QUESTIONS OF THE DAY. hant Marine. How it rose, increased, became great, ed ; with an inquiry into the conditions essential (On and prosperity. By DAVID A. WELLS. Octavo, 5 & 6 The American Citizen's Manual. Edited by WORTHINGTON C. FORD. Part I. Governments (National, State, and Local), the Electorate, and the Civil Service. Part II. The Functions of Government, considered with special reference to taxation and ex- penditure, the regulation of commerce and industry, provision for the poor and insane, the -management of the public lands, etc. Two vols. in one. Cloth . . . . . . . I 25 7 Spoiling the Egyptians. A Tale of Shame. Told from the British Blue-Books. By J. SEYMOUR KEAY. Octavo, cloth, 75 9 The Destructive Influence of the Tariff upon Manufacture and Commerce, and the Figures and Facts Relating Thereto. By J. SCHOENHOF. Octavo, cloth, 75 cents ; paper . . 40 10 Of Work and Wealth. A Summary of Economics. By R. R. BOWKER. Octavo, cloth 75 13 Public Relief and Private Charity. 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By CHARLES ISHAM. i2mo, cloth, with Map of the Fishing-Grounds. ...... 75 42 Bodyke : A Chapter in the History of Irish Landlordism. By HENRY NORMAN. Octavo, cloth, illustrated ... 75 43 Slav or Saxon. A Study of the Growth and Tendencies of Russian Civilization. By WM. D. FOULKE, A.M. Octavo, cloth . I oo G. P. PUTNAM'S SONS, Publishers, New York and London. THE ECONOMY OF HIGH WAGES AN INQUIRY INTO THE CAUSE OF HIGH WAGES AND THEIR EFFECT ON METHODS AND COST OF PRODUCTION BY Of* J. SCHOENHOJl^ LATE U. S. CONSUL ; COMMISSIONED BY DEPT. OF STATE TO INQUIRE INTO THE ECONOMY OF PRODUCTION AND THE STATE OF TECHNICAL EDUCATION IN EUROPE; AUTHOR OF "THE DESTRUCTIVE INFLUENCE OF THE TARIFF"; "THE INDUSTRIAL SITUATION;" "WAGES AND TRADE"; "IN- DUSTRIAL EDUCATION IN FRANCE," ETC., ETC. WITH AN INTRODUCTION BY THOMAS F. BAYARD I,ATE SECRETARY OF STATE, U. 8. A. G. P. PUTNAM'S SONS NBW YORK LONDON 27 WEST TWENTY-THIRD STREET 24 BEDFORD STREET, STRAND t>( lUutktrbocktr TQnas 1892 COPYRIGHT, 1882, BT J. SCHOENHOF. INTRODUCTORY LETTER FROM HON. T. F. BAYARD, Late Secretary of State, U. S. A. WILMINGTON, DEL., June 10, 1892. JACOB SCHOENHOF, ESQ., NEW YORK. My Dear /Sir: I am gratified to learn that you are now prepared to lay before the country, in a compendious form, the results of the personal examination and intelligent study which, under instructions of the Department of State in 1887, you prosecuted in those industrial centres of Europe where technical education had been most highly developed and had proved itself to be productive of the highest economy and best results. Impressed by a necessity of a practical and thorough comprehension by our countrymen of the actual condition of their foreign competitors in the arts and manufactures, to the end that their energies and intelligence could be successfully applied to keep them abreast of the world's column of artificers in the progress of science and inven- tion, I considered it fortunate for the public that I was j v INTRODUCTORY LETTER. enabled to command your especial faculties in the execu- tion of the task. My only regret has been caused by the arrestation of your work, pending its satisfactory completion, by your removal from your position in the Consular service and the consequent subtraction of that support and further- ance which your official association afforded. I had indulged the hope that the non-partisan nature of your employment, and the signal ability you had displayed in the execution of your Consular duties, would have con- stituted a protection to the public interests, and have shielded you from the desiccating blasts of " the spoils system." Nevertheless, I congratulate you upon the result of your labors as now presented to the country, and which I cannot doubt will prove of great value in the campaign of educa- tion in political economy now happily in progress in the United States. The scope and purpose of your investigations were not limited to reporting mere processes of manufacture and the bare statistics of the hours of labor, rates of wages, cost of machinery, of raw materials, utilization of wastes, etc., etc. Such information, however interesting and valuable, was not wholly wanting, nor was it difficult to obtain. Your purpose was even more important, and its results were to INTRODUCTORY LETTER. V contain a higher significance, which was to indicate and establish the power of education of the human hand and brain, and the application of sense and feeling in the expan- sion and improvement of the products of human industry ; to show how " the sweat of the brow is lessened by the conception of the brain," and increased wages accompany increased efficiency. The proofs contained in the reports of your investiga- tions, go far to refute the shallow and repulsive theory that a human being is a mere machine and to prove that, on the contrary, true economy and philosophy join in declar- ing that the cheapest labor is the labor that is most productive, and that the more the forces of cultivated intelligence, conscientiousness, and hopefulness shall infuse themselves into human industry, the more abundant and valuable the results, the greater the sum of human hap- piness, and the more stable the political institutions of a country. No sophistry is more demonstrable than that contained in the phrase "the labor market," a phrase which grates upon the ear and offends the moral sense for it seems to classify men with machinery, and fails to take into account human impulses and feeling, the heart and brain in their effect upon the energy and excellence of human industry. When Turner, the artist, was asked with what he mixed Vi INTRODUCTORY LETTER. his colors, lie growled out, " Brains " and there is not a department of human labor, however mechanical, in which the enlistment of the brain, and with it the heart of the laborer, is not in a degree and way of its own of practical importance. Amid the elements of the cost of production, labor is ever present and essential, and consequently in the fierce and strenuous competition of the industrial world the true economy in labor, its quality as well as quantity, is the question of controlling importance. Before the item of profit can arise, the cost of the various elements combined in any product must be first deducted. Wages, taxes, rent, insurance, interest, capital, material, waste are among these items, and labor is the ever-present and essential integer which imparts vitality to the whole. An increase of any of these items trenches upon labor, and true wisdom instructs that labor is entitled to the chief consideration and outranks all the others in its importance. The facts you have adduced and your deductions irre- sistibly establish the proposition that low wages do not mean cheap production, and that the best instructed and best paid labor proves itself to be the most productive so that the rate of wages and the cost of production are not alternative nor equivalent expressions, although so frequently and ignorantly confused. INTRODUCTORY LETTER. v ii As the efficiency of labor is increased, prices will be lessened, and this creates new demands, so that successful ( and progressive industry implies a necessity for wider markets, and a minimum of artificial restriction upon ex- changes in the commercial world. Mechanical excellence is one of the fruits of technical education, and the command of every market follows the workman who can produce what is best and at the lowest cost. Skill is the outgrowth of educated senses, and the superi- ority of labor consists in the degree in which mind aids muscle in its tasks hence the discrimination in the re- wards between "skilled" and "unskilled" labor. The information afforded by your studies as now re- ported, cannot fail to prove a valuable contribution to the just and rational solution of the great labor problem of the present day, and will assist alike employers and employed. I hail with satisfaction everything that tends to emanci- pate labor from the control, or as it is delusively styled, the "protection" of the State, and demonstrates the essential truth that excellence in skill and labor comes from each member individually, and not from an aggregate of mem- bers in which individual excellence is not recognized nor respected. Nothing surely can be more unreasonable, unjust, and viii INTRODUCTORY LETTER. delusive than the view or scheme of regulating the rewards of labor which excludes the value of individual intelli- gence, industry, skill, and the attendant moral force which are combined by the law of their creation with the labor of mankind. There is gratifying evidence of growing recognition of the needs and just claims of labor in such institutions as the Metropolitan Museum in New York, which is a great public adjutant as a school of design ; a well-spring of edu- cation of the earning capacities of manual labor, serving as a model for imitation as well as technical and practical instruction. Akin to it in usefulness and beneficent purpose is the Drexel Institute of Art, Science, and Industry in Philadel- phia another splendid illustration of well-considered indi- vidual generosity and wise public spirit. And thus in the education of the faculties for special results, general results must also be achieved in the expan- sion of their faculties and elevation of mankind. Technical education, by means of which taste is culti- vated and skill acquired, will greatly promote that healthy and self-reliant independence so desirable for a nation. It is by such means that the true elevation of the indus- trial classes will be attained, and that relations of mutual confidence and good understanding between employers and INTRODUCTORY LETTER. i x employed, will be established. It will, in fact, be a resort to "the golden rale," productive only of benignity, and which will be found the most reliable means of exorcising from modern civilization its worst spectre the antagonism of capital and labor. I hope your work may hasten on the day when the hon- est individual may be permitted to enjoy the calm content of constant industry and the advantages of his own labor, free alike from the tyranny of numbers in his own class or of that other class "of prosperous plunderers who live in abundance surrounded by the victims of their injustice and rapacity." You have certainly erected a modest porch to the great edifice of sound sociology, and performed a service to the people of the United States. I am, Yery truly yours, T. F. BAYAED. TABLE OF CONTENTS. PAGE Introductory Letter from Hon. T. F. Bayard, late Secretary of State, U.S.A iii PART I. THE CAUSE OF HIGH WAGES. CHAPTER I. The Economy of Production and the Tariff interwoven 1 The Relative Positions of Producers 4 The Tariff Reform Issue 5 In what Foreign Tariffs are Distinct from American Tariffs 8 Wage Differences in Protected and Unprotected Industries 10 The McKinley Act a Monument of Legislative Ignorance 11 The Raw Material in Production 13 CHAPTER II. The Labor Question in the Tariff 18 The Fallacy of the Old Theory of Wages 19 Relative Productiveness of Labor 20 Differences in Coal Mining 22 Increase of Earnings and Reduced Cost going Hand in Hand 24 The Same Labor Differences in Higher Products 25 Maintaining Power of Labor 28 What Causes High Wages 31 CHAPTER III. Low Wages, Stagnating Causes. Improvement in Machinery more Profitable in High-Wage Countries 35 A High Standard a Prerequisite to Improvement 38 Low Wages Indicate Low Productivity 39 Irish Industries as Object Lessons 41 Working for a Home Market 44 x ii CONTENTS. CHAPTER IV. PAGE Advantages of Old Methods in Certain Industries 50 How These Low Wage-Earners Live 51 How they Work in Lyons 53 Economic Advantages of the Old System. Capital left Free 55 The Evolution of Industries 58 The Producer and Consumer are One. Increasing Productiveness is Increasing Consumptiveness 61 The Economic Value of High Wages generally not Understood 63 CHAPTER V. The Efficiency and Productiveness of Labor increased by Education. 67 Cheap Labor and Ignorant Labor Synonymous 67 The Ideal Part in the Economy of Production 69 Teaching Industrial Art 72 The Industrial Art Museum 74 Antique and Modern Art Industry 76 CHAPTER VI. Science and Art Powerful Factors in the Economy of Production. ... 81 Superiority of English Work 82 Helps in Technical Training 84 American Chemists Lagging behind 88 Scientific Improvements quickly adopted 89 CHAPTER VII. Improvements and Inventions 91 Powerful Influence in Metallurgy 92 Steel Rails 93 Price Reductions in Other Forms of Iron 95 Other Illustrations of Superior American Methods 97 The Steamship an Illustration of Modern Development. Science applied to Industry 103 CHAPTER VIII. Proof of Principles laid down taken from Agriculture. Results of Scientific Methods 108 Ignorance the Causa of Poverty 109 CONTENTS. xiii PAGE Difference in Results Traceable to Institutions Ill Modern Russian Agriculture on a Thirteenth Century Level of Eng- land 115 High Results of Ownership by the Tiller under Free Laws 119 General Farming Results in Europe Confirmatory of the Principle . . 122 Causes of Lombardy's Superior Agriculture 1 25 The Contrasts and their Causes . 180 CHAPTER IX. Security from Famine guaranteed by Civilization. Auxiliary Advan- tages by Improved Means of Communication 134 Truck Farming, a Creation of the Railroad and the Steamboat 136 The Richer Lands give the Poorer Crops 138 Poor Results and High Results due only to Poor or Good Farming. . 188 A Practical Illustration of Results of Best Methods 144 Extent of Land required under Different Methods of Cultivation .... 150 CHAPTER X. The Condition of the Workingman under the Old and the New Dis- pensation 153 The Standard of Living under the Best of Old Conditions 154 The Measure of Progress expressed by the Budget of Consumables . . 160 Comparison of Budgets 163 The German Workingman's Basis of Living now, on that of the Eng- lish a Hundred Years Ago 167 PART II. THE EFFECT OF HIGH WAGES. Comparative Methods and Cost of Production in America and European Countries. CHAPTER I. Unreliability of Statements of Protected Interests. The Potter's Industry in Evidence 175 The Industry in America and England 176 CONTENTS. PAGE Assertions of the Trenton Potters 179 Inefficiency attracted by a High Tariff 184 Labor-saving Appliances in Pottery 186 Sanitary Ware 188 Brown Stoneware 190 CHAPTER II. The Trust and Monopolies alone benefited by Tariff Legislation. The Glass Industry in Evidence 194 Flint Glass, Table Ware, Hollow Ware, etc 195 Mode of Pay and Comparative Rates in England and America 196 English Rates 198 Cut Glass, Decorated and Fancy Ware 202 Window Glass 204 Plate Glass 205 CHAPTER III. The Insincerity of the Claim for Protection of Labor. Demonstrated by a Comparison of the Cost of Coal and Iron Mining, here and abroad 208 America's and England's Position 212 Iron Ore 213 Coke and Pig-Iron 215 Steel Rail Making 218 CHAPTER IV. The Injury of Protection to Industry. The Advantages America reaps from Superior Methods and Low Labor Cost frustrated by Protection 222 Manufacturers' Tools and Machinery 224 Cutlery 228 Arms, Ammunition, Machinery 229 Europe's Methods Different 231 CHAPTER V. The Textile Industries. Labor's Higher Reward in America Due entirely to Greater Exertion. Greater Output and Lower Labor Cost in Cotton Manufacture. The Tariff Increases Profit Rates but Reduces Wages. Print Cloth in Evidence 234 CONTENTS. XV PAGE Relative Positions of England and America 236 Print Cloth. The Comparative Cost and Rate of Wages 237 Republican Contradiction 242 CHAPTER VI. Ability to Satisfy the Taste of Buyers Determines the Course of Trade. Cotton Goods, Printing, Finishing. Our Importations Caused by Inability of Home Producer to Answer the Wants of the People. New Departure in Tariff Legislation 246 Cotton Velvets 250 Cotton Hosiery 255 CHAPTER VII. Futility of attempting Industrial Creations by Protective Tariffs. Flax Cultivation and Linen Manufacturing. Cotton Embroid- eries and Laces classed under Linen for Tariff Increase. Reasons why they cannot be produced here 258 Linen Manufacturers 262 Cotton Embroidery, Cotton Lace 264 Embroidered and Hemstitched Handkerchiefs. . . 267 CHAPTER VIII. Science and Skill in Manufacturing Industries. Silk Manufactur- ing. Lyons and Paterson compared. Superiority of Lyons Goods. Lower Cost Due to Other Causes than Differences in Labor 269 Loading of Silks 273 Comparative Cost of Spinning 275 The Dyeing of Silk 277 Weaving 278 General Conditions of Silk Manufacturing in America 281 CHAPTER IX. Silk Plushes. Increased Duties to Foster Non-existing Industries.. Marked Decline in Silk Manufacturing in General. Tariffs can- not Supply the Absence of Skill and Knowledge 283 xv i CONTENTS. CHAPTER X. PAGE Wool and Woolens. Protection frustrated by its own Excesses. Wool artificially Dear Limits Consumption. Decrease of Sheep. Increase in England. Decline in Wool Manufacturing Trace- able to the Tariff. Great Increase in tbe Use of Wool Sub- stitutes 294 The Wool 295 American Wool 298 Other Disastrous Effects of a Wool Tariff 301 Decline in Wool Increase in Shoddy 307 CHAPTER XI. Woolens and Worsteds. Methods pursued in Comparative Inquiry. . 310 Worsteds and Combed- Yarn Goods 313 The Labor 314 The Yarn 318 Italian Cloths 323 Mohair and Other Combed- Wool Dress Goods 325 CHAPTER XII. Carded-Wool Goods. Labor not Higher than in England 328 Dress Goods 329 Answering by " If " 333 The Proof is in the Selling Price 337 All- Wool Kersey Cloth 338 6-4 Cheviots 340 CHAPTER XIII. Plushes, Pile Fabrics, Knit Goods classed with Clothing for Duty Increase 342 Knit Fabrics 345 Carpets 348 Summary of Comparative Cost in Woolens and Worsteds. What is the Cost Difference under Free Wool 351 CHAPTER XIV. The Making-up Industries. Industries protected, but not by Tariffs. 356 The Manufacturing System of Berlin 361 The Sweating System 363 CONTENTS. CHAPTER XV. PAGE Improved Methods and Division of Labor. Labor in Ready-made Goods here and abroad. Great Export Articles. Foreign Commerce restricted by the Tariff 370 Boots and Shoes 373 The Foreign Trade Aspect 375 Reciprocity Treaties 379 CHAPTER XVI. The Tariff in its Relations to the Industrial Problem. Comparative Labor Cost in Principal Industries in America and England. High Wages and Reduced Hours resulting from Improvement in Economy of Production 383 The Cost of Production 385 Economic and Sociological Deductions 390 The Cotton Industry, an Illustration 395 The Cause of Progress and Prosperity 401 Addenda 406 Index 409 2 THE CAUSE OF HIGH WAGES. Eine einzige Thatsache vermag die Systeme ganzer Jahrhunderte tiber den Haufen zu werfen und ganze Bibliotheken in Makulatur zu ver- wandeln. Gegen die Thatsachen hilft kein Strauben und Protestiren. Frauenst&dt. A single fact is able to upset the systems of centuries and to turn whole libraries into waste paper. Neither resisting nor protesting avails against facts. CHAPTER I. The Economy of Production and the Tariff interwoven. Impossibility to treat the One without a Thorough Understanding of the Ele- ments of Production. The Difference of Tariffs here and abroad. The Raw Material, the Natural Starting-point in Production. The Inherent Differences to be considered. THE protective theory starts from the assumption that an act of legislation can equalize the differences which eco- nomically considered exist between one country and another in the ability of producing whatever is not absolutely with- held by nature. As within this wide limit there is very little which cannot be called into being in the range of products consumed by the people, provided the differences in cost can be balanced by enabling the home producer to charge the difference on the consumer, there can be very little difficulty to understand the genesis of protection. The taxing power of nations has not been loath to avail itself of the advantages which this dogma offered. By per- suading the workingman that he could find more remunera- tive employment he was made an easy proselyte, wherever he had anything to say in the selection of his rulers, to the policy of excluding foreign products by tariff taxation, which might interfere with the sale of the products of his own industry. The manufacturer, of course, would be the 1 2 THE ECONOMY OF HIGH WAGES. stanchest advocate of the policy, as he could collect all the profits from the consumer which lie between his enhanced cost of production and the price he could realize from the sale of his goods. It was his interest, therefore, at all times to have this margin as big as possible. He did this very effectively, as is known to all generations of tariff-afflicted peoples, by getting the legislators to keep raising the duties to heights as demanded by every interest. Many things, however, have escaped notice, which, had they received due weight, would, have tipped the balance in the opposite direction. Taxation of foreign imports for revenue, selects only such articles as dutiable which will not interfere with home production. Articles of luxury or of immediate consump- tion not requiring a process of remanufacture are fit objects of such taxation. Taxation for protection, necessarily must gradually extend over all articles which go into every species of remanufacture. Every one concerned in the pro- duction of consumables will consider himself injured unless he gets his share allotted in the enterprise of creating universal prosperity by universal taxation. Taxation for protection, therefore, covers the raw material of the fabric as well as of the worker, the sustenance on which he must feed to keep up his tissue. It covers every advance in the scale of pro- gression. Every new feature in the metamorphosis of pro- duction is made a subject of additional caretaking by taxa- tion. Finally, by this inflating process constantly going on, the cost of production is increased so that protectionism would become extinct more by the curses of its beneficiaries than by the kicks of its enemies, were the former as enlight- ened as one might expect the producers to be on the econo- mies of their own crafts and trades. Another cause of dis- tress to the protected, growing out of protection, is in the attraction of capital and enterprise to these artificially fos- THE ECONOMY OF HIGH WAGES. 3 tered industries by which the very reverse of the early ben- efits frequently follow to those who embark with hardly any other qualification than the possession of capital. The pressure which the unusually keen competition fol- lovying therefrom exercises on prices cannot be alleviated by relief which foreign markets would give. The inflated cost of materials, though labor and capital become alike depressed in the struggle for survival by a merciless compe- tition, would prevent this, if all other things were equal. The difficulties interposed by protection to the normal growth and expansion of industries are increased when further abnormities have been introduced which make it doubtful by what name to call a system of fiscal taxation such as encumbers the statute books of the United States. It has been doubtful at all times, from 1870 on, whether to call it a system of protection, obstruction, or destruction. It may be said to be one thing or the other as the parties concerned are affected by such a system of hybrid legisla- tion. When the so-called Morrill tariff the war tariff was enacted, the terms were moderate compared to what they have become since by successive layers. The later increases, required by the exigencies of the war, in 1865 and 1867 were found necessary, in part at least, as offsets against the newly introduced system of internal revenue taxation, which taxed home products specifically, besides taxing the manufacturer on his sales, the banker and the merchant on their turnover, and then the net incomes of all concerned over again. All these internal rates have long ago become extinct, and nothing remains of the whole sys- tem, except those on intoxicating liquors, beer, and cigars, which are properly called excise duties and do not bear on the subject of discussion except in a very remote way. The tariff on foreign imports, however, has not been 4 THE ECONOMY OF HIGH WAGES. reduced. We cannot call the tariff act of 1883 a reduction. In all its essential features it was as burdensome as that of 1867 ; in one sense greatly more so, inasmuch as the de- cline in prices of almost all commodities since 1867 had thrown out of proportion the relations of the specific duties to the prices of the articles on which they were imposed.* Hence the tariff of 1883 weighed more heavily upon the people as consumers and producers than that of 1867, which was strictly a war measure. The Relative Positions of Producers. It is evident, confining ourselves more strictly to the concrete question as it presents itself in the United States, that the industrial interests would long have rebelled against this war tariff and its further excrescences had they not been held in check by fears and threats. The latter were more powerful than they would have been had they been met by a more thorough understanding of the principles which govern the economy of production than is the case among so intelligent a people as the producing classes of the United States, including the manufacturers. The latter soon found out that the taxing of raw material for protec- tion's sake practically confiscated the advantages given by * In illustration I will refer to the price of raw wool. In 1867 the price of greasy Australian was 12|d. (25 cents gold) London price. The duty was 11 cents a pound and 10 per cent, ad valorem, equal to 54 per cent. The same wool is now quoted at 8d. or 16 cents a pound, and was a few months previous to this writing as low as 7}d. or 14| cents. Specific duty of 11 cents makes the ad valorem percentage to come to 70 to 75 per cent. so that, even without the 10 per cent, ad valorem of the old tariff taken off (changed in 1883 to a net rate of 10 cents per pound), the new tariff taxes wool one-third more than the extremest war tariff rates have been. The specific rate of 11 cents in 1867 equalled 44 per cent. ; in 1892 it equals 70 to 75 per cent. THE ECONOMY OF HIGH WAGES. 5 protection to their respective industries. A large class of them, chiefly among those whose products had exceeded the limited markets to which they were confined thereby, made protestations. As early as 1882 they organized, and later took more decided action asking for radical reform of the tariff on the basis of free raw materials. In 1884 they sent the writer a representative to Chicago to urge the adoption by the Democratic National Convention of their views, contained in the following resolutions : "First The abolition of all duties on raw materials, such as wool, iron, and other ores, coal, jute, hemp, flax, dye stuffs, etc., in order that we may compete in home and foreign markets with other manufacturing nations, not one of which taxes raw materials. "Second The adjustment of the tariff, so that manufactures approach- ing nearest to the crude state will pay a lower rate, and manufactures that are further advanced, requiring more skill and labor, will pay a higher rate of duties." The convention adopted these views, and they form now the credo of that party. At first sight it may seem unjust to free the products of the farm or the mine and to protect the products of the mill. I admit the stricture to be correct. I consider all protective taxes injurious to that extent that they increase the cost of production. I consider them superfluous, as the economy of production in the United States clearly shows. It is the object of these pages to show that production is conducted on so essentially different a basis in the United States than in other countries that all the arguments hitherto employed for the maintenance of the protective principle become more than hypothetical. But no matter what the demonstrations, though they be based on the most reliable facts obtainable by personal investigations, the practical conditions are that the fiscal laws of the country cannot be changed at will. 6 THE ECONOMY OF HIGH WAGES. Accustomed methods of raising revenue must b& followed. Whatever the opinion of the most radical reformer, he must take existing conditions, the bias of the public mind, into very serious consideration. A tariff on imported commodi- ties will maintain itself for some time to come, and it remains here only to say that a tariff on finished articles is the only possible way of meeting the difficulty. To raise a revenue and give relief from burdensome taxation to the producer and the consumer can only be done by cutting away some- where. Leaving the raw material taxed and taking off the duties from manufactures would be too absurd even for mention. A child could see that it would shut up every workshop and mill. The producer of the raw material would not need to concern himself further about the advan- tages of his special protection. He would have killed the goose which lays the golden eggs. There would be no mar- ket whatever for his protected raw material. But, on the contrary, the best protection for the producer of the raw material lies in the healthy expansion of manufacturing industries an axiom which, stated by the author, has always given extreme satisfaction to protectionists. The only difference is in the methods found necessary. The writer considers non-interference, his opponents constant interference, the best means to the great end. The natural advantages and resources are so great, the impulses to exploit them for individual benefit are so pow- erful, in the United States, that no matter what other nations may deem necessary in consequence of a different historical development, considerations which may guide them do not apply here. In agriculture these differences of an economico-political character have at all times had the most decisive influence. It can be demonstrated from the most substantial facts, that the freest institutions give the great- THE ECONOMY OF HIGH WAGES. 7 est excess of products. The rude system of agriculture in America cannot be classed with the systems of the advanced countries of Europe. The settlers of new lands are not given to intensive cultivation. What gives the quickest returns to the labor of the husbandman is an extensive cultivation of comparatively large tracts of land requiring little manuring and preparing. A comparison of yield per acre is therefore inadmissible. But the great total result is that America, feeding her own people in abundance, sends perhaps twenty -five per cent, in value of agricultural prod- ucts to make up the deficiencies of Europe. A tariff for protection of agricultural products in America stands therefore much in the position of blinding the farmer while his pockets are rifled by highwaymen. The effect of a tariff stimulation on such products of the soil which for inherent differences have been previously imported in more or less important quantities, has always been an extended acreage allotted to the crop, in the anxiety of the farmer for something " that will pay." The consequence of fostering by " protection " has therefore always been an oversupply of undesirable and often unmarketable products within a year or so of the enactment, and a greater distress of the farmer than he had felt before he received the treacherous gift. It is plain from this brief statement of an undisputable fact, that the American farmer cannot be protected by pro- tective legislation. All threats of certain interested people would, from this cause alone, have been met with contempt had not the living generation of industrials been so filled with the protective mania that their understanding of con- ditions under which production is conducted had become obtuse. No wonder that this condition of the mind of the two classes of producers, the agricultural and the manufac- 8 THE ECONOMY OF HIGH WAGES. turing, has been considered an excellent field for the design- ing politician to cultivate in his interest. By playing one interest against another the Eepublican party has been able to strike fear among all and thus make anxious victims be- lievers in benefits largely the children of the imagination. From the agriculturist's point of view the only remedy for complaints, he has had ample reasons for advancing of late years, lies in the removal of import duties of a protective character affecting the price of his consumables, and not in the imposition of duties on what he produces. The surplus determining the price of his entire product, the price for him is made on European exchanges, buying that surplus. Ab- solute free trade being out of consideration for reasons stated the practical question remains to find a nearest ap- proach, which would relieve the consumer without prevent- ing the collecting of revenue by means conformable to ingrained notions of the people. There remains then no other way to bring all these exigen- cies and seemingly conflicting interests into harmony than by such a policy as is demanded in the resolutions referred to as the only practical basis of tariff reform. In what Foreign Tariffs are Distinct from Amer- ican Tariffs. From the American manufacturer's point of view the pro- tected interests chiefly the only rational basis of a tariff is one based on free raw materials. The fact that no other industrial nation, with whom American manufacturers aim to compete in neutral markets, taxes raw materials, should be an object lesson strong enough for them. When we hear of Germany or France taxing raw materials it always means tax- ing food supplies. Foolish as this must appear, raising the THE ECONOMY OF HIGH WAGES. 