prac tical, common-sense method to adopt, and that is to reviey and analyze the sociological sequences of these disturbance! so far as they have been developed and determined. A review in which sympathetic sentiments are allowed to pre dominate is not, however, what is needed; but rather oni which will array and consider the facts and the conclusion: which can fairly be deduced from them, apart, if possible from the slightest humanitarian predisposition. The sur geon’s probe that trembles in sympathy with the quiverin; flesh into which it penetrates, is not the instrumentalit best adapted for making a correct diagnosis. | Such a review it is now proposed to attempt, and in ‘enter ing upon it the first point worthy of attention is, that witl the exception of a change unprecedented in modern time —in the relative values of the precious metals—all that ha occurred differs from the world’s past experience simply 1 ii degree and not in kind. We have, therefore, no absolutel, unknown factors to deal with; and if the record of the pas INDUSTRIAL AND SOCIAL EVOLUTION, ye not as perfect as could be desired—for it is only within a mparatively recent period that those exact statistics which mstitute the foundations and absolute essentials of all mrect economic reasoning have been gathered—it is, never- eless, sufficiently so to insure against the commission of 1y serious errors in forecasting the future, of what in spect to industry and society is clearly a process of evolu- om. This evolution exists in virtue of a law of constant sceleration of knowledge among men of the forces of ature, and in acquiring a capacity to use them for increas- gor supplementing human effort, for the purpose of in- ‘easing and cheapening the work of production and distri- ition. ‘There is, furthermore, no reason for doubting that iis evolution is to continue, although no one at any one time in foretell what are to be the next phases of development, ‘even so much as imagine the ultimate goal to which such rogress tends. The ignorance, prejudice, and selfishness man may operate in the future, as in the past and at resent, in obstructing this progress; but to entirely arrest , or even effect a brief retrogression, would seem to be iterly impossible.* That many of the features of the situation are, when msidered by themselves, disagreeable and even appalling, m not be denied. When one recalls, for example, through hat seemingly weird power of genius, machinery has been mmoned into existence—machinery which does not sleep, des not need rest, is not the recipient of wages; is most rofitable when most unremittingly employed—and how no 1e agency has so stimulated its invention and use as the op- dsition of those whose toil it has supplemented or lightened -the first remedial idea of every employer whose labor is iscontented being to devise and use a tool in place of a _* Those persons whose business renders them most conversant with pat- ts are the ones most sanguine that nothing is likely to oceur to interrupt even check, in the immediate future, the progress of invention and dis- very. Sr: 328 RECENT ECONOMIC CHANGES. man;* and how in the place of being a bond-slave it seems to be passing beyond control and assuming the mastery: when one recalls all these incidents of progress, the folloy- ing story of EKastern magic might be almost regarded in the light of a purposely obscured old-time prophecy: A certain man, having great learning, obtained knowledge of an in. cantation whereby he could compel inanimate objects tc work for him, commanded a stick to bring him water. The stick at once obeyed. But when water sufficient for the man’s necessities had been brought, and there was threat. ened danger of an oversupply, he desired the stick to stoy working. Having, however, omitted to learn the words for revoking the incantation, the stick refused to obey. Thereupon, the magician in anger caught up an axe. and, with a view to diminish or destroy the power of the stick to perform work, chopped it into several pieces: whereupon, each piece immediately began to bring as much water as one had formerly done; and in the end not only the magician but the whole world was deluged and de. stroyed. * The following is one striking illustration in proof of this statement: After the reaping-machine had been perfected to a high degree, and had come into general use in the great wheat-growing States of the Northwest, the farmer found himself for ten or fifteen days during the harvest period at the mercy of a set of men who made his necessity for binding the wheat con- currently with its reaping, their opportunity. They began their work in the southern section of the wheat-producing States, and moved northward with the progress of the harvesting: demanding and obtaining $2, $3, and even $4 and upward, per day, besides their board and lodging, for binding: making themselves, moreover, at times very disagreeable in the farmers’ families, and materially reducing through their extravagant wages the profits of the crop. An urgent demand was thus created for a machine that would bind as well as reap; and after a time it came, and now wheat is bound as i is harvested, without the intervention of any manual labor. When the sheaf were first mechanically bound, iron wire was used as the binding material: but when a monopoly manufacturer, protected by patents and tariffs, charged what was regarded an undue price for wire, cheap and coarse twine was sub- stituted; and latterly a machine has been invented and introduced, which binds with a wisp of the same straw that is being harvested. | ate 7 IS CIVILIZATION A FAILURE? 329 The proposition that all transitions in the life of society, on those to a better stage, are inevitably accompanied by man suffering, is undoubtedly correct. It is impossible, an old-time writer (Sir James Stewart, 1767) has re- wked, to even sweep a room without raising a dust and easioning temporary discomfort. But those who are in- ned to take discouraging and pessimistic views of recent omnomic movements, seem not only to forget this, but also content themselves with looking mainly at the bad results such movements, in place of the good and bad together. } it is not difficult to understand how a person like the issian novelist Tolstoi, a man of genius, but whose life d writings show him to be eccentric almost to the verge insanity, should, after familiarizing himself with peasant- e in Russia, come to the conclusion that “the edifice of fil society, erected by the toil and energy of countless nerations, is a crumbling ruin.” But the trials and vicis- udes of life as Tolstoi finds them among the masses of assia are the result of an original barbarism and savagery om which the composite races of that country have not t been able to emancipate themselves; coupled with the istence of a typically despotic government, which throt- 3 every movement for increased freedom in respect to th person and thought. But these are results for which e higher civilization of other countries is in no way re- onsible and can not at present help, but the indirect influ- ice of which will, without doubt, in time powerfully affect id even entirely change. No one, furthermore, can fa- iliarize himself with life as it exists in the slums and tene- ent-houses of all great cities in countries of the highest Vilization ; or in sterile Newfoundland, where all Nature is wsh and niggardly; or in sunny Mexico and the islands of ie West Indies, where she is all bountiful and attractive, ithout finding much to sicken him with the aspects under hich average humanity presents itself. But even here the idence is absolutely conclusive that matters are not worse, b00 RECENT ECONOMIC CHANGES, but. almost immeasurably better, than formerly; and th: the possibilities for melioration, through what may be terme the general drift of affairs, is, beyond all comparison, great than at any former period. The first and signal result of the recent remarian changes in the conditions of production and distributio: which in turn have been so conducive of industrial and x cietary disturbances, has been to greatly increase the abur dance and reduce the price of most useful and desirab] commodities. If some may say, “ What of that, so lon as distribution is impeded and has not been correspond ingly perfected?” it may be answered, that productio: and distribution in virtue of a natural law are correlatiy or reciprocal. We produce to consume, and we consum to produce, and the one will not go on independent] of the other; and although there may be, and actuall is, and mainly through the influence of bad laws, mor or less extensive maladjustment of these two great pro cesses, the tendency is, and by methods to be hereafte pointed out, for the two to come into closer and close harmony. | Next in order, it is important to recognize and kee, clearly in view in reasoning upon this subject, what of goo these same agencies, whose influence in respect to the futur is now regarded by so many with alarm or suspicion, hav already accomplished. | A hundred years ago the maintenance of the existins population of Great Britain, of the United States, and of al other highly-civilized countries, could not have been possi ble under the then imperfect and limited conditions of pro duction and distribution. Malthus, who in 1798 was led b his investigations to the conclusion that the population o the world, and particularly of England, was rapidly pressin; upon the limits of subsistence, and could not go on inereas ing because there would not be food for its support, was en tirely right from his standpoint on the then existing economi' | THE MALTHUSIAN THEORY. Sok mditions;* and no society at the present time, no matter ow favorable may be its environments in respect to fertility : land, geniality of climate, and sparseness of population, making any progress except through methods that in {althus’s day were practically unknown. The Malthusian ieory is, moreover, completely exemplifying itself to-day in adia, which is densely populated, destitute in great degree f roads, and of the knowledge and use of machinery. For ere the conditions of peace established under British rule te proving so effective in removing the many obstacles to 1e growth of population that formerly existed, that its in- vease from year to year is pressing so rapidly on the means t subsistence, that periodical famines, over large areas, and scompanied with great destruction of life, are regarded as yinevitable that the creation of a national famine fund by 1e Government has been deemed necessary. t+ *‘ Malthus made no prediction in the strict sense of the word. He had ‘awn out from experience that the human race tended to increase faster than e means of subsistence; its natural increase being in geometrical ratio, and e increase of its means of subsistence an arithmetical one ; so that population id been kept down only in past times by war and famine, and by disease as e consequence of famine. He was bound to anticipate that a continuance of e process would expose the race once more to the operation of these natural 1ecks, or to a descent of the masses in the scale of living, or to both of these ‘ils. That the new experience has been different from the former one, and ‘at owing to various causes the means of subsistence have increased faster an the population, even when increasing at a Malthusian rate, is no disproof rely of the teaching of Malthus. His statistical inquiries into the past re- ain as valuable as ever.’’