2. (ell S3 =3 1 -I Schoenhof Wages and trade ^ - ( 3 - ? THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES WAGES AND TRADE Manufacturing Industries AMERICA AND IN EUROPE I J. SCHOENHOF llTHOI! OK " WOOL AND WOOLLENS," AND Of" THE DESTRUCTIVE INFLUENCE OF THE TARIFF ' WITH AN INTRODUCTION BY R. R. BOAVKER NEW YORK PUBLISHED FOR THE NEW YORK FREE-TRADE CLUB BY G. P. PUTNAM'S SONS 27 & 29 WEST 23D STREET 1884 QUESTIONS OF THE DAY— NO. X. The Destructive Influence of the Tariff upo Manufacture and Commerce, and the Figures an Facts Relating Thereto. By J. Schoenhof. izmr cloth, 75c.; paper, 40c. * " He states his case clearly, and his argument is well fortified with fif ures and worthy of attention." — Globe Democrat, St, Louis. ; " Both friends and opponents of his doctrine will find the slender vo ume a useful book of reference, owing to the admirably arranged tables an statistics." — Picayune, New Orleans. " Mr. Schoenhof brings forward ' figures and facts' that will be of ir terest and value even to those who disagree with his conclusions. His a]: pendixes, in particular, group data not easily to be had elsewhere." — Sta New York. "As an argument it is absolutely conclusive. * * * "Wg gay en phatically of the whole pamphlet, read, mark, learn, and inwardly dige it. " — Literary Chtirchinan. " Packed with well-arranged figures and condensed arguments. "- Nation. j " We recommend the book to all who are interested in this great que? tion of the day." — A'ews and Cotirier, Charleston. " Books of this kind cannot be too widely distributed and careful!' read, and not only read but thoroughly studied." — Times, Kansas City. " An able presentation of the anti-protection argument. * * * Jt j well to read it and get a clear idea of the free-traders' case." — Times, Tro} " These figures •■ * * ought not to be hastily thrown aside. * * We cordially welcome to the literature of political economy this brochure c Mr. Schoenhof." — Post, Hartford. G. P. PUTNAM'S SONS, New York and London. vVAGES AND TRADE Manufacturing Industries AMERICA AND IN EUROPE J. SCHOENHOF THOR OF "wool AND WOOLLENS," AND OF " THE DESTRUCTIVE INFLUENCE OF THE TARIFF' WITH AN INTRODUCTION BY R. R. BOWKER NEW YORK PUBLISHED FOR THE NEW YORK FREE-TRADE CLUB BY G. P. PUTNAM'S SONS 27 & 29 WEST 23D STREET 1884 Press of G. P. Putnam'. Sons New Yc-rk HF xc>n INTRODUCTION. The question of labor and wages is the one question which ought most to concern American economists and American states- men. For the great body of our seventeen million male workers are wage-earners averaging less than ^400 per year; and "the greatest good of the greatest number " is the purpose of the American nation. The protectionists have claimed that a protective tariff raises wages. This is the "last ditch " of their argument. There began to be doubt about the truth of this claim. Consequently the New York Tribune^ the organ of the protectionists, sent a special cor- respondent to Europe to obtain evidence in support of it. Mr. Robert P. Porter, who had been special agent of the Census as to statistics of wealth and secretary of the Tariff Commission, was secured for this purpose. Mr. Porter did what he was sent to do. He presented a picture of the distress of England under free trade and of the prosperity of France and Germany under a protective tariff that was most of a surprise to those who knew most of those countries. But if a European traveller should to-day visit the cotton-mills of Connecticut and inquire how much women earn there ; inves- tigate the tenement-houses of New York and the making of cigars and artificial flowers ; look into the Alaska St. slums of Philadel- phia, and finally ask in Altoona and Pittsburg and other centres of "protective" industries, in which the vestiges of the riots of 1877 are still to be seen, how many mills are shut down, and how many hands are out of work, and how much the rest are earning, he could easily convince foreigners that democracy is a failure and the United States the unhappiest of nations. " A lie which is all a lie can be met and fought with outright, But a lie that is part a truth is a harder matter to fight." iii 720620 WOT. ii«»w ^^ IV To meet these part-truths of Mr. Porter's, Mr. J. Schoenhof, whose papers on " The Destructive Influence of the Tariff on Manufacture and Commerce" have