9 oost of living, reducing the standard of life and in consequence reducing the productive capacity of the working classes, jet it is something quite mild in comparison with raising the price of the manufacturer's raw material his " matiere premiere " (first materials) fifty to a hundred per cent, above the cost at which his foreign competitors use the same. In a sense the foreign agriculturist stands towards his tariff in the position in which our industrial classes stand towards our tariff. There the landed classes, chiefly the landed proprietors, draw all the benefits from the tariff, while the small peasant, agricultural laborer, and all the rest of the people are heavily taxed on their food supplies. To benefit a few the whole nation is taxed and the nation's productive power curtailed. Here in America agriculturists cannot be protected, as has been shown. They are merely taxed, to support an artificial system in which make-believes go a great way to make burdens seem a blessing. Of course, the same relates to all the occupations which are engaged in the professions, personal services, and the distributing trades. The same relates to all the industrial occupations which cannot possibly be benefited by a pro- tective tariff: the building trades, railroad building, slaugh- tering, and other trades connected with food supplies, and all occupations operating on non-transportable objects. All told, there are barely 5 per cent, of bread-earners to whom any direct benefit can be said to accrue from the protective tariff, while all of them (even the 5 per cent.) suffer to the full extent of the whole measure of double taxation, viz., for revenue to the government, and for protection to a favored few. But even this very small class reduces itself to a smaller and smaller number, the closer one examines into the industrial fabric which is said to be benefited. It is in evidence that the greater the amount of protection dealt out, 10 THE ECONOMY OF HIGH WAGES. the lower the rate of wages; while the freer the industry from all such influences, the higher the rate of wages.* In the cotton industry the daily wages are not materially differ- ent from English wages. If we take the greater number of looms and spindles worked, and the greater number of weekly * I will give here the wages paid in the building trades and in cotton manufacturing, as evidence. The wages for Germany are taken from the wage lists prepared for regular periodical publication by the Sociological Society Concordia, in Mayence. For the building trades I take the wages for the Hansa towns, where the highest rates are paid. For Eng- land I take the wage rates for Manchester, Liverpool, and London from the lists prepared by the Trade Unions' Committee for the Royal Com- mission on Trade Depression. For America I take the rates ruling in New York City. The wages, reduced to the hour, compare as follows : GERMANY. ENGLAND. AMERICA. Cents. Cents. Cents. Bricklayers (34.7 pfg.) 8* 16 45 Stonemasons 8J 16 to 18 45 Carpenters (30 pfg.) 7i 16 30 to 35 The percentage of wages of England over Germany is a round 100 per cent. ; of America over England, 180 per cent., and over Germany, 430 per cent, and 330 per cent. , respectively. In the cotton goods industry 1 take the wages of spinners and reduce them also to the hour, so as to bring them to a common basis. These wages are taken from mills which I visited, and they were given me by the parties paying, and corroborated by those receiving them. RHENISH GERMANY MAvruFSTFR I OWFT T AND SWITZERLAND. Cents. Cents. Cents. Mule spinners (men) 5.2 to 6 14 to 17 15 to 16 Ring spinners (women) 4.3 to 5.2 6 8.4 The English and American mule spinners stand about on a par, while they earn from 165 to 200 per cent, more than Swiss or German spinners. The American spinner-girl earns 70 per cent, more than the Swiss or Ger- man, and 40 per cent, more than the English girl. But this is balanced by handling eight sides with 960 spindles, against four sides with 576 spindles in England. The American spinner gets less pay per work than the English, Swiss, or German. THE ECONOMY OF HIGH WAGES. H working hours into consideration, they are decidedly below the English rates. In woolens, taking all the differences into consideration, 25 per cent, would cover the higher rate of pay which our working people can call their own, and even this is frequently balanced by a higher output. In the building trades, which are certainly independent from all benefits a tariff can give, as houses cannot- well be imported, the differences are from 200 to 400 per cent, in favor of the American artisan. Entirely different considerations than tariffs bring about the higher rate of wages which prevails in this country. What these causes are, will be the subject of the succeeding chapters. Here it can only briefly be mentioned that the wage earner does not draw any benefit from protective duties, and that so long as the tariff on raw materials prevails, he, along with the employer, is directly injured by the system. The facts in support of this will be brought out in the course of this treatise. Blind prejudice may strenuously oppose their application, but the force of facts is too strong to be long delayed before sweep- ing away artificially bolstered-up theories. The McKinley Act, a Monument of Legislative Ignorance. The legislators responsible for the act did what they were expected to do. They simply delivered the goods for value received in 1888, with a tentative hint to future campaign contributions. Still they might have shown an apprecia- tion of the consumers' interests. They could have learned that they are entirely compatible with the true interests of the manufacturers. An inquiry into the productive methods of European countries would have shown them that these are based on vitally different principles. They would then 12 THE ECONOMY OF HIGH WAGES. have seen that our importations are due to only a limited extent to cheaper labor cost in Europe. They, as well as the recipients of legislative favors, should know that tech- nical and artistic skill are elements of very great importance in manufacture. If we are deficient in the one or the other, it is only natural that we import what we cannot find equally satisfactory at home. Our labor, being machine labor, is generally cheaper than European labor, which is to a large extent hand labor or in- ferior machine labor or unproductive underfed labor, as com- pared with higher productive American labor. What our labor suffers from, is the high cost of taxed materials. Free raw materials and a higher technical and artistic develop- ment would result in lasting benefits to our manufacturing industries, which periodic additions to already extreme tariff rates can never do. They increase the cost of production in spite of our cheap labor, and continue the congested condi- tion so frequently complained of by manufacturers. It was my good fortune to be charged by Mr. Bayard, the late Secretary of State, with the important mission of inquiry into the economy of production and the state of technical education in Europe. The information gained from my investigations fully bears out these views. I had not been able to make a final report, and it shall be my en- deavor now to give to the public a review of the industrial situation from personal observation in the foremost indus- trial countries of Europe and the United States. From the insight into the competitive side of the productive process gained thereby, it will be not difficult to understand that the McKinley tariff is opposed to the best interests of our pro- ducing classes, the manufacturers included ; that it failed entirely to accomplish what it set out to do, and that it could not end in anything but failure, because starting on THE ECONOMY OF HIGH WAGES. 13 entirely erroneous premises, even when it honestly strives to benefit American industries. The Raw Material in the Product. Before speaking, however, of production and the proc- esses by which it is conducted in the different countries, of labor, its reward and its productiveness, of the true causes which lead on to progress, the basis of prosperity of the working classes, it is essential to say a word or two of the raw material, especially as the most important part the inherent part, which gives character to the fabric is given but little consideration by the tinkers in legislation. Since nations have risen from barbarism and isolation they have become accustomed to exchanging their products. This exchange of commodities served to create more wants and develop taste. What is not produced, for reasons too varied to specify, by one country is obtained through com- merce from another. Now, among all things impossible to produce by all coun- tries, gifted with the same intelligence and advancement in science and the arts, is that which is the product of nature, and this we call raw material. Everything else in the fin- ishing into an article of use may be reached even by nations not having the same natural adaptation and artistic feeling, by proper teaching and training. To the raw material can- not be given the essence by cultivation which it derives from the soil and the climate. Great are the variations in minerals even. Take clay and stone. One of the reasons adduced for crazing in pottery is in the different properties which the clay of this country possesses compared with the clay and kaoline of Cornwall and Devonshire. In iron ore, not one ore has the same qualities as another. We cannot 14 TEE ECONOMY OF HI&H WAGES. use our ores for Bessemer iron, except from the remotest sections of the county on Lake Superior. In all these materials the chemical qualities and affinities of the parts determine the character of the product so entirely that only the grossest ignorance would endeavor to build up industries and put restraint upon the free choice of nature's gifts. But even to textiles this applies with fullest force. For fine yarn spinning no cotton equals Egyptian. Our own Sea Island is something quite different from and superior to the upland cottons. It is only of late years that our cotton manufacturers begin to see the advantages which they would reap from a greater use of Egyptian cotton. Though in small quantities yet, as compared with the use made of it by the English, Swiss, and German fine yarn spinners, the rapid increase during the last few years shows that even protected manu- facturers cannot forever continue oblivious to the pressure of trade facts. Rays of outside facts creep into the fool's paradise of protection, and disturb the harmony of interests so dexterously fostered, no matter how carefully the blinds are pulled. Of the 500,000 bales of Egyptian cotton raised, we imported in 1885 a total of 4,553 bales and in 1890 some 9,000 bales. The bale is of 750 pounds. Egyptian cotton has properties which even Sea Island cotton does not possess. Aside from the fact that it has a long fibre and is therefore excellently suited for combing purposes, making a very even thread, it has the very great advantage of a higher lustre, so that the fabrics made of it are softer and take more the character of silk goods. In the dyeing, the goods made of Egyptian cotton have more brilliancy of color, and for cotton and silk mixed goods it is of especial importance that the respective fibres blend well. THE ECONOMY OF HIGH WAGES. 15 Besides all this the goods made from this cotton take a much finer finish. All this is well known to foreign manufact- urers and is the chief cause why we import most of our fine yarn goods. In all American fabrics made to substitute these foreign importations, a lack of knowledge of this first principle in production, to have the proper raw material for the goods, is painfully apparent. In no branch, however, are the differences so great as in wool. Our own wools show conclusively that almost every State of the Union produces a different grade. For instance: the wools raised in the far West in the new Territories and States are considered very inferior to those raised in the States east of the Mississippi. The pasturage consists of wild grasses, which during the dry season be- come parched, leaving the sandy soil underneath as a fine dust or sand, which permeates the fleece, adding much to its shrinkage and changing not only its appearance but the strength of staple, more especially where the soil is alkaline. Such wools lack in lustre and spring, and goods made from them show a dead, cottony appearance. They could not possibly be used as an offset in the manufacture of fabrics which we Import, amounting in 1890 to $50,000,000, and which, adding duties, $35,000,000, represent $85,000,000 American value laid down at the ports, exclusive of freight and other charges. For the replacing of this vast amount the American supply would be entirely insufficient. We raise the corre- sponding wools in very limited quantities (and, what is more to the point, in receding quantities) in the older States only. Texas and California wools have good felting properties. For combing purposes they are unserviceable. Of combing wools only a limited amount is raised in the States lying east of the Mississippi. But most of the goods used for outer 16 THE ECONOMY OF HIGH WAGES. wear have for years been made of combed and not of carded wool. The same differences we find in English wools. The Southdown is different from the north country wool ; the Scotch from the English ; the Welsh wool different from the English and Scotch again. The best reputed kinds of Scotch tweeds can only be made from a particular class of Scotch wools. Irish wool is different again. Welsh, Irish, and Scotch wools shrink but very little when manufactured into flannels, knit goods, etc., in the washing ; German and American wools, very much more so. Australian, Cape, and Plate wools differ again. But these differences can be made very valuable by adapting the varying qualities to the respective fabrics to which they give their special character. The same can be said of silk. China silk, Japan silk, Italian, French, East India silks, they all differ. Breeding and cultivation can improve the product, but cannot give it the properties which it derives from the soil upon and the sun under which it grows. In articles of direct consumption, this is so well under- stood that a reference to it will make the meaning plain to everybody. Nobody accustomed to the taste of Rhine wine will take American wines instead, nor would anybody who had a preference for French wines take the Italian growth in their place. No amount of cultivation will produce Havana tobacco in any part of the United States. Nor would tobacco grown in one part of the United States from seed transplanted from another part of the country produce the same tobacco. A tax upon raw materials will always and necessarily injure home industries, because the people who for one reason or another prefer an article of foreign to one of domes- tic manufacture on account of the inherent qualities of its THE ECONOMY OF HIGH WAGES. 17 material, be they what they may, will buy the foreign article if by virtue of the duty the raw material is excluded from our workshops and factories, and thereby withdraw support to that extent from home industries. Protectionists who always are so full of concern in behalf of the working classes and their employment at full wages omit to give this side their consideration. 2 CHAPTER II. The Labor Question in the Tariff. The Old Labor Doctrine opposed to Experience. The Cheapness of Well-paid Labor. Iron and Coal Mining-Machine Operating. Foreign Labor not capable of Exertion like American. Mostly Crude Labor from Abroad. Slowness in Adopting Labor-saving Improvements in Low- wage Countries. NOTHING in the whole 'catalogue of argument for pro- tection by its advocates has been used with so much effect as the fact that the daily wage rate of American working people is higher than that paid by manufacturing nations of Europe. From this fact, that wages are higher in America, a fact not disputed by any one, the conclusion has readily been jumped to that the differences between the rate paid in Europe by competing nations and in America in the same lines of industry should be equalized by tariff duties laid upon the article of foreign manufacture. The question here arises, What connection is there be- tween the daily wages of the workingman and the cost of his work ? Until very recently the theory had been accepted without argument and criticism that a day's labor in any one line in one country would produce the same results as a day's labor in another country ; indeed, it has been handed down as an axiom, and upon this the so-called iron law of wages has been built, which to a large extent is the cause of our present socialistic agitation. The so-called law arises from another so-called law, promulgated by the English school of economists, that, if wages rise in one part of a country THE ECONOMY OF HIGH WAGES. 19 above the general rate ruling, very soon an influx will fol- low of labor from the lower stratum, which will soon begin to press on and reduce the rate of wages to the old standard. This, then, necessarily would lead to a state in which it would be hopeless for the working classes to expect any- thing more than the mere means for their subsistence and for the perpetuation of their race. How ever such a view could have got abroad and taken possession of the thought of generations is one of these incomprehensible features which we meet in the history of thought. Views are accepted without being questioned if put forth with suffi- cient authoritativeness, even if the experience of every day shows their futility. The Fallacy of the Old Theory of Wages. The theory of wages which we combat in these pages is principally based on Ricardo. He formulates this so-called iron law, as a kind of dogmatic prison-cell out of which there is no escape for the working classes, and we cannot do better than to quote him in his own words : " If the shoes and clothing of the labourer could, by improvements in machinery, be produced by one-fourth of the labour now necessary to their production, they would probably fall 75 per cent. ; but so far is it from being true that the labourer would thereby be enabled permanently to consume four coats or four pair of shoes, instead of one, that it is probable his wages in no long time would be adjusted by the effects of competi- tion and the stimulus to population to the new value of the necessaries on which they were expended. If these improvements extended to all the objects of the labourer's consumption, we should find him probably, at the end of a very few years, in the possession of only a small, if any, addition to his enjoyments." (The Works of David Ricardo : London, John Murray, 1886, p. 12.) Instead of being not true that the laborer would by these 20 THE ECONOMY OF HIGH WAGES, improvements be enabled permanently to consume four coats instead of one, etc. (which is equivalent to reaping the full benefit of the improvements in the economy of pro- duction), history shows that the effect of these improve- ments has always been to increase the well-being of the laborer. The improvements referred to must by the natural force and the momentum given thereby, lead by necessity to the improvement of conditions wherein the laborer always gets the largest proportion of the gain. The facts lead to exactly contrary conclusions from those of Ricardo and the schools accepting them. Any one who has experience in manufacturing knows by his own observations that the laborer's wages increase in the proportion that his produc- tive capacity increases, whatever the causes which bring this about. Not his money wages alone but his real wages, expressed in their purchasing power. Relative Productiveness of Labor. Every employer of labor knows and will readily admit that the laborer's value stands in exact proportion to the quantity of work turned out. The productive capacity of the labor is a varying quan- tity, even aside from the aid given by machinery and inven- tion. We find not alone that nation and nation differ in the same occupations, but the different sections of a country vary in results when output and output is compared. Thomas Brassey, in his interesting book, "Work and Wages," gives an abundance of facts to show the superior- ity of English over continental labor in road-building and railroad-building navvy work principally. For the best and most difficult work, that of making curves, etc., he could employ no other labor but English. English labor was THE ECONOMY OF HIGH WAGES. 21 paid at a much higher rate than continental labor, working alongside of it. But still, measured by the work done, in many instances the cost was higher at the lower wage rate per diem than the work done at the higher wage rate per diem. The better feeding and better muscular development of the Englishman is accepted now as explanation of this fact. But in reference to the differences in the effectiveness of crude labor employed in the same occupation, we can take an example frorn the United States to show clearly and dis- tinctly that a day's work in the same occupation is some- thing quite different in different parts of the same country. Pig-iron-making is, perhaps, one of the crudest industries, so far as labor employment goes. The principal part of the labor expense at a furnace is wheelbarrowing and yard- work. In the Northern States, especially in the Pittsburgh region, where most of the ore used is from Lake Superior, a great part of the expense is due to the necessity of storing the ore on account of climatic influences, interruption of navigation in winter, and so on, thereby necessitating two handlings instead of one. In England, with its open win- ters, no such necessity exists. The ore is run from the mine on tracks to the furnace to be filled into barrows, put upon the lift, hoisted, and dumped into the furnace. If im- ported ores are used, the furnaces being situated along the coast, the steamers are run close by and the ore is taken direct from the ship to the furnace. In the Southern States the ore beds are situated so near the furnaces that much the same condition prevails. Crude labor per day there is certainly not more than about two-thirds of what it is in Pittsburgh ; still, with the seem- ing advantages of cheap day labor and the advantages of situation mentioned, I found in a recent investigation on the labor cost in iron-making in certain furnaces in Ala- 22 THE ECONOMY OF HIGH WAGES. bama, that the labor cost per ton is nearly the same as in Pittsburgh and a little higher than at furnaces in eastern Pennsylvania, which I visited in 1888 a time when labor, consequent upon high iron prices, had obtained twice an increase in pay of ten per cent. This, my own observation, is fully corroborated in a re- cent statement published by the Labor Bureau at Washing- ton. Taking about twenty -five furnaces from the Northern States, and about the same number from the Southern States, the average for both is nearly the same; leaving out of the average for the Southern States three furnaces which are given as making iron at the labor cost per ton of $0.595, $0.784, and $1.008 (which is an impossibility on the face of it, judging from the known conditions), the average for the other twenty-one Southern furnaces is about $1.70 per ton. This is a higher average price of labor than in Northern furnaces. Southern ores, however, are mostly cheaper ores of a lower percentage of iron, consequently, require more wheelbarrowing and hoisting. Therefore, on the same basis of work done, the cost would be about the same if any- thing, somewhat higher showing clearly that though cheap labor gets less remuneration per diem, its cheapness is no saving to the employers. More hands are required to do the same amount of work that better paid labor does at the same cost. More efficient labor in the North accomplishes greatly more in a given time, and thus renders its work, if anything, at a lower cost than the cheaper labor elsewhere Differences in Coal Mining. Coal mining in the rich bituminous fields of America gives a further illustration. Taking the data from the census of 1890 for the mining industries of Alabama, Ken- THE ECONOMY OF HIGH WAGES. 23 tucky, Tennessee, West Virginia, Pennsylvania, Ohio, Illi- nois, and Indiana, we find the products, value, and wages as follows (tons at 2,000 Ibs.) : ANNUAL PRODUCT. WAGES PER TON. VALUE AT MINE. 3,378,000 $0.94 $1.10 Tennessee 1,925,000 82 1 21 Kentucky 2,399,000 70 99 West Virginia 6,231,000 60 82 Pennsylvania 36,174,000 58 77 Ohio 9,976,000 69 94 Illinois 12,104 000 69 97 The lower cost per ton goes hand in hand with the higher day rates. An approximate idea can be given from this table of the differences in the labor cost and relative work- ing capacity in the same line of production in the different sections. The annual earnings of the laborer would not permit to base comparisons on, on account of the difference in number of days worked in the year. The nature of the coal and the depth and incline of the seams are also differ- ences of importance in coal mining. But where a survey of production is taken on so large a scale a fair average of con- ditions may be assumed to exist. Allowing for all possible objections and eschewing all other generalizations we can certainly accept this as irrefutable evidence that coal is mined cheaper in the Northern than in the Southern States. As to the earnings, we cannot take the yearly earnings as a criterion of daily wages. The days of employment in the year, varying so much in the different States, are at hand only for five of these States. But taking these and putting Kentucky and Tennessee for the Southern and the remain- ing States for the North we find the average day rate for 24 THE ECONOMY OF HIGH WAGES. Miners. Laborers. $ $ Cents. Tennessee 1.98 1.26 82 Kentucky 1.75 1.56 70 West Virginia 1.86 1.47 60 Ohio 2.01 1.77 69 Illinois 1.96 1.63 69 Increase of Earnings and Reduced Cost going Hand in Hand. The labor cost per ton, it will be seen, is lowest where the average of day wages is highest. But if this demonstrates satisfactorily our point, we can with equal certainty refute the statement cited above that labor does not permanently gain by the improvements which lead to a reduction in price. We can show this by putting the average annual earnings of all employed in these coal-mining States, the labor cost per ton, and the value per ton, side by side with the same items from the census of 1880 : Yearly Earnings. Wages per Ton. Value per Ton. 1880. 1890. 1880. 1890. 1880. 1890. $ $ Cents. Cents. $ $ Tennessee 332 392 68 82 1.27 1.21 Kentucky 261 334 73 70 1.20 .0.99 West Virginia. . 295 391 72 60 1.10 0.82 Ohio 320 352 86 69 1.29 0.94 Illinois 382 357 99 69 1.44 0.97 A rise in the total of earnings is very marked, and goes hand in hand with a very decided fall in the price of the product. The decline in the cost of production is due to nothing else but to improvements governing the economy of pro- duction in the mining industry. THE ECONOMY OF HIGH WAGES. 25 The same practical results show themselves in other industries all along the line so far covered by the last census. In woolens the earnings of all employed have risen from an average of $294 to one of $347. The price of wool hav- ing declined, as shown in the opening chapter, as much as twenty-five per cent, between 1879-80 and 1890, shows, in combination with a greater use of shoddy, cotton, and other wool substitutes in the industry, that a far greater bulk had to be manufactured than is expressed in the difference of values of raw material, which rose from $164,000,000 to $203,000,000. Divided over the product, the cost of produc- tion must necessarily be less. The bulk being, to say the least, by one-third greater in each dollar's worth of material consumed in 1890 over 1880, and the ratio in the rise of wages equal to the ratio of values in material, leaves no room for any other conclusion. The Same Labor Differences Manifest in Higher Products. In the making of finished iron, I was told by the Presi- dent of the Amalgamated Association of Iron and Steel Workers that the piece rates at Southern puddling furnaces were the same as in Pittsburgh ; that the labor there, how- ever, is very wasteful, and that experience has shown that three white men do the work of five colored men. This proves conclusively that even work done by mere muscular labor, shows great gradations in efficiency of the workers ; that no great competition and pressing down by help not used to the work, or of a lesser efficiency, can ensue, or offer serious dangers to those employed and possessing greater efficiency, is obvious from these examples covering crude labor processes. 26 THE ECONOMY OF HIGH WAGES. It is held generally that labor-operating machinery of the same nature and construction would turn out in a given time the same amount of work. It has been my own expe- rience that labor turned on the same kind of work, and using the same machinery, showed the most varying results. Sew- ing-machine operators in my employ turned out, in so sim- ple a labor object as plain hemming, all the way from 2,000 to 6,000 and 7,000 yards a week, which, paid at the rate of twenty cents a hundred yards, gave wages varying from $4 to $12, and sometimes $14, a week. The lowest grade of earnings may be due to lesser experi- ence and skill, as that of beginners; but even among opera- tors of experience differences exist, if we take $12 as the maximum, varying all the way from $6 to $12 under an equally ready supply of work, and in the same number of working hours. This is a very simple article, requiring only deftness of hand, and no special change and shifting. Equal variations I found in more difficult parts trimming and adjusting. There is, however, one very important point which will also be conceded by every one familiar with manufacturing : that the work done by those who earn the highest wages and do the work most rapidly is the work which, based upon its selling value, would command the highest prices, being done better, more regularly, and cleaner than that of those who earn the lower wages. This is a very important distinction, upon which too much emphasis can- not be laid for the understanding of the labor question as well as the understanding of the economy of production in general. In all my inquiries, abroad and at home, I always found this fact a predominating feature. If such variations in the skill and productive power of the individual workers under the same roof and under the same direction, supervision, and training, impress themselves upon THE ECONOMY OF HIGH WAGES. 27 our view, how much more must we expect to find variations in the output when the production of the same lines of goods is carried on in different countries. In almost every employment of an industrial nature a very great amount of training is requisite to make it effective or make it serviceable at all. Only in times of very great demand and scarcity of labor would any one employ crude labor in factories where skill is required. The first question at all times for an employer to put would be. What can you do ? How skilful are you ? What are joar earnings ? Never would he ask, How cheaply can you work? He would surely take the one offering his or her services first who had been in the habit of earning the highest wages, do- ing the greater amount of work, etc. In times of depression or lesser demand, he would surely dismiss those of his hands who earn the lowest rate of wages, and keep those who are best paid per diern, etc. How, then, can it be that wages cannot rise beyond the point of mere subsistence of the worker, when the skill of the worker is so powerful a factor in determining the rate of wages ? Nor can the rate of wages be seriously affected by an influx of new labor, because new labor is seldom labor accustomed to the occupation. There is never in any one industry a perceptible amount of desirable labor floating which could be used to effectively compete with the trained help holding the field. No sensible employer would en- gage new hands in place of the ones used and trained to his work, even were it offering itself for employment* * The most recent appearance of the bogeyman, that has come within my notice, is in Prof. R. T. Ely's " The Labour Movement in America." He says : "The cost of production is the limit below which the price of other commodities cannot permanently fall, for the production is diminished as 28 THE ECONOMY OF HIGH WAGES. But a main point for consideration is this, that labor can- not at the bidding of a sudden demand arising somewhere else be removed from old homes and associations. If trans- planted to new spheres, even in the same occupations, it is seldom able, except after long application, to cope with the trained labor of the place, especially when the labor is of a the price falls, and at times ceases almost altogether. But the individual labourer cannot diminish his supply of labour so long as he lives, and misery and death are the factors which must bring about a decrease in the supply of his commodity and raise its price to the cost of production, in other words, to what it costs the labourer and his family to live and to maintain the customary standard of life among the members of his class. "Closely connected with the foregoing is the fact that the price of labour does not at once rise when the demand increases, as is usually the case with other commodities, for the first effect is that the unemployed receive work ; and after the ' reserve army ' finds employment competition among purchasers of labour raises its price. ' ; Finally, the only way to diminish the supply of the commodity labour in the market in the future is, by prudence in marriage, to diminish the birth-rate. But to accomplish this, will and intelligence are necessary, and some probability that the labourer would reap the fruits of his self- denial. No such guarantee exists, because the folly of his fellows will render his prudence of no avail. In addition to this, the labourer in America can hope to influence the supply of labour offered in the market of the future only when he gains some control over immigration." The professor moves the army of the unemployed about like a condot- tiere, throwing it into this or into that camp which may be willing to bid for its services. The fact is not considered at all that, however large the army at any one time, those belonging to any one handicraft or employment are usually few and rather scattered. Given a " reserve army " of 1,000 of unemployed in a time of depression among a population of 50,000 (certainly a very large percentage), there would be, let us say, 25 potters among them. These would be the only ones that could possibly exercise a pressure on the existing rates of potters' wages. The other 975 would not be of the least consequence to the potting industry and could in no conceivable way endanger the equilibrium. The tailors, the shoemakers, the tinsmiths, the machinists, the seamstresses, the longshoremen could not possibly find employment in any trade except their own specialty. As working- THE ECONOMY OF HIGH WAGES. 