—‘* Some General Uses of Statistical Knowledge,” OBERT GiFFEN, Loyal Statistical Society of England, 1885. + The present condition of India constitutes one of the most curious and teresting economic and social problems of the last quarter of the nineteenth mtury. While the general average of the population for the whole country 184 to the square mile, there are districts in India in which a population, to » counted by tens of millions, averages from 300 to 400 to the square mile, id others in which a population, to be counted by some millions, rises to 0 and even 900 to the square mile. These latter probably constitute the ost densely-populated districts of the world, the population of the most msely-peopled country of Europe—namely, Belgium—averaging 480 to @ square mile. The total population of India is estimated at 268,174,000. nder the old-time system of native rulers, frequent wars, consequent on for- 302, RECENT ECONOMIC CHANGES, Under different circumstances the correctness of the ideas of Malthus are also being demonstrated in Japan Recent investigations by Prof. Rein, of the University oj Bonn, Germany, show “that with an area about the same as the State of California (157,000 square miles), and with only one tenth of such area practically available for cultiya. tion, Japan supports a population of 36,000,000 almost en. tirely from her own product. Making due allowance for what may be eked out of the nine tenths taken up by for. est, desert, and mountain, it appears that the incredible number of 2,560 inhabitants are supported from each square mile of cultivated land, or four to the acre. It is well known eign invasions and internal race antagonisms, with accompanying famines and epidemic diseases, materially restricted the growth of population. But undei the conditions of peace, with protection for lite and property, which have beer attendant in late years on British rule, the population of India is increasing s¢ rapidly—nearly one per cent per annum—and so disproportionately to thé amount of new and fertile soil that can be appropriated, as to leave but littl margin, under existing methods of cultivation, for increasing the means 0} subsistence for the people. Much new soil has been put under cultivation during the last century of British rule, and a quarter of a million of square miles of cultivable waste yet remains to be occupied; but the fact that the national revenues from the taxation of land have not increased to any extent in recent years is regarded as proof that land cultivation is not increasing ix proportion to the growth of population, and that the limits of agricultural pro- duction are approaching exhaustion. An annual increase of one per cent on the present population of India means at least 20,000,000 more people to feed in ten years, and upward of 40,000,000 in twenty years; and the problem tc which the British Government in India has now before it, and to which it is devoting itself with great energy and intelligence, is,in what way, and by what means, can the character and habits of the people—especially in respect to their methods of agriculture—be so developed and changed that ‘their in- dustry can become more efficient on practically the same soil?”? Much has been already done in the way of increasing and cheapening, through roads, canals, and railroads, the means of transportation, and in promoting irriga- tion and education, and especially the use of new tools and methods for culti- vating the soil. But so many are the obstacles, and so great is the moral iner- tia of the people, that, although remarkable progress has been made, the prospect seems to be that, ‘from decade to decade, larger and larger masses of the semi-pauperized, or wholly pauperized, will grow up in India, requiring state intervention to feed them, and threatening social and financial diftioum of the most dangerous es, fi ] | MALTHUSIAN PRACTICE OF FRANCE. 335 at this can be done on a small scale, but its application 'a nation is marvelous.” Nothing is wasted in Japan; erything is utilized, and all arable land has been brought the highest state of cultivation. But as the existing pop- ation is disproportionate to the maximum product that ‘n be obtained from the land under the most favorable cir- mstances, there is already no margin left above the cost -avery frugal living; and no further large increment of ulation under present agricultural conditions is consid- ed possible. ' France, also, at the present time, according to Yves uyot—one of the leading French economists and states- en—‘is Malthusian in practice though not in doctrine,” id he thus illustrates it : i _ “The virtue of frugality has been preached to the Frenchman, and 'e bourgeois has put this virtue in practice. He has labored, only to ‘able the sooner to rest. The man who is honored has long been the an who ‘does nothing.’ In order to attain this dignity, the bour- ots lived scantily, and sought in economy a security for the future. inginess was the bourgeois’s virtue. Logically enough he stinted mself or children as in everything else. Little by little the peasant ‘oprietors and large farmers perceived and adopted the bourgeois stem. They began with scraping together a few crowns to buy a orsel of land. Then, foreseeing the partition of this land, and dread- g its attendant expenses, which would have swallowed up at a single ilp all the fruits of their toil, they effected a further saving—in chil- ‘n—and contemptuously left it to the poorest classes to burden ‘emselves with large families. We give the proof of this assertion! ne increase of population is slower in France than anywhere else, be birth-rate of France is eighty per cent lower than in England and tussia. For every oe hundred persons in England and France re- ‘ectively in 1801, there were in 1878 two hundred and twelve in Eng- nd, and in France only one hundred and forty-two !”—* Principles ’ Social Economy,” by Yves Guyor (English translation by C. H, eppington, London, 1884). Illustrations confirmatory of the assertion that the food sources of half a century ago would be inadequate for the ipport of the existing population of the leading civilized 334 RECENT ECONOMIC CHANGES. countries are familiar, but the following are so striking ; to warrant renewed presentation : All the resources of the population of the United State as they existed in 1840, would have been wholly inadequai to sow or harvest the present average annual corn or whe crops of the country; and, even if these two results ha been accomplished, the greater proportion of such a cere: product would have been of no value to the cultivator, an must have rotted on the ground for lack of any means adequate distribution; the cost of the transportation of ton of wheat, worth twenty-five dollars at a market, for distance of a hundred and twenty miles over good road and with good teams and vehicles, entirely exhausting i initial value. Fifty years ago corn (maize) was shelled in the nile States by scraping the ears against the sharp edge of. frying-pan or shovel, or by using the cob of one ear { shell the corn from another. In this way about five bust els in ten hours could be shelled, and the laborer woul have received about one fifth of the product. The six gre: corn States are Illinois, Indiana, Missouri, Iowa, Ohio, an Kansas. They produce more than one half the corn raise in the country. ‘These States, by the census of 1880, ha 2,056,770 persons engaged in agriculture, and it would hay been necessary for this entire community to sit astride ¢ shovels and frying-pans for one hundred and ten days ou of three hundred and sixty-five to shell their corn-crop fc the year 1880 by the old processes. | In 1790, before the grain-“ cradle” was invented, a able-bodied farm -laborer in Great Britain could with sickle reap only about a quarter of an acre of wheat in day; at the present time a man with two horses can cu rake, and bind in a day the wheat-product of twenty acre Forty years ago a deficient harvest in any one of th countries of Eur ope entailed a vast amount of suffering an starvation on their population. To-day the deficiency ¢ : CONDITIONS OF FAMINE. 335 ny local crop of wheat is comparatively of little cohse- uence, for the prices of cereals in every country readily ecessible by railroad and steamships are now regulated, not y any local conditions, but by the combined production nd consumption of the world ; and the day of famines for he people of all such countries has passed forever.* The xtent to which all local advantages in respect to the supply nd prices of food have been equalized in recent years through he railway service of the United States, is demonstrated by he fact that a full year’s requirement of meat and bread for n adult person can now be moved from the points of their nost abundant and cheapest production, a thousand miles, or a cost not in excess of the single day’s wages of an aver- ge American mechanic or artisan. The same conditions that one hundred, or even fifty, *It is not a little difficult to realize that the causes which were operative ) occasion famines a hundred years ago in Western Europe, and which have ow apparently passed away forever, are still operative over large portions of he Eastern world. The details of the last great famine in China, which ecurred a few years ago, indicate that over five million people died of starva- ion in the famine district, while in other portions of the empire the crops vere more abundant than usual. The trouble was, that there were no means f transporting the food to where it was needed. The distance of the famine rea to the port of Tientsin, a point to which food could be and was readily ransported by water, was not over two hundred miles; and yet when the oreign residents of Shanghai sent through the missionaries an important ontribution of relief, it required fifteen days, with the employment of all the nen, beasts, and vehicles that could be procured, to effect the transportation f the contribution in question over this comparatively short distance. Relief 9 any appreciable extent to the starving people from the outside and pros- erous districts was, therefore, impracticable. Consul H. M. Jewett, in riting to the United States Department of State, in June, 1887, on the great listress by reason of deficiency of food and threatened famine at that time in \sia Minor states, that while certain districts were greatly suffering for want f grain, an oversupply in other districts was wholly unavailable for lack of acilities for railroad transportation ; a condition of affairs identical with what wevailed in France during the last half of the eighteenth century. Contrast hese experiences with the fact that when Chicago burned up in 1871 a train oaded with relief contributions from the city of New York, over the Erie tailroad, traversed nearly a thousand miles and reached its destination in wenty-one hours after the time of departure. "336 RECENT ECONOMIC CHANGES. years ago limited the supply of food, and made it confes edly inadequate to meet the demands of a population in creasing in a greatly disproportionate ratio, also limited th opportunities for employment to such increasing number apart from agriculture. Nearly and probably fully one hal of all those who now earn their living in industrial pursuit; do so in occupations that not only had no existence, bu which had not even been conceived of, a hundred years agc ‘I'he business of railroad construction, equipment, and oper ation, which now furnishes employment, directly or indi rectly, to about one tenth of all the population of the Unite: States engaged in gainful occupations, was wholly unknow) in 1830. Apart from domestic or farm service little oppor tunity existed for women to earn a livelihood by labora the commencement of the present century; but at the pres ent time more than three million women in the Unite States are engaged in nearly every kind of labor pursued b: men, from tilling the prairies of the West to preaching—; vast multitude that every year grows greater. | The existence of the present populations of Europe ant the United States—nay, more, the continuance and progres of civilization itself —has therefore been made possibl solely through the invention and use of the same labor-say ing machinery which not a few are inclined to regard a likely to work permanent injury to the masses in the future It is still easy to avoid all trouble arising out of the use o labor-saving machinery by going to the numerous countrie. —many of which are rich in the bounties of Nature—whicl do not possess it. But these are the very countries to whicl no person of average intelligence desires to go. | . Restless and progressive humanity generally believes als that the continued betterment of the race is largely condi tioned on the extension of free government based on popu lar representation and constitutional safeguards; and als on the successful continuation of the experiment under sucl conditions which was entered upon by the people of ‘hi { I ONDITIONED EXISTENCE OF THE UNITED STATES. 337 Tnited States just a hundred years ago. But the Govern- 1ent of the United States, under its existing Constitution, as been made possible only through the progress which ian has made in recent years in his knowledge and control f the forces of nature. Without the perfected railroad nd telegraph systems, the war for the maintenance of the ‘ederal Union under the existing Constitution could not robably have been prosecuted to a successful conclusion ; nd even if no domestic strife had intervened, it is more than oubtful whether a federation of numerous States, sovereign n many particulars—floating down the stream of time like n elongated series of separate rafts, linked together—could ave been indefinitely perpetuated, when the time necessary 9 overcome the distance between its extremities for the nere transmission of intelligence amounted to from twenty o thirty days.