h 
 
 
 CONTEMPORARY 
 
 THEORIES OF UNEMPLOYMENT 
 
 AND OF 
 
 UNEMPLOYMENT RELIEF 
 
 BY 
 
 FUEDERICK C. MILLS, M. A. 
 
 Sometime Garth Fellow in Economics 
 Columbia University 
 
 SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS 
 
 FOR THE DEGREE OF DOCTOR OF PHILOSOPHY 
 
 IN THE 
 
 Faculty of Political Science 
 Columbia University 
 
 NEW YORK 
 I917 
 
EXCHANGE 
 
Digitized by the Internet Archive 
 
 in 2007 with funding from 
 
 Microsoft Corporation 
 
 http://www.archive.org/details/contemporarytheoOOmillrich 
 
CONTEMPORARY 
 THEORIES OF UNEMPLOYMENT 
 
 AND OF 
 
 UNEMPLOYMENT RELIEF 
 
 BY 
 
 FREDERICK C. MILLS, M. A. 
 
 Sometime Garth Fellow in Economics 
 Columbia University 
 
 SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS 
 
 FOR THE DEGREE OF DOCTOR OF PHILOSOPHY 
 
 IN THE 
 
 Faculty of Political Science 
 Columbia University 
 
 NEW YORK 
 I917 
 
..^-^^ 
 
 Copyright, 191 7 
 
 BY 
 
 FREDERICK C. MILLS 
 
 
 lO^ 
 
TO MY MOTHER 
 LILY NIGHTINGALE MILLS 
 
PREFACE 
 
 Certain explanations of the choice and arrangement 
 of material in this monograph are necessary. 
 
 The subject of unemployment is one which ramifies 
 into many channels. An exhaustive survey of the field 
 being impossible, the necessity of severely limiting the 
 study to certain lines of investigation involved the neg- 
 lect of other equally important phases of the question. 
 So far as has been possible the work has been held 
 strictly to a study of theories as to the causes of the 
 modern phenomena of unemployment and as to the 
 methods by which unemployment can be prevented or 
 relieved. Facts concerning the extent of unemployment 
 have been touched upon only where they have a bearing 
 upon either of these two subjects. 
 
 Though the paper has been prepared primarily to 
 present present-day theories, its scope has been slightly 
 enlarged so as to include, on the side of theory, a brief 
 statement of the treatment of the subject of unemploy- 
 ment by the classical economists, and, on the side of 
 practical relief, as representing the working-out of cer- 
 tain theories, a summary of the treatment of the able- 
 bodied poor under the English Poor Law. A brief 
 compendium of the course of tramp and vagrancy legis- 
 lation in the various states of the United States is also 
 included. It was felt that without some such foundation 
 the study of contemporary theories would have been too 
 far divorced from practical relief and from previous eco- 
 nomic thought. 
 
 7] 7 
 
»ap»^*-^ 
 
 8 PREFACE [8 
 
 With the exception of some early study by Henry C. 
 Carey, Francis A. Walker, Henry George and a few re- 
 lief administrators, the subject of unemployment is one 
 that has only recently attracted attention in the United 
 States. The course of recent opinion in this country on 
 this subject has been largely influenced by continental 
 and, especially, by English thought. It is in the latter 
 country that scientific method has been most effectively 
 applied to the study of this problem. This exposition 
 begins, accordingly, with a treatment of the development 
 of English practice and of present English theories on 
 the subject. 
 
 The method adopted for the arrangement and presen- 
 tation of the material involve the breaking-up of the 
 complete theories advanced by the various writers in 
 order to present their various views on each of the main 
 theories that are held today. This arrangement sacri- 
 fices the possibility of comparing the views of one au- 
 thority, as a unified whole, with those of another ; but it 
 makes possible the full presentation of each of the main 
 types of theory without the repetition and disorganiza- 
 tion that would result from the full statement, in chrono- 
 logical order, of the complete program of each thinker 
 considered. 
 
 The definitions given to the term ** unemployment " by 
 the various authorities cited vary widely, some using it 
 to cover merely the involuntary idleness of able-bodied 
 workers, others cloaking under it all idleness, whatso- 
 ever its cause or nature. The limiting extent to which 
 certain authorities apply the term is indicated in the con- 
 sideration of their theories. Throughout this paper, how- 
 ever, unless otherwise noted, the term is used in a broad 
 sense ; in the writer's opinion the vagrant and other 
 types of '' unemployables " are legitimate elements of the 
 
9] PREFACE 9 
 
 problem of unemployment, even though the social or 
 industrial cause be one step further removed than in the 
 case of the temporarily unemployed wage earner. 
 
 The inclusion in the present paper of a study of French 
 and German theories has not been possible. Important 
 contributions to the subject have been made by conti- 
 nental students and by continental practice. It is hoped 
 that it will be possible to make such a survey at some 
 time in the future. 
 
 The writer desires gratefully to acknowledge his in- 
 debtedness to those who have aided him in the prepara- 
 tion of this monograph. Professors Carl C. Plehn and 
 Jessica B. Peixotto of the University of California have 
 given helpful advice and criticism. Sincere thanks are 
 due Professor Henry R. Seager of Columbia University 
 for valuable assistance in the revision of the manuscript 
 and in the preparation of proof. To Professor Carleton 
 H. Parker of the University of Washington the writer 
 stands deeply obligated for the enthusiasm which he has 
 contributed to the performance of this work. 
 
CONTENTS 
 
 CHAPTER I 
 
 FAGK 
 
 The Development of English Unemployment Theory and 
 Remedial Practice 
 
 1. The Classical Economists on Unemployment 13 
 
 2. The Able Bodied Under the English Poor Law 22 
 
 3. The Unemployed Workman Act 31 
 
 4. Board of Trade Labor Exchanges 36 
 
 5. The National Insurance Act 38 
 
 CHAPTER n 
 
 Contemporary English Theories of Unemployment and of 
 Unemployment Relief 
 
 1. Loss and Lack of Industrial Quality 42 
 
 2. Proposed Remedies for Qualitative Maladjustments 52 
 
 3. Industrial Fluctuations 59 
 
 4. Proposed Remedies for Unemployment Resulting from Indus- 
 
 trial Fluctuations • . . . 67 
 
 5. The Labor Reserve 84 
 
 6. Proposed Remedies for Under-employment 90 
 
 7. The Personal Equation in the Problem of Unemployment. . . 100 
 
 8. Proposed Remedies for Unemployment due to Personal Failings 104 
 
 9. Unemployment Insurance 107 
 
 10. The Relief of the Unemployed 113 
 
 CHAPTER III 
 
 The Development of American Unemployment Theory and 
 Remedial Practice 
 
 1. Miscellaneous Types of Early Theory 118 
 
 2. The Early American Economists on Unemployment 124 
 
 3. Methods of Practical Relief 127 
 
 4. Tramp and Vagrancy Legislation in the United States 130 
 
 II] II 
 
12 CONTENTS [l2 
 
 CHAPTER IV 
 
 Contemporary American Theories of Unemployment and of 
 Unemployment Relief 
 
 PASK 
 
 1. General Statement 138 
 
 2. The Relation of Immigration to Unemployment 146 
 
 3. The Floating Laborer 157 
 
 CHAPTER V 
 i Conclusion 163 
 
 Appendix I. American Statistics on Unemployment 165 
 
 Appendix II. References 170 
 
CHAPTER I 
 
 The Development of English Unemployment 
 Theory and Remedial Practice 
 
 I. the classical economists on unemployment 
 
 The period during which the classical system of eco- 
 nomics of the Manchester School was being formulated 
 was one characterized by distress from unemployment at 
 least equally severe with any of more recent years.' Yet 
 we find no exposition of unemployment as such. Cer- 
 tain problems closely connected with that subject are 
 discussed, but chief emphasis is usually placed upon an 
 aspect other than that bearing upon the question under 
 consideration. Thus the possibility of general over- 
 production and " glut" is a favorite bone of controversy, 
 but the point with which the economists are primarily 
 concerned is whether profits could thus be reduced to 
 zero, not whether the resulting flooding of the market 
 would throw men out of work. However, there is a re- 
 
 ^ Sir Robert Giffen, in his inaugural address as President of the Royal 
 Statistical Society in 1883, stated "... the poor are to some . . . 
 extent, fewer, and those who remain poor are, individually, twice 
 as well off on the average as they were fifty years ago." Quoted, 
 Webb and Freeman, Seasonal Trades (London, 1912), p. 7. 
 
 In Essays in Finance (second series), p. 379, Mr. Giffen writes: 
 *' . . . periodic starvation was in fact the condition of the masses of 
 the working men throughout the Kingdom fifty years ago." Quoted, 
 Seasonal Trades, p. 7. 
 
 Cf. also "Distress of Laboring Classes since 1815." T. R. Mal- 
 thus, Principles of Political Economy (Boston, 1821), p. 379, et seq. 
 13] 13 
 
14 CONTEMPORARY THEORIES OF UNEMPLOYMENT [14 
 
 lation more or less intimate between many of the modern 
 theories and those set forth by the men of this school. 
 A summarized statement of their views will pave the 
 way for the presentation of later developments in this 
 field. 
 
 On the question of the irregularity of employment 
 Adam Smith says the first and, so far as his followers in 
 this school are concerned, the last word. As one of the 
 five classic reasons for the inequalties of wages between 
 different industries Smith includes relative constancy or 
 inconstancy of employment.^ The more inconstant the 
 employment the higher will be the wage, for " What he 
 earns . . . while he is employed, must not only maintain 
 him while he is idle, but make him some compensation 
 for those anxious and desponding moments which the 
 thought of so precarious a situation must sometimes 
 occasion." This principle is repeated by Smith's succes- 
 sors for over one hundred years, practically unquestioned 
 except by Senior, who disagrees as to the increased an- 
 nual real wage. "But this evil (despondency because 
 of precarious situation) is compensated, and in most dis- 
 positions more than compensated, by the diminution of 
 his toil. We believe, after all, that nothing is so much 
 disliked as steady, regular labor; and that the oppor- 
 tunities of idleness afforded by an occupation of irregular 
 employment are so much more than an equivalent for its 
 anxiety to reduce the wages of such occupations below 
 the common average." " Senior contends, however, that 
 the periods during which capital is unproductive must 
 be compensated by a surplus profit when it is produc- 
 tively used. 
 
 ^ Wealth of Nations, book i. chap. x. 
 
 'Nassau W. Senior, Political Economy (6th ed., London, 1872), pp. 
 207-8. Also quoted in Seasonal Trades, p. 10. 
 
15] DEVELOPMENT OF ENGLISH UNEMPLOYMENT 15 
 
 Thomas R. Malthus, following Adam Smith, made 
 two important contributions to the subject under con- 
 sideration. His doctrine of population, at least as it 
 was first enunciated, and as interpreted by later fol- 
 lowers, exercised a vicious negative effect on the course 
 of scientific study of the problems connected with desti- 
 tution. The effect it had of completely overshadowing 
 certain other doctrines advanced by Malthus in connec- 
 tion with this same subject has been almost equally re- 
 grettable. His theory of the pressure of population on 
 the means of subsistence, the resulting destitution being 
 merely one of the natural positive checks to an excess 
 of numbers, is too well known to require detailing here.^ 
 Unemployment, according to this view, is caused solely 
 by an excess of workers, and can only be dealt with by 
 allowing full play to the rigorous process of natural 
 selection. " A man who is born into the world already 
 possessed, if he cannot get subsistence from his parents 
 on whom he has just demand, and if society do not want 
 his labours, has no claim of rt^ht to the smallest portion 
 of food, and, in fact, has no business to be where he is. 
 At Nature's mighty feast there is no vacant cover for 
 him. She tells him to be gone, and will quickly execute 
 her own orders if he does not work upon the compas- 
 sion of some of her guests." ^ His theory is essentially 
 one of surplus population. Malthus's doctrines were 
 eagerly accepted by the upper classes, for they lifted 
 from their shoulders not only responsibility for the con- 
 dition of the poor, but also responsibility for active 
 effort toward social improvement. 
 
 Malthus' relation to unemployment theories does not 
 
 * For the theory in full see Malthus, An Essay on the Principles of 
 Population (London, 1803). 
 ^Ibid., p. 53. Quoted, Seasonal Trades, p. 11. 
 
l6 CONTEMPORARY THEORIES OF UNEMPLOYMENT [i6 
 
 end here, however. In his Principles of Political Econo- 
 my,^ is included the earliest, most complete and most sym- 
 pathetic treatment of the question of the unemployed that 
 is found anywhere in the works of the economists of this 
 school. In attempting to explain the distress of the labor- 
 ing classes after 1815, he contends it to be due to the fact 
 that capital, revenue, and the effective demand for pro- 
 duce had been diminished by the wars, while the work- 
 ing population was in excess of the demand, because of 
 the many births during the preceding period, and the 
 return of soldiers and sailors from the wars. He recom- 
 mends as a remedy the employing of the working classes 
 in unproductive labor, or at least in labor the results of 
 which would not go for sale into the markets. The build- 
 ing of public works and the improvement of grounds and 
 hiring of servants by the wealthy are advocated. Stat- 
 ing that " nothing can compensate the laboring class for 
 a fall in the demand for labor," that "fluctuations al- 
 ways bring more evil than good to the working classes," 
 he urges that it should be the object of government to 
 maintain peace and an equable expenditure.^ The pas- 
 sage is noteworthy not only for the striking change in 
 spirit since the earlier work, but for the recognition of 
 the evil effects on the laboring class of industrial fluctu- 
 ations, and for the recommendation of methods for re- 
 lieving the distress due to unemployment. 
 : Malthus' treatment of overproduction is worthy of 
 iiote because of the importance of that subject in later 
 discussion. He argues the possibility of a real excess 
 of goods over the quantity that could be consumed, 
 though he does not show the possible connection be- 
 tween overproduction and unemployment. 
 
 ^ T. R. Malthus, Principles of Political Economy (Boston, 1821), 
 p. 371 et seq. 
 ^ Ibid., p. 403. 
 
1 7] DEVELOPMENT OF ENGLISH UNEMPLOYMENT ly 
 
 Through the works of David Ricardo there are scat- 
 tered references to subjects that are today looked upon 
 as important factors in unemployment, but Ricardo does 
 not develop them as such. The Malthusian doctrine of 
 population is accepted in full. The maintenance of the 
 poor out of public funds is severely condemned, the Poor 
 Law of the day, which richly deserved censure, being 
 sharply attacked.' An increase in population is looked 
 upon not necessarily as causing unemployment, but as 
 lowering wages below the natural price until the num- 
 ber of the poor is reduced by misery so that wages 
 can again rise.* A question that has long been at is- 
 sue is touched upon by Ricardo in discussing the effects 
 of the introduction of machinery.^ He contends that 
 the employment of machinery always leads to an in- 
 crease in the net product of a country, but not neces- 
 sarily to an increase in the gross product. As the power 
 of employing labor depends on the latter, there very 
 often results a diminution in the demand for labor, pop- 
 ulation becomes redundant, and there is distress and 
 poverty among the laboring class. Later economists 
 took issue with Ricardo on this point. His general atti- 
 tude on the question of relieving unemployment is shown 
 where he endorses a statement that the great evil of the 
 laborer's condition is poverty, resulting either from the 
 scarcity of food or of work, but holds that the state 
 should recognize the limitations of its power to remedy 
 these conditions by legislation.'^ The same attitude is 
 shown in another section where he argues that the dis- 
 tress arising from a revulsion of trade is a necessary evil 
 
 ^ David Ricardo, Principles of Political Economy and Taxation 
 (London 1881), p. 58. 
 ^Ibid.y p. 51. ^ Ibid., pp. 235-242. 
 
 ^'Ibid., p. 58. (Footnote.) 
 
l8 CONTEMPORARY THEORIES OF UNEMPLOYMENT [ig 
 
 to which a rich nation must submit.' This acceptance 
 of the maladjustments of the industrial system and of the 
 resulting misery as a necessary feature of that system is 
 characteristic of the whole Manchester school. 
 
 James Mill deals with none of the subjects connected 
 with the problem of unemployment except in bringing 
 forward the Malthusian theory of population in explain- 
 ing wages. 
 
 J. R. McCulloch, like his predecessors, attacks the 
 Poor Law for its tendency to derange the natural relation 
 between the supply of labor and the demand for it,=^ 
 shows the connection between population and fluctua- 
 tions in wage rates,^ and repeats verbatim Adam Smith's 
 statements as to variations in wages due to irregularity 
 of employment.'^ Of chief importance is his attempt to 
 refute Ricardo's contention that the introduction of ma- 
 chinery tends to reduce the demand for labor. McCul- 
 loch holds that improvements in machinery may some- 
 times force workmen to change their employments, but 
 that they always increase the gross product, and therefore 
 have no tendency to lessen the effective demand for labor.5 
 
 The works of Nassau Senior are notable for an appre- 
 ciation of the problem of unemployment and a careful 
 consideration of the causes of unemployment. In some 
 of the points he makes he anticipates later thought. 
 His disagreement with Adam Smith as to the distress 
 occasioned by irregularity of employment, and his rather 
 questionable conclusion as to the joys of that state of affairs 
 have been noted. Of greater validity is his other reason- 
 
 ^Ricardo, op. cit., p. i6i. 
 
 'J. R. McCulloch, Principles of Political Economy (Edinburgh, 
 1825), p. 355. 
 ^Ibid., p. 344, et seq, *Ibid., pp. 240-1. 
 
 ^Ibid., pp. 175-188. 
 
I^] DEVELOPMENT OF ENGLISH UNEMPLOYMENT ig 
 
 ing on the subject. To the development of manufactures 
 and the division of labor is ascribed the phenomenon of 
 unemployment. ''Few principles are more clearly estab- 
 lished," Senior writes/ "than that the productiveness of 
 labor is in proportion to its subdivision, and that in pro- 
 portion to that subdivision must be the occasional suf- 
 fering from want of employment." Another point which 
 Senior mentions is first made by him among the econo- 
 mists ; that is, that unemployment is in part due to lack 
 of mobility on the part of labor. "There can be no 
 doubt that we have among our institutions and our 
 habits much that fetters and misdirects the industry of 
 our laborers ; and that these causes frequently occasion 
 and always prolong the want of employment to which 
 large portions of our laborers are frequently exposed." ^ 
 A striking illustration of the position of the modern 
 worker is given by Senior. The savage, like one of his 
 own instruments, is clumsy and inefficient but a complete 
 self-sufficing unit in himself. The civilized man, like a 
 single wheel in one of his large machines, is marvelously 
 efficient w^hen combined with others, but alone almost 
 useless.3 
 
 In the works of the great " codifier " of the classical eco- 
 nomists there is nothing new on the subject of unemploy- 
 ment. John Stuart Mill accepts the Malthusian doctrine of 
 population,'^ discussing it solely in its effect on wages, 
 quotes Smith on the irregularity of employment as tending 
 
 ^Nassau William Senior, Political Economy (London, 1872), p. 219. 
 
 ^Ibid., p. 218. 
 
 ^ Ibid., p. 219. It is significant, in connection with these theories of 
 Senior, that he was one of the members of the Royal Commission on 
 the Poor Laws of 1834, the rigorous " Principles " of which still dom- 
 inate English poor relief. 
 
 *J. S. Mill, Principles of Political Ecpnomy (New York, 1864; from 
 Sth London edition), p. 206. 
 
20 CONTEMPORARY THEORIES OF UNEMPLOYMENT [20 
 
 to increase wages/ and follows McCulloch in denying 
 Ricardo's contention that the conversion of circulating 
 into fixed capital can injure the laboring classes in the 
 aggregate, though admitting that temporary distress may 
 result.'' 
 
 J. E. Cairnes, in developing the theory of non-com- 
 peting groups and in popularizing Senior's wage-fund 
 doctrine, makes several points bearing upon the prob- 
 lem. An increase in the amount of fixed capital at 
 the expense of circulating capital will, at least for a time, 
 have disastrous results in the development of pauperism, 
 he contends, because of the curtailment of the wages 
 fund involved in this change.^ However, such a cur- 
 tailment will not be a permanent one, since *'. . . the 
 true and only limit to the employment of labor is in- 
 creasing cost of production. Increase the productive 
 powers of industry, extend the knowledge of the indus- 
 trial arts which support and comfort mankind, and there 
 is little danger that laborers will ever fail of employment 
 for want of work to do."^ Cairnes thus holds with Mill 
 and McCulloch that distress due to the introduction of 
 machinery will be merely temporary, involving a neces- 
 sary change in the distribution of labor, but not a falling- 
 of¥ in the total demand for labor. 
 
 With Cairnes the line of immediate disciples of the 
 Smith-Ricardo-Mill school of economists comes to an 
 end. Their direct contributions to the study of the 
 problem of unemployment were not many. The three 
 outstanding ideas on the subject which they leave us are 
 that unemployment is compensated by higher pay and 
 
 *Mill, op. cit., pp. 473-4- 
 
 ^ Ibid., pp. 130-6. 
 
 '^J. E. Cairnes, Political Economy (New York, 1874), p. 179. 
 
 ^Ibid., pp. 257-8. 
 
21 ] DEVELOPMENT OF ENGLISH UNEMPLOYMENT 2 1 
 
 the Opportunities for idleness, that it is due to a surplus 
 population, and that it is a necessary concomitant of in- 
 dustrial changes, and therefore merely temporary in 
 character. Their study of the problem was not inten- 
 sive. Engaged as they were in building up a science of 
 political economy it could hardly be expected that they 
 should exhaustively study one phase of the subject. Prop- 
 agating, moreover, the idea of free enterprise and laissez 
 faire in industry, they were not likely to emphasize a 
 point at which the doctrine of absolutely unrestricted 
 business enterprise broke down, in so far as the well-being 
 of the working classes was concerned. It was on these 
 grounds, in part, that Bagehot and Jevons and Toynbee, 
 who followed Cairnes, broke away from the restrictions 
 of the classical school.' 
 
 ^For a brief review of the attitude of the Manchester school toward 
 the problem of unemployment, see a paper by Juliet S. Poyntz, included 
 in Seasonal Trades by Webb and Freeman, (pp. 7-12). It is rather a 
 severe criticism of the school from the standpoint of a Fabian Socialist 
 than a fair review. 
 
 W. M. Leiserson gives a good summary of the views of the early 
 economists in an article in the Political Science Quarterly for March, 
 1916 (vol. xxxi, no. I, pp. 5-9). 
 
 The views on the subject of unemployment of some of the lesser 
 writers of the classical era, notably those of the Ricardian socialists, are 
 worthy of exposition, but the scope of the present paper prohibits it. 
 
 There is much that is suggestive of labor doctrines concerned with 
 unemployment in the socialist writings of the nineteenth century, 
 especially in the works of Karl Marx. Marx' analysis may be briefly 
 summarized. 
 
 With the advance of accumulation the proportion of constant (fixed) 
 to variable (circulating) capital changes. If it was originally 1:1, it now 
 becomes successively 2:1, 3:1, 4:1, 5:1, 7:1, etc., so that, as the capital 
 increases, instead of 1-2 of its total value, only 1-3, 1-4, 1-5, 1-6, \-%etc., 
 is transformed into labor power. Since the demand for labor is deter- 
 mined only by the variable constituent of capital, that demand falls 
 progressively with the increase of the total capital. Capitalist accumu- 
 lation, therefore, constantly produces a relatively redundant population 
 of laborers— a surplus population. This surplus labor population forms 
 
22 CONTEMPORARY THEORIES OF UNEMPLOYMENT [22 
 2. THE ABLE-BODIED UNDER THE ENGLISH POOR LAW 
 
 While the problem of unemployment is one that must 
 be approached from the standpoint of industry, rather 
 than from the standpoint of the Poor Law or of charit- 
 
 a disposable industrial reserve army. The course characteristic of 
 modern industry, viz., a decennial cycle of periods of average activity, 
 production at high pressure, crisis, and stagnation, depends on the 
 constant formation, the greater or less absorption, and the reformation 
 of the industrial reserve army, or surplus population. (In their turn 
 the varying phases of the industrial cycle recruit the surplus population, 
 and become one of the most energetic agents of its re-production). 
 Moreover, on the possibiHty of throwing great masses of men suddenly 
 on the decisive points without injury to the scale of production in other 
 spheres, depends fluidity and transformability of capital. The whole 
 form of the movement of modern industry depends, therefore, upon the 
 constant transformation of a part of the laboring population into unem- 
 ployed or half-employed hands. The over-work of the employed part 
 of the working class swells the ranks of the reserve. Relative surplus- 
 population is the pivot upon which the law of demand and supply of labor 
 works. 
 
 The relative surplus population exists in every possible form. Every 
 laborer belongs to it during the time when he is only partially employed 
 or wholly unemployed. There are, however, three general forms — the 
 floating, the latent, and the stagnant. The floating surplus population 
 is found in the centres of modern industry, among the laborers who, 
 repelled and then attracted, are swayed by the expansions, contractions 
 and shiftings of production. It is constantly augmented by the boys 
 who were employed up to maturity and then turned out, for capitalistic 
 production wants constantly larger numbers of youthful laborers, smaller 
 numbers of adults. Of its members, also, are the thousands who are 
 always out of work, even when there is a complaint of the want of 
 hands, because the division of labor chains them to a particular branch 
 of industry. The latent surplus population exists in the rural districts, 
 where capitalistic production, having taken possession of agriculture, 
 has forced out a part of the agricultural population. This excess is there- 
 fore constantly on the point of passing over into an urban or man- 
 ufacturing proletariat, and on the lookout for circumstances favorable 
 to this transformation. The third category of the relative surplus pop- 
 ulation, the stagnant, is that part of the active labor army which is 
 characterized by extremely irregular employment, furnishing to capital 
 an inexhaustible reservoir of disposable labor power. It recruits itself 
 constantly from supernumerary forces of modern industry and agricul- 
 
23] DEVELOPMENT OF ENGLISH UNEMPLOYMENT 23 
 
 able administration, it is yet necessary to understand the 
 attitude which the Poor Law administrators have taken 
 in order to view in the proper perspective modern 
 theories and remedies. 
 
 Previous to 1834 the Poor Law passed through three 
 distinct periods, the division into periods being based 
 upon the principles dictating Poor Law practice. From 
 early times the poor have been divided into two classes, 
 those unable to earn a livelihood, and the able-bodied, 
 the "sturdy rogues and vagabonds." It was with the 
 second of these classes that the Poor Law was first con- 
 cerned, the "deserving poor" being left to churches, 
 
 ture, and especially from those decaying branches of industry where 
 handicraft 'is yielding to manufacture, manufacture to machinery. 
 There is, finally, the lowest sediment of the relative surplus population, 
 the "dangerous" classes, those dwelling in the sphere of pauperism. 
 It is pauperism which is the hospital of the active labor-army and the 
 dead weight of the industrial reserve-army. Das /Capital, chap, xxv, 
 sections 3-4, (London, 1901), pp. 642-664. 
 
 Marx anticipated in this analysis many of the later theories as to the 
 causes of unemployment, as will develop in later discussion. 
 
 The reasoning of the other socialists of the day was rather more sup- 
 erficial than that of Marx, though tinged with the same intense revolu- 
 tionary flame. The principle of the right to work was probably first 
 enunciated in France by Fourier and Considerant. Upon it was based 
 the scheme of employing in public works all who were out of work, 
 which was attempted in 1848 (the ateliers nationaux). The matter of 
 seasonal irregularity was first studied about the middle of the century 
 by Louis Blanc, who gathered statistics from 1500 work-people in 830 
 workshops in Paris, as to their daily wage and the number of months 
 during which each was out of work during the year. Very early in the 
 nineteenth century Robert Owen in England was earnestly working 
 to relieve the distress due to unemployment, proposing state provision 
 of work as a protection against the misery resulting from industrial 
 fluctuations. With the exception of the contribution made by Marx, 
 the chief element in which was the conception of a mobile army as a 
 necessity in capitalistic production, there is nothing of exceptional value 
 to present study in the works of the early socialists. Cf. Seasonal 
 Trades, pp. 11-16. 
 
24 CONTEMPORARY THEORIES OF UNEMPLOYMENT [24 
 
 guilds, and private charity. Up to the Act of Elizabeth 
 in 1601 extremely harsh laws for the suppression of vag- 
 abondage were in force. Under the Acts of 1388 and 
 1405 gaol and stocks, with bread and water diet, were 
 the mead of sturdy beggars.^ The Act of 1531 made 
 necessary licenses for begging ; he who was caught with- 
 out a license was " to be beaten with whips till his body 
 be bloody by reason of such beating." Scholars of Ox- 
 ford and Cambridge begging without authorization under 
 the seal of their universities were to be punished in the 
 same way. The years 1547 and 1572 marked even more 
 severe penalties. Branding, the enslavement of wives 
 and children, and death were some of the punishments 
 for " loitering, idle wanderers." The extreme severity 
 of these laws of course prevented their strict enforcement.'' 
 The second of the early periods is that beginning with 
 the Act of Elizabeth in 160 1. The dominant principles 
 were, first, the relief of the lame, impotent, old, blind 
 and other poor people not able to work, and, second, the 
 setting to work of those having no ordinary or daily 
 trade of life by which to get their living. Funds were 
 to be provided by the practically compulsory taxation of 
 every inhabitant. Every parish was solely responsible 
 for its own poor. Laws of settlement were strictly en- 
 forced under this act, to prevent the flocking of the poor 
 to the parishes where they were best treated.^ Parish 
 poor houses first came into being during this period 
 
 ^Cf. T. Mackay, The English Poor (London, 1889), pp. 112-116. 
 
 "^ Ibid., pp. 118-121. 
 
 'Such laws, however, were not originated at this time. Measures 
 restricting the mobility of labor were enforced before the time of Wat 
 Tyler during the reign of Richard II, and at varying intervals there- 
 after. Cf. Mackay, op. cii., pp. 1 12-13. 
 
25] DEVELOPMENT OF ENGLISH UNEMPLOYMENT 25 
 
 because of the need for a test to prevent promiscuous 
 giving by local justices.^ 
 
 In 1782, with the passage of Gilbert's Act, came the 
 beginning of the form of poor-law relief to which 
 Malthus and other of the early economists took such 
 strong exception. The workhouse test was abandoned. 
 All who were able and willing to work were to be pro- 
 vided by the Poor Law Guardians with employment 
 " suited to their capacity and near the place of their resi- 
 dence.'' Moreover, they were " to be properly main- 
 tained and provided for until such employment were 
 secured," and the deficiencies of the earnings of such 
 work, if not enough for maintenance, were to be made 
 up to them. Striking evils ensued. Money and food 
 were doled out liberally, often without a labor test. In 
 one place an independent laborer, by hard work, could 
 earn 12 shillings a week, while a pauper, for nominal 
 work, received 16 shillings a week. In some places 
 people were forced by law to employ and pay a number 
 of laborers, the number being based upon the amount of 
 their property."" The poor-rate assessment became very 
 high with these heavy drains upon it. The evil effects 
 of the system, in the degradation of the working classes, 
 in the fostering of an inefficient laboring force, and in 
 the encouragement it gave to an excessive growth of 
 population have been widely advertised since the break- 
 down of the old law.3 In 1834, following the Report of 
 
 ^T. Mackay, Public Relief of the Poor (London, 1901). An interest- 
 ing account of the economic background of the Act of Elizabeth is given 
 on pp. 18-34. 
 
 'Instances taken from J. S. Nicholson, Principles of Political Eco- 
 nomy (London, 1893), pp. 371-81. 
 
 T/., Great Britain, Report of the Royal Commission on the Poor 
 Law, (London, 1834), pp. 77-98. 
 
 An especial problem which developed during this period was that of 
 
26 CONTEMPORARY THEORIES OF UNEMPLOYMENT [26 
 
 the Royal Commission on the Poor Laws appointed to 
 investigate these conditions, the Act of 1834 was passed. 
 
 The Report of the Commission of 1834 and the laws 
 passed to carry out the principles therein embodied deal 
 chiefly with the able-bodied, for the evils of the pre- 
 ceding period had grown up primarily around the system 
 for relieving this class. In considering the Report it is 
 necessary to remember that it came as a reaction against 
 the former system of allowances, and in an age when the 
 doctrine of laissez faire dominated the economists and 
 the statesmen. That the principles it put forward were 
 excessively severe upon the individual pauper or unem- 
 ployed man is therefore not surprising. 
 
 The dominating principle of the Report is that which 
 is known as *' less eligibility." **The first and most 
 essential of all conditions is that his (/. <?., the individual 
 relieved) situation on the whole shall not be made really 
 or apparently so eligible as the situation of the indepen- 
 dent laborer of the lowest class." ' Two proposals for 
 the actual administration of relief are based upon this 
 general principle. 
 
 I. That outdoor relief to the able-bodied and their 
 families be discontinued (with certain minor excep- 
 tions). 
 
 the agricultural laborer. The decay of the yeomanry, which set in 
 about 1760 with the enclosure of the commons and the displacement 
 of home manufactures by the factory system, and the concomitant 
 development of a proletarian class, gave rise to the most pressing of 
 the problems the Poor Law adminstrators had to face. The whole 
 question of agricultural conditions has been, and continues to be, an 
 important factor in the problem of unemployment, both directly and 
 indirectly through its relation to the influx of rural workers to the 
 cities. It is admirably treated by Miss O. J. Dunlap, The Farm Lab- 
 orer — The History of a Modern Problem (London, 191 3). Cf. especi- 
 ally in this connection, pp. 1-90. 
 ^Report of the Royal Commission on the Poor Laws ri834), p. 228. 
 
2y] DEVELOPMENT OF ENGLISH UNEMPLOYMENT 27 
 
 2. That relief be offered to able-bodied persons and 
 their families only in well-regulated workhouses. 
 
 The two fundamental principles, therefore, are those of 
 "less eligibility" and of a" workhouse system." Added 
 to these is a third, that of " national uniformity," a cen- 
 tral administrative board being recommended.' It is 
 important to note that the principle of ''less eligibility" 
 included the doctrines that those helped by the parish 
 should work *' as hard and for less wages than indepen- 
 dent laborers work for individual employers," ' and that 
 the able-bodied be subjected to " such courses of labor 
 and discipline as will repel the indolent and vicious." ^ 
 
 The most striking feature of the Poor Law Report of 
 1834, at least from the point of view of the present study, 
 is the fact that in a period when the number of " legiti- 
 mately " unemployed and underemployed was excessively 
 large, according to contemporary evidence as to indus- 
 trial conditions, absolutely no distinction was made be- 
 tween the unemployed man and the vagrant or pauper/ 
 The policy of rigorous deterrence was to be applied 
 without discrimination to all who were in need of public 
 assistance, no matter what the cause of their poverty 
 might be. The key to this attitude is found in the 
 theory as to the cause of unemployment which was held by 
 the members of the Commission. The " surplus labor " 
 theory had dominated previous relief systems, being the 
 popular contemporary explanation of the phenomenon of 
 unemployment. If there were more workers than there 
 was work, it was held by those administering relief prior 
 to 1834 that the community should take care of the 
 
 '^Report of the Royal Commtssion on the Poor Laws (1834), p. 297. 
 ^ Ibid., p. 262. ^ Ibid., p. 307. 
 
 *C/. S. and B. Webb, Minority Report of the Poor Law Commis- 
 sion (London, 1909), part ii, p. 3. 
 
28 CONTEMPORARY THEORIES OF UNEMPLOYMENT [28 
 
 surplus. The whole policy of the Commission of 1834 
 was based upon the belief that individual unemployment 
 was due to individual faults, that ability and industry 
 could always find a market.' In regard to the " surplus 
 labor" theory, the Report states that even "after a sys- 
 tem of administration, one of the most unquestionable 
 effects of which is the encouragement and increase of 
 improvident marriages among the laboring class, has 
 prevailed in full vigor for nearly forty years " there is no 
 real surplus in the kingdom as a whole."" 
 
 A recommendation which is of interest in its bearing 
 upon unemployment relief, and which is somewhat incon- 
 sistent with this denial of a labor surplus, is made by the 
 Commission in empowering the vestry of each parish " to 
 pay out of the poor rates the expenses of emigration of 
 any persons having settlements within that parish who 
 may be willing to emigrate.'^ ^ Xhis recommendation is 
 explained by the statement that there may be a tempo- 
 rary, surplus of labor in certain districts. 
 
 The scope of this paper prohibits a detailed description 
 of the working-out of the principles of 1834 during the 
 last eighty years. Nominally the principles still dictate 
 the relief of all classes of destitute persons, with the ex- 
 ception of certain classes of the unemployed who are 
 provided for by the Unemployed Workman Act of 1905. 
 In fact there have been various changes in practice since 
 that time. Such of these as apply to the able-bodied 
 may be briefly enumerated. 
 
 The difficulty of enforcing the strict prohibition of out- 
 door relief broke dovvn that policy, except in certain 
 
 ^ Cf., Great Britain, Report of Royal Commission on the Poor Laws 
 and the Relief of Distress (London, 1909), part iv, chap. 9. 
 "^Report of Poor Law Commission of 1834, pp. 351-2. 
 ^ Ibid., V. z^i, et seq. 
 
29] DEVELOPMENT OF ENGLISH UNEMPLOYMENT 29 
 
 districts, even before it had ever been rigidly enforced. 
 In 1842 an Outdoor Labor Test Order was promulgated, 
 permitting the giving of work to able-bodied men at 
 wages, under certain conditions and in certain parishes. 
 In 1852 this order was embodied in the Outdoor Relief 
 Regulation Order, which is still in force. The absolute 
 prohibition of outdoor relief still applies, however, to 
 some sections of England and Wales. 
 
 The workhouse system, which was recommended by 
 the Commission of 1834 for universal application to all 
 able-bodied men seeking relief, is now applied universally 
 to one class only, the wayfarers or vagrants, for whom 
 a system of casual wards has grown up all over England. 
 The General Workhouse Order of 1847, which provided 
 that all able-bodied inmates of workhouses should do ten 
 hours work in summer and nine in winter, each day, at 
 such work as stone-breaking and oakum-picking' still 
 applies to much of the work done in these casual wards. 
 Compulsory detention for a certain period is prescribed 
 in some districts for all who may apply. The policy of 
 1834 in all its severity still governs these casual wards. 
 
 The principle of 'Mess eligibility'* as a dominant 
 factor has been broken down in practically all parts of 
 Poor Law administration except that dealing with the 
 vagrant class. Other types of the able-bodied have the 
 opportunity either to secure outdoor relief with a labor 
 test, or to secure employment at wages under a Distress 
 Committee.^ In both cases they are in a position rather 
 more eligible than that of the lowest grade of manual 
 worker. 
 