29 higher developed kind, as expressed in its higher earnings. Most of the labor brought from foreign shores is of the cruder kind, if industrial, or it is entirely agricultural and attracted by the facility of obtaining land. The labor brought from foreign countries to America to work in American mills, even if used to the same machin- men out of employment are usually the least expert ones, they cannot exert a depressing influence, even while they are engaged in the nefarious practice which haunts the vision of the professor. But the "reserve army" broken up into corporal's guards of occupations becomes more reduced yet in power of doing mischief. All manufacturing industries are minutely subdivided to-day. The sewing-machine operator on a Willcox & Gibbs, would be out of place where Singer, or Wheeler & Wil- son machines are in use. The white goods sewer would not be able to get along in a factory working woolen goods. The straight sewer could not compete with the trimmer. In pottery, as we have chosen that example, the turner, the handler, the flat goods presser, the dish maker, the sani- tary ware maker, the mold maker, the dipper, the decorator, etc., etc., would all be classed among our 25 unemployed potters. But each one ever so expert, let us assume, in his own branch would find it hard to make a day's wages in any one of the other branches of his trade. In a factory of boots and shoes employing 500 hands it is doubtful that as many as twenty are engaged in one and the same occupation, each one forming in itself a specialty, which to become expert in requires a good long apprenticeship. But wages are paid by the piece in all manufactur- ing industries, and it can well be understood what cleverness and skill it requires to make high earnings, and the advantages of the trained over the untrained are therefore entirely unassailable. I can assure the professor that in a business experience of twenty-five years I never was able to find desirable accessions among the " reserve army," whenever business required me to increase my stock of help. I know that the experience of other manufacturers is of exactly the same nature. Of course, the remedy of diminishing the supply of labor by voluntary or involuntary death increase is unfolded. The Malthusian skeleton is taken out of the cupboard and shaken whenever we find ourselves hemmed in by perplexing economic phenomena. But the performance is too anachronistic even for appeal to the gallery gods. 30 THE ECONOMY OF HIGH WAGES. ery, is found at first to be entirely unable to compete with American labor. It is only after considerable time that it can take its place and earnings in common with American labor. Here these new-comers work side by side with the old prac- ticed hands at considerably lower rates. But their lower wages are expressive of lower working capacity. Ameri- can higher earnings are only, in other words, an expression of a higher working capacity. In England I frequently heard it said that laborers brought from Ireland usually break down after the first week's trial ; had then, living with friends, to first get used to the English standard of life, and feed up in order to be able to do work at the English rate. Gradually, in keeping with their better feeding and living, they become as good and strong workmen as the English. Now, in American mills the very same holds good. The labor which we bring from Europe is seldom employed directly in manufacturing, except in special lines where the work people are brought over for industries newly created for which we have no American labor ready, wanting the training and experience requisite for their operation. The foreign labor entering mill life usually takes up the crude labor processes, and with growing efficiency makes claim to and quickly obtains the standard rate of wages ruling in the respective occupations. Skilled labor does not emigrate so freely as is generally taken for granted by those who make definitions for text books, and take facts and conditions supposed to exist but really as far removed from the living experience of the day as the study of the writer is removed from the workshop of the worker. In 1885 the emigration from the United Kingdom to the United States, of adult males, having been employed in mechanical employments, showed a total of 9,541 only. Of these 2,257 were miners and about 1,750 were employed in THE ECONOMY OF HIGH WAGES. 3i the building trades bricklayers, masons, carpenters, etc. the rest, of something over 5,000, were distributed over different manufacturing industries. In England I found, far more so than in America, that the artisan classes and mechanics can only with difficulty be brought to leave their occupations and homes. Their earnings are remunerative, their expenses low, on account of low cost of commodities due to free trade, their love of home and surroundings is intense; and I found during my consulship that very few left the potteries to emigrate, but that a goodly number were at all times returning from America, preferring, as they said, the old associations and steady employment with a sure income to the high earnings in America, frequent stoppages of work, and wages spent as freely as received. This applies even to Germany and certainly in the strongest measure to France. As to the former country very few skilled workmen are found among the myriads who leave the shores of fatherland, com- paratively speaking. Of the French, not an emigrating people under any circumstances, the number of skilled workmen coming over by no means cover the demand which is always at hand from special industries for their higher skill. What Causes High. Wages. It is a fortunate sign of the times that we are at last beginning to recognize the all-important and redeeming fact, that cheap labor by no means means cheap production; that, on the contrary, low cost of production and a high wage rate go hand in hand. This may seem paradoxical, but on closer examination it will be found to be entirely logical and in keeping with the facts and philosophy of the economy of production. The leading principle can be stated in a few words. 32 THE ECONOMY OF SIGH WAGES. The United States, with its vast resources, free laws, and extended territory, gives a field for employment of labor which no other country possesses, excepting perhaps the Australian colonies. The great stretch of unoccupied soil gives an opportunity for the satisfaction of what is one of the chief desires of man, to be the possessor of a homestead upon his own land. From the widely distributed ownership of land radiate all other employments. A high wage rate and a higher standard of living are thereby insured. So long as the land is able to absorb, in times of business depression and collapse in manufacturing industries, the surplus labor of the towns, a lower wage rate once reached cannot permanently maintain. Labor under all circum- stances, instead of being always ready to submit to a pressing-down process by the exercise of the undue power of capital, as maintained by the old economists, under free laws and freedom of association maintains, and with slight variations, always regains, if temporarily lost, its old position and wage rate. A perceptible rise in the rate of wages ruling in the United States and in England, and even Germany and France, has taken place within the last twenty-five years; while at the same time a decline in the price of commodities and provisions has gone hand in hand with this rise in wages. The facts are so indubitable and have so incontest- ably been demonstrated that we can dispense with intro- ducing data in support of this.* This in itself is sufficient to controvert the theory of wages alluded to above. It shows plainly that Eicardo's four pairs of shoes or four coats are absorbed by the workers and not * See Schoenhof, The Industrial Situation. G. P. Putnam's Sons, 1885. TEE ECONOMY OF HIGH WAGES. 33 by the capitalists. A rise in wages and a decline in the price of commodities is the best evidence of this. Even where the laborer's wages could become easiest de- pressed by the large influx of foreign labor as in the coal-min- ing industry, we find, as shown, not alone that the wage rate maintains itself upon the standard of the workers of ten years ago but shows a steady increase. This is quite natural and in obedience to the powerful impulse given by freedom to all labor to work up to the highest level of pay obtainable or ruling in a country. It is admitted on all sides that im- ported labor, like the month of February, comes in as a lamb and goes out as a roaring lion. At first ready to accept any conditions for obtaining work, no sooner does it feel itself securely lodged and able by the acquisition of the necessary skill to maintain the position, than it demands full rate of pay. Hence this being the case with the only possible men- ace to the ruling standard of wages, we cannot see that any danger can be discovered to the continuance of the ruling high standard of wages. The tendency of economic forces is a rising one in wages, as will be further demonstrated, and so long as freedom is the basis of action, the high rate once gained must be considered a permanent one, which cannot be interfered with or repressed. The influence of a protective tariff as a force to bring about conditions which create this happy state is, however, not more powerful than that of a fly on a revolving wheel, with due deference to the opinion of the fly. Happy as the augury is for the working classes, the em- ployer of labor is not only not injured, but fully as much benefited by the inevitable results of a high rate of wages. Indeed the law of gravitation is not more absolute than this, that where, as in America, the rate of wages of labor per diem is a high one, the first object of the employer is to 3 34 THE ECONOMY OF HIGH WAGES. economize its employment. The result is that in no country is the organization of labor in mills and factories so com- plete as in the United States. In no country is the appli- cation of machinery carried to the extent to which it is carried in the United States. Here invention and improve- ment are always most readily welcome in the labor processes involved. Manufacturers introducing a change in manufac- tures have a machine built to accomplish what in other countries would be left to hand labor to bring about. Ma- chinery, used to the limit of its life in Europe, is cast aside in America if only partially worn, or while satisfactory in this respect, if an improvement has come out that can do the work quicker and consequently cheaper. The improvement introduced by one manufacturer in any line is quickly adopted by his competitors. Labor-saving is the result, and a cheapening of production ensues, which is the due outcome of the high cost of day labor in the United States. CHAPTER III. Low Wages, Stagnating Causes. Improvement in Machinery more Prof- itable in High- wage Countries. Peasant and House Industries. A Picture of a Home-market Country. IF a high wage rate is an impelling cause in this country to the introduction of improvements and the adoption of labor-saving processes, the low wage rate per diem ruling elsewhere is an equally strong inducement for the continu- ance of rusty and antiquated methods. The old labor methods, going parallel with low wages, become quite in- grained with the countries where they prevail, and offer sufficient grounds for their perpetuation. To the employer of labor, advantages are offered which are in themselves sufficient not to make him anxious for changing the old for the new methods. Conservatism becomes increasingly pro- nounced in proportion as the rate of wages descends to a lower and lower scale. But the effect of this tendency in low wage countries to adhere to old labor processes and continue the employment of obsolete machinery and method, becomes obvious to all when their products compete with goods in the same lines produced by high wage countries. What in other instances would be a commendable quality, here often becomes a grave defect. Durability is considered an advantage. In the economy of production it has become a disadvantage when an improvement, or the introduction of new machin- ery, can effect savings equal almost to the whole labor cost, 36 THE ECONOMY OF HIGH WAGES. or reduce the labor cost to the extent that a profit can be realized where none existed before. A few examples will illustrate the effect on the cost of production, of these rapid changes and improvements in machinery. In 1886 (a rather dull year) I found in cotton spinning in Oldham that, in ninety mills, thirty-four paid neither dividends on stock nor interest on loan capital ; an equal proportion paid no dividends, but paid interest on borrowed capital, and only twenty-two were able to pay in- terest and a moderate dividend on shares. All these mills are conducted on the co-operative plan. The managers, superintendents, etc., get very little more than workmen's wages, and everything is managed on the most economical basis. Even their basis of capitalization is one which would give the greatest advantage to the profitable employment of capital. These Oldham mills are all established on a capi- tal of which only half is raised on shares, while the other half is loan capital. As loans on a safe security and for per- manent investment can be raised in England at the low rate of interest of three per cent., of course, the profits going to the shares must be correspondingly higher as soon as the earnings of capital go above the rate of interest paid on the loan, than if the whole capital invested were share capital. But with all these advantages in the way of a substantial dividend on the shares, the results were as stated. The latest reports from the Oldham spinneries (for 1891) covering the same number of mills, give even less satisfac- factory results to the invested capital than those of 1886. "While those Oldham mills, built mostly in the sixties, were showing such poor results, the workings of newer erec- tions were of a very satisfactory character. A spinning mill at Rochdale, run on the same basis as these Oldham mills, and whose work account I had the THE ECONOMY OF HIGH WAGES. 37 privilege to examine, and a statement of which can be found in No. 70, Consular Reports, paid a dividend of 5 per cent, besides carrying an amount equal to 2 per cent, as surplus, to profit and loss. The mill was recently built, had the lat- est improved machinery, and not alone was enabled thereby to produce at a lower rate of cost in labor and expense, but had a lower rate of waste than I found the case elsewhere. This shows, if nothing else, an advantage of machinery not being too durable. The adoption of an improvement, principally in the lower numbers, of cotton spinning, some- times saves more than the whole of the spinning cost. An improvement in roving lately introduced promises a saving of 5 per cent, in cotton by diminishing the rate of waste to that extent. The mechanism is an American invention, was taken over to England, and there, on trial, was found to do all that it was represented to have done in America. An insurmountable difficulty, as it seemed, arose. Manufactur- ers who had shown themselves quite ready to adopt the invention after having given it trial, reported that it was of no use. It was soon found that the opposition came not from the manufacturers themselves, but from their foremen and mill managers, whose reluctance to adopt new devices is proverbial. It is an open secret, as has been brought out in many lawsuits, that an opposition of this kind is not an insurmountable obstacle; that it can be overcome with money. If England is much slower in adopting improvements and exchanging less advantageous machinery for more perfected, the Continent of Europe shows this in a still more aggra- vated form. In Switzerland I found looms and spinning machinery that would be considered inadequate in England and America. The manufacturers prided themselves on the durability of their machinery, costing two and three times as 38 THE ECONOMY OF HIGH WAGES. much as the English, but lasting five times as long. This would in part explain that work done under such conditions, though the wage rate per diem be much lower in Swiss than in English cotton mills, is dearer than in England, barring the fact of lesser proficiency of labor, due to poorer nutri- tion. But the lower wage rate per diem accounts here also for the persistence in using machinery to the full extent of its natural life. The incentive is wanting for replacing, with large capital outlay, old and obsolete for new and improved machinery. Quite on the contrary, the cheapness of human labor where it prevails is the greatest incentive for the perpetuation of obsolete methods. A High Standard a Prerequisite to Improvement. A certain high rate of wages is essential for the profitable employment of machinery. It is said that in railroad build- ing and canal work in India, it is found that the low day rate at which laborers can be hired for carrying the dirt away from the banks, makes the employment of machinery unprofitable and unnecessary. " Many mickle make a muckle." A much higher rate of wages and a considerably higher standard of living of the working classes would have to be preexisting before rapid and radical changes from one kind of machinery to other and more improved machinery would be practical or become an economic necessity. In silk throwing I found the labor cost in English mills to be higher than in American mills. The wages, however, were in America double what they were in England.* I * This was on a comparison of wages paid in Macclesfield, England, with wages paid in a silk mill in Massachusetts. For further information on this subject I refer to a succeeding chapter on the silk industry. THE ECONOMY OF HIGH WAGES. 39 stated then, in my report, that one mill in America had lately exchanged old machinery for new, by which change the speed had been increased from 5,000 to 7,500 revolu- tions a minute. When my report was published in Eng- land, a silk throwster who read it told me that if they ran. their machinery at such speed in their mills all their girls would run away, as they had not the nerve power to stand such a high rate of speed. Later on I found mills in America that ran their ma- chinery at 10,000 revolutions a minute, and one which ran at 12,000 and even 13,000 revolutions. Of course, to keep in line, all others have to follow the same rate of improve- ment. The survival of the fittest is, therefore, so to speak, the result of a high wage rate; and a high standard of living in industrial countries, becomes the prerequisite to a low cost of production. The lower the rate of living, the lower I always found the industrial development of the country. I visited Ireland with a view of ascertaining whether low wages, even with the aid of improved methods of manufact- ure which I found in some mills, were an aid in production. Outside of Belfast and the linen industry, I found labor very inefficient. In woolens, on improved power looms, the results were far below those of English mills, while Ameri- can mills exceed both. Low Wages Indicate Low Productivity. The peasant and house industries of Europe are sprung from the soil, in the process of evolution, the progenitors of the more improved systems of to-day. Small though the income is to the peasant homes from industrial work, their agricultural holdings are so small that without this addi- 40 THE ECONOMY OF HIGH WAGES. tion the lot of these poor people would be still worse. In- deed, the power mill has nowhere created so much distress as among the peasantry who were accustomed to look to indus- try for part of their income. The change from hand embroid- ery to machine embroidery by the invention and introduction of the so-called Swiss machine has at once taken out of the hands of the peasant women of Ireland a source of em- ployment and of earnings which cannot be replaced by other occupations. By generations of adaptation they have ac- quired remarkable skill and excellent taste. Living in the most frugal and primitive manner, they can subsist on the very lowest rate of pay, and hence make it questionable in many industrial fields whether the economic advantages are all on the side of the factory system. How these people live and work can be seen from an examination of life in Ireland. The examination is an inter- esting object lesson. Two sister countries, only divided by the Irish Channel, a three hours' run by steamer. The one, England, holds the most advanced commercial and indus- trial position in Europe ; the other, Ireland, the most back- ward. In England wages for men average, say four shillings a day ; in Ireland, all along the west and south coast, where these peasant industries have given the popu- lation a most remarkable aptitude and versatility, men would be happy if they could be assured of regular earnings as high as a shilling a day. England, though not raising more than half her food supply, feeds her people with abundance ; Ireland, exporting large stores of food produce, has a major- ity of her people underfed and frequently on the brink of starvation. All these conditions could not be coexistent if the old labor theory were correct. The cheap labor ought to have attracted capital sufficient to make it economically of value, or by being drawn over to England have repressed THE ECONOMY OF HIGH WAGES. 41 wages there. It is not possible here to draw all the deduc- tions admissible from this parallel, but this one in proof of our thesis, that labor to become economically valuable, must have risen to a higher standard of living than these moun- tain dwellers occupy. In other words, this would be, that their standard of wages would rise with their greater effi- ciency. The advantages and disadvantages would soon outbalance each other, and practically this I found always the case. Wherever I met power-mills in Ireland, I could make a test of practical application. The low rate of wages and of living to which the Irish have become reduced through ages of oppression, has produced the result that at about one-half the rate of wages ruling in England, not one industry can hold its own against the latter country in the same lines of activity. Irish Industries as Object Lessons. The Irish industries are of peculiar interest and a fruitful source of study, as showing the conditions from which indus- trial life in general has taken its rise. In the remoter parts of the country Donegal, for instance one finds the most primitive conditions of life ; a sturdy, honest, and industrious population, anxious and willing to work. I was there after the evictions of the poor peasants from their homes on the Olphert estate. The men were erecting turf cabins, dug-outs, with walls and roofs of turf, as shelter for their families. After completing these primi- tive habitations the men tramped in gangs of twenty or thirty to Derry or the nearest harbor, to take ship to Eng- land and Scotland for harvest work, to bring home 4 or 5 for the winter. I met men who had been two or three times in America two or three years at a time, working for 42 THE ECONOMY OF HIGH WAGES. the support of their families at home. One was preparing to go a third time in his married life of seven years. After accumulating a few hundred dollars, they returned home, living with their families till their savings were used up. The children are sent to Deny and other Ulster towns, where regular labor markets exist. Here they are hired by the larger farmers and for work suitable to their tender age during the summer. At the end of the season they tramp home again with 2 to 4 in hand. In winter they attend school. Neither mountains, rivers, nor oceans are obstacles in the search after work and wages. Neither young nor old hesitate to seek abroad what is denied them at home. This is in answer to those who ascribe the poverty of these sections to the want of thrift and to lazy habits of the people. Here we find labor at its lowest pay, and perhaps its lowest efficiency, and the tools equally primitive. Con- ditioned as it is, it finds no markets for its products, and English capital, always eager to enter into the most hazard- ous undertakings in distant countries, has not found the low rate of wages under which labor can be hired there a suffi- cient inducement for employing it, except on such work, principally hand work of women, for which they have a peculiar adaptation sprigging handkerchiefs, knitting, etc. The deftness of hand of these peasant women, spending their time largely in house and field work, is very remark- able. We find the same, however, in the mountain districts of the continent of Europe. A great deal of the fine needle- work and embroidery, hand sewing, kid glove making, real lace making, and work in numberless notions known under the name of articles de Paris, etc., is done by the peasant women in France and Germany. The price paid for such THE ECONOMY OF HIGH WAGES. 43 work would not suffice to pay the expenses of the most penurious living here. The linen industries of Germany, Belgium, Holland, and Ireland have taken their rise from peasant industries. The spinning wheel used to be found in every household. In Germany, until recently, home-made linen of yarn spun by the peasants was a regular article of trade. It is only of late that hand-spun linens are gradually being replaced by machine-made linen in the finer numbers, while the cheap- ened production of cotton cloth is gradually driving the coarser peasant-made linens out of the market. However, in my recent visits, I found a good deal of hand-made linen in use still in the northern part of France and Germany. Peasant women still bring their rolls of linen to market towns, and at Leipsic during the fair I found a good deal exhibited by peasants and traders. The earnings per diem in all these occupations are very small. Still, taken collectively, they help to round out the family's income. Field work occupies the peasant, espe- cially the female part of the family, only a part of the year. In the winter months these industries give very welcome occupation and a means for bridging over periods of scarcity. Many a highly developed industry of to-day, upon which the wealth and prosperity of nations are founded, took its rise from peasant and home industries. It takes long periods of evolution till primitive peoples alienate themselves from producing everything that is needed in the home and on the farm, and till special trades arise to supply their needs. In the records of Strasburg, up to the thirteenth century we find no reference in cloth-making to weavers. We find, however, dyers, fullers, and finishers. It is evident from this that the weaving was done exclu- sively by the women of the peasantry and of the burghers 44 THE ECONOMY OF HIGH WAGES. as late as that. Before that period the dyeing of cloths was done in the same way. On the west coast of Ireland condi- tions of this primitive nature prevail to this day, which can be considered fitting backgrounds for the industrial devel- opment in progressive countries. Working for a Home Market, There almost everything is raised and produced on the land by the people. The soil is poor and does not yield much under the present system of agriculture. It is bog land, badly drained, or not drained at all. Where there is no bog the land is arid and stony. The soil has to be made by the peasant actually created before he can. think of getting any but the poorest crops. From a little patch of land, not more than a few acres, under cultivation, I have seen heaps of stones collected that would build a goodly- sized stone fence. The bog has to undergo a far more serious treatment. It has to be ditched and drained. Then a subsoil has to be made. Sand and seaweed are carried from a distance, the top of the turf is burnt, and a manure thus procured which then, with the sand and seaweed, is mixed with the soil to loosen and fertilize it. I have seen the men and women carry seaweed in hampers upon their backs from the shore up steep hills for miles into the country. It is evident that land which has to be worked in this way can only produce for the poorest living. Under con- ditions existing it can only be worked by the spade. A peasant arid his whole family working such land could not raise much surplus for sale or exchange. Land of this sort has to be worked constantly or else it falls back into a state of aridity worse than before. The land where the tenants had been evicted a year or two previous to my visit began THE ECONOMY OF HIGH WAGES. 45 to assume the character of the surrounding bog and wild land. A people living under such conditions would consider any addition to their earnings, no matter how small, a bless- ing indeed. The invention and adoption of machinery, re- placing hand labor, has dealt the severest blow to the poor peasantry of European countries. Formerly, all embroideries were hand made. White edgings and insertions in numberless quantities were made principally by the peasant women of Ireland and constituted a vast industry. All this employment has been taken from them and transferred to Switzerland and Saxony, the em- broidery machine being now found in the Swiss and Saxon mountain homes, doing largely for an entirely new set of workers what, before the advent of the machine, the needle had done for the peasants of Ireland. In such conditions the population, cut off from the sea for want of harbors with landing facilities for ships and by the absence of railroads from land communication, is obliged to perpetuate the old state of living in making everything that is required at home. The farmer is a farmer and a builder too. All the houses are built by the farmers. The houses built in the last few years show a great advance. They are better built and more commodious than those of older times. While the old houses were mere mud hovels, with the cow and the pig under one roof with the family, without parti- tions even, the new houses have separate buildings for the animals, and the dwellings are divided into three rooms, usually, the kitchen in the middle and a good-sized room on each side ; windows and doors are well put in and the roofs are slated. This is due, not to a new acquisition of skill in the peasants, but to a change in the laws which prevents the landlord from exacting increased rents from the peasant 46 THE ECONOMY OF HIGH WAGES. upon every sign of improvement on the farm. Indeed, the old laws and conditions spread like a pall over the whole land and largely explain the anomalies mentioned above. This I found not alone in poor, stricken Donegal, but in the famed Protestant part as far north as Portrush. The reputed Ulster tenant rights were by no means a guarantee against rack-renting on any visible sign of farmer prosperity, such as decent dwellings, slated roofs, and increased pro- ductiveness of the soil. Since the establishing of the land courts and other measures of protection against the rapacity of landlords, improvements have sprung up which are the natural outcome of greater security of tenure and a guaran- tee of the unhindered enjoyment of the fruit of one's labor. This only in parenthesis, and to return to our peasant industries. The clothing of the people is made by the women. They shear the wool, scour it, card it, spin it, and, if they have looms, weave it, or give it to a weaver, also a peasant. The dyeing is done with especial skill. They have many lichens and other plants which they gather and use in making dyes. Their friezes and tweeds look especially well when made up. They make very handsome cardinal arid blue friezes for women's wear, frequently adorned with a colored border. I have been shown by a peasant woman some blankets and quilts of wool of a rich cardinal, very evenly dyed. Such are the natural industrial powers, now going to waste for want of employment, of perhaps the poorest peasantry of Western Europe. They are a world by them- selves. They show us more than anything else how easy it is to establish manufacturing industries where the population is naturally gifted with all the elements of knowledge per- taining to manufacturing. These peasants are confined to a THE ECONOMY OF HIGH WAGES. 