* In every highly civilized country, where accurate investi- rations have been instituted, the consumption of all the ubstantial articles of food, as well as of luxuries, has, within ecent years, been largely and progressively increasing ; and s the consumption of rich and well-to-do people in such ountries remains almost stationary, inasmuch as they have ways been able to have all they desired of such articles, it s reasonable to infer that this result has been mainly due to he annually increasing ability of the masses to consume. in Great Britain, where this matter has been more thor- yughly investigated than in any other country, the facts re- yealed (as will be presently shown) are most extraordinary. In the case of the population of Paris, M. Leroy-Beaulieu uso reports a wonderful increase in the consumption of food-products since 1866, and states that, if the ravages of the phylloxera (vine-pest) could be checked, and the price * When the battle of New Orleans was fought, in 1815, more than twenty- wo days elapsed before the Government at Washington received any infor-aa- ion of its occurrence, 338 RECENT ECONOMIC CHANGES, of wine reduced, the cost of living for the whole of Franc would be less than it has ever been during the last half century. In the United States the increase in the con, sumption of such pure luxuries as spirits and tobacco ; increasing in a greater ratio than population. In 1888, the consumption of distilled spirits was 1-23 gallons per capita, The consumption of beer has increased from 6°68 gallons per capita in 1878 to 8:26 gallons in 1880, 1018 gallons in 1883, and 12:48 in 1888. The increase in the consumption of tobacco in recent years has also been enormous. In 1868 the recorded consumption was about 1:30 pounds per capita of manufactured tobacco and 16-7 cigars per capita each year, with no consumption of cigarettes. In the ten years ending with 1878, notwithstanding the general depression in business in the later year, the consumption on the whole more than doubled, rising to 2°31 pounds per capita of manufactured tobacco and 40°5 cigars per capita, besides 3-5 cigarettes for each inhabitant. In the ten years ending in 1888, the con- sumption of manufactured tobacco increased about fifty per: cent, or to 3:23 pounds per capita; of cigars, more than fifty per cent, or 61°4 for each inhabitant; and of cigarattes, from 3°D to 29-7 for each person. In these figures, therefore, is to be found a demonstration that the ability of the masses. in the United States in recent years to satisfy their desires has materially increased, and that the condition of the. working-people has at all events been far removed from pri- vation. | Great improvements have been made during the last ten. or twenty years in the breeding of live-stock and its eCO- nomical management, whereby a greatly increased product of animal food can be obtained from a given number with comparatively little increased labor or expense. In the mat-. ter of dairy produce, recognized authorities in England esti- | mate that the average increase in the yield of milk per cow in that country has been at least forty gallons per annum since 1878; and this for the 3,500,000 cows in milk, owned - INCREASED PRODUCTION OF FOOD. 3839 British farmers, “ means 140,000,000 extra gallons of milk er and above what the same animals yielded in 1878; and 6d. per gallon would amount to an extra return of no less an £3,500,000 for the United Kingdom, or £1 per cow. made into cheese, it would mean an increase of 62,500 as.” In the case of both cattle and sheep, it is entirely acticable to get the same weight of meat in an animal two or three years of age as was formerly obtained at ar or five years; and improvement in this early matur- ‘in turn means that the quantity of meat made by e same number of animals is very much greater than rmerly. Furthermore, not only has the supply of food increased, + the variety of food available to the masses has become eater. Nearly all tropical fruits that will bear transporta- m have become as cheap in non-tropical countries as the mestic fruits of the latter, and even cheaper; and the in- eased consumption thus induced has built up new and tensive branches of business, and brought prosperity to e people of many localities that heretofore have had no arkets for any products of their industry.* The knowledge gained in recent years respecting the mderful fecundity of fish, and the conditions for their vorable breeding and preservation, is so complete, that the iim has been made that the world might be fed from the ean alone, and that an acre of the sea properly cultivated capable of yielding more food than ten acres of arable nd. Thirty or forty years ago fish in its most acceptable rm—namely, fresh—was only available to consumers living ‘close proximity to the ocean; but now, fish caught on the iters of the North Pacific, and transported more than * Tn the seven years from 1880 to 1887 the importation of bananas into the tited States increased forty-fold. In that same year twenty-six steamers per mth, together with a large number of sailing-vessels, were engaged in this siness; and in the city of New Orleans more than five hundred people ind employment in the mere handling of this single article of fruit. 23 340 RECENT ECONOMIC CHANGES. two thousand miles, are daily supplied fresh to the marke of the Atlantic slope of the United States, and sea-produc of the coast of the latter, transported two thousand mile are regularly furnished in a fresh condition to Britis markets. During the whole period from 1870 to 1888 the won| consumption of luxuries—of tea, coffee, and ferment« liquors—has gone on increasing, and shows only a certai retardation of the rate of progress, and not a positive declin even in the specially bad years. One point of immense and novel importance in helpir to a conclusion as to whether the race under the condition of high civilization is tending toward increased comfort ar prosperity, or toward greater poverty and degradation, is: be found in the fact which recent investigators have dete mined, namely: that in the United States the daily wag paid, or the daily earning capacity of a healthy adult worke in even the most poorly remunerated employments, is mo than sufficient, if properly expended, to far remove tl! individual recipient from anything like absolute want, suffe ing, or starvation. Thus, in the case of fifty-nine adu female operatives in a well-managed cotton-mill in Marylan’ the per capita cost of subsistence, with a bill of fare en bracing meats, all ordinary groceries and vegetables, mil eggs, butter, fish, and fruit, has been found to be not | excess of twenty cents per day, including the cost of t] preparation of the food and its serving. In Massachusett where the results were derived from the six months’ boar) ing of seventeen men and eight women (three servants), tl men being engaged in arduous mechanical employment and consuming comparatively large quantities of meat, tl daily cost of the subsistence of each individual was twent eight cents per day. In the jails of Massachusetts fh average daily cost of the food of the prisoners and of a employés of the prisons for the year 1883—bread of the be quality, good meats, vegetables, tea, rye-coffee, being fr | i POSSIBLE COST OF SUBSISTENCE. 341 ished liberally—was a trifle over fifteen cents per day for ach person.* In the State of Maine the average cost of the food (raw jaterial) of the convicts in the State-prison, for the seven 2ars next preceding November, 1887, was 11:63 cents per ay; the quality of the food being very good (including ieat or fish, milk, coffee, and molasses every day), and the uantity supplied to each person being limited only to his ¢ her eating capacity. In one of the best conducted almshouses of Connecticut, ve condition of which was carefully investigated by the titer in 1887, the sum of $7,000 per annum, exclusive f interest on the plant and extraordinary repairs, was rund to be sufficient to maintain an average of sixty-five mates, mainly adults, in a building of modern construc- on, scrupulously clean, thoroughly warmed and ventilated, ith an abundance of good and varied food, clothing and iedical attendance, or at an average daily expenditure of rout thirty cents per capita. ‘The average weekly cost of je patients in the six establishments for the care of the isane in Massachusetts for the year 1887 was $3.50 for each atient. _ The evidence, therefore, is conclusive that “an ample ad varied supply of attractive and nutritious food can be inished in the Eastern portions of the United States— id probably in Great Britain also—at a cost not exceeding venty cents per day, and for a less sum in the Western sec- ons of the country, provided that it is judiciously pur- 1ased and economically served”; and the legitimate infer- ice from these results is, that the problem of greatest — * These results are due to the laborious and careful investigations of Mr. Tward Atkinson, of Massachusetts, and were first published in 1884, under e title of ‘‘The Distribution of Products.’”? Together with the results of nilar investigations conducted by Mr. Robert Giffen, of England, they rank tong the most important and valuable contributions ever made to economic d social science. 342 RECENT ECONOMIC CHANGES. importance to be solved in the United States and in Grea Britain, in the work of ameliorating the condition of the honest and industrious poor is (as Mr. Atkinson has ex. pressed it), to find out how to furnish them with ample anc excellent food as cheaply as it is supplied to the inmates o: our prisons and almshouses. ) The facts in regard to the general increase in the deposit: of savings-banks, and the decrease in pauperism, are als entitled to the highest consideration in this discussion. Ih the United States the aggregate deposits in such banks wer probably about $1,500,000,000 in 1888 as compared witl $759,946,000 in 187374; an increase of nearly one hundrec per cent in fourteen years, while the increase of populatio1 during the same period was probably not in excess of thirty six per cent.* A rapid increase in recent years in thy savings-bank deposits of most of the countries of Hurop: is also reported. In Great Britain the increase betweer 1875 and 1885, as regards deposits, was forty per cent, anc in the number of depositors over fifty per cent.; while thi increase in population during the same period was about te! per cent. The capital of all the “trustee” and “ postal ’ savings-banks in Great Britain in May, 1889, was £106,502, 200 ($517,659,892). But, besides these savings-banks, ther are in Great Britain a number of institutions for the pro | * The development of the savings-bank system in the United States up t the year 1888 has been confined almost entirely to the Eastern and Middl States; and in that year such banks were in full operation in only ten State; and only partially so in three other States. These thirteen States were Main: New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, Ne’ York, New Jersey, Pennsylvania, Maryland, Ohio, Wisconsin, and Minn¢ sota. The deposits in these banks, furthermore, by no means represent tl, entire result of the provident savings of the people of the United State: Life-insurance takes a not unimportant share of the savings of the peopl building and loan associations attract some, and cheap and easy investmen! in real estate doubtless take their share of savings. Still, the fact remair that, as shown by the territorial distribution of the savings-banks, a vel considerable field for the extension of the system in the United States sti continues open. } - - SAVINGS-BANK DEPOSITS. 