 The most important single point of departure from 
 
 *C7. Sidney and Beatrice Webb, English Poor Law Policy (Lon- 
 don, 1909), pp. 74-5- 
 ' Cf. infra ch. i, sec. 3. 
 
30 CONTEMPORARY THEORIES OF UNEMPLOYMENT [30 
 
 the principles of 1834, in so far as the question of unem- 
 ployment is concerned, was that marked by the Circular 
 of 1886 sent out by Joseph Chamberlain, then president 
 of the Local Government Board. It is of supreme im- 
 portance in its relation to all later unemployment relief 
 in that it first makes an official distinction between 
 " able-bodied destitution " and '' able-bodied pauperism," 
 marking the inauguration of " a policy of discrimination 
 between some able-bodied applicants and others accord- 
 ing to their character and circumstances with a view to 
 the rehabilitation of the man really seeking work." ' In 
 the Circular and in his letters concerning it, Mr. Cham- 
 berlain urged that the working men who were in distress 
 because of the prevailing industrial depression be not 
 familiarized with poor-law relief. The workhouse test 
 and the labor test were to be upheld for the able-bodied 
 pauper, but for the unemployed wage-earner different 
 methods of relief were necessary. The Circular requested 
 the local boards of guardians " to expedite as far as 
 practicable the commencement of any public works 
 which they may be contemplating, so that additional 
 employment may be afforded." "^ Only once before, in the 
 case of the Lancashire cotton famine, 1863-6, had such 
 provision of public work for the unemployed been con- 
 sidered.3 It is to be noted that in first recommending 
 this plan, Mr. Chamberlain advised that wages given on 
 these works be somewhat below the normal level. 
 
 The principle of discrimination between unemployed 
 types, and that of providing work for the industrial un- 
 employed, were endorsed by a special committee of the 
 House of Commons in 1895, and furnished the basis for 
 
 ^English Poor Law Policy, p. 172. 
 'Quoted, Ibid., p. 165. 
 ^ Ibid., pp. Q2-3. 
 
31 ] DEVELOPMENT OF ENGLISH UNEMPLOYMENT 31 
 
 Mr. Long's Unemployed Workman Act of 1905. The 
 working-out of the principles will be briefly touched 
 upon in describing that act, which provided new ma- 
 chinery outside the Poor Law for caring for a large 
 element of the unemployed. The casual ward, the labor 
 yard, and the general mixed workhouse still remain 
 under the Poor Law as agencies for caring for many 
 types of unemployed men. 
 
 Through all the history of the English Poor Law, 
 with its swings from the side of haphazard and indiscrim- 
 inate giving to that of rigorous and indiscriminate de- 
 terrence and semi-penal and indiscriminate detention, 
 there does not once appear a dictating policy based upon 
 a scientific study of the able-bodied unemployed man, 
 and upon a comprehension of the fact that there are 
 many types and many causes for destitution. Rather 
 does it rest upon unreasoned assumptions as to the 
 causes for the existence of destitution. Perhaps the 
 distinctive feature of poor-law policy until the time of 
 Mr. Chamberlain was complete absence of discrimination. 
 It was not until those in charge of poor-law relief began 
 to discern the complexity of the causes of unemploy- 
 ment, began to realize that the roots of unemployment 
 lie outside the individual and within the industrial sys- 
 tem itself, that progress began to be made. As yet, the 
 conception of outside causes and the practice of discrim- 
 ination in administration have been applied within a lim- 
 ited sphere only. The Unemployed Workman Act of 
 1905 represents an important step in the new direction. 
 
 3. THE UNEMPLOYED WORKMAN ACT 
 
 The Circular of 1886, which urged that unemployed 
 workingmen be dealt with outside the Poor Law, through 
 the provision of work at wages by the municipalities, 
 
32 CONTEMPORARY THEORIES OF UNEMPLOYMENT [32 
 
 has been mentioned. From 1886 to 1905 this method 
 was adopted more or less extensively by municipalties 
 throughout the kingdom. The funds were largely raised 
 by public subscription. Various difficulties, mentioned 
 below, were encountered. In 1905 a plan based upon 
 this general method of caring for the unemployed, but 
 designed to do away with some of its faults, was put 
 forward by Walter Long, then president of the Local 
 Government Board, and was passed by Parliament as 
 the Unemployed Workman Act. The main features of 
 the Act were these : ' 
 
 1. Distress committees expressly for dealing with 
 unemployment were to be established by every borough 
 council in London, and by every council in other cities 
 having a population in excess of 50,000. These distress 
 committees were to be in no way connected with the 
 Poor Law. 
 
 2. The expenses of these committees were in part to 
 be met by public subscription and in part provided out 
 of the rates (the public money). 
 
 3. Regular workers temporarily out of work, not 
 casual laborers, were to be aided by the distress com- 
 mittees, in any of the following ways : 
 
 a. By assisting workers to emigrate or migrate. 
 
 b. By the provision of temporary work (of actual 
 and substantial utility, at a wage below the 
 normal wage for unskilled labor). 
 
 c. By the establishment of farm colonies. 
 
 d. By the organization of a system of registering 
 employers wanting workers and workers want- 
 ing work (public labor exchanges). 
 
 ^Report of Royal Commission on the Poor Laws, 1909, vol. i, pp. 
 490-504. 
 
33] DEVELOPMENT OF ENGLISH UNEMPLOYMENT 33 
 
 The Unemployed Workman Act was designed to carry 
 out Mr. Chamberlain's principle of discrimination, by 
 selecting the " elite of the unemployed," the men from per- 
 manent situations, and giving them the means for tempo- 
 rary support while reHeving them of the necessity of falling 
 upon the Poor Law. In addition, its framers contem- 
 plated a national system of information bureaus for dis- 
 tributing the labor of the country. The whole system 
 of relief under this act was made national in its scope 
 in the hope of doing away with the haphazard, disunited 
 methods that had characterized this method of relief 
 when administered by the various municipalities. 
 
 Brief reference may be made here to certain of the ill 
 effects of the Unemployed Workman Act, and to certain 
 of the respects in which the hopes of its proposers have 
 not been realized. 
 
 The labor exchanges contemplated by the Act were 
 founded nowhere but in the city of London. There they 
 met with a considerable degree of success, even though 
 limited in their scope by the failure of other cities to 
 establish co-operating branches, and formed the basis 
 for the national system of exchanges established in 1909.' 
 
 The farm colonies established under the Act, especi- 
 ally that at Hollesley Bay, were partially successful, in 
 that those who were sent to these colonies were tempo- 
 rarily helped. However, the relief given in this way was 
 very costly, and had no lasting effect, those that were 
 helped being allowed to lapse back into destitution after 
 leaving the farms. 
 
 The evils of the relief works that had been established 
 by the various separate municipalities in accordance with 
 Mr. Chamberlain's suggestions were in the main per- 
 
 * Cf., infra, pp. 36-38. 
 
34 CONTEMPORARY THEORIES OF UNEMPLOYMENT [34 
 
 petuated in the works started by the distress commit- 
 tees. Complete discrimination, with the elimination of 
 the confirmed casual was impossible; thus to a very 
 large proportion of the men helped the work given by 
 the cities was nothing other than another casual job, 
 which tended to continue, rather than stamp out the 
 vicious system of casual employment. This evil was in- 
 tensified by the fact that such a large number were 
 registered in the periods of distress that each one could 
 be given only a brief dole of work, which was of little 
 material aid. The costs of the works carried on under 
 this system were extravagantly high, because of the in- 
 efficiency of many of the men in the class of work given 
 them, and the disorganization of the working forces. 
 Perhaps the worst evil that developed in connection 
 with the public relief works was the forestalling of or- 
 dinary work, the displacement of the regular workers by 
 men of less efficiency from other trades.^ 
 
 The majority of the Poor Law Commission of 1905-9 
 considered the evils of the Unemployed Workman Act 
 so far to outweigh its advantages that they recom- 
 mended its discontinuance. The minority, however, 
 contended that until a more adequate scheme for caring 
 for the unemployed had been put into effect, the Unem- 
 ployed Workman Act should be continued in operation. 
 
 Notwithstanding the difficulties it encountered and 
 the numerous evils that developed in connection with 
 its operation, the Unemployed Workman Act undoubt- 
 edly served an important purpose in sharply differentiat- 
 ing the methods of caring for the unemployed, as such, 
 
 ^ For criticisms of the Act cf. Report of the Royal Commission on the 
 Poor Law (1909), pp. 494-504. Also appendix to Report of Royal Com- 
 mission, vol. xix. For a more favorable criticism, cf. the Minority 
 Report (London, 1909), part ii, pp. 133-162. 
 
I 
 
 35] DEVELOPMENT OF ENGLISH UNEMPLOYMENT 35 
 
 from the ordinary methods of reUeving pauperism, sick- 
 ness and poverty, and in emphasizing the necessity of 
 discrimination, even though in practice complete discrim- 
 ination could not be secured. It set up the problem of 
 unemployment as a separate problem, requiring separate 
 study and treatment. On the problem itself, as Bever- 
 idge points out, it has made no appreciable impression. 
 Even in its failure, however, it performed the great 
 service of demonstrating ''. . . the inadequacy of all mea- 
 sures which, like itself, leave industrial disorganization 
 untouched and deal only with the resultant human 
 suffering." ' 
 
 ^W. H. Beveridge, Unemployment: a Problem of Industry (Lon- 
 don 1912), p. 191. 
 
 Cf. pp. 162-191 for a careful criticism by a man who was closely in 
 touch with the practical working out of the Unemployed Workman 
 Act. 
 
 Cf. also, /Report to Legislature of the State of New York by the Com^ 
 mission to inquire into the Question of Employers' Liability and 
 Other Matters. Third Report, Unemployment and Lack of Farm 
 Labor (April 26, 191 1), pp. 71-83. A very complete analysis, especially 
 illuminating on the work of the farm colonies in England. On pp. 
 130-3 of this same (N. Y.) report the text of the Unemployed Work- 
 man Act is given. 
 
 Mention should be made of another factor which has from time to 
 time been of importance in the relief of the unemployed — that is, the 
 work of voluntary agencies. The giving of charity of this type has 
 been based upon the belief, on the part of the movers in the various 
 schemes, that the Poor Law was inadequate for dealing with the able- 
 bodied unemployed. This work has consisted either of the collection 
 of emergency relief funds, to be dispensed with or without the require- 
 ment of work, or of the establishment of shelters and labor homes. 
 The most important instance of the direct dispensation of funds gathered 
 in this way is that of the famous Mansion House Fund of 1885-6. 
 Nearly ;^8o,ooo was distributed in London during that winter, in a 
 most haphazard and undiscriminating manner. "There are men still 
 living among the unemployed of today who can recall with regret those 
 golden days" (Beveridge, p. 158). The demoralizing effects of this 
 "orgie of relief" were felt for years. In 1904-5 another Mansion 
 
36 CONTEMPORARY THEORIES OF UNEMPLOYMENT [36 
 4. BOARD OF TRADE LABOR EXCHANGES 
 
 Since 1905 there have been two important develop- 
 ments in England in connection with the problem of 
 unemployment : the passing of the Labor Exchanges 
 Act in 1909 and of the National Insurance Act in 191 1. 
 Brief outlines of the essential features of these acts are 
 given, as the measures have an important bearing upon 
 the course of discussion concerning the problem being 
 reviewed. 
 
 . The labor exchanges which were authorized to be 
 established by the distress committees in the various 
 municipalities of Great Britain, under the Unemployed 
 Workman Act, were in fact put into operation only in 
 London, where they met with a limited degree of suc- 
 cess. In 1909 the government proposed a bill creating 
 a national system of labor exchanges under the Board of 
 
 House Fund was gathered. Farm colonies were established at Osea 
 Island and Hadleigh, outside of London. In return for work done 
 there by married men, who had previously been in regular employment, 
 their families were given relief in London. Far more satisfactory re- 
 sults were obtained. Similar funds were gathered at various times in 
 other cities, being dispensed, in the main, in a way that did more harm 
 than good. 
 
 Such shelters as have been established by private parties have been 
 under the control of the Salvation Army, the Church Army, and minor 
 religious bodies. In most cases relief in these places is given without 
 the exaction of work, there being thus a competition between lax, un- 
 disciplined private shelters and harshly severe casual wards. The 
 most notable accomplishment of religious bodies has been the establish- 
 ment of fairly successful rural colonies in certain places. 
 
 For descriptions of voluntary agencies for relieving the unemployed, 
 see, Minority Report, Royal Commission on the Poor Laws, part ii, 
 pp. 99-114; Report of Royal Commission oyi the Poor Laws, part vi, 
 ch. 3, pp. 468-481 and Beveridge, op. cit., pp. 157-162. 
 
 A very full description of the working of all agencies outside the 
 Poor Law for dealing with unemployment is given in appendices, vol- 
 umes 19, 19A and 19B to the Report of the Royal Commission on the 
 Poor Laws containing the findings of Cyril Jackson and J. C. Pringle. 
 
37] DEVELOPMENT OF ENGLISH UNEMPLOYMENT 37 
 
 Trade. It was passed with practically no opposition. 
 The chief provisions of the Act/ which is very brief, and 
 of the code of regulations drawn up under the Act, are 
 as follows : 
 
 1. The Board of Trade may establish labor' exchanges, 
 and such other agencies as they think fit, for the collec- 
 tion and furnishing of information as to employers re- 
 quiring work-people and work-people seeking employ- 
 ment. 
 
 2. The power of establishing labor exchanges without 
 the sanction of the Board of Trade is taken away from 
 the distress committees. 
 
 3. Local representative advisory committees, on which 
 are representatives of both employers and workmen, may 
 be appointed in each district to advise and assist the 
 Board of Trade in the management of the district labor 
 exchange. 
 
 4. Neutrality in trade disputes is provided for. 
 
 5. No fees are to be charged either to employers or 
 workmen. 
 
 6. TraveHng expenses may be loaned to work-people 
 traveling to employment found for them through a labor 
 exchange. 
 
 Provision was later made for the separate registration 
 of juvenile applicants for employment,^ and for close co- 
 operation with the education authorities for the place- 
 ment of juvenile workers.^ The task of communicating 
 
 ^ Cf., Report on Unemployment, etc. (N. Y.), pp. 134-40, for the text 
 of the Labor Exchanges Act, the regulations drawn up under it, and 
 the schedules used by the labor bureaus. 
 
 The text of the Act is also given in Beveridge— Appendix E, p. 279, 
 et seq. 
 
 ^Beveridge, pp. 289-90. 
 
 ^Ibid., pp. 285-8. 
 
38 CONTEMPORARY THEORIES OF UNEMPLOYMENT [38 
 
 with parents and of advising young persons as to the 
 work for which they are adapted is in the hands of the 
 local education authority, while that of registering the 
 actual applications for employment and bringing the 
 appHcants into touch with employers is, in the main, in 
 the hands of the labor exchanges. Special voluntary 
 advisory committees for juvenile work are provided for. 
 The main characteristic of the labor exchanges being 
 established under the Act is, in the words of the gen- 
 eral manager of the system, that they are" national, indus- 
 trial (not eleemosynary), free, voluntary, and impartial." ' 
 
 5. THE NATIONAL INSURANCE ACT 
 
 In December, 191 1, the English National Insurance 
 Bill' became a law. The Act went into operation on 
 July 15, 1912, and the payment of benefits under it began 
 on January 15, 1913. Provisions for sickness insurance 
 and unemployment insurance are made by the Act. 
 The chief provisions concerning the granting of unem- 
 ployment insurance are as follows : 
 
 I. Work-people (skilled or unskilled, organized or un- 
 organized) in the following trades are compulsorily 
 insured against unemployment : (a) Building; (b) Con- 
 struction of works; (c) Mechanical Engineering ; (d) 
 Shipbuilding; (e) Ironfounding ; (f) Construction of 
 vehicles ; (g) Sawmilling. 
 
 - National Conference on the Prevention of Destitution; Papers and 
 Proceedings (London, 191 1), p. 397. 
 
 For discussions of the working of the labor exchanges cf. National 
 Conference on Prevention of Destitution, pp. 215-72, 394-432. 
 
 Beveridge, op. cit., pp. 291-306. 
 
 Report on Unemployment, etc., (N. Y.), pp. 82-92. A careful and 
 comprehensive though brief report on the English system. 
 
 'For the text of the Act see David Lloyd George, The People's In- 
 surance (London, 191 1), pp. 144-160, 168-171. 
 
 Cf. also, Beveridge, Appendix F, pp. 314-334. 
 
39] DEVELOPMENT OF ENGLISH UNEMPLOYMENT 39- 
 
 These trades are in the two main groups of building 
 and engineering, the occupations which are most pre- 
 carious, in that they are subject to very considerable 
 seasonal and cyclical fluctuations. Lloyd George esti- 
 mated that about one-sixth of the industrial population 
 of England would be insured under the Act. 
 
 2. The machinery of administration is made up of the 
 previously existing labor exchanges, and the existing 
 trade unions giving unemployment benefits. 
 
 3. Compulsory contributions of 2jd. a week are paid 
 by each workman and by employers for each employee 
 during the period of employment. No contributions 
 are required while the workman is unemployed. 
 
 4. An amount equal to one-third of the total contri- 
 butions from workmen and employers (one-fourth of 
 the total) is to be paid into the fund by the state. 
 
 5. Abatements amounting to over 50 per cent of their 
 total contributions are allowed to employers who will 
 insure their workmen for a year at a time. This large 
 rebate is given in order to encourage employers to give 
 their men regular employment, and to discourage casual 
 employment. 
 
 6. Benefits of seven shillings a week in the engineer- 
 ing trades and six shillings a week in the building trades 
 for a maximum period of fifteen weeks of unemployment 
 during any twelve months are provided for, subject to 
 certain restrictions to prevent fraud and malingering. 
 
 7. Trade unions in the compulsorily insured trades, 
 which pay out-of-work benefits, will be repaid from the 
 insurance funds that amount of their benefits which 
 their members would have been entitled to draw had 
 they received their insurance directly. 
 
 8. Trade unions in other trades, which pay out-of- 
 work benefits, may receive from the general insurance 
 
40 CONTEMPORARY THEORIES OF UNEMPLOYMENT [40 
 
 fund an amount equal to one-sixth of tl^eir disbursed 
 benefits, provided that an amount not in ^cess of two 
 shillings a week per unemployed member shall be paid 
 to the unions from the general fund. This method of 
 aiding voluntary unemployment insurance is one of the 
 essential features of the Act. 
 
 The inauguration of this system of unemployment in- 
 surance is of such recent date that a judgment as to 
 success would be premature.' 
 
 This brief resume of the National Insurance Act brings 
 to an end the summary treatment of the theories and 
 remedies of the past, with which it was thought advisable 
 to introduce this monograph. Though an intensive treat- 
 ment of the subjects considered has not been possible, the 
 matter next to be taken up may perhaps be seen with 
 a truer perspective because of this introduction. 
 
 ^ Lloyd George, The People's Insurance, contains an interesting ac- 
 count of the presentation of the bill to Parliament by Mr. George, and 
 the arguments in favor of it. 
 
 Beveridge, Appendix F, pp. 307-361, gives the regulations and sched- 
 ules which have been drawn up in the administration of the measure. 
 
 Sidney and Beatrice Webb, in The Prevention of Destitution (Lon- 
 don, 1912), rather harshly criticise the original Insurance Bill. Their 
 general discussion of insurance as a measure of relief is illuminating 
 (pp. 158-220.) 
 
CHAPTER II 
 
 Contemporary English Theories of Unemployment 
 AND OF Unemployment Relief 
 
 Many diverse theories have in the past been advanced 
 and are held today as to the basic causes of the phe- 
 nomenon of unemployment. Some of the past theories 
 have been discarded with the advance of economic 
 knowledge. On the contemporary theories varying de- 
 grees of emphasis are placed by the different students of 
 the problem. Few of them advance one exclusive cause, 
 but few agree as to the relative importance of the sev- 
 eral outstanding causes. To take up in chronological 
 order, or otherwise, the complete scheme of each writer 
 would involve a great deal of repetition and a consider- 
 able degree of disorganization in the presentation of the 
 problem. It is deemed best, therefore, to consider sep- 
 arately each of the prominent group causes into which 
 fall the many theories advanced. 
 
 In the introductory chapter to his analysis of the 
 problem of unemployment,^ W. H. Beveridge emphasizes 
 several fundamental considerations which are equally 
 pertinent to the present exposition. The evil to be 
 studied, he says, is that of ''maladjustment between the 
 supply of and the demand for labor." ^ His inquiry, 
 therefore, is to be an economic one, not one made from 
 the standpoint of charitable administration. In the 
 
 ^ Unemployment: A Problem of Industry (London, 1912). 
 "^ Ibid., p. 3. 
 
 41] 41 
 
42 CONTEMPORARY THEORIES OF UNEMPLOYMENT [42 
 
 second place, it is unemployment, not the unemployed, 
 which must be studied, for '' any one unemployed indi- 
 vidual may represent the concurrence of many different 
 forces, some industrial, some personal/' ^ These two 
 general considerations will govern the present approach 
 to the problem. 
 
 What may be called the " orthodox " theories as to 
 the causes of unemployment may be ranged under four 
 main heads, to accept the classification set up by Bev- 
 eridge, which is convenient for the present purpose. 
 They are: the loss and lack of industrial quality; indus- 
 trial fluctuations; the reserve of labor; and the personal 
 factor. Certain theories {g. g,, that of a labor-surplus) 
 do not fall within this classification, being omitted be- 
 cause not widely held today. Reference to some of these 
 outlying theories is made below.^ 
 
 I. LOSS AND LACK OF INDUSTRIAL QUALITY 
 
 The ultimate problem of unemployment, as has been 
 pointed out, is that of lack of adjustment between the 
 supply of labor and the demand for labor. The present 
 section deals with types of "qualitative maladjustment," 
 
 ^Beveridge, op. cit., p. 3. 
 
 ' It is perhaps unnecessary to state that in the present consideration 
 of the different theories nothing but their broad outlines can be sketched. 
 For the details of the different proposals, and for the technical points 
 concerning the administration of the proposed relief measures, reference 
 may be made to the authorities quoted. 
 
 Attention should also be called to the fact that a very considerable 
 re-alignment of the theories of most of the authorities dealt with will 
 be necessary in order to bring them under the accepted classifica- 
 tion, inasmuch as the methods of attacking the problem and of classify- 
 ing its elements vary with each individual writer. 
 
 The grouping accepted seems to be the best available. Its use will 
 make for greater clearness and simplicity of presentation than would 
 otherwise be possible. 
 
43] CONTEMPORARY ENGLISH THEORIES 43 
 
 wherein the available supply of labor is not of the quality 
 demanded by contemporary industrial needs. This mal- 
 adaptation may be due to one of three causes. 
 
 In the first place there may be changes in the char- 
 acter of the demand for labor, "changes of industrial 
 structure," due to the decay of particular industries, the 
 introduction of new processes or of machinery, or to a 
 regional shift in the location of an industry or a group 
 of industries.' Controversies have raged since the days 
 of the classicists as to the eiifect of such industrial 
 changes on the condition of the laboring classes. The 
 view held jointly by Ricardo* and Marx 3 that the use of 
 machinery tended to displace labor has been mentioned. 
 The general conclusion of the older economists, however, 
 was that merely temporary distress would be caused by 
 such changes, since the gross demand for labor would 
 be increased by increased production.** This is also the 
 general consensus of opinion among modern economists, 
 though the relative degree of importance attached to it 
 as a cause of unemployment varies widely. There is no 
 controverting the fact that a new process may render a 
 a skilled man's technical knowledge useless,^ even while 
 tending ultimately to increase the totial produce of the 
 
 ^ Cf. Beveridge, pp. 111-13. Cf. also J. A. Hobson, The Problem 
 of the Unemployed (London, 1896), pp. 38-44. 
 
 An illuminating description of " Increasing and Decreasing Trades," 
 covering the period from 1861 to 1891 is given by Charles Booth in his 
 Life and Labor of the People in London, vol. v, second series (vol. 
 ix of the complete works), pp. 295-302. 
 
 ^ Supra, pp. 17-18. 
 
 ' Supra, pp. 21-23. 
 
 *• Supra, p. 23. 
 
 ' C/. N. B. Dearie, Industrial Training (London, 1914), p. 352. 
 Cf. also Minority Report part ii, pp. 167, 189-90. 
 
44 CONTEMPORARY THEORIES OF UNEMPLOYMENT [44 
 
 country, and hence the demand for labor.' Beveridge is 
 among those who contend that such changes are of Httle 
 practical importance in affecting the volume of unem- 
 ployment,'' holding that these industrial reformations act 
 very gradually in reducing the demand for any particular 
 type of labor. The majority report, emphatically deny- 
 ing a contraction in the gross demand for labor, yet 
 urges the importance of the "social time-lag'^ as a cause 
 of local and temporary unemployment.^ The Webbs in 
 their minority report class these changes as one of the 
 important " frictions of industrial life " which are con- 
 stantly turning steady men out of permanent situations, 
 " men who for years have satisfied the demand for labor 
 in one form and who may find the form suddenly 
 changed ; their niche in industry broken up ; their hard- 
 won skill superfluous in a new world; themselves also 
 superfluous unless they will and can learn fresh arts and 
 find the way into unfamiliar occupations." "^ A similar 
 argument is put forward by Mr. John Richardson in his 
 testimony before the Poor Law Commission.^ He holds 
 that modern machine methods tend, in their ultimate 
 effects, permanently to displace labor, as well as to re- 
 duce the general level of skill and intelligence among 
 workers. 
 
 ' Cf. Great Britain, Report of Royal Commission on the Poor Laws, 
 Appendix, vol. ix. pp. 202 — 3. An interrogation of Sidney Webb by- 
 Professor Smart concerning the effects of machinery and changing 
 industrial processes gives rise to an illuminating exchange of opinions 
 on the subject. 
 
 'Beveridge, pp. 113-17. 
 
 '^Report of Royal Commission on the Poor Laws, part vi, ch. 1, pp. 
 437-45. 
 
 * Quoted, Minority Report, part ii, p. 168. Cf. also Prevention of 
 Destitution, p. 95. 
 
 '"Report of Royal Commission on the Poor Laws, appendix, vol. ix, 
 pp. 252-3. 
 
45] CONTEMPORARY ENGLISH THEORIES 45, 
 
 A view midway between these diverse contentions is 
 held by Hobson. The factor determining whether un- 
 employment is to be increased or diminished by the 
 introduction of machinery in a particular trade is the 
 " elasticity of demand " for the product of that trade. 
 If inelastic, workers will be displaced, but even in this 
 case there need be no net reduction of employment, since 
 the purchasing power released by the fall of price of a 
 commodity will be turned in other directions/ 
 
 The requirement laid upon the modern working-man 
 by this ** changeability of the industrial process *' is that 
 of a degree of mobility and adaptability never exacted 
 from his predecessors. On this point all agree, whether 
 tending to minimize or exaggerate the importance of 
 these changes.* 
 
 The second factor tending to bring about a loss of 
 industrial quality is that of age. The worker who is 
 growing old, who is losing his power to adapt himself 
 to new conditions and new circumstances, is facing an 
 industrial world which requires a constantly greater de- 
 gree of adaptability. Extensive inquiries tend to prove 
 that men are not turned out of their positions on account 
 of old age any more frequently at present than has been 
 the case in the past,^ but that getting back into industry 
 after middle age has been reached is becoming more 
 difficult. Rather convincing evidence on this point is 
 given by Rowntree and Lasker in the record of an in- 
 
 *J. A. Hobson, The Industrial System (London, 1909), pp. 279- 
 282. Cf. also, Hobson, Problem of the Unemployed, pp. 49-50. 
 
 'On this subject cf. Geoffrey Drage, The Unemployed (London, 
 1894), pp. 127, 148-9; Percy Alden, The Unemployed (London, 1905), 
 pp. 34, 66. Alden's book deals almost exclusively with proposed rem- 
 edies, taking certain causes rather for granted. 
 
 '^ Cf. Beveridge, pp. 117-24. 
 
46 CONTEMPORARY THEORIES OF UNEMPLOYMENT [46 
 
 tensive study of unemployment in the town of York. 
 For practically one-fourth (23.3^) of the regular workers 
 unemployed at the time of their survey, age was the 
 primary factor which rendered re-entry into industry 
 difficult/ It is interesting to note that the one apparent 
 exception to this general rule was found in the building 
 trades, in which contractors evidently favored men above 
 middle age."" A considerable difference of opinion exists 
 as to whether the length of industrial life is increasing 
 or diminishing. On the one hand it is held that the 
 period of dependence has increased, because, with a 
 lengthening actual life there has been no change in the 
 length of the working life.^ This is controverted, at 
 least in its absolute form, by Beveridge, who shows by 
 means of superannuation age figures that in certain trades 
 the working life has increased.'^ The Webbs specifically 
 deny that age is of increasing importance as a cause of 
 the turning of men out of industry, holding, however, 
 that age makes more difficult the mobility and adapta- 
 bility required in the modern world. ^ 
 
 Third of the causes of maladjustment as to quality be- 
 tween the supply of and the demand for labor is that of 
 
 ^ Rowntree and Lasker, Unemployment: A Social Study (London, 
 191 1), pp. 52-4. 
 
 Ubid., p. 148. 
 
 'C.J. Hamilton, "Unemployment in Relation to Age and Accident." 
 In : Papers and Proceedings, National Conference on the Prevention of 
 Destitution (1911), pp. 460-6. 
 
 * Unemployment, pp. 122-3. 
 
 ^Minority Report, part ii, pp. 224-30. 
 
 A. C. Pigou, Unemployment (N. Y., 1913), places age among the 
 several causes conducing to maladjustment between wage rates and de- 
 mand, and hence to unemployment. Cf. infra, pp. 48-49. 
 
 Cf. also Testimony of Mr. John Richardson before the Poor Law 
 Com., appendix, vol. ix, p. 253. 
 
47] CONTEMPORARY ENGLISH THEORIES 47 
 
 deficiency of industrial training. This is placed by some 
 as the ranking cause for the existence of unemployment, 
 or, at least, as one of the most insidious and demoraliz- 
 ing of the several causes. "We regard," says the Min- 
 ority Report of the Poor Law Commission^ " this pierpet- 
 ual recruitment of the unemployable by tens of thousands 
 of boys, who, through neglect to provide them with 
 suitable industrial training, may almost be said to grad- 
 uate into unemployment as a matter of course, as perhaps 
 the gravest of all the grave facts that the Commission 
 has laid bare." ^ 
 
 The theory, in its broad form, is as follows : A charac- 
 teristic feature of modern industry is the employment of 
 juveniles not as learners but as wage-earners,'' in occu- 
 pations which they can retain only up to maturity, and 
 which fail to prepare them for anything other than the 
 lowest forms of unskilled work. These " blind alley" or 
 *Mead end" occupations are the breeding grounds for 
 the low-grade casual type which forms the chief element 
 in the underemployed and unemployable classes. That 
 these classes are so recruited is clearly shown by the 
 startlingly large precentage of youths applying to dis- 
 tress committees.3 Not only has lack of industrial train- 
 ing characterized ** blind alley" employments, but also 
 vicious habituation to irregularity and often to im- 
 morality.'^ 
 
 ' Quoted, Dearie, p. 416. 
 
 ' Ci. supra, p. 21-23, note on Marx' theories. 
 
 ^Minority Report, part ii, p. 220. 
 
 *■ E. g. the influence of the messenger service. 
 
 Cf. Dearie, Industrial Training, pp. 360-452, for a very complete 
 analysis of the *' blind alley " and its relation to the problem of unem- 
 ployment. 
 
 Cf. also Cyril Jackson, "Boy Labor", Royal Commission on the 
 Poor Laws, appendix, vol. xx. 
 
48 CONTEMPORARY THEORIES OF UNEMPLOYMENT [48 
 
 The opinion of the subscribers to the minority report 
 as to the importance of this subject is clear from the 
 above quotation. Again they state, " The mass of un- 
 employment is continually being recruited by a stream 
 of young men from industries which rely upon unskilled 
 boy labor and turn it adrift at manhood without any gen- 
 eral or special industrial qualification and — it will never 
 be diminished until this stream is arrested." ' Beveridge, 
 however, while recognizing the deleterious effects of 
 this system of juvenile employment, and considering it 
 to be a vital factor in the determination of the incidence 
 of unemployment, does not hold it be of extreme impor- 
 tance in its effects upon the volume of unemployment."* 
 It does help to determine what individuals shall be 
 among the casuals and the under-employed, but the mere 
 elimination of that system " would not touch the causes 
 of industrial fluctuation, or, in practice, prevent casual 
 employment." 3 The reason, according to Beveridge, for 
 the existence of a group of casual laborers is not the 
 unfitness of certain men for steady work, but the pre- 
 sence of a demand for that type of labor. The lack of 
 industrial training facilitates but does not cause casual 
 labor.* 
 
 From another point of view Professor A, C. Pigou 
 advances a theory as to the relation of this " blind alley" 
 training to unemployment. His general contention is 
 
 ^Minority Report, part ii., p. 224. 
 
 A vivid description of these conditions is given by Sidney Webb in 
 the introduction to Juvenile Labor Exchanges and After Care, by 
 A. Greenwood (London, 1911). 
 
 ' Unemployment, pp. 125-32. 
 
 ^ Ibid,, p. 131. 
 
 * For a discussion of the topic of the relation of casual employment 
 to unemployment cf. infra, ch. ii, sec. 5. 
 
49] CONTEMPORARY ENGLISH THEORIES 49 
 
 that " unemployment is wholly caused by maladjustment 
 between wage rates and demand," his main thesis being 
 that unemployment is due to an excess of the demanded 
 wage rate above the competitive level which would 
 normally be established where a given number of people 
 of given degrees of efficiency are competing for work 
 under a system of casual engagement/ Since payment 
 cannot be adjusted to efficiency " an element of artifici- 
 ality is introduced into the wage rate of second-grade 
 work-people."'' Especially is this true where, because 
 of humanitarian ideas, a legal or customary minimum 
 wage above the normal competitive level for inefficient 
 workers is established. The creation of inefficient work- 
 ers, therefore, through faulty industrial training, is a 
 strong factor in bringing about a state of maladjustment 
 between wage rates being paid and those rates normal 
 to the number and relative efficiency of the workers. 
 Pigou, in fact, places such emphasis on this factor (to- 
 gether with that of personal disability), that he lays 
 down this law : " The determinant upon which the aver- 
 age amount of unemployment ^ depends is found in the 
 number of work-people of the lowest grade, so ill- 
 endowed by nature and education as to be incapable of 
 really efficient work, that exist in any country, as com- 
 pared with its general wealth." '^ 
 
 N. B. Dearie, writing with the experience of an inten- 
 sive survey of industrial training in London, presents 
 the problem in yet another light. The lack of industrial 
 
 ^A. C. Pigou, Unemploymetit, pp. 51-7. 
 
 Ubid., p. 63. 
 
 'Pigou uses the term unemployment as practically equivalent to ** in- 
 voluntary idleness," including time lost by persons working short time 
 as well as by those doing no work; Unemployment, p. 242. 
 
 *Ibid.y pp. 66-7. 
 
50 CONTEMPORARY THEORIES OF UNEMPLOYMENT [50 
 
 training, according to his analysis, helps to determine 
 the amount as well as the incidence of unemployment/ 
 The reason for this effect upon the amount of unemploy- 
 ment is found in the possibility of '* substitution of 
 methods " in production. Employers adapt their meth- 
 ods to the labor supply, doing their work with steady^ 
 skilled hands if they are available, or with a large num- 
 ber of lower-grade irregularly employed workers, if they 
 are to be obtained. Net profit to the employer is often 
 the same, whether he turn out high-class goods or cheap 
 low-grade goods, so the choice of method is in a sense 
 immaterial to him, depending upon the available labor 
 supply.^* That labor which is the product of " blind 
 alley" employment is peculiarly suited to the second 
 type of production, with its greater amount of irregu- 
 larity. There results, essentially because of the existence 
 of *' blind alleys," a greater amount of unemployment. 
 
 A discussion of the reflex influence of unemployment 
 upon industrial training is an important contribution 
 which Dearie makes.^ The relation of the supply of labor 
 to the demand for it will determine whether the methods 
 of production and of training are to be wasteful or other- 
 wise. If there be a '* defective demand" {i. ^., one 
 considerably short of the total labor supply) irregular 
 methods of employment and bad methods of training 
 will be resorted to. That such a defective demand has 
 existed in England for years is proved, in Dearie's eyes, 
 by the excessive waste of boy labor, and by the unneces- 
 sarily huge reserves of labor maintained both in the 
 skilled and unskilled trades. There is thus a vicious 
 interaction between unemployment and faulty industrial 
 training, each tending to perpetuate the other. 
 
 ^Industrial Training, p. 418, -Ibid., pp. 418-20. 
 
 ^Ibid., pp. 427-52. 
 
5 1 ] CONTEMPORARY ENGLISH THEORIES 5 1 
 
 The majority of the Poor Law Commission hold that 
 " the growth of large cities has brought with it an enor- 
 mous increase in the (juvenile) occupations that are 
 making directly for unemployment in the future."^ In 
 very comprehensive papers presented to that Commission, 
 Reginald Bray"" and Michael E. Sadler ^ put forward 
 similar contentions, the former epigramatically stating 
 that " No use at five-and-twenty is of more validity than 
 too old at forty." 
 
 Of the unemployed youths interviewed in the survey 
 of York, the great majority had come from "blind alley'' 
 occupations.* 
 
 The most detailed study extant of the actual occupa- 
 tions entered upon by boys leaving the elementary 
 schools, with regard to the permanence and educative 
 value of these occupations, was made by Cyril Jackson 
 for the Royal Commission on the Poor Laws.^ His 
 survey convinced him of the dififiiculty boys find in secur- 
 ing permanent work of a satisfactory character, and of 
 the degenerating effect of the work they do get not only 
 negatively in failing to train them, but positively in 
 breaking down character and sense of responsibility.^ 
 
 The question as to whether the lack of industrial train- 
 ing merely causes certain individuals rather than others 
 to be unemployed, or does actually increase the aggre- 
 
 * Report of Royal Commission on the Poor Laws, vol. i, p. 418. 
 "^ Ibid., appendix, vol. ix, pp. 315-29. 
 
 ^ Ibid., appendix, vol. ix, pp. 211-28. 
 