won deserved attention, was asked to show the other side of the case. This he has done by the statistics and facts now gathered together in these pages. ' There is nothing more difficult than for the fair-minded econo- mist to obtain absolutely certain comparisons of wages. Differ- ences in hours of labor, in the purchasing power of money, in neighborhood and circumstance, in the division of labor in the same trades, in the modes of production, in the use of machinery, are a few of the confusing elements. Mr. Schoenhof, a citizen of the United States, a native of Germany, a merchant in and manu- facturer of woollen goods, an employer of labor, a student of economics and of industrial conditions, is, however, well qualified to obtain the actual facts, and he carefully gives the authorities for his tables. Mr. Porter has in some cases done the same ; in other cases it is evident that a careful selection of fields of inquiry supplied data such as he desired. The general truth underlying the specific truths and half-truths brought forward by these two witnesses is, as discerned by free- trade economists, that wages are higher but product cheaper in free-trade England than in protected France and Germany ; and that wages are in some cases lower, in others the same, in most happily higher, but product dearer (where raw materials are taxed, though cheaper where they are not taxed) in the United States than in England or any other country. I may add one striking confirmation of the principle that wages may become higher as prices become lower. More than a generation ago, in Plymouth Co., Mass., the tack-makers were paid from 2 to 3 cents per thousand, and earned ^1.25 to $1.50 per day ; the men who now tend the labor-saving machines earn from $4 to ^6 per day, though they are paid only f cent per thousand. Mr. Schoenhof's deductions in his previous book are that wages are determined more by the standard of living among wage- earners than by any other consideration ; that this standard in- creases when all agencies have free play, but decreases under re- strictive laws ; that where the standard of living is highest, pro- ductive power and inventions are fullest and production conse- quently cheapest. These deductions are borne out by the statistics in the following pages. I have had myself practical acquaintance with labor in America and in England, and have seen that the nervous force, the ingenuity, and other qualities of the American workman enable him to work so much more effectively as to present this paradox of higher wages and cheaper production. The conclusion is that the natural prosperity of the wage- earners in the United States has been decreased by " protective " restriction and would be increased by free trade. That wages are higher in England under free trade than in the old "protective" days is shown in some of Mr. Porter's own figures, and the differ- ence is something more than can be accounted for by other reasons. Give American labor free raw materials to work upon and it will get out of the vastly increased product then exported a very much greater wage. Certainly in purchasing power, probably in actual dollars and cents also. I heard, in Berlin, from a United States officer of legation, a startling commentary on the effect of " protection " on purchasing power. He said it was common talk in that city that the cost of feeding, clothing, and housing the German army was so much greater under the high tariff as to overbalance all that the government gained from it. Mr. Porter's ears were not open to such suggestions. Mr. Porter overlooked another significant fact, which I learned at first-hand. In one of the Peabody tenement buildings in London, meant for the lowest wage-earners, the average earning of heads of families was 23s. 7|d. per week, or about $300 per year, more than in some of our protected industries. Mr. Schoenhof gives the facts which show that the decadence of English commerce exists chiefly as a desire of American pro- tectionists. The development of England in the prosperity of her people during the free-trade era is shown by the facts adduced by Mr. J. S. Moore from the Financial Reform Almanac. In 1840, the birth-rate in England and Wales was 31.93 per thousand of popu- lation and the death-rate 22.86, showing a balance of 9.07 ; in 1882, the birth-rate