343 motion of thrift, which have no exact counterpart in the United States, and which also hold large amounts of the savings of the people; as railway savings-banks, incorporated provident building societies (with £53,000,000 of funds in 1887), friendly societies, etc., and in all of which the deposits are rapidly increasing. Savings-banks, it may also be men- tioned, have been established in connection with the schools of Great Britain; and the number of schools having such arrangements in 1887 was reported at 2,225. The statistics of the “ postal savings-banks” of Great Britain, institutions not known in the United States, but which seem to find special favor with the British people, are especially worthy of notice. ‘Their increase from 1878 to 1887 has been from 5,831 to 8,720 in number, from 1,892,756 to 3,951,761 in depositors, and from £30,411,563 to £53,974,000 in credits to accounts. ‘ Despite all fluctuations in trade, the deposits in these banks have gone on steadily increasing year by year ; and that this has been due to greater thrift among the working-classes, and not to the growth of a larger class of accounts, is proved by the fact that the average amount to the credit of each depositor was decidedly less in 1888 than in 1878. Or, to put it in another way, the depositors have in- creased in number nearly one hundred and nine per cent, while the deposits have increased by only seventy-seven per cent.” The aggregate capital of all the savings-banks and provi- dent institutions of Great Britain in 1888 was probably about -£215,000,000, or considerably in excess of one thou- sand millions of dollars. . Switzerland and Sweden and Norway lead all the nations of Europe in the ratio of savings-deposits to the population —the increase, comparing 1860 with 1881, having been from the ratio of 4:2 to 35°5 in the former, and in the case of the latter from 6:8 to 18:1. In Prussia, where the savings- banks are used almost exclusively by the poorer classes, the deposits are regularly increasing, and for 1887—’88 were larger than in any previous year. 844 RECENT ECONOMIC CHANGES. ‘The percentage increase in deposits and depositors ir France and Italy in recent years has also been large, and fa in excess of any percentage increase in their population ‘he aggregate savings-deposits in various institutions an¢ societies for the Continent of Europe, in 1885, was estimatec at £338,000,000; or, including Great Beikuen £538,000,00( ($2,614,000 ,000). It is clear, therefore, from these data that the habit and the power of saving have greatly increase¢ in recent years in all highly civilized countries and are still increasing. There are no statistics of national pauperism in the United States, and general conclusions are based mainly on the returns made in the eight States of New York, Penn- sylvania, Ohio, Illinois, Massachusetts, Wisconsin, and Michigan. A report made by the standing committee of the various State boards of charities to the National Conference of Charities in 1887 was, that “except for the insane, whe are everywhere constantly accumulating beyond their due ratio to the whole population, there has never been for a period of five years any increase in the proportion of pau- pers to the population; while for longer periods there has generally been a decrease in the number of the poor as com- pared with the whole population”; and this, too, notwith- standing the very great obstacles which stand in the way of all public and private effort for the checking of pauperism in acountry like the United States, “ which annually receives such armies of poor from European countries, and at home permits Oe to breed so much of pauperism, espe: cially in cities.” | In England, where the population, between 1875 and 1885, increased in a larger proportion than in any previous decade, there was no increase but a very steady decrease of pauperism ; or, from an annual average number of 952,000, or 42 per cent of the whole population in 1870-77 to 787,000, or three per cent of the population for 1880-84. For the year 1888 the number relieved in England and y PAUPERISM AND CRIME. 345 Vales was 2°7 per cent of the population. For Scotland, he corresponding figures are much the same; although he Scotch administration of the poor is totally inde- endent of that of the English. In short, there is no vidence that pauperism is increasing in England and Scot- ad with their recent marked increase in population, or hat the people are less fully employed than formerly ; but he evidence is all to the contrary. In Ireland, the experi- nce has been different. ‘‘ Here, there has been an increase n pauperism, accompanied by a decline in population,” the umber of paupers in receipt of relief, on the 1st of January, 887, being returned as 113,241, as compared with 106,717 n 1885.* Prussia, with a marked increase in population, returned | decrease in the number of paupers receiving relief from ‘ities and towns from 3°87 per cent of the whole number in (884, to 3°65 per cent in 1885. Crime in Great Britain is diminishing in a remarkable nanner. A diminution is also reported in Italy. In the United States, while crime has diminished in a few States, or the whole country it has, within recent years, greatly nereased. In 1850 the proportion of prison inmates was ‘eported as one to every 3,448 of the entire population of he country; but in 1880 this proportion had risen to one ‘or every 855. ‘These results are believed to be attributable nthe Northern States mainly to the great foreign immigra- jon, and, in the Southern, to the emancipation of the legroes. Finally, an absolute demonstration that the progress of nankind, in countries where the new economic conditions lave been most influential in producing those disturbances ind transitions in industry and society which to many seem Taught with disaster, has been for the better and not for *« The Material Progress of Great Britain’? ; address before the Economic ection of the British Association, 1887, by Robert Giffen. 3846 RECENT ECONOMIC CHANGES. the worse, is to be found in the marked prolongation of hi man life, or decline in the average death-rate, which h; occurred within comparatively recent years in these san countries. ‘Thus, the average annual death-rate in Englar and Wales, during the period from 1838 to 1875, was 22°3 p: thousand. From 1876 to 1880, it was 20:08. But, for tl six years from 1880 to 1887, the average has not exceed« 19°3; which means that about 500,000 persons in Englar and Wales were alive at the close of the year 1886 who wou. have been dead if the rate of mortality which prevailed b tween 1838 and 1875 had been maintained.* The ayvera annual death-rate of the city of London for the decade b ginning in 1860 was 24:4 per thousand. In the followir ten years it declined to 22°5. But for the year 1888 it Wi only 18°5 per thousand; a rate lower than any previous recorded within the motopalem area, and which entitl) London to the claim of being the healthiest of all tl world’s great cities. In Vienna, Austria, the death-rate hi decreased since 1870 from 41 to 21 per thousand; a resu that has been sequential to the introduction into the city ‘ an improved supply of good water, and to the extensive coi struction of new and improved houses—fifty-eight per cel of all the houses of Vienna having been built since 184 The average death-rate for the whole United States, for tl census year 1880, was between 17 and 18 per thousanc which is believed to be a less mean rate than that of ar European country except Sweden. | The results of the most recent and elaborate investig tions on this subject, communicated, with data, by M. V. chee, to the “ Bulletin de l’Institut International Stati tique,” Rome, 1887, are, that the mortality of Europe h diminished from twenty-five to thirty-three per cent, ql * It is also to be noted that by far the larger proportion of the = | duration of human life in England is lived at useful ages, and not at the ¢ pendent ages of either childhood or old age. | 7 DECREASE OF MORTALITY AND DISEASE. 347 that the mean duration of life has increased from seven to twelve years, since the beginning of this century. This esti- mate of the rate of improvement for all Europe is higher than the English data would alone warrant, but may be cor- rect. At the same time it is well recognized that through the absence of reliable data it is impossible to speak with certainty as to the decrease in mortality, or as to the expec- tation of life in any country, except in respect to the last forty or fifty years. Now, while improved sanitary knowledge and regulations have contributed to these results, they have been mainly due to the increase in the abundance and cheapness of food- products, which in turn are almost wholly attributable to recent improvements in the methods of production and dis- tribution. But, whatever may have been the causes of these changes, they could not have occurred without an increase of vitality among the masses. Again, if civilization is responsible for many new dis- eases, civilization should be credited with having stamped out, or greatly mitigated, not a few that a century ago were extremely formidable. Plague and leprosy have practically long disappeared from countries of high civilization. . For the five years from 1795 to 1800 the average annual number of deaths from small-pox in the city of London was 10,180; but for the five years from 1875 to 1880 it was only 1,408. Typhus and typhoid fevers are now known to be capable of prevention, and cholera and yellow fever of complete terri- torial restriction. T’yphus fever, once the scourge of Lon- don, and especially of its prisons, is said to have now entirely disappeared from that city. Anesthetics have removed the pain attendant upon surgical operations; and the use of antiseptics has reduced the mortality contingent upon the same in the larger hospitals; or, taking the experience of Germany as the basis of comparison, from 41°6 in 1868 to 4°35 per cent in 1880. According to Mr. Edwin Chadwick, “in the larger schools of the districts of the poor-law union 348 RECENT ECONOMIC CHANGHS. of Great Britain . . . the chief diseases of children are noy practically abolished. ‘These institutions may be said to he children’s hospitals, in which children, orphans of the low. est type from the slums, are taken in large proportions with developed diseases upon them, often sie to die from con. stitutional failure alone. Yet in a number of these separati schools there are now no deaths from measles, whooping) cough, typhus, scarlatina, or diphtheria, . . « while the gen eral death-rate of the children in these schools is now les than one third of the death-rates prevalent among thi children of the general population of the same ages.” | The science and practice of medicine and surgery are furthermore, “ undergoing a revolution of such magnitud) and importance that its limits can hardly be conceived Looking into the future in the light of recent discoveries, i does not seem impossible that a time may come when th causé of every infectious disease will be known; when al such diseases will be preventable or easily curable; wher protection can be afforded against all diseases, such as scar let fever, measles, yellow fever, whooping-cough, ete., 11 which one attack secures immunity from subsequent con tagion; when, in short, no constitutional disease will be in curable, and such scourges as epidemics will be unknown ‘These results, indeed, may be but a small part of what wil follow discoveries in bacteriology. ‘The higher the plane 0 actual knowledge the more extended is the horizon. Wha has been accomplished within the past ten years as os | knowledge of the causes, prevention, and treatment of dis ease far transcends what would have been regarded a quarte, of a century ago as the wildest and most impossible specula tion.”—Pror. AusTIN Fiint, M. D., The Forum, Decem ber, 1888. ) Dealers in ready-made clothing in the United States as sert that they have been obliged to adopt a larger scale o sizes, in width as well as in length, to meet the demands a the average American man, than were required ten year DISEASES OF CIVILIZATION. 349 igo; and that in the case of clothing manufactured for the pecial supply of the whole population of the Southern sec- ions of the country, this increase in size since the war, at- ributable almost entirely to the increased physical activity yf the average individual, has been fully one inch around he chest and waist. Varieties of coarse clothing, as the yrogan shoe and cotton drills, which before the war were old in immense quantities in this same section of the coun- iy, have now almost passed out of demand, and been super- seded by better and more expensive products. The Ameri- an is, therefore, apparently gaining in size afd weight, which could not have happened had there been anything like retrogression, or progress toward poverty on the part of the masses. On the other hand, there are certain sequences of the jew conditions of civilization pertaining to individual and societary life which are less flattering and promising. In she same ratio as the facilities for the production and distri- ution of commodities have been expanded and quickened, che necessity of untiring attention to business, as a pre- ‘equisite for success, has been increased, and the intensity wt competition stimulated. The forces of business life are a0 longer subject to the control of the man of business. Having subordinated the lightning to the demands of busi- ness, business must go at lightning speed. “The electric Message is superseding the leisurely letter. There is now no quiet waiting for foreign correspondence. ‘The cable mnounces a bargain struck on another continent, and the same day, before the goods have been even shipped, the sargo is sold and the transaction ended.” If one trader a APPENDIX. 