 * Rowntree and Lasker, Unemployment, p. 9. 
 
 This fact, of course, neither proves nor disproves the Beveridge con- 
 tention that faulty training determines the incidence, not the volume, 
 of unemployment. 
 
 ^Appendix, vol. xx. 
 
 '^ Ibid., pp. 27-28. 
 
52 CONTEMPORARY THEORIES OF UNEMPLOYMENT [52 
 
 gate amount of unemployment, is perhaps of academic 
 rather than of practical interest, since even those who 
 hold the former view admit that the evil facilitates casual 
 employment, and should be eliminated. 
 
 The three factors dfscussed in the present section, 
 though technically differing in character, are all inter- 
 related causes for qualitative maladjustment between the 
 supply of and the demand for labor. Whether maladap- 
 tation is due to an " objective change in the methods of 
 production," a " subjective change brought by advancing 
 years," or to original deficiencies in industrial training, 
 there is the same ultimate evil to be dealt with. 
 
 2. PROPOSED REMEDIES FOR QUALITATIVE 
 MALADJUSTMENTS 
 
 The inadvisability of attempting in any way to inter- 
 fere with changes in industrial processes, because of their 
 ultimate beneficial results, is admitted by practically all 
 the authorities. Dearie does not sanction the methods 
 of production, arising from a defective demand, which 
 depend upon cheap, irregular labor, and hence would 
 discourage that type of industrial change. However, he 
 sees no method of preventing that particular evil except 
 through an increasing demand for labor.' The conclu- 
 sion, therefore, in regard to this first cause is that, in- 
 dustrial changes being unavoidable, the remedy for 
 resulting distress is to be found in community action to 
 further mobility and adaptability on the part of its labor 
 force. 
 
 Beveridge conceives that the organization of the labor 
 market, the bringing about of ^'organized fluidity of labor " 
 through a national system of labor exchanges, would of 
 
 ^Industrial Training, p. 452. 
 
53] CONTEMPORARY ENGLISH THEORIES 53 
 
 itself largely settle this problem/ Guidance to new oc- 
 cupations, not support, is requisite for men who have 
 lost their established means of livelihood. The Webbs 
 go somewhat further than this. The necessary adapta- 
 bility, in their view, must be given by the state to those 
 who are capable of resuming their places in industrial 
 employment. Free training establishments with a strict 
 curriculum of physical and industrial training, aiming at 
 the '* industrial over-hauling " of each individual ad- 
 mitted, are earnestly advocated.^ The majority of the 
 Poor Law Commission also propose labor exchanges 
 for assisting the mobility of labor,^ and agricultural and 
 industrial institutions for training the unemployed.'^ 
 
 A fact which is becoming of increasing importance in 
 connection with the introduction of machinery, tending 
 to lessen the resulting displacement of labor, is that 
 modern machinery largely displaces other machinery. 
 Less and less does it replace the handicraft arts, as it 
 formerly did. So narrow has the field of handicraft be- 
 come that future machine inventions will in all probability 
 cause but a small fraction of the distress occasioned by 
 the first inventions. From the tending of one machine 
 the modern operator turns to the tending of another and 
 more efficient machine. As a factor in unemployment, 
 therefore, such mere mechanical changes appear to be 
 becoming of minor consequence. 
 
 ^ Unemployment,^^. 210-11 ; cf. infra, ch. ii, sec. 6, for the discussion 
 of labor exchanges. 
 
 ^Minority Report, part ii, pp. 301-2. . 
 
 ^Report of Royal Com,, on the Poor Law, vol. i, pp. 507-9. 
 
 ^ Ibid., p. 545. The general proposals concerned with unemployment 
 insurance and assistance during periods of unemployment are relevant 
 in this connection, but since they apply to all unemployment, whatever 
 the cause, they will be treated separately. Cf. infra, ch. ii, sees. 9, 10. 
 
54 CONTEMPORARY THEORIES OF UNEMPLOYMENT [54 
 
 Unemployment due to old age can at least in part be 
 prevented through a labor-exchange system, which 
 should aim to place older men in positions for which 
 they are peculiarly fitted.' The aim of social policy, 
 Beveridge asserts, is to keep age secure ; old men should 
 therefore be given a marked preference in the filling of 
 positions. Pigou, who sees a chief cure for unemploy- 
 ment in the adjustment of payment to efficiency, urges a 
 lower scale for older men, pointing out that in fact sev- 
 eral trade unions not only permit but enforce this lower 
 rate.^ 
 
 Old-age pensions, though not established in England 
 with any direct reference to the problem of unemploy- 
 ment, have some bearing upon this question. The Old 
 Age Pensions Act of 1908 provided that all persons over 
 seventy years of age whose annual income did not ex- 
 ceed thirty-one pounds, ten shillings, should receive 
 weekly pensions from the government. The amount of 
 the pension varies from five shillings to one shilling per 
 week, according to the means of the pensioner. Certain 
 disqualifications are provided for, but in the main the 
 provisions of the Act are liberal.^ 
 
 The most important element in this problem of con- 
 forming the quality of the labor supply to the demand is 
 that of eliminating the evil of "blind alley" employment, 
 of ensuring to the youthful worker a training which shall 
 fit him for steady occupation later in life.*^ Here again 
 
 ^Ct. Beveridge, p. 211. ^Unemployment, pp. 61-2. 
 
 'The text of the Act may be found in William A. Casson's pamphlet, 
 Old Age Pensions Act (London, 1908), which gives, as well, the regu- 
 lations made thereunder, and explanatory annotations. Old Age Pen- 
 sions and the Aged Poor by Charles Booth (London, 1899), is still of 
 value on this subject. 
 
 *For a complete discussion of existing agencies designed to accom- 
 plish this end, and the presentation of a careful program of future policy, 
 cf. Dearie, Industrial Training, pp. 452-553. 
 
55] CONTEMPORARY ENGLISH THEORIES 55 
 
 we must avoid a digression into controversies concern- 
 ing technical methods, and merely outline a broad pro- 
 gram, indicating one or two points of difference of 
 opinion. 
 
 There are two main phases to this question of youth- 
 ful misfits — the organization of boy labor, and the reor- 
 ganization of general education and industrial training.' 
 A beginning in the solution of the problem of organizing 
 the boy labor market has been made in the establish- 
 ment of juvenile labor exchanges, connected with the na- 
 tional labor-exchange system and co-operating with the 
 national educational authorities.'' The building-up, 
 however, of a thorough system of juvenile advisory com- 
 mittees, of voluntary care committees, of juvenile trade 
 boards, and of the various agencies by which children 
 are to be advised and directed in their choice of occupa- 
 tions, is, to a great extent, still to be consummated.^ On 
 the need for these all are agreed. Arthur Greenwood, 
 in a valuable little book,* sums up the possibilities of re- 
 form in the juvenile labor market. 
 
 In regard to the necessary reorganization of general 
 education, the majority Report sounds the keynote of a 
 general complaint. That "... our school curriculum 
 does not supply the right class of instruction and train- 
 ing for industrial purposes," that "... the atmosphere 
 of our school life is (not) altogether congenial to a 
 career of manual labor," and that as a consequence 
 '* clerical labor is a glut upon the market " while " high 
 class artisans are at times obtained with difficulty" are 
 
 » Cf. Dearie, p. 528. 
 
 ' Cf. supra, p. 37. 
 
 3 Cf, Dearie, pp. 544-49- 
 
 *• Juvenile Labor Exchanges and After Care (London, 1911). 
 
56 CONTEMPORARY THEORIES OF UNEMPLOYMENT [56 
 
 some of the strong assertions made.' The majority lay 
 down no direct program for reform, but urge the Board 
 of Education '* thoroughly to reconsider the curriculum, 
 the aims, and the ideals of elementary education," en- 
 dorsing in part the recommendations of their investiga- 
 tor, Mr. Cyril Jackson. A school-leaving age of 15, 
 with attendance until 16 of boys not properly employed, 
 is specifically advocated, while a tentative recommenda- 
 tion for universal military service is made."" Dearie, in 
 this same connection, advises the development of manual 
 training, general industrial and commercial training for 
 the older boys, and 15 as the school-leaving age.^ 
 
 The question as to the methods of giving the technical 
 industrial training required is a bone of bitter contro- 
 versy betw^een the different English authorities. Best 
 results are looked for by Dearie with a system of reor- 
 ganized and supervised workshop apprenticeship, com- 
 pulsory continuation schools being provided for boys 
 under 18 not satisfactorily employed. Certain "blind 
 alley" trades are to be eliminated, while the evil results 
 of others are to be counteracted by supervision and con- 
 nection with continuation schools. To accompany these 
 reforms, the prohibition of excessive hours of labor and 
 the restriction of night work by juveniles are advocated.* 
 The contentions of Professor Pigou are based upon his 
 general analysis of the unemployment situation. He 
 urges the discouragement of "blind alley" occupations 
 and the provision of increased facilities for education 
 
 ^ Report of Royal Commission on the Poor Laws, vol. ii, p. 231. 
 
 ^For Mr. Jackson's conclusions and recommendations fsee appendix, 
 vol. XX, to the Report of Royal Commission on the Poor Laws, pp. 
 27-32. 
 
 ^Industrial Training, p. 550. 
 
 ^Ibid., p. 551. 
 
57] 
 
 CONTEMPORARY ENGLISH THEORIES 
 
 S7 
 
 and training as measures which will tend to bring the 
 general level of efficiency up to that which is worth the 
 customary minimum wage, and which will thus tend to 
 eliminate unemployment.' Rowntree and Lasker, with 
 other suggested reforms, advocate the creation of com- 
 pulsory schools giving technical and physical training to 
 unemployed juveniles up to the age of 19. ^ 
 
 A contribution of great value to the study of the 
 whole problem of child-work is made by Miss O. J. 
 Dunlap and Richard B. Denman in their English Ap- 
 prenticeship and Child Labor.^ Though not essentially 
 an analysis of child labor as a factor in unemployment, 
 it throws a flood of light on this phase of the subject, 
 the historical study of the apprenticeship system and 
 the changes in industrial method being strikingly illum- 
 inating. Their findings in the latter regard, concerning 
 industrial changes, lead them to a conclusion directly 
 opposed to that of Dearie on the question of shop- 
 apprenticeship. **The systematic enforcement of ap- 
 prenticeship," they assert, "would be impossible under 
 modern industrial conditions,"* though they admit its 
 limited applicability. Moreover, they allege that there is 
 a real demand today for a great deal of low-skilled labor, 
 so that the plan of giving all boys a technical training is 
 absurd.^ Every youth, however, needs protection from 
 the evil of lack of educative qualities, and should be 
 given the adaptability, initiative and physical well-being 
 needed in any work he will do. For the attainment of 
 this general training and for the improvement of juvenile 
 working conditions four general proposals are made. 
 
 ^Pigou, Unemployment y p. 243. 
 ^London, 1912. 
 ^Ibid., pp. 330-1. 
 
 ^ Unemployment, pp. 20-28. 
 ^Ibid., p. 327. 
 
58 CONTEMPORARY THEORIES OF UNEMPLOYMENT [58 
 
 The raising of school age, an adolescent part-time sys- 
 tem, with compulsory continuation classes, the regula- 
 tion of youthful employment out of school hours, and 
 the creation of juvenile advisory committees to assist in 
 the organization of the juvenile labor market are recom- 
 mended as essential to the elimination of the evils of the 
 present system/ 
 
 The subscribers to the Minority Report advance the 
 most drastic scheme of any proposed. For the full un- 
 derstanding of the plan it should be noted that they have 
 in mind not only the good of the juveniles concerned 
 but the necessity of finding industrial vacancies for the 
 surplus labor resulting from the carrying-out of a pro- 
 cess of "decasualization."* The chief points in the rec- 
 ommendation are these : ^ 
 
 1. No boy under the age of 15 shall be employed in 
 any occupation whatsoever. 
 
 2. No youth under the age of 18 shall be employed for 
 more than 30 hours a week. 
 
 3. All youths between the ages of 15 and 18 shall 
 attend a compulsory continuation school giving physical 
 and industrial training 30 hours a week. 
 
 W. H. Beveridge looks upon the problem of improv- 
 ing the conditions of youthful labor as identical in prin- 
 ciple with that of organizing the labor market, both be- 
 ing methods of adjusting supply to demand. That 
 industrial training can be looked upon as " the principle 
 
 remedy for unemployment " is denied.'* Technical edu- 
 
 • 
 
 * Cf. English Apprenticeship and Child Labor, pp. 309-50, for a very 
 comprehensive treatment of the modern problem of juvenile labor, 
 
 'C/. infra, ch. ii, sec. 6. 
 
 'C/. Minority Report, part ii, pp. 268-75. 
 
 * Unemployment, p. 212. 
 
59] CONTEMPORARY ENGLISH THEORIES 59 
 
 cation is endorsed only in so far as it can be guided by 
 an accurate knowledge of industrial conditions, the ideal 
 of teaching a trade to every youthful worker being con- 
 demned.' The best contribution the educational system 
 can make, Beveridge maintains, is the encouragement of 
 adaptability, not the teaching of any particular trade. 
 Primarily it must be through a better organization of 
 the labor market, with an extension of labor-market or- 
 ganization into the schools, that this type of maladjust- 
 ment is to be remedied. "^ 
 
 3. INDUSTRIAL FLUCTUATIONS 
 
 The second of the group-causes for unemployment is 
 industrial fluctuations resulting in a changing demand 
 for labor. These fluctuations are of two types — sea- 
 sonal, in which the complete cycle of falling and in- 
 creasing demand is completed within the period of one 
 year, and cyclical, in which the change extends over a 
 number of years. It is a characteristic feature of the 
 first type that the variations in activity are trade varia- 
 tions, usually affecting each trade or group of trades in 
 a peculiar and distinctive manner and at a particular 
 time. The cyclical fluctuations strike practically all 
 trades alike, resulting in fairly uniform periods of activity 
 and depression. 
 
 The causes of seasonal fluctuations are not far to seek, 
 nor is there any considerable difference of opinion con- 
 cerning them. The root cause is, !of course, climatic. 
 That is the sole determinant of cultivating, sowing and 
 
 * Unemployment, p. 214. 
 
 ^Ibid., pp. 211-15. 
 
 Reference to the necessity of reforming conditions of juvenile educa- 
 tion and labor is made by Charles Booth in Life and Labor of the 
 People in London, vol. v, second series (vol. ix of collected works), 
 pp. 295-302. 
 
6o CONTEMPORARY THEORIES OF UNEMPLOYMENT [60 
 
 harvesting periods in the agricultural industries, and of 
 all the activities dependent upon these. Similarly, 
 weather conditions affect directly building activities, and 
 indirectly coal mining and gas manufacture, through 
 their influence on demand. A directly derived cause is 
 the " periodicity of social and economic activities." ^ 
 While usually these are immediately dependent upon 
 climatic changes, there is a large number of cases in 
 which mere custom, once seasonal periods exist, has 
 maintained them after the original climatic necessity had 
 disappeared. Thus wool sales take place six times a 
 year in the British Isles on dates maintained by the force 
 of custom alone. ^ The fluctuations of the " tyrannous and 
 exacting demands of fashion " are similarly determined to 
 a large extent by custom rather than by meteorological 
 necessity. 
 
 The widespread effect of this seasonality, influencing 
 during the course of a single year the volume of output in 
 practically every industry, has not been thoroughly appre- 
 ciated. Its presence even in trades far removed from direct 
 connection with weather conditions is due to the close in- 
 terlocking of the elements of modern industry, irregularity 
 in one trade ramifying with varying intensity through all 
 those connected with it.^ 
 
 Certain characteristics of seasonal fluctuations may be 
 briefly referred to. Not only do they vary in time between 
 different trades, but in regularity and range. Fluctuations 
 in industries characterized by large-scale production are 
 less marked than in those in which small-scale production 
 prevails.* With the widening of a trade's industrial area, 
 
 ^ Webb, Seasonal Trades, p. 34. 
 ' Cf. Beveridge, p. 34. 
 ' Cf. Seasonal Trades, p. 37, 
 'Ibid., p. 56. 
 
6i] CONTEMPORARY ENGLISH THEORIES 6l 
 
 both as regards sources of supply and markets, local fluc- 
 tuations tend to neutralize each other, and the irregularity 
 of the provincial stage tends to be lessened/ Seasonal irre- 
 gularity, moreover, is not so marked in those industries in 
 which the value of capital appliances is great ^ or in which 
 the necessary labor is skilled and limited in supply.^ In both 
 these cases it is to the employer's advantage to regularize 
 his work throughout the year. 
 
 The relation of seasonal fluctuations to unemployment 
 need not be extensively dwelt upon. A special committee 
 of the Charity Organization Society, investigating unskilled 
 labor, regarded the seasonal supply of commodities and the 
 seasonal demand for commodities as two of the four chief 
 causes of casual employment {i. e., employment for an hour 
 or a day) which is one of the most pernicious factors in 
 present-day unemployment.* Seasonality, with all other 
 forms of irregularity of employment, tends to build up in 
 each industry, and often for each employer, a reserve of 
 labor — a " stagnant pool " — large enough to satisfy the 
 total demand in the busiest season, and hence the source of 
 unemployment and under-employment during the rest of 
 the year.^ That the existence of these reserves is encour- 
 aged by employers for their own personal advantage is 
 probably true in many cases.® The throwing out of work 
 of skilled men by seasonal fluctuations is an obvious cause 
 of distress, for normally men of this type are not in a posi- 
 tion to pick up casual jobs during the off-seasons. Pro- 
 posals for relieving the unemployment due to these annual 
 
 ^ Cf. Seasonal Trades, p. 55. 
 
 ^Ihid., pp. 57-8. Cf. also Charity Organization Society, Report of 
 Special Committee on Unskilled Labor (London, 1908), pp. 5-6. 
 
 ^Ibid., p. 6. *'Ihid., p. 4. 
 
 5 Cf. infra, pp. 84-88. 
 
 ^Cf. Seasonal Trades, p. 60. 
 
62 CONTEMPORARY THEORIES OF UNEMPLOYMENT [62 
 
 changes in the activity of different industries are dealt with 
 at the end of this section/ 
 
 Fluctuations in business and industrial activity have char- 
 acterized the course of economic history since the beginning 
 of the nineteenth century. In the wake of the depressions 
 accompanying these fluctuations have been periods of wide- 
 spread unemployment, prevailing in all trades at the same 
 time. The evil effects of temporary seasonal depressions 
 have been inconsiderable as compared with the results of 
 three- or four-year periods of idleness or part-time employ- 
 ment. The causes of these periodic fluctuations are obscure 
 and intangible, yet deeply founded in the modern industrial 
 system. That they are obscure is best proved by the wide 
 diversity of theories that trained economists have advanced 
 to account for them. Discrepant opinions still persist. 
 Merely the briefest resume of a few of the most important 
 current theories of business cycles can be here included.^ 
 
 John A. Hobson gives these periodic depressions the cen- 
 tral position in his analysis of the unemployment question. 
 He deprecates the tendency to " fritter away the unity of 
 a great subject" by a study of detailed facts, which leads 
 to a failure to discern the true single cause of the various 
 phenomena. Unemployment, he maintains, is but an aspect 
 
 ^Seasonal Trades, by Webb and Freeman, which has been quoted 
 above, contains comprehensive descriptions of various trades in which 
 there are marked seasonal fluctuations. The introduction by Miss 
 Poyntz is of especial value. 
 
 Detailed data on seasonal irregularities in a number of trades are 
 given in Charles Booth's Life and Labour of the People in London, 
 vols, i, ii, iii, iv, second series (vols, v, vi, vii, viii of collected works), 
 passim. 
 
 * Cf. W. C. Mitchell, Business Cycles (in University of California 
 Memoirs, vol. 3, Berkeley, 1913), pp. 5-20, for a more comprehensive 
 summary of current theories. 
 
 In order to round out the discussion of causes of C5''clical fluctuations 
 certain American theories will be advanced at this point, though this 
 section is otherwise devoted to EngHsh theories. 
 
63] CONTEMPORARY ENGLISH THEORIES 63 
 
 of trade depression, and " under-consumption is the direct 
 economic cause of the industrial malady." ^ His argu- 
 ment, in outline, is this: There is a right proportion be- 
 tween saving and spending in the income of an industrial 
 community at any time, the right proportion being that at 
 which the amount saved will adequately provide for the 
 demand for final commodities on the part of the population 
 in the calculable future, maintaining full employment for 
 the factors of production. However, " the existence of a 
 surplus income not earned by its recipients . . . has the 
 effect of disturbing the economical adjustment between 
 spending and saving," for the surplus received in active 
 times by the small well-to-do class must perforce be 
 saved, their gross income being greater than their spending 
 power. This " over-saving " leads to large investment in 
 the means of production, and the markets become con- 
 gested with goods which cannot be sold at a profit, con- 
 sumption having failed to keep pace with the power of 
 production. Then comes a fall in prices, the incomes of 
 the wealthy are reduced until excessive saving is stopped, 
 and the glut is slowly worked off. During the period of 
 depression there is a " simultaneous excess of all the factors 
 of production; " this condition is the true problem of un- 
 employment. " Over-saving is the proximate cause of that 
 condition; the existence of surplus incomes is the ultimate 
 cause." ^ 
 
 The cause of market glutting (beyond the possibility of 
 sale at a profit) is laid by W. H. Beveridge at another door. 
 He agrees that with the present amount and distribution of 
 the national income " agencies for future production are 
 
 ^Problem ofJheUneptployed (London, 1896), p. viii. 
 
 * r^T also J. A. Hobson, The Industrial System (London, 1909), pp. 
 282-7. The most recent statement of Hobson's theory is given in this 
 work. 
 
64 CONTEMPORARY THEORIES OF UNEMPLO YMENT [64 
 
 set up in excess of present requirements." The reason, 
 however, is found in the nature of competition. The at- 
 tempt of a group of competing producers to " engross as 
 large a share as possible of the market" leads sooner or later 
 " to their joint production overshooting the demand and 
 glutting the market." ^ Result the usual depression and 
 unemployment until the accumulated stocks are cleared. 
 
 The majority of the Poor Law Commission, while rec- 
 ognizing trade cycles as an important factor in the unem- 
 ployment problem, make no attempt to give a specific solu- 
 tion for this evil, merely pointing out that with the modern 
 system of industrial organization, each individual catering 
 to the wants of others whom he may never meet, the marvel 
 is that supply and demand balance each other so well as 
 [they do, not that there are occasional maladjustments.* 
 
 Professor Pigou's reasoning on the subject of these fluc- 
 tuations and their relation to unemployment is novel. The 
 amount of the " aggregate wage-fund " {i. e., the quantity 
 of resources that a community is prepared at any time to 
 devote to the purchase, at a given wage, of labor) ^ is de- 
 pendent upon the amount of the real income of the com- 
 munity and the degree of optimism which business men 
 entertain as to the prospects of investment. Variations in 
 both these factors (income and optimism) come about as 
 the result of variations in the bounty of nature. In the 
 conclusion that, in a considerable number of cases, booms 
 in business confidence have their origin in good harvests, 
 Pigou holds that " deduction and induction corroborate 
 one another." * He further contends that there is a large 
 element of truth in Jevons' connection of cyclical move- 
 
 ^ W. H. Beveridge, Unemployment, p. 59. 
 
 ^ Report of Royal Com. on Poor Laws, pp. 423-4. 
 
 3 Pigou, Unemployment, pp. 113-4. 
 
 *Ibid., p. 115. . ' 
 
65] CONTEMPORARY ENGLISH THEORIES 65 
 
 ments with solar changes. An additional point which is 
 of importance in regard to the relation of these periodic 
 depressions to unemployment is made by Pigou. '' Cy- 
 clical movements of the general wage-fund tend to react 
 with exceptional force upon the demand for labor in indus- 
 tries engaged in the production of instrumental goods." ^ 
 This is true for two reasons : In the first place investments 
 are the essential point of fluctuation, and it is in the pro- 
 duction of these instrumental goods that investment be- 
 comes materialized. Secondly, variations in the demand 
 for the production of new instrumental goods are larger 
 partly because of the existence of a large stock of them, 
 relative to the annual output, and partly from the fact that 
 a period of boom adds to the stock and so confronts the 
 ensuing period of depression with an enlarged initial 
 supply.^ His conclusion is that "A nation which concen- 
 trates upon the manufacture of the instruments of industry 
 courts, thereby, a relatively heavy burden of unemploy- 
 ment." " 
 
 Of other explanations there have been many. Thus, 
 " May ascribes crises to the disproportion between the in- 
 crease in wages and in productivity, Aftalion to the dimin- 
 ishing marginal utility of an increasing supply of com- 
 modities, Bouniatian to over-capitalization, Spiethoff to 
 over-production of industrial equipment and under-produc- 
 tion of compHmentary goods, Hull to high costs of con- 
 struction, Lescure to declining prospects of profits, Veblen 
 to a discrepancy between anticipated profits and current 
 capitalization, Sombart to the unlike rhythm of production 
 in the organic and inorganic realms. Carver to the dis- 
 similar price fluctuations of producers' and consumers' 
 
 1 Pigou, Unemployment, p. 112. 
 
 ^Ihid., pp. 1 10-2. * Ibid., p. 112. 
 
66 CONTEMPORARY THEORIES OF UNEMPLO YMENT [66 
 
 goods, Fisher to the slowness with which interest rates are 
 adjusted to changes in the price level." ^ Because of the 
 extreme importance of this subject to the problem under 
 consideration it seems advisable, even at the risk of cover- 
 ing ground that has been well trod, to summarize the ex- 
 planation of business cycles given by Professor W. C. 
 Mitchell. His explanation necessarily lacks the simplicity of 
 the foregoing theories, for he holds that such fluctuations 
 can only be understood when viewed as the result of the 
 interaction of many and complex factors. The cycle may 
 be traced through, starting at any one. point : 
 
 Recovering from a period of depression we start with these 
 conditions — a low price level, a low cost of doing business, 
 narrow margins of profit, liberal bank reserves, a conservative 
 business policy, moderate stocks of goods, and cautious buying. 
 Given these conditions, with accumulated stocks exhausted, 
 population growing, timidity slowly being forgotten, and the 
 investment demand returning, an expansion in the physical 
 volume of trade begins. This spreads cumulatively through- 
 out the industrial world, returning to give new impetus where 
 it started. A rise of prices, also spreading rapidly, results, 
 larger profits being coined by producers because the rise in 
 supplementary costs lags behind the rise in selling prices. 
 Large profits and business optimism lead to an expansion of 
 investments, and the physical volume of business is further 
 swelled. 
 
 Stresses within the system of business begin to accumulate. 
 The costs of doing business gradually increase; capital be- 
 comes scarcer and interest rates rise; the negotiation of se- 
 curities becomes more difficult. Selling prices can be raised 
 sufficiently to offset these stresses in most industries. But 
 for an important minority prices cannot be raised or capital 
 cannot be secured and the prospect of declining profits must 
 
 1 Mitchell, Business Cycles, p. 19. 
 
67] CONTEMPORARY ENGLISH THEORIES 67 
 
 be faced. Credit, being based upon the capitalized value oi 
 present and prospective profits, begins to waver; investors 
 become wary and press for a settlement of outstanding ac- 
 counts. 
 
 With the liquidation of the huge credits that have been piled 
 up, a crisis develops. Liquidating debtors put pressure upon 
 their own debtors; other creditors take alarm. This liquida- 
 tion and the resulting contraction may be accomplished with- 
 out a violent wrench, or may be characterized by a financial 
 panic if the banking organization be weak. In the latter case 
 the evils of the crisis are intensified. 
 
 There follows a period during which depression spreads 
 over the whole field of business and grows more severe. 
 Wage-earners are discharged, family incomes fall, consumers' 
 demand declines. Business demand and investment are 
 curtaileid. Prices fall, discouragement spreads, enterprise is 
 checked. For two or three years industrial depression reigns 
 and i^ severe condition of unemployment exists.^ 
 
 4. PROPOSED REMEDIES FOR UNEMPLOYMENT RESULTING 
 FROM INDUSTRIAL FLUCTUATIONS 
 
 Of the remedies proposed for unemployment due to 
 seasonal fluctuations, the discussion of two, those concerned 
 with unemployment insurance and with relief for men dur- 
 ing periods of unemployment, will be deferred until the 
 general subject of causes of unemployment is concluded. 
 Certain others which apply to both seasonal and cyclical 
 fluctuations will be considered under the latter head.^ 
 
 The outstanding proposal as to methods of dealing with 
 seasonal fluctuations exclusively is that looking toward the 
 organized dovetailing of the various seasonal occupations, 
 so as to give the workers in seasonal trades subsidiary occu- 
 
 ^ W. C. Mitchell, Business Cycles, pp. 571-9. Most of the foregoing 
 summary is given in Professor Mitchell's own words. 
 2 Cf. infra, pp. 113-117. 
 
68 CONTEMPORARY THEORIES OF UNEMPLO YMENT [68 
 
 pations for the off-seasons. On the basis of studies made 
 by the Royal Commission on the Poor Laws and by some 
 of his own students, Sidney Webb puts forward the " eco- 
 nomic hypothesis " that " there is no seasonal slackness in 
 the community as a whole," ^ that the volume of employ- 
 Iment in the aggregate is practically constant throughout the 
 /year. Since weekly or monthly we are all consuming the 
 same amount in the aggregate, it follows that " we are 
 setting to work, in the aggregate, the same amount of 
 labour." ^ The annual distress, therefore, resulting from 
 alternations of employment and slackness in separate trades, 
 is due only to failures in adjustment, since the " seasons " 
 in different trades completely neutralize each other. In- 
 telligently organized mobility, secured by means of national 
 labor exchanges, will thus be able to eliminate most of the 
 distress of this character through the dovetailing of the 
 different seasonal industries into each other.^ 
 
 This contention that the aggregate demand for labor is 
 constant throughout the year is specifically denied by Pigou, 
 who asserts that '' the cold weather of winter is predomi- 
 nantly a cause of contraction in the demand for labor, the 
 area over which it cuts down demand being wider than 
 that over which it augments demand." * Even though the 
 winter depressions are only partly oft'set, however, by activ- 
 ity in other trades, Pigou urges the efficacy of labor ex- 
 
 * Seasonal Trades, p. viii. 
 ^ Ibid., p. ix. 
 
 ' J. A. Hobson in his latest book makes the same statement — that 
 "the aggregate employment during any given year does not vary much" 
 (Work and Wealth, N. Y., 1914, p. 230). Alternative trades for work- 
 ers in irregular employment are suggested as being entirely feasible. 
 That trades which are necessarily irregular should themselves carry the 
 burden of the " labor reserve " needed is a further contention of 
 Hobson. 
 
 * Pigou, Unemployment, p. 109. 
 
eg] CONTEMPORARY ENGLISH THEORIES 69 
 
 changes in increasing the mobility of labor. The dove^ 
 tailing of seasonal occupations so as to provide employment 
 throughout the year is also advocated by the majority of 
 the Poor Law Commission/ 
 
 While recognizing that this process of " deseasonaliza- 
 tion " would involve the displacement of a large part of 
 the men now engaged in seasonal occupations, Beveridge 
 favors it, though uncertain as to the extent to which sea- 
 sonal correlation can be carried.^ The root, however, of 
 the seasonal fluctuation problem, as Beveridge sees it, is 
 under-employment, the living from hand to mouth even 
 during the busy months. The worker regularly employed 
 most of the year can provide in advance, either through 
 direct saving or through trade-union benefits, for the slack 
 season, but the under-employed casual has no opportunity 
 to do this. On him falls the chief burden of seasonality. 
 It is as a question of wages, therefore, that seasonal un- 
 employment must be considered. The problem of casual 
 employment lies at the heart of that of seasonal employ- 
 ment. With the remedying of the demoralizing conditions 
 of casual employment will come an increase in the intelli- 
 gence and foresight of the workers, which will result in 
 their making adequate provision for foreseen periods of 
 seasonal unemployment." 
 
 A comprehensive discussion of the possible methods of 
 obviating seasonality, or at least its most evil conse- 
 quences is contained in the paper by Miss Pbyntz in 
 Seasonal Trades.^ The tendency of widening markets, 
 large-scale production, the introduction of machinery, 
 with the resulting increase in over-head expenses, to 
 
 ^ Royal Commission on the Poor Law, vol. i, p. 517. 
 
 ^ Beveridge, Unemployment, p. 210. 
 
 3 Cf. infra, pp. go, 91, for Beveridge's decasualization proposals. 
 
 * Pp. 55-69. 
 
^O CONTEMPORARY THEORIES OF UNEMPLOYMENT [70 
 
 diminish seasonality has been mentioned/ The fact that 
 adaptabihty on the part of the laboring force, as well as 
 mobility, is needed for the success of dove-tailing opera- 
 tions is emphasized ; industrial training for the furtherance 
 of such adaptability is urged. ^ 
 
 Seme of the most important of the proposals for en- 
 abling workers to meet seasonal depressions without the ill 
 effects that characterize such phenomena at present are 
 concerned as well with cyclical fluctuations. The various 
 recommendations having to do with the unemployment that 
 is a feature of one period of the business cycle are of two 
 types, preventive and palliative. The preventive measures 
 are those designed to do away with the cycle itself; the 
 palliative measures are those proposed to relieve the accom- 
 panying distress. The former type will be briefly dealt with 
 first. 
 
 Periodical depressions of industry have been and by many 
 still are looked upon as inevitable — as the " shadow side of 
 progress itself." This, on the whole, is the view of Bev- 
 eridge, who holds that " they probably cannot be eliminated 
 without an entire reconstruction of the industrial order/' ^ 
 Many others of those writing on the subject of unemploy- 
 ment accept cyclical fluctuations, if not as inevitable, at 
 least as outside the scope of their subject, insofar as other 
 than merely palliative measures are concerned.* There are 
 those, however, who look upon these cyclical movements as 
 preventable. 
 
 Pigou puts forward several proposals for lessening the 
 magnitude of these fluctuations. His program includes 
 
 1 Cf. supra, pp. 60, 61. 
 
 ' Material too detailed for inclusion here is contained in some of the 
 other valuable papers in Seasonal Trades. 
 ' Beveridge, Unemployment, p. 67. 
 * Cf. Report of Royal Commission on the Poor Laws, p. 427. 
 
71 ] CONTEMPORARY ENGLISH THEORIES yi 
 
 three measures : The bond of credit, which is the material 
 basis for the close interdependence of the various elements 
 in the industrial community, should be weakened, for this 
 interdependence is the cause of the widespread character 
 of the distress resulting from depressions. An increased 
 amount of cash business and a reduction in the average 
 lengths of credits are suggested as methods of accomplish- 
 ing this end. Secondly, an enlightened banking policy 
 conducing to the same end is urged. His third remedial pro- 
 posal aims at reducing the stimulus to business booms by 
 denying to business men the " excess of prosperity " which 
 they reap because of the reduced real interest paid on loans 
 during a period of rising prices. Fisher's plan of " stabil- 
 izing the dollar " by making the standard coin virtually a 
 token coin, while increasing or diminishing the mint price 
 of bullion in accordance with variations in the index num- 
 ber of general prices, is advocated by Pigou as a means of 
 preventing the stimulus to expansion given by these excess 
 profits. He asserts that the lessening in the average volume 
 of unemployment which would result from this change 
 would compensate for the extra expense involved.^ 
 
 The remedy which J. A. Hobson proposes for unem- 
 ployment is derived directly from his analysis of cyclical 
 fluctuations. Surplus incomes — over-saving — under-con- 
 sumption — this is the causal chain leading to unemploy 
 ment. Hence, the only effective remedy for unemployment 
 must be one which will strike at these causes and ** correct 
 the normal tendency of production to outrun consump- 
 tion.'' ^ The ownership of increased consuming power is 
 the vital point upon which the remedy must turn, and it 
 must aim at a system under which " the power to consume 
 shall be accompanied by the desire to consume." * The 
 
 * C/. Pigou, Unemployment, pp. 1 16-128. 
 
 ' The Industrial System, p. 296. ' Problem of the Unemployed, p. 99. 
 
72 CONTEMPORARY THEORIES OF UNEMPLO YMENT [72 
 
 measures which are to accompHsh this are of four types. 
 The taxation of unearned incomes, the money so secured 
 to be dispensed in raising the standard of pubhc Hfe, thus 
 increasing consumption and discouraging over-saving, is the 
 major remedy proposed. Rehef works for the unemployed 
 are advisable solely because they involve increased consump- 
 tion and lowered production. The raising of wages is a 
 second method by which the surplus income can be reduced 
 and consumption increased. The general shortening of 
 hours will have a like effect. Finally, the removal from the 
 labor market of superabundant laborers — juvenile workers, 
 inefficients and weaklings — will tend to reduce the '' over- 
 supply of current productive power." ^ 
 
 None of the other English writers on unemployment 
 have attempted to advance programs for preventing these 
 cyclical fluctuations. Mitchell enumerates several modern 
 agencies which are giving us, by degrees, slightly greater 
 control over " the complicated machinery of the money 
 economy." " Public regulation of the prospectuses of new 
 companies, legislation . . . against fraudulent promotion,, 
 more rigid requirements on the part of stock exchanges 
 regarding the securities admitted to official lists, more effi- 
 cient agencies for giving investors information, and a more 
 conservative policy on the part of the banks toward specu- 
 lative booms," together with the tendency toward " inte- 
 gration of industry," are some of the factors making for 
 the reduction of the magnitude of these fluctuations, and 
 hence of value as preventives of unemployment.^ 
 
 There remain to be considered the palliative remedies, 
 
 ^ The Industrial System, p. 298. Certain references in Work and 
 Wealth (1914) to "the necessary elasticity of economic life," "a cer- 
 tain amount of unavoidable unemployment," etc., seem. to show that 
 Hobson does not look upon the complete elimination of unemployment 
 as possible. Cf. pp. 229-30. 
 
 ' Cf. Business Cycles, pp. 585-6. 
 