was 33.46 and the death-rate 1931, a balance of 14.15. Since 1840, the consumption of articles which indicate "solid comfort " has increased fourfold : In 1840, the consump- tion of currants and raisins was/^r capita 1.45 lbs., in 1882, 4.32 ; raw sugar, 15.20 and 62.10 lbs. ; rice, .09 and 13.49 lbs. ; tea, 1.25 and 4.67 lbs. In 1840, there were in England and Wales 27,187 committals for crime out of 15,730,813 population, or i to 580 ; in 1882, 15,260 out of 26,406,820, or only i to 1,730. From 1849 to 1882 the recorded paupers had decreased from 934,419 (or i to 18.26) to 799,296 (or I to 33.14). When we add to such evidence, the fact that less than 700,000 workers in this country depend on " protected " industries, that 2,000,000 depend on unprotected mechanical industries, and that 7,670,000 are unprotected farmers, it is a wonder that American wage-earners have so long suffered themselves to be misled. Many workingmen sympathize, many farmers do not sympa- thize, with the views of Mr. Henry George as to the evils of our land system. But workingmen and farmers can alike agree with Mr. George that the protective system is holding us all down. Mr. Schoenhof might well dedicate his book, as free-traders hope they are dedicating their work, " to the greatest good of the greatest number." R. R. BOWKER. WAGES -AND TRADE IN MANUFACTURING INDUSTKIES IN THE UNITED STATES, GREAT BRITAIN, FRANCE, AND GERMANY. I propose to give the wages and earnings of working-classes employed in factories by competing nations. Little progress can be made toward a final adjudication of the tariff question until the bugbear of " European pauper labor " is removed from the vision of our public men. I shall bring the matter in divisions to the reader, arranged according to the importance of the various branches. The tables which I shall give are from the best authorities I can find in the United States, England, France, and Germany. My authorities are : FOR THE UNITED STATES. Reports of the Bureau of Statistics of the United States. '' " " " of Labor of Mass. JNew Jersey. FOR GREAT BRITAIN. Leone Levi, " Wages and Earnings." Statistical Abstract for the United Kingdom. • Government Reports to Parliament. Mulhall, Dictionary of Statistics, 1884. Consular Reports to the Department of State of the United States. FOR FRANCE. Moreau de Jonnes, " Statistique de 1' Industrie de la France." Othenin d' Haussonville, " La Vie et les Salaires a Paris." Report of Consul- General Walker. FOR GERMANY. Report of Consul Du Bois and other Consuls to Department of State. Tables of Statistics of Wages of " Concordia." Reports of Chambers of Commerce to Secretary-General. Dr. Heinrich Frankel, " Die tagliche Arbeitszeit." Statistisches Jahrbuch fur 1883. I, THE TRUE CONDITIONS OF BRITISH TRADE, In order to prove that the present tariff system of the United States ought to be continued in force, the New York Tribune sent ex-tariff-Commissioner Mr. Robert P. Porter abroad, to collect statistics in the interest of " protection " ; or rather what "American Protectionists " are pleased to call protection, " equal protection to every thing," manufactured goods and raw materials alike ; frequently .giving heaviest rates to the crudest and coarsest fabrics, and lower rates as fabrics increase in fineness and finish- ing process. Advocates of this doctrine seem to forget that the heavy tax on the raw material and on the crude fabric makes the " protective tariff " on higher branches absolutely nugatory. By this system nearly two thirds of our vast industries have to suffer at home from all the disadvantages arising from open markets for the competing products of foreign industries, without at the same time sharing in the advantages of free trade for their own prod- ucts, made of these high-taxed materials.* In order to save this * An analysis of the census report on manufacturing industries in the United States, gf iS3o, and a comparison with that of i860, gives some interesting facts. The large increase from $1,885,000,000 to $5,369,000,000 is ascribed to protection by that school of economists who claim high and burdensome taxa- tion as synonymous with protection. Now "manufactures" of the census reports have to be subdivided into three classes : 1. Agricultural or mining products, or labor services with small additions of materials, or work that has to be done on the spot, uninfluenced by any pos- sible furtherance by the aid of the law-making power. This class contains such items as : Blacksmithing, Bread and Crackers, Carpentering, Coffee-Roasting, Cooperage, Fertilizers, Flouring, Food and Canning, Liquors, Lumber, Slaughtering, Sugar Refining. 