475 worked under such bad conditions that England is forced to import __iron-ores from Spain, from Elba, and from Africa.* Her coking coals are also produced under conditions of great disadvantage, which have _ been thus described in a recent (1886) report by Mr. J oseph D. Weeks to the United States Geological Survey. Referring to the most im- portant British coke district—the “ Durham ”—from which nearly one half of the coke-supply of Great Britain is derived, he says: “The typical coke of Great Britain, as the McConnellsville is of the United States, is the Durham coke; it is high in carbon, low in ash, ete.; the veins are low, the thickest measuring but six feet; the miner is neces- 4 sarily compelled to lie in a constrained and cramped condition upon his back while working, never standing upright while in the face; the pits are deep and the mines fiery, with all the danger to life and health arising from these conditions. The best coal is obtained from the lower seams.” The Durham cokes are furnished at a lower price than any other in Great Britain or in Europe. The average earnings of those who work in them are from seventy cents to $1.10 perday. The cost of coke in Durham is not given. The price of coke for Bessemer pig in Cardiff, Newport, and Swansea is stated to be $3.51 to $3.57. In South Wales the cost of a ton of coke is given at $1.70, and in Bel- gium at $2.57. At McConnellsville, Pa., the rates of wages are con- siderably higher, but have been somewhat depressed of late by reason of the use of natural gas at Pittsburg. For several years, according to Prof. Pumpelly’s investigations, the value of coke at the oven throughout the United States was $1.22 per ton; a striking example of production at low cost—i. es of coke—with exceptional high wages, owing to the better conditions under which the work is performed. The data for the cost of iron-ore and steel in Great Britain and in the ‘United States, and for the comparison of the rates of wages, are not at * The importation of iron-ores into the chief iron-producing countries of Europe dates from about the year 1866, when the Bessemer process had be- come fairly established. In that year Great Britain imported little or no ores, the only European countries receiving supplies of foreign ores being France, Germany, Belgium, and Austria. The aggregate imports of those four countries amounted at that time to nearly 900,000 tons, or about one sev- enth of the total now imported into the chief iron-making countries from out- side sources. In 1868 the iron-ore imports of Great Britain were returned at 114,485 tons. In 1877 they exceeded 1,000,000 tons. In 1880 they suddenly Tose to 2,634,000 tons; and for 1887 they amounted to 3,762,000 tons. That large areas of’ consumption in the United States also found it profitable to use foreign ores of iron is shown by importation into the couutry, in the single _ year 1888, of 1,770,947 tons, notwithstanding a duty on the same of thirty- eight per cent. 476 RECENT ECONOMIC CHANGES. present available. Itis alleged, however, that the abundance of our sup- ply of ores and coal, lying near the surface and in close proximity, will enable the American manufacturer to pay about double wages, in com- parison with Great Britain, and yet to bring out the iron at the furnace at the same cost, so far as the element of labor in it is concerned. Under the instructions lately given by Congress to the Bureau of the Statistics of Labor, and by means of the investigations which are now in progress, it may be possible at no distant day to be able to compare the cost of production of iron and steel and other crude or partly manufactured materials in the United States in terms of days’ labor, or by the quality and intensity of the labor, as well as in terms of price, or by the rate of wages; the latter being an entirely fallacious standard, seldom of any value in making the comparison of the rela- tive power of one country, as compared with another, to supply goods or wares of any kind. For, as a rule, the rates of wages in all industries to which modern machinery, tools, and inventions have been applied, are in inverse proportion to the cost of the product, so far as it is made up of the wages of labor—the lowest cost being the correlative or complement of the highest rates of wages, where the commerce be- tween several countries, or between the sections of one country with another is free from artificial obstruction. Doubtless a sudden remis- sion of the existing duties now levied by the United States on the importation of iron and steel would result in the suspension of some furnaces—perhaps a considerable number—which are out of date as respects location, construction, and management. Such establish- ments are now kept alive only by the disparity in the price of their products in the markets of the United States and of Great Britain. Concurrently, also, there might be a sudden and excessive demand upon the iron-mines and furnaces of Hurope, especially of Great Britain, for their products. But this last could not be met without altering all the existing conditions of the iron industries of those countries. Miners and metal-workers are not trained in a day; and those who are in such work would immediately feel the effect of the additional demand and would call for higher wages; while the disadvantages of production in Great Britain would be rendered even greater, through the necessity of ordering larger and larger supplies of ore from Spain, Hlba, and Africa. The supply in Spain being now limited, it could hardly fail to happen that a heavy advance in the price of iron would occur throughout Europe. The sudden appearance of a free customer, whose consumption is already forty per cent of the total production of the world, for any considerable part of the iron and steel supply from other countries, would have an effect on the conditions of the work- APPENDIX. 47% men in Kurope very greatly disproportionate to the quantity called _ for. Such an advance in the price of these products on the other side of the ocean would immediately protect all the well-placed iron-fur- - naces, mines, and metal-works of the United States. Their control of their own markets would then be established ; stability would be given to the conditions of business, and the American consumers of iron, who outnumber the makers of iron by twenty to one, would be relieved from their present disadvantages in competition with other countries. It is well known and may be considered a well-established fact that, in almost all the arts of using iron and steel, the people of the United States excel those of Great Britain. Their heavy exports of lo- comotives, of cutlery, axes, sewing-machines, pumps, and the like, bear witness to this fact. ‘The only reason why they have been unable thus far to build ocean steamships has been the disparity between Europe and America in the price of materials. This would be removed for all time by the heavy advance in the price of such materials in Great Britain and on the Continent, which would certainly ensue from the increased demand contingent on the abrogation of import duties under consideration; and then would follow such a participation by the United States in the commerce and carrying-trade of the world as her natural advantages entitle her to claim and expect. Holding, as her people now do, the paramount position in the production of iron and steel at low cost, but at higher rates of wages than are elsewhere paid for similar service, the time would soon come when all questions of competition in the production and supply of iron and steel would cease. The people of the United States, furthermore, are not subjected to the burden of excessive taxes in ratio to their product, their gross taxes being even much less per capita than those of any other country. They are free from the burden of standing armies, the cost of which is represented only in small measure by the amount paid to support - them, but is felt in greatest measure by the withdrawal of men at the must productive period of life to waste their time in camps and bar- racks. They would, accordingly, assume that advantage of position to which they are entitled in the civilized world and for supplying the non-machine-using nations with every kind of manufactured products which they may require. It may be held by those who would oppose the remission of all du- ties upon iron, steel, machinery, and the like, that, unless this artificial stimulus of a high tariff had been given to those branches of indus- _ try in the United States, they would not have been developed to any- _ thing like the extent which has occurred. This isa pure hypothesis. There is no foundation, in fact, for any such theory. The iron and 473 RECENT ECONOMIC CHANGKHS, steel industry in the United States is older than the Constitution, and its growth has been coincident with the growth of the country. Doubtless the variations in the tariff, as well as in the demand for railway purposes, have subjected this branch of industry to greater fluctuations than almost any other. Whether or not the product of iron and steel would have been as great as it is now without the inter- ference of the Government is to-day a matter of no consequence. It is a dead issue. The question now is, What is the cost to the people of the United States of this disparity in the price of iron and steel which is due to the maintenance of a tariff—a tariff not for the purpose of build- ing up or starting an infant industry, but for the mere purpose of main- taining the present conditions, whatever they may be? .When viewed in this light, the cost of the system may prove to be much more than it is worth to the people subjected to its burden, for it isa tax upon productive capital and productive power laid at the very foundation of all industry. The disparity in the price of rails costs every mile of railway in the United States a certain amount of money over and above the cost of laying rails, for example, in India, over which wheat is to be transported that comes into direct competition with American wheat in foreign markets. The people of the United States being deprived of the power to build steamships for ocean service, and the disparity in the price of mate- rials increasing the cost of their railways by ten per cent and of their mills and factories by twenty, and even in some cases by fifty per cent, as compared with the cost of the mills and works of their direct com- petitors in other countries, the latter are thus enabled to supply the non-machine-using nations of the world with the greater part of their necessary goods and wares, and are sending to the United States a constantly increasing proportion of goods and wares for its consump- tion, in spite of the high taxes levied on their importation. The American people are thus subjected to a very heavy and con- tinuous loss. Their power of controlling their home markets is im- paired; they lose the advantage of their position and of their oppor- tunity to supply the vast non-machine-using countries of the world, containing over a thousand million population, with goods and wares made at high wages and low cost, for the reason that, in consequence of a disparity in the price of the material which lies at the foundation of all arts, they have by their own act given supremacy to Great Britain, in the lower cost of her investments, for meeting this de- mand. INDEX. Africa, South, trade depression in, 2. Agricultural implements, displace- ment of labor in manufacturing, 52 ; labor in England six hundred years ago, 402. Agriculture, British, recent losses of, 87; depression of, in Europe, 177; future of, 464; disinclination for pursuit of, 353; of Europe, four causes for depression of, 89; pop- ulation engaged in the United States, 178; Russian, restrictions on, 280. America, surplus wheat product of, 178. Anesthetics, reduction of mortality through use of, 347. Anglo-French treaty of 1860, results of, 263. Animal products, changes of, 195. _ Animals, essential difference from men, 400; limitation of wants of, 400. Apothecary, modern, changes in busi- ness of, 54. Argentine States, bounties on export of meat, 309; meat product of, 160; progress of, 455. Armies of Europe, cost of, 322; num- bers