73] CONTEMPORARY ENGLISH THEORIES 73 
 
 those designed to mitigate the evil effects of industrial de- 
 pressions/ Chief of these is the proposal so to manipulate 
 production as to lessen the fluctuations in the demand for 
 labor that accompany business cycles. This manipulation 
 may be voluntary on the part of private producers, may be 
 governmentally induced by means of bounties or taxes, or 
 may be accomplished by means of the distribution of public 
 (state or municipal) consumption. There are thus two 
 types, manipulation from the side of production and 
 manipulation from the side of consumption.^ 
 
 The possibility of varying the volume of production de- 
 pends upon the character of the good produced. If it be a 
 perishable good, variation of production so as to offset 
 fluctuations is, of course, impossible. For if the amount 
 of labor engaged in the production of this good in certain 
 districts be increased during periods of depression, the in- 
 creased production will cause a lowering of prices, and 
 production must fall off in some other districts.* A de- 
 crease of production in good times will have a correspond- 
 ing effect, so the desired balancing of fluctuations cannot 
 be achieved in this way. The situation is different, how- 
 ever, where the good produced is a durable one, and storing 
 is possible. In the production of staple, standardized arti- 
 cles, which are not costly to store nor subject to changes 
 of fashion, the demoralizing effects of a fluctuating labor 
 demand can be largely prevented through manufacture for 
 stock. Pigou contends that the number of^ commodities 
 which can be made for stock, either through increased 
 standardization or increased storage facilities {e. g., by re- 
 frigeration) is constantly increasing, with important result- 
 
 ^ As was mentioned above, certain of the remedies to be here enu- 
 merated apply to seasonal as well as cyclical fluctuations. 
 * Cf. Pigou, p. 175. ^ Ibid., p. 176. 
 
74 CONTEMPORARY THEORIES OF UNEMPLO YMENT [74 
 
 ing possibilities for the diminution of unemployment.^ It 
 was noted above ^ that making for stock is already widely 
 practised by those firms whose overhead expenses, because 
 of expensive machinery, etc., are large, or which employ 
 skilled labor which cannot be easily secured.^ This meas- 
 ure, obviously, can be applied either to seasonal or to cycli- 
 cal depressions. 
 
 There is one further suggested method of manipulating 
 production — governmental creation of new industries to 
 act " as reservoirs of labor, as sources of an elastic demand 
 able to expand and contract simultaneously as the demand 
 in the rest of the labor market contracts and expands." * 
 Attention should be called in advance to the fact that it is 
 not the mere creation of new industries as such that is 
 urged by those who suggest this method of relieving unem- 
 ployment. Though proposals for the solution of the prob- 
 lem of unemployment through the opening of new sources 
 of demand have been made at various times in the past, 
 such views are virtually discarded today. Fluctuations and 
 disorganization cannot be prevented by an increase in the 
 number of ordinary industries " whose activity at any 
 given moment is determined by the current demand for the 
 goods produced." ^ 
 
 The most definite proposal for the taking up, by the 
 creation of governmental work, of the slack labor resulting 
 from seasonal and cyclical fluctuations is made by Rown- 
 tree and Lasker.^ Their contention is that " any industry 
 
 * Pigou, Unemployment, pp. 100-3. 
 2 P. 61. 
 
 ' Cf. Seasonal Trades, pp. 57-9. 
 *■ B^veridge, p. 194. 
 
 * Rowntree and Lasker, Unemployment, p. 72- Cf. also Beveridge, 
 pp. 193-4. 
 
 * Unemployment, pp. 73-9, 306-8. 
 
75] CONTEMPORARY ENGLISH THEORIES 75 
 
 in which the number of persons engaged can be modified 
 without regard to the immediate state of trade " can be 
 used as a means of maintaining a fair degree of equiHbrium 
 between the supply of and the demand for labor. In for- 
 estry, especially, they believe they have such an industry, 
 and it is with it that their suggestion is chiefly concerned. 
 From the Report of the Royal Commission on Afforesta- 
 tion they quote the statement that there are in Great Britain 
 eight and one-half million acres suitable for afforestation. 
 They estimate that during the period of planting 500,000 
 men could be employed at this work for four months each 
 year, the number and length of time worked varying with 
 the general state of trade. After the maturing of the trees 
 (from 40 to 80 years after planting) 21,250 men would 
 be employed permanently and 191,250 for four months 
 each year. About nine-tenths of the employees would be 
 temporary workers, a proportion similar to that prevailing 
 in Belgium where a like scheme is at present in operation. 
 The ftmdamental principles the authors lay down for all 
 such work are that it should be needed, and that it should 
 be conducted on business principles, not as relief work. 
 Though such measures would only provide work for a cer- 
 tain class of laborers it is contended that their temporary 
 absorption would immediately improve the prospects of 
 those who were left. 
 
 The minority of the Royal Commission on the Poor 
 Laws endorse a similar proposal for the carrying on of 
 afforestation and land reclamation, though they advance 
 the plan as one primarily for meeting cyclical depressions. 
 The same warning against making these works relief works 
 is sounded. The enterprises should be valuable in them- 
 selves, men suited to the work should be employed, and 
 normal wages should be paid. The number employed each 
 year should be based upon reports from the national labor 
 
76 CONTEMPORARY THEORIES OF UNEMPLOYMENT [76 
 
 exchange as to conditions in the labor market. As an addi- 
 tional argument in favor of the scheme it is asserted that 
 the work will actually be done cheaper, due to the fact that 
 capital, which is unemployed just as labor is during periods 
 of depression, can be secured at lower rates. ^ 
 
 Beveridge takes emphatic exception to this proposal for 
 governmental creation of new industries.^ He advances 
 three arguments against it : Such works, he contends, would 
 inevitably become relief works, where inefficient men were 
 paid more than they were worth.^ If an attempt were 
 made to avoid this by hiring only men skilled in the work 
 to be done, only a certain few trades would be benefitted, 
 the general labor market being unaffected. Secondly, such 
 industries could not act as reservoirs for the labor market 
 unless employment in them were made less attractive than 
 ordinary employment — that is, men would not flow out 
 again when industrial conditions became better. (The very 
 obvious expedient of discharge from state employment 
 when general conditions bettered evidently did not occur to 
 Beveridge.) His third objection is the most important and 
 the one with the greatest validity. " To set up a reservoir 
 of labor at the public cost," he says, " is simply to per- 
 petuate industrial disorganization." * The methods con- 
 ducing to casual employment and demoralizing periods of 
 idleness would be supported by affording a refuge to men 
 during the periods of idleness. " The economic causes of 
 unemployment are left untouched " by such measures. It 
 
 * Minority Report, part ii, pp. 284-6. 
 
 ' Beveridge, Unemployment, pp. 193-7. 
 
 ' Valuable data concerning such works in the past are contained in 
 the report by Cyril Jackson and J. C Pringle on " The Effects of Em- 
 ployment or Assistance given to the Unemployed since 1886 as a means 
 of Relieving Distress outside the Poor. Law," Report of Royal Com- 
 mission on the Poor Laws, appendix, vol. xix. 
 
 * Beveridge, Unemployment, p. 196. 
 
77] CONTEMPORARY ENGLISH THEORIES yy 
 
 is upon the disorganized condition of the labor market that 
 Beveridge beHeves the first attack must be made/ 
 
 Manipulation from the side of consumption is practically 
 confined to manipulation of the demands of public author- 
 ities, national and municipal, though the similar distribu- 
 tion of railroad orders has been suggested. It may take 
 the form of manipulation designed to regularize the public 
 demand for a commodity or a service, manipulation de- 
 signed deliberately to " casualize " public work which 
 would normally be regular, so as to offset fluctuations in 
 private work, or manipulation of normally irregular de- 
 mands so as to accomplish the same end. Authorities are 
 divided as to the advisability of each of these various types 
 of governmental distribution of demands. 
 
 The radical policy of "deliberately introducing into the 
 demands of public authorities fluctuations complementary 
 to those occurring in private industry " is strongly advo- 
 cated by the minority of the Poor Law Commission.* 
 Proceeding from an estimate made by A. L. Bowley, they 
 assert that if three or four per cent of the government 
 orders were held back each year and concentrated on the 
 slack years of industrial depression, unemployment due to 
 cyclical fluctuations could be largely eliminated. In place 
 of the policy of the past, in which no heed was paid by the 
 government to the state of the labor market in letting its 
 contracts, they urge the " earmarking " of about four mil- 
 lion pounds a year of the money annually expended on 
 works and services, to be set aside and spent during the 
 lean years in private industry. The ultimate expenditure 
 of the money — on government printing, buildings, battle- 
 
 * The reason for this stand by Mr. Beveridge will appear when his 
 analysis of labor reserves is considered. Cf. infra, pp. 90, 91. 
 
 ' Minority Report, part ii, pp. 280-4. Cf. also Prevention of Destitu- 
 tion, pp. 112-24; Mitchell, Business Cycles, pp. 586-7. 
 
78 CONTEMPORARY THEORIES OF UNEMPLOYMENT [78 
 
 ships, telegraph and telephones, etc. — would be the same, 
 but a consistently administered ten-year program would re- 
 place the present haphazard distribution of the national 
 income. Though the minority admit that only the workers 
 in certain industries would be directly helped, they contend 
 that there would be given an automatic impetus to contin- 
 uity of employment in all trades through the prevention of 
 discontinuity in certain of the central trades. Here would 
 be secured the " approximate uniformity, one year with 
 another, in the aggregate demand for labor in the com- 
 munity as a whole," ^ without which unemployment on a 
 large scale cannot be prevented. 
 
 The majority of the Poor Law Commission take another 
 view of .the possibilities in this direction. The deliberate 
 casualization of public work, the deliberate introduction of 
 irregularities for the benefit of the intermittent laborer, is 
 regarded as " pernicious." ^ Only insofar as public work is 
 normally irregular is it advisable, according to the major- 
 ity, to attempt to counterbalance fluctuations in private in- 
 dustry by means of the distribution of public demands.' 
 They do agree, however, that that part of the public de- 
 mand for labor which normally fluctuates should be made 
 to " vary inversely with the demand in the open market." 
 
 A very careful analysis of the various possible methods 
 of manipulating governmental demands is made by Pigou.* 
 The first type of such manipulation mentioned above, that 
 designed to regularize a public demand which is normally 
 almost continuous in character, is unreservedly endorsed as 
 a preventive of unemployment. The concentration of nor- 
 mally irregular demands upon the slack years is also advo- 
 cated. To the minority plan for complementing private 
 
 * Prevention of Destitution, p. 114. 
 
 ' Cf. Report of Poor Law Commission, part vi, ch. 4, vol. i, pp. 524-5. 
 
 ' Pigou, Unemployment, pp. 178-86. 
 
79] CONTEMPORARY ENGLISH THEORIES 79 
 
 fluctuations by the distribution of the public demands he 
 gives a quahfied approval. If there be a high degree of 
 mobility in the labor force of a country, the " introduction 
 of compensatory fluctuations " is advisable. However, if 
 labor be immobile, if its movement between the centers of 
 public demand and those of private demand be impeded, 
 the introduction of fluctuations in public work will merely 
 result in establishing other casual occupations, each the 
 center of a separate labor reserve. The better developed 
 the system of national labor exchanges, therefore, the more 
 successful would be such plans as that of the minority. 
 Pigou's reasoning on this point appears conclusive. 
 
 Another suggestion for preventing, or at least lessening, 
 the extent of the unemployment due to industrial fluctua- 
 tions is that for promoting the elasticity of wage rates. 
 Pigou best develops this theory, and places the most em- 
 phasis upon it as a means of counteracting the evil effects 
 of business depressions. We have seen ^ that this econo- 
 mist considers all unemployment to be due to faulty ad- 
 justment between standard wage rates and rates normal to 
 conditions of supply and demand in the labor market at\ 
 any given time. If the demanded wage rate is in excess of 
 that which would be established by all the laborers in a 
 certain market competing among themselves for positions, 
 with given demand conditions, unemployment will result, 
 the amount of unemployment being dependent upon the} 
 amount of this excess.^ The possibility of maladjustment! 
 between standard rates and those rates at which every man \ 
 would be employed is, of course, increased by fluctuations 
 in the demand for labor. Hence, if rigid rates be main- 
 tained in the face of a falling demand, it is inevitable that 
 a number of workers will be thrown out of employment. 
 Pigou's conclusion is that " unemployment is likely to be 
 
 1 Cf. supra, p. 49. 
 
8o CONTEMPORARY THEORIES OF UNEMPLO YMENT [go 
 
 I greater, the more rigidly wage-rates are maintained in the 
 j face of variations in the demand for labour." ^ 
 i The two circumstances impeding the necessary plasticity 
 of wages are the variability in the purchasing power of 
 standard money, and the absence of harmonious co-opera- 
 tion between workers and employers.^ Such lack of adjust- 
 ment as is due to the failure of money wages to correspond 
 to changing real wages might be in part at least obviated by 
 the adoption of some such scheme as that of Fisher's for 
 giving the dollar or pound a fixed purchasing power. ^ The 
 rigidity in wage rates due to the fact that employers and 
 employees do not understand each other's problems, and 
 do not attempt to adjust the scale of wages to demand fluc- 
 tuations, is to be eliminated through a perfection of the 
 methods of industrial peace. The general principle of the 
 sliding scale is endorsed by Pigou as a means of securing 
 this adjustment.* 
 
 Beveridge looks upon elasticity of wages as of minor 
 importance, as his analysis of unemployment does not at 
 all correspond with that of Pigou. He endorses the gen- 
 eral principle of lower wages in bad times as one method 
 of putting a premium on getting work done at the times 
 when employment is slack, though urging the necessity of 
 not impairing the general level of wages through such tem- 
 porary concessions.^ 
 
 * Unemployment, p. yy. ' Ibid., pp. 79-88. ' Ibid., pp. 125-28. 
 
 * Pigou regards the prevention of industrial disputes as vital to the 
 prevention of unemployment. Not only is industrial peace advisable 
 as a means of securing elasticity of wages, but only through such peace 
 can the unemployment due to the stoppage of general industry by 
 strikes in particular fields be done away with. A full discussion of his 
 proposals for securing machinery for collective bargaining and con- 
 ciliation is not possible in this paper. Cf. Unemployment, pp. 81-93, 
 128-146. 
 
 * Unemployment, pp. 231-2. 
 
Si] contemporary ENGLISH theories 8i 
 
 The plans above discussed have all aimed at lessening the- 
 amount of unemployment itself. There remain to be con- 
 sidered two measures for the prevention of the distress 
 caused by industrial fluctuations, namely, the averaging of 
 work, and the development of a system of rural homes, 
 with small farm plots, for city workers/ 
 
 The averaging of work, by means of the elasticity of 
 w^orking hours, is a method of meeting fluctuations that 
 has long been applied, though in limited fields. Coal 
 mining and cotton spinning in England are conspicuous for 
 their utilization of this measure. The method involves the 
 employment of the full number of workers in a given in- 
 dustry, or factory, for fewer hours per week during periods 
 of trade depression, instead of the retention of only a part 
 of the force on full time. The work to be had is averaged 
 over the whole force. Conversely, in times of abnormal 
 industrial activity, the force necessary during normal times 
 is worked longer hours, in preference to the employment 
 of additional men. This latter policy prevents the drawing . 
 into an industry of a surplus labor reserve, the members 
 of which can find employment only during the busy season.^ 
 The working of shorter hours in dull seasons is almost 
 universally endorsed, but the policy of overtime in busy 
 periods, which is urged as an essential element in the same 
 scheme,^ is strongly opposed by some. This is particularly 
 true of the trade unions. Systems of sharing work by 
 ** reducing the number of working hours per day per man " 
 have been often resorted to by the unions.* Yet overtime 
 
 1 Two further measures, unemployment insurance and the general 
 assistance of unemployed men, are taken up below, pp. 107-117. 
 
 2 For a discussion of labor reserves, cf. infra, pp. 84-97. 
 'C/. Beveridge, pp. 220-2, and Pigou, pp. 186-8. 
 
 *C/. S. and B. Webb, Industrial Demojcracy (London, 1902), pp. 430 
 452, on "Continuity of Employment." Cf. also Report of Poor Law 
 Cotmnission, appendix, vol. ii, p. 124. 
 
82 CONTEMPORARY THEORIES OF UNEMPLO YMENT [82 
 
 is an object of constant attack by the unions and their sup- 
 porters. Miss Poyntz attributes seasonal irregularity in 
 large part to this as a cause/ The minority of the Poor 
 Law Commission take a similar stand, contending that legal 
 limitation of overtime forces employers to regularize their 
 work, and thus prevents excessive seasonal fluctuations.^ 
 Some very sound criticisms of the short- time expedient are 
 made by Rowntree and Lasker. Their statistics show that 
 its applicability is limited, in the main, to the highly organ- 
 ized trades. The chief dangers inherent in this method of 
 meeting fluctuations are that it " places the whole burden 
 of meeting the difficulty upon the workers, regardless of 
 their individual ability to bear it," and '' conceals the evil 
 of unemployment while doing nothing to lessen it." ^ A 
 deterioration in the workers' standard of living is feared 
 by these investigators if there be a general adoption of such 
 a policy, though as a temporary expedient, within a limited 
 field, it is practicable. 
 
 A second method of relieving the distress due to unem-^ 
 ployment, while making no attempt to touch unemployment 
 itself, is the planned ''decentralization of town population " 
 through the provision of plots of rural land as homes for 
 town workers. Among the authorities dealing primarily 
 with unemployment, Rowntree and Lasker are practically 
 alone in their emphasis upon this measure, and in their 
 careful exposition of the plan.* 
 
 When all the preventive measures have been worked out 
 and applied, it is contended that fluctuations will persist^ 
 that manual laborers will have to face periods of unem- 
 
 * Seasonal Trades, p. 63. 
 
 ^Minority Report of Royal Commission on the Poor Laws (Parlia- 
 mentary edition), p. 1185, footnote. (Quoted, Pigou, p. 187.) 
 'Rowntree and Lasker, Unemployment, pp. 79-80. 
 
 * Ibid., pp. 262-89. 
 
83] CONTEMPORARY ENGLISH THEORIES 85 
 
 ployment. Basing their opinion upon a careful study of 
 conditions in Belgium, these authorities propose, as a 
 method of preventing the deterioration and demoralization 
 that accompany the periods of idleness of urban workers, 
 a scheme enabling workers to reside in the country while 
 working in the cities. There are three essential economic 
 conditions involved in the working out of such a plan — the 
 securing of land in small plots and in the desired localities, 
 cheap and rapid transit between town and country, and the 
 opportunity of securing capital upon easy terms for the 
 erection of houses. That these conditions can be fulfilled 
 in England as well as in Belgium is the fervent opinion of 
 the two authors. The trouble involved is, to their minds, 
 more than balanced by the unquestionable gains in the 
 health and character of the working classes which could be 
 secured under such a system.^ 
 
 A similar proposal, essentially for the purposes of coun- 
 teracting the rural exodus, solving the agricultural labor 
 problem and re-creating the old yeomanry, is elaborated by 
 Miss Dunlop ^ in concluding a comprehensive analysis of 
 the whole rural problem. Tenancy rather than ownership 
 is requisite for the building up of a small farm system, 
 Miss Dunlop claims, citing the failure of the Allotments 
 Act of 1892 to prove the point. Greater success is looked 
 for from the Small Holdings and Allotments Act of 1907, 
 under the provisions of which 60,889 acres were acquired 
 within two years. It is interesting to hear that the Small 
 Holdings Commission, who are administering the Act, con- 
 
 ^ Their chapter on " A Valuable Suggestion.' from Belgium " embodies 
 a big idea. It is interesting as the only one of their suggestions 
 which goes back to that which they consider to be the fundamental 
 cause of unemployment — synchronous idleness, or but partial utiliza- 
 tion of the three factors in the creation of all wealth — land, labor and 
 capital. Cf. p. 68. 
 
 ^ The Farm Laborer, pp. 221-52. 
 
84 CONTEMPORARY THEORIES OF UNEMPLO YMENT [84 
 
 tend that the best method of establishing small holdings is 
 through letting an area of land to a co-operative association 
 for cultivation.^ 
 
 5. THE LABOR RESERVE 
 
 From the question of industrial fluctuations we pass to 
 the third of the main causes of unemployment — the main- 
 tenance of labor reserves. The fact of the existence of 
 chronic over-supplies of casual labor in various occupations, 
 with resulting under-employment and destitution, has long 
 been recognized. Booth and his co-workers, in their survey 
 of the working people of London in the late 8o's and early 
 90's, described it." Sidney Webb, writing at about the 
 same time, testified to " the fearful daily struggle for bread 
 at the Dock gates." ^ But the discovery of the reason for 
 this " chronic and ubiquitous over-supply of casual labor," 
 which the Webbs term " perhaps the most momentous of 
 this generation in the realm of economic science," * was 
 only recently made. It is Beveridge who has made the 
 
 ^ The Farm Laborer, p. 239. Kropotkin's Fields, Factories and 
 Workshops (London, 1913), contains valuable data on the question of 
 the small farm system. Cf. especially chs. iii, iv and v (pp. 79-240). 
 
 2 Charles Booth, Life and Labour of the People in London, first 
 series, " Poverty," 1892-3. Vol. i, pp. 37-50, a vivid description of the 
 living and working conditions of the four lowest classes; pp. 146-155, 
 on the causes of poverty ; see especially p. 152 for a partial anticipation 
 of Beveridge on labor reserves. Vol. iv, pp. 12-36, "The Docks," by 
 Beatrice Potter (Mrs. Sidney Webb). See also vol. iii of second 
 series (vol. vii of complete set), pp. 392-432, for a later description of 
 dock labor. Second Series, " Industry," 1895-1903. Vol. i (vol. v of 
 complete set), pp. 87-135, on conditions of employment in the building 
 trades. Detailed descriptions of the different trades are given in vols, 
 i, ii, iii, iv of the series (vol. v, vi, vii, viii of complete set). Vol. v 
 (vol. ix of complete set) contains valuable material on the irregularity 
 of earnings, pp. 228-^2. 
 
 'Sidney Webb, The London Programme (London, 1891), p. 7. 
 
 * Prevention of Destitution, p. 130. 
 
85] CONTEMPORARY ENGLISH THEORIES 85 
 
 most original and most intensive studies in this field. Of 
 the contemporary writers, none have materially added to 
 Mr. Beveridge's analysis of the problem.^ 
 
 There are these observed facts to be explained : The dis- 
 tress from want of employment is chronic. An " irreduc- 
 ible minimum " of unemployment exists in all trades at all 
 times. Trade-union statistics prove that this unemploy- 
 ment is due to loss of time by many, not to the chronic idle- 
 ness of a few. The typical applicant to distress committees, 
 moreover, is not unemployable, but industrial, a casual 
 laborer. That this unemployment is due to an excessively 
 rapid increase of population is disproved by known facts — 
 unemployment in rapidly growing industries, increasing 
 productivity of labor, and the rising remuneration of labor, 
 which proves it to be of increasing importance in pro- 
 duction. 
 
 The explanation of the existence of this irreducible min- 
 imum of unemployment is found in the labor reserve which 
 tends to accumulate in modern industries. This reserve of 
 labor is made up of '' the men who within any given period 
 are liable to be called on sometimes but are not required 
 continuously." ^ Its size depends upon the number of sep- 
 arate employers, the irregularities of their separate busi- 
 nesses and of the industry as a whole, the relative mobility 
 of labor, the average length of engagements, and the extent 
 to which chance prevails in the hiring of workers. Condi- 
 tions in any one of these respects may be such as to result 
 in the development of a " stagnant pool " of labor in an 
 industry; the size of the reserve may be increased by the 
 cumulative action of any or all of the other factors. Bev- 
 eridge's analysis of their separate and mutual effects upon 
 the labor market may be briefly summarized : 
 
 ^ Unemployment, "The Reserve of Labor," ch. v, pp. 68-110. 
 ^ Ibid., p. 102. 
 
86 CONTEMPORARY THEORIES OF UNEMPLOYMENT [86 
 
 The number of workers who gather in any given center 
 of the labor market will tend to equal the maximum num- 
 ber who may be able to obtain employment in that center. 
 If each employer in a certain industry maintains his own 
 center of employment, so that no man working for him 
 works for any other employer in that industry, a separate 
 reserve will be built up for each of them. If the volume 
 of the business of each varies from day to day, week to 
 week, or month to month, the number of workers employed 
 and " at the gate " will tend to equal the maximum number 
 employed during the busiest period. If the term of en- 
 gagement is brief, and if the element of chance enters in the 
 selection of workers, the matter is further complicated and 
 the reserve is further swelled. With no discrimination 
 whatsoever, every man will in the long run get as much 
 employment as every other man. The number of competi- 
 tors for positions in each given center of employment will, 
 therefore, tend to increase until the average remunera- 
 tion received by each reaches the subsistence level of the 
 class of men employed. If the average pay be below this, 
 certain men will have to withdraw; if it be above the sub- 
 sistence level, newcomers, having equal chances for em- 
 ployment, will attach themselves to the industry.^ 
 
 Assume now that instead of each employer drawing his 
 labor supply from his own reserve there is perfect mobility 
 of labor within the given industry; the reserve will tend to 
 equal the maximum number employed in the industry as a 
 whole at the busiest season. The separate fluctuations of 
 individual employers will here partially neutralize each 
 
 * It should be noted that the greater the degree of skill required, and 
 the stronger the barriers to admittance to the given occupation, the less 
 applicable is this reasoning. The casual occupations are largely residual 
 in character, however; being unskilled j they are subject to "constant 
 and unlimited pressure of competition downwards from every other 
 grade of industry." 
 
87] CONTEMPORARY ENGLISH THEORIES 87 
 
 other, and so cut down the necessary reserve. The author 
 ilkistrates, this point by assuming ten centers of casual em- 
 ployment, each employing a minimum of 50 men and a 
 maximum of 100 men. A total force of 1000 men will thus 
 be maintained. In the industry as a whole, however, the 
 minimum number employed is 700, the maximum 800. 
 With perfect fluidity of labor a reserve of 100 men will 
 suffice, and the extra 200 men who have been living in an 
 under-employed condition forced out.^ Thus, the greater 
 the degree of mobility of labor, the smaller will be the 
 necessary reserve maintained in an industry. An excessive 
 element of chance, complete absence of selection in em- 
 plo}Tnent, would, of course, vitiate the favorable results of 
 mobility in the cutting down of the reserve. 
 
 On the basis of this reasoning Beveridge distinguishes 
 three elements in the total reserve of labor for any occupa- 
 tion : those men representing fluctuations in the total volume 
 of work in the industry as a whole; those representing the 
 element of friction in the labor market ; and those " at- 
 tracted and retained by the perpetual chance of work." ^ 
 
 This tendency toward the accumulation of reserves exists 
 in varying degrees of strength in practically all industries, 
 though seen in its most vicious forms in the casual occupa- 
 tions. The reserve as such is a " normal industrial phe- 
 nomenon," necessary in all the industries liable to fluctua- 
 tions in volume. This needed power in a given industry 
 may be maintained, without producing distress, either 
 through a high wage level, unemployment insurance, or 
 elasticity of hours. Usually, however, faulty methods of 
 
 ^ Beveridge, pp. 77-8. 
 
 ' Ihid., p. 81. Beveridge illustrates and emphasizes his arguments on 
 these points by reference to the conditions at the London Docks, where 
 all the factors giving rise to labor reserves may be seen in active opera- 
 tion. 
 
88 CONTEMPORAR Y THEORIES OF UNEMPLO YMENT [88 
 
 securing the reserve power are resorted to ; the men of the 
 reserve suffer a continuous '* leakage of employment," and 
 there results the demoralizing evil of under-employment — 
 the reduction of earnings to, or even below, the level of 
 bare subsistence. Though all the members of a labor re- 
 serve are subject to irregularity of employment, it is only 
 that element which is called on " often enough to be pre- 
 vented from drifting away elsewhere, but not often enough 
 to obtain a decent living " ^ which constitute the " under- 
 employed." It is in the casual occupation, to which en- 
 trance is free and in which every one has a chance of secur- 
 ing work, that the incessant competition of low subsistence 
 standards works out in demoralizing under-employment. 
 
 The deteriorating effect of unemployment will be touched 
 upon in considering the personal factor.^ The same vicious 
 reaction upon personal character, the perpetuation and in- 
 tensification of the conditions conducing to reduce indi- 
 viduals to casual work, is characteristic of under-employ- 
 ment. Wages are inefficiently spent; wives and children 
 are forced into industry; the securing of public relief 
 prompts a descent into the unemployable class. Finally, 
 there is the fact that in a world where chance rules supreme, 
 where " the good are not more successful in securing work 
 than the evil," personal merit and honesty are almost draw- 
 backs. " No class in the community," says the minority of 
 the Poor Law Commission, " could withstand the demoral- 
 izing influence of such a view of life and such a system." ^ 
 
 Beveridge's analysis of the labor reserves is, as has been 
 noted, the most comprehensive. Pigou's approach to the 
 problem is somewhat different, his method involving far 
 more of abstract reasoning than does that of the practical 
 
 1 Beveridge, p. io6. 2 (^f^ infra, pp. 100, 102. 
 
 ' Minority Report, pt. ii, p. 218. 
 
89] CONTEMPORARY ENGLISH THEORIES 89 
 
 unemployment relief administrator, Mr. Beveridge. Pro- 
 fessor Pigou points out a double cause for the origin of 
 reserves. He considers that unemployment is due to lack 
 of adjustment between demanded or established wage rates 
 and the normal competitive rates at which all workers in a 
 given market could secure employment.^ If, now, in any 
 given occupation the actual wage has been raised artificially 
 above the level ruling for similar work elsewhere, new men 
 will be drawn into the occupation until the expectation of 
 earnings ( " the wage rate multiplied by the chance of em- 
 ployment ") is reduced to the level of earnings that prevail 
 outside.^ If the artificial increase be ten per cent, ten per 
 cent of the men assembled there will, on the average, be 
 unemployed. This holds true, however, only where the 
 method of engagement is of the casual type. Where effec- 
 tive barriers are maintained, even though the attractive force 
 of high wages is felt, an inflow of workers will be pre- 
 vented. 
 
 Closely allied with this cause of labor reserves is another 
 factor, that of industrial fluctuations. The rates in occu- 
 pations giving irregular employment must be higher than 
 those affording regular employment for two reasons — to 
 compensate for greater uncertainty of employment, and to 
 build up reserves which can be used in busy times. Thus 
 the wage rate in fluctuating occupations will be such as to 
 attach to such occupations " a number of work-people 
 roughly intermediate between the number for whom em- 
 ployment at that rate can be found in good times and in 
 bad times, respectively." ^ Wage rates above normal are 
 thus the prime cause of the creation of reserves of labor, 
 according to Pigou's reasoning. 
 
 1 Cf. supra, p. 49. 
 
 ' Pigou, Unemployment, pp. 54-7. ' Ibid., p. 97. 
 
go CONTEMPORARY THEORIES OF UNEMPLO YMENT [go 
 
 The minority of the Poor Law Commission accept Bev- 
 eridge's analysis of labor reserves unqualifiedly. Both 
 majority and minority reports condemn in strong words 
 the system which creates these " stagnant pools " of labor, 
 and subjects industrial workers to the enervating influence 
 of chronic under-employment. Three sets of special in- 
 vestigators were sent out by the Royal Commission to work 
 on unemployment and allied problems. "All these inquirers 
 . . . starting on different lines of investigation and pursuing 
 their researches independently all over the kingdom . . . 
 came, without concert, to the same conclusion, namely, that 
 of all the causes or conditions predisposing to pauperism, 
 the most potent, the most certain, and the most extensive 
 in its operation was this method of employment in odd 
 jobs." "All these (other) conditions (low wages, insani- 
 tary conditions, excessive hours of labor, outdoor relief, 
 drunkenness) injurious though they are in other respects, 
 were not found, if combined with reasonable regularity of 
 employment, to lead in any marked degree to the creation 
 of pauperism." ^ 
 
 6. PROPOSED REMEDIES FOR UNDER-EMPLOYMENT 
 
 The system of labor reserves has a bearing upon the 
 problem of unemployment only in that it is the chief factor 
 in the creation of under-employment. It is not the reserves 
 of labor which are to be done away with, therefore, but the 
 resulting evils. The problem, Beveridge says, is essentially 
 one of business organization — " that of providing a reserve 
 
 ^Minority Report, pt. ii, pp. 195-6. A study of the many questions 
 concerning casual labor, under-employment, etc., which are connected 
 with the subject of labor reserves cannot be entered upon here. In 
 addition to the references quoted, valuable material on the subject, 
 statistical and otherwise, can be found in the Report of the Special 
 Committee on Unskilled Labor, Charity Organization Society (London, 
 1908) ; cf. also Report of the Royal Commission on the Poor Laws, pt. 
 vi, ch. i (vol. i, pp. 427-31) ; Prevention of Destitution, pp. 129-33. 
 
91 ] CONTEMPORARY ENGLISH THEORIES 91 
 
 of labor power to meet fluctuations in such a way as not to^ 
 involve distress." ^ It is an industrial method which is to 
 be reformed. 
 
 The remedying of the baneful results of the present 
 labor-reserve system involves three distinct steps. First 
 must come the organization of the labor market, the secur- 
 ing of organized fluidity of labor by means of a national 
 system of labor exchanges. Secondly, a policy of " de- 
 casualization " must be carried through, a strict system of 
 concentrating all irregular work upon the smallest possible 
 number of men necessary. Lastly, provision must be made 
 for the absorption of the surplus of casual labor who are 
 excluded from the chance of work by the enforcement of 
 the policy of concentration involved in decasualization. 
 
 The advisability of a national system of labor exchanges ^ 
 has been touched upon in considering other causes of un- 
 employment. By means of these exchanges men thrown 
 out of employment by changes of industrial structure^ 
 may be guided to new occupations. Men turned out be- 
 cause of advancing age * can be fitted into old men's places, 
 which can be ferreted out by such agencies. Juvenile 
 workers ^ can be advised as to industrial opportunities, and 
 the flowing stream of entrants into industry can be guided 
 into channels where permanent work awaits them. The 
 dovetailing of seasonal industries and the provision of 
 subsidiary occupations ^ can be best attempted through such 
 a system. 
 
 But it is with the men of markedly discontinuous em- 
 ployment, the men who are chronically under-employed, 
 
 *Beveridge, Unemployment, p. no. 
 
 ^Cf. suprGf p. 37, for a summary of the provisions of the Labor 
 Exchanges Act. 
 3 Supra, p. 53. * Supra, p. 54. 
 
 5 Supra, p. 37. « Supra, pp. 67, 68. 
 
92 CONTEMPORARY THEORIES OF UNEMPLO YMENT [92 
 
 that a labor-exchange system " reaches its highest utility." 
 Frederick Harrison has forcefully described the condition 
 of the men of this class. '' In most cases the seller of a 
 commodity can sell it or carry it about from place to place 
 and market to market with perfect ease. He need not be 
 on the spot; he can generally send a sample; he usually 
 treats by correspondence. ... It is totally otherwise with 
 a day laborer. . . . He must himself be present at every 
 market, which means costly personal locomotion. He can- 
 not correspond with his employer ; he cannot send a sample 
 of his strength; nor do employers knock at his cottage 
 door." ^ It is with this class that the system of personal 
 application, of labor-hawking, of aimless and undirected 
 wandering in search of work universally persists. Mobility 
 in the labor market, which has been "demanded by econo- 
 mists since Adam Smith," is secured with the maximum of 
 friction and the maximum of distress among the working 
 classes. The consensus of opinion is so strongly in favor 
 of a national co-operating system of free labor exchanges 
 that little space need be given here to the various arguments 
 in favor of it. The majority of the Poor Law Commission 
 look upon a comprehensive system for assisting the mobil- 
 ity of labor, " based upon industrial supply and demand " 
 as imperatively necessary.^ The minority express even 
 more emphatically the need of such a system.^ Professor 
 Pigou states that organized and intelligent fluidity of labor 
 would make unnecessary the maintenance in irregular occu- 
 pations of wage rates so far above the normal as to retain 
 a reserve of labor for use during busy seasons.* 
 
 1 Quoted, F. A. Walker, The Wages Question (N. Y., 1886), pp. 183-4. 
 ^Report of Poor Law Commission, pt. vi, ch. 4 (vol. i, pp. 505-17). 
 ' Minority Report, pt. ii, pp. 248-67. Cf. also Prevention of Destitu- 
 tion, ch. vi, passim. 
 * Pigou, Unemployment, pp. 146-70. A. L. Bowley, in an article on 
 
93] CONTEMPORARY ENGLISH THEORIES 93 
 
 An adequate national system of labor exchanges having 
 once been established, the enforcement of a policy of strict 
 decasualization is the next step necessary for the elimina- 
 tion of under-employment. 
 
 The irregularity of demand which lies at the root of 
 under-employment cannot be prevented. But, through the 
 agency of the labor exchanges, the separate reserves of 
 labor maintained by the individual employers for the pur- 
 pose of meeting these fluctuations can be replaced by one 
 common reservoir. " The Stagnant Pools of labor can be 
 drained," ^ if each group of similar employers secure all 
 their irregular men from this common center. The Webbs 
 propose that the hiring of men for irregtdar jobs at the 
 government labor exchanges be made compulsory upon em- 
 ployers. Only in case a minimum period of employment of 
 one month were guaranteed (subject to dismissal for mis- 
 conduct, etc.) could employers hire men through other 
 channels.^ An equally strong plea for compulsion is made 
 
 " Wages and the Mobility of Labor " {Economic Journal, March 1912, 
 pp. 46-52) throws some light upon the probable reflex influence of 
 greater mobility upon the elasticity of wages and upon the amount of 
 unemployment, which is of particular interest in comnection with Pro- 
 fessor Pigou's analysis of unemployment as depending upon wage 
 rates. In cases of increasing return, claims Mr. Bowley, the ultimate 
 effect of mobility is to cause wages to rise to a higher level than pre- 
 viously, in the better-paid districts. In cases of constant or diminish- 
 ing return the rate of wages ultimately falls in the district of immi- 
 gration. (Labor is assumed to flow from the regions of low wages to 
 those of higher wages.) His conclusion as regards the amount of un- 
 employment is that it will be diminished, and total employment will be 
 increased, by increasing mobility of labor, provided that there is a 
 possibility of increasing return, and that the local labor supply in the 
 district of immigration is inadequate for the full development of the 
 industries of the region. 
 
 ' Minority Report, pt. ii, p. 261. 
 
 ' Ihid., pp. 261-2. Cf. also the testimony of Sidney Webb before the 
 Royal Commission on the Poor Laws (appendix, vol. ix, pp. 194-5). 
 