2. Manufactures which are dependent on manufactured material. These materials are so largely protected that the product has no benefit from mongrel system of taxation from annihilation, which it so richly deserves, the whole arsenal of the dictionary has been ransacked to find names and sentences so as to make it more acceptable than experience has proven it to the consumer and the producer. Neither " horizontal reduction " nor " incidental protection " will help the case, when the march of events categorically demands a thorough and intelligent reform of the tariff, so as to give relief to our manufacturing industries, and encourage the development of the higher branches. To bring all industries of a country into healthy development, attention and encouragement must be given to the higher grades. To these the lower branches must be made tributary. If the higher branches are starved by excessive taxation on their mate- rials, these materials will suffer equally. Other protective nations have shaped their fiscal policy to this end a generation ago, while the tariff, as the additional cost of the material is often higher than the " pro- tection" on the product amounts to. 3. Manufactures of first process, which are wrought from raw materials, such as textiles, crude iron and steel, etc. They bear the following relation, according to a careful classification which I have made, i860 1880 Class I. $657,000,000 $1,800,000,000 " II. 462,000,000 1,790,000,000 " III. 770,000,000 1,800,000,000 Only the last class has been deriving any great benefit from protection. But the advantage is equally illusory, if brought to the test of analysis. The tax on raw material has dwarfed the development of this class more than any other. Lines which depended on their own exertions have far exceeded the proportion of development of class III. But this class III, if reduced to the valuations of i860, would certainly not amount to more than three fourths of that sum. The inflation of prices in consequence of the much higher cost of the material, with the exception of cotton goods perhaps, would fully account for this difference. Besides, it must be borne in mind, that iSSo was the notorious boom-year. Were we to reduce values of census report to the valuations of 1879 or of 1884, we could certainly not claim more than $1,350,000,000 of protected industries as against the same class in 1S60 with $770,000,000, an increase of 75 per cent., whilst our population has increased 50 per cent, in the meantime. Comparing this increase of our productive strength with the rapid advance of other nations not so hampered, we can only deplore the blindness of our law-makers and people in obstinately refusing to strike at the real source of the evil : the stupid tax on raw materials. we persist in the reverse. The present stagnation is too eloquent a monitor. It would be well to seek other means of relief, than picturing the miseries and suffering of free-trade England, and painting in glowing colors the condition of protected Germany. This will not bring the slightest aid and relief to our glutted markets, and to our striking or locked-out operatives, even if the doleful news sent us from England by the correspondent of the N. Y. Tribune were true. He pictures the commerce of the United Kingdom declining, its industries decaying, its work- ing-people starving for want of employment, while all nations that have adopted or retained the protective policy are happy and con- tented. The latter take the trade away from the proud ruler of the sea. Their workpeople are constantly employed, and in- creased earnings are the result of the introduction of higher pro- tective taxes against former lower rates. All this sad news is repeatedly unrolled before our eyes, and in reading it our sym- pathetic heart is moved at the sight of the decadence of this great and mighty empire. The waves of destruction which England for a generation has launched upon the commerce and industries of rival nations are at last