of men in, 322. Art, impolicy of taxing, 390; stimulus to industrial development, 390. Artists, increased opportunities for employment of, 388. Arts, disappearance of certain, 55. curious price Asia Minor, famines in, 335. Associations, co-operative, 451, 452. Atkinson, Edward, investigations of, 209, 258, 342, 409, 412; on the cost of food, 258, 341; on the cultivated land of the United States, 176; on the economic value of a glass of beer, 405. Australia, commercial distress in 1885, 2; recent progress of, 454; wages of labor in, 362. Bacteriology, discoveries in, 348. Bananas, consumption of, 339. Banking, concentration of, 99. Bank-notes, reduced cost of making, 53. Bank of France, gold and silver re- serves in, 211; new notes of, 53. Barter, three forms of, 219. Bastiat’s law of the distribution of capital, 370. Bear, W. E., on the meat-supply of the United Kingdom, 158. Beaulieu, Leroy, on the cost of living in France, 404. Beef-slaughtering, economics in, 97. Beer, economic value of a glass of, 405. Beet-root sugar, bounties, European, experience of, 295; production of, 127, 129, 180. Bell, Sir Lowthian, on the prices of iron, 139, 480 Bessemer steel, importance of the in- vention, 43. — Bessemer steel rails, average prices of, 1883-’86, 43; comparative prices in the United States and Great Britain, 820, 472. Bi-metalism, 225. Bi-metallic controversy, relation of, to Civilization, 256. Bleaching-powders, recent prices of, 158. Bombay, recent economic experiences of, 434, Boot and shoe industry, displacement of labor in, by machinery, 52. Boot and shoe manufacture, division of labor in, 94. Bottles, displacement of labor in mak- ing, 52. Bounties, on shipping, 309; sugar- | production, 126, 128, 295, 299; ulti- mate effect on production, 306. Brazil, commercial policy of, 272. Bread, cost of manufacture and distri- bution, 58; question of future scar- city, 177 ; reduction in the cost of, in Great Britain, 85. Bridge, Brooklyn, economic experi- ences of, 385. Bright’s disease, increase of, 350. British commercial sentiments, change in, 266. British exports and imports in 1887, comparison of volume and vaiues, 84, British industries, growth in fifty years, 62. British people, purchasing power of, 306. British shipping, supremacy of, 318. Brooklyn (N. Y.) suspension-bridge, 335, 386. Bullion, increased facilities for mov- ing, 213. Business, modern conditisns of, 107; new conditions entailing disease, 350. RECENT ECONOMIC CHANGKS. Butter, artificial, 449. Buttons, changes in manufacture and style, 389 ; cuff, conditions of manu- facture, 92. California, minimum cost of growing wheat in, 98. Canal, Liverpool and Manchester, 112. Canals, in France, recent experience of, 113; in the United States, com- parative rates on, 1138; return tothe use of, 112; Suez, economic influ- ence of, 29. Capital and labor, present relations of, 91, Capital, available, in the world, 217; impairment in value of, 418; in- vested in sugar-refining, 92. Capitalistic system of production, ad- vantages of, 399; law of destruction of, 369. Carpenters of Paris demand protec- tion, 281. Carrying-trade, on land, revolution of, 40; on sea, 87. ; Cattle, new methods of fattening, 463 ; use of sugar for feeding, 801. Century, nineteenth, place in history, 465. Cereals, British, recent decline in the prices of, 90; regulation of the prices of, 45; world’s surplus, where stored, 45. Chadwick, David, on the laboring- classes of Great Britain, 356. Cheese, improvements in manufacture of, 162; recent price experiences of, 162. Chemicals, recent decline in prices of, 158. Chemnitz, condition of labor in, 865. Chewing-gum, price and demand for, 199, Child labor, increase of, 95. Children, reduction of death-rate in British union poor-schools, 348. Chili, deposits of nitrate of soda, 156. INDEX. China, Cochin, commerce and trade of, 276; inferiority in tea-produc- tion, 158; recent famines in, 71, 385. | Chinese expulsion from the United States, 286; immigration, appre- hension of, 374. Cigars, increase in consumption of, 337. Cinchona- trees, cultivation of, in the East Indies, 154. Cincinnati, market prices for 13884~’87, 201. Circulation, monetary, of the United States, 221-223. Cities, aggregation of population in, 352; tendency of population to, 432. Civilization and barbarism, changes in the conditions that define, 64. Civilization, high, antagonistic to the use of silver, 255; modern. tendency of, 324; present, made possible by machinery, 336. Civilizations, money of, varying, 253. Clearing-houses, recent statistics of, 214. Cloth, cotton, reduction in the prices of, 258. Clothes, cheap, purchasers of, 431. Clothing, cheap, benefit of, 480; pro- duction of materials for, 258 ; ready- made, increase in sizes demanded in the United States, 348. Coal, displacement of use by natu- ral gas, 56; economy in consump- tion of, 150; power evolved from consumption of, under modern con- ditions, 88; production in Russia, 280; product of the United States, 149; effect of machinery on, 50; re- cent production and price experi- ences of, 148; reduction in con- sumption of, by ocean-steamers, 38 ; world’s product of, 149. Coal-tar colors, economic influence of, 55. Coffee, recent production and price ex- periences of, 152; variations in price 481 and consumption of, 880; world’s annual production of, 152. Coinage of the world, tri-metallic, 254. Coinage, silver, of the United States, 228. Coin, small use of, in bank transac- tions, 214. Coins, use of small, when necessary, 252. Colonial policy of France, 276. Comity of nations, decline in, 285. Commerce, foreign, of European coun- tries, 290; how the tele&raph has revolutionized, 32; ocean, of the world, how carried, 314. Commercial intercourse of nations, how restricted, 316. Commodities, divergence in prices movements, 200; modern condi- tions, for cheap production, 74; per capita consumption of, in Great Britain, 856; prices of, and the de- cline in the value of silver, 250 ; sup- ply of, governed by different laws, 31. Compensations for economic disturb- ances, 430. Competition, social influences of, 452. Connecticut, cost of food in alms- houses of, 841; decline in land- values in, 425; purchasing power of wages in, 405, 409. Consumption, increase in consequence of reduction of price, 383; of com- modities, stimulants to, 380; rela- tions to production, 330; relation to price, 379, Co-operation, analysis of, 452. Co-operation and the labor problem, 103, 104. Copper, modern cost of producing, 135; production and price-experi- ences of, 184; ‘* syndicate,” history of, 137. Copper money, conditions for use of, 258. : Coral, decline in prices of, 195. Corea, monetary experiences of, 253. 482 Corn, export of American, to Italy, 91; product of the United States, 334; shelling of, 334. Corn laws, effect of repeal of, 260. Cotton, how bought, 110; manufact- ure of the United States, relation of wages and service, 373; purchas- ing power of, at different periods, 220; recent price-experiences of, 179; reserve stocks of, 182; world’s supply of, 181. Cotton cloth, relations of price and. consumption, 382. Cotton fabrics, recent increased con- sumption of, 180. Cotton-growing, conditions for profit- able, 100. Cotton-mills of the United States, di- vision of employés in, 95. Cottun piece-goods, exports of, to India, 240; prices and product, 1865-85, 220. Cotton-seed oil, use of, 159. Countries, average earnings of people of different, 362; non-machinery- using, exempt from economic dis- turbances, 68; of greatest progress, 454. Cracker-bakeries, consumption of tin- plate by, 108. Credit and capital, effect on trade of the world, 217. Crime, decline in Great Britain, 345, 359; increase in the United States, 845; recent statistics of, 345; rela- tions to education, 359. Crises, financial, of the last century, 813 periodicity of, 81. Crop failures in 1879-’81, 6. Cuba, improved production of sugar in, 102. Culture, influence of, on consump- tion, 77. Cycles of panic and speculation, 80. Dakota, wheat product of, 57, 170. Death-rate, decline in, 346. RECENT ECONOMIC CHANGES. Debtors, relative burdens of, 220. Demonetization of silver, meaning of term, 280. Diamonds, market for, in the United States, 197; recent production and prices, experiences of, 196, 197; South African supply of, 196; value of, exported from South Africa, 197. Discontent, societary, causes of, 407. Diseases, children’s, extinction of, 348 ; of civilization, 849, 350. Distress of agricultural laborers in Europe, 376-378. Distribution, modern economies in, 110; of products, disturbance in old methods of, 100. Disturbances, economic, since 1873, explanation of, 61; industrial, in connection with the invention of stocking-making machinery, 867. Dollar, silver, of the United States, experience of, 227. Earnings of people of different na- tionalities, 362. Earth and rock, reduction in the cost of excavating since 1859-’60, 50. East, possible future trade of the, 461. Economic, disturbances since 1873, 1; outlook, the, 824, 427; peculiarities in the United States, 387. ‘‘ Economist,’’ London, tables of index prices, 122. Economies, influence of small, 85. Educational system of Great Britain, 859. Egypt, reclamation of, 459. Eight-hour law, 489. Electricity, industrial use of, 66; in- fluence of prospective use on labor conditions, 400; relations to trade, 65. Employment of labor, changing con- ditions of, 375. Engines, compound steam, economi- eal results of, 38. | England, banking deposits of, in INDEX. 1874-1884, 212; depression in, 18; pauperism in, 344; present popu- lation not formerly possible, 330. Europe, development of trade under conditions of free exchange, 263 ; liberal commercial movement in, from 185470, 261, 262; meat, sup- ply of, 161; military system of, 323 ; present wheat product of, 179; re- actionary commercial policy of, 287, 292; recent experience of their mercantile marines, 311. Evolution, illustration of societary re- form through, 362; material, pros- pect of continuance, 67 ; of industry and society, 327. Exchange, evils from fluctuations of, 238; fluctuations in, an invariable accompaniment of trade, 238. Export bounties on sugars, 126-129. Failures in business, ratio of, 351. Famines, prevention of, 45. Farming capital, losses of, in Great Britain, 87. Farm-laborers, English, wages of, 88. Fashion, influence of, on the price of wool, 188. Fish, cultivation of, for food, 339; fe- cundity of, 339; low prices of, in 1884, 2; recent decline in prices of, 163. Flint, Prof. Austin, on progress in the treatment of diseases, 348. Flour, displacement of labor in manu- facture of, 52; labor, cost of, under modern conditions, 58; low cost of ocean transportation, 165; manu- facture, new conditions of, 101. Flour-mills and bakeries, consolida- tion of, 101. Food, equalization of prices and sup- ply, 835; increase in variety avail- able, 339; reduction in the cost of, 258. Foods, increase in consumption of, in the United States, 380. 32 483 Forces, controlling business life, 349. France, commercial antagonism with Italy, 274; decline of land-value in, 424; depression of agriculture in, 177; depression of industry in 1883-88, 9; exemplification of the Malthusian theory in, 333; exper- ence with shipping bounties, 310, food experiences in the eighteenth century, 71; indemnity paid to Ger- many, 226; monetary condition of, 215; slow increment of popula- tion in, 833; statistics of wages in, 410; taxation in, 24. Freedom, commercial, curious illus- tration of the benefits of, 49; effect of, on the masses, 363. Freight rates, great reductions on American railroads, 40. Freights, ocean, reduction of, 38; rail- roads, average rates in the United States, 1883-87, 164; railroad, de- cline in rates of, 164; recent price, experiences of, 163, 164. Frenchmen, frugality of, 333. French sugar bounties, 129. Gain, greatest, that has accrued to the the masses, 444. Gas, natural, use of, 56; relation of consumption to price, 382; water- oil, advantages of, 57. Georgia, decline in the value of land, 426. German Empire, comparative indus- trial results in, 62. Germany, concentration of banking in- terests in, 99; experience with sugar bounties, 129; financial and indus- trial depression in, in 1873, 4; gold and silver bank reserves, 211; mon- etary system, change in, 224, 225; in 1878, 225; old coinage of, 228 ; re- cent social changes in, 404; savings- banks in, 212; state regulation of in- dustries, 282; Sunday labor in, 269. Gibbs, Mr. H. H., on the formation of prices, 125. 