94 CONTEMPORARY THEORIES OF UNEMPLO YMENT [94 
 
 by Beveridge. "If the thing cannot be done voluntarily it 
 will have to be done, and will be done, compulsorily. A 
 new clause in the Factory Code, e. g., that no man should 
 be engaged for less than a week or a month unless he were 
 taken from a recognized labor exchange, would be a legiti- 
 mate and unobjectionable extension of the principle that 
 the state may and must proscribe conditions of employment 
 which are disastrous to the souls and bodies of its citi- 
 zens." ^ The majority of the Poor Law Commission, it is 
 worthy of note, report against such compulsion.^ 
 
 Once it were secured that all casual labor was hired at 
 but one center (or at several co-operating centers), the 
 second step in the decasualization process could be taken. 
 Upon certain men, selected on the basis of efficiency, em- 
 ployment would be concentrated. ". . . . successive jobs 
 under different employers should, so far as possible, be 
 made to go in succession to the same individual, instead of 
 being spread over several men, each idle half, or more than 
 half, his time." "' A definite number of regularly employed 
 men, securing steady incomes, free of the demoralizing in- 
 fluences of uncertainty and irregularity of work and in- 
 come, would replace the heterogeneous mass of under- 
 employed, irresponsible and industrially deteriorating 
 casuals. 
 
 The five elements in the problem of the labor reserve 
 were noted above.* What will be the effect on each of 
 such a policy — concentration of work through the agency 
 of the labor exchanges ? The many separate centers of em- 
 ployment are replaced by one center in each district. The 
 
 ^ Contemporary Review, April 1908, p. 392. (Quoted, Pigou, pp. 
 159-60.) 
 
 ' Report of Royal Commission on the Poor Laws, pt. vi, ch. 4. 
 ' Beveridge, p. 201. 
 * Cf. supra, p. 85. 
 
95] CONTEMPORARY ENGLISH THEORIES 95 
 
 lack of mobility of labor is transformed into " orgagnized 
 fluidity." The short-term engagements continue (though 
 employment for longer periods is encouraged by the com- 
 pulsory employment at the labor bureau of short- job men) 
 but many short-term jobs are combined, to give fairly reg- 
 ular employment to the individuals securing work. There 
 is still irregularity in the separate businesses, but their fluc- 
 tuations can be used mutually to offset each other by dove- 
 tailing through the exchanges. And, Anally, the vicious 
 system of chance engagements, with its virtual premium 
 upon personal irregularity, gives way to a method under 
 which the strictest sort of personal responsibility can be 
 enforced. With the policy of concentration of employment 
 upon the minimum number necessary, the managers of the 
 labor bureaus will soon weed out those held to be dishonest, 
 ineflicient and unreliable.^ Only in such a policy as this 
 (decasualization through a national system of labor ex- 
 changes), says Beveridge, is to be found the remedy for 
 *' the most urgent part of the unemployed problem — the 
 chronic poverty of the casual laborer." ^ 
 
 There remains for consideration the most important diffi- 
 culty in the way of the enforcement of a decasualization 
 policy — that of finding ways and means for the absorption 
 of the surplus. For, inevitably, the concentration of em- 
 ployment upon some means the complete displacement of 
 others. 
 
 Beveridge supports the decasualization policy on the gen- 
 eral principle that " on any view of society, one man well 
 fed and capable is preferable to two on half ratioos." ^ If 
 the men forced out find work elsewhere, well and good. 
 If they do not find work, it is either because they are ineffi- 
 
 ^ Cf. Minority Report, pt. ii, pp. 266-7. 
 
 ^ Beveridge, Unemployment, p. 201. ^ Ihid., p. 204. 
 
96 CONTEMPORARY THEORIES OF UNEMPLO YMENT [96 
 
 cient or because there is an actual surplus of labor in the 
 country. If inefficient, society should know it and should 
 care for them, at least to the extent of preventing the bring- 
 ing-up " in semi-starvation of fresh generations of ineffi- 
 cients." If the forced-out men constitute a real surplus, 
 they should be left no alternative but emigration. How- 
 ever, Beveridge states, in the actual enforcement of de- 
 casualization, discrimination as to the time and degree of 
 application can be exercised. In good times it can be hast- 
 ened; afforestation and other schemes providing fresh 
 openings for labor can be utilized in the disposition of the 
 surplus; emigration can be encouraged. His conclusion is 
 that even though hardship on certain individuals be in- 
 volved, the ultimate advantage of securing a minimum con- 
 tinuity of employment for those who are left outweighs the 
 temporar}^ difficulties.^ 
 
 The proposal to dispose of the surplus by means of emi- 
 gration is made by various writers. Stanley C. Johnson, 
 who has made a most intensive study " of emigration from 
 the British Isles to the North American continent concludes 
 that ". . . of all the members of our community who are 
 at present unemployed, only a small section would be able 
 to benefit by any system of emigration to America which 
 might be proposed." ^ Mr. Johnson's conclusion is based 
 upon the Webbs' analysis of the types of unemployed men 
 and his own researches as to the qualities required for suc- 
 cessful emigration. He quotes approvingly Mr. Herbert 
 Samuel's reservation in the Report on Agricultural Settle- 
 ments: " An increase of numbers has not added to the de- 
 gree of unemployment. A decrease of numbers does not 
 
 * Cf. Beveridge, Unemployment, pp. 199-209. 
 
 ' A History of Emigration from the United Kingdom to North 
 America, 1763-1912 (London, 1913). 
 ' Ihid., p. 303. 
 
97] CONTEMPORARY ENGLISH THEORIES 97 
 
 promise to reduce it." ^ Holding that as yet there is no 
 serious overcrowding, Mr. Johnson directly implies that 
 the surplus resulting from decasualization can be utilized 
 to advantage at home." 
 
 This question of absorbing the surplus is taken up very 
 comprehensively in the report of the minority of the Poor 
 Law Commission. With the exception of Rowntree and 
 Lasker, who touch upon the possibility of putting the sur- 
 plus, or an equivalent number, upon the land,^ the subject 
 is not developed by other contemporary English authorities. 
 The inclusion of a summary of the minority plan is, there- 
 fore, deemed advisable. 
 
 It is the belief of the Webbs and the subscribers to their 
 report that " there exists in the United Kingdom today no 
 inconsiderable surplus of labor — not, indeed, of workmen 
 who could not with an improved organization of industry 
 be productively employed, but of workmen who are, as a 
 matter of fact, now chronically under-employed." * " The 
 surplus of labor power which already exists in the partial 
 idleness of huge reserves of under-employed men . . . will 
 then (after decasualization) for the first time stand re- 
 vealed and identified in the complete idleness of a smaller 
 number of wholly displaced individuals." ^ Three social 
 reforms are proposed, by the adoption of which, concur- 
 rently with the adoption of the measures aimed at unem- 
 ployment directly, the Webbs believe this surplus can be 
 absorbed. 
 
 * A History of Emigration, op. cit., p. 305. 
 
 ' The valuable statistics and comments which are given in Mr. John- 
 son's book throw an interesting light on the emigration from the 
 United Kingdom. Though its relation to unemployment and poor-law 
 administration is not emphasized, material of value on these subjects 
 is contained in the book. 
 
 'Rowntree and Lasker, Unemployment, p. 142; cf. also supra, p. 82. 
 
 * Minority Report, pt. ii, p. 268. ^ Ibid., p. 268. 
 
C^ CONTEMPORARY THEORIES OF UNEMPLOYMENT [98 
 
 I. The Halving of Boy and Girl Labor 
 The evils of the system under which juveniles work, the 
 tendency of modern industry to turn out boys as imskilled 
 laborers, are emphasized throughout by the the minority. 
 With the apprenticeship system broken down, it is claimed 
 that the necessary training between the ages of fifteen and 
 eighteen can only be provided by the community itself.^ 
 The proposal of the authors is to " shorten the legally per- 
 missible hours of employment for boys, and . . . (to) re- 
 quire them to spend the hours so set free in physical and 
 technological training." ^ If this plan were adopted at the 
 same time as those aiming at the decasualization of indus- 
 try, not only would the obvious and all-important educa- 
 tional advantages be secured, but one-half of the employ- 
 ment previously had by juveniles would be open to the men 
 turned out by the decasualization process.* 
 
 2. The Reduction of the Hours of Labor of Railway and 
 Tramway Servants 
 While stating that a gradual reduction in the daily hours 
 of labor is coming about, the authors state that this has 
 little bearing on unemployment and none at all on under- 
 employment. Though the working hours have in the past 
 been reduced, " the number of men employed has not 
 thereby been increased." * The Webbs do contend, how- 
 
 1 Minority Report, p. 271. 2 Jljid., p. 272; cf. supra, p. 58. 
 
 3 Ihid., pp. 274-5. 
 
 *Ibid., p. 275. This is even more emphatically stated in Mr. Webb's 
 closing address at the 1912 Conference on the Prevention of Destitu- 
 tion. "He . . . emphasize(d) the fact that a reduction of the hours 
 of labor could not do anything whatsoever to prevent the occurrence 
 of unemployment. . . . The causes which produced unemployment 
 would still go on, even if they reduced the hours of labor to four per 
 day." (National Conference on the Prevention of Destitution (1912), 
 Papers and Proceedings [London, 1912], p. 473). It is interesting to 
 note the complete right- about- face that Mr. Webb has made in this 
 
99] CONTEMPORARY ENGLISH THEORIES 99 
 
 ever, that in one great industry, that of the railway service, 
 together with the allied omnibus and tramway services, the 
 reduction of the present excessive hours would actually in- 
 crease the number of men required, and thereby afford an 
 opportunity for the absorption of some of the surplus labor 
 resulting from the decasualizing process. 
 
 3. The Withdrawal from Industrial Wage Earning of the 
 Mothers of Young Children 
 The '* boarding out " of the children of widows and de- 
 serted wives with their own mothers upon a stipend suffi- 
 cient for their full support, with the consequent withdrawal 
 of these women from industry, is urged as a third measure 
 which will give openings for the absorption of the surplus. 
 The inadequacy of the relief at present given under the 
 poor law, combined with chronic under-employment of the 
 husbands of many women with young children, has forced 
 thousands of these persons into industrial life. Their with- 
 drawal, which is of itself extremely desirable, should take 
 place concurrently with the unemployment relief measures.^ 
 
 regard. In The Eight Hours Day by Sidney Webb and Harold Cox 
 (London, 1891) we find the following opinions expressed: "That a re- 
 duction in the hours of labor, when it results in a diminution in average 
 productivity, does result in the employment of additional workers is 
 proved by innumerable instances" (p. 108). ". . . several instances of 
 the beneficial results of limiting the hours of labor in this very matter 
 of providing for the unemployed" are given in a footnote (p. 108). 
 Again (p. 112), the authors speak of "the necessary absorption of a 
 portion of the reserve army of industry," the unemployed, and the 
 partially employed which would result from an eight-hour bill. This 
 contention which the Webbs at present hold to be fallacious is repeated 
 in many places in this earlier work. 
 
 ^ Minority Report, pp. 278-80. Cf. also Prevention of Destitution, pp. 
 132-7. Certain remedies for the evils of the casual-labor system, as 
 well as for other factors in destitution, are proposed by Booth in his 
 first report upon the conditions of the poor in London. Charles Booth, 
 Life and Labour of the People in London, vol. i (first series), pp. 162- 
 171. 
 
lOO CONTEMPORARY THEORIES OF UNEMPLOYMENT [iqO 
 
 7. THE PERSONAL EQUATION IN THE PROBLEM OF 
 UNEMPLOYMENT 
 
 There have been considered above those general factors 
 in unemployment which are essentially industrial in their 
 nature, which, as causes of unemployment, have at least no 
 direct connection with the individual. It has been largely 
 with the character of the demand for labor, and with 
 changes in that demand, that the study has been engaged. 
 The supply of labor, with reference to the bearing of the 
 personal factor both on the volume of unemployment and 
 upon the incidence of unemployment, is now to be con- 
 sidered. 
 
 This study of the relation of personal character to un- 
 employment is greatly complicated by the fact that there is 
 a strong reflex influence of unemployment and irregular 
 employment upon the individual, a reaction which makes it 
 difficult to state positively which is dominantly cause and 
 which is primarily result — defective personality or unem- 
 ployment. This difficulty, which will be referred to later, 
 must be kept in mind in the following discussion. 
 
 That personal deficiencies ^ do increase the total volume 
 of unemployment is generally agreed upon, though Bev- 
 eridge takes care to emphasize the relative unimportance of 
 this factor, stating that ". . . no conceivable improvement 
 in the character of workmen will eliminate the main eco- 
 nomic factors in unemployment." ^ In two ways personal 
 failings may increase the volume of unemployment. In the 
 first place, gross unwillingness to work on the part of a 
 parasitic class of criminals and vagrants, and the unwilling- 
 ness of a grade of individuals slightly higher in the scale 
 
 * Physical incapacity is not included under the term "personal de- 
 ficiency " as here used. 
 ' Beveridge, Unemployment, p. 138. 
 
lOi] CONTEMPORARY ENGLISH THEORIES loi 
 
 to work continuously will obviously have this effect/ Sec- 
 ondly, personal factors common in a greater or less degree 
 to all men, such as lack of enterprise and lack of adapta- 
 bility, increase the amount of unemployment by setting up 
 frictions in the labor market.^ This evil, though more diffi- 
 cult to isolate and study than the first named, is none the 
 less of importance. 
 
 The unemployable class, who belong in the first division 
 named above, have been objects of much discussion, and 
 have been by some looked upon as the fundamental element 
 in the whole problem of unemployment. A full discussion 
 of this subject is beyond the scope of this paper, but certain 
 diverse views as to the make-up of the class may be men- 
 tioned. 
 
 W. H. Dawson, in his book The Vagrancy Problem,^ 
 classifies the unemployable into four types: the nomad 
 vagabond, who lives by begging, blackmail and pillage; the 
 settled resident loafer of the towns ; the intermittent loafer, 
 who usually has a dependent family; and the female 
 vagrant.* Mr. Dawson, whose strongly repressive policy 
 of relief will be dealt with later, does not attempt to delve 
 back into the causes for the existence of these types.'' 
 
 ^ Pigou omits from his book any discussion of these types, for, by 
 his definition, unemployment means " involuntary idleness " only. 
 
 ^ Cf. Beveridge, p. 137. 
 
 ' (London, 1910.) 
 
 * The Vagrancy Problem, pp. 2-5. 
 
 ^ There is a mass of literature in the field of vagrancy, a subject which 
 can merely be mentioned here. C. J. Ribton-Turner, in A History of 
 Vagrants and Vagrancy (London, 1887), gives an interesting study ot 
 the tramp problem in England and in continental Europe. Josiah Flynt 
 Willard's Tramping with Tramps (N. Y., 1901) is a fascinating picture 
 of vagrant life in various countries as seen from within. The Report 
 of the Departmental Committee on Vagrancy (London, 1906) records 
 an intensive survey of vagrancy in Great Britain. 
 
I02 CONTEMPORARY THEORIES OF UNEMPLOYMENT [102 
 
 The minority of the Poor Law Commission approach the 
 problem in another way, classifying the unemployable on 
 the basis of the industrial route traveled before becoming 
 units in this '' wastage of the wage-earning class." 
 Their analysis indicates a primary emphasis upon 
 the reflex influence of periods of idleness as the cause of 
 personal deficiencies. The first division consists of those 
 who in the prime of life drop into the unemployable class. 
 From the men who have lost permanent positions through 
 industrial or business changes there is a small but steady 
 stream.^ From the " Men of Discontinuous Employment/' 
 making high wages while at work but with incessantly re- 
 curring periods of idleness, the descent is more rapid." 
 Personal weaknesses and shortcomings play a part here, 
 giving the degenerating influences fuller play than they 
 would otherwise have. It is the under-employed, however, 
 who are the most prolific source of unemployables.' 
 Though individual weaknesses are of some importance 
 here, also, the fundamental cause of degeneracy is the sys- 
 tem under which the men of this class work. Charity Or- 
 ganization Society workers testified : '* It is not that the 
 casual man has a larger dose of original sin than his fel- 
 lows; it is that he is exactly what any other class in the 
 community would become . . . were they submitted for 
 any length of time to the same system of employment." * 
 The willingness of the wife to work, and the opportunity 
 to keep her at work once she has started, are factors that 
 were found to make the road to the unemployable class 
 much easier to travel. 
 
 The second source of unemployables, according to the 
 minority analysis, is graduation from adolescence into that 
 
 * Minority Report, pt. ii, pp. 214-5. ^ Ihid., pp. 215-17. 
 
 ^ Ibid., pp. 217-18. * Ibid., p. 217. 
 
I03] CONTEMPORARY ENGLISH THEORIES 103 
 
 class. The general subject of " blind-alley " employment, 
 lack of industrial training, and consequent demoralization 
 has been considered above/ The men who gravitate into 
 the unemployable class from the premature appearance of 
 old age^ form the third of the types of unemployables. 
 This subject has also been touched upon, and need not be 
 further considered here.^ 
 
 Whatever the ultimate source of this class!, however, 
 whether industrial disorgamzation or personal weakness, it 
 exists and is a factor serving to increase somewhat the 
 aggregate volume of unemployment occurring at any one 
 time.* 
 
 In its effect upon the incidence of unemployment the per- 
 sonal element is of obvious impoTtance. The " selective in- 
 fluence of personal character " is all pervasive. The weaker 
 workers in factory, store or office are first turned out when 
 industry or business slackens. Even in busy times it is the 
 iess efficient workers who form the " casual fringe " about 
 all industries, and who bear the burden of the minor indus- 
 trial fluctuations. Here again the unfortunate reflex influ- 
 ence of the periods of unemployment's seen. Idle because 
 of their weaknesses, these weaker brothers have their in- 
 feriorities accentuated by their idleness.^ Thus unemploy- 
 
 1 Cf. supra, p. 54 et seq. 
 ^ Minority Report, p. 214. 
 3 Cf. supra, p. 54. 
 
 * The number in the permanent vagrant class was placed at from 
 20,coo to 30,000 in Great Britain as a whole, by the Departmental Com- 
 mittee on Vagrancy which reported in 1906. The figures on this subject 
 given by 'Rowntree and Lasker in their survey of York are interesting. 
 They found important faults of character among 18.6% of the unem- 
 ployed regular workers (pp. 54-5). Among the "work-shy," moral 
 delinquency due to poor heredity, degrading environment, and faulty 
 education was an outstanding feature (pp. 173-193). 
 
 * Cf. Beveridge, pp. 138-43. 
 
I04 CONTEMPORARY THEORIES OF UNEMPLOYMENT [104 
 
 ment and individual failings perpetuate each other in a 
 vicious circle of cumulative interaction. 
 
 8. PROPOSED REMEDIES FOR UNEMPLOYMENT DUE TO 
 PERSONAL FAILINGS 
 
 The first step to be taken in the campaign against the un- 
 employables is the elimination of those factors which are 
 manufacturing, say the minority/ a new generation of this 
 class every ten or twelve years. Proposed reforms to 
 accomplish this end include industrial training, and all 
 those perfections of industrial machinery " which increase 
 a man's chance of getting work, and which improve his 
 condition when unemployed and reduce the likelihood of 
 demoralization." ^ 
 
 Through these reforms in industrial machinery, more- 
 over, especially through the organization of the labor mar- 
 ket, the problem of the unemployable can be isolated. De- 
 casualization will make it impossible for the semi-unem- 
 ployable to work two or three days a week. The incompe- 
 tent casual will be forced out of industry and the necessary 
 disciplinary treatment can be given him.^ Vagabond wan- 
 dering can be prevented, since the excuse of seeking em- 
 ployment cannot be given if transportation is advanced 
 through the labor exchanges to all men securing positions 
 in outlying parts of the country.* By making registration 
 at the labor exchange a prerequisite to the receipt of any 
 form of public assistance, the personal responsibilty of hus- 
 band and father can be brought home, and this more subtle 
 form of vagrancy eliminated.^ 
 
 * Minority Report, pt. ii, p. 214. 
 
 ^ Rowntree and Lasker, Unemployed, p. 198. The latter measures, 
 dealing with men while unemployed, are discussed below (pp. 113-117) ; 
 the general reforms referred to have been outlined above. 
 
 ^ Cf. Beveridge, p. 215. 
 
 * Minority Report, pt. ii, p. 265. ^ Ihid., pp. 266-7. 
 
105] CONTEMPORARY ENGLISH THEORIES 105 
 
 With industry thus organized so that the unemployable 
 is marked off, and steps taken to prevent the re-creation 
 of the type, the problem of dealing with the present 
 generation of the " work-shy " remains. As to remedies 
 we have a rather sharp division into camps, though there 
 is some considerable area of common agreement. 
 
 A system of detention colonies to be used in conjunction 
 with the voluntary training schools and farm colonies for 
 the unemployed ^ is generally agreed upon as necessary. 
 The difference of opinion comes in regard to the character 
 and administrative policy of these colonies. On the one 
 side stand the Departmental Committee on Vagrancy, which 
 reported in 1906 after a searching investigation, and the 
 majority of the Poor Law Commission of 1909. The gen- 
 eral principle on which they stand, that of repression, is 
 voiced by W. H. Daw^son: ". . . society is justified, in its 
 own interest, in legislating the loafer out of existence." ^ 
 To attain this end, forced labor colonies modeled on conti- 
 nental plans and administered by the police as penal insti- 
 tutions are recommended. Short sentences are deprecated, 
 committal of vagrants for from six months to three years 
 being urged. The existing casual wards, except insofar as 
 transitionally necessary, are to be discontinued, cheap hotels 
 for genuine wayfarers taking their place. Within the colo- 
 nies men are to be engaged in industrial and agricultural 
 trades, though competition with free industry is to be 
 avoided.^ 
 
 ^ This subject is closely allied to that dealing with the general treat- 
 ment of unemployed men {infra, pp. 113-117), but it is deemed best to 
 consider it at this time. In practice the administration of the two 
 systems might be closely connected. 
 
 2 Vagrancy Problem, p. ix. 
 
 ' The Departmental Committee on Vagrancy, The majority of the 
 Poor Law Commission, and W. H. Dawson are, with slight differences 
 of opinion, agreed on this general type of treatment. For a summary 
 
Io6 CONTEMPORARY THEORIES OF UNEMPLOYMENT [io6 
 
 Leaning toward a somewhat less severe policy, aiming 
 not to punish but rather to cure the men of this class of the 
 " morbid frame of mind " which has caused them to be- 
 come *' work-shy," the minority propose detention colonies 
 similar in their general constitution to those referred to 
 above but administered primarily as training establishments 
 and having nothing to do with the police authorities/ Con- 
 tinuous employment is to be given and rigorous discipline 
 is to prevail. Good conduct will be rewarded by promotion 
 to one of the free training establishments. A similar 
 method of dealing with vagrants was advocated by Edmond 
 Kelly.^ He emphatically emphasized the reformation side 
 of the work and urged the absolute separation of the colo- 
 nies from both penitentiaries and workhouses. 
 
 As to the treatment of the problem of the personal factor 
 in unemployment there are, thus, certain differences of 
 opinion, but the broad path of general policy is clear. The 
 industrial conditions creating the type need to be dealt with ; 
 by means of better labor market organization the present 
 generation of " work-shys " should be isolated for separate 
 treatment; these should be subjected to rigorous disciplinary 
 detention, with training aiming at regeneration of those who 
 can be re-made into efficient workers. Those personal fail- 
 ings in all workers which increase the frictions of industrial 
 
 of the report of the former, cf. Dawson, The Vagrancy Problem, pp. 
 231-45. Dawson's own plans are detailed on pp. 62-103 of the same 
 book. The recommendations of the majority of the Poor Law Com- 
 mission appear in their report, vol. i, pp. 548-9. 
 
 * Minority Report, pt. ii, p. 308. The earlier attitude of the Webbs 
 toward the problem of the unemployable is expressed in Industrial 
 Democracy, pp. 784-9- Though no specific remedial measures are sug- 
 gested, the necessity of isolating the problem before it can be ade- 
 quately dealt with is emphasized. 
 
 ' The Unemployables (London, 1907). Especially valuable for the 
 discussion of the labor-colony system, which is strongly advocated. 
 Cf. pp. 36-51 for material on English remedies. 
 
lo;] CONTEMPORARY ENGLISH THEORIES 107 
 
 movement and adaptation, and therefore increase somewhat 
 the aggregate volume of unemployment, may in part be elimi- 
 nated by some such measures as will be touched upon,^ but 
 reform in this direction involves deeper considerations than 
 those concerned with the particular problem of unemploy- 
 ment.^ 
 
 9. UNEMPLOYMENT INSURANCE 
 
 In a dynamic industrial state unemployment cannot be 
 prevented. Business and industrial activity involve indus- 
 trial changes, and a certain amount of unemployment is a 
 necessary accompaniment of these changes. That great 
 amount of unemployment which exists today and that mini- 
 mum of unemployment which will persist must be dealt 
 with by other than merely preventive measures which aim 
 at industrial reformation. Theories as to the methods of 
 providing for individuals during periods of unavoidable 
 unemployment are of two types — those dealing with insur- 
 ance against unemployment and those concerned with public 
 relief measures. 
 
 As to the advisability, on principle, of unemployment in- 
 surance, there seems to be little argument. Given the facts, 
 as Mr. Chiozza Money points out,* that manual work is for 
 the most part inherently irregular, and that uncertainty of 
 
 1 Cf. infra, pp. 113-117. 
 
 ' W. C. D. Whetham, in a lecture on " Eugenics and Unemployment " 
 (Cambridge, 1910), discusses the relation of racial breeding to pauper- 
 ism and unemployment. He believes that these problems can only be 
 solved finally by an improvement in the " innate character of the popu- 
 lation." Considerable material on the general subject of the treatment 
 of vagrancy in Britain and other countries is contained in a Special 
 Consular Report on Vagrancy and Public Charities in Foreign Coun- 
 tries issued by the Bureau of Statistics of the Department of State 
 (Washington, D. C, 1893). The disorganized form of presentation of 
 the valuable matter it contains materially lessens its usefulness. 
 
 * L. G. Chiozza Money, Insurance versus Poverty (London, 1912), pp. 
 314, 317. 
 
I08 CONTEMPORARY THEORIES OF UNEMPLOYMENT [io8 
 
 maintenance due to an irregular income is demoralizing in 
 the extreme, it is incumbent either upon the workers or 
 upon society to afford regular payment for irregular work. 
 That this should be done through some form of insurance 
 follows from the limited savings of the individual, the im- 
 possibility of prophesying individual risks, and the converse 
 possibility of averaging, and thus foreseeing the risks in- 
 curred by a body of men. 
 
 I. G. Gibbon states that three conditions are necessary 
 for the application of the principle of insurance : ^ first, it 
 must be possible to foretell the amount of the risk for the 
 group which is to be insured ; second, the risk must be gen- 
 eral to the members of the group ; third, it must be possible 
 to prevent fraud. Gibbon contends that though there are 
 few trades in which the exact fluctuations of employment 
 can be foreseen, and though changing industrial conditions 
 in the future may change the risk, it is possible, with a 
 broad margin of error, to secure statistics on which insur- 
 ance premiums can be based. The majority of the Poor 
 Law Commission, while condemning the idea of general 
 unemployment insurance, because of the extreme variations 
 in risk and the probable preponderance of " bad risks," be- 
 lieve that trade-group insurance is possible, because the risk 
 within a given trade is susceptible of fairly exact measure- 
 ment.^ This view that within a given trade sufficient actu- 
 arial certainty for insurance can be secured is held by most 
 of the English authorities on the subject,^ but constant at- 
 tention, and readiness to change rates with greater experi- 
 ence are advised. That voluntary insurance in the past has 
 
 1 1. G. Gibbon, Unemployment Insurance (London, 1911), pp. 14- ip- 
 ^ Report of the Royal Commission on the Poor Laws, pt. vi, ch. 4. 
 ^ Cf. EncyclopcBdia Brittanica, nth ed., vol. 27, pp. 578-80. H. Llewel- 
 13m Smith, Secretary to the Board of Trade, is quoted on the subject. 
 Cf. also Chapman and Hallsworth, Unemployment in Lancashire (Man- 
 chester, 1909), p. no. 
 
I09] CONTEMPORARY ENGLISH THEORIES 109 
 
 been successfully worked out on trade lines substantiates 
 this argument. The present English insurance scheme, as 
 was noted above/ rests on a trade basis. 
 
 The second condition, that the risk must be general to 
 the members of the group, is only partially fulfilled as re- 
 gards unemployment. Statistics of benefits paid by certain 
 trade unions are evidence that unemployment falls more 
 heavily upon the ^' weaker brothers " within a group. Year 
 after year certain individuals exhaust their benefit, while 
 others draw little or none. But these delinquent members 
 tend to be squeezed out in time ; and even though the light- 
 ning strikes some continuously, all are subject, in greater 
 or less degree, to periods of idleness.^ So again, with a 
 margin of error, the general requirements for insurance are 
 met in the trade group.^ 
 
 The third possibility which would make the method of 
 insurance inapplicable is that of fraud. If malingering on 
 a large scale is possible, the whole scheme would obviously 
 break down. If the insurance be voluntary, by trade unions, 
 it is largely possible to prevent this, through the pressure 
 of opinion and the knowledge of trade openings on the 
 part of the members generally. Fraud of this kind, how- 
 ever, is one of the chief obstacles to government schemes. 
 The best way of combating it is through the full utilization 
 of a labor-exchange system by those administering the in- 
 surance. Voluntary idleness under the pretence of work 
 would not be possible were a government office seeking out 
 vacancies. Such close co-operation between the insurance 
 officials and the labor-exchange managers is provided for 
 by the National Insurance Act of 191 1. The broad con- 
 clusion reached by the English students, then, is that un- 
 
 1 P. 38. 
 
 ' Cf. Beveridge, Unemployment, pp. 140-2. 
 
 » Cf. Gibbon, pp. 16-18. 
 
I lo CONTEMPORARY THEORIES OF UNEMPLOYMENT [no 
 
 employment ^ is an insurable risk. While individuals may 
 point to faults or inadequacies in any particular system, or 
 even weaknesses in the method itself,^ the consensus of 
 opinion is that insurance in one form or another is needed. 
 As Beveridge says, it is a direct, flexible and immediate 
 method of relieving unemployment, while it enables the 
 burden of an expense necessary to industry to be borne col- 
 lectively instead of individually.^ 
 
 On the question as to whether the state should assist in 
 insurance against unemployment, there is again a fairly 
 uniform agreement. Tlie inability of a large majority of 
 the workers to make this provision for themselves is per- 
 haps the best reason for such assistance.* Again, as a 
 matter of self-protection it is urged that the state should 
 assist, for if the money is not spent in this way it will have 
 to be spent in relief work in another form, the beneficial 
 effects of which are not so certain. Habits of providence 
 and co-operation, moreover, are said to be stimulated by the 
 encouragement of insurance schemes. From another point 
 
 * Unemployment due to trade disputes and to a few other specified 
 causes is not considered to warrant the payment of benefit. 
 
 ' The Webbs, in The Prevention of Destitution, emphasize the limita- 
 tions of insurance. It does not prevent unemployment, and should 
 not be considered an alternative to preventive measures. By lessening 
 the distress accompanying unemployment it may, they say, actually 
 lead to an increase in the evil itself (pp. 159-63). Rowntree and 
 Lasker, in a joint paper, point out the wide field that cannot be touched 
 by such measures; Revue Internationale du C homage (Paris, 1911), pp. 
 147-8. 
 
 ' Beveridge, Unemployment, pp. 225-7. 
 
 * Mr. Money estimates that in 1908 there were 17,050,000 manual 
 workers and small salary earners in Great Britain. Of these, about 
 700,000 belonged to trade unions providing unemployment benefits. 
 One million two hundred and fifty-four thousand pounds was ex- 
 pended on unemployed benefits in that year, an average of one pound 
 and fifteen shillings per member; Insurance versus Poverty, pp. 315-7. 
 
Ill] CONTEMPORARY ENGLISH THEORIES 1 1 1 
 
 of view such public aid is advocated, for it is contended 
 that only when the state feels the financial pressure of un- 
 employment will preventive steps (such as the regulariza- 
 tion of expenditures) be taken. As an abstract matter of 
 justice, Gibbon holds, public assistance should be given. 
 Unemployment is characteristic of present social and in- 
 dustrial organization; it is a community, not an individual 
 matter, and therefore the community should aid in the 
 bearing of the burden.^ 
 
 A dissenting opinion on this subject is advanced by S. J. 
 Chapman, of the University of Manchester. Holding that 
 the personal equation would " undermine the actuarial 
 bases " of insurance, that the chance of fraud would be too 
 great, and that the subsidizing of trade-union insurance 
 would necessitate the state upholding trade-union policies 
 and standards. Professor Chapman maintains that any form 
 of insurance in which the government attempts to take a 
 part is inadvisable. Only that insurance against unemploy- 
 ment which is wholly provided and administered by the 
 trade unions themselves is considered practicable.^ 
 
 The limits of this paper would be exceeded by a full dis- 
 cussion of the different types of unemployment insurance 
 which have been practised or proposed. As to the relative 
 merits of the two general types, voluntary and compulsory, 
 and the various species of each, there has been much dis- 
 cussion. An autonomous voluntary scheme, that is, one 
 established and maintained by the workmen themselves, 
 was the only type prevailing in England previous to the pas- 
 sage of the National Insurance Act. That act provided 
 compulsory insurance within certain trades, contributions 
 to be made by employers, employees and the state, and re- 
 
 1 Cf. Gibbon, Unemployment Insurance, pp. 229-30, for a summary 
 of reasons advanced for public aid. 
 
 '^ Brassey and Chapman, Work and Wages (London, 1908), pt. ii, 
 "Wages and Employment," pp. 325-36. 
 
1 12 CONTEMPORARY THEORIES OF UNEMPLOYMENT [112 
 
 enforced the voluntary schemes by providing governmental 
 subsidies. The latter method of subsidizing autonomous 
 schemes is the well-known Ghent plan. Admittedly an ex- 
 periment, the English system is thus affording an oppor- 
 tunity for the trial of two directly opposite types of insur- 
 ance. The outcome of the trial will undoubtedly shape 
 future policy beyond as well as within the British Isles.^ 
 
 ^ I. G. Gibbon comes out unreservedly in favor of the Ghent system 
 of subsidies — of "helping self-help." Comprehensive descriptions of 
 the continental methods of insurance are included. 
 
 The minority of the Poor Law Commission strongly recommended a 
 similar form of subsidizing trade unions paying out-of-work benefits 
 (pt. ii, pp. 288-93). 
 
 The majority, while making no specific recommendations, urge that 
 in any form adopted the existing trade organizations be utilized; 
 Royal Commission on the Poor Lazvs, pt. vi, ch. 4. 
 
 Public subventions for supplementing the benefits of trade associa- 
 tions are also recommended by David F. Schloss {Insurance Against 
 Unemployment, London, 1909), whose book contains a summarized 
 description of all existing methods. 
 
 An ardent advocate of compulsion, as the only method of helping 
 those who most need it, and a strong supporter of the Act of 191 1, is 
 found in Mr. Chiozza Money, to whose book reference has been made 
 (Insurance versus Poverty). It contains the text of the National In- 
 surance Act, with full explanations. 
 
 A brief symposium of views on the subject, with particular refer- 
 ence to the Act of 191 1, is included in the Revue Internationale du Cho- 
 mage (Paris, 191 1), pp. 127-152. I. G. Gibbon, J. A. Hobson, and 
 Rowntree and Lasker contribute notes. 
 
 The Report of the Special Committee on Unskilled Labor (London, 
 1908) points out the absolute necessity of an efficient labor-exchange 
 system for the success of unemployment insurance schemes. The com- 
 mittee recommend no particular plan, because a national system of 
 labor exchanges was not in sight at that time (pp. 66-77). 
 
 Cyril Jackson, who investigated unemployment for the Royal Com- 
 mission on the Poor Laws, publishes his personal views in Unemploy- 
 ment and Trade Unions (London, 1910). His conclusion concerning 
 insurance is expressed in no uncertain words: "A subsidy to trade 
 unions is therefore not only the easiest but also the sole effective 
 method of unemployment insurance" (p. 39). The central thesis of 
 his book is that the solution of the problem of unemployment is to be 
 found only through governmental co-operation with trade unions 
 {cf. p. 85). 
 
113] CONTEMPORAR Y ENGLISH THEORIES i j 3 
 
 10. THE RELIEF OF THE UNEMPLOYED 
 
 Before a national insurance act, universal in scope, can 
 be worked out there will be actual destitution due to unem- 
 ployment to be faced ; even though such a universal measure 
 be applied, there will always remain some whom it cannot 
 reach. So relief of more direct character is immediately 
 necessary and will probably always be needed. The various 
 recommendations concerning the character which such re- 
 lief should take in the future will be briefly enumerated.^ 
 
 The Report of the Poor Law Commission contains a com- 
 prehensive set of suggestions dealing with the able-bodied 
 unemployed. Three principles which are to dictate action 
 on their behalf are laid down. They are co-operation (be- 
 tween all agencies dealing with the unemployed), discrimi- 
 nation (between unemployed individuals), and restoration.* 
 The proposed mechanism of relief is as follows : 
 
 Any individual who cannot be immediately helped 
 through the labor exchanges and who has no unemployment 
 insurance benefit accruing will be first assisted, if possible, 
 by voluntary aid organizations. The commission suggests 
 these voluntary committees as a means of mobilizing local 
 personal service and fully utilizing privately subscribed 
 funds. ^ These will give the temporary assistance to man 
 and family which is often all that is required for tiding over 
 brief spells of idleness. Behind this voluntary body will 
 stand the public assistance authority. Those appealing to 
 this body will be classified on the basis of their physical 
 condition, technical training and industrial record. Those 
 
 ^ Relief measures now taken under the Poor Laws and under the 
 Unemployed Workman Act were sketched above (pp. 26-31, 31-36). 
 
 ' Report of the Royal Commission on the Poor Laws, pt. vi, ch. 4. 
 
 ' For a full description of these committees, which make up am im- 
 portant part of their proposed machinery for charitable relief, see the 
 Commission's Report, pt vii. 
 
1 14 CONTEMPORARY THEORIES OF UNEMPLOYMENT [114 
 
 whose condition and character are such that they require 
 merely temporary maintenance will be given either assist- 
 ance at home in return for daily work, partial home assist- 
 ance, the man, but not his family, being kept in an institu- 
 tion, or full institutional assistance, both man and family 
 being helped at an industrial or agricultural institution. 
 The second class consists of those who would not be helped 
 by merely temporary assistance, but require a prolonged 
 period of training. For these persons, whose restoration 
 to industrial efficiency is sought, industrial and agricultural 
 institutions and labor colonies similar to the best of those 
 which have been tried in the past would be provided. The 
 third class specified by the majority are those " unemploy- 
 ables " who require detention and discipline. The Poor 
 Law Commission's recommendations concerning their treat- 
 ment have been outlined.^ 
 
 This constitutes their complete permanent program. 
 However, pending the full development of the measures 
 suggested, the prosecution of public works by the local 
 authorities, financially assisted by the board of trade, is rec- 
 ommended for periods of acute distress.^ 
 
 One of the vital points connected with the program of 
 the majority is that all those who receive assistance, other 
 than medical, for three months or more during the qualify- 
 ing year are to be disfranchised.^ To this the minority 
 take strong exception. 
 