47 home market. They work for a home market. They eke out a precarious living only by going outside of their own districts and home surroundings for earnings which they cannot possibly make at home, under the conditions that have been forced upon them by the ruthless conquerors who, in successive waves, have taken possession of the more pro- ductive soil, and whose spirit was well characterized in their ultimatum to the poor Irish, "to hell or to Connaught." But the picture given here shows us approximately what must have been the beginning of the industries of the modern world, the foundation from which Europe started in its industrial development. On the continent of Europe other and far more compli- cated industries have taken their rise in the peasants' homes and are still successfully carried on there, some requiring great skill of hand and showing a depth of artistic feeling to an astonishing extent. I refer to the wood-carvers of the Bavarian and Tyrolese mountains. These poor peasants, without any art-school training, with a hand made heavy by field-work, display a fineness of ex- ecution and a depth of feeling in some of their work which I have not seen approached by any of the numberless pro- ductions of pupils and graduates of the many industrial art schools of Europe. In Ireland, charming objects of wood- carving done by peasants are thrust under your eyes on every roadside by peasant women. They are cut from bog oak, an extremely hard wood. Though the designs are limited to Irish emblematic figures of a rather conventional character, they still show much natural taste. The carvers are entirely self-taught. The few art schools in the larger towns are certainly not reached by them, and have so far not exercised any influence upon this art. Another industry, also largely a peasant industry, is the 48 THE ECONOMY OF HIGH WAGES. making of real lace. It used to be a source of income to the poor peasantry of Ireland, but fashion, more than anything, has made this in all countries where the industry exists a precarious source of income. Irish lace designs are stiff and conventional, and while the lace industry of Belgium and the Saxon and Bohemian mountain districts has received a new impetus-of late years, Irish lace-making can hardly be considered an industry now. The proper teaching in design by art schools, brought into proper contact with the lace workers of Belgium, Aus- tria, and Saxony, is freely acknowledged by the people as a constant and beneficent stimulus. I can only passingly refer to the varied industries of Thu- ringia in glass, porcelain, toys, and other varieties of fancy goods too numerous to specialize. They reach into every household in the plains and the mountains. A far more complicated industry, however, than any of these that of watch and clock making may also be classed among the peasant industries. In the Black Forest of Southern Ger- many and in Switzerland this industry arose in the early part of the century. The work is distributed to every ham- let and home in the mountains. The earnings, small as they are, have helped to keep away starvation, which was formerly a frequent visitor. Lately, machinery has been introduced to make competition with American clocks and watches possible. America, with its high-cost labor, is always the dreaded competitor of these poorest paid working people of the industrial countries of Europe. The employment of labor- saving automatic machinery of American origin in these trades is intended to bring about the basis upon which they hope to be able to maintain themselves. The use which I have seen made of American machinery in a watch and THE ECONOMY OF HIGH WAGES. 49 clock factory in Trieberg, in the Black Forest, has given me the impression however, that the results obtained there will fall quite short of the results obtained here, and that the machinery used in a country whose industries are entirely built upon the employment of machinery, largely automatic machinery', is something quite different when employed by a people whose industries have been built upon hand pro- cesses, and where the cheapness of labor is a bar to the introduction and economic employment of the American system of work. CHAPTER IV. Advantages of Old Methods in Certain Industries. House Industries economically considered. The Silk Industry of Europe. The Mode of Living. The Rate and Method of Paying. The Master and the Weaver dividing the Piece Rate paid by the Manufacturer. Aux- iliary Help, how paid. Neither Risk nor Expense to Manufacturer. ONE of the leading industries, the silk manufacture of Europe, spreads far into the country districts from the respective centres. It is as well a country as a town industry. The work is still distributed into the individual homes, although power mills are run for some of the staple goods, ribbons, etc. The silk and velvet industry of Ger- many, Switzerland, France, and Italy is conducted on about the same basis. In 1885, in Crefeld and surroundings, the power loom stood in its relation to the hand loom as one to twenty. The weavers receive from the manufacturer the silk and warp yarn dyed and ready to be put on the looms. The system has its advantages, certainly, in articles like silk and satin, over the new system of manufacturing in power mills. The advantages are so great, although the price paid by the piece to the weaver in power mills is below what the very poorly paid hand-loom weavers receive for their work, that it is not likely that the factory system, economically considered, will be found preferable, except in a country like America, which, for very weighty reasons, THE ECONOMY OF HIGH WAGES. 51 cannot possibly conduct its industries upon the basis of manufacturing just mentioned. To illustrate the working system on this plan I will give a few examples. We obtain thereby the output, the price paid, and the standard of living of the working classes under the old system. For instance, a hand-loom weaver had a piece of satin on his loom, of which the following is an account : it was of two widths on the loom 47 centimeters wide each (17 to 18 inches) and 40 meters long. The price paid him per double meter was 58 pfennige, or about 15 cents. The quality was of 1,362 reeds of 4 threads each. (Power-loom weaving in America would not be paid at a higher rate, but a fairly good weaver would turn out three times as much. This class of goods, however, is made very little in this country.) Of this quality the Crefeld weaver could make three and a half meters a day, working twelve hours in summer, and in winter, by the aid of lamp light, longer hours yet, frequently as late as ten at night. The children did the spooling, and out of 24 marks for the piece he had to pay about 3 marks per piece to the loom fixer. It takes the loom fixer about a day for a double- width piece of satin of this description. The loom fixer goes from house to house to the weavers to make ready their warps. All the weaver can earn, therefore, net for two weeks' work is 20 marks, or 10 marks ($2.40) a week. The question as to saving, where such scanty wages prevail, is naturally met with a laugh. How These Low-wage Earners Live. The mode of living of these poor people is of the poorest, and their pallid color and emaciated condition tell the whole 52 THE ECONOMY OF HIGH WAGES. sad story, "but also that better-fed people and less run-down labor would undoubtedly produce more than what these were doing.* They do not work very steadily either. A good deal of time is spent in pauses. Every gossip brings a welcome interruption. I found in the whole district, wherever I went, pretty nearly the same state of things. Men's earnings on work of this and similar character were from 10 to 12 marks a week, and women's from 7 to 8. * I came to one of these weavers at dinner time. They were husband and wife and two children and a baby on the breast. Their dinner con- sisted of soup, sourcrout, sausage, and bread. Under a plentiful supply this might be considered a fair meal. But the soup was water with milk. I could not detect a trace of fat even on the soup, though an evidence of it would have shown on the soup in the plates. The children, however, seemed to relish it. Remarking on the character of their soup and on my question what else their dinner consisted in, the wife lifted the cover off the pot on the stove, in which I saw sourcrout enough to fill a soup plate not overfull, and one little sausage of the size of a Frankfurt. Low as this fare is, and little strength as it can impart to the people who are raised, live, work, and die under it, it is by no means the lowest which supports life of the working classes of this and other districts of Germany. In the eastern provinces, Silesia for instance, the sausage even is not an everyday occurrence. These people made silk velvet, 50 centimeters, or 19 inches wide, for which they received 2.70 marks (64 cents) per meter. They work 13 J- hours, commencing at 5.30 in the morning, and do about 80 centimeters (about 32 inches) a day. The wife at intervals relieves the husband, or she works on a separate loom (at the time worked by another working- man). They gave as their earnings for the past year 630 marks ($151), and estimated the husband's part of this as 450 marks, and the wife's part as 180 marks. This, however, I will add, was the lowest rate of earnings I met with. Leaving out the wife as an independent worker, as she cannot be counted as doing more than relieving the husband, we can say that their combined earnings would have represented at that time the higher wage rate of adult male hand-weavers, to wit: 12 to 13 marks, and the husband's earnings the lower wage rate, dependent either on the better paying work or on the greater capacity for work of the weaver. THE ECONOMY OF HIGH WAGES. 53 Quite a number of them, however, have little patches of land, which supply them vegetables and potatoes, and thus render them considerable assistance. A few from better times own their own houses, but where they depend entirely upon the result of this industry they are frequently placed in a very pitiable condition, as so much in silk depends on fashion. In the very article just mentioned, what was then being paid under a limited demand at the rate stated, of 58 pfen- nige a meter, used to be paid a few years previous on a brisker inquiry at 92 pfennige (22 cents) a meter. In this industry, therefore, more than in any other, the weaver's con- dition alternates between times of prosperity and fair living and times of depression and semi-starvation. Power-loom weavers at the same time and in the same district, were earn- ing in sixty-eight hours' working time per week, from 18 ($4.32) to 22 marks ($5.28). How They Work in Lyons. In Lyons, hand-loom weavers make the finest goods, for which Lyons is renowned and unapproachable. The master weaver takes his tram and organzine from the manufacturer and brings back the finished goods. He usu- ally employs a number of workmen and women, with whom he and his wife work along, each on a separate loom. The master pays the rent of the workshop and furnishes the looms to his help. One master whom I visited had four looms on very fine silk and beaded stuff then in fashion (1887), for which he received 61 ($1.15) a meter. To show the alternations of high prices and high earnings, and low prices and low earnings, as influenced by fashion and demand, I will state that for that very material the year previous the 54 THE ECONOMY OF HIGH WAGES. weaver master received 12f. ($2.30) a meter, and of course paid the workmen accordingly. Under the reduced demand and price of 6f. per meter, the workmen, doing two meters a day, received 3f. per meter. Their workday is from 7 A. M. to 8 P. M., with two hours for meals. Out of these 6f. the workman pays a girl helper 1.25f. (24 cents), and the mas- ter pays her an equal amount. This reduces the net part going to the master to 2.37f. (45 cents) per meter. The rent for the premises in which to place four looms, inclusive of house room for the master and his family, was 350f. ($68) a year. This master made 4.75f. (93 cents) a day on each of the two looms then worked by workmen, besides the full amount of what was made by himself and his wife on the loom worked by themselves. Of course full earnings could not be made by either on their looms, ^the master being occu- pied part of his time in going backward and forward to the manufacturer and doing the outside work. Part of the wife's time is taken up in household duties. Another master, helped in a similar way, was engaged on furniture velvet of a very fine quality. He received 20f. a meter for a piece of fifty meters long. It takes an expert weaver about four months to finish a piece. It takes two weeks to mount the loom. The weaver gets IGf. a meter and makes about four to four and a half meters a week. He pays the boy helping, often a son or other relative of the weaver, 3f. (58 cents) a week, and the master pays him the same amount. This leaves to the workman 37f. to 42f. ($7 to $8) a week, or from 6f. to 7f. ($1.16 to $1.33) a day. The master makes an equal amount gross from the loom worked by his workmen, less the mounting of the loom and the preparing of the warp, which he has to pay alone out of his share. This sort of work was also then not in very brisk demand, being somewhat out of fashion, and showed the influence of THE ECONOMY OF HIGH WAGES. 55 depression in trade on the earnings of the workpeople. On the whole, these three examples show how different the earnings of workpeople are, engaged in the same industry and in the same manner of home industries, supplied with the material from the manufacturer, and doing the complete work in their own homes or in shops under the eyes of masters. The most depressed condition in the trade I found in Ger- many, where the average of wages was not over two-thirds of what it was in Lyons, and earnings in silk weaving varying between fifty as the mark of depression and a hundred as that of active demand. Lyons is especially renowned for the beauty of its work in all silk goods of a rich character. It is the leader in fashion in silks all over Europe and America. Its taste in design and color is equalled nowhere. When silk fabrics are in fashion, its workpeople are the first to feel the effects, and it is difficult often to execute the orders pouring in upon them. Not alone does the wage rate per yard rise, but work supply is abundant, and high earnings result from both causes. Of course, the opposite effect results from decline of demand. Economic Advantages of the Old System to the Manufacturer. Capital Left Free. It seems to be settled in the minds of thoughtful observ- ers that the system of work prevailing in the silk industry of Europe, as described, cannot easily be superseded. It offers to the manufacturer advantages which fully counter- balance the advantages accruing to him from the smaller rate paid per yard in power mills. First, the all-important fact that the manufacturer can employ all his capital as free 56 THE ECONOMY OF HIGH WAGES. and floating capital. He requires no fixed capital. He has not hundreds of thousands invested in brick and mortar and machinery. The looms belong to the weavers without any risk of ownership to the manufacturer. Mostly all manu- facturers, owners of power mills, and especially so in America, are bound by the necessity of keeping their work- people together. They feel impelled by this to supply work to them, even in times of slack demand. In America the workpeople are apt to leave the neighborhood for other employments wherever they offer. The manufacturers, hav- ing perhaps spent years in training their help to their work, know the difficulty of getting a supply when needed. For these reasons they quickly overstock themselves with goods made for stock instead of goods made on orders, soon become involved, have to raise money to keep themselves afloat, and have to sacrifice stocks in order to raise money and keep going. In times of prosperity and active demand earnings and profits are high. But few in America are cir- cumspect enough to lay by their surplus profits to tide them over a rainy day, sure to come with the high-pressure industries in America. The European manufacturer is not so eager to extend his works, adding machinery and buildings, but is satisfied to lay up his surplus profits as reserve capital. The American system gives great results in times of active demand and unrestricted outlet, but shows frequently disastrous results when depression sets in. The manufacturer in Europe in this and similarly conducted industries has no responsibil- ity and no engagements. He works on orders ; he does not start his looms till he has received the orders which come from all the markets of the world. Except in articles for which he is certain that he has a ready demand in the near future, he seldom does give work except after it has THE ECONOMY OF HIGH WAGES. 57 been ordered. A change of fashion can be easily met by him, and although dulness may be a loss of profits and trade, yet it is no risk to his investments, because he has no capital invested in a factory, and is not compelled to work on stock to keep his help. The system of working on the domestic industry plan saves, besides all general manufacturing expenses, the inter- est on fixed capital employed and most of the auxiliary help necessary in the running of a mill. His items of cost are always given, fixed quantities. The savings in the general expense part of the manufacturing cost, inter- est, and fixed charges are so great that they would com- pensate for any saving in the power-mill rate of wages per piece. There are, however, other advantages in hand-loom weav- ing in silks. First, cheaper silks can be used to advantage, while in power-mill weaving, and especially in America, with less skilled workpeople, a much stronger and better quality is required.* Another point is this, that goods made on hand looms are quite different from those made on power looms. The hand-loom product shows greater softness, suppleness, and character than power-loom work. Of course, in a general sense what can be made on a power loom can be made on a hand loom, but to the eye the two are quite different things. People are guided by their tastes, and are determined to have that which pleases their senses most, their eye and their touch, and it is plain that they will continue to be guided by preferences in this direction. The hardness of American, the softness of Lyons fabrics are features well known to all wearers of silks. * See chapter on silk. 58 THE ECONOMY OF HIGH WAGES. The Evolution of Industries. It is very important to keep these distinctions in view as starting points for an understanding of the industrial prob- lem under examination. The industrial development of all Europe has sprung from conditions like those of Ireland, described. The conditions as we find them in outlying countries of Europe, mountain districts of the continent, the islands and highlands of Scotland, and the west of Ireland, are those which prevailed in more advanced industrial countries at more or less remote periods. We can follow the process of industrial development of centuries under our own eyes if we go from the stagnant to the more advanced countries. We observe in the economy of production a process of evolution that has been going on from the remotest to the present time. We need not go back into the historical records preserved to us in libraries, or in authropological museums, to get back to the begin- ning. The past from which our civilization has sprung is still living with us. All we need to do is to go among primitive people and study their methods of work, their tools and employments, and mode of living, and we can surely find the prototype of our own ancestors in the differ- ent stages of their development. As the tools have changed, so have the systems of work changed. The simple work- shop is a step beyond the original house industry ; the work- shop of larger dimensions, with divisions of labor added, is an extension of the primitive workshop ; the factory is an extension of the workshop, and the power mill an advance on the factory. The people employed are the people born and bred on the soil for generations, used to all the employ- ments by heredity, as having been for generations, perhaps, the occupation and source of maintenance for all the mem- THE ECONOMY OF HIGH WAGES. 59 bers of the family. The introduction of machinery collected larger numbers under one roof, but they were always the same people, and always working the same materials. Nor has the power mill changed very much in that most impor- tant part of manufacture the nature of the workpeople. They have all the peculiar fitness resulting from heredity and long contact with the industry in which they are em- ployed. The workers in the Staffordshire potteries are all Staffordshire people. They all talk the same dialect and have the same interests. One does not find many that are not born in the same county. The cotton mills of Lanca- shire are all peopled by Lancashire people, the Yorkshire mills by Yorkshire men and women, and so on in all the countries of Europe. Here, in America, industrial life starts from entirely oppo- site grounds. We have no house industries to start from. The population is a migratory one. Americans seldom keep to one industry all their lifetime. The children of Americans hardly ever now enter factory life. The factory is started on an artificial basis ; that is to say, a collection of capital, building of a mill, stocking with machinery, and a collecting of workpeople from wherever they can be brought together. While the American system has its great advantages, it has certainly its disadvantages equally pronounced. The highest stage of development in the productive process, however, has been reached in America. Of all others, the working classes are benefited by this industrial develop- ment. The conditions of the working classes necessarily are improved by every progress made in the economy of production. Actual wages measured by their purchasing power rise with a rise in the productiveness of labor. Where the labor processes are most advanced and aided by science 60 THE ECONOMY OF HIGH WAGES. and the application of its findings and discoveries to pro- duction, there, naturally, labor is most productive, and the share going to labor for its remuneration is the highest. The labor cost by the piece is reduced, but the earnings of the laborer are increased, by the application of a new- invention. ( The quantity produced in excess of the quantity produced by the former process must be large enough to outbalance by far the deficiency caused by the reduction in the piece price. The introduction of machinery or any im- proved method in place of an old one, without this compen- sating result, would not alone find serious opposition on the part of the worker, and therefore be adopted with reluctance by the manufacturer, but the manufacturer himself would otherwise not consider the inducement sufficient for the capital sacrifice it would entail on him. The working classes, however, are not only producers, but consumers; and as consumers the purchasing power of their wages is of equal importance to them as their rate in the sense of earnings. Now, every improvement in the method of pro- duction which increases productiveness of labor not only leads to higher earnings, but also to a cheapening of commodities. The cheapening of products means nothing less than making the product accessible to classes of the population who had not been able before to make use of the article at all, or in a more limited way than they would and could under new and cheaper processes of production. If we were to return to-day in our processes of manufact- ure and production to the economy of production ruling a hundred years ago in the most advanced industrial coun- tries, we could not produce one-fourth of the goods which now, on account of their abundance, have become necessa- ries of life of our people. Their price would be so high that none but the wealthy could afford to buy them. The widen- THE ECONOMY OF HIGH WAGES. 61 ing of markets, the necessary aim and object of manufactur- ers, can only be reached therefore by a cheapening, which follows improvement in the economy of production. The poorer classes, meaning the bulk of the nation, being those where an increasing ratio of absorption is almost unlimited, , are therefore necessarily those benefited by every progress made. The inventor and employer of improvements is by necessity compelled, in other words, to carry into the humblest home, comforts to which it had not been used before. This is, so to speak, an automatic process, con- stantly going on, by which gradually but surely the progress in the economy of production brings comfort and well-being into wider and wider circles. The Producer and Consumer are One. Increasing Productiveness is Increasing Consumptiveness. In this self-acting principle of an ever-ready market opened by increasing productiveness, the statement quoted from Bicardo, and on which the general theory on labor and wages criticised above is based, and from which our dreary labor views obtain their principal support, finds its easy refutation. The four coats produced with the same amount of work which was formerly required to produce one coat, have to be consumed. If they could not find consumers, the employer of the machine or of the improvement by whose aid the plus-product in a given time can be turned out, would not go to the expense and inconvenience of the change. The economic inducement would be wanting the change would not be made. But, leaving out the wealthy classes, the absorbing power of the people is in an increas- ing ratio with either a lowering of prices of commodities at steady wages, or with rising wages and steady prices, and, 62 THE ECONOMY OF HIGH WAGES. certainly, as the practical case stands now, with rising wages and declining prices. Either one or the other, and, as we have seen in our own time, the latter case results from improvements in the economy of production. The standard of living of a country makes the general rate of wages. From reasons given above (Chapter II.), the standard in America being, through general causes, a very high one, the rate of wages is a high one. The absorbing capacity of the people is the only limitation of market to which the plus-product is subjected. So long as 90 per cent, of our population have to support families on incomes below $500 a year,* it is self-evident that we have an open market at our immediate doors to absorb products which are now only accessible to that class of the population which lives at a somewhat higher rate of expenditure, i.e., can expend a larger amount on products of labor. But $500 expresses a maximum average of earnings. A very large half of our population has to subsist, with a family group of three, f on less than $400, and from there downwardly, say $300, another large class have to subsist. If all these bread-win- ners could be made to live on $500 per family group, by a sudden change in their incomes, there would be a market for commodities created which would set our mills and workshops to a very severe test of ability to supply the demand. The endeavor to obtain the highest rate of wages ruling in the country and the industry, and the other endeavor of the working classes to maintain the rate of wages once reached, are not stronger ruling economic forces than the passion of man to obtain as high a rate of comfort * For detailed statement of incomes of working classes see Schoenhof, " Industrial Situation," Chap. XII. f This is based on the table of "occupations," in the census, where one wage earner represents three heads of the population. THE ECONOMY OF HIGH WAGES. 63 and well-being as his income, under due provisions for the future, will allow him to indulge in. To maintain themselves in their standard of life has given impulse to the most heroic struggles of the working classes. They have sacrificed immediate well-being, and even the wherewithals to maintain themselves and their children, rather than submit to wage reductions which, in their views, threatened a reduction in the standard of life. But while sacrifice of immediate well-being for an ulterior end deserves our admiration, from the point of view gained so far by our inquiry into the " Economy of High Wages," it will be seen that, economically, these acts speak of a high degree of wisdom. On the other hand the attempts of the employing classes to depress the rate of wages show fre- quently an entire misapprehension of the principles under which production is conducted. Most of the strife would disappear if it were more fully recognized that a high rate of wages has all the time been the powerful lever to reach- ing the low cost of production which practically rules to-day in the industries of the United States. The Economic Value of High Wages generally not Understood. A high rate of wages expresses a high rate of productive- ness, and its converse a high consuming power. A relatively high consuming power, high standard of living, is required to make the laborer efficient, strong in body and in mind. Without this, labor remains economically more or less ster- ile, for which an adequate proof will be given in the further progress of this work, treating the industries of the country seriatim. Employers can therefore under no possibility lose where a permanently high rate of wages rules. They cannot 64 THE ECONOMY OF HIGH WAGES. possibly lose under a rising rate of wages even, as a rise in actual wages is only possible with a rise of the productive power of labor. A higher rate of wages than the one of a previous period simply registers the change which has gone on in the direction of improvement in the economy of pro- duction. But, instead of being injured, the employer gains positively by the rise in the standard of wages through the in- creasing demand thereby created for the increasing product. The demand for this plus-product can come from the labor- ing classes only, the wage earners, and the people of small incomes. The well-to-do are numerically not a large class. Considerably less than one-tenth of our population would cover them. Of them, however, it can be said that they would not increase their rate of consumption of the neces- saries of life either from a cheapening of prices or an increase in income. It is therefore of the working-classes alone, that a market for the plus-product can be expected. Of course, I include here the farmer who tills his farm without the aid of hired help, except at harvesting. With all of these a rise in income means an increased consump- tion of commodities. Everything in the wide field of economic phenomena tending to show the benefits arising to the employing classes of a high rate of wages, it is not a little astonishing that such constant repressing force should be employed to oppose a rise in wages. In the lower wage countries this tendency exerts itself the strongest. In Germany, we find in mills a certain maximum day rate fixed. This is fixing the piece rate on the time wage basis. The workers to earn this rate have to turn out a fixed quantity. If they do less, proportionate deductions are made. Under more encour- aging aspects they could produce greatly more. But not receiving the benefit out of the plus-product which is THE ECONOMY OF HIGH WAGES. 