484. Giffen, Robert, economic investiga- tions of, 119, 152, 166, 841, 358, 361. Gilchrist-Thomas steel process, 43. Glass-making, American, wages in, 371. Gold and prices, 123. Gold and Silver Commission, British report of, 189, 190. Gold and silver unlike other com- modities, 217. Gold, monetary stock of, 208; present annual production of, 210; relation to British exports and imports, 212; saturation-point of, in exchanges, 254; scarcity theory, 205-208 ; sta- bility in cost of production, 256 ; two functions of, 220; world’s an- nual product of, 207, 208. Government relations to national life in Great Britain, 360. Grain-cradle, results of’ invention of, O84, Grain, local differences in European prices, 46; variations in prices of, in the seventeenth century, 46. Grancey,.M. de, study of Ireland, 377. Great Britain, co-operative societies of, 103; cotton-manufacturing in- dustry of, in 1888, 184; monopoly of tin-plate manufacture, 146; na- tional income of, 357 ; present con- ditions of wheat-supply, 49; rela- tions of government to national life, 360; statistics of income-taxes in, 304, Grosvenor, William M., on changes in prices, 411. Guild system of the middle ages, re- vival of, 281. Handicraft products, recent price ex- periences of, 191. Handicrafts, destruction of, 96. Hand-labor occupations, permanent condition of, 68. Hemps, Manila and Sisal, prices of, 204. RECENT ECONOMIC CHANGES. Hides, decline in prices of, 198. History, extraordinary commercial, 277; place in, of the period from 1860 to 1885, 27. Hog-products of the United States, decline in export of, 317. Holland and the silver question, 249. Hops, recent price experiences of, 195. Horse-flesh, consumption of, in France, 449. Hours of labor, 414, 415. House-decorative industries, 388. Human race, increased power of, through railroad agencies, 41. Illinois, decline in land-values in, 426. Illiteracy, decline of, in Great Britain, 360. Immigration, restrictions on, 285. Index-number system of prices, 120. India, British exports to, 240; In- dia Council bills, influence of, on price of silver, 229; increased ex- ports of, 240; Malthusian theory exemplified in, 831; new indus- tries of, 243; periodical famines in, 331; population of, 382; prod- uce, recent change in the condi- tions of distribution, 31; produc- tion of tea in, 153; railroad system of, 171; reduction of length of voy- age to and from, since 1869, 29; stability of prices in, 193; sugar production of, 305; wheat produc- tion of, 168. Individualism of machinery operatives, 93. Indo-China, commercial experience of, 276. Industrial depression in England, 18; recognition of a universal cause of, 253; since 1888, relative severity of, in different countries, 8; specula- tion as to causes, 19, 22. Industrial development, modern ra- pidity of, 63. Industrial expansion of Germany, 62. a INDEX. Industrial over-production, 73, 74. Industries, iron and steel, of the United States, 318; extinction of certain, 54, 55. Industry, artificial, failure of, Europe, 290. Inflation of business prior to 1873, O. Intelligence as an element of discon- tent, 401. Interest, reduction in rates of, 421. International balances, economy in settling, 213. Inventions, destructive influence of, 369; of the future, 65, Ireland, causes of discontent in, 377, 403. Tron and steel, comparative cost in the United States and Great Britain, 820, 467; effect of cheapening on railroad construction, 49: enhanced cost of, in the United States, 318, 820. Iron,annual consumption in the United States, 320, 469; cause of recent de- cline in prices, 139; comparative consumption in the United States and Great Britain, 318; decline in the use of the puddling process, 141 ; industry of the United States, capi- tal invested in, 321, 473. Iron, production and price - experi- ences, 1387-140; production and prices in the United States from 1872 to 1889, 12-14; prospective production, 392; purchasing power in 1865 and 1885, 221; world’s con- sumption of, 393; world’s produc- tion, 188. Iron, pig, increased economy and efficiency of production of since 1860, 28; increase in world’s prod- uct, 1870-1883, 49; lowest prices in American history, 12. Italian agriculture, how affected by the Suez Canal, 33. Italy, commercial antagonism with in 485 France, 274; depression of agricult- ure in, 178, Ivory, increase in the price of, 195. Jails of Massachusetts, cost of food- supply for, 340. Jam manufacture in Great Britain, 802. Japan, agriculture of, 832; exemplifi- cation of the Malthusian theory in, 332; limits of population in, 333. Java, recent calamities of, 250. Jefferson’s opinion on the results of traveling, 403. Jewelry, capital invested in manufact- uring, 92; economy in manufact- ure of, 52. Jews, business peculiarities of, 453. Journalism, recent development of, 389. Jute, recent product and prices of, 188. Knowledge, influence of increased, 324. Krapotkin, Prince, on the division of labor, 94. Labor and capital, present relations of, 91. Labor, average saving of labor in Eng- land since 1880, 29; comparative efficiency and earnings in different countries, 410, 411; decrease of, in the management of vessels, 35 ; dis- content of, causes for, 3645 displace- ment of, by machinery, 51, 364; division of, in the manufacture of boots and shoes, 94; efficiency of, in iron production, 140; extreme di- vision of, 897; foreign contract in the United States, 374; grievances in Europe, 375; increased efficiency in cotton manufacturing, 181; in cotton - mills of the United States, 50; increased productive power in coal-mining, 150; reduction of hours by legislation, 438 ; Sunday, in Ger- 486 many, 415; tendency for transfer to higher grades, 890. Laborers, in Great Britain, improved condition of, 355; lowest, change in relative numbers of, 407; manual, slow advance in culture of, 77. Land, area of cultivated, in the United | States, 176; decline in value and use in France, 878; decline in value of, | 423; fertile, influence on material progress, 454, Lard, supersedure of by cotton-seed oil, 56. Latin Union, action of, in relation to silver, 227. Laundresses of Paris demand protec- tion, 281. Law of the use of metallic money, 251. | Lead, limited uses for, 148; recent production and price-experiences of, 147; world’s production of, 148. Leather, recent decline in prices of, 198. Lexis, Prof., on recent price move- ments, 125. Life assurance in Great Britain, 359. Living, reduction in the cost of, 337. Looms, power, displacement of’ labor by, 365. ' Losses, occasioned by changes, 111. Luxuries, increase in consumption of, 337. economic Machinery, antagonism with machin- ery, 96; counteraction of the evils of labor-displacement by, 388; dis- placement of labor by, 51; effect of labor-saving, on wages, 871; epoch of efficient, 61; evolutions of from labor discontent, 327; for Panama Canal, labor power of, 50 ; influence of, in equalizing wages, 105; inten- sified influence in recent years, 61 ; labor-saving, stimulus to invention of, 68; most expensive of all prod- ucts, 91. RECENT ECONOMIC CHANGES. Mackerel, recent price-experiences of, 163. Madder, destruction of the business of growing and preparing, 55. Maine, purchasing power of wages in, 412, Malthus’s views on population, 330. Man, and animals, essential difference between, 400; change in condition of, through prices, 115. Manchester, recent commercial policy of, 266. Mankind, what is to be the future of, 427; recent increase in control of the forces of Nature by, 27. Manufactures, tendency to consolida- tion, 96. Manufacturing, modern system of, 98. Marines, mercantile, of Europe, 311. Marriage-rate, decline of, in Europe, 350. Maryland, cost of living in, for oper- atives, 340. Massachusetts, apportionment of pop- ulation in, 352; cost of dietary for prisoners in, 340. Masses, greatest accruing gain of the, 444, Matches, increased consumption _ through exemption from taxation, 384. Meat, dressed, restrictions on sale of, in the United States, 284; frozen, extent of trade in, 161; improve- ments in the production of, 339; new sources for supply of, 159. Meats, cost of ocean transport, 38 ; re- cent price-experiences of, 158. Mechanics, practical, imperfect de- velopment of, 400. Medicine, prospective progress in, 348. Merchandise, cost of transporting in the United States, 164; sales by samples, 110. Metals, precious, change in relative values of, 224; inquiry respecting INDEX, changes in their relative values, 189, 190; reduction in the price of, 259, Mexico, silver product of, 235; trade of, how affected by decline in sil- ver, 237. Middle-men, disappearance of, 107, 110. Milk, increase in product of, 338. Millennium, the, not an economic fac- tor, 395. Milling, experience in the United States, 79. Mills, flour, increased cost of, 101. Millstones, discontinuance of’ use of, 55. Minnesota, industrial and social legis- lation of, 287. Money, devices for economizing, 211 ; purchasing power in England at different periods, 413; use of, in va- rious civilizations, 253. Money-order postal system, 216. Monopolies, conditions of trade, 74. Mortality, decline in rates of, 347. Nail-trade of the United States, 79. Nations, increasing antagonism of, 285. Nature, penalty for subordinating her forces, 366. Netherlands, industrial depression in the, 265. New England, abandonment of farm properties in, 352. Newfoundland, economic ances in, 38. New Orleans, battle of, 337. New York, apportionment of popula- tion in, 352. New Zealand, cheese product of, 163 ; meat product of, 161. Nickel, recent price, experiences of, 147; increased supplies of, 147. disturb- Occupations, increasing diversity of, 388. ! 487 Ocean-freights, recent experiences of, 165. Octroi duties in France, 281. Ohio, land-values in, 426. Oil, cotton-seed, economic influence of discovery of, 56; mineral, pro- duction and price, experiences of, 181; Standard Trust Company, 132. Oils, vegetable, recent price-experi- ences of, 159. Oleomargarine legislation, 449. Operatives, loss of independence through machinery conditions, 95. Operative, work of, in cotton-mills of the United States in 1840 and 1886, 50. Opium, recent price movements of, 199; substitutive use of quinine, 394. Over-production, definition of, 25, 70. Panama Canal, power of machinery employed in excavating the, 50. Panies, periodicity of, 80. Paper bags, economy and use of, 53. Paper, increase in the manufacturing capacity of the United States, 54; recent decline in prices of, 155. Paris, municipal taxation of, 24. Patagonia, development of, 455. Pauperism, statistics of, 344. Paupers, modern treatment of, 414. Pessimistic views of social progress not warranted, 324, 363. Petroleum, recent price - experiences of, 131. Phylloxera, ravages of, in France, 23. Pills, manufacture, by machinery, 54. Pins, manufacture of, in 1876 and 1888, 59. Plague, extinction of, 347. Poor, are they growing poorer? 418 ; British, improvement in condition of, 857; destruction of, through pov- erty, 453; of England forty years ago, 402; of London, 876. Population, annual movements of, 488 401; effect of labor-saving ma- chinery on, 873; existing, of Great Britain, not possible a hundred years ago, 830; rural, of France, 852; sparse, relation to wages, 343 ; unemployed, statistics of, 435. Portugal, economic situation of, in 1887~’88, 10. Postage, effect of reduction of, in the United States, 383. Postal-money, use of, 216. Postal savings-banks, 342. Postal statistics, economic teachings of, 389. Poverty, new factors in the problem of, 485; the destruction of the poor, 453. Price, meaning of the term, 207; re- lation to consumption, 379. Prices, American, general average in 1860 and 1885, 119; average, from 1849 to 1885, 116; calculation of, by the ‘¢ index’? system, 120; cause of recent decline in, 123 ; curious cause of depression in, 73; desirability of high, 447; effect of fluctuations of, on business, 115; effect of railroads and steamships on, 46; enhance- ment of retail, 450; exceptional changes in, 194; factors occasioning decline in, 202; formation of, on what depends, 124; in England in 1872, 4; in semi-civilized countries, 103; in the days of Abraham, 115; is decline of, an evil? 250; not regulated by statutes, 75; periodical changes in, not due to natural laws, 83; permanent decline of, in case of commodities, 188; phenomenal re- duction of, 257; recent depression of, 114; relation of, to volume of circulating medium, 222; retail, recent price-experiences of, 192; two fundamental causes influencing, 124. Print-cloths, increased power of pro- duction of, 28. RECENT ECONOMIC CHANGKS. Product, law of division of, between capital and labor, 370. Production, anarchy of, 379; average increase in the power of, in recent years, 28; concentration of, a neces- sity, 98; economic conditions of new methods, 73; examples of ex- cessive, 71; modern conditions for economic, 96 ; relations to consump- tion, 330. Production and distribution, new conditions of, 28; recent saving of time and labor in, 28. Products, changes in the methods of distribution of, 106. Profits, destruction of, by excessive production, 78; great reduction of, in business, 107; reduction of, un- der modern conditions, 255, 418. Property, conditions of transmission of, 852; destroyed by civilization, 369; small accumulation of, by the masses, 445. Prophecies, Benner’s, 81. Protective duties, recent influence of, on European commerce, 292. Prussia, statistics of savings-banks in, 3438. Purchasing power of the people, in what consists, 215. Quicksilver, production and price ex- periences of, 144. Quinine, economic experiences of, 153, 395 ; increased consumption contin- gent on reduction of price, 85; new sources of supply of, 154, 155. Rags, recent decline in prices of, 155; substitutes for, in paper-making, 155. Railroad construction, numbers em- ployed in, 336; recent reduction in the cost of, 49. Railroad freight service of the United States, cost of, in 1887, 41. Railroad, Illinois Central, relation of INDEX. wages to cost of service, 3872; serv- ice, world’s distribution of, 42 5 system of the world, equivalent work of, in 1885, 41; mileage, world’s, in 1889, 41. Railroads, American, average freight charges of, 40; comparatively re- cent use of, 42; tendency of, to con- solidate, 96. Railway system of India, 171. Railways, rapid development of, in India, 171. Reforms, industrial, in Great Britain, 399. Rent, as a cause of social distress, 451; increase in expenditures for, 413. Rents, house, stability of rates for, 192. Retail and wholesale prices, inequality of, 450. Retail trade, revolution of, 109. Rich, are they growing richer? 