 " Maintenance under Training " is the caption under 
 which the minority advance their relief recommendations. 
 Their plan of treatment is based upon the belief that " the 
 capacity of the industrial system to absorb fresh labor is 
 
 ^ Cf. supra, pp. 27, 28. 
 
 ' A full statement of the views of the majority is given in the Report 
 of the Royal Commission on the Poor Laws, pt. vi, ch. 4 and pt. ix. 
 * Ibid., pt. vi, ch. 4. 
 
115] CONTEMPORARY ENGLISH THEORIES ^ TT^- 
 
 far from exhausted, but this capacity depends entirely upon 
 the labor being . . . suited to the particular developments 
 of the time." ^ To bring about the industrial regeneration 
 necessary for many of the unemployed, a system of free 
 training establishment and of detention training colo- 
 nies is advocated, the former designed only for men who 
 can be made fit to resume their places in industrial employ- 
 ment, the latter for the ** work-shy." - Admission to the 
 free establishments is to be optional with any unemployed 
 man, but public assistance of any kind will only be given to 
 the families of such able-bodied men as do attend. The 
 curriculum would include strict physical training and the 
 complete industrial overhauling of each individual ad- 
 mitted. If in an outworn trade he would be taught other 
 work; if a poor workman in a flourishing trade, the train- 
 ing given him would be designed to make him an efficient 
 workman in that trade. Maintenance for each man and his 
 family would be provided out of the public funds during 
 this period of training. By close co-operation with the 
 national labor bureau each man would be placed as soon 
 as opportunity offered and the degree of his efficiency justi- 
 fied it.' 
 
 Relief works for the unemployed, that is, the carrying-on 
 of public works on which they can be employed, are con- 
 demned by the minority as over-costly, degenerating in the 
 effects on the individual, and as *' representing only a coun- 
 sel of despair." 
 
 The outstanding point of difference between the majority 
 and minority proposals in this regard is that the latter rest 
 upon the fundamental belief that all work with the able- 
 
 "^ Minority Report, pt. ii, p. 300 (quoted). 
 
 2 Cf. supra, p. 27. 
 
 ' Minority Report, pt. ii, pp. 293-308. 
 
1 1 6 CONTEMPORARY THEORIES OF UNEMPLOYMENT [i i6 
 
 bodied should be taken completely away from the poor-law 
 authorities and placed under a ministry of labor. It is an 
 administrative proposal of far-reaching importance, but 
 apparently one which is not to be acted upon by Parliament. 
 
 An inconspicuous provision in the National Insurance 
 Act may pave the way for important future advances in the 
 training of inefficients. Article lOO states that if an insur- 
 ance officer considers that the skill or knowledge of a work- 
 man is defective, but that these defects may be remedied 
 by technical instruction, he may " pay out of the unemploy- 
 ment fund all or any of the expenses incidental to the pro- 
 vision of the instruction, if he is of opinion that the charge 
 on the unemployment fund in respect of this workman is 
 likely to be decreased by the provision of the instruction." 
 What may be done in the future under the provision of 
 this article is uncertain, but the possibilities are striking. 
 
 Beveridge touches very briefly on the relief which should 
 be accorded the unemployed. That such relief should 
 be administered under the poor law, that the line between 
 industry and relief should be sharply drawn, and that 
 it should aim at the restoration to physical vigor and tech- 
 nical skill of those capable of it, he makes clear, however.^ 
 
 * Beveridge, Unemployment, pp. 232-4. 
 
 For interesting accounts of labor colonies, see three articles in Papers 
 and Proceedings, National Conference on the Prevention of Destitu- 
 tion (London, 1911), pp. 482-493, 499-509- 
 
 J. A. Hobson discusses labor colonies and similar institutions in The 
 Problem of the Unemployed, pp. i3i-45- He considers such attempts 
 to be very far from a real solution of the problem at issue, though 
 of possible value in a small way. 
 
 Professor Chapman weighs the relative advantages of labor colonies 
 and relief works for unemployed men in Work and Wages, pt. ii, pp. 
 33<5-43, 372-84. 
 
 A general conclusion in favor of restorative training is reached by 
 Pigou in his chapter on the " Relief of the Unemployed ;" Unemploy- 
 ment, pp. 228-41. 
 
 A chapter on the " Public Provision of Work," which is valuable be- 
 
117] CONTEMPORARY ENGLISH THEORIES fl/" 
 
 The chief methods recommended for caring for men 
 while unemployed have been touched upon in this section 
 and throughout the paper. To detail at greater length sim- 
 ilar recommendations, of which there are many, is unneces- 
 sary. What is aimed at in them all is the maintenance of 
 families in good health while the wage-earner is idle, the 
 prevention of demoralization, and, if possible, the industrial 
 regeneration of those needing it and capable of such res- 
 toration. Such relief measures, combined with deeper- 
 going reforms which aim to organize English industrial 
 life, may well furnish the basis for a scientific campaign 
 looking toward the elimination of the distress which has in 
 the past accompanied unemployment and under-employment. 
 
 cause of the detailed local statistics given, is contained in Chapman 
 and Hallsworth, Unemployment in Lancashire, pp. 115-33. 
 
 Edmond Kelly's, The Unemployables, which was referred to above, is 
 exclusively devoted to the treatment of labor colonies as agencies for 
 the training and regeneration of unemployed men of the lower types. 
 
/ 
 
 CHAPTER III 
 
 The Development of American Unemployment 
 Theory and Remedial Practice 
 
 I. miscellaneous types of early theory 
 
 ^i>/ Intensive study of the problem of unemployment is a 
 / ^ very recent development in the United States. Severe un- 
 employment there was at various times during the latter 
 half of the nineteenth century, and the problem of vagrancy 
 has been virtually a permanent one since the Civil War. 
 Though these conditions called forth nothing approaching 
 a scientific analysis, the spectacle of large numbers of able- 
 bodied men out of work during periods of industrial in- 
 activity did cause brief flurries of excitement, characterized 
 by generalizations of hobby-ridden individuals as to the 
 causes of the phenomenon, and by appeals for immediate 
 remedies essentially of a superficial character. The former 
 constitute a considerable portion of the early American 
 literature on the subject. 
 
 A striking example of this early type of theory is the 
 " Labor Exchange " idea, which was rather extensively 
 circulated from 1890 to 1898. , Believing that iinemploy- 
 ment and the like ills that beset the world were the result 
 of the use of a metallic exchange medium which was scarce 
 and hard to obtain, certain individuals formed a " National 
 Labor Exchange " at Independence, Missouri, in 1890. It 
 was designed to afford work for all by enabling everybody 
 to exchange directly the things he produced for the things 
 he n&eded. Labor, represented by a^paper currency,- was to 
 118 '^' - " [11^ 
 
1 19] AMERICAN UNEMPLOYMENT THEORY i ^9 _ 
 
 bejhe medium of exchange. It was amiounced in 1897 that 
 300 branches with a total membership of 15,000 had been 
 set up. The movement apparently died shortly afterward, 
 however, for no trace of it appears after 1898.^ 
 
 Similar in some respects is the conclusion reached by 
 Hugo Bilgram, who asserts, after an involved argument, 
 that business stagnation and involuntary idleness can be 
 prevented by the issue of credit money." 
 
 As early as 1871 Henry George was attacking land 
 monopolization in California.^ In 1878, lecturing on Why 
 Work is Scarce, Wages Low, and Labor Restless,^ he 
 specifically named the monopoly of land as the cause of 
 unemployment, and advocated the single tax as a method 
 of relief. He takes occasion at the same time to deny that 
 the influx of Chinese, to which unemployment was popu^ 
 larly attributed, was the root cause of the lack of work. 
 In Progress and Poverty,^ his theory is outlined at length. 
 The Malthusian doctrine of a tendency toward a surplus 
 population is repudiated,® George asserting that productive 
 
 1 Information concerning this interesting movement is contained in : 
 The Labor Exchange Quarterly, July 1896, vol. i, no. i (Independence, 
 'Mo.) ; G. B. DeBernardi, Trials and Triumphs of Labor (Independ- 
 ence, Mo., 1896) ; J. A. Kinghorn- Jones, How We May Dispose of 
 Our Surplus Products and How We May Employ Our Surplus Labor 
 (San Francisco, 1898) ; B. J. Sharp, Labor Exchange in a Nutshell 
 (Salem, Oregon, 1897) ; E. Z. Ernst, The Progressive Handbook of 
 the Labor Exchange (Olathe, Kansas, 1894). 
 
 ' Hugo Bilgram, Involuntary Idleness (Philadelphia, 1889). Mr. Bil- 
 gram's book is an elaboration of a paper presented to the American 
 Economic Association. 
 
 ' Henry George, Our Land and Land Policy, National and State (San 
 Francisco, 1871). 
 
 * Lecture delivered in Metropolitan Temple, S. R, March 26, 1878. 
 Pamphlet printed for the Land Reform League. 
 ' (San Francisco, 1879.) 
 Ibid., bk. ii, " Population and Subsistence," pp. 81-136. 
 
I20 CONTEMPORARY THEORIES OF UNEMPLOYMENT [120 
 
 forces can keep pace with population. *'. . . in any given 
 stage of civilization a greater number of people can produce 
 a larger proportionate amount of wealth and more fully 
 supply their wants than can a smaller number." ^ The 
 single tax and the accompanying reforms which are to 
 remedy the " unequal distribution of wealth based on the 
 institution of private property in land " are fully explained 
 in this later work. 
 
 The second type of literature concerned with the problem 
 of unemployment, previous to the introduction of the more 
 intensive methods of study of recent years, is that coming 
 from men personally in touch with the unemployed. On 
 the purely descriptive side there is such work as Josiah 
 
 /^ Flynt Willard's realistic narratives of American tramp 
 life,^ and W. A. Wyckoff's portrayal of a winter among^ 
 the unemployed of Chicago.^ More critical in their nature 
 
 " are the contributions of those writing from the point of 
 view of charity administration. John Graham Brooks gives 
 us one of the earliest papers on the imemployed written 
 from this standpoint.* He states frankly that he ". . . . 
 cannot think it of prime importance to search for the causes 
 of poverty and want of work," and confines his treatment 
 largely to an exposition of the necessity of a change in the 
 form of charity and a discussion of certain proposed 
 methods of dealing with the unemployed. Four measures 
 are suggested: emplo)mient bureaus, graded work tests, 
 / trade schools for giving skill and capacity to the incom- 
 \ petent, and compulsory farm colonies and work-shops. 
 
 1 Henry George, op. cit., p. 134. 
 
 2 Josiah Flynt, Tramping with Tramps (N. Y., 1901). 
 
 »W. A. Wyckoff, The Workers— The West (N. Y., 1898), pp. 1-146. 
 
 * Annals of the American Arademy of Political and Social Science, 
 " The Future Problem of Charity and the Unemployed," July 1894, PP. 
 1-27. 
 
121 ] AMERICAN UNEMPLOYMENT THEORY ^ 12F 
 
 Certain of these, it will be noted, are the remedies proposed 
 today. But Brooks' analysis of the problem to be met, 
 though he states that he is not searching for causes, is fun- 
 damentally different from that of modern students. He is 
 reasoning throughout from the individual, finding the cause 
 essentially in the individual and in the individual' sj^tbiree J 
 great passions — the sexual, gaming, and drink. "| This ap- 
 pears unmistakably when he states that " This dead-beat 
 crowd by any test that we apply to it is our greatest 
 plague." ^ The point is emphasized here because it is char- 
 acteristic of all the earlier approaches to the study of this 
 question.* 
 
 The same point of view is apparent in another early 
 study, though a somewhat deeper analysis is made in 
 this paper. J. J. McCook, speaking on *' The Tramp. i*i:Qb- 
 lem^^ explains its development in this way: When an in- 
 dustrial slump occurs, the young unmarried men, usually 
 those a trifle irregular because of tendencies toward drink- \ 
 ing, are first turned out by the employers. In seeking work. .^ 
 elsewhere, a taste of wandering life is experienced. When 
 times become better these men have become accustomed to 
 the life of the vagrant and will not return to industry. 
 Severe laws, which leave the fundamental problem un- 
 touched, may scatter them but do not regenerate them. 
 The remedies are to be found in the prohibition of heavy 
 drinking, measures to prevent people from discovering that 
 they can live without work, the passage and enforcement \ 
 oi good laws, the " abolition of industrial booms, financial 
 
 crises, business slumps, and hard times," the encouragement 
 
 J 
 
 1 Annals of the American Academy of Political and Social Science, 
 
 op. cit., p. 25. ^^ 
 
 2 Cf. supra, p. 22 et seq. " *'■"■ 
 ^Proceedings of the National Conference on Charities and Correc- 
 tions, Twenty-second Annual Session, 1895, pp. 288-301. 
 
( 
 
 122 CONTEMPORARY THEORIES OF UNEMPLOYMENT [122 
 
 of marriage, the prevention of train- jumping, and the estab- 
 lishment of reformatory institutions, 
 
 " The man who does not desire to work, who prefers to 
 eat his bread in the sweat of some other man's brow," is 
 the subject of a paper by Washington Gladden, who so 
 defines the " Workless Man." ^ An adequate work test is 
 looked upon by Gladden as the essence of the correct rem- 
 edy. Once having established this work test, four other 
 measures are proposed: Workhouses are needed in the 
 cities and farm colonies in the country ; training in the arts 
 of industry should be included in early education; tem- 
 porary employment for the industrial and capable among 
 the unemployed should be provided by the state; breeding 
 by paupers should be made impossible. 
 
 Somewhat later in point of time and characterized by 
 relief proposals somewhat broader in their scope, but with 
 the same emphasis on individual fault, is Edward T. De- 
 vine's analysis in Principles of Relief.^ Speaking of able- 
 bodied men applying for assistance, he says : " Lack of 
 employment, which, at the time of application, is given in 
 the great majority of instances as the reason for being in 
 need, is usually found, on inquiry, to be due to some per- 
 sonal deficiency in the employee. He has been discharged 
 for intemperance, for inefficiency, for inability to meet the 
 demand upon him, or for some objectionable trait." * De- 
 vine does state that in a certain proportion of instances the 
 lack of employment is due to industrial causes, of which he 
 enumerates ". . . the introduction of machinery, changes 
 in methods of industry, a f alling-off in the demand for par- 
 ticular commodities, disturbances of credit, and the . . . sub- 
 
 ^ Z' 1 Washington Gladden, " What to Do with the W 
 /^' ( ceedings of the National Conference on Charitie 
 
 Workless Man," Pro- 
 ties and Corrections, 
 V.JTwenty-six Annual Session, 1899, pp. 141-152. 
 
 '(N. Y., 1904.) ^Ibid., p. 151. 
 
123] AMERICAN UNEMPLOYMENT THEORY 123 " 
 
 stitution of new management in a particular industry. . ." 
 Five possible measures of assistance are mentioned by De- 
 vine. They are the use of employment agencies and news- 
 paper advertisements, direct appeal to possible employers of 
 labor and co-operation with the trade union, the creation of 
 industrial colonies or industries in which those who cannot 
 be placed in regular employment may become self-support- 
 ing, the use of temporary industries, such as woodyards, 
 and the giving of duly safeguarded material relief.^ x\n- 
 other measure, a varied manual training in youth, is men- 
 tioned incidentally as a means for enabling workers to meet 
 enforced industrial changes with less suffering. 
 
 In considering Devine's reasoning and his recommenda- 
 tions, as well as those of others engaged in charity work, 
 the fact must be borne in mind that they are speaking, in 
 the main, of a particular class of the unemployed, those 
 who apply for relief at charity headquarters. Neverthe- 
 less, a statement such as the following links up this analysis 
 with those others in which the problem of unemployment is 
 an individual problem. " The first principle to be recog- 
 nized is that the obligation to find employment, like the 
 obligation to continue suitable employment when one has it, 
 rests primarily upon the applicant himself." " 
 
 The works summarized above, which represent the opin- 
 ions of the ablest of those connected with charity adminis- 
 
 1 Devine, op. cit., p. 161. 
 
 ^Ibid., p. 152. Reference is made below to later works by Devine. 
 A very obvious shift of emphasis from the individual to society and 
 industry as basic sources of unemployment and vagrancy will be noted. 
 
 Another study of vagrancy, comprehensive, but emphasizing individual 
 faults essentially, and looking primarily to the taboo, to repressive 
 legislation as the remedy, appears in the Annals of the American 
 Academy of Political and Social Science (May 1904), vol. xxxiii, no. 3, 
 pp. 37-48. Benjamin €. Marsh, "Causes of Vagrancy and Methods 
 of Eradication." 
 
124 CONTEMPORARY THEORIES OF UNEMPLOYMENT [124. 
 
 tration a decade or more ago, will serve to depict the gen- 
 eral views of this class of workers. From them we turn to 
 a brief review of work done in another field, that of theory/ 
 
 2. THE EARLY AMERICAN ECONOMISTS ON UNEMPLOYMENT 
 
 The absence of an intensive analysis of unemployment 
 which characterized the two types of writers mentioned 
 above is also notable in the works of the early American 
 economists. The Malthusian doctrine of a surplus popula- 
 tion is a bone of controversy; the relation of the mobility 
 and adaptability of labor to wages is considered ; the effect 
 of the introduction of machinery on the number of men em- 
 ployed is referred to; but unemployment as a distinct prob- 
 lem is not studied. Certain points of value to the present 
 study are made, however, by some of these earlier thinkers. 
 
 The works of H. C. Carey contain a suggestive treatment 
 of certain of the general factors involved in the problem 
 being considered. Malthus' contention that population 
 can outstrip the means of subsistence, and that unemploy- 
 ment and misery are results of this tendency, is opposed on 
 two different grounds. In the first place, man's productive 
 powers are held to be indefinitely extensible with the devel- 
 opment of civilization. " With every increase in the ex- 
 tent to which matter has taken upon itself the form of man, 
 there should consequently be found an increase of his power 
 to guide and direct the forces provided for his use . . . 
 and constant increase in his power to command the food 
 and clothing required for his support." ^ Secondly, the re- 
 
 ^ Note should be made of an additional piece of early material bear- 
 ing on the subject of unemployment. The First Annual Report of the 
 United States Commissioner of Labor (1886) on "Industrial Depres- 
 sion " contains a recommendation for the restriction of immigration as 
 a preventive of unemployment (pp. 271-3). 
 
 ^ H. C. Carey, Principles of Social Science (Philadelphia, 1858-9), vol. 
 i, p. 89. 
 
125] AMERICAN UNEMPLOYMENT THEORY lai^ 
 
 productive power in man is not a constant quantity. There 
 is a " self-supporting law of population " which " secures 
 harmony in the growth of numbers and of food." Man's 
 reproductive power "... diminishes as his various facul- 
 ties are more and more stimulated into action — as employ- 
 ments become diversified — as the societary action becomes 
 more rapid — as land becomes divided — and as he himself 
 becomes more free." ^ 
 
 Another point made by Carey in his exposition of the 
 essential harmonies of social life is that with the develop- 
 ment of civilization the '* continuity of societary motion " 
 increases. The " unceasing waste of labor," which is one 
 of the conditions of early society and a scattered people, is 
 replaced, with the growth of wealth and population, by an 
 equal distribution of employment throughout the year.^ 
 This thesis, which is of extreme importance to the question 
 of unemployment, is elaborated at some length. The "asso- 
 ciation of mankind," a "diversity of employments," a vari- 
 ety of commodities produced, a growing complexity in the 
 life of man and in the combinations among men, a " rapid- 
 ity of circulation," all these are essential to the promotion 
 of that continuity in the motion of society which is held to 
 be the supreme test of civiHzation. And Carey believed 
 that these harmonies were being worked out, that the early 
 " gambling character of the labor of the fields " and all the 
 other discontinuities which characterize a low stage of de- 
 velopment were disappearing.^ 
 
 In his American Political Economy* Francis Bowen sets 
 
 1 H. €. Carey, op. cit,, vol. iii, p. 308. Cf. vol. iii, chs. 46 and 47, pp. 
 263-327, for a full exposition of Carey's views on population. 
 
 2 Ibid., vol. iii, p. 28. 
 
 ' For a development of this interesting theory at length, cf. Principles 
 of Social Science, vol. ii, ch. 20, pp. 17-42; vol. iii, ch. 38-44, pp. 17-232. 
 * (New York, 1890.) 
 
126 CONTEMPORARY THEORIES OF UNEMPLOYMENT [126 
 
 forth, in the main, the stock statements of the classical 
 economists on the questions concerned with unemplo5rment. 
 Adam Smith's assertion that high wages compensate for 
 irregularity of employment is repeated/ Senior's exposi- 
 tion of the difficulty of the transfer of labor from one 
 occupation to another, which is " the principal evil of a 
 high state of civilization," is quoted.^ As to the effects of 
 the introduction of machinery, Bowen sides with Ricardo's 
 critics in asserting that ordinarily the ultimate demand, be- 
 cause of the resultant cheapened production, will be suffi- 
 cient to cause the absorption of all who are temporarily 
 thrown out of work. If the demand for a commodity be 
 limited by natural causes, however, " any improvement 
 which will diminish the labor required for its production 
 must permanently deprive some laborers of employment." * 
 With Carey, Bowen repudiates the Malthusian theory of 
 population. He sets forward " two great facts which 
 afford a complete refutation of Malthusianism. The first 
 is that the limit of population, in any country whatsoever, 
 is not the nimiber of people which the soil of that country 
 alone will supply with food, but the number which the sur- 
 face of the whole earth is capable of feeding; and it is a 
 matter of demonstration that this limit cannot even be 
 approached for many centuries." * The second fact is that 
 " the practical or actual limit to the growth of population, 
 in every case, is the limit to the increase and distribution, 
 not of food, but of wealth." ^ And that the increase of 
 population is attended by a more than proportionate in- 
 crease of wealth is held, for " every human being is an 
 implement for the production of wealth.'* 
 
 ^American Political Economy (New York, 1890), pp. 192-3. 
 2 Ibid., pp. 200-2. 8 Ibid., p. 54. 
 
 * Ibid., p. 140. 5 Jbid., p. 140. 
 
127] AMERICAN UNEMPLOYMENT THEORY i^ _ 
 
 Francis A. Walker in his treatment of wages de- 
 velops a theory bearing immediately upon the subject of 
 unemployment. The essential immobility and lack of adap- 
 tability of labor, factors which prevent perfect competition 
 for the product of industry, are emphasized in both his 
 chief works/ Not only is labor narrowly restricted geo- 
 graphically, but there is a marked slowness of occupational 
 change. Caimes's theory of non-competing groups is en- 
 dorsed, except in his contention that the children of the 
 work classes constitute a ''disposable funds." Walker con- 
 cludes that "... until you secure mobility of adult labor 
 you will fail to find it in the rising generation." ^ In his 
 contention that mobility, adaptability and guidance of the 
 rising generation are needed. Walker is anticipating later 
 proposals for the remedying of industrial disorganization.^ 
 
 3. METHODS OF PRACTICAL RELIEF 
 
 The -summarized discussion of the theories of the three 
 classes of thinkers considered above is intended to give an 
 idea of the course of theoretical reasoning in the United 
 States on the question of unemployment. The review of 
 methods of practical relief need not be lengthy. 
 
 The treatment of the able-bodied unemployed during the 
 latter part of the nineteenth century and the first decade of 
 the twentieth ran about the same general course as did 
 English practice.* For homeless men, municipalities and 
 associated charities sometimes provided lodging-houses with 
 attached woodyards or other plants for the enforcement of 
 
 » Francis A. Walker, Political Economy (N. Y., 1888) ; The Wages 
 Question (N. Y., 1886). 
 
 ^ The Wages Question, p. 203. 
 
 ' C/. Political Economy, pp. 260-6; The Wages Question, "The Mo- 
 bility of Labor," ch. 11, pp. 174-205. 
 
 * Cf. supra, pp. 22-31. 
 
128 CONTEMPORARY THEORIES OF UNEMPLOYMENT [128 
 
 the supremely necessary " work test." ^ The Salvation 
 Army and the Volunteers of America have established 
 similar institutions in the large cities, in some cases with a 
 work test, in many cases, it is alleged, without such a test.^ 
 At times, when public attention had been sharply called to 
 the question by a severe winter, an acute industrial depres- 
 sion, or the gathering of " armies " of the unemployed in 
 the urban centers, funds were raised by public or private 
 action and temporary employment given. Such temporary 
 works usually bore the same sort of doubtful fruit as similar 
 English works had done.^ Free employment bureaus con- 
 ducted by philanthropic institutions, municipalities, and in 
 some few instances by states, were established at various 
 times and at various places for aiding the unemployed. The 
 comparative lack of success of these earlier attempts was due 
 to several causes, of which inefficiency, inadequate appropria- 
 tions, lack of co-operation, and failure of all concerned to 
 
 ^ A fairly comprehensive description of the treatment of the able- 
 bodied by charitable institutions is contained in Charles R. Henderson^ 
 Modern Methods of Charity (N. Y., 1904), especially pp. 395-6, 451-4, 
 on vagrants. Cf. also Amos G. Warner, American Charities (N. Y., 
 1908), pp. 244-262, much more modern in its treatment. E. T. Devine, 
 Principles of Relief, to v^'-hich reference has been made, contains mate- 
 rial on this subject, cf. ch. iv, pp. 412-31, "Industrial Distress in New- 
 York and Indianapolis, Winter of 1893-4." A similar discussion of 
 winter relief is contained in the Annals of the American Academy of 
 Political and Social Science, November 1894, PP- 61-81. Helena S. 
 Dudley describes the relief work for women carried on in the Wells 
 Memorial Institute at Boston. Descriptions of the more recent work 
 of this character will be found in most of the current periodicals. 
 
 ' Accounts of the work of the Salvation Army and of the Volunteers 
 of America are given in : Monographs on American Social Economics, 
 no. 20, " The Social Relief Work of the Salvation Army in the United 
 States," by Commander Booth Tucker, 1900; Charles R. Henderson, 
 Modern Methods of Charity (N. Y., 1904), PP. 433-38; United States 
 Bureau of Labor, Bulletin No. 48 (September, 1903), "Farm Colonies 
 of the Salvation Army." 
 
 3 Cf. supra, pp. 25 et seq. 
 
129] AMERICAN UNEMPLOYMENT THEORY 129 
 
 realize their true function are outstanding. Reference will 
 be had to them later/ )Several farm colonies were created 
 by voluntary agencies, and in {i 911 $10,000 was appro- 
 priated in New York State for the establishment of an in- 
 dustrial farm colony. But the public employment given 
 was rare and brief; "Wayfarers Lodges" were compara- 
 tively few, and patronized only in extremities of need by 
 men out of work; the work of the early employment 
 bureaus was virtually insignificant. The characteristic 
 treatment has been to leave the men to their own devices, 
 and to the police.j 
 
 The distinction between men temporarily out of work 
 and the chronic idlers, which was urged by Mr. Chamber- 
 lain in England in the Circular of 1886 and which was 
 attempted under the Unemployed Workman Act, has not 
 been made in practice in the United States. It is approxi- 
 mately correct to say that until quite recently the blanket 
 terms for the unemployed of this country have been 
 '' tramp " and " vagrant." And to a considerable extent 
 is this still true of common parlance, for every migratory 
 worker is a " tramp." It has been with the police, more 
 than with any of the other agencies mentioned, that this 
 class has had its dealings. The " need of co-operation with 
 the police " in dealing with this class is emphasized by C. 
 R. Henderson in Modern Methods of Charity. Tramp and 
 vagrancy laws have applied practically indiscriminately to 
 all who had " no visible means of support," workers and 
 non-workers alike. A brief resume of these laws is there- 
 fore pertinent to the present discussion. 
 
 * For descriptions of the earlier offices, cf. Monographs on American 
 Social Economics, no. 6, W. F. Willoughby, " Employment Bureaus," 
 (Boston, 1900) ; Massachusetts Bureau of Statistics of Labor, 34th 
 Annual Report (Boston, March, 1904), pt. ii, pp. 131-213, Free Em- 
 ployment Offices in the United States and Foreign Countries; United 
 States Bureau of Labor, Bulletin No. 68 (Jan., 1907) ; J. E. Connor, 
 Free Public Employment Offices in the United States. 
 
130 CONTEMPORARY THEORIES OF UNEMPLOYMENT [130 
 
 4. TRAMP AND VAGRANCY LEGISLATION IN THE UNITED 
 
 STATES ^ 
 
 There are eighteen states " having tramp laws. In seven- 
 teen of the states ^ the legislation covers persons begging 
 from house to house and subsisting on charity; in nine* 
 the laws apply to all persons " roaming about without vis- 
 ible means of support " ; in five states ^ they apply to per- 
 sons " wandering about without a fixed residence or lawful 
 occupation " ; the laws of two states ® include persons rid- 
 ing on trains without permission ; those of two states ' 
 cover persons not making reasonable efforts to secure em- 
 ployment ; while the law of one state ^ applies to persons 
 lodging in places other than lodging-houses. 
 
 No minimum sentence is prescribed by the laws of eleven 
 states;® it is three days under the law of one state; ^^ 
 thirty days in three states; ^^ six months in two states,^ 
 and one year in one state. ^' 
 
 * The material on tramp and vagrancy legislation included in this 
 monograph has been obtained from charts compiled by W. C. Frank- 
 hauser and Sidney D. Gamble, which constitute a digest of all such 
 legislation prior to April i, 1915. Acknowledgment of indebtedness 
 to them is due. 
 
 2 Maine, New Hampshire, Vermont, Massachusetts, Connecticut, 
 Rhode Island, New York, New Jersey, Pennsylvania, Delaware, Mary- 
 land, North Carolina, Alabama, Ohio, Mississippi, Nebraska, Iowa, In- 
 diana. 
 
 3 New HampshirCj Vermont, Massachusetts, Connecticut, Rhode Is- 
 land, New York, New Jersey, Pennsylvania, Maryland, North Caro- 
 lina, Alabama, Ohio, Mississippi, Nebraska, Iowa, Indiana, Maine. 
 
 * Vermont, Massachusetts, Connecticut, Rhode Island, New York,. 
 New Jersey, Delaware, Maryland, Iowa. 
 
 ^ Maine, Pennsylvania, Delaware, Maryland, Mississippi. 
 •Vermont, Massachusetts. ' Nebraska, Iowa. ^ New York. 
 
 * New Hampshire, Vermont, Connecticut, New York, Pennsylvania, 
 Delaware, North Carolina, Ohio, Mississippi, Iowa, Indiana. 
 
 ^^ Nebraska. " Maine, New Jersey, Maryland. 
 
 " Massachusetts, Alabama. " Rhode Island. 
 
131 ] AMERICAN UNEMPLOYMENT THEORY 131 
 
 A maximum sentence is not specified in one state ; ^ it is 
 ten days in one state/ twenty days in one state,* thirty 
 days in three states,* six months in three states,^ ten months 
 in one state,® one year in four states,^ fifteen months in 
 one state,® two years in one state, '^ and three years in two 
 states/'' 
 
 Thirteen states ^^ set no fines; one state ^^ prescribes a 
 minimum fine of $3, while one ^^ sets a minimum fine of 
 $50. A maximum fine of $20 is set by the laws of one 
 state, ^* of $50 by two states,^*^ of $100 by one state,^* and 
 of $200 by one state/ ^ 
 
 The place of commitment is not noted in the laws of two 
 states/® In one state ^^ commitment to the penitentiary at 
 hard labor or to the state farm is provided for, while 
 another ^^ gives the alternative of the penitentiary or 
 jail. One ^^ prescribes the jail at hard labor, while two ^^ 
 
 * Indiana. ' Iowa. ^ Nebraska. 
 
 * North Carolina, Delaware, Mississippi. 
 ^ Vermont, New York, New Jersey. 
 
 * Maine, 
 
 ■^ Connecticut, Maryland, Pennsylvania, Alabama. 
 
 ® New Hampshire. ® Massachusetts. 
 
 i'^ Rhode Island, Ohio. 
 
 " Maine, New Hampshire, Massachusetts, Connecticut, Rhode Island, 
 New York, New Jersey, Pennsylvania, Delaware, Maryland, Ohio, 
 Iowa, Indiana. 
 
 ^^ Nebraska. ^' Alabama. ^* Nebraska. 
 
 ^^ Mississippi, North Carolina, 
 
 ^^ Vermont. 
 
 ^'^ Alabama. 
 
 ^^ Nebraska, Indiana. 
 
 19 New York. 
 
 '"Ohio. 
 
 '1 Maine. 
 
 *' Alabama, Iowa. 
 

 132 CONTEMPORARY THEORIES OF UNEMPLOYMENT [132 
 
 set the jail or hard labor. Three ^ fix the jail, three ^ the 
 workhouse, while one ^ sets either the workhouse or the 
 jail. One state * provides for sentence to the house of cor- 
 rection, no labor being specified, while another ^ sets the 
 house of correction at hard labor. Another state ^ gives 
 three alternatives, the house of correction, the state farm 
 or the workhouse. The law of one state ^ provides for no 
 commitment whatsoever, stating that tramps shall be set to 
 work on the streets or hired out. 
 
 On the matter of pay there is again variance. Fourteen 
 of the eighteen states having tramp laws allot no pay for 
 work done by such offenders when imprisoned. Of those 
 providing that tramps set to work shall be remunerated, 
 one® fixes 33^^ cents a day, one^ $1.00 per day, one ^^ 
 $1.50 per day, while one ^^ prescribes that a " fair wage " 
 shall be paid. 
 
 This sketch of the character of tramp laws is virtually 
 duplicated as regards the almost complete lack of uniform- 
 ity, the varying severity, and the absence of discrimination, 
 by a description of vagrancy laws. Up to April i, 191 5, 
 44 stated y^ had definite vagrancy laws, those without such 
 laws applying their tramp legislation to all classes of 
 
 • N€w Hampshire, North Carolina, Mississippi. 
 ' Connecticut, Rhode Island, New Jersey. 
 
 • Pennsylvania. * Maryland. ^ Vermont. 
 
 • Massachusetts. "^ Delaware. ® Vermont. 
 
 ' Nebraska. ^^ Iowa. " Delaware. 
 
 " New Hampshire, Massachusetts, Connecticut, Rhode Island, New 
 York, New Jersey, Delaware, Maryland, North Carolina, Alabama, 
 Ohio, Mississippi, Nebraska, Iowa, Virginia, West Virginia, South 
 Carolina, Tennessee, Georgia, Florida, Kentucky, Michigan, Wisconsin, 
 Indiana, Illinois, Louisiana, Arkansas, Texas, Oklahoma, Missouri, 
 Kansas, Minnesota, North Dakota, South Dakota, Wyoming, Montana, 
 Colorado, Utah, Nevada, Washington, Cahfornia^ Arizona, New Mex- 
 ico, Idaho. 
 
133] AMERICAN UNEMPLOYMENT THEORY 133 
 
 vagrants. The applicability of these laws to the unem- 
 ployed, especially to those of the migratory type, is shown 
 by the fact that in 37 states ^ they apply to '' those who 
 lack the means of support — who are able to work but re- 
 fuse," in 17 states^ to ''persons lodging in places other 
 than lodging-houses without permission," in 30 states ^ to 
 " healthy beggars who solicit alms as a business," and in 
 2y states * to " suspicious persons strolling about without 
 lawful business." While such definitions appear to exclude 
 the legitimately unemployed, the fact that both the apparent, 
 external line of cleavage and the actual line of cleavage 
 between the vagrant, the tramp, and the industrial unem- 
 ployed man cannot be clearly drawn has served to prevent 
 such exclusion in actual practice. 
 
 Sentences prescribed vary from a minimum of one day 
 to six months, and from a maximum of ten days to three 
 years, being sixty days or over in most of the states having 
 such laws. Indeterminate sentences are provided for by 
 
 ^ Massachusetts, Connecticut, Rhode Island, New York, Maryland, 
 North Carolina. Alabama, Ohio, Mississippi, Nebraska, Iowa, Virginia, 
 South Carolina, Tennessee, Georgia, Florida, Kentucky, Michigan, Wis- 
 consin, Indiana, Illinois, Louisiana, Arkansas, Texas, Oklahoma, Mis- 
 souri, North Dakota, South Dakota, Wyoming, Montana, Colorado, 
 Idaho, Nevada, Washington, Cahfornia, Arizona, Utah. 
 
 ' Massachusetts, Connecticut, Rhode Island, New York, Maryland, 
 Iowa, Wisconsin, Illinois, Louisiana, North Dakota, Montana, Utah, 
 Idaho, Nevada, Washington, California, Arizona. 
 
 ' Connecticut, Rhode Island, New York, Maryland, North Carolina, 
 
 Alabama, Ohio, Mississippi, Nebraska, Iowa, Virginia, South Carolina, 
 
 Tennessee, Georgia, Florida, Michigan, Wisconsin, Indiana, Texas, 
 
 Oklahoma, Minnesota, North Dakota, Montana, Colorado, Utah, Idaho, 
 
 Nevada, Washington, California, Arizona. 
 
 / : *.jbelaware. North Carolina, Alabama, Ohio, Nebraska, Virginia, 
 
 South Carolina, Georgia, Florida, Kentucky, Michigan, Wisconsin, Illi- 
 
 / nois, Arkansas, Texas, Oklahoma, Missouri, Kansas, North Dakota, 
 
 \ South Dakota, Montana, Colorado, Utah, Idaho, Nevada, California, 
 
 Arizona. - "' ^ 
 
134 CONTEMPORARY THEORIES OF UNEMPLOYMENT [134 
 
 the laws of two states/ The place and character of com- 
 mitment vary, as they do under the tramp laws, between 
 penitentiary, jail and workhouse. The laws of fourteen 
 states ^ provide specifically for outdoor labor on the streets, 
 in some cases in chain gangs. That of one state * allows 
 two days' credit on the prison term for each day's work. 
 As has been noted, New York has established a state farm, 
 to which vagrants as well as tramps may be sent for inde- 
 terminate periods. Of the fourteen state laws prescribing 
 outdoor labor, nine* provide for payment for such labor, 
 the amount varying from 75 cents per day to $2.00 per 
 day. In two states ^ one-half of the proceeds of their 
 labor is given to the men at outside work. 
 