rolling back upon her, threatening to unhinge that mighty creation of Cobden, Bright, Peel, Gladstone, and their like. The advice given by the men who have discovered this harrowing state of affairs to the English statesmen is, to abandon their free-trade policy, and to adopt the principle of protection and exclusion. But the advice remained unnoticed, although " that strong man of the Tariff Commission " had hurried back from his Continental mission to England, to admon- ish the government and people, and give them warning of their impending doom, unless they adopt the policy of their com- petitors. " Is it not all plenty and happiness in the United States ? " " It is true the latter have no foreign outlet for the surplus product of their mills ; but what is the use of foreign commerce ? The less you export the more you have at home." Argument much like this appeared in the very columns of the Tribime. Now what are the real facts of the case ? What are the conditions of industrial nations so far as their commerce is concerned in manufacturing industries, and what are the wages paid to their operatives ? Is the protective or the free-trade policy more conducive to their happiness and the development of trade ? Are wages determined by tariffs or by other agencies ? What are these agencies ? What is it that gives preponderance in industries and trade to the countries whose working-people are used to shorter hours and to a higher standard of living ? All these postulates are totally at variance with theories handed down by protectionists. To prove their correctness, however, is the aim of these brief papers. If correct, our fiscal policy must be shaped accordingly, if we intend to keep a foremost rank in the progress of nations. The first and most prominent discovery of the protectionistic press, the decline of the commerce and manufacturing industries of Great Britain, has not the first semblance of truth. I will give the exports of British manufactures for the three years, 1880, 1881, 1882, from a Return to an order of the House of Commons : Exports of coal and of manufactures from the United Kingdom, year ending December 31st. 1880. 1S81. 1882. $15,420,000 $17,800,000 $20,000,000 7,000,000 6,670,000 6,850,000 7,000,000 7,200,000 5,650,000 4,600,000 5,250,000 5,600,000 11,500,000 12,000,000 10,700,000 4,000,000 4,500,000 5,000,000 40,000,000 42,000,000 46,000,000 16,000,000 16,500,000 16,000,000 1,400,000 1,600,000 2,000,000 57,000,000 64,000,000 62,000,000 276,500,000 284,000,000 266,000,000 29,000,000 33,000,000 36,000,000 9,600,000 10,100,000 10,600,000 4,400,000 4,600,000 5,200,000 16,700,000 20,000,000 21,000,000 17,000,000 18,600,000 19,800,000 4,900,000 5,300,000 6,400,000 136,000,000 132,000,000 151,000,000 12,000,000 12,500,000 12,000,000 13,500,000 17,000,000 18,250,000 33,000,000 33,500,000 34,000,000 44,000,000 47,500,000 58,000,000 13,000,000 17,500,000 17,000,000 6,300,000 9,700,000 5,000,000 TOO, 000, 000 103,000,000 107,000,000 $880,000,000 $925,000,000 $948,000,000 Apparel and Slops Arms, Ammunition, etc. . Bags and Sacks Books Chemicals Caoutchouc Manufactures . . Coal and Fuel Copper, etc. Cordage Cotton, Yarns and Twist " Piece Goods . . . . " Other, Lace, Hosiery, etc. Earthenware, etc Glass Haberdashery ...... Hardware and Cutlery . . . Hats Iron and Steel Jute Yarn and Manufactures Leather and Manufactures Linen Yarn and " . . Machinery Silk, Twist and Manufactures . Telegraph Wires Woollen, Worsted and Yarns Total There has been a steady rise in the value of British exports of this class since 1878. In bulk the exports were never so great as in 1882, not even in 1872 and 1873, when they exceeded the values of 1S82 by only five per cent. The valuation of English exports of manufactures in 1873 was on the average fully twenty- five per cent, above that of 1882. Nor is the report that the English markets are filled increasingly with foreign fabrics any nearer the truth than the statement re- futed above. The same report of the British Government states : Imports of foreign manufactures into the United Kingdom, year ending December 31st. 18S0. i88r. 1882. Chemicals Copper, Manufactured Cotton, " . , Glass and Manufactures . Hats Iron and Steel Manufactures Leather and Manufactures Paper Silks Tin, Blocks and Bars . • Watches Woollens and Yarns . . Total $5,200,000 