65 clearly due them, but on the contrary knowing that a greater quantity of work done would lead to a reduction of rates or increase of the ratio of output for the day rate fixed, they certainly in return make an economic use of their only salable commodity: their working power, vital power, which the employer considers himself not concerned to replenish. Many manufacturers in Germany expressed themselves to me in deploring terms of this state of affairs. They were wise enough to see that this short-sighted policy is the chief cause of Germany's low productiveness of labor. Those following an opposite policy had most satisfactory results. " They don't eat and don't work," said a shoe manufacturer of Vienna, when we compared notes on the productiveness of Austrian and German labor and of American labor. "Bread and beer-swilling and an occasional bit of sausage cannot give strength sufficient to compete with you." It is then clearly evident that there is no greater fallacy than the doctrine that a low rate of wages is necessary to in- sure a low cost of production. In fact, the opposite is shown to be the true principle upon which the productive processes of nations rest. Yet, how far are we still from recognizing this redeeming fact? The whole armature of possession, governments, and the schools of learning, were put into active service to defeat the attempts of the working-classes at bettering their position; to wit: increasing the rate of wages to enable the buying of sufficient food to replace the wear and tear of tissue. In^England this was the condition in the first half of the century. It is the condition of the continent at the end of the century. The improvements in the condition of labor are due to this, that the working classes were in a position that they could wrench from the privileged classes the necessary concessions which alone 5 66 THE ECONOMY OF HIGH WAGES. could enable them to reach the position which they occupy to-day. This fortunate position is the only vantage ground which England possesses and which secures to her the safe and undisputable rulership of the commerce of the world. Reluctantly, sullenly even, the employing classes there, acquiesce in the new development. By education and association they are made to still cherish the belief, despite the world-facts surrounding them, that a low rate of wages is necessary to a low cost of production. The growing tide of democracy in England can afford to laugh at an occa- sional outbreak of rhetoric repression. It is not dangerous there, this sort of atavism. But not so on the continent There the governments are still the willing instruments. Recent years have brought so many examples, that we need not fear contradiction when we say that the repression of the working-classes is still con- sidered to be one of the functions of governments. The more or less active interference of the military forces depends simply on the more or less extensive or intensive mode of protest of the working-classes against the old, incarnate labor theories, so destructive to the countries where they prevail and guide the economy of production. CHAPTER V. The Efficiency and Productiveness of Labor increased by Education. The Ideal Part in Production. Change of Sentiment in Europe. Aid given by Art Instruction to Industries. The Effect on English In- dustries. The French System of Education directed to Industrial Ends. The Industrial Help of Art Museums. Cheap Labor and Ignorant Labor Synonymous. PERNICIOUS as the labor views just treated were, and little calculated to reach the end at which they aimed, the ideas prevailing in regard to the intellectual outfit of the laborer were still worse. They were a necessary sequence of the low wage theory. Given the one, the other must follow. A plentiful supply of cheap labor can only be secured by depriving the laborer of all means of cultivating his mind. If he becomes intellectually improved and instructed he will become restive, dissatisfied, and ask higher and higher wages. This can be avoided only by reserving the educa- tional facilities of the age to the privileged few. In England, especially, the battle fought against educa- tion of the working classes was a long and bitter one. Manufacturers held, and I have met not a few who still hold, to the creed that labor would be the more satisfactory the less it knew, outside of the work in which it was employed. Starting on this doctrine, as a matter of course, the intro- duction of common schools was opposed by the employing classes with a vehemence reminding us of the Dark Ages. The science and art schools are frequently spoken of as 68 THE ECONOMY OF HIGH WAGES. instruments for spoiling good material, not alone in Eng- land. Though these voices are isolated, yet they are echoes from a not distant past, when they expressed the opinions of the employing classes generally. These crude opinions are making room for more enlight- ened views since experience has taught a different lesson. Countries more backward in industrial competition were soon to make rapid strides toward gaining trade which English manufacturers were in the habit of considering their own heirloom. If anything, a loss of trade is an eye- opener in England. This successful competition was recog- nized by England as well as by France to be due to a more thorough teaching in science and art schools, especially in Germany, and the wider dissemination of knowledge among the German working classes. Now, of course, a different spirit is beginning to manifest itself in England and in France, the two countries where the introduction of more enlightened systems was opposed most bitterly by class interests. As I have shown in my report on industrial education in France* the system of education introduced into and now extending over the whole country is based on the most enlightened and comprehensive theories of education. The end in view is to give to the people, the poorest included, all the advantages of mental, manual, and technical training that can be given in the school years up to the age of fourteen, and as much supplementary education as may be needed and desired by the youth of both sexes for special pursuits. As a practical educational system, with the object of making efficient workers, I do not believe that there is else- where a system of education equal to that of France. Eng- * Technical Education in Europe. Department of State, Washington, D. C. (1888.) Part I. Industrial Education in France. THE ECONOMY OF HIGH WAGES. 69 land, in its Technical Education Act passed two years ago, has laid the seeds for a most thorough reform in school education on as wide a basis as that of France. In theory, at least, it is now everywhere conceded that the efficiency of the workpeople grows in proportion to their intellectual advancement. All the ages behind us have historically demonstrated this as a fact. But it is well known that facts were not always by deductive politi- cal economy considered a necessary ground for theories to stand on. If the facts contradict the theory, "so much the worse for the facts." The brightness and quickness of youths who had gone through the schools, in the manufacturing districts of Eng- land, contrasted very favorably with the dulness of many of the adults who had none of the advantages of the younger generation. With the advantages which the in- dustrial nations of Europe possess in the hereditary skill of their working classes in a variety of special industries, over America, and with a dissemination of knowledge and education among them, they occupy a very strong vantage ground. Europe is now full of the eagerness of nations not to be outdone by competitors in the establishment of such educational advantages as give the greatest facilities for the development and strengthening of industries. The Ideal Part in the Economy of Production. The ideal part relates not alone to the intellectual outfit of the laborer, but also to all the intellectual forces set to work in the creating of the huge productive machinery of the age. For the full understanding of our problem we must separate industries into two classes : Those relating to 70 THE ECONOMY OF HIGH WAGES. finished products, articles of use and fashion, and the cruder manufactures. In the former, art is the great teacher ; in the latter, science. First, art teaching. Here England has been the first to recognize the importance of a national system of industrial art education. Experience of a disappointing nature has given the impulse to the creation of a system which has undoubtedly borne excellent fruit. The Universal Exhibition of 1851 showed to the Eng- lish how poor and tasteless in design and color many of their industrial productions were, as compared with those of France. Far-seeing and leading statesmen recognized the necessity of action in order to insure the full main- tenance of the position of Great Britain in the world of trade and manufacture. To this the science and art department of South Kensington owes its origin. Art schools are now distributed all over the industrial centres of the United Kingdom. They produce good draughtsmen, designers, modelers, etc. To my mind, however, the sys- tem needs remodeling, and requires more independence of teaching in the different centres. All the work of the dif- ferent schools bears one and the same imprint, that of South Kensington. It is too much after the same pattern, not enough scope being given to individuality and to the per- sonal intuition of the art master as well as of the pupil. The paying by results is held by many to make the masters too anxious for drilling and getting prizes. In spite of all this, the schools undoubtedly benefit the decorative industries. The pottery, metal, and glass in- dustries, in their continued ascendency over their Conti- nental competitors, would alone speak favorably for the schools. The mere fact that Continental competitors copy so much from English pottery and reproduce the richer THE ECONOMY OF HIGH WAGES. 7J work of English origin in cheaper production, not by any means through their cheaper labor, but mostly by following the same design, leaving out a great deal of the richer work, however, gives a silent but eloquent acknowledgment of the superiority of English work and taste in this branch of in- dustry. The English take talent from wherever they can get it when they find it superior to the national product. Native talent, however, is coming more and more to the fore. A few of the leading art potteries and other art industries employ French directors. Foreign talent is un- doubtedly attracted by the high pay which the English are always ready to give to superior skill and talent, but it plays no important part. Native talent in pottery, paint- ing, modeling, cameo-cutting, in glass, and in metal chasing produces work in design and execution inferior to none of France. The Eoyal Worcester factory's work ranks with the highest. If imitation is the highest kind of flattery the homage paid to this remarkable firm is certainly the great- est acknowledgment of its superiority. Yet, as I have been assured by the director and principal owner of the factory, they educate all their artists themselves. The director showed me, however, very costly pieces in their museum, which they buy regardless of price if they con- tain elements which, either by their originality or beauty of composition, color effect, etc., they can make useful in their own work. They do not shrink from spending hun- dreds of pounds for objects small in size, but full of leading ideas. A very small Japanese vase was shown me, picked up in 1876 in Philadelphia, for which an extraordinary price had been paid, by which, it appeared to me, many of the Royal Worcester ideas must have been suggested. The Philadelphia Exhibition of 1876 showed us the 72 THE ECONOMY OF HIGH WAGES. greatness of Japan as an industrial art country. In Amer- ica articles of commerce of Japanese art are only cheaper specimens, selected with a consciousness of the high-tariff duties to which they are subjected when they enter this country. The Paris Exhibition of 1889 was full of pieces which the trade of England even, free of any tariff charges, would be afraid of handling. They gave an idea of the capacity of that wonderful people for art work. There is object teaching ready for every one able to understand and profit by it Teaching Industrial Art. I take it for granted that everybody will understand that when I lay such importance upon industrial art teaching I do not mean that it is only the regular school which can give it The school is only one of the many methods open for teaching. If art taught in schools connected with facto- ries like that at Sevres, the Koyal Worcester, etc., makes the future workman more proficient in his special branch than in the special school, this mode of teaching is only substituting one for another. A proper teaching in well- organized schools, however, gives undoubtedly a broader foundation. Industrial art schools abound especially in Germany. The World's Exhibition of 1876 in Philadelphia did much in opening the eyes of governments and industrial insti- tutions in Germany by impressing them with the poverty of their productions compared with those of other nations. Great support has been given since to industrial art schools and technical schools, with a view to giving much-needed help to industries. The graphic arts especially have found great development through the influence of industrial art THE ECONOMY OF HIGH WAGES. 73 schools. In ornamentation, design, color, and general out- side appearance, they have made great progress. This shows in the pressure which they have been exercising on foreign competitors in neutral countries, especially on the English. The intrinsic value and quality of their products, however, have not improved equally. It is undoubtedly due to this inferiority in quality that they not infrequently lose position in foreign markets. What progress Germany does make, however, is, more than progress anywhere else, traceable to the influence of the art and technical school, especially in color and chemical industries. Some of the schools, like that at Crefeld, show remark- able completeness of organization, teaching all the elements of production in that most complex of all industries, the manufacture of silk. Schools of this character would be of the highest value to America, where industries are a matter of creation, and not of gradual growth and development, as in Germany and the industrial countries of Europe, and therefore only the more needful. In France, art teaching as an organized course in public instruction is of recent times. The inherent artistic feeling of the French was considered a sufficient fund to draw from. The teachers and directors of art schools in Germany are to the present day fully conscious of this superiority in the French, and readily acknowledge it. The natural sense of taste shows so prominently in all articles of French origin, that little need be said on the subject. Still, with all this natural advantage, thorough art teaching in all branches of the industrial arts, wherever it can give additional impetus, has been considered necessary by those shaping the destinies of France. A course of art teaching has been estab- lished which could not be broader, covering the whole system of public instruction, nor higher in its reach, as it 74 THE ECONOMY OF HIGH WAGES. ultimately connects with the Ecole des Beaux-Arts, the crowning edifice. At the Paris Exhibition of 1889 the exhibits clearly showed to any one following the industrial development of nations the great help which the schools have given the industries of France. The exhibits at the Exposition of the different art schools, which I visited in 1887, were especially gratifying from the industrial point of view, giving a clear indication of what class of workers would soon be spread over the industries affected thereby. On the whole I found industrial art teaching in France more satisfactory than anywhere else, in- asmuch as there is not the gulf between what is generally called real art and industrial art. No nation understands so well as France, that art in its highest productions is but speaking the language of the people. The greater the art, the more direct and eloquent the appeal to the common understanding. The greater the art, the truer to nature. Hence, a saturation of industrial pro- duction with the true spirit of art cannot have any but the most salutary practical results. The more this quality be- comes part of industrial productions accessible to the masses of the people, the more extended the markets, of course. And so it follows, that though the cost of production need not be enhanced, the benefits and profits to industries must grow with an extension of art teaching and artistic feeling to all classes engaged in production appealing to taste. The Industrial Art Museum. The superior advantages given to the industrial countries of Europe and the workers engaged in these industries, which we may class, for want of a better name, under the general name of taste industries, are by no means limited to THE ECONOMY OF HIGH WAGES. 75 hereditary skill, natural taste, and art teaching. The culti- vation of taste bj the sight of beautiful objects, the special productions of different countries, is certainly a great help in raising the art standard of a nation. There can be no doubt that the high perfection in industrial art works of the German master craftsmen of the fifteenth and sixteenth cen- turies was due to the custom of making it a condition for admission into the craft that every Draftsman applying for his diploma of mastership should have spent some years away from home and in foreign travel. The workingman travelled from place to place, and frequently visited far dis- tant countries. This custom prevailed up to recent times, being still in vogue within my own recollection. I remem- ber the familiar figure, knapsack on back, stick in hand, tramping the highroad from town to town. The workingman's tramping it certainly did not detract from his ability to take in the varying aspects and impres- sions of different countries. The trades then were, however, conducted on different principles from the modern idea and the factory system. The master workman had to be master of all the parts belonging to his craft. The builder was not only a bricklayer or mason, but also skilled in the art of drawing his plans and doing practically what a modern architect does to-day ; the same with the cabinetmaker, the weaver, the worker in textiles and metals, etc. By the modern system of division of labor, much of the task is taken out of the hands of the individual worker and given to special hands ; still there is 'no doubt that even work so subdivided will be benefited if the worker doing only a part in the whole possesses trained skill and developed taste. The printer in calico print works does not make the design, but if he has no eye for the harmony of color he is very apt to spoil a good pattern. 76 THE ECONOMY OF HIGH WAGES. Now craftsmen can no more take their lessons from travel in foreign countries. The importance of having the great storehouses of the past and present open has, however, been recognized, and art industrial museums have been created which offer an always-ready opportunity to everybody who wants to cultivate his taste and enlarge his ideas. Here, again, England has been a leader, followed now by almost every natign of an industrial character except America. The South Kensington Museum contains treasures in every conceivable branch of industry, collected from all parts of the world, and leading us back to remotest times. Every industrial centre in England has an art museum of its own, to which South Kensington periodically sends exhibits from its vast stores, which loans are replaced from time to time. The South Kensington Museum, with its numerous branches and its whole organization, is a result of the Exhi- bition of 1851. Being first in the field as a collector from old treasures stored up in palaces, monasteries, and in the hands of private collectors, its task was an easier one than that of its imitators. It does not belong to my present task to describe in detail these vast collections. Still, it may be well to call attention to specimens of what we are pleased to call industrial art, to show what treatment was given it by the ancients, to the collection of Tanagra figures in South Kensington and the British Museum. A figure of a reclining lady, four inches by eight and six inches high, was paid for at the price of 270 10s. The inimitable ease of pose, the grace and beauty of the figure, brought out even more by the charm- ing arrangement of the drapery, which the Greeks employ to cover the nude form, not to conceal it, make the impres- sion that such treasures are well acquired at any cost, though they be terra-cottas and produced in quantities as articles of THE ECONOMY OF HIGH WAGES. 77 trade and manufacture by the potters of Tanagra. Indeed, we see in the British Museum the moulds in which they were cast and a partly-finished model, part of the nude not yet covered by drapery. Another specimen of ancient art may be mentioned here. It is the most expressive lesson extant of the highest per- fection in what we should call to-day industrial'art objects. I speak of the famous Portland Vase. It is the greatest masterpiece of its kind, and is fitly placed in the gem room of the British Museum. It is made of two layers of glass* The lower layer, forming the body of the urn, is of black ; the top layer, of white glass. By cutting away the upper part, enough is made to remain to make the design, as in all cameo cutting. The difficulties of the task are very great. The Webbs, of Stourbridge, who have made a specialty of cameo plaques, and produce beautiful pieces on this prin- ciple at a value of a hundred guineas and upwards, showed me a piece which cracked in the hands of the artist when only a few hours more work was required for com- pletion. The bringing out of the design depends on the darker or lighter tones. These are produced by the cutting away of more or less of the white substance. Now, mis- takes cannot be remedied as when the matter is only laid on as in paste-on-paste decorations in pottery. If the technique offers great difficulties in a plaque, a flat surface of the size of a dinner-plate, how much more in a round body like a vase! Yet the figures of gods and mortals actually live and speak. Posture and bodily perfection would do high honor to the greatest sculptors of modern times. The limbs show that they are meant to do service on earth ; that even if some of the people represented are used to living in am- brosial heights part of their time, their feet and ankles are in proportion and fit for use among mortals. 78 THE ECONOMY OF HIGH WAGES. In the work of Sevres and of Mintons' in Stoke we Bee still too much of a pandering to a taste which runs more after an imaginary than the real type of the beautiful. In ancient plastique art we see the best living models reproduced ; in the modern we see*them "improved" and "idealized."* *How the "improver" and " idealizer" is equipped for his ambitious task is apparent from the many examples of his skill, which he has seen fit to place along with the specimens of ancient art which have received his attentions in the restorations. They fill all the museums of Europe. The forms of gods, heroes, and mortals are made grotesque by fhe additions of arms, hands, and feet evidently stolen from some clumsy clown of awkward manners and appearance. They had even attempted to restore the holy lady of Milo, the goddess of incomparable hauteur and loveliness, of unsurpassable lines and forms. The artists who attempted the work were unable to come within an approach to the task. The age seems at least to have reached a first step to progress, a conscious- ness of its incapacity, and so the restorations were removed and the foam- born Aphrodite stands to this day, in her solitary retreat in the Louvre, without arms and without her left forefoot, and without toes to her right foot. More fortunate than her brother of Belvedere, though muti- lated, she will never be an object of derision should the gods ever return from their exile among the barbarians, who have gone so far as even to scrape the classic forms and thereby destroy their beauty forever. But the most astonishing example we find in two statues in the Louvre two statues called "Venus Accroupies." The one was found at Vienne, and the other at Tyre. Though sepulchered at distant places, they were evidently twin sisters, exact likenesses of one another in size, pose, and character. The one was found in a perfect state of preserva- tion, the other only the upper part of the body including the hips. The missing lower body had to be restored by the artist, equipped with all the art cunning of his craft. The restoration stands an eloquent admission of " non possumus. " At about thirty feet distance from the complete classic work stands this half-classic, half-modern work of art, a sort of hermaphrodite, because the upper part is that of lovely woman- hood, the lower seems to belong to one of the more massive, coarser sex. Aside from the absence of the fine accentuations in lines, which make classic statuary so wonderfully alive, this restoration, with the original actually completed before the restorer's eye, is in dimensions of a body twice the weight of its upper part. The statue restored is a standing THE ECONOMY OF HIGH WAGES. 79 Therefore, a return to classic art means a return to nature arid its never-closed storehouse of information. These few types show us how the ancients regarded " industrial art." We cannot go astray if we follow closely in the track cut out for us. From my observations I carried away one general im- pression, the expression of which will not be out of place here : that, at least in the aesthetic side of industrial art, the present, no matter where, with all its unbounded aux- iliaries, has no standing before its ancient teachers. The skilled weaver who makes his own design and dyes his own colors is not reached by all the complexity of modern textile industry. The illuminations in the old missals of the fourteenth and fifteenth centuries show a delicacy and richness of tints which after five and six centuries have more wealth of color than if products of yesterday. While the wall paintings of Pompeii and Egypt, not to speak of those of the Renaissance, live to the present day, the fres- cos of the Maximilianaeum in Munich, hardly forty years old, have already crumbled away. The most remarkable work of graphic art is the Book of Kells in the National Library at Dublin. This is a work of about the seventh or eighth century of our era, a time when all Western Europe was still steeped in barbarism. The delicacy of colors, the treatment of concentric lines, the general harmony, give the illuminations an ornamental effect unexcelled in any period or any country. Nowhere, however, have I found a museum as an aid to accusation that our age has lost, or, perhaps, not recovered the correct vision which antiquity possessed and which enabled it to produce master- pieces in the workshop, perhaps, where the atelier and the studio stand aside in dull mediocrity. 80 THE ECONOMY OF HIGH WAGES. the development of a special industry so complete as the industrial museum at Lyons, of which I have given a full description in my " Report on Industrial Education in France." Here, also, the remoter period shows the greater wealth and warmth in color and design. There we see all the greatness of the Venetians of the thirteenth century mirrored in their silks and velvets, as we see it in South Kensington and elsewhere in their ancient glassware. We understand why they prohibited their craftsmen from going abroad, why they made hostages of the relatives of these craftsmen, even to the penalty of death, if they did not return within a given time. In the aesthetic part of art industries we have a great deal to learn ; we find, when examining the treasures of these museums, very little to be proud of in our own achieve- ments. In Germany and Austria almost every town has its museum, many of them organized with a view to help- ing existing industries. They are, however, on a smaller basis than the South Kensington Museum, but are all excel- lent in their way. Yet being new, supplied only with lim- ited funds and largely dependent on aid given by private individuals, they cannot, of course, be put in the same category with their English prototype. In addition to the objects exhibited in these museums, the art libraries attached to them are of great usefulness. These libraries are open to everybody, and contain almost every known work relating to industrial art. Their port- folios are full of designs and reproductions of artistic work. In this manner a constantly flowing source is open, from which those interested can take refreshing draughts. CHAPTER VI. Science and Art powerful Factors in the Economy of Production. Cheapening of Price. Influence of Science Schools. Technical Training. Art and Technical Schools greatly needed in the United States. Scientific Methods are quickly adopted. American Invent- ors easily lead the World in improving Mechanical Appliances and are ably assisted by the Workmen who handle the Machines, but the Chemists of this Country are far behind those of Europe. Cheapening the Cost of Production. I HAVE endeavored to outline the elements which combine in giving character and value to manufactures, aside from the material part of the work that may be in them. I have found it necessary to show the superiority of Europe over America in possessing a stock of working people, born and trained to the trades in which they are engaged. They bring to their work a certain indefinable skill of eye and touch which shows itself in the fabric, and which cannot be put into it by any substitution from without. How this mani- fests itself practically in all our importations from Europe, I shall show later on in dealing with the special schedules of our tariff act. The word taste alone will hardly express the full meaning I wish to convey. But I find no better word by which to express all that makes an article attractive and induces people to pay a higher price than for the American counterpart. Our large importation in finished goods is due to the fact that they show attractive points in their general appearance, color, design, and finish, which for lack of skill or adaptation are wanting in those produced here. Others we cannot manufacture, because other conditions may be 6 82 THE ECONOMY OF HIGH WAGES. wanting. In what we do manufacture successfully against foreign competition, the labor cost is very seldom a consider- ation. Wherever quantity of production comes into play, our superior machinery, working methods, and the energy of our workpeople are fully able to cope with that part of the question. In many lines training given in art and technical schools would be of much greater service to our industrial classes than all the tariff increases repeatedly enacted for the fostering of home industries. To this proposition our manu- facturers generally answer that they can buy talent culti- vated abroad much better trained than they could expect to get here, even if they had these schools. This may be true so far as leading artists and designers are concerned. It certainly cannot apply to the many who would be benefited by this training and distributed into very important though minor subdivisions of manufacture. Besides, experience speaks against it. The same views were formerly held in European countries, but they are abandoned in the light of the manifest advantages of the introduction of art and tech- nical training in the different excellent schools that have sprung up all over Europe. Superiority of English Work. There is no manufacturer or workman so proud of his rule-of-thumb efficiency as the English, and speaking from practical results no one else has a right to be so proud of it Strange to say that in many lines of manufacture where technical skill and science play the greatest part, Germany, with all the help it receives from its school training, has not been able to approach the superiority of British work. The color and finish of cotton velvets, for instance, and of seal plushes in silk, to name only a specimen or two, are of such THE ECONOMY OF HIGH WAGES. 83 acknowledged superiority that the English more than hold the market against the rivalry of Germany. Still England recognizes the importance of technical training, and has gone to work with open hand to supply its coming generations with the means of increasing efficiency. This is due to the fact that while Germany has not been able to supersede England in neutral markets, the English see clearly that their rivals are approaching them perceptibly, and by means of nothing else than their technical and art schools. If any nation by reason of its development from an agricultural into a manufacturing nation (whose working classes are mainly recruited from European unskilled labor) has the need of such institutions as we have been describing art schools and technical schools it certainly is the great republic of the United States. Strange to say that, few as have been the attempts to establish industrial art schools, most of them seem to die of inanition due to the neglect of government and industrials. General McClellan, while governor of New Jersey, interested himself earnestly in establishing an art school in Trenton. He succeeded so far as to get it started with the support of the manufacturers. But even this useful enterprise in a centre whose chief indus- try is an art industry, viz., pottery, went to pieces again after his retirement from the governorship. The waste in American mills and much of the bad work done are due to the absence of special skill in labor as well as in the labora- tory and the management in different branches of the works. Loose and even corrupt practices on the one side and in- competency on the other have frequently led to destruc- tion of wealth where all other elements of prosperity were present. Since the establishing of the Institute of Technol- ogy in Boston it is acknowledged in that centre that much has been done toward the eradication of these evils. 84 THE ECONOMY OF HIGH WAGES. Helps in Technical Training. The great corporations in our leading textile industries would be especially benefited by schools furnishing trained American help in science and in art Our people are still engaged in the task of subduing a continent. The extent of the territory progressively covered by an enterprising population still absorbs, so to speak, the intelligence of the nation. Quantity and immediate results are the main objects of all enterprises, The railroad engineer in uniting conti- nents, the inventor turning out a new machine, the scientist discovering a new process, all have the same purpose to make production serviceable to the masses and all classes of people. Necessity is the mother of invention. We are inventors by compulsion. Some of the greatest inventions and improvements for cheapening production were either made here in America or adapted and improved from foreign types. All industrial countries must be quick in accepting scientific discoveries of a far-reaching nature, but that the United States outrun the world in the contest for mechani- cal and scientific improvement is proved by the fact that in iron-making, steel-making, cotton-spinning, silk-throwing, and in the coarser wool fabrics (after reducing the cost of raw wool to the foreign free wool basis), though paying higher wages per diem, America fully holds her own, frequently at a lower cost of labor by the piece. The higher wage rate per diem ruling in the United States enables the opera- tives to enjoy a better mode of living and better nutrition of body and mind. They eat more and better food than any of the operatives of Europe, and their general mode of living is upon a higher standard. They operate more spin- dles, more looms in the textiles. In steel-making, coal-mining, coking, etc., an equal number of hands turn out more tons THE ECONOMY OF HIGH WAGES. 