 In the foregoing summaries no attempt has been made 
 to give a compendium of the various tramp and vagrancy 
 laws, nor to note the specific laws of particular states. 
 They are meant to show the general type of treatment to 
 which the " workless man " was often exposed, and to in- 
 dicate the general theories lying back of these laws. The 
 legitimacy of the application of this type of legislation to 
 the criminal tramp and the worst type of vagrant is not 
 here questioned, though there is room for doubt as to 
 their effectiveness even in this field. The significant point 
 is that to the ordinary peace officer and petty judge, 
 as to the ordinary person, the unemployed man, especially 
 if a migratory worker of the type very common in the 
 
 * New York, Georgia 
 
 ' Georgia, Illinois, Arkansas, North Dakota, Colorado, Nevada, Cali- 
 fornia, Arizona, New Mexico, Ohio, Kentucky, Wyoming, Iowa, Wash- 
 ington. 
 
 * Nevada. 
 
 (J)Oh\o, Kentucky, Arkansas, Wyoming, Illinois, Colorado, California, 
 Iowa, Washington. 
 
 * Iowa, Washington. 
 
135] AMERICAN UNEMPLOYMENT THEORY 135 
 
 United States, has been a tramp or a vagrant. Dis- 
 crimination was, and to a great extent still is, lacking in 
 the treatment of these two classes. Laws such as that of 
 Rhode Island, allowing $5.00 per conviction to peace offi- 
 cers arresting tramps, intensify the evil effects of such lack 
 of discrimination by putting premiums upon the arrest of 
 homeless men. The "floating" policy, the forced moving-on 
 of all non-residents, which has been characteristic of an- 
 other type of police solution of the problem of the migra- 
 tory man is in strict accord with, and is in fact an out- 
 growth of, the theories inherent in this law making. 
 
 This tramp and vagrancy legislation, this police control, 
 has constituted perhaps a major part of the field of practice 
 in the treatment of the unemployed. The above discussion 
 of it, as a counterpart to the development of the types of 
 theoretical reasoning touched upon, will help to show what 
 has been the groundwork of the modern American theories 
 concerned with unemployment and the unemployed man. 
 
 Brief reference has been made to the earlier attempts to 
 establish public employment bureaus in the United States.^ 
 Later developments, notably in regard to action by the 
 various states, have been far more promising, not only in 
 that laws providing for such bureaus have been enacted, 
 but in the comprehensive character of the employment-office 
 systems thus established in certain of the states. At the 
 present time ^ twenty-four states have laws providing for 
 the organization of the labor market by means of central- 
 ized state employment-agency systems.* In addition, one 
 
 1 Supra, p. 128. 
 
 2 April 1917. 
 
 'The states having such laws, with the years of their enactment, are 
 as follows: Arkansas, 1917; California, 1915; Colorado, 1907; Connec- 
 ticut, 1905; Illinois, 1915; Indiana, 1909; towa, 1915; Kansas, 1901; 
 Kentucky, 1906; Maryland, 1916; Massachusetts, 1906; Michigan, 1905; 
 
136 CONTEMPORARY THEORIES OF UNEMPLOYMENT [136 
 
 state ^ authorizes municipalities to set up public bureaus, 
 another ^ encourages municipalities to take such action, 
 and a third ^ requires them to do so. In the sphere of fed- 
 eral action the attempt of the Division of Information of 
 the United States Bureau of Immigration to provide ma- 
 chinery for the same purpose is promising. This subject 
 is briefly discussed below in connection with the immigra- 
 tion question.* 
 
 While these state systems are as yet inadequate, and 
 although uniformity and full interstate co-operation have 
 not as yet been achieved, the spread of the movement 
 toward a more efficient distribution of labor marks the 
 coming of a truer conception of the nature of the problem 
 of unemployment. 
 
 We have considered types of the men of one idea who 
 attempted to solve the problem of unemployment. That 
 anything of value to a solution of the problem was con- 
 tributed by them is doubtful, though the force of Henry- 
 George's thought is not yet spent. Wyckoff and Flynt, in- 
 vestigators of reality, gave American society that closer 
 and more intimate view of the " submerged tenth " which 
 Charles Booth had given contemporary England. The 
 charity administrators, the individual with all his faults 
 bulking large in their view, tended to overlook the 
 
 Minnesota, 1905; Missouri, 1899; Nebraska, 1897; New Jersey, 1915; 
 New York, 1914; Ohio, 1890; Oklahoma, 1908; Pennsylvania, 1915; 
 Rhode Island, 1908; South Dakota, 1913; West Virginia, 1901 ; Wis- 
 consin, 1901. Thanks are due to Dr. John B. Andrews, secretary of tlie 
 American Association for Labor Legislation, for the list of these laws. 
 
 ^ Montana. 
 
 ^ Louisiana. 
 
 » Idaho. 
 
 * Cf. infra, pp. 155, 156. Cf. also John R. Commons and John B. An- 
 drews, Principles of Labor Legislation, "Federal Activity" (N. Y., 
 1916), pp. 276-8, 
 
137] AMERICAN UNEMPLOYMENT THEORY 137 
 
 dominant industrial factors. Yet value their work has had, 
 and the modern program for the prevention of unemploy- 
 ment contains measures recommended years ago by men 
 with this training. Similarly, though the American econo- 
 mists did not isolate for separate study the problem being 
 reviewed, and do not, of course, give us a complete analysis 
 of the question as it is presented today, certain of the con- 
 clusions they reached appear on that same program. From 
 charity practice, public and voluntary, something has been 
 learned. The place of police power in the treatment of the 
 unemployed, the possibilities of repressive legislation, have 
 been indicated by the outcome of such legislation. But a 
 synthesis of methods and a concentration of attention on 
 the specific problem of unemployment were needed for a 
 more perfect analysis. A beginning in that study has been 
 made. 
 
CHAPTER IV 
 
 Contemporary American Theories of Unemployment 
 AND OF Unemployment Relief 
 
 I. general statement 
 
 As a whole, the contributions made by American stu- 
 dents to the study of unemployment lack the concreteness, 
 the fullness, and the general applicability characteristic of 
 four or five of the standard English works. There is no 
 standard American work. There is no one authority con- 
 taining a general description of conditions in the country 
 as a whole, an analysis of such statistics and other infor- 
 mation as we have, a full treatment of causes, a description 
 of remedies and their applicability to the United States, 
 and an outline of the all-important administrative ma- 
 chinery needed.^ There are governmental commission 
 reports touching the subject of unemployment. There 
 are local reports by various state and city commissions, re- 
 stricted in scope and with but a limited circulation. There 
 are fragmentary statistics,^ published by federal and state 
 bodies and by a few other groups, partially summarized by 
 occasional individuals. Popular magazine articles and edi- 
 torials innumerable have appeared within the last five years. 
 The iniquities of the private employment-agency system 
 and the necessity for public offices have been themes for a 
 
 1 A notable contribution in this last field is made in John R. 
 Commons and John B. Andrews, Principles of Labor Legislation (N. 
 Y., 1916), ch. ix, "Administration." 
 
 2 A note concerning American unemployment statistics is made at 
 the end of this monograph. 
 
 138 C138 
 
139] CONTEMPORARY AMERICAN THEORIES 139 
 
 mass of writing. Other literature there has been on the 
 tramp, the vagrant and the migratory worker, most of it 
 characterized by a failure to link up these elements with 
 the main problem. Industrial education, vocational train- 
 ing and occupational guidance have received varying 
 amounts of space, in some cases as phases of the unemploy- 
 ment problem, more often as separate subjects. Land 
 monopoly and immigration have been featured as causes of 
 unemployment. Conventions have been held, and various 
 of the more serious journals have given space to fairly 
 comprehensive discussions of the problem. Finally, there 
 has been propaganda designed to stimulate effective reme- 
 dial work along correct lines. But, except in a very limited 
 degree and in condensed form in certain of the reports, 
 books, periodical articles and propaganda literature, there 
 has been no synthesis of the subject, no full consideration 
 by any one authority of the causes, conditions and possible 
 remedies for unemployment as it faces the people of the 
 United States today. 
 
 To review in detail the various theories as to the causes 
 of unemployment and the remedies for unemployment 
 which appear in this variegated literature would constitute 
 in large part a mere repetition of the first part of this paper 
 which traced the various opinions held by English writers. 
 The repetition would be not only one of form, but largely 
 one of fact also. The analysis of the problem which has 
 been sketched above has, in all its essentials, been accepted 
 by American students of unemployment.^ Additional fac- 
 
 1 The first comprehensive account of the problem of unemployment 
 to appear in the United States was the Report to the Legislature of the 
 State of New York by the Commission Appointed . . . to inquire into 
 the Matter of Employers' Liability and Other Matters, Third Report, 
 Unemployment and Lack of Farm Labor (Albany, 1911). This report, 
 largely the work of William M. Leiserson, appeared two years after 
 the first edition of Wm. H, Beveridge*s classic, Unemployment — A 
 
I40 CONTEMPORARY THEORIES OF UNEMPLOYMENT [140 
 
 tors there are which enter into the situation as the United 
 States faces it, and original work along certain lines has 
 been and is being done in this country. But in its broad 
 outlines the problem is the same and the analysis of it is 
 the same. 
 
 The study of the problem made by William M. Leiserson 
 corresponds closely to the approach outlined in the first 
 part of this paper. His first, and what is to date his full- 
 est exposition of the question appears in the Report on Un- 
 employment and Lack of Farm Labor, published in 191 1 
 by the New York Commission on Employers' Liability. 
 Though the investigation was confined to New York State 
 the findings have a wider bearing. The proposed remedies, 
 being recommendations for immediate legislation, are nec- 
 essarily more restricted than more general suggestions 
 would be. They include a system of public employment 
 offices, the publication of a labor-market bulletin, the occu- 
 pational direction of juveniles, and the manipulation of 
 public work so as to regularize employment opportunities.^ 
 His latest contribution, an article on " The Problem of 
 Unemployment Today," ^ though briefer, is wider in its 
 scope and contains the results of more recent work. He con- 
 tends that unemployment is not an insoluble problem, that 
 
 Problem of Industry, and follows closely the lines laid down by Bev- 
 eridge. 
 
 (Note should be made of the treatment of the problem by the 
 United States Industrial Commission, Final Report, 1902, pp. 74^3* 
 Most of the factors at present held to account for unemployment are 
 enumerated, but the omission of several of thoise fundamental in the 
 analysis, and the failure to present the case with the logical clearness 
 characterizing Leiserson's presentation of the situation in New York 
 justify the statement that the latter was the first American analysis 
 along acceptedly sound lines.) 
 
 1 N. Y. Commission on Employers' Liability, etc., Report on Unem- 
 ployment and Lack of Farm Labor, pp. 65-9. 
 
 ^Political Science Quarterly, March 1916 (vol. 31. no. i), pp. 1-24. 
 
141 ] CONTEMPORARY AMERICAN THEORIES 141 
 
 it is a result of maladjustment, that it is not personal but 
 economic, that there is no over-population, no absolute^ 
 surplus of labor, but a fluctuating industrial reserve force 
 which is " only relatively superfluous." It follows from 
 this that labor-saving machinery and improved processes 
 cannot create a surplus labor force ; they merely make more 
 difficult the problem of adjusting supply to demand. The 
 imemployed man is therefore " an industrial factor, not a 
 parasite upon industry." ". . . . to adjust these fluctua- 
 tions, to distribute labor more evenly over the country, and 
 in better proportions among the occupations, to equalize 
 the amount of work among the seasons and the years," 
 " to secure a more perfect adjustment of particular forms 
 of labor to specific demands " — this is " the essence of the 
 problem." ^ These ends are to be achieved by "a con- 
 nected network of public employment bureaus," by guiding 
 the entrance of children and immigrants into the labor 
 market, through regularizing the labor demand by shifting 
 necessary public work to periods of depression, by a de- 
 casualization process, through " positive efforts of employ- 
 ers to regularize employment," and by means of insurance 
 against the " inevitable unemployment risk." * 
 
 The United States Industrial Commission in its Final 
 Report y printed in 1902,^ gives an analysis approximating 
 present-day conclusions more closely than do other writings 
 of that date. Personal, climatic and industrial causes are 
 specified; immigration* is named as a cause contributing 
 to the seasonal concentration of employment ; " the work- 
 
 * Political Science Quarterly, op. cit., pp. 14-21. 
 ^ Ibid., pp. 16-20. 
 
 ' United States Industrial Commission, Final Report (vol. 19 of the 
 Commission's Reports) (Washington, 1902), pp. 746-763. 
 
 * Cf. infra, pp. 146-156, for a treatment of the relation of immigra- 
 tion to unemployment. 
 
142 CONTEMPORARY THEORIES OF UNEMPLOYMENT [142 
 
 man's ignorance of the labor market " is considered to be 
 an important element in the situation. The remedying of 
 this latter condition by the development of the labor-agency 
 system is the only specific recommendation made on this 
 subject/ 
 
 The most pretentious of the publications of individuals 
 on the question is Frances A. Kellor's Out of Work — A 
 Study of Unemployment.^ A revision of an earlier work ^ 
 concerned primarily with the evils of the private employ- 
 ment agency system, the later book is designed to describe 
 the present unemployment situation and the remedial meas- 
 ures which have been undertaken or proposed. A broad 
 field is covered, and a considerable body of information 
 concerning conditions, attempted remedies, and the details 
 of various programs for the future is set forth without a 
 marked degree of organization. A great part of the book 
 is devoted to a discussion of the organization of the labor 
 market. The diagnosis by Miss Kellor is virtually that of 
 the English students and need not be detailed. The book 
 is referred to later in connection with the treatment of sev- 
 eral peculiarly American problems. 
 
 Approaching the subject from the field of insurance I. 
 M. Rubinow analyzes the problem in the same way, em- 
 phasizing the same general factors.'* As to a solution, 
 Rubinow believes that the only remedy is to be found 
 through an averaging of wages, and that this can only be 
 done by means of " compulsory, subsidized unemployment 
 insurance." ^ 
 
 ^ United States Industrial Commission, Final Report, pp. 757-61. 
 
 2 (New York, 1915.) • 
 
 » F. A. Kellor, Out of Work (New York, 1905). 
 
 ^ I. M. Rubinow, Social Insurance (New York, 1913), ch. 26, "The 
 Problem of Unemployment," pp. 441-455. 
 
 5 Ibid., pp. 455-79. Rubinow's discussion of unemployment-insurance 
 systems is a valuable addition to the material on that subject 
 
143] CONTEMPORARY AMERICAN THEORIES 143 
 
 Isaac A. Hourwich ^ points to the same causes of sea- 
 sonal and cyclical variations, absence of mobility, and the_ 
 building-up of labor reserves. The contention that unem- 
 polyment is the result of over-population is classed by Hour- 
 wich as fallacious. 
 
 The United States Commission on Industrial Relations ^ 
 gives " two basic causes of unemployment — unjust distri- 
 bution of income and land monopolization," and additional 
 minor causes corresponding to those which have been 
 named. The former causes are mentioned above. ^ Em- 
 phasis has been placed throughout by Leiserson and 
 others of the Commission staff who worked on unemploy- 
 ment, upon the necessity of organizing the labor market,* 
 which, as we have seen, is Beveridge's key to the solution 
 of the problem. 
 
 To detail the findings of other bodies as to the general 
 causes of unemployment and the general methods of relief 
 would entail mere repetition. The Report of the Chicago 
 Municipal Markets Commission,^ the Report of the Mayor's 
 Commission on Unemployment (Chicago),^ the report to 
 
 ^ Isaac A. Hourwich, Immigration and Labor (N. Y., 1912), pp. 114- 
 125. 
 
 ' United States Commission on Industrial Relations, Final Report 
 (Washington, 1915), pp. 33-38, 156-182, 255-275. 
 
 3 Pp. 119, 120. 
 
 * United States Commission on Industrial Relations, Final Report, 
 pp. 170-182. Cf. also: United States Commission on Industrial Rela- 
 tions, Tentative Proposals for Consideration on the Question of Public 
 and Private Employment OfUces (Washington, 1914) ; United States 
 Commission on Industrial Relations, First Annual Report (Washing- 
 ton, 1914), pp. 55-57. 
 
 ^Report to the Mayor and the Aldermen by the Chicago Municipal 
 Markets Commission on A Practical Plan for Relieving Destitution 
 and Unemployment in the City of Chicago (Chicago, 1914). 
 
 6 (Chicago, 1914.) 
 
144 CONTEMPORARY THEORIES OF UNEMPLOYMENT [144 
 
 the Commonwealth Club of California on Unemployment ,^ 
 the Report on Unemployment by the Commission of Im- 
 migration and Housing of California,^ the Forty-sixth An- 
 nual Report on the Statistics of Labor of Massachusetts ^ 
 fix the same broad causes, with certain additional points of 
 emphasis to be noted later, and propose the same basic 
 methods of relief. Henry R. Seager,* Edward T. Devine, 
 in his later works,^ John R. Commons,^ Charles R. Hen- 
 derson '^ agree on the essentials of the same analysis. 
 Scott Nearing * and Jacob Hollander ^ have voiced the 
 cry that remedial maladjustment is the cause of unemploy- 
 ment. Alice Solenberger/^ in her study of homeless wan- 
 derers, sensed the basic industrial fault lying at the root of 
 the human problem she tried to solve. 
 
 Notable, also, have been the series of articles appearing 
 in the Annals of the American Academy of Political and 
 
 ^ Transactions of the Commonwealth Club of California (vol. 9, no. 
 13 )» Unemployment (San Francisco, 1914). 
 
 ^ Commission of Immigration and Housing of California, Report on 
 Unemployment (Supplement to First Annual Report) (Sacramento, 
 1914). 
 
 ' (Boston, 1915), pt. ii, pp. 24-31. 
 
 * Henry R. Seager, Social Insurance (New York, 1910), pp. 84-114. 
 Cf. also Seager's letter to Devine in Report on the Desirability of 
 Establishing an Employment Bureau in the City of New York (New- 
 York, 1909), pp. 86-89. 
 
 ^Misery and its Causes (New York, 1913), pp. 11-14, 1 15-146; Report 
 on tJie Desirability of Establishing an Employment Bureau in the City 
 of New York. 
 
 ^ Labor and Administration (New York, 1913), pp. 358-381. 
 
 ^Report of the Mayor's Commission on Unemployment (Chicago, 
 1914). Cf. also "The Struggle Against Unemployment," American 
 Labor Legislation Review, May 1914 (vol. iv, no. 2), pp. 294-299. 
 
 ^Social Adjustment (New York, 1911), pp. 266-284; Social Religion 
 (New York, 1913), PP- 124-137, 211. 
 
 • The Abolition of Poverty (New York, 1914). 
 
 ^^ One Thousand Homeless Men (New York, 1911). 
 
145] CONTEMPORARY AMERICAN THEORIES 145 
 
 Social Science. Various of their issues ^ have dealt with 
 phases of the unemployment problem, and material of ex-^ 
 ceptional value on the subject has been contributed. Out- 
 standing in the contemporary field of practical work toward 
 a solution of the pressing question of unemployment have 
 been the American Association for Labor Legislation and 
 its subsidiary body, the American Section of the Inter- 
 national Association on Unemployment. Under the aus- 
 pices of these organizations two national conferences on 
 unemployment have been held, intensive investigations 
 prosecuted, a national survey of methods of unemployment 
 relief conducted, and propaganda looking toward an intel- 
 ligent meeting of the problem carried on.^ The character 
 of the relief measures detailed in their propaganda litera- 
 ture — the establishment of public employment exchanges 
 by means of which entrants to industry may be guided, 
 seasonal industries dovetailed, and casual labor decasual- 
 ized; the systematic distribution of public work; the reg- 
 ularization of industry by employers, workers and con- 
 sumers ; unemployment insurance — indicate how closely the 
 analysis of unemployment made by these bodies corres- 
 ponds to that outlined in the first part of this monograph. 
 
 Apart, however, from the main factors in the situation, 
 which are considered to be universally the same, there are 
 
 1 Cf. especially: vol. ZZ, no. i, January 1909, " Industrial Education"; 
 vol. 2)3, no. 2, March 1909, "Labor and Wages"; vol. 59, May 1915, 
 "The American Industrial Opportunity," pp. 104-21 1; vol. 61, Septera- 
 l>er 19 1 5, "America's Interests after the European War." 
 
 ^ The " Proceedings of the First National Conference on Unemploy- 
 ment" appear in The American Labor Legislation Review, May 1914 
 (vol. iv, no. 2). The "Proceedings of the Second National Confer- 
 ence on Unemployment," together with reports of investigators, are in 
 The American Labor Legislation Review, June 1915 (vol. v, no. 2). 
 The "Unemployment Survey" is in The American Labor Legislation 
 Review, November 1915 (vol. v, no. 3). 
 
146 CONTEMPORARY THEORIES OF UNEMPLOYMENT [146 
 
 certain conditions peculiar to the American problem of un- 
 employment. Two of these, the problem of immigration 
 and that of the migratory element, are important factors 
 in the situation in the United States. The outstanding fea- 
 tures of each of these problems in their relation to unem- 
 ployment will be briefly considered. 
 
 2. THE RELATION OF IMMIGRATION TO UNEMPLOYMENT 
 
 The flood of immigration to the United States has been 
 increasing annually in volume beyond all precedents of 
 similar population movements in the world's history. Dur- 
 ing the year ending June 30th, 1914,^ 1,218,480 immigrant 
 aliens were admitted to the United States. During the 
 twenty-year period from 1895 to 19 14, 14,750,738 immi- 
 grants came to this country. Previous to the year 1896 the 
 proportion of immigrants coming from northern and west- 
 ern Europe far exceeded that from southern and eastern 
 Europe. The tide changed in that year, the number of 
 Italians, Poles, Hebrews, Greeks, Russians and others of 
 the latter group swelling enormously with each passing 
 year. During the decade from 1901 to 19 10, 21.8% of the 
 total number of immigrants were from northern and west- 
 ern Europe, while 71.9% came from southern and eastern 
 Europe. The character of the recent immigrants is indi- 
 cated also by the occupational division. Of the 1,214,480 
 immigrants for the year ending June 30th, 1914, 14,601 
 were of the professional class, 173,208 of the skilled classes, 
 320,215 professed no occupation, while 658,869 were vir- 
 
 * Since the beginning of the European War, immigration has, of 
 course, fallen far below this figure. What the course of future immi- 
 gration will be is an unsettled question. The statistical data are from 
 the reports of the Commissioner General of Immigration and from the 
 Statistical 'Review of Immigration compiled by the United States Im- 
 migration Commission (vol. iii of that Commission's Reports), 
 
147] CONTEMPORARY AMERICAN THEORIES i^y 
 
 tually unskilled, though a considerable part of these are 
 classed as farm laborers/ 
 
 This influx has given rise to many new problems, and to 
 the intensification of many old ones. Its effect on the labor 
 market is apparently so obvious that for years it has been 
 maintained by many persons that immigration is the basic 
 cause of unemployment. That it is at least an important 
 contributing factor is the opinion of the United States Im- 
 migration Commission, an opinion submitted on the basis 
 of a most comprehensive survey of the general question of 
 immigration. " Their (the recent immigrant population) 
 numbers are so great," concludes the Commission, " and 
 the influx is so continuous that even with the remarkable 
 expansion of industry during the past few years there has 
 been created an over-supply of unskilled labor, and in some 
 of the industries this is reflected in a curtailed number of 
 working days, and a consequent yearly income among the 
 unskilled workers which is very much less than is indicated 
 by the daily wage rates paid." " This " over-supply of un- 
 skilled labor in the industries of the country as a whole " 
 is held to be " a condition which demands legislation re- 
 stricting the further admission of such unskilled labor." 
 The same conclusion is reached by the Commission's inves- 
 tigators of immigrants in industries.^ " The entrance into 
 the operating forces of American industries of . . . large 
 numbers of wage-earners of the races of Southern and 
 Eastern Europe . . . has led to the voluntary or involun- 
 tary displacement from certain occupations and industries 
 of the native American and older immigrant employees." * 
 
 * An additional 51,587 are put in a miscellaneous group. 
 
 ' United States Immigration Commission, Reports (Washington, 
 1911), vol. i, p. 39. 
 
 ' W. Jett Lauck was the expert in charge of these field investigations, 
 and the conclusions represent his findings, in part. 
 
 * United States Immigration Commission, Reports, vol. i, pp. 500-1. 
 
148 CONTEMPORARY THEORIES OF UNEMPLOYMENT [148 
 
 The restrictive measures suggested by the Commission 
 are seven in number, the three most important being " the 
 exclusion of those unable to read or write in some lan- 
 guage," " the limitation of the number of each arriving 
 each year to a certain percentage of the average of that 
 arriving during a given period of years," and " the exclu- 
 sion of unskilled laborers unaccompanied by wives or fami- 
 lies." ^ 
 
 An earlier government investigational commission, the 
 United States Industrial Commission, formed a similar 
 opinion. ". . . the general conclusion is inevitable that 
 while a moderate flow of immigration may be assimilated 
 without depressing effects, a rapid influx of immigrants 
 with low standards of living, crowding into the cities and 
 into the less skilled occupations, creates an unfair compe- 
 tition with those already here, intensifies the effects of other 
 depressing causes, and weakens the organization of the 
 working people, by which they hope materially to improve 
 their earnings." ^ In still another phase of the unemploy- 
 ment situation, the Commission contends, does immigration 
 serve to accentuate the problem. The evil of excessive 
 seasonal concentration of production in a short, busy season 
 is held to be made possible by " the over-supply of un- 
 organized labor and the necessity under which the em- 
 ployees exist of working more hours when they find em- 
 ployment in order to compensate for the period of idleness." 
 " It is mainly the presence of a large supply of immigrant 
 workpeople and their willingness to work more hours that 
 make it possible to concentrate production " in the trades 
 marked by that practice.^ 
 
 * United States Immigration Commission, Reports, vol. i, p. 47. 
 "^ United States Industrial Commission, Final Report (vol. 19 of com- 
 plete report, Washington, 1902), p. 969. 
 
 »/&fd., p. 751. 
 
149] CONTEMPORARY AMERICAN THEORIES 149 
 
 *' Agriculturalizing the immigrant " is not looked upon 
 b}^ the Industrial Commission as a final solution of the- 
 problem, though of value when combined with other meas- 
 ures/ Various restrictive measures designed to raise the bars 
 higher and so keep out some of the surplus are suggested.^ 
 
 Jeremiah Jenks and W. Jett Lauck ^ favor a like restric- 
 tive program. Though this policy is based upon other 
 reasons than a belief in a superfluity of labor, it is to be 
 noted that among their conclusions it is stated that " the 
 point of complete saturation has already been reached in 
 the employment of recent immigrants in mining and manu- 
 facturing establishments." * The authors are very definitely 
 in favor of restriction, holding such a policy to be a neces- 
 sary first step toward ameliorating the present conditions 
 of industrial affairs, under which " not only the economic 
 welfare of the American wage-earner but the maintenance 
 of our political and social institutions are threatened." ^ 
 
 The American Federation of Labor has consistently ad- 
 vocated restriction of immigration, basing its attitude in 
 part on the point being considered here — that immigration 
 is a direct cause of unemployment. Its policy is expressed 
 in a statement submitted to the United States Immigration 
 Commission ^ by Samuel Gompers, president of the Fed- 
 eration. One of the exhibits in the statement, an article by 
 John Mitchell, states '' That there is an inseparable relation 
 betw^een unemployment and immigration is demonstrated 
 by all the statistics which are available upon the subject." ^ 
 
 ^ United States Industrial Commission, op. cit., pp. 971-977. 
 
 ' Ibid., pp. 995-1014. 
 
 ^ The Immigration Problem (New York, 1913). 
 
 * Ibid., p. 210. 
 
 * Ibid., p. 213. 
 
 * United States Immigration Commission, Reports, vol. 41, pp. 369-431. 
 ' Ibid., p. 374. That the " glutting of the labor market through im- 
 
I^o CONTEMPORARY THEORIES OF UNEMPLOYMENT [150 
 
 The opinion that immigration is a cause of unemploy- 
 ment, and that therefore restriction is necessary, is quite 
 commonly held. The New York Commission on Employ- 
 ers' Liability reports : " The large and continuous additions 
 to the laboring population of the State due to immigration 
 are among the most important single causes of unemploy- 
 ment. Immigration, no doubt, accounts in part for the 
 chronic over-supply of labor revealed by the statistical evi- 
 dence we have presented." ^ Prescott F. Hall similarly 
 holds that " The displacement of large numbers of native 
 workers by foreigners who underbid them affects the stand- 
 ard of living, not only by direct competition but by increas- 
 ing the ranks of the unemployed." ' 
 
 They who contend that immigration is a cause of un- 
 employment do not hold the field alone, however. Isaac A. 
 Hqurwich is the staunchest defender of the view that the 
 solution of unemployment is to be found by reforming 
 other conditions, not by checking the incoming alien. Hour- 
 wich first develops the orthodox explanation of unemploy- 
 
 migration" is merely temporary and that the consequent over-supply 
 of labor in the large cities is temporary, is asserted by Mitchell in an 
 earlier publication. The evils of even this temporary glut are strongly 
 emphasized, however. Organized Labor (Philadelphia, 1903), p. 182. 
 
 John R. Commons, Races and Immigrants in America (New York, 
 1911), pp. 115-116, quotes some interesting resolutions adopted by the 
 General Executive Board of the United Garment Workers of America, 
 which consists with one exception of iRussian Jews. The resolutions 
 allege that the labor market has been overstocked so that the workers 
 of this country are seriously menaced. Congress is called upon to 
 completely suspend immigration for a term of years, and other drastic 
 measures are urged. 
 
 ^ Report to the Legislature of the State of New York by the Com- 
 mission appointed to Inquire into the Question of Employers' Liability 
 and Other Matters, Third Report, Unemployment and Lack of Farm 
 Labor (Albany, 1911), pp. 7-8. 
 
 ^Immigration (New York, 1913), p. 135. 
 
151 ] CONTEMPORARY AMERICAN THEORIES 151 
 
 ment, accounting for the glutting of the labor market by 
 Beveridge's " labor reserve " argument/ He next pro-~ 
 ceeds to refute the argument that this " normal glutting " 
 might be aggravated by immigration. If underbidding by 
 the cheaper alien forces the native out of work, the per- 
 centage of unemployment should be higher among the 
 natives in the industries in which they both work, alleges 
 Hourwich. Statistics from the Report of the United States 
 Immigration Commission are quoted to disprove this argu- 
 ment.^ Furthermore, the ratio of unemployment is least 
 in the states having the largest proportion of immigrant 
 wage-earners, greatest in those where the proportion of im- 
 migrants is lowest. Immigration and unemployment statis- 
 tics are next compared over a period of years, Hourwich at- 
 tempting to show by these figures that with increasing immi- 
 gration unemployment decreases, and with declining immi- 
 gration unemployment increases.^ This is explained by the 
 fact that " unemployment and immigration are the effects 
 of economic forces working in opposite directions; that 
 which produces business expansion reduces unemployment 
 and attracts immigration, that which produces business de- 
 pression increases unemployment and reduces immigra- 
 tion." * It is merely a case of economic supply and de- 
 mand, says Hourwich in another article; '^ there may be 
 fluctuations, but in the long run the supply of immigrants 
 will adjust itself to the demand. Holding it as proved that 
 unemployment is not the result of over-population, Hour- 
 wich contends that it necessarily follows that " the limita- 
 
 ^Immigration and Labor (New York, 1912), pp. 114-125. 
 ^Ibid., pp. 126-128. 
 ^Ibid., pp. 137-139. 
 * Ibid., p. 145. 
 
 ^Political Science Quarterly, December 191 1, "The Economic As- 
 pects of Immigration" (vol. xxvi, no. 4), pp. 615-42. 
 
1^2 CONTEMPORARY THEORIES OF UNEMPLOYMENT [i^^ 
 
 tion of the number of wage-earners can promise no relief 
 against unemployment." ^ 
 
 Not quite so emphatic in their arguments are others who 
 do not admit immigration as a cause of unemployment. 
 Helen L. Sumner, holding that ". . . these cycles (of pros- 
 perity and depression) have a greater influence than can be 
 attributed to the competition of alien labor," ^ considers 
 the case against immigration to be unproved. Frances Kel- 
 ler takes the same attitude. ". . . we do not know whether 
 our reserve of immigrant labor is larger than the country 
 should carry or not." ^ 
 
 The most recent statement of the " present-day analysis 
 of unemployment " is that of Leiserson.* It is held here to 
 be definitely established that there is "no absolute overplus 
 of labor," that, though ports of entry for immigrants and 
 certain occupations may be over-supplied with labor, there 
 are always other parts of the country and other occupations 
 capable of using more labor than they have. Leiserson, 
 therefore, sides with those who look beyond immigration 
 for the fundamental causes of unemployment.** 
 
 ^ Immigration and Labor, p. 146. 
 
 '^ Adams and Sumner, Labor Problems (New York, 1905), p. 87. 
 
 ^ Out of Work, p. 147. 
 
 * Political Science Quarterly, March 1916, " The Problem of Unem- 
 ployment Today," vol. xxxi, no. i, pp. 1-24. 
 
 ^Ibid., pp. 12-14. 
 
 The Surplus Labor Theory of Unemployment 
 
 Mention of the theory that unemployment is due to a real surplus of 
 labor has been made at various points in the preceding analysis. It 
 was not taken up at length because virtually discarded by the leading 
 English students. A brief statement of the development and present 
 status of the theory in England is relevant at this point, however, for 
 it has a bearing upon the question of the relation of immigration to 
 unemployment. 
 
 Malthusianism was in its essence a theory that over-population was 
 the cause of destitution. (C/. supra, pp. 15 et seq.) The tendency of 
 
153] CONTEMPORARY AMERICAN THEORIES 153 
 
 One other phase of the immigration question, in its re- 
 lation to unemployment, should be noted. The necessity of~ 
 the distribution of immigrants upon their arrival, of their 
 
 population to increase faster than the power of production was believed 
 to be the cause of unemployment, pauperism, and all the accompanying 
 misery. How Ricardo completely reversed this theory that the power 
 of production was outstripped by population, in contending that a sur- 
 plus of labor might result from increased power of production, is aptly 
 pointed out by William AI. Leiserson (in the above-mentioned article, 
 pp. 7-8). For Ricardo claimed that the introduction of machinery and 
 improved processes resulted in the permanent displacement of labor. 
 {Cf. supra, pp. 17 et seq.) ''Thus," says Leiserson, "the doctrine that 
 labor is superfluous because population grows faster than production 
 becomes a doctrine that increased productive power creates a surplus 
 of labor." 
 
 The same theory of a superfluity of labor is inherent in poor-law 
 procedure prior to 1834. The practice of community support of the 
 able-bodied out of the rates was based largely upon the belief that 
 such a surplus existed. (Cf. Report of Royal Commission on the Poor 
 Laws, 1909, pt. vi, ch. 9, sec. 442.) The Royal Commission of 1834, as 
 has been noted above (pp. 26 et seq.), repudiated this theory, and based 
 their recommendations upon the doctrine of personal responsibility for 
 unemployment. 
 
 The idea that there are more workers than work did not die, how- 
 ever. It has appeared constantly in popular discussion, and has 
 been voiced at various times by students of the problem. The London 
 County Council expressed it in a rather tentative form in 1903. " If it 
 is a fact that there does not exist sufficient work in the country to 
 afford employment for the whole population, that circumstance alone 
 appears to warrant a consideration as to whether the reduction of the 
 hours of labor to a reasonable limit, in the interests of industry and 
 labor alike, is not a matter of the highest importance." (Quoted, 
 Brassey-Chapman, Work and Wages, London, 1908, vol. ii, Wages and 
 Employment, p. 352.) The Webbs speak of the " surplus of labor 
 power which already exists in the partial idleness of huge reserves of 
 under-employed men" (Minority Report, pt. ii, p. 268), and state that 
 ". . . there exists in the United Kingdom today no inconsiderable sur- 
 plus of labor." They qualify their assertions, however, by admitting 
 that this is not a surplus made up of workmen who could not, with an 
 im.proved organization of industry, be productively employed. The 
 surplus of which they are seeking to dispose is not a real superfluity 
 of labor, therefore. 
 
 The most emphatic statement that there is a real surplus is made by 
 
154 CONTEMPORARY THEORIES OF UNEMPLOYMENT [154 
 
 industrial and regional guidance, is emphasized by those 
 who argue for increased restriction. The congestion of 
 immigrants in certain occupations and in certain cities is 
 
 Norman B. Dearie (Industrial Training, London, 1914). His theory 
 of a " Defective Demand " (i. e. one not sufficient to engross the total 
 supply of labor) has been referred to (supra, p. 50). It is true, he 
 says, that ". . . under existing methods of employment the whole supply 
 is required for some purpose or other. But there is more than enough 
 of it (labor) to permit the free use of the more irregular and wasteful 
 methods of employment, and to provide for the growth of large re- 
 serves of labor, both of men and boys" (p. 437). Were it not for this 
 superfluity of labor, Dearie contends, the present vicious waste of juve- 
 nile and adult labor in faulty methods of industrial training, "bhnd 
 alleys," and in unnecessarily large labor reserves, could never go on. 
 That they exist is proof of the existence of a surplus (pp. 436-452). 
 
 Arguments contradictory to this theory of an excessive number of 
 workers are advanced by most of the writers on unemployment. Thus, 
 Herbert Samuel, in denying the theory that England is over-populated, 
 stated: ". . . . those who hold this view forget that, other factors 
 being constant, the development of a country's natural resources and 
 its foreign trade increases with the growth of its population and 
 diminishes with its fall, that a small population may mean a smaller 
 production and not a greater regularity of employment, and, conversely, 
 that an increase of population may not involve an addition to the ranks 
 of the unemployed." (Reservation of Herbert Samuel in the Report 
 of Agricultural Settlements in British Colonies, 1906, p. 24. Quoted by 
 Stanley C. Johnson, A History of Emigration from the United King- 
 dom to North America, 1 763-1912, London, 1913, pp. 304-5.) Rowntree 
 and Lasker assert that **. . . it is clear that the absorption of a perma- 
 nent surplus of efficient, even though unskilled labor cannot be an in- 
 soluble problem unless there is a shortage of one or both the other two 
 factors in the production of wealth, vis., land and capital. As there is 
 no such shortage in England today, it must be possible for statesman- 
 ship to bring unemployed labor into union with unemployed land and 
 capital, and so absorb any surplus which might result from decasual- 
 ization." (Unemployment, London, 191 1, pp. 141-2.) 
 