418. Roller- process for grinding wheat, 100. Rougham, English village of, in the time of Henry III, 402. Roumania, tariff legislation of, 277. Routine, subordination to, in all sys- tematized employments, 396. Rupee of India, purchasing power of, 245. Russia, abandonment of land by peas- antry, 10; civil society in, 3829; grain-harvest of 1888, 48; recent commercial policy of, 264; sugar bounties in, 129; trade depression in, 10. Sail-cloth, diminished manufacture and use of, 56. Sailing-vessels, decrease in number and use, 39. Saltpeter, decline in price of, 156, 158. Salt-trust, influence on prices of chem- icals, 158. 489 Sandwich Islands, sugar product of, 300. Sanitary reform, results of, 347. Sarsaparilla, prices of, 193. Sauerbeck, M., on recent price-experi- ences, 116, 122. Savings-bank deposits in England, 342; Europe, 342; the United States, 342; Savings-banks of Germany, 212; of Massachusetts, rates of interest in, 421; statistics of, 342, 344. Saxony, employment of children in, 95; hand-loom weavers of, 368. Schools, British, poor-law union, ex- tinction of children’s diseases in, 348; public free, in the United Kingdom, 359. Sea, as a source of food, 339 ; carriage, recent cheapening of, 36. Seal-fishery of Newfoundland,changes in, 39. Securities, moneyed, rates of interest on, 422. Self-denial, economic illustration of, 405. Servitude, natural, 445. Sheep, recent increase of, 160. ‘¢ She-towns,’’ 95. Ship-building, effect of excessive, on freight charges, 165. Shipping statistics of Great Britain, 313. Shoddy, use of, 187. Shoemaking, industrial experiences of, 397. Shoes, division of labor in the manu- facture of, 95. Siemens’ tank - furnace, economy of, 52. Silk, adulterations of, 188; product and prices of, 188. Silver and India wheat, 244, 246, 248. Silver, bar, prices from 1873 to 1888. Silver, bullion, price from 1865 to 1873 ; decline in price of, 144; pro- industrial 490 duction of, 144, 210; increase in the product and use of, 232; lowest price of, 227; possible future value of, 459; sales of, by Germany, 226, 2273; unstable equilibrium of, 229. Smith, Adam, description of the pin manufacture in 1776, 60. Socialism, definition of, 405. Societary changes, a factor of discon- tent, 404. Society, civil, Tolstoi’s views on, 329; highest honors of, 869; human, what constitutes ? 430 ; modern, com- plex character of, 466. Soda, nitrate of, recent price-experi- ences of, 156. Soetbeer’s tables of prices, 200. Soil, abandonment of cultivation of, 852, 853. Spain, commercial policy of, 265; eco- nomic condition of, 10. Speculation, reduction of the elements of, 82. Spices, increased consumption in the United States, 384. Spindles, cotton, increase in revolution of, 204. Spirits, distilled, decline in British consumption, 861. Standard of value, preference for a single, 257. Statistics, the foundation for economic reasoning, 327. Statute enactments, powerless to ar- rest industrial transitions, 366. Steam-engine, future entire displace- ment of, 65. Steam-engines of the world, horse and man power of, 44. Steamers, ocean, comparative efficien- ey of, before and after 1875, 387; screw, modern equipment and cost of, 37. Steel, Bessemer, durability of, 141; value of discovery of, 48; compara- tive price in the United States and RECENT ECONOMIC CHANGES, ‘Great Britain, 318; consumption of, in the United States, 320; sub- stitution of, in place of iron, 44, 140. Stocking-loom, story of invention and use, 366. Strikes, influence on the invention and use of labor-saving machinery, 68. Stuttgart, Chamber of Commerce, re- port on trade, 292. Suez Canal, economic effect of its con- struction, 29. Sugar, beet-root, artificial stimulus to production of, 296-298; bounties, evils of, 302 ; comparative consump- tion by different countries, 308; conference, ‘international,’ 306, 3807; decline in price, 1880-1887, 126; effect of bounties on produc- tion and price, 126; increase in production of, 128; modern planta- tion production of, 102; multiple uses of, 301; peculiarities of con- sumption in the United States, 387 ; production of the world, 128 ; profit in refining, 92; refining, magnitude of capital invested in, 92; Sandwich Islands product, 800; small profit in refining, 98. Suicide, increase of, 350; statistics of, 850. Sunday labor, 269. Surgery, prospective advances in, 348. Swank, James M., report on the iron and steel industries of the United States, 318, 467. Tallow, recent decline in prices of, — 159. Tariff, protective, influence of, in Ger- many, 294; recent French, 278. Tariffs of Continental Europe, 270, 273; taxes on iron and steel im- ports into the United States, 322. Taxation, burden of indirect, 321; INDEX. illustrations of increased consump- tion contingent on reduction of, 884, 885; indirect, burden of, 318. Taxes, incidents of indirect, illus- tration of, 818; on food, 448; on iron and steel in the United States, 321, 467. Tea, importation, changes in methods of, 107; increased consumption in Great Britain, contingent on tax reductions, 884; recent production and price, experiences of, 153, Teachers, increased opportunity for employment of, 388. Telegraph, influence of, on the con- ditions of business, 32; rates, re- cent reductions in, 166. Telegraphy, future wider utilization of, 66. Telephone, creation of employments by, 387 ; future utilization of, 66. Textile manufactures, division of la- bor in, 95. Time, economic advantages from the | saving of, 445. Tin, production and price-experiences of, 145. Tin-man, changes in his business, 107. Tin-plate, economy in the manufact- ure of, 108. Tin-plates, improvements in manu- facture of, 146; production and price-experiences of, 106, 146. Tobacco, increase in consumption of, 338. Tolstoi’s views on civil society, 329. Tolu, balsam, production, prices, and uses of, 199. Tonnage, ocean, over-supply of, 168 ; statistics of British, 35. Towns, movement of population to- ward, 353. Trade, changes in, through the agency of the telegraph, 82; depression of, since 1873, 1; emancipation of, from restrictions, 261; European, | 491 rapid development under commer- cial freedom, 263; experiences from 1872 to 1886, 15, 18; foreign, of Europe, recent changes in, 288, 289; governmental interference with, 260: illustrations of the smoothness of, under natural conditions, 47 ; increase in the occupation of, 351; influence of fluctuating paper money on, 239; international con- ditions of, 247; monopolization of, 97; of the world, how carried on, 217; restrictions, logical results of, 280; retail, changes in, 109; volume of, not contracted by depression in prices, 82. Transportation, effect of reduction of cost of, 460. Travel, educating influences of, 401. Treaty, Anglo-French, of 1860, 261, 262. Trinidad, restrictive tariff of, 265 ; small retail purchases in, 253, Trusts, formation and extension of, 294; origin of, 74; problem of, 75, 76. Trust, Standard Oil, 132. United Kingdom, daily exchanges through clearing-houses, 214; in- crease in specific productions, 876. United States, annual increase of busi- ness in, 85; conditions of existence in, 337; curious monetary experi- ence of, 221; decline of its mercan- tile marine, 314; financial crisis in 1873, 5; gold stock per capita, 215; idle population of, in 1885, 18 ; illus- tration of depression of business in 1884—’85, 9; increased tariff rates of, 278; movement in 1854 for free- dom of trade, 261; pauperism in, 344; production and consumption of paper in, 155; railroad freight transportation of, in 1887, 41; re- cent advance of wages in, 408; re- lation of the silver dollar to its 492, coinage system, 227; relative ex- ports of, 178; sugar bounties in, 300; the world’s disturbing factor, 454; use of shoddy in, 187. Value-perceiving faculty, 453. Value, preference for single standard of, 257. nS Vessel, sailing, disappearance of the, 39. Vessels, economy of construction and management of, 35; large, 99; small, unfitness for cheap trans- portation, 99. Victoria, colony, wealth of, 455. Vineyards, destruction of, by disease, in France, 23. Volume of circulating media, does it control prices? 222. Wages, advances in rates of, 406 ; com- parative advance of, in England, France, and the United States, 408; curious use of high, 77; equaliza- tion of, in different countries, 105; highest, where paid, 862; influence of machinery on, 487; in the iron- furnaces of the United States, 321; of cotton-mill operatives in Rhode Island in 1840 and 1886, 50; on wheat-farms in the United States and Prussia, 59; proportion enter- ing into the cost of pins, 60; rela- tion to the cost of living, 404; rise of, concurrent with the fall in prices of commodities, 417 ; source of pay- ment, 417; their relation to money, 253. Wages and machinery, 371-878. Walker, Joseph H., investigations in respect to business success, 352. Wants, creation of new, 389. War expenditures, 322. War, Franco-German, economit re- sults of, 268. Wars, contrast between ancient and modern, 8238. RECENT ECONOMIC CHANGES. Watches, American manufacture of, 383. i Wealth, accumulation dependent on value-perceiving faculty, 453; equalization of, in Great Britain, 858; influence of protective tariffs on the distribution of, 294; muta- bility of, 352. Wealth of France, 354; Great Britain, 304, Wealth of Great Britain, changes in items of, 428. Wealth of the United States, 384. Western Union Telegraph Company, work of, in 1887-88, 67. West Indies, recent experience in sugar production, 180; sugar prod- uct of, 801. Whalebone, increase in price of, 195. Wheat, acreage, recent reduction in Great Britain, 88; American, re- duction of export prices of, 89; American, variations in price from 1879-’81, 7; comparative cost of growing under different conditions, 98; exhaustion of value by trans- portation, 334; extraordinary ex- portations of the United States in 1879-81, 6; future supply of, 176; Indian, cause of increased supply, 244; labor cost of, in Dakota, 57; lowest recorded price of, 167; movements and prices in 1888, 47; over-production of, 173; phenome- nal decline in, 175; price increased by taxation, 448; product of Eu- rope, 179; of the United States, 169; recent price - experiences of, 166-176. Women, employment in textile in- dustries, 898; increased opportuni- ties for employment, 336. Woolen industry of Ireland, condi- tion of, 878. Wool, production and prices of, 184, 187. INDEX. 493 Wool-prices, how influenced by the | World, aggregate capital of, 217 ; use of shoddy, 187. trade of, how carried on, 217; Wools, Australian, decline in the what it did not have fifty years prices of, 188. ago, 64, - Work, average daily hours of, in 1860, 415 ; limitation by statute, 438. Work breeds work, 394. Zollverein, German trade, conditions Workingmen, increase in the com- of, in 1870, 262; proposed Euro- forts of, 77. pean, 295. 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