85 in a given time than any of their competitors in Europe, England not excluded. They work more steadily in every hour of their working day. The steadiness of the worker, the application of his whole time and energy to his work, is most intense, and is only possible where good nutrition pre- vails. Every moment is made use of to turn out the great- est number of pieces that can be ground out of his machine or run out of his hand while at work. This alone explains the high rate of earnings in some occupations, coupled with the low piece-price paid, which, when I stated it to manu- facturers in the same industries in European countries, caused astonishment. Many of our foreign rivals are aware of this and dread a reformed tariff (in the Democratic sense), a low tariff on a basis of free raw materials. Much of this is due, aside from the superior quality of American labor, to the scientific development of the age. Many a new industry has been called into being of which the last generation was entirely ignorant. Quickest of all are the United States to avail themselves of these. Thus, what may be called the new science of our generation electricity has found new developments and applications in America. I will not speak of the telegraph and the tele- phone, which play so important a part in the world's com- mercial life, and, in saving time and employment of capital, have become very important factors in cheapening prices, but of the application of electricity to productive processes. Here we have an entirely new vista of possibilities still in store for us. The feats accomplished within the short time since the application of electricity to industries are so won- derful that we may well indulge in prophecies which a decade or two ago would have been considered flights of imagination of the most fanciful kind. In metal industry especially, is electricity destined to play a most important 86 THE ECONOMY OF HIGH WAGES. part, and I will allude to only a few of the results attained within the last few years. The welding of different metals had resisted all attempts. Electricity has solved the prob- lem very effectively, and a process has been invented by which iron and copper, or any other metals are welded now at a nominal cost. Welding by electricity cheapens many a form of iron that had formerly to be welded by subjecting the different parts to a separate heating process. Another direction in which electricity has shown its wonderful capac- ity for cheapening cost is in the recent development of the manufacture of what maybe called a new metal, aluminium. Aluminium possesses qualities which make it of the highest value industrially. It unites with great tensile strength great specific lightness. It does not oxidize in moist air, nor is it affected by water. Its softness makes it easily workable. It can be hammered and drawn into wire. For these reasons it would be an excellent material for almost every article of use now made of iron, steel, copper, or brass. Its specific weight is 2.56 against 7.84 of iron. Wherever lightness combined with strength is desirable, and this is the case in almost everything made wholly or largely of metal, its capacity for employment is unlimited. For military equipments it would, for this reason alone, prove of the greatest value, either pure or as an alloy with other metals. The supply is unlimited, as it is contained in all clay to the extent of about 35 per cent The use of this valuable metal was, however, up to recent years almost impossible on account of its high cost. Aluminium was produced for practical purposes and in a compact form by Ernst Wohler in 1845, and by Deville in 1854. The French Government, seeing the great advantages to be derived from this metal, assisted with large sums and enabled the erection of works at Javelle, and the manufac- THE ECONOMY OF HIGH WAGES. 87 ture in quantities. The process, however the Natron proc- ess was too expensive to give the metal much scope for employment. The price at first was as high as fr. 1000 per kilogram (about $90 a pound) and was gradually reduced by various inventions and discoveries to about $10 a pound, at which price it was sold but a few years ago, when the world was informed of the invention in America of a process of reducing aluminium by electricity. Fac- tories were started in America and in England and put in successful operation. The price was quickly reduced to $2 a pound, and something over a year ago to $1. It was then said that this reduced price would not leave a profit to those operating by the new electro-chemical process, that the price was reduced to discourage the employment of new inventions rapidly coming into the field, by which the cost of production is again reduced considerably. The patentee of a later process which has come under my notice claimed then that the metal can easily be produced as low as 30 or even 25 cents per pound. But before any new process had been put into operation, the employers of the electric process who had claimed that aluminium could not be profitably produced at $1 a pound, have since seen fit to reduce the price to 50 cents a pound. It is useless in a discussion of the kind that we are engaged in, to task the reader with technical explanations as to the difference between one invention and another. I only wish to point out the effect of scientific discoveries on the cost of production. The difference in wages, whatever their day rates may be, sinks into insignificance when compared to this destroying factor in price making. Last summer it was stated in England before the British Association that the cost of aluminium bronze (with 10 per centum of aluminium) was but a few years ago $1.20 per pound, and at the time 88 THE ECONOMY OF HIGH WAGES. of the reading of the paper 33 cents. At the present price of aluminium, the aluminium bronze can be produced at considerably less cost. The governments of different coun- tries are preparing for the extensive use of aluminium as an alloy with steel in their ordnance and small arms, ship- building, armor-plating, etc. Here, then, science has again called into existence new industries, a new metal of great serviceability, probably to be produced in the near future at what, compared with the past, will be merely a . nominal cost. American Chemists Lagging Behind. In chemistry equal results can be noted. But here America lags behind European countries, and science schools and technical colleges with extensive laboratories would be of the highest value. In this branch Germany especially has had remarkable success. Many of its most flourishing industries are pre-eminently chemical industries, and their establishment and very profitable operation are traceable to the excellence of its polytechnic schools and the high science training in its universities. Some of our colleges have very good chemical schools and laboratories. But they seldom reach high enough. In most instances they lack the means for sufficient extension. American colleges and universities are generally endowed schools, based on bequests and legacies ; hence they are in most cases hampered by provisions which direct the applica- tion of the funds and interfere with the free exercise of judgment as to the teaching. The direction of the teach- ing is taken from the faculty and left to the trustees. But teaching must be as free as science in order to show the best results. Returning now to applied chemistry, I will cite an THE ECONOMY OF HIGH WAGES. 89 example to show the cheapening effected by the intro- duction of science into manufacturing industries. Paper making has especially gratifying results to show, and this within a very brief space of time. I take here the Eng- lish prices, because England has for a long time had the advantage of cheaper prices for its materials, and has been the seat of the industries which furnish the chemicals for most paper makers, and largely so for our American manu- facturers. A fine quality of glazed packing paper, known to almost every user of English goods, sold in 1879 at 39 per ton. In 1890 it had come down to 18 10s., or less than one-half the old price. This reduction is partially due to improvements in machinery and the manufacturing methods. The largest part, however, is owing to the improvements mostly chemi- cal in the reducing of the manufacturing materials used. It costs less to make the pulp because, as we discover improved processes, chemicals used in reducing the fibrous matter are cheaper. Bleaching powder, which had been 14 the ton in 1879, is now 5 to 6 a ton. Soda ash, etc., have come down in proportion. Soda pulp when first introduced sold at 22, and sells now at 9 unbleached and 11 bleached, a ton ; while the mechanical pulp, mostly from Germany and Sweden, sold last winter at Hull at 34 shillings or $8 a ton. Sulphite pulp is a long fibre pulp which owes its creation as an industry to the chemistry development of Germany. It largely replaces rags in paper making. In England it is now sold at rates between 11 10s. and 12 10s. These improvements in pulp making have, of course, largely reduced the value of rags. Jute end cuttings and rope ends, formerly largely used, have come down from 14 to 6 in sympathy with the decline of price in the 90 THE ECONOMY OF HIGH WAGES. other materials. America has kept in line in the progress made in the industry. A number of improvements are of American origin. Although it has to import its soda ash, bleaching powder, and other chemicals, and pay duty, it produces soda pulp as cheaply as England, and by means of its consolidation of works and a quicker eye to improve- ments is even able to export pulp. The labor cost here is also infinitesimal, independent of the remuneration per diem. A product of 5,000 pounds a day of one converter would not require more than four or five men at $1.50 a day. The wage rate per pound would not be more than one-tenth to one-seventh of a cent. Re- duction of wages would not accomplish very much toward reduction of price, alongside of the cheapening influences recorded above. Great saving of expense and cost has been effected by improved methods in the recovery of soda ash and other chemicals used in the manufacturing process. In this the Americans have made great strides of late, and in soda pulp making are fully able to compete on a free trade basis with the whole world, and carry off the honors besides. Equal progress has been made in America in paper mak- ing. In spite of the onerous burdens on materials, we are able to export to England with higher prices for our chemi- cals, and even pay the freight for the paper, and undersell English makers in their home markets. This is due to the fact that in America, wherever indus- tries can be so conducted, a special article or special line is made by one mill, year in and year out. Infinite machinery keeps grinding away and produces infinite quantities. The general cost is reduced pro rata with the increased quanti- ties run out by the mill. In England, as I have repeatedly been told, paper makers THE ECONOMY OF HIGH WAGES. 91 make all kinds of paper that are wanted. This principle applies as well to other industries to which I shall have reference hereafter. One of the leading men controlling and selling the output of a number of mills, told me that one house prides itself on manufacturing not fewer than 160 different sorts of paper. By its different methods America is enabled to pay high wages and undersell Europe. CHAPTER VII. Improvements and Inventions. Labor Cost enormously reduced. Iron in Finished Forms. Metallurgy. Automatic Machinery. Its Effect on Cost. Labor Cost an Insignificant Item. Cheapest Cost and Highest Wages with Highest Scientific Development. The Steel Rail and the Ocean Steamer, Creations of Science. Powerful Influence in Metallurgy. THE greatest savings in the cost of production have, how- ever, been realized in metallurgy, and in the production of pig iron and steel the most astonishing and gratifying results have arisen. It is not more than sixty years ago, as I was told by an old ironmaster of North Staffordshire, that it took six tons of coal for the production of a ton of pig iron, where one and three-quarters are used now. The introduc- tion of the hot blast and the better construction of furnaces have brought this about. Not only is less coal used, but the ores yield now almost all the iron they contain, while formerly there used to be considerable waste. Of course the labor of carting the materials was then proportionately greater too. The value of the fuel saved alone is sufficient to more than cover the present price of pig iron. The dif- ference is equal to the labor cost in ten tons of pig iron at the furnace average labor cost in England. While we may say that labor employed about furnaces receives from one- third to one-half more pay, the cost of pig iron has been reduced to less than one-third the price it commanded then. In the manufacturing of steel, both on "the Bessemer and THE ECONOMY OF HIGH WAGES. 93 the basic process, improvements have led to economies by which the price of steel has been reduced far below the price of puddled iron, which is gradually making room in almost all employments for steel. English steel rails, which had been in 1869, $55, and in 1873, $80, are now about $20, and were as low as $18 in 1888. American steel rails had to follow, of course, in this price decline. In 1869 they were $132 currency a ton, or $88 gold. They are now $30 a ton, and were sold as low as $25, about three years ago. American rail mills, it is not saying too much, are the best equipped in labor-saving methods and appliances, and an American rail can be produced now from the pig iron at less cost on the average in labor, although the daily rates are considerably higher, than in Europe. These are truly achievements of science applied to industry. The far-reach- ing effect is brought home now to every understanding. Railroad building could otherwise never have attained the extension which it has. Hundreds of thousands of homes and farms would not have been established. The food sup- plies of Europe, principally of England, would be still sub- ject to scarcity, and want and misery still be the lot of the working classes of England, not to speak of Germany and Prance, if iron and steel were still produced at the cost and by the methods of the time when railroads were first started. Some of the most important inventions for reducing the cost of rolling the rails are American. But whatever their origin, they are applied to better advantage here than abroad. The effect is a much smaller number of men employed for the same output, even where we compare American with English rail mills. The resulting higher wage rate per day and lower labor cost per ton will not surprise, therefore. The invention and introduction of the three-high blooming- 94, THE ECONOMY OF HIGH WAGES. and rail-mill instead of the two-high mill did a great deal in cheapening the cost of production. Automatic tables and travelling cranes do now the chief work in American rail mills. "Before the introduction of automatic appliances, from fifteen to seventeen men were required to operate a three-high rail mill. The automatic tables reduced this number to five, including the roller in charge of the train," says one of our great engineers, Mr. Hunt, the inventor of the tables, in a paper in the Engineering and Mining Journal They were first introduced in 1884-85, and we can well see from this that the labor cost of steel rails from the ingot to the rail is a necessarily decreasing quantity in the train of these inventions and improvements. To give the reader an idea of the workings of an Ameri- can rail mill of to-day, I will quote from the paper referred to above : " After the ingot is reduced in the blooming mill it is carried by power rollers toward the first rail train, and through a shear by which the end, which was the top of the ingot, is cut off, and the long bloom sheared in two, each half making two or three rails, according to the weight of the intended section. The first half at once passes through the rail roughing rolls, the second one being held for a few seconds, or until the first has made three passes, when it is also sent forward. "If from any reason the bloom when sheared should have become too cold to be safely and successfully finished, an overhead traveller is provided to carry it at a right angle into a ring at the side of the mill, in which heating furnaces are located with a Wellman charging and drawing crane in front of them. When sufficiently heated the same carrier conveys the steel back to the table rollers. " By this arrangement cold cobbles, or other rail blooms, can be heated and delivered to the rolls. In the roughing rolls the bloom re- ceives five passes in three-high rolls. It is then passed to the second roughing tables and is given three passes in three-high rolls. The par- tially formed section is elevated to the back tables of two-high rolls, and making one pass through them reaches a dummy table in front, from which it slides down to driven rollers, and is by them carried back to the THE ECONOMY OF HIGH WAGES. 95 three-high set of rolls which are in line with the first roughing rolls, and driven by the same engine. In these it receives four passes, making, in all, thirteen rail-mill passes. It is now a finished section, long enough to cut into three 30-foot rails. This is done at one operation by four saws. After passing through the cambering machine, the rails are car- ried by power down the hot beds. When sufficiently cool they are loaded by power on a spider car, which is handled by a special locomotive. The rails are conveyed to the several cold beds, located conveniently to the cold straightening presses, and are unloaded on these beds by an auto- matic arrangement of arms or levers, receiving their power from steam taken from the locomotive boiler. " Here it is all self-acting machinery which does the work. The few men seen about in an American rail mill direct and guide. In Germany, near Aix-la-Chapelle, and in England (Middlesborough, and Darlington) I saw at what was reputed as the best equipped works no arrangements even approach- ing this complete system of scientific apparatus. In rolling and handling the rails men were employed to do what is done here by automatic appliances. We turn a ton of rails out of the pig iron at a labor cost of $2.50 at the present time, which in England costs $3.04. At the same time our labor per diem receives two-thirds more pay than the com- paratively well paid English labor. Price Reductions in Other Forms of Iron. If we look into the prices of iron at remoter periods, with their crude methods, we can well understand the backward- ness of European countries. Indeed, the progress of the ages can almost be measured by the progress made in the produc- tion of iron. In the early Middle Ages especially, iron had become so scarce an article, that almost every remnant of it brought down from the Roman period was made use of in one form or another. Thus, for instance, it is recorded that the iron clasps which had been used in the huge masonry of the 96 THE ECONOMY OF HIGH WAGES. Porta Nigra at Treves were removed and forged into weap- ons and utensils. For the fifty years previous to 1830, when railroad building took its rise, the price of English pig iron, according to Tooke's " History of Prices," aver- aged about 7 per ton. From old accounts we learn that the price of bar iron not further back than the seventeenth century was 25s. 8c?. a hundredweight, which is equal to 25 13s., or about $125, the gross ton, which the value of money at that time would make considerably higher yet, compared to our present prices. tAbout the middle of last century the price was yet 20 a ton. At the present time English bar iron varies between 5 and 6. The reduction in price of finished articles of iron, caused by the application of improvements and mechanical inven- tions, is greater yet, and here again America shows most astonishing results. Our principle laid down above, that high wages lead to cheapened production by a necessity like a natural law, finds excellent proof in the iron industry, principally in finished forms. Here automatic machinery replaces hand labor in almost all except the finishing proc- esses. By this means we are able to indulge in the luxury of what, compared with the prices paid in free trade coun- tries, must be called high-priced iron and steel (to help the infant industries of Pennsylvania and their millionaire owners), and still undersell European free-trade countries with the finished products. The drop-hammer has been lately introduced in Ameri- can plow works, and contracts are taken at $4.50 a plow. I heard of one order for 20,000 plows to Argentina at that price. This was in 1890. In that same year I visited one of the principal English works of world-wide repu- tation. There the hammer and the anvil alone were in use, and the blacksmith wielded his craft unassisted by any THE ECONOMY OF HIGH WAGES. 97 mechanical auxiliaries. The cheapest plow which they pro- duced was 80s. or $7.29. But as in other trades so in agricultural implements, their trade, being principally an exporting one, has adapted itself to the local variations of the demand. We know how tastes and habits determine the character of tools and implements no less than of com- modities. England, trying to give the people of foreign lands the articles which they claim to be suitable to their purposes, accommodates her manufacturing system to the conditions most suitable to the purpose. The many varia- tions do not permit of a system, except under very great modifications, which can afford to build and use machinery for one specialty or pattern even. This factory not alone produced a variety of plows for the different countries, but mowers, reapers, and other agricultural implements. Our system of work may somewhat interfere with a rapid exten- sion of exports by not being elastic enough to adapt itself to special local demands. Much can be done, however, to assimilate the American working system to a readier com- pliance with foreign tastes. But be this as it may, we hold the inner circle. We certainly cannot be dislodged from the hold on the home market by any possible emergencies arising out of foreign labor and manufacturing conditions as here outlined. Other Illustrations of Superior American Methods. One of the most interesting labor processes by which the difference between the old methods and the American methods can be illustrated is that involved in the making of an article largely used in building a piece of iron for uniting beams, turned into its proper shape after it has 98 THE ECONOMY OF HIGH WAGES. been heated. The uniting of beams by means of this beam hanger is preferable to mortising, as mortising weakens the beam to the extent that the timber is cut away. The beam hanger leaves the beam intact, and unites the two beams equally firmly. In Germany and other foreign countries it is forged by the blacksmith on his anvil. In America, where its use is far more extensive on account of the more general employment of wood as a building material, it was formerly made in the same way. Lately a machine has been invented by which, after the iron is heated, it is rolled by one operation into the proper shape. In Germany, as I found out by personal inquiry, a black- smith and his helper would not make more than twenty of these irons in a day, and wages at three marks (or 72 cents) a day would be considered high pay. The selling price of these irons is about 9 cents a pound in England and Germany. In America, though iron is higher than in England and Germany, the roller at the machine earns from $3 to $3.50 a day ; the helper, $1 to $1.50 ; and the iron is sold at 3| cents a pound, with a good profit to the manu- facturer. A day's work on one machine turns out 600 to 700 finished beam hangers. The cheapened product and the rapidity with which orders can be filled now, creates markets which formerly were wanting through lack of ability to supply them. Here again cheapness is not at all due to any individual labor exertion (except that close and exhaustive application which is possible only to well- paid labor), but almost entirely to the inventive spirit so characteristically American. These labor processes are always paid at piece-work rates. The time occupied in rolling is the same, whether the irons be of larger or smaller size. It takes ten seconds to run a THE ECONOMY OF HIGH WAGES. 99 bar through the rollers. The heating of the larger pieces, however, takes more time than that of the smaller, and on this account the larger irons occupy more time in making. A machine can roll three tons of iron a day at less than a cent per pound for the labor, as against perhaps five cents under the old hand process. Other forms of iron are treated in the same way, but this will suffice as an example to illustrate the influence of invention upon prices. In pin making, screw making, chain making, and kindred indus- tries, automatic machinery does all the work, while human labor is confined to feeding the machine which turns out the work. It sounds almost ludicrous to hear the question of wages or labor cost mentioned in connection with opera- tions of this kind. What difference would it make in the cost of the product in pin making whether the day rate of the workman tend- ing the machine be $2 or $3 under working methods like these? In a factory in Connecticut I found 70 pin-making machines in operation. They were tended by three men and one machinist and a boy helper for the repairing. The combined output of these self-acting machines is 7,500,000 of pins a day or 25,000 papers.* The pins are even put on the paper by the machine. The difference in the cost, whether the combined wages of the five men be $7.50 or $10.00 per day, is infinitesimal. Allowing for stoppages, and taking the output at 20,000 papers, the difference would not be more than one-eighth of a cent. * It was considered a great triumph of progress of his time by Adam Smith that ten persons under proper division of labor could make among them upwards of 48,000 pins a day. Forty-eight thousand pins the product of ten men a hundred years ago, against 7,500,000 pins the product of five men to-day. A four-thousand times greater product by the aid of modern machinery than possible by the aid of the best system then known. 100 THE ECONOMY OF HIGH WAGES. The most surprising results are attained, however, in com- posite products, articles of immediate use and wear, when different parts of so complicated an article as a watch, a clock, or a pair of shoes can be made by an application of the American system. As shown in the Introductory Letter to the Secretary of State to my report on Technical Education (Industrial Edu- cation in France) a Waterbury watch is made at the trifling labor expense of fifty cents. The material in no instance is further advanced, when it enters the mill, than sheet steel. All the springs, wheels, screws, pins, pinions, etc., are made by self-acting machinery. Yet the factory had at the time of my visit 420 employees on its pay-roll, fully one-half of whom were women, at an average of wages of $10.71. We see here a remarkable illustration of a low cost of labor consequent upon a high rate of wages. But here every improvement or device tending to cheapen cost is quickly introduced. A machine was lately put in by which 1,200 to 1,500 springs are turned out a day with two machines and two men, to take the place of other machinery which exacted the employment of twelve men for an output of 1,000 springs. In Germany, in the Black Forest, I visited the works of a u stock company " turning out clocks by the help of machinery and power. Screw-making was done by a man putting pieces of copper cut from the rod into the required sizes into the receptacle of the machine. Of course the machine had to stop for each operation of turning out a finished screw. The whole looked somewhat funny to one accustomed to the operation of automatic machinery, grind- ing out incessantly without any human labor, except that of a boy, putting in a new rod when the old is worked up and the last screw has fallen into the bag. Under such differ- ences and distinctions, it becomes apparent that labor in THE ECONOMY OF HIGH WAGES. 101 watch and clock making at $10.71 is cheaper in Massachu- setts than labor at ten or twelve marks ($2.40 to $2.88) in the Black Forest. We find the best illustration of the superiority of Ameri- can workpeople in quantitative production over their English and foreign competitors when using and handling the same kind of machinery. The application of these methods and employment of self- acting machinery, plays nowhere a more important part than in machine building itself. Not alone that a machine made by machinery can be made more cheaply than by hand labor : the parts also are usually more exact in the fittings, and offer the very great advantage that they can at all times be easily replaced simply by specifying the number of the part, and therefore of great practical value for shipment into countries where skilled labor for repairs is scarce. Here, also, every part is usually accompanied with the building of a new machine for the purpose. The effect of these tool machines may be measured from one little example that I noticed in a factory making dyna- mos. The cutting of threads in the racks in the electrical mechanism was formerly done by hand, and the racks (about eighteen inches long) cost about fifteen cents apiece in labor. This is now done by a machine specially constructed for the purpose, with unvarying exactness, at a quarter of a cent. With such help, utilizing machinery wherever possible, one of the dynamo works which I visited lately turns out one dynamo per day, of sixty arc lamps, with all the lamps, hanging boards, cut-out boxes, amperes, switchboards, and all the innumerable little supplies, too numerous to mention, for equipping so complicated and highly-developed a mech- anism. For 160 persons, with a large proportion of helpers (boys and young men), the weekly payroll is $2,200, includ- 102 THE ECONOMY OF HIGH WAGES. ing superintendents, office and shop rent, as well as office help. The help employed in the factory averages about $12 a week. Considering the large proportion of minor help, the rate of pay for the more skilled occupations, of course, is very much higher. But whatever the amount of weekly earnings might be, would here again not be of great importance if held against the commercial value of the article produced. The total labor employed in the production of an appa- ratus as described would be $400 (on the basis of calcula- tion given above) while the gross selling price is, or was at least at that time (1890), $4500. The high selling price, quite disproportionate to the cost of production, is due to an extent to the guaranteeing of the dynamos. They require constant attention and repairing on account of the binding of the journal in the bearing, arising from the heat- ing, through the high-speeded machine. Many inventions are being put into requisition which are calculated to obviate this difficulty and to bring down the price. So far as the labor cost stands to the value of the product it can be easily seen that the question of wages is but an unimportant item. The manufacture of products so thoroughly protected by patents as these are, becomes an absolute monopoly, and the profit rates are large as bespoken by the high dividends on watered stocks and other evidences of rapid capital accumulations out of the earnings. The question of the relations of labor to the cost of production resolves itself entirely to one of equipment "Whether labor be equipped with all the improvements and inventions or not, whether labor be well conditioned and fed or underpaid and overworked, decides the contest, not the relative difference in day wages. It is the output after all which makes the price of a commodity. THE ECONOMY OF HIGH WAGES. 1Q3 It has been my unvarying experience that, even with the employment of machinery, the number of people employed for a certain output is proportionately much larger where the rate of pay is lower. In other words, that a higher rate of pay more than compensates in the output by the results. The Steamship an Illustration of Modern Devel- opment. Science applied to Industry. A collective picture of what science has done for the progress of the race in the field of industry is given by the steamboat. The greatest results of the combination of science and work are seen in the iron monsters which traverse the oceans and balance the deficiency of one zone by the abundance of another. All the sciences hold con- gress here. The latest achievements are quickly intro- duced, lest some rival line would offer cargo space at a fraction less. But comfort and health of the passengers, steerage or cabin, have to be studied no less than the ability of carrying the greatest bulk at the minimum of cost. The economy of space and of power becomes the chief end here. Chemistry supplies cold storage room and removes from sea-water the salty substance. Electricity gives lights and signals and power to the many inner arrangements of these swimming hotels or rather towns, considering the number of temporary inhabitants. There is hardly a trade which is not set to work at the building and equipping of a steamer. But none of the advances in the other sciences would have availed had it not been for the great improvements in machine building. It would hardly be possible to carry bulky freight long distances on board steamers, were their machinery still constructed on the patterns in use some thirty or forty years ago. Nearly all the storage room now 104 THE ECONOMY OF HIGH WAGES. consigned to freight tonnage would be given to fuel. The compound engine, first introduced by Randolph, Elder & Co. in 1854, was soon followed by the triple and quadruple expansion engine. I will not do more here than allude to these facts and let the reader judge of the economic impor- tance of these marine inventions by the results. The first steamship which crossed the Atlantic (1819) was the Savan- nah, an American vessel. But as she was a sailer fitted up for steam, partly sailing, we cannot bring her in except as a matter of record and to do homage to the flag. In 1833 the Royal William crossed from Quebec, but all her hold had to be filled with fuel. It was said by a competent authority in 1835, that " As to the project which was announced in the newspapers of making the voyage directly from New York to Liverpool it was altogether chimerical, and they might as well talk of making a voyage from New York or Liverpool to the moon." If prophesying was a hazardous undertaking even in an age of faith, it is still more so in the age of science. The Great Western sailed from Bristol first in 1838 and consumed between 12 days 7 hours, her shortest, and 22 days her longest passage. Carlyle said in connec- tion with this, that " The success of the Great Western left our still moist paper demonstration to dry itself at leisure." These earliest steamers used 10 pounds of coal per hour to the indicated horse-power. From this, by the rapid intro- duction of improvements, the consumption of coal has gradually come down to less than 1 J pounds per horse-power per hour. With less than one-eighth of storage room re- quired for fuel,* the impetus given to steam navigation and * I give the concise history of the improvements from a paper of Mr. Henry Dyer in the Scottish Review : " The chief stages in the development of the marine engine are clearly marked by the pressure of the steam used, and the amount of coal con- THE ECONOMY OF HIGH WAGES. 