11,600,000 12,100,000 8,400,000 200,000 18,000,000 31,500,000 5,600,000 64,000,000 8,250,000 2,000,000 45,500,000 $212,300,000 $6,400,000 10,000,000 12,000,000 8,000,000 160,000 18,200,000 32,000,000 5,400,000 56,000,000 9,000,000 2,200,000 35,000 000 $194,400,000 $7,200,000 11,600,000 11,800,000 8,000,000 230,000 19,000,000 36,500,000 5,750,000 54,000,000 12,000,000 2,300,000 37,000,000 $205,400,000 It will be seen from this, that there is great latitude between the statements set afloat by the sources mentioned above and the real facts of the case. Equal stress has been laid upon a decline in wages in England and a corresponding rise in Germany. My most diligent investigations have not been able to discover any material foundation for these assertions. The relative conditions of working-people in factories of the various nations coming under the heading of this inquiry can best be estimated from an exam- ination of the tables in the following subdivisions : 1 u •ssaj X[qrj3pTsiioD aju 'asinoo jo 'sSiiiujca -. to - . u ,sa3uioAv : nam Jojoo'€$o3i;i3Au ; t-o'S$xe : z£-t-$xoi c IS'I 3 O '.t-8"£$x9 ;o9-e$x-o3 :9€-e$x ei :oi-e$xoi \L%-z%f.^03Av jod oS't^ o; oS'i$ uiojj c < B 3 : H Sui.OcA S31UJ 11: sijiiu .lOAVod III s.i3ATJ3A\ JO s!Suui.n;3 3i[; 3AiS 'ajuliug 3i{i jo siia\oi X.io^ot;; tCi uio.ij si.iodn>^ » _rt CO 10 ^. f^ o< t^ 3 .yi . 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Report of Carroll D. Wright, Commissioner of Labor, Mass. Legislatif. 7. Report of U. S. Consul Dubois. 5. Report of U. S. 14 of our manufactures of worsteds, knit goods, gimps, and trim- mings of all kinds. The yarn-spinner, has, however, an equal right to repudiate the imputation that he is benefited by the duty. He has a charge of lo cents on every pound of grease wool. " Pro- tection to the farming interest " exacts from 50 to 70 ^ of the yarn-maker. Upon inquiry, I am informed by the Department of Agriculture, that only one million ranchmen and farmers have made returns of sheep. There are, however, over 4,000,000 of farms in the United States, according to the last census. Natu- rally, but few of the 1,000,000 sheep- owners have large interests ; but giving to this class all the benefits of numbers, it is only 25 per cent, of the farms who derive any advantage from this tax, the most hurtful of our cumbersome system. Which manufactur- ing industry is enriched or protected by this " protective system," I must leave to a subtler mind to calculate. I must confess that I am not capable of it. That the horizontal-reduction plan, now so popular among our public men, is wofully out of proportion as a means of relief in an emergency like this, must be clear to every mind. In my book, " The Destructive Influence of the tariff," I have shown the same absurdity of so-called tariff-protection to exist in other lines of woollens — from the cloak-industry down to the raw material. The same as to shawls, etc. WAGES IN THE IRON INDUSTRIES. In the iron industries, American wages average fully 75 per cent, more than English wages. Wages in England are fully 75 per cent, higher than those paid in Germany for like work in metals, and perhaps one third higher than in France. I have no very recent tables for France at my command. Judging, how- ever, from an article in the April number of the Revue des Deux Monies by Mr. Othenin d'Haussonville, " La Vie et les Salaires a Paris," and comparing living expenses of Paris and wages with those of provincial towns of 1873, ^ consider myself justified in making this average Now what is the result of competition of high-wage countries and low-wage countries in metal-work and machinery ? If the theory assailed, that low-wage countries drive their high-labor 15 C— MACHINERY. England. U. States. Germany. 1865. 1880. 1880. 1880. 1878. 1881. 1880. E a 1882. Occupations, E ^^-- 2-S :' C o u O C rt o £ S: CO • - "H c/) o "3 ° >H u, one o «J ,„ CJ " CO CJ CO : '-' S (J rt • i: ^ i b"g ° o ?-?i ,^ u c o bww " rt _ _ cj <= S S "J^ o g J2-3 •M C C 0) o I- t. rv Qoo :^ : o ij <^ ;^ c-i "^ ?, o rt.S o d c/^ -^ >» ^^ O 'C'= rt Ul i^ ii a fl- c 5 S 113 DO •3 S o-a ^co O in M o t-'fcSa. c c! o o o -^ 71 o o o t/3 O r-~ IT) c/ii: ei M 'S- CS in 36 d d d o o o 'S ° ° ° • ' vd" in d' T3 E O — 5 ^ 8 8 8 ta _ o |5 o o o s=.2 o CO O O ro c^ O^ -^1 -2^ ceo o o o So c o o o TtOO CO o u C/J