 Beveridge goes into a somewhat more detailed argument to prove 
 that "unemployment cannot be attributed to any general want of ad- 
 justment between the growth of the supply of labor and the growth of 
 the demand." (Unemployment, London, 1912, p. 11.) The orthodox 
 economic arguments are brought forward to show that not only is there 
 a general dependence of the supply of population upon demand, but a 
 
155] CONTEMPORARY AMERICAN THEORIES 155 
 
 probably the greatest obstacle to their assimilation, as well 
 as the chief cause of their alleged intensification of the" 
 problem of unemployment. It is again merely the question 
 of labor-market organization, of adjusting supply to de- 
 mand, geographically and occupationally. Especially is this 
 occupational or qualitative maladjustment due to the influx 
 of immigrants to be noted. For the question of industrial 
 training as a means of providing a labor force qualitatively 
 adapted to the industrial needs of the country is peculiarly 
 pertinent to the immigration situation. The need of an 
 agency for the geographical distribution of immigrants has 
 long been felt. The Immigration Act of February 20, 1907, 
 provided for the establishment of a division of information 
 designed " to promote a beneficial distribution of aliens 
 admitted into the United States among the several States 
 and Territories desiring immigration." ^ For this purpose 
 the division is to " gather from all available sources useful 
 information regarding the resources, products, and physical 
 characteristics of each State and Territory, and shall pub- 
 lish such information in different languages, and distribute 
 the publications among all admitted aliens." The work has 
 been carried on with a fair degree of success, especially in 
 the direction of immigrants to agricultural positions.^ In 
 
 more immediate dependence of the demand upon the supply (p. 5). 
 Secondly, Beveridge shows that there are not too many men in Eng- 
 land for the available land, the. depopulation of the rural districts 
 proving the fact. That the wealth of the country and the productivity 
 per head of the population continue to increase is further proof that 
 there is no over-population, for that would mean that the law of dimin- 
 ishing returns had come to apply to labor generally. Finally, the rising 
 reward to labor, the fact that its price is rising nominally and relatively, 
 is held to show conclusively that there is no superabundance of labor 
 and no tendency for labor to become of decreasing importance as a 
 factor in production (pp. 8-10). 
 
 1 Immigration Act of February 20, 1907, section 40. 
 
 ' For details of the workings of the Division of Information, includ- 
 
1 56 CONTEMPORARY THEORIES OF UNEMPLO YMENT [ 1 56 
 
 19 14, in response to a widespread feeling that a national 
 system of labor exchanges was needed, the Division of In- 
 formation of the Bureau of Immigration attempted to 
 widen the scope of its work by the establishment of a 
 nation-wide system of placement bureaus, post-offices 
 throughout the country being utilized as offices. The at- 
 tem.pt was rather unfortunate, there being no adequate 
 preparations made, a trained staff being lacking, and the 
 post-offices being unfitted for such work/ 
 
 This question of the distribution of immigrants has re- 
 ceived considerable attention in the literature on immigra- 
 tion, and, as well, in that on unemployment. The Immi- 
 grants in America Review^ has featured it, Frances Kellor ^ 
 has emphasized it, Peter Roberts * and Frederic Haskin ^ 
 devote space to it. The disorganization of our immigrant 
 labor market and the chaotic conditions prevailing in this one 
 industrial field have been brought sharply home to the 
 United States. Fortunately, the attack on disorganization 
 here appears to be leading to a campaign against the more 
 important maladjustments prevailing over the whole field 
 of labor placement.^ 
 
 ing statistics of distribution, see the Reports of the Chief of the Divi- 
 sion, appearing in the Annual Reports of the Commissioner General of 
 Immigration. 
 
 ^ A " conference on employment " for the furtherance of this plan 
 was held at San Francisco in August 1915, under the auspices of the 
 United States Department of Labor. A report of the proceedings ap- 
 pears in the Monthly Review of the United States Bureau of Labor 
 Statistics, October 1915 (vol. i, no. 4). 
 
 - Cf. especially The Immigrants in America Review for March 1915 
 (vol. i, no. i). 
 
 * Out of Work, pp. 1 10-148. 
 
 * The New Immigration (New York, 1912), pp. 63-66. 
 ^ The Immigrant (New York, 1913), pp. 92-99. 
 
 * Cf. also in connection with immigrant distribution : New York, 
 
157] CONTEMPORARY AMERICAN THEORIES 157 
 
 3. THE FLOATING LABORER 
 
 A second element in the unemployment situation whicKT 
 is found in an exceptionally aggravated form in the United 
 States is the problem of the floating laborer. Its magnitude 
 and importance, and something of its fundamental nature 
 are just beginning to be understood. The United States 
 Commission on Industrial Relations reports : " There are 
 large numbers of American workers, in all probability sev- 
 eral; millions,^Who are not definitely attached either to any 
 particular locality or to any line of industry." ^ Samuel 
 Gompers, president of the American Federation of Labor, 
 stated to that body : " The lot of the migratory laborer in 
 the United States today is in some points worse than slav- 
 ery. . . . The very large proportion of unskilled or casual 
 workers who at the present time usually find employment 
 only on short jobs or at seasonal work suffer a precarious 
 existence. As they move from place to place they often go 
 hungry, and while at work their food is usually of a poor 
 quality, ill prepared. . . . The character of much of the 
 work performed in the United States does not permit of 
 steady employment of a regular body of men. ... In all, 
 it is difficult to estimate how many men are thus living in 
 the United States today, but the number reaches into the 
 ^nmior^' ^ 
 
 First Annual Report of the Bureau of Industries and Immigration, igii 
 (Albany, 1912), pp. 33-42; New York, Report of the Commission of 
 Immigration (Albany, 1909), pp. 109-128. United States Bureau of 
 Labor, Italian, Slavic and Hungarian Unskilled Immigrant Laborers 
 in the United States, Bulletin No. 72 (Washington, September 1907), 
 pp. 403-486; Massachusetts, Report of the Commission on Immigration 
 (Boston, 1914), pp. 37-53. 
 
 * United States Commission on Industrial Relations, Final Report 
 (Washington, 1915), p. 156. 
 
 ' Quoted, Fifteenth Biennial Report of the Bureau of Labor Statis- 
 tics of California, 1911-1912 (iSacramento, 1912), pp. 49-50. 
 
 J 
 
158 CONTEMPORARY THEORIES OF UNEMPLOYMENT [158 
 
 This problem of the migratory worker — a problem aris- 
 ing out of the seasonal character of the nation's industries 
 and the country's wide geographical extent — is closely in- 
 terwoven with the allied questions of the tramp and vagrant. 
 In the first place, the line of cleavage between these classes 
 at any one time cannot be clearly drawn. The tramp and 
 the vagrant work at times ; conversely the migratory worker 
 is likely to beg or steal at times. Numerous classifications, 
 however, have been made, all with a doubtful degree of 
 precision. lAlice Solenberger ^ divides " tramps " into 
 those wandering continuously, those wandering only at par- 
 ticular times or seasons, and those wandering periodically 
 with long intervals of regular life between. Edmond Kelly 
 makes four divisions : youths under twenty-one who tramp 
 for amusement; able-bodied workers and misdemeanants; 
 neuropaths; the non-able-bodied.^ i These classifications, 
 
 I One Thousand Homeless Men (New York, i^liX^pp. 209-238. 
 * The Elimination of the Tramp (New Yorl^ iQoSJi pp. 9-1 1. Kelly 
 includies in an appendix (pp. 103-107) several' other classifications. 
 Picturesque, and at the same time having a great element of truth, is 
 that of Dr. Reitman, who is himself a tramp : 
 f (i) Tramp. 
 (o) Dreams and wanders. 
 
 (b) Trampdom — Main lines 
 of railroads. 
 
 (c) Runaway boy. 
 
 Vagrants 
 
 or penniless 
 
 wanderers. 
 
 Every species 
 
 is itself 
 
 subclassified 
 
 according to 
 
 (a) Character, 
 
 (b) Geographical 
 
 distribution, 
 
 ic) Type. 
 
 Tramp criminal. 
 Criminal tramp. 
 Neuropathic tramp. 
 
 (2) HOBO. 
 
 (a) Works and wanders. 
 
 (b) Hoboland — farms, ice- 
 houses, section houses, 
 mines, etc. 
 
 (c) Non-employed. 
 
 (3) Bum. 
 
 (a) Drinks and wanders. 
 (&) Bumville — barrel-houses 
 
 and saloons. 
 (c) Drunkard. 
 
 Tramp hobo. 
 Train hobo. 
 Bum hobo. 
 Criminal hobo. 
 Neuropathic hobo. 
 
 Criminal bum. 
 Neuropathic bum. 
 
159] CONTEMPORARY AMERICAN THEORIES 159 
 
 made by persons in whose work the tramp proper has 
 bulked large, tend to minimize the very large proportion oi 
 wandering workers proper. 
 
 In a second way is the problem of the migratory laborer 
 interlocked with those of the tramp and vagrant. For the 
 path downwards is easy to travel, and a large number of 
 the best type of laborer have gone over it. The Indus- 
 trial Relations Commission traces their course, r Young 
 men, full of ambition and high hopes for the future, start 
 their life as workers, but, meeting fajlure after failure in 
 establishing themselves jn„ some tra,de . gr ^^^^c^^^ their am- 
 
 bitions and hopes go to pieces, and they gradually sink into 
 the ranks of the migratory and casual workers. Continuing 
 their existence in these ranks, they begin to lose self- 
 respect and beQome ' hoboes.' Afterwards, acquiring cer- 
 tain negative habits, as those of drinking or begging, and 
 losing all self-control, self-respect, and desire to work, they 
 become ' down-and-outs ' — tramps, bums, vagabonds, gam- 
 blers, pickpockets, yeggmen, and other petty criminals-:- 
 in short, public parasites, the number of whom seems to be 
 growing faster than the general population." ^ Though 
 this picture is somewhat overdrawn, the tendency to sink 
 is undoubtedly ever present in the life of the migratory 
 worker. 
 
 The strongest, perhaps, of the forces serving to push the 
 migratory laborer down into the ranks of the non-workers, 
 to increase the irregularity of his working periods, and 
 thus to intensify the normal problem of unemployment, has 
 been the condition of the camps in which this class of 
 
 C* ynited States Commission on Industrial Relations, Final Repor^^ 
 "^157. Will Irwin has sketched this descent graphically, basing his 
 articles on the findings of Peter A. Speak, who covered the field of 
 migratory labor for the Industrial Relations Commission. Cf. "The 
 Floating Laborer," Saturday Evening Post, May 9, June 6, July 4, 1914. 
 
l6o CONTEMPORARY THEORIES OF UNEMPLOYMENT [i6o 
 
 worker has been housed. The flare-up at Wheatland in 
 August, 191 3, first drew the attention of CaHfomia to the 
 character of these camps/ The resulting investigation 
 throughout the state disclosed intolerably filthy and in- 
 sanitary conditions in a large percentage of such quarters.^ 
 Nor has California been alone in this regard. Leiserson, as 
 superintendent of the Wisconsin public employment offices, 
 attributed in part to camp conditions the fact that men re- 
 fused to take work offered them.^ Conditions similar to 
 those in California are noted in New York,* and in the 
 Middle- West. ^ The relation of these conditions to irregu- 
 larity of employment seems to be directly proved by statis- 
 tical evidence, for the labor " turnover " varies roughly 
 throughout California in accordance with the character of 
 the living quarters provided in the different seasonal occu- 
 pations. A " turnover " of 100 per cent (complete replace- 
 ment of the labor force) in a two-week period is not un- 
 common in certain of the railroad and lumber camps of the 
 state ; in exceptional cases the period has been even briefer.® 
 
 Cf. Carkton H. Parker, "The Wheatland 'Riot," in The Survey, 
 <5 W V^arch 21, 1914 (vol. 31, no. 25), pp. 768-770. 
 
 2 For statistics on this SHbject, cf. The First Annual Report of the 
 Commission of Immigration and Housing of California (Sacramento, 
 1915). 
 
 ^American Labor Legislation Review, Feb. 1913 (vol. iii, no. i), p. 
 132- 
 
 ^Report of the Commission of Immigration of the. State of New 
 York (Albany, 1909), pp. 126-128. 
 
 ^ Chicago, Report of the Mayor's Commission on Unemployment, pp. 
 69-72. 
 
 For further descriptions of the working conditions of the migra- 
 tory laborers, cf. Frances A. Kellor, Out of Work, chapter on *' Immi- 
 gration and Unemployment," passim; Peter Roberts, The New Immi- 
 gration, pp. 66-69. 
 
 * Cf. Carleton- H. Parker, " The California Casual and His Revolt," 
 Quarterly Journal of Economics, November, 1915 (vol. 30> no. i), pp. 
 1 19-122. 
 
 h VMa 
 
l6i] CONTEMPORARY AMERICAN THEORIES i6i 
 
 fVVith. dirty qiiarters, hard work,,, poor food, and long hours \ 
 to contend with, it is not to be wondered that the descent j ~& 
 into shiftlessness, vagrancy, and crime is so easy. | 
 ""The mode of treatment of migratory persons has been 
 indicated above in the consideration of the tramp and 
 vagrancy legislation of the various states. Beyond this re- 
 pressive type of relief no comprehensive attempt to deal 
 with the various types of migratory wanderers and with the 
 underlying industrial causes has been made. Certain states 
 have started the cleaning-up of their labor camps; New 
 York State has established a farm colony for the purpose 
 of regenerating the fallen ones of this class; the scattered 
 public employment offices represent a commencement of the 
 task of organizing and directing the movements of labor. 
 But those who have studied the situation look to deeper- 
 going measures for a possible solution of the various prob- 
 lems involved. In addition to making recommendations 
 for a national system of labor exchanges, and an intelligent 
 distribution of public work, the Federal Industrial Rela- 
 tions Commission proposes that cheap transportation be pro- 
 vided, that the stealing of rides be eliminated, that cheap 
 workingmen's hotels be established, and that state and fed- 
 eral farm colonies be provided for the rehabilitation of 
 these men.^ Alice Solenberger details a set of institutions, 
 including compulsory farm colonies, for the treatment of 
 the degenerate in these classes.* The case for compulsory 
 farm colonies is put most strongly by Edmond Kelly,^ who 
 devotes his entire book to the explanation of that type of 
 solution. Kelly, it must be noted, is concerned primarily 
 with the tramp, the " won't work," and does not attempt to 
 deal with the deeper economic factors. 
 
 ^ Final Report, pp. 159-160. 
 
 ' One Thousand Homeless Men, pp. 235-236. 
 
 ^ The Elimination of the Tramp (New York, 1908). 
 
l62 CONTEMPORARY THEORIES OF UNEMPLOYMENT [162 
 
 The problem of the migratory worker and the migratory 
 vagrant, important as it is in the American situation, has not 
 as yet been adequately studied. A conception of its im- 
 portance is dawning upon social thinkers. The survey has 
 yet to be made which will point the way to a definite attack 
 and a definite solution. 
 
CHAPTER V 
 Conclusion 
 
 Through all the diverse opinions ^ as to the causes of 
 unemployment and as to what should be done to remedy 
 the situation, the central theme of industrial disorganiza- 
 tion runs. '^ . . . The nineteenth century," two students of 
 an allied problem state, ** left the twentieth an unenviable 
 legacy — the legacy of an industrial system which had grown 
 up without forethought, and whose maladies had been 
 treated with spasmodic doses of medicine, administered in 
 
 ^ Space and' time limitations have made it necessary to merely men- 
 tion certain of the less orthodox and less widely accepted theories of 
 unemployment. From the contention of the extreme individualist that 
 **. . . it is the imperfect development of competition, broadly con- 
 ceived, in relation to the intricate economic circumstances with which 
 it has to cope, that accounts for proficient people being without occu- 
 pation" (S. J. Chapman, in Brassey-Chapman, Work and Wages, vol. 
 ii, "Wages and Employment," pp. 349-350) to the attitude of the 
 socialist who looks upon unemployment as " co-extensive with the capi- 
 talist system "(John Spargo, " Sociahsm as a Cure for Unemployment," 
 in Annals of the American Academy of Political and Social Science, 
 May 191S, vol. 59, pp. 157-64) diverse theories run a wide course. 
 The forty-year-old theory of Henry George and the more recent one 
 of the Federal Industrial Relations Commission agree in placing land 
 monopolization as a cause. The unjust distribution of income has been 
 put forward as a basic reason. Politics, the sweating system, the pre- 
 vailing wage system, sun spots, the tariff, convict labor, the minimum 
 wage, child labor, the entrance of women into industry, "big busi- 
 ness " — all have been pilloried as responsible for unemployment. Pos- 
 sibly all have a connection, more or less remote, with the problem 
 being considered, but the inclusion of a discussion of them in the 
 present paper has been impossible. 
 
 163] 163 
 
1 64 CONTEMPORARY THEORIES OF UNEMPLOYMENT [164 
 
 a spirit of hopeful experiment rather than with any pro- 
 found study of the needs of the system." ^ The necessary 
 study of that disorganized condition is in process of being 
 made. 
 
 For complete knowledge of all the factors in the unem- 
 ployment problem further investigation is needed. But the 
 time when investigation should occupy the whole field is 
 past. William Leiserson ^ has made an emphatic appeal for 
 the next step — for action, for the carrying through of a 
 program for the prevention of unemployment, for the out- 
 lining of the necessary laws, for the devising of the needed 
 administrative machinery. The path of remedial action is 
 not yet entirely clear, but it has at least been blazed. Con- 
 structive work, for which investigation has sufficiently 
 paved the way, is the present need. 
 
 * Dunlap and Denman, English Apprenticeship and Child Labor 
 (London, 1912),- p. 309. 
 
 *"The Problem of Unemployment Today," Political Science Quar^ 
 terly, March 1916, pp. 23-4. 
 
APPENDIX I 
 
 AMERICAN STATISTICS ON UNEMPLOYMENT 
 
 (These references do not include publications later than the early- 
 part of 1916, nor are they intended to be at all exhaustive for the 
 period previous to that date. They are designed to suggest the general 
 character of American statistics on unemployment, rather than to con- 
 stitute a complete statement of all such statistics existing.) 
 
 The earliest figures available on this subject are those gath- 
 ered by the Massachusetts Bureau of Statistics of Labor in 
 June and November, 1878, and published in the Tenth Annual 
 Report of that Bureau. (Boston, January 1879, pp. 3-13.) 
 Far more intensive in their nature are those compiled in con- 
 nection with the Massachusetts censuses of 1885 and 1895. 
 The former were published in the Eighteenth Annual Report 
 of the Bureau of Statistics of Labor (Boston, December 
 1887, pp. 1-294), the latter in the Massachusetts State Census 
 of 1895. The 34th Annual Report of the Bureau of Statistics 
 of Labor (Boston, March 1904, part ii, pp. 131-213) con- 
 tains some data on the amount of unemployment at that time. 
 The Annual Reports of the Chief of the Bureau of Statistics 
 of Labor, from 1908 on, give figures as to the amount of un- 
 employment among organized wage-earners. 
 
 Statistics showing the amount of unemployment among 
 members of trade unions in New York State have been pub- 
 lished since 1897. In 1897 and 1898 these were published in 
 the Annual Reports of the Bureau of Labor Statistics of that 
 state. From 1899 to 19 13 they appeared quarterly in the 
 Bulletin of the Bureau of Labor Statistics. Since September 
 19 1 3, a special series of Bulletins on Unemployment have been 
 issued, while more recently the issue of monthly Labor Market 
 Bulletins has been begun. Though restricted in their scope 
 to organized workers, they are valuable as indices to seasonal 
 165] 16s 
 
1 66 APPENDIX I [1 66 
 
 and cyclical fluctuations and other business changes. Though 
 a compilation of individual causes of unemployment, such as 
 lack of work, lack of material, weather, labor disputes, dis- 
 ability, etc., is included, no investigation of the more funda- 
 mental causes is attempted. 
 
 The Report to the Legislature of the State of Neiu York by 
 the Commission Appointed . . . to Inquire into the Question 
 of Employers' Liability and Other Matters — Third Report — 
 Unemployment and Lack of Farm Labor (Albany, 191 1, pp. 
 28-38) contains a summary of previous statistics on unem- 
 ployment in New York State, together with additional mate- 
 rial gathered by the Commission. 
 
 The United States Census workers gathered data on un- 
 employment in 1880, but lack of funds and doubt as to their 
 reliability prevented their compilation. The census of 1890 
 contains some material on the question. That of 1900 (volume 
 on Occupations) deals at length with unemployment, but a 
 warning as to the uncertain character of the findings is given. 
 Similar data were gathered in 1910, but have not as yet been 
 published. 
 
 The Bulletin on Manufactures published by the United 
 States Census contains general statistics of the number em- 
 ployed by months. The Census of Manufactures of 1905 has 
 information as to the numbers employed in all manufacturing 
 industries in 1904, by months. 
 
 The United States Bureau of Labor Statistics has done 
 some work in this field, and is at present publishing valuable 
 data. The i8th Annual Report of the United States Com- 
 missioner of Labor (1903) details the amount of unemploy- 
 ment among 25,440 families; the material for this report was 
 gathered during the years 1900-2. 
 
 Of their later publications the following are valuable on 
 this subject: 
 
 Bulletin No. 10 (Miscellaneous Series No. i, on Statistics 
 of Unemployment and the Work of Employment OMces in the 
 United States. Previous statistics from various sources are 
 summarized. 
 
167] APPENDIX I 167 
 
 Bulletin No. 116 (Women in Industry Series No. i). 
 Hours, Earnings and Duration of Employment in Selected 
 Industries in the District of Columbia. 
 
 Bulletin No. iiq (Women in Industry Series No. 2). 
 Working Hours of Women in the Pea Canneries of Wis- 
 consin. 
 
 Bulletin No. 146 (Wages and Hours of Labor Series No. 
 8). Wages and Regularity of Employment in the Dress and 
 Waist Industry of New York City. 
 
 Bulletin No. 14/ (Wages and Hours of Labor Series No. 9). 
 Wages and Regularity of Employment in the Cloak, Suit, and 
 Skirt Industry. (In New York City and Boston.) 
 
 Bulletin No. 1^2 (Miscellaneous Series No. 10). Unem- 
 ployment in New York City. 
 
 Bulletin No. 182 (Women in Industry Series No. 8). Un- 
 employment among Women in Department and Other Retail 
 Stores in Boston, Mass. 
 
 Bulletin No. 183 (Miscellaneous Series No. 12). Regular- 
 ity of Employment in the Women's Ready-to-W ear Garment 
 Industries. 
 
 The Monthly Reviews which the Bureau has published since 
 July 191 5, give scattering statistics on unemployment. 
 
 The Bureau of Labor Statistics has been conducting in- 
 vestigations on the "turn-over," concerned with the average 
 term of employment, which will give statistical evidence in a 
 field of unemployment largely untouched as yet. 
 
 The Annual Reports of the United States Geographical 
 Survey state the number of work days and idle days in the 
 coal-mining industry in the United States. 
 
 Similar information for the mines of the state of Illinois 
 has been included in the annual Illinois Coal Report. 
 
 Various of the state bureaus of labor statistics publish data 
 as to the number employed by months in the different manu- 
 facturing industries, and other scattered material touching on 
 the problem. 
 
 Reports of varying scope are published by the public em- 
 ployment offices, state and municipal. 
 
I68 APPENDIX I [1 68 
 
 The Monthly Labor Market Bulletin issued by the super- 
 intendent of the state employment offices of Wisconsin gives 
 a valuable summary of general conditions in that state. 
 
 The American Federationist, the official organ of the Amer- 
 ican Federation of Labor, published data concerning the 
 amount of unemployment among organized workers, from 
 1899 to 1909. The number unemployed each month, and the 
 maximum and minimum numbers unemployed each year were 
 given. Publication of this information was discontinued in 
 1909 because of doubts as to its value. 
 
 A census of the unemployed was made in Rhode Island in 
 1908, covering the urban districts. The information gathered 
 appeared in the 22nd Report of Industrial Statistics, Rhode 
 Island, 1908. 
 
 Figures on unemployment in Chicago are contained in two 
 documents: The Report of the Mayor's Commission on Un- 
 employment, Chicago, March 1914; Report of the Mayor 
 and Aldermen by the Chicago Municipal Markets Commission 
 on a Practical Plan for Relieving Destitution and Unemploy- 
 ment in the City of Chicago. Chicago, December 28th, 1914. 
 
 Some statistics on conditions in Portland, and in the rest of 
 Oregon, are given in the Reed College Record, December 
 1914, No. 18, ^ Study of the Unemployed, by Arthur Evans 
 Wood. 
 
 Of value as showing seasonal fluctuations in a particular 
 industry is the Special Report of the Bureau of Labor Statis- 
 tics of California on Labor Conditions in the Canning Indus- 
 try (Sacramento, 1913). 
 
 Statistical analyses of the irregularity of female employ- 
 ment in various industries are included in an article by Irene 
 Osgood Andrews, " The Relation of Irregular Employment 
 to the Living Wage for Women," which appeared in The 
 American Labor Legislation Review for June 191 5 (vol. v, 
 no. 2), pp. 291-418. 
 
 Data indicating the percentage of unemployment among 
 wage-earners in fifteen cities of the United States during 
 191 5 are given in an article by Royal Meeker, " Some Recent 
 
169] APPENDIX I 169 
 
 Surveys of Unemployment," in Annals of the American Acad- 
 emy of Political and Social Sciences, September 191 5 (voT. 
 61), pp. 24-9. 
 
 Scott Nearing gives a resume of some of the earlier statis- 
 tics in '' The Extent of Unemployment in the United States" — 
 Quarterly Publications of the American Statistical Associa- 
 tion, September 1909 (vol. ii, new series, no. 87), pp. 525-49. 
 
 The sources of unemployment statistics in the United 
 States are indicated in a paper read by W. M. Leiserson be- 
 fore the International Conference on Unemployment. Cf, 
 Compte Rendu de la Conference Internationale de Chomage 
 (Paris, 191 1 ), vol. 2, rapport no. 15, "The Fight Against 
 Unemployment in the United States." 
 
APPENDIX II 
 
 REFERENCES 
 
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 Dunlop, O. J. The Farm Labourer. London, Fisher Unwin, 1913. 
 Great Britain. Royal Commission on the Poor Laws, Report. 1834. 
 . Royal Commission on the Poor Laws and Relief of Distress. 
 
 London, Eyre and Spottiswoode, 1909. 
 
 Royal Commission on the Poor Laws and Relief of Distress. 
 
 London, 19 10. Appendices, vols. 19, 19a, 19b. 
 
 Leiserson, William M. " The Problem of Unemployment Today." Po- 
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 McCulloch, J. R. Principles of Political Economy. Edinburgh, 1825. 
 
 Mackay, T. The English Poor. London, Murray, 1889. 
 
 . Public Relief of the Poor. London, Murray, 190 1. 
 
 Malthus, T. R. An Essay on the Principles of Population. London, 
 1803. 
 
 . Principles of Political Economy. Boston, Wells & Lilly, 1821. 
 
 Mill, John S. Principles of Political Economy. New York, 1864. 
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 Nicholson, J. S. Principles of Political Economy. London, Macmil- 
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 Poyntz, Juliet S. " Introduction " to Seasonal Trades, Webb and Free- 
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 Ricardo, David. Principles of Political Economy and Taxation. Lon- 
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 Senior, Nassau W. Political Economy. London, 1872 (6th ed.). 
 
 Smith, Adam. Wealth of Nations. 
 
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 of the Minority Report of the Poor Law Commission. London, 
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 . English Poor Law Policy. London, Longmans, 1909. 
 
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 170 [173 
 
I7l] APPENDIX 11 171 
 
 (b) Current English Theories _^ 
 
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 , Royal Commission on the Poor Laws and Relief of Distress. 
 
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172 APPENDIX II [172 
 
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 . The Problem of the Unemployed. London, Methuen, 1896. 
 
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 National Conference on the Prevention of Destitution. Papers and 
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 Pigou, A. C. Unemployment. New York, Holt, 1913. 
 
 (Ribton-Turner, C. J. A History of Vagrants and Vagrancy. London, 
 Chapman & Hall, 1887. 
 
 Rowntree, B. S., and Lasker, B. Unemployment — A Social Study. 
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 Schloss, D. F. Insurance Against Unemployment. London, King, 1909. 
 
 United States. Special Consular Reports. Vagrancy and Public Char- 
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 Webb, Sidney. The London Program. London, Swan Sonnenschein, 
 1891. 
 
 Webb, Sidney and Beatrice. Industrial Democracy. London, Long- 
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 . Prevention of Destitution. London, Longmans, 1912. 
 
 . The Public Organisation of the Labor Market. Part H of the 
 
 Minority Report of the Poor Law Commission. London, Long- 
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 Webb, Sidney, and Cox, Harold. The Eight Hours Day. London, 
 Scott, 1891. 
 
 Webb, Sidney, and Freeman, Arnold. Seasonal Trades. London, Con- 
 stable, 1912. 
 
 Whetham, W. C. D. Eugenics and Unemployment. A Lecture Deliv- 
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 Bowes & Bowes, 1910. 
 
 (c) Early American Theories and Practice 
 American Academy of Political and Social Science, Annals. Novem- 
 ber 1894. (Helena S. Dudley on "Relief of Unemployed Women 
 in Boston.") 
 
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 Bilgram, Hugo. Involuntary Idleness.. Philadelphia, Lippincott, 1889. 
 
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 Carey, H. C. Principles of Social Science. 3 vols. Philadelphia, Lip- 
 pincott, 1858-9. 
 
 DeBernardi, G. B. " Trials and Triumphs of Labor." Labor Exchange 
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 Devine, Edward T. Principles of Relief. New York, Macmillan, 1904. 
 
 Ernst, E. Z. The Progressive Handbook of the Labor Exchange. 01a- 
 the, Kansas, 1894. 
 
 Flynt (Willard), Josiah. Tramping with Tramps. New York, Cen- 
 tury, 1901. 
 
 George, Henry. American Farmer. "Social Problems," chap. 20. (Land 
 and Labor Library, vol. i, no. 12.) New York, 1887. 
 
 . Lecture on the Single Tax. San Francisco, Weekly Star, Feb- 
 ruary 8, 1890. 
 
 . Our Land and Land Policy, National and State. San Fran- 
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 . Progress and Poverty. San Francisco, Hinton & Co., 1877. 
 
 Why Work is Scarce, Wages Low, and Labor Restless. (A 
 
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 Land Reform League, 1878. 
 Gladden, Washington. " What to Do with the Workless Man." 26th 
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 1899. 
 
 Henderson, 'Charles R. Modern Methods of Charity. New York, Mac- 
 millan, 1904. 
 
 Kinghorn-Jones, A. How We May Dispose of Our Surplus Products, 
 and How We May Employ Our Surplus Labor. (Prize Essay, 
 Mechanics Institute.) San Francisco, 1898. 
 
 McCook, J. J. "The Tramp Problem." 22d National Conference on 
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 Marsh, Benj amin C. "Causes of Vagrancy and Methods of Eradication." 
 American Academy of Political and Social Science. Annals, May 
 1904 (vol. 23, no. 3). 
 
 Massachusetts, Bureau of Statistics of Labor. 34th Annual Report. 
 " Free Employment Offices in the United States and Foreign Coun- 
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 Sharp, B. J. Labor Exchange in a Nutshell. Salem, Oregon, 1897. 
 
 Tucker, Commander Booth. Farm Colonies of the Salvation Army. 
 United States Bureau of Labor, Bulletin No. 48, September 1903. 
 
 . The Social Relief Work of the Salvation Army in the United 
 
174 APPENDIX 11 [174 
 
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 1900. 
 
 United (States Commissioner of Labor. First Annual Report. 1886. 
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 . The Wages Question. New York, Holt, 1886. 
 
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 (d) Tramp and Vagrancy Legislation 1 
 
 TRAMP LAWS 
 
 State, Revised Statutes of 
 
 Alabama 1907 
 
 Connecticut 1913 
 
 Delaware 1879 
 
 Indiana 1908 
 
 Iowa 1902 
 
 Maine 1903 
 
 Maryland 1906 
 
 Massachusetts 1903 
 
 Mississippi 1904 
 
 Nebraska 1907 
 
 New Hampshire 1900 
 
 New Jersey 1910 
 
 New York 1911 
 
 North Carolina 1905 
 
 Ohio 1908 
 
 Pennsylvania 1879 
 
 Rhode Island 1896 
 
 Vermont 1912 
 
 vagrancy laws 
 
 Alabama 1907 
 
 Arizona 1901 
 
 Arkansas 1911 
 
 California 1912 
 
 Colorado 1912 
 
 Connecticut 1913 
 
 Delaware 1861 
 
 Florida , 1907 
 
 1 See page 130 for acknowledgment. 
 
175] APPENDIX II 1 75 
 
 Georgia 1905 
 
 Idaho 1908 — 
 
 Illinois 1908 
 
 Indiana 1908 
 
 Iowa 1913 
 
 Kansas 1905 
 
 Kentucky 1904 
 
 Louisiana 1912 
 
 Maryland 1914 
 
 Massachusetts 1913 
 
 Michigan 1913 
 
 Minnesota 1913 
 
 Mississippi 1904 
 
 Missouri 1909 
 
 Montana 1907 
 
 Nebraska 1907 
 
 Nevada 1912 
 
 New Hampshire 1901 
 
 New Jersey 1910 
 
 New Mexico 1897 
 
 New York 1914 
 
 North Carolina 1908 
 
 North Dakota 1913 
 
 Ohio 1908 
 
 Oklahoma 1910 
 
 Rhode Island 1896 
 
 South Carolina 1902 
 
 South Dakota 1913 
 
 Tennessee 1907 
 
 Texas 1909 
 
 Utah 1911 
 
 Virginia 1912 
 
 Washington 1909 
 
 West Virginia 1913 
 
 Wisconsin 1911 
 
 Wyoming 1899 
 
 (e) Current American Theories 
 
 Adams and Sumner. Labor Problems. New York, Macmillan, 1905. 
 
 American Academy of Political and Social Science. Annals. Vol. 33, 
 no. I. Industrial Education. January 1909. 
 
 . Vol. 2»z, no. 2. Labor and Wages. March 1909. 
 
 . Vol. 59. American Industrial Opportunity. May 1915. 
 
 . Vol. 61. America's Interests After the European War. Sep- 
 tember 1915, 
 
lye APPENDIX II [176 
 
 American Association for Labor Legislation. (American section In- 
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 American Federationist. Passim. (See index to contents for the years 
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 . Bureau of Labor Statistics. 15th Biennial Report. Sacra- 
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 . Bureau of Labor Statistics. i6th Biennial Report. Sacra- 
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 . Commission of Immigration and Housing. Report on Unem- 
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 . Commission of Immigration and Housing. First Annual Re- 
 
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 . Commission of Immigration and Housing. Report on Relief 
 
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 . Commonwealth Club. Transactions, December 1914 (vol. 9, 
 
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 Chicago. Report to the Mayor and Aldermen by the Chicago Muni- 
 cipal Markets Commission on a Practical Plan for Relieving Desti- 
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 cember 28, 1914. 
 
 . Mayor's Commission on Unemployment. Report. Chicago, 
 
 March, 1914. 
 
 Commons, John R. Labor and Administration. New York, Macmil- 
 lan, 1913. 
 
 . Races and Immigrants in America. New York, Macmillan, 
 
 191 1. 
 
 Commons, John R., and Andrews, John B. Principles of Labor Legis- 
 lation. New York, Harper & Bros., 1916. 
 
 Devine, Edward T. Misery and its Causes. New York, Macmillan, 
 
 1913. 
 
 . Report on the Desirability of Establishing an Employment 
 
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 tion Co., 1909. 
 
 Hall, Prescott F. Immigration. New York, Holt, 1913. 
 
 Haskin, Frederic. The Immigrant. New York, Revell, 1913. 
 
 Henderson, Charles R. Chicago — Report of the Mayor's Commission 
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177] APPENDIX II lyy 
 . " The Struggle Against Unemployment." American Labor 
 
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 . Immigration and Labor. New York, Putnam, 1912. 
 
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 . Out of Work. New York, Putnam, 1915. 
 
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 . " Public Employment Offices in Theory and Practice." Amer- 
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 . " The Theory of Public Employment Offices and the Principles 
 
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 . Director of the Bureau of Statistics. 46th Annual Report on 
 
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 . " Extent of Unemployment in the United States." American 
 
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 -^ . Commission of Immigration. Report. Albany, 1909. 
 
 . Commission Appointed under Chapter 518 of the Laws of 
 
 1909 to Inquire into the Question of Employers' Liability and 
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178 APPENDIX 11 [178 
 
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 . " The Wheatland Riot." Survey, March 21, 1914 (vol. 31, 
 
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VITA 
 
 Frederick Cecil Mills was born on March 24, 1892, 
 in Santa Rosa, California. He was educated in the pubHc 
 schools of Oakland, California, and at the University of 
 California, receiving the degree of Bachelor of Letters 
 from the latter institution in 1914. During the year 191 4- 
 15 he served as investigator for the Commission of Immi- 
 gration and Housing of California and for the United 
 States Commission on Industrial Relations. His investi- 
 gational work with these commissions was concerned with 
 the related problems of unemployment, migratory labor, 
 and immigration. During 191 5-16 he served as assistant 
 in economics at the University of California, and carried 
 on graduate study under Professors Carl C. Plehn, Jessica 
 
 B. Peixotto, Stuart Daggett, and Carleton H. Parker. He 
 acted as director of shelter and employment for the city of 
 San Jose, California, during the winter of that year. In 
 June 1 91 6, he received the degree of Master of Arts from 
 the University of California. 
 
 The academic year 191 6- 17 was spent in residence at 
 Columbia University as Garth Fellow in Political Economy. 
 His work in economics was under the direction of Profes- 
 sors Edwin R. A. Seligman, Henry R. Seager, Wesley 
 
 C. Mitchell, and Robert E. Chaddock. In addition, studies 
 
 were carried on in philosophy under Professor John Dewey, 
 
 and in anthropology under Professor Franz Boas. He 
 
 attended the graduate seminar of Professors Seligman and 
 
 Mitchell. 
 
 179 
 
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