1Q5 the carrying trade can be readily imagined. The reader is too familiar with all the great gifts, civilizing, liberalizing, enfranchising from the thraldom of poverty and want even, to need much demonstration from the author, whose object it is only to point out the road upon which the human family is progressing from misery and dependence to free- dom and prosperity. But what is of equal interest in the consideration of the steamboat, in our review of the industrial aid given by science, is the parallel illustration of the method applied to the building of the iron monster of the sea, and the result sumed per-indicated horse-power per hour, and these may be briefly reca- pitulated. Until about 1830 the pressure seldom exceeded three pounds on the square inch above that of the atmosphere. Prom that date a gradual increase took place, and in 1845 the average was about ten pounds on the square inch. By 1850 it had reached fifteen pounds. In 1856, Ran- dolph, Elder & Co. employed pressures of thirty pounds in their com- pound engines, but it was not till almost ten years later that such pres- sures became general in the merchant service. On the compound engine becoming common, pressures rose suddenly to sixty and in some cases to eighty and one hundred pounds on the square inch, and now for triple expansion engines the average is over one hundred and fifty pounds, while for quadruple expansion engines it is two hundred pounds on the square inch. With regard to coal consumption, the earliest marine engines must have used nearly ten pounds per indicated horse-power per hour. In the well-known side-lever engines it was about seven pounds, while for engines in use before the general introduction of the compound type four to four and one-half pounds was the average. Randolph, Elder & Co., as we have seen, had an average of from two and one-half to three pounds. In 1872, when two-cylinder compound engines had been in use for some years, the average was found to be about 2'11 pounds, being a saving of nearly fifty per cent, over the ordinary engines, while in 1881 there was a reduction to 1 '828 pounds, or a further saving of 13 - 37 per cent. With triple and quadruple expansion engines there has been a still further reduction of about twenty-five percent., the consump- tion of fuel in some of these engines being as low as one and one-half or one and one-quarter pounds per indicated horse-power per hour." 106 THE ECONOMY OF HIGH WAGES. expressed in wages. The outfit of a yard is a marvellous collection of labor-saving appliances. Operations are now conducted by machinery of the highest efficiency, which formerly were all done by hand and hand tools. It is im- possible here to do more than to notice in a general way an all-important fact with which we can fitly conclude the general discussion of the cause and effect of a high wage rate in the mechanical arts. A general statement will, how- ever, cover the whole case. The effect of all the improve- ments and inventions in the immense mechanism required has been a constant reduction in the cost of building per ton. The wages paid in the yards of Scotland and England are the highest paid in any calling. At times of activity the earnings in the trades connected with the building rise to 4: and 5 a week, two and three times the rates paid in outside occupations. Still England is the iron-boat builder of the world, and is only equalled by America in regard to high wages paid to the worker and low cost of construction by the ton. In 1888 I visited the yards of the chief steam- boat builders in Philadelphia. They were building then one of the fast cruisers. Their equipment with labor-saving apparatus for riveting and other processes was as perfect as one is accustomed to find in American shops. The firm's protective proclivities are known. Yet they had to confirm my conviction that protection did injury to their trade by preventing them from building steamers as cheaply as the English, by the following statement : In the centract for the cruiser, estimates were invited from English builders. Their estimate on the same specifi- cations was $1,200,000. The American firm obtained the contract for the sum of $1,350,000. But the American in- side fittings are far superior and more expensive than those submitted by the English firm. A member of the firm told THE ECONOMY OF HIGH WAGES. 107 me that on the basis of the English specifications and with the materials at the English level of cost, they could have produced the cruiser at the same price. The force of the argument that the labor differences would not stand in the way of Americans in the building of iron steamers, were the duties on their materials abolished, is increased by the statement of a fact illustrative of the development in ship- building. The firm referred to above employs a riveting machine for riveting boiler shells, the shell turning on a rotary platform. Before the introduction of the machinery the riveting engaged the work of a gang, composed of two riveters, one holder, and two boys, for two full weeks. The same work is now performed by the same number of hands in one and a half days' time. A saving of seven days out of eight enables the payment of a higher rate without interfering with the competitive capacity of the builders. With this we will conclude this general consideration of the economy of high wages in industrial employments, and turn our attention to the question of the supply of the wherewithals which uphold the force and strength of the labor, the supply of the staff of life which determines the actual value of the rate of wages. CHAPTER VIIL Proof of Principles laid down, taken from Agriculture. Application of Scientific Methods. Great Results. Extending the Margin of Star- vation. Every Addition to the Productiveness of the Acre an Addi- tion to the Soil. THE questions treated in the preceding chapters find no- Tvhere better illustration and support than in agriculture. In no other branch of industrial activity are the gratifying results so easily traceable to what we must consider the pri- mary cause of all progress and prosperity, freedom from restraint and security of possession, as in agriculture. In no field of employment can it be shown so clearly that even the difficulties which nature may impose are as nothing against the indomitable will of man employing his best faculties for the acquisition of possessions guaranteed to him by free and just laws. The question of a high rate of wages is practically the question of food, etc., the raw materials of which are the produce of agriculture. It is evi- dent that we cannot well consider the questions here intro- duced, as satisfactorily treated, without examining the de- velopment of agriculture along with the other branches of human activity. It will serve, therefore, a double purpose : first, in allaying apprehensions that growing populations are necessarily causes of poverty ; and second, to show in- tellectual force to be equally effective in this as in all other employments, and able to overcome difficulties of the most formidable character. THE ECONOMY OF HIGH WAGES. 109 Ignorance the Cause of Poverty. The end of the eighteenth century gave birth to theories which made everlasting poverty the preordained condition of the working classes, death only alleviating the miseries which would be the inevitable consequence of growing pop- ulations. It is reserved for the end of the nineteenth century to dis- sipate the fears which have ever since haunted the imagina- tion. Poverty abject poverty was the general characteristic of that time. Negro slavery, with all its disgracing features to the civilization which bred it, had this silver streak in the cloud that it fed its victims. Hunger and want did not infest the cabins of the slaves, any more than the stable of the horse or other four-legged cattle. But who can read the history of those days, and not be moved at the condition of nine-tenths of the people of England and Continental Europe? There bread was scarce indeed, and hunger, the gaunt spectre that haunted the poor man's home. The pop- ulations were sparse compared to to-day. In England the population has trebled, while it is not too much to say, the consumption per head has doubled. True, the population could not subsist on to-day's cultivated area, under the present system. But that a much greater population could subsist if the land were more distributed among cultivating owners, admits of no doubt. As it is, every year more and more land goes out of cultivation and is put under grass. In the last twenty years not less than three million acres have gone out of tillage. What this means can be seen from the fact that three million acres would grow nearly all the wheat which is imported now from abroad. By improved cultivation the average yield per acre has risen to thirty HO THE ECONOMY OF HIGH WAGES. bushels. We can easily appreciate the significance of this fact, when we consider that the average yield in wheat, for France is from 16 to 17 bushels, for Germany 21 bushels, and for America 12 bushels. English soil and climate are by no means as propitious to agriculture as those of the other countries.* England's superior yield in all branches of agriculture, root crops and hay as well as cereals, is due * On this point it is well to hear the testimony of the highest authority on comparative agriculture, since the days of Arthur Young, Mr. Leonce de Lavergne, " Essai surl'economie ruralede 1'Angleterre, de 1'Ecosse et de PIrlande (1854) ": " Le sol et le climat de 1'Angleterre seront-ils done naturellement superieurs aux notres ? Bien loin de la. Un million d'hectares sur 13 sont restes tout a fait inproductifs et ont resistes jus- qu'ici a tous les efforts de 1'homme ; sur les 12 millions restants, deux tiers au moins sont des terres ingrates et rebelles que 1'industrie hu- maine a eu besoin de conquerir." (Are, then, the soil and climate of England superior by nature to our own ? Far from it. Out of 13 million hectares one million have remained entirely unproductive and have resisted so far all human efforts. Of the remaining 12 millions two-thirds at least are irresponsive and rebellious soils, which the industry of man had to conquer.) He then 'proceeds to analyze the country by sections and to speak of the unpropitious climate, its proverbial fogs and rains, and of the excessive humidity, "est peu favorable au froment qui est le but principal de toute culture " (little favorable to wheat, which is the chief end of agricul- ture), and winds up in the comparison: "Combien le sol et le climat de la France sont superieurs ! Encomparant a 1'Angleterre, non plus seule- ment le quart, mais la moitie nord-ouest de notre territoire, c'est-a-dire les trente-six departements qui se groupent autour de Paris, a 1'exclusion de la Bretagne, nous trouvons plus de 22 millions d'hectares qui depassent, en qualite" comme en quantite, les 13 millions d'hectares anglais." (How much superior the soil and climate of France ! Comparing to England, not one-fourth but the northwest half of our territory, to wit : the thirty-six departments grouping around Paris, with the exclusion of Brittany, we find more than 22 million hectares which surpass in quality as in quantity the 13 million hectares of England.) And with all this natural inferiority, there results : nearly two bushels of England to one of France. THE ECONOMY OF HIGH WAGES. alone to the more thorough husbandry and introduction of improvements dating from the early part of last century and continuing through modern days through conditions peculiarly favorable to agriculture. Capital, enterprise, and free labor (though handicapped and depressed) were turned to the soil at a time when all Europe was looking with contempt on agriculture, and, excepting the countries where a free peasantry had survived, agricultural labor was chafing under oppression worse than that of slaves. A reaction has begun to set in which makes capital with- draw from land. This may be a forerunner of a new era in the tenure of land, by which even a greater productiveness of the soil may be brought about than is the case there now. A survey of the field shows distinctly that where holdings are cultivated by the owner, supplied with sufficient stock and capital, in gross and net yield he surpasses by far the great landowner or the tenant farmer, even of England. This is to show how rash it must appear to set a limit to the food-producing capacity of an acre of ground of which an immense area is yet awaiting the advent of the tiller. It is equally shortsighted to base deductions and predictions on existing facts. It is safer to accept the present as a halting station from a remote past, and if we have to do pre- dicting, let at least experience guide us. Difference in Results traceable to Institutions. Four to six bushels an acre was the average net yield, after allowing two bushels for seed corn, in the thirteenth and fourteenth centuries in England. It was clearly an ex- tensive cultivation of a large area of soil by economically 112 THE ECONOMY OF HIGH WAGES. dear and individually cheap labor. Under conditions then existing this was the best system, if for no other reason than because it was the only system available. The modern sys- tem gives a net yield of twenty -eight bushels. Subdrainage, proper manuring,* rotation of crops, etc., after six centuries * The efficacy of manuring was not unknown to the early periods of husbandry in England, but the practice was of a very rudimentary kind. The sheep were driven into the corn-fields after harvesting, as the drop- pings gave the manure before another crop was sown. The owners of flocks were paid a rent in money, or in kind, for the lending of their flocks for the purpose by cultivators who had no sheep. " Sheep were occasionally hired to lie on the ground. This must evidently have been in inclosures. A hundred and fifty sheep were folded on an acre at from Is. 4> M f ^ ts cj p a a 33 i a *fi OJ >> q S W V & 3 03 d si s 2 .0 S s s 3 03 i a Q o < "S n 1 3 O Cabbages. Cucnmbers. Watermelons. Potatoes. 1 a '5. 02 Tomatoes. New England $ 130 116 44 47 $ 85 92 40 67 $ 140 128 4 $ 79 76 45 75 $ 61 14 7 36 $ 1,833* $ 55 43 20 28 $ 34 50 36 591 $ 73 34 t 42 $ 165 90 49 New York and Pennsylvania. . Norfolk t 168 South Atlantic The labor is more intelligent in the Northern sections than in the Southern. Its higher rate of wages controverts the time-worn theories that low wages are a requisite to high profits. The day wages on truck farms are: for men, in New England, $1.25 ; in New York and Pennsylvania, $1.19 ; in Norfolk, 75 cents, and in the South Atlantic division, 85 cents. For boys and girls they are 65 cents in New Eng- land, 50 in Pennsylvania and New York, and from 85 cents * See note, p. 140. f Minus income of $18 per acre, but unexplained. % Minus income of $7 per acre, but unexplained. Minus income of $3 per acre, but unexplained. |j High prizes realized in comparison, on account of early growth. THE ECONOMY OF HIGH WAGES. 143 down to 25 cents in the South. Here again a demonstra- tion is given of the difference between piece-rate wages and time wages, wherever piece rates find employment, as in gathering the crops. The higher day rates simply express the higher working capacity and greater productivity of the worker. While the day rates are higher in the North, the piece-work rate is less than in the South, showing in the few instances stated that in a given time the cheap labor of the South turns out considerably less work than the better paid labor of the North. Picking string beans, for instance, is paid per bushel at the rate of 10 to 12 cents in the North and of 12 to 15 cents in the South ; peas at 15 cents North and 20 cents South. Not alone are higher day wages expressive of higher intelligence and working capacity of the laborer, but they always carry with them a higher working of the farm. The Northern farm employs more hands and more farm animals to the acre, more manure, and, all told, the highest degree of tillage under scientific methods. The differences in intensity of cultivation are made clear by the subjoined exhibit of the varying ratios of hands and farm animals to the acreage of truck farms. (I count two women equal to one man.) | ^ S&o- l!&. 6 o "! o 5 O S 8 iS w S 1 New England 6838 7.810 3 468 1.14 50 New York and Pennsylvania . . Norfolk 108.135 45 375 69.654 20.152 26.232 5 790 .64 .44 .24 .125 South Atlantic 111 441 34 983 6 686 31 .06 144 THE ECONOMY OF HIGH WAGES. As truck farming does not employ labor equally through- out the year, the above figures could not very well be taken as illustrative of anything more than that the different sec- tions employ labor, in greater or smaller degree to the acre, in the ratio given. Nearly the same proportion of farm animals being employed, and these not being supplied accord- ing to demand, but being a fixture of the farm the year around, it is evident that the general test of intensity of cul- tivation by the labor employed is as correct as the other test of the fertilizers employed. A Practical Illustration of Results of Best Methods. The best proofs of the high results of farming on the most approved scientific methods, employing labor as ex- tensively as in the New England section, and fertilizing as freely, I collected on a recent visit to the South. From Savannah to Jacksonville, Florida, and from there to Suwanee Springs, about a hundred miles west, and thence north and east again to Savannah, I found nothing but sand in endless abundance. The forest stretches in every direction. But the soil is so poor that the pine, though getting all the fecundity which is in the soil, disputed only by a sickly looking growth of very thin grass, seldom grows to be a respectable tree. The land around Savannah does not look more inviting. The live oak, rooting strong and deep, seems to be the only growth courageous enough to spread out We have seen the average yield of the South Atlantic division. The division includes a large stretch of country from above Charleston down to and inclusive of Florida. If the Savannah district alone were investigated, it would perhaps show a smaller yield than given in the THE ECONOMY OF HIGH WAGES. 145 above abstract. Mj visit to the truck farms around Savan- nah was in May, and at a time when for six weeks not a drop of rain had fallen. Field after field of early vegeta- bles lay parched and withering, and with many of the farm- ers the results, not always satisfactory at the best of times, were quite discouraging. Everything seemed changed when I came to the fields of one of the most successful farmers in the district. Here not a yellow leaf was visible, and I found the farmer directing his help who were busily engaged in gathering crops and packing for shipment. Deep plowing and a thorough preparation of the soil allow his roots to go deep enough to get all the moisture and thus to escape the drought affecting surrounding fields *so injuriously. He keeps the soil and the plants in good condition by successive plowings. He uses on every acre of his farm fully thirty dollars' worth of artificial guano and twenty dollars' worth of farm-yard manure, part of which he gets from his own stock, and part from the town, brought out by scavengers. He employs from 35 to 40 hands permanently, and from 200 to 300 at gathering time. He works now 120 acres. When he obtained the farm, only 60 acres were in fairly good condition. The rest has since been broken, drained, and cleared. All is now in fine condition, the land well built up by rotating crops and rich fertilizing. He has three crops from the land, if he can gather his first crop so that he can plant corn in May. June planting is injured by worms. He raises on one acre from 150 to 200 crates of cabbages, as a second crop 40 bushels of corn, and after har- vesting the corn from two to two and a half tons of hay. In Irish potatoes he gets 200 bushels to the acre, after which follows a crop of hay. He could raise larger crops of pota- toes, but that early potatoes are frequently frost killed. This happened to him a year ago ; then he plowed them 10 146 THE ECONOMY OF HIGH WAGES. over, planted cabbages, and came out with a good profit on the cabbages and two crops of hay on top. Crowfoot and crap grass spring up immediately after a good rain where the land is well manured, though without manuring nothing would grow. The money yield of these crops depends so much on the conditions of the market that the prices fluc- tuate very greatly. The quantities of produce raised give therefore a better impression of the most improved methods of farming when we hold them against the results of farm- ing as generally practiced in Georgia, where, be it remem- bered, the average in corn is not more than twelve bushels, and, for South-eastern Georgia, ten bushels per acre. The salable value of one species of farming is $6. of the other $200. After providing feed for stock 35 head on the farm, among them 18 mules, and 5 pleasure horses, which my informant keeps in Savannah for the use of him- self and family he sells annually from 200 to 250 tons of hay, netting from $2,500 to $3,000. His permanent help is paid at the rate of 50 and 60 cents for males, and 40 to 50 cents for females. He houses them in cottages on the farm (for which they pay no rent) and allows them what vegetables they require for their own use. Yet he has realized as much as $25,000 from his sales in a single year under favorable conditions of the market. The net results are not less satisfactory and may well be classified among the best in the country.* * Equally important data can be introduced from an examination of other agricultural departments. The average per acre planted with cot- ton is about 160 pounds for Georgia. This represents the well and the poorly farmed acre, the fertilized and the non-fertilized. The land with constant cropping takes five to six acres to produce one bale. The same land supplied with 2 hundredweights of fertilizers produces a bale to two acres. Land has lately been given 10 hundredweights of fertilizers by a class of farmers who have but begun to bring intelligence to the cotton THE ECONOMY OF HIGH WAGES. 147 Greater concentration of effort, a higher cultivation, more intelligent working of a smaller acreage seem to be the only fields, with the yield of a bale and a half from one acre. The highest net profit resulted from the highest degree of cultivation. Even under the present low price of cotton, giving but 6 cents to the farmer, high cultivation leaves a fine profit. The cost of raising cotton under the two last-mentioned degrees of fertilizing distributes itself as follows : COST PER ACRE AND NET PROFIT RESULTING FROM RAISING COTTON, FERTILIZING WITH B : 10 hundredweights. "50 Ibs. cotton @ 6 ctu $45.00 Cost of fertilizers $16.00 1 hoeing* 1.00 Ginning . . . 3.00 20.00 A : 2 hundredweights. Yield : 250 Ibs. lint cotton, @ 6 cts. $15.00 Cost of fertilizers $3.00 2 to 3 hoeings 2.50 Ginning 1.00 6.50 $8.50 $25.00 This assumes the farmer to do his own work, as is now very generally the case. The picking expense is about covered by the price received for the cotton-seed. But even when hired labor is employed, the results are highly sat- isfactory under the improved method. Four dollars for plowing is taken to cover the cost of man and horse per acre. The two statements of cost under hired labor to cultivate twenty acres in cotton would be as follows : A. Cotton: 10 bales. $30 Seed, 300 bushels @ 15 cts. to 18 cts. . 50 $350 5 months' labor, man, @ $10. . . .$5) 5 months' support @ $5 25 Picking @ 50 cts. per 100 pounds seed cotton 75 Ginning per bale, $2 20 Fertilizing per acre, $3 60 230 B. $900 900 pounds seed 150 $1,050 Labor $50 Support 25 Picking, 450 cwts. @ 50 cts 225 Ginning 60 Fertilizing 320 680 $120 $370 Whatever deductions may have to be made yet from these net results, commission and freight ($2 to $2.50 per bale covers these two items) must be balanced by the consideration that the labor of the owner is here replaced by hired labor. * One hoeing, I am told, is enough with richer fertilizing, where 2 to 3 are required on the poorer farmed laud. 148 THE ECONOMY OF HIGH WAGES. opening the Southern farmer has left for improving his by no means satisfactory condition. The planter is becoming more and more a part of history. The pressure of prices, the consequence of improvements and discoveries, is becom- ing too intense to allow wastage and high expenses. Farm- ing as described, scientific farming alone remains profitable. The large truck farm worked under the eye and management of the farmer by hired help, may be only a transition to the ten-acre farm worked by the farmer and his family with the same satisfactory results of a surplus at the end of the year after providing a comfortable living for the family condi- tions which the forty or fifty acres of a one-horse farm of the white farmer, and the twenty -five acre farm of the colored man, cannot begin to secure. Everything, by the force of competition, is in a moving condition, and, as Goethe says : "Und wer nicht schiebt, der wird geschoben." (Who does not push, he will be pushed.) We have here only given the product in the different countries, per acre, under cultivation by the plow. The pos- sibilities under spade culture have not been considered at all. The Lombard saying is : " If the plow has a share of iron, the spade has an edge of gold." * Two pieces of land of equal fertility and equal manuring have given on a test a result of 66 by the spade and 28 by the plow.f A laborer employed by the landlord of the Glengariff hotel (in the southwest of Ireland), had a piece of land of a quarter of an acre free of charge from his employer, which he worked with the spade in his spare time, and on which he raised, as he told me, 25 bags, or 75 bushels, of potatoes. The land itself was no better than the average in that * " Si 1'aratro ha il vomero di ferro, la vanga ha la punta d'oro." f &. de Laveleye, jficonomie Rurale : La Lombardie. THE ECONOMY OF HIGH WAGES. 149 section, mostly bog and reclaimed mountain land. Either requires much preparatory work till it is brought to a point where the spade can be set in. Those living in large cities can easily inform themselves on the results of the highest degree of cultivation practiced by the market gardener. An example of it has lately been reported in the Contemporary Review, in describing the maraichers in the suburbs of Paris. The yield of an acre, it will be seen from the example, can be carried, indeed, to an extent to which it would be as rash to set a limit as it would be to set a limit to the inventive faculty of the mind. I will quote the illustration in evidence. Speaking of the gardener, it says : "His garden is only 2^ acres in extent ; \ acre is given up to aspar- agus. From Sept. 1 to April 30 he sends every day to Paris from 200 to 1,000 bunches, getting for them on an average through the eight months 6d. a bunch. They grow in frames 50 feet long, 5 feet wide, floored with slates ; under these, hot-air pipes, above them a shallow layer of earth. The roots are crammed in as thickly as possible, covered with two inches of good soil, and the glasses are drawn over ; in eight days they are ready to cut, the stocks lasting for two months. He has also 1,000 bell- glasses, costing If. each, for salads. Every year the whole surface of the garden to the depth of six inches is taken out, sold to the neighboring bourgeois for their flower gardens, and replaced by manure from Paris, which we saw standing in large ricks ready to be spread. He employs fifteen men and pays 35 per acre rent on a fifteen years' lease, with right of pre-emption. We sat down with him to calculate his profits. Here is the balance sheet we made out : Wages 1,000 Rent and taxes 100 Manure 100 Firing and repairs 200 Interest on capital 150 Horses and carts 100 Sundries 50 Balance (profit) 1,028 Total 2,728 Sale of asparagus 2,550 Sales from rest of garden 178 Total 2,728 Net profit of 1,028 on a little over two acres of ground." 150 THE ECONOMY OF HIGH WAGES. Here fifteen men find employment on 2 acres. They re- ceive wages of $320 a year, as high a rate as is paid in many of the trades of Paris, requiring considerable skill. A rent of $168 is paid an acre, and still this victim of diminishing returns and of the rent gatherer pockets 454, or $2,200, net profit from each acre of soil, impoverished by successive generations of cultivators since the days of Julius Caesar. Without wishing to avail myself in the argument of these examples of highest cultivation, and returning to general agriculture, we get the most striking proof of the inadmissi- bility of the ruling theories, here criticised, when we apply the varying results to territorial comparisons of the United States. The crops of the United States in 1887 covered an area of 200 million acres. Of this the corn crops covered 42 million; potatoes, 2.4 million; cotton, 18.6 million; hay and grass, 37.7 million acres. Considering the exports, this acreage would have been sufficient to feed and clothe seventy millions of people. Allowing ten millions of acres for small crops, not here enumerated, tobacco, etc., kitchen- gardening and truck farming, this ratio would take three acres of soil for every head of population. To raise all this enormous product under the rough methods still prevailing, and under a therefore comparatively small yield per acre, a territory of the size of the states of Texas and Louisiana would be sufficient, and leave all the rest of the states and territories open for increasing population to settle upon. Advancing to more intensive systems of cultivation, as in the chief agricultural states of Europe, but only selecting the self-supporting ones, we arrive at the following interest- ing comparisons, as we progress from the lowest to the highest yield : THE ECONOMY OF HIGH WAGES. 151 Austria-Hungary, on the same method of computation, averages If acres per head of population, allowing for excess of exports. On this basis of yield the territory required for the United States would be 125,000,000 acres, and be cov- ered by the State of Texas, with one-fourth of the territory to spare. The same ratio represents France. Germany's cultivated lands cover 65,000,000 acres, and with a popu- lation of 50,000,000 requires 1| acres per head : equal to 88,000,000 acres on the American basis of population, cov- ered by a territory half the size of Texas. Of the cultivated area of Belgium and Holland, one acre suffices, and for the United States this ratio of cultivation would only require 70,000,000 acres, equal in size to the State of Colorado.* On the basis of Lombardy, not more than 53,000,000 acres would be necessary, or a territory of the size of Minnesota. On the ratio of yield per acre, as instanced by the truck farmer at Savannah, whose farming account 1 examined, half an acre would suffice where three acres are employed now. On this basis, 35,000,000 acres, or a territory of the size of the State of Wisconsin, would be required. * I give here the acreage under different crops supplying food for man and beast in the European countries here named. Fallows are not in- cluded. CORN CROPS. POTATOES. ROOTS, GRASS, MEADOWS, ETC. VINEYARDS. TOTAL. POPULATION. Acres (Millions). Acres (Millions). Acres (Millions). Acres (Millions). (Millions.) Austria-Hungary. . . France 38 37 3.7 3.6 30 22 70 62 40 38 Germany.. 34 7.8 17 60 50 Belgium 2 4 .5 1 8 5 6 Holland . . 1 5 4 3 1 5 5 152 THE ECONOMY OF HIGH WAGES. The same measure of comparison applied to European countries would be equally impressive. From the applica- tion of the highest degree of cultivation to the countries subject to the lower degree, an extension of the supply of products is realizable there, which, figuratively speaking, would be equal to adding new continents to the cultivable area of the world. With these data in hand, we can safely relegate the ques- tion of food supply to remote generations. Even these may not feel more grateful to us for our worry on their behalf than we have occasion to feel obliged to our ancestors at the beginning of the century for the fears they entertained on our account. The question of pressure of population on subsistence is taken out of the possibilities of ages to come. The growth of intelligence, the application of science to production under the protection of liberty, has given us the surest guarantee that the positions gained are safe posses- sions of the race. The source of poverty is not to be sought any more in increasing populations, but in the yet imperfect organization of the machinery of distribution of the products of toil and science. More and more we begin to learn to master the new development. As the masses progress in intelligence they will become able to absorb and to enjoy the great prosperity which all classes of workers, by the hand and the brain, have been instrumental in creating. The chief obstacle in the way to this end, however, is in the mistaken policy of governments, that they can contribute to the well-being of the masses by interference and by taxa- tion. CHAPTER X. The Condition of the Workingman under the Old and the New Dispensa- tion. Progress measured by the Budget of Consumables. The Ger- man Workingman on the Basis of the English of a Hundred Years ago. The Great Purchasing Power of England the Result of the Plus Earnings of her Working Classes. THE condition of the working classes a hundred years ago and down to the time when the new development began to break down the old barriers, compared with their condition to-day, furnishes the strongest evidence in support of the positions here taken. So plainly do the facts point in this direction, that it appears strange that so little use has been made of them for refuting the contrary theories from which so much misdirected agitation has sprung. The comparison will show that the comfort and well-being of the working classes of to-day are due entirely to the eco- nomic progress outlined in the preceding chapters, and that the contrary conditions still prevailing are entirely due to the neglect of the causes which have led to that progress. The effect of high wages in cheapening production has been correctly estimated by old writers. Not to mention earlier apostles of this sound theory, Arthur Young (" Trav- els in France ") declares most directly in favor of it, and was the more worthy of practical consideration, because his declaration is the result of actual comparisons after long years of observation by travel in France, Italy, Spain, Eng- land, and Ireland. " The great superiority of English manufactures in general over those of France, in connection with the higher cost of labor, is a subject of 154 THE ECONOMY OF HI&H WAGES. great interest and of the highest political importance. It shows that manufacturing industries are not benefited by a nominally low price of labor, as they flourish most where, on the contrary, labor is nominally at the highest price. They nourish perhaps on account of this that labor nominally the highest is in reality that which costs the least. The quality of the work, the skill with which it is performed, go for a good deal in the balance ; these depend to a great extent on the ease in which the workman lives. If he is well fed, well dressed, if his constitution preserves all its vigor and activity, then he will surely do his work far better than a man to whom poverty leaves but a meagre pittance.' (Arthur Young on " Manufactures in France.") The Standard of Living under the Best of Old Conditions. But this superiority of English wages over French by no means entitles them to be called satisfactory in the light of the position gained by the English-speaking nations of to- day. The French average of wages is stated by Young as 13d for men, 7%d. for women, and tyd. for spinner-girls. For England he gives the average as 20d. for men, 9d. for women, and Q\d. for spinner-girls. In Germany the rate of wages was much lower still than in France. The degree of comfort and working power which the English working classes could buy for their higher wages was balanced to an extent by the high price of wheat then beginning to make itself felt, the effect of the corn laws which made the succeed ing fifty years the darkest in their history. Nothing perhaps has been so productive of good to the working classes of England and contributed so much to the greatness of the nation as the remarkable period of fifty years of low corn prices from 1715 to 1765. It was during this time that the working classes were enabled to get that superior strength and working power on which Arthur THE ECONOMY OF HIGH WAGES. 155 Young dwells and which laid the groundwork for the indus- trial revolution which has since overturned the world. The average price of wheat for that period was about 35s. a quarter of eight bushels, varying from 23s. in 1732, as the lowest price, to 53s. in 1754, as the highest price, for the fifty years of the period. This must have been indeed the golden time of the working classes, compared to the later period in which the price of bread was doubled, to say the least ; while, as Frederic Eden says, in " The Condition of the Poor " (1797) : "To counterbalance this the rise in price of labor was very little, if anything, more than 2d. in the shilling, except what money is earned in piece-work, which ten or twelve years ago was not nearly so plentiful as at present." He gives the wages for 1737 and 1787: 1737. 1787. For out-door labor per day IQd. I2d. " thrashers dd. ~i%d. " laborers near great towns 16d. IQd. " scribblers 14d. 15d. " shearmen I5d. 18d. " weavers, 2d. higher. " women spinners J5d. Id. For the period of 1765 to 1796 the average price of wheat stood at about 50s., with 42s. in 1776 and 1786 as the low- est, and 81s. in 1795 as the highest, price of the period. The 25 years from 1796 to 1820 were terrible years indeed for the working classes. The average price of wheat was near a hundred shillings. The lowest price was 60s. in 1803, the highest 128s. in 1801 ($4.00 a bushel). That matters did not improve up to the time of the repeal of the Corn Laws is presumed to be a fact so well established that we need not dwell upon this part of the 156 THE ECONOMY OF HIGH WAGES. subject. The time when the worst aggravation had not yet been reached, when war, gold premiums, and all the evils of taxation for the maintenance of government and of the privileged classes had not yet brought things to their climax, may, therefore, be selected as a fair basis for com- parison. The time is, furthermore, well suited for the pur- pose, as it represents the " good old time " when the factory system had hardly begun to invade and press upon the house industries. The whole idyl of the good patriarchal period was still in full bloom, with the manor-house at one end and the " home " * at the other end of the social structure. Work was still distributed and done entirely as it is still done in many parts of Germany f and other Euro- * The name given to the poor-house by the people in England. f According to the Industrial Census of Germany in 1882, more than one-half of all engaged in manufactures, where small groups of workers can at all be employed, were employed in groups of less than 5 to each establishment. In A Total of Worked in groups of less than 5 persons. Worked in groups of more than 5 persons. 459,713 298,125 161 588 In machinery, instruments, etc 356,069 127,565 228,524 In chemicals 71,777 16,867 54,910 In textiles. . . . 910.089 440,573 469,516 In paper and leather industries 221. 6S8 469 695 107,293 367,688 114,395 102 007 In nutriments, food and drink 743,881 468,652 275,229 Total 3,232,932 1,826,763 1,406,169 Organizations large enough for profitable employment of power ma- chinery would have to be aggregates of many more than 5 persons. The number of people employed in domestic industries, those working in their own homes, for account of business-houses, merchants, exporters or manufacturers, is very large. A total of 754,550 persons are so engaged. The kingdom of Saxony alone employs 138,000 persons, and Rhenish Pros- THE ECONOMY OF HIGH WAGES. 157 pean countries, England herself not excepted. Steam power certainly had not yet begun " to run down human labor " and " made human flesh so cheap," as we are so often told in speech and song. Manufacturing was entirely based on home industry. Even spinning was done in the rural homes. Weaving was a house industry well into the first half of the nineteenth century. As late as 1830 the cotton industry of Lancashire employed 250,000 hand looms against 50,000 to 80,000 power looms, according to Porter ("Progress of the Nation"), and Ellison ("The Cotton Trade "), who is authority for the latter number. The work of Sir Frederic Eden gives us a full insight into these halcyon days, which, in contrast to the suc- ceeding period and the bread-riot times, were certainly to be remembered with longing. Nearly the combined earn- ings of a family were consumed in bread alone. Two ex- amples, one of a smaller and one of a larger family, may serve for many, reported by Eden, to give the earnings and explain how they were expended. sia and Westphalia 102,000 in domestic industries ; 230,000 are engaged in textiles, mostly in weaving. Hosiery still occupies over 40,000 people in house industry. The principal lines in textiles occupy in home indus- tries the following position ; I set side by side the total of all engaged in the representative branches : PERCENTAGE OF ALL EMPLOYED. Engaged in House Indus- tries. Total in Industry. Per< Silk weaving and velvet (Rhenish Prussia 49,022). . Woolen weaving xnt. 70 22 40 4-2 30 55 53,286 23,799 41,045 52,295 22,212 40,5-28 76,264 108,007 103,808 125,591 73,750 73,828 Linen " Cotton " Mixed good? weavi ng Knit goods,hosiery(kmgdom of Saxony alone,30,513) Total 42 233,165 561,248 158 THE ECONOMY OF HIGH WAGES. The first family consisted of husband, wife and three children, one of them able to earn a little money. s. d. The husband's earnings per week were 8 The wife and oldest child earned 4 6 Parish aid . . .16 14 ($3.40) This was laid out for : s. d. Bread, 12 loaves (4 Ibs.), @ 11 d. or 11 Butter, 3 Ibs. (bought of the master at a reduction), @6d 1 6 Clothing and other expenses 1 6 14 The house was built on waste land, and, " the landlord not having asked rent for many years, may now be considered freehold." Had they had to pay rent, the contribution from the parish would have had to be larger or the bread cut smaller. One shilling and sixpence a week, or $20 a year, for cloth- ing and other expenses of a family is not a reducible sum. The wardrobe could not be more fully supplied than that of many of our German house weavers of to-day. As the second case, I will cite that of a weaver in Ken- dall, wife and seven children. They earned : s. d. Man 9 2 daughters 4 6 3 daughters 2 6 Oldest boy 2 6 One girl knitting 6 Parish allowance 1 20 THE ECONOMY OF HIGH WAGES. 159 This was spent as follows : s. d. Provisions 14 Other expenses, soap, fuel, rent, clothing 5 6 Of the first part : s. d. Bread and flour absorbed 6 Meat, 6 Ibs. @ 4* d 2 3 Milk, 7 qts. lid 10 Butter, 2 Ibs. @ 9 d 1 6 Tea and sugar : tea, 2 ozs. ; sugar, 1^ Ibs 1 6 Potatoes, 2 pecks 1 2 Ale.. .06 14 Bread was 11 to VLd. a quartern loaf; flour, 2s. 3d. to 3s. 2d. a stone of 16 Ibs. ; potatoes, Is. 9d a bushel ; beef, 4d ; pork, 3 to 5d. ; mutton, 5d. If the wife baked the bread, instead of buying it, a family of nine good bread eaters would not have had more than 5 pounds of flour for bread, and perhaps 2 pounds of oatmeal a daj^, out of the shilling spent under that heading. Meat at 4%d. would give 6 pounds a week. Milk at l%d. a quart allows one quart per day. Tea and sugar, at the high prices which these articles then commanded, gave precious small quantities for the 2d a day left for them. Potatoes would allow something over two pecks a week at Is. 9c?. the bushel. So we find the daily consumption of nine eaters to have been : In bread and flour 7 pounds. " meat f pound. " milk 1 quart. " potatoes 5 to 6 pounds. This was all the obtainable supply of food of the great majority of the working classes in the good old times. 160 THE ECONOMY OF HIGH WAGES. The Measure of Progress expressed in the Budget of Consumables. Let us now see how a workingman's family lays out its earnings to-day, and what is the food supply it consumes. I shall give the earnings and budget of an English potter from his own statement to me. From other personal inquiry I know that it is a fair average of earnings as well as of living expenses. Many individual earnings are less than given in this case; others are considerably higher. But in manufacturing districts the wife is usually a far greater wage-earner than in this case; in the potteries especially so.* * That this represents very fairly an average of earnings is proven by copies which I made from the wage lists of a pottery manufacturer at Hanley in 1889 : A jollyer, 5 2s. 8d. He pays out of this two lads at 8*. and 6s. Gd., and three women at 10s., 16s., and 10*. = 1 16s., and has left, therefore, 2 12s. 2d., or $12.81. A second one earns gross 5 16s. Wd., and with the same deductions for his help has 3 6s. 4d., or $16.11. A third earns 5 14s. gross, and net 3 3s. Gd., or $15.38 Women jollyers : First case, 2 13s., out of which go 1 4s. for three helpers at 8s , which leaves her net 1 9s., or $7.04. A second one, 2 5s. gross, less 9s. and 7s. each to two helpers, leaves net 1 9s., or $7.04. A man plate maker earns 3 16s., less 12s. for helper, net 3 4s., or $15.54. Still another earns net 3 3s. Gd., or $15.42. He has between 200 and 300 in the savings bank. Another (a young man of 24), 2 18s., with 16s. Gd. off, nets 2 Is. Gd., or $10.08. A turner, 2 14s., less 9s., net 2 5s., or $10.93. A mould maker, 2 5s., less 6s., net 1 19s., or $9.48. Another mould maker, 2 7s., less 6s., net 2 Is., or $9.96. A kiln man, 3, less 14s., net 2 6s., or $11.16. A woman in fancy work potting made 30s., or $7 30. To take these earnings and say they represent the Staffordshire potters' THE ECONOMY OF HIGH WAGES. 161 The family under consideration consists of husband, wife, and three children. The husband earns 30 shillings. The wife 6 Total 36 We can here safely set a man's wages of 30 shillings against a rate of 12 shillings in corresponding occupations a hundred years ago, and, as in the case of male weavers, of 24 shillings against 9 shillings in the good old times. But let us see what we get for a shilling to-day in food supplies as against the period we have dealt with above. Bread is about 4|c?. a loaf to-day. This is 11 Ibs. for a shilling, while at lie?., the price then, the workingman could only buy 4j\ Ibs. Of flour, a shilling bought from 5 to 6 Ibs. Now (Is. 8d. the stone) it buys 9f Ibs. Meat is the only article which has become dearer. But it has become so, because the workingman has become a great consumer of flesh food, which he was not then glad enough, then, if there was always enough bread and potatoes. Of beef a shilling bought about 2^ pounds on an average. To-day imported frozen beef is sold at 4d. to 6d a pound, wages would be as unfair as the practice usually adopted by American manufacturers for an effect, and which practice has been criticised in these pages. That 30s. ($7 30) is below rather than above the average, and 36s. ($8.74) more expressive of the individual worker's earnings in the potteries, is proven from a statement of the average wages of fifteen pottery works, taken from their books at the time of a general strike in 1882-83. They are as follows : (1) Flat pressers, $7.75 ; (2) dish makers, $9.67 ; (3) cup makers, $9.97 ; (4) saucer makers, $7.97 ; (5) hand-basin makers, $9.71 ; (6) hollow ware pressers, $8.18 ; (7) hollow ware jiggerers, $11.69 ; (8) printers, $6.59 ; (9) oven men, $6.59 ; (10) sagger makers, $8.50; (11) mould makers, $10.29; (12) turners, $8.05; (13) handlers, $8.43. 11 162 THE ECONOMY OF HIGH WAGES. and English beef Sd. to 12c?. for the choice pieces. A shil- ling buys 2 to 3 pounds of the former and 1 to 1 pound of the latter. The same is true of mutton. New Zealand mutton of very fine quality is sold at &d. to 5d. a pound. Were the English workingman not so fastidious, he could have his meat as cheap as his ancestors, what meagre portions they could buy. But he insists on his home-grown beef and mutton. He even wants the best cuts, and disdainfully leaves the poorer pieces to be taken by the " classes/' A story is current in the potteries, that in the flush days of the early eighties a lady asking the price of a fine cut of beef was answered, " Oh, you won't buy this nohow ! None but the collier ladies buy these pieces." Butter averages Is. 4d. a pound now. Hence a shil- ling buys | pound against 1 pounds a hundred years ago. Tea was 4s. Id. to 8s. 6d. at the company's warehouses ; at retail 6s. to 10s. Taking the lowest price, a shilling bought 2f ounces. To-day, at 2s. 60?. or 60 cents a pound, a shilling buys 6f ounces. Refined sugar was 7%d. ; now it is 2%d. a pound. A shilling's worth was then If pounds, and. is now 5 pounds. Potatoes are now 8d. a peck. In 1797 they were Qd. to Qd. a peck (Is. 9d. to 2s. a bushel). Hence a shilling buys 1 pecks now, against If to 2 pecks then. We see from this, that a workingman in England can not alone buy to-day more food products all around for Is. than his forefathers could a hundred years ago, but that he has a far greater number of shillings at his disposal. As this is a very instructive object lesson, we will tabulate here: THE ECONOMY OF HIGH WAGES. 163 WHAT A SHILLING BOUGHT IN 1790, AND WHAT A SHIL- LING BUYS TO-DAY, IN THE CHIEF FOOD PRODUCTS CONSUMED BY WORKINGMEN IN ENGLAND. 1790. 1890. Wheaten bread, pounds 4ft 11 Wheat flour, pounds 5 to 6 9 Beef, pounds 2k to 3 1 to 3 Mutton, pounds 2 to 3 1 to 2 Butter, pounds Ij Tea, ounces 2| 6 Sugar, pounds If 5 Potatoes, pecks 1| to 2 1 When three-fourths of the earnings of a family have to be devoted to food, and most of this goes to the purchase of bread and flour, we can well understand the significance of these figures. Taking now the budget of the working potter mentioned above, comprising a family of 2 adults and 3 children, we find him laying out his 36s. as follows : s. d. $ 1. Food supplies 15 7 = 3.74 2. Other expenses, rent, taxes, fuel, sundries, clothing 14 2 = 3.40 3. Balance 63 = 1.46 Food takes only 43 in a hundred of earnings, leaving 39 per cent, for other commodities and expenses, while 18 per cent, go to savings. The savings bank has taken the place of the poor-house. But what is more to the point yet in illustration of our case, we have here a family of 2 adults and 3 children consuming as much and, taking other products than bread, more than a family of nine mostly grown up persons in the old days. We have here the following items as the weekly food bill of the potter : 164 THE ECONOMY OF HIGH WAGES. i. d. 1. Bread, 6 loaves, @ 4&d 2 3 2. Flour, 4 pounds 5 3. Meat, 7 pounds 3 11 4. Milk, 4 quarts 1 5. Butter, 1$ Ibs 2 6. Lard, lb., @ Qd . 3 7. Tea, 10 ounces 1 3 8. Sugar, 5 pounds, @ fyd 1 9. Potatoes, 1 peck 8 10. Ale and tobacco 1 2 Besides these articles, which also appear in the food budget of the workingmen of 1797, we have : 11. For spices, other vegetables, etc 1 8 Making up our food bill of 15 7| I inquired into the finances of another family which con- sisted of father, mother, and six grown-up children, all earning money, except the youngest boy of the age of fifteen. This family baked its own bread, and consumed a sack of flour of 224 pounds in five weeks. Hence per week : *. d. 1. Flour, 45 Ibs 4 5 2. Meat, 16 Ibs., @ 9d 12 3. Milk, 10 qts 2 6 4. Butter, 4} Ibs 6 5. Tea, 1 lb. 2 6 6. Sugar, 5 Ibs 1 7. Potatoes (about), \ pks 7 Does not smoke or drink. 8. Other food products 9 Placing side by side the two groups, we behold the rela- tive positions of the working classes of the two periods. One is representative of the old, the other of the new civil- ization and development. We cannot better show the THE ECONOMY OF HIGH WAGES. 165 advantages resulting from the progress made than by set- ting in parallel columns the quantities of food consumed by Family A, 2 adnlts and Family AA, 2 adults and Difference in 3 children. (1790.) 3 children. (1890.) Consumables. Bread 12 loaves 6 loaves 6 loaves Flour 4 Ibs + 4 Ibs. Meat 7 Ibs +7 Ibs. Milk 3qts 3 qts Butter 3 Ibs li Ibs - H Ibs. Tea 10i ozs + 1(H ozs. Sugar 5 Ibs + 5 Ibs. Potatoes 1 peck Extras 2s. 8d + 2s. 8d. But here we may be told that the outlay of the family's earnings of a hundred years ago in bread alone was not judicious, as bread was so high and meat relatively cheap. Very well, let us reconstruct the table of outgoings on a basis of six loaves of bread and assimilate the bill of fare to the more diversified plan of our modern example. Accord- ing to the prices of commodities stated above : Plus or Minus Family A. Family AA. of AA. a. d. s. d. Bread, 6 loaves, @ lid 5 6 6@4d 2 3 equal. Flour, 3 Ibs., @ 2\d 7 @l{d 5 + 1\ Ibs. Meat, 4 Ibs., @ 4*d 1 6 7 @ 7d 4 1 + 8 Ibs. Milk, 3 qts., @ l$d 4} 3 @ 4d 1 equal. Butter, 1| Ibs., @9d 1 H H @ 1*. 4.d..2 equal. Tea, 2| ozs 1 10$ 1 8 + 7| ozs. Sugar, 2 Ibs., @ 7$d 1 3 5 @ 2$d 1 + 3 Ibs. Potatoes, 1 peck 6 1 8 equal. Sundries 10 ..0210 + Zs.Qd . Omitting sundries 1110 and 13 1 represent the money value of the respective budgets. But on only Is. Sd. more outlay the workman of to-day can live so much better than a workman of one hundred years ago, as the plus figures above indicate, not to speak of the large surplus left over for other purposes. 166 THE ECONOMY OF SIGH WAGES. On the basis of consumption of 1790, to-day's budget would stand as follows : Family A. s. d. Bread, 6 loaves, @ lid 5 G Flour, 3 Ibs., @ 2\d 7 Meat, 4 Ibs., @ 4<2 1 6 Milk, 3 qts., @ \\d 4 Butter, H Ibs., @ Qd 1 U Tea, 2f ozs 1 Sugar, 2 Ibs., @ 7$d 1 3 Potatoes, 1 peck 6 Family AA. S. d. .2 3 .0 3J .2 4 .1 .2 .0 5i .0 5 ..0 8 4 @ Id . . 3@4.27 37.9 Wool. . 70 32 Total $1.02.27 69.9 The general cost outside of the wool was stated by the * The charges for the American goods cover the following items : Wool expense, $836 ; general expense, $10,106 ; rent, $2,884 ; insurance, $352 ; taxes, $1,009 ; interest, $3,461 ; and cover half a year, with a product of 163,614 pounds of woven goods. THE ECONOMY OF HIGH WAGES. 331 manufacturer as being covered by 33 cents a pound. In England the dyeing and finishing is higher, being done out- side. The American dyeing cost has to be corrected, being higher than given in my report on these dress goods. I inti- mated then, that some corrections might be necessary. The American goods are dyed in the wool. The mill manufac- tures, besides the all-wool goods, a considerable quantity of cotton mixed goods, and has the cotton dyed outside before it is carded in with the wool. This item of cost has to be added. An additional sum of 1.9 cents would amply cover this, as by the account of the mill rendered to me subse- quently. Goods of the same weight dyed in the piece, in all colors except navy blue and myrtle green, cost 4.6 cents the pound by the account of the mills to the commission merchant, who is the selling agent for the goods in question. Allowing for this difference, there is still sufficient margin in the general cost to make American flannels and carded- wool dress goods independent of foreign competition were there no tariff whatever. The American weaver gets 2.65 cents per yard of these goods, turns out about 300 yards per week, and earns, accordingly, $7.95. The English weaver gets (7. Sd. per piece of 72 yards) 2.56 cents per yard, turns out 105 yards on an average, and earns $2.71. Both are paid by the piece at nearly the same rate. The American operator handles two looms, works harder and longer hours. The Yorkshire girls handle one loom and are satisfied with, earning 12s. a week. " Higher than 15s. their ambition seldom goes," a manufacturer told me. This is the Alpha and the Omega, the question and the answer, in the problem of to-day. This class of goods needs nothing so much as free wool to make it exportable. Manufacturers know this very well, and have been very outspoken at times about it. 332 THE ECONOMY OF HIGH WAGES. How could it be otherwise? The general cost of pro- duction aside from the wool is somewhat below foreign cost, but the wool costs more than twice as much as abroad. It was pointed out at the time by the editor of the Boston Journal of Commerce that I had allowed 20 per cent, for shrinkage in the manufacture of the clean wool in the Eng- lish cost and not in the American cost My aim at that time was more to get at the manufacturing differences than at precise wool cost, which, as I stated then in my report, could be corrected. With the 20 per cent, added, the relative wool cost would have stood as 84 American against 32 cents Eng- lish cost. Hence, the smaller price seemed the safer to accept in consideration of the selling price of the goods. As to the objections raised against the price of the English wool, I have answered them on page 303. The statement made there, in reference to the wool question in general, found emphatic support from an American manufacturer and com- mission merchant. He writes to rne on the subject: "English goods are invariably made out of a blend, and in this blend there are all the way from five to twenty different qualities of wool, each of which is associated with it to give some desirable quality to the goods, either of texture, finish, or price. ... I am obliged nearly every week to refuse profitable contracts to make goods which would occupy consider- able quantities of American machinery, simply because the raw stock and the experience of handling the same do not exist in this country. The importation of the former is prohibited by the tariff and the tariff, is like- wise responsible for our inexperience in handling certain raw stocks, which have been excluded from this market for upward of twenty-five years." Here we have the whole difficulty. We have not the experience in handling raw stocks, nor have we the stocks of wool required for the blending, because they have been excluded from the market for upward of twenty-five years. Otherwise we could employ our cheap labor and working THE ECONOMY OF HIGH WAGES. 333 methods very profitably on orders now going constantly to foreign countries. It needs no emphasizing that this gen- tleman asks for no other favors than free wool. Answering by " If." That the statement of the hard fact that the cost of pro- duction, irrespective of wool, is not higher in America in the labor, and in the total even lower, than in England, should be assailed, and its refutation attempted by those who were for years scrambling for higher duties on woolens, was to be foreseen. Hence it can be well understood that I took especial care to satisfy myself of the correctness of my information. This explains why I acquaint the reader with the manner of the investigation. As in our fight for open markets and lighter burdens so much depends on the facts, it is certainly necessary that facts like the above, upon which the case is rested, should be unassailably correct and be safely depended upon as absolutely correct, and, therefore, if they are challenged by what appears competent authority, it also follows that the challenge should be answered. The report on this subject found wide discussion at the time. The leading papers commented on the evident lessons. Some one had to reply so as to save the theory that pro- tective duties were required on account of the wages, and the treasurer of the Farr Alpaca Company was good enough to assume this duty of chivalry. The head of so large a corporation principally engaged in the manufacture of " dress goods " would certainly be the fittest person to silence all who accepted, and possibly in argument made use of the statistical facts and comparisons. And so he did, judging from the quiet that reigned ever after. It escaped notice, however: 334 THE ECONOMY OF HIGH WAGES. First, that the Fair Alpaca Company, as the name, even, would indicate, makes goods of combed wool only, such as cashmeres, Italian cloths, and mohair and alpaca goods, and that I had distinctly stated that " they are made of carded wool, and are of plain flannel weave. They represent, therefore, manufacturing flannels as well as sackings or ladies' cloth." The two kinds of goods are so essentially different, and are manufactured on such different bases, that it would show either great ignorance or great disingenuous- ness to substitute one for the other. Second, it escaped notice that the treasurer of the Alpaca Company offered no data from his own mill. He pro- ceeded by ifs and innuendoes and by statements obtained from dyeing establishments in Philadelphia. In regard to the yarn, he says that, if the wool price were as low in England as stated against the price here, the yarns could be imported, and, with the manufacturing and dyeing done as cheaply as appears from the mill account, "they [the American manufacturers] would not only monopolize the home market, but be able to export under the tariff clause, for a drawback of duty on goods exported when wholly manufactured of material imported." Precisely. But who has ever heard of flannel yarns or carded wool yarns as an article of export in England? Our flannel mills make their own yarns, the same as in England. For combing yarns the short wools in the English goods are entirely unsuitable, as the gentleman undoubtedly knows. But combed yarns were always imported in large quantities until the new tariff, as the gentleman must likewise know, gave a monopoly to the American spinners and to the Farr Alpaca Company and a few other large corporations, the Arlington Mills, etc. They undoubtedly know the reasons why the tariff on yarns was put up so high, as they were the parties who prepared THE ECONOMY OF HIGH WAGES. 335 the tariff clauses relating to these points so profitable to them and so disadvantageous to all other branches. It would be very interesting to get a detailed statement of the cost of the company's goods ; but upon this subject the treasurer is eloquently silent. Upon the cost of flannels or sackings he is hardly a competent person to speak. Yet he creates the impression that he is treating identical goods. Not a very creditable method, to controvert by substitution of different articles and by befogging the people. That he had cashmeres in view, and not sackings, when he spoke of " all-wool dress goods dyed black " is seen from the weight of the goods, for which he obtained the price from " a job dyer in Philadelphia." * They are 35 inches wide, six yards to the pound, or two and two-thirds ounces to the square yard about one-third the weight of sackings or ladies' cloth, which are about two yards to the pound. Cashmeres are certainly a more expensive article to dye on the pound basis than flannels or sackings. One may send them to dye- houses, and importers and others frequently do so, but manufacturers of flannels and sackings are certainly not in this habit. The job dyers make a good profit out of their advantage on the cashmeres, which the manufacturers of flannels and sackings find it useful to keep for their own benefit. The job dyers pay freight, general charges, and a number of expenses which the manufacturers either do not figure or classify with the total general expense. The job dyer also expects to make a profit, and I am informed by a manufact- urer who occasionally sends goods to job dyers that these items amount to about 40 per cent, of the total price asked by the job dyer. Accordingly what would stand on the * The Farr Alpaca Company's mills are in Holyoke, Massachusetts. 33 G THE ECONOMY OF HIGH WAGES. books of a mill dyeing its own goods as 6 cents, would be charged as 10 cents by the job dyer. The dyeing charge of this Philadelphia job dyer is stated to be 16 cents a pound, but with six yards to the pound. Hence, the treasurer of the Farr Alpaca Company insists that the dyeing of sackings ought to be charged at the same rate, and other things in proportion. The cost of labor in dyeing depends largely on the quan- tities put into one dyeing. A job dyer doing work for all comers and in varieties of goods cannot do the dyeing on the plan on which a mill does its own dyeing, where one class of goods is dyed one color at a time, let us say for a day, without a change of vats. How cheaply the dyeing is done by large quantity dyeing, is proved by other accounts col- lected by me at the same time. A mill in Massachusetts mak- ing heavy 6-4 indigo blue sackings for men's wear, weighing from 10 to 18 ounces a yard, gave me 6,500 to 7,000 pounds of wool dyeing as a day's work. They employ from 45 to 50 men at $1.15 a day in the dyeing. Including the foreman they get $60 a day in wages. This is six-sevenths of a cent in labor per pound. But the same hands do the scouring of the wool likewise. As the accounts of the two operations are not separable, we have to take the labor cost of scour- ing from a mill in Ehode Island, where wages are on a not very much higher level. This is three-eighths of a cent, and leaves .47^ cent, about half a cent, for the dyeing labor. Now, I hear it said that wool dyeing may involve less handling than yarn dj^eing or cloth dyeing. Well, I have here an account for yarns from a Philadelphia dye-house, who pay much higher wages than are paid either in Massachusetts or Rhode Island. A week's work is about 35,000 pounds of yarn. For this work are em- ployed : THE ECONOMY OF HIGH WAGES. 337 Five sets of kettlemen at $12 a week $120 One set of kettlemen at $13 a week 26 Two poJers at $10 a week 20 One carrier up at $10 a week 10 One whizzer tender at $13 a week 13 Three scourers at $13 a week 39 One fireman at $14 a week 14 One driver at $12 a week 12 With a total pay roll of $254 or 0.725 a pound, barely three-quarters of a cent. These men get fully 100 per cent, higher wages than is paid in Yorkshire, but we can safely challenge dyeing being done there as cheaply as .362