Viii. The Manufacturing Industries Of The United States.

Viii. The Manufacturing Industries Of The United States.

IV. CAPITAL IN MANUFACTURING.

Another factor which entered into the modern system of production, and a very important one, was that of capital. The factory could not be established or operated without considerable amounts of money or its equivalent, credit. The machinery which transformed the raw material into the finished product, the material itself, the very buildings in which the work was performed, the payment for the transportation which brought it together, the wages of the men and women engaged in the work, all required capital, and in large sums. The accumulation of this capital, its management, the keeping of accounts of cost of material and labor and of the finished product, required financial skill and acquaintance in the markets in which this capital could be obtained; for often the sums required were in excess of the quantity possessed by the individual who had invested his all in the buildings and machinery, and must needs borrow of some other capitalist the additional sums required for purchasing material and paying the wages of his workmen. Sometimes the owner of the capital preferred to supply it and take a proportionate share in the earnings of the factory, and thus developed the company. Then, as the business grew and the investments of various men in a single establishment increased, it became necessary for them to take an active share in the management either in person or by representatives who became known as the “directors” of the work.

Thus arose the successors of the individual manufacturer, the company, and the corporation. Man must die and the death of an individual manufacturer, or the manager of a manufacturing firm or partnership, must affect disadvantageously the interests of the factory and its employes. Thus the importance of organizations which would continue unchanged in form and general management in case of the absence or death of any individual. This was one of the reasons for the establishment of the corporation. More important than this was the facility which it offered to holders of capital in sums large or small to invest their money in manufacturing without being compelled to give their individual attention to the industry in which the money was invested. The board of directors, which the investors might choose, managed the business either by personal attention or by the selection of competent and experienced persons for that service, and the investor felt assured that his money would be properly managed by the competent business men forming the board of directors and the experts whom these directors might employ to manage the details. Hence the corporation, under which the manufacturing establishments grew to enormous proportions, employing thousands and tens of thousands of people, and bringing material from the places in which it could be most cheaply obtained, investing money if need be in facilities for transporting and even producing the raw material, and cheapening the cost of production.

Another step which increased the importance of capital as a factor in the great manufacturing industries of the world came in more recent combinations of great corporations, in which a number of great manufacturing establishments agree to operate under one general management, thus adjusting production in the various lines of manufacture to the general demand, existing supply and prospective consuming power of the markets, establishing systematic methods for exploiting and selling the finished product, and so further minimizing cost of production and distribution. This last combination, the corporation of corporations, is generally known as the “trust” or “combine,” and under it the great manufacturing industries of the world have reached their greatest development, the cost of production has been minimized, the field for the selection of the materials has been enlarged, and the area in which the products are offered for sale also greatly extended.

While these great organizations, made up by placing under one general management a number of great establishments manufacturing articles of like character, are doubtless able to reduce the cost of production and distribution and prevent production in excess of probable demand, it is also true that they are in many cases able to exercise a greater control over prices of labor, of material and of finished product than when operating singly.

Meantime the world’s supply of money for investing in manufacturing, and the industries which contribute thereto, greatly increased. The world’s gold production in the decade ending with 1840 averaged but 13½ million dollars per annum. Then, owing to the gold discoveries in California and a little later in Australia, the production so much increased that the annual average in the decade ending with 1860 was 135 million dollars per annum, or ten times as much as on the average in the decade ending with 1840. For the next 35 years the production averaged about 125 million per annum. Then, suddenly, through the discoveries of great gold deposits in Africa and Alaska, the production began to exceed 200 million per annum, then 300 million, and in 1906, 1907, 1908 and 1909 averaged more than 400 million per annum, or as much in a single year as in the 40 years from 1800 to 1840.

Gold, unlike most other productions prized by man, is not consumed. It has enduring qualities; and the facility with which it can be transformed without material loss from one form for use to any other required form enables man to retain and accumulate a large part of the products of a long period. The wheat produced in one year is eaten before the next year is ended. The cotton crop of one summer is turned into clothing and worn to rags by the time another crop is ready for the factory and workshop. But the gold is conserved and utilized as money or the basis of money, and the accumulations of the recurring years merely increase the stock of that generally accepted medium of exchange. To be sure a small share, perhaps one-fifth, is used in manufacturing and the arts, and a small percentage lost in various ways; but probably three-fourths of the gold product enters circulation in the form of money or its equivalent, and thus increases very rapidly the world’s money supply.

Meantime the systems built up in the business world by which business is performed with mere pieces of paper which represent the gold and silver accumulations have greatly multiplied the available stock of money; and the ease with which it may be transferred from place to place, from country to country, and from continent to continent also adds to its availability and frequency of use in the world’s transactions. The supply of that article which the manufacturing and business world terms “money,” whether in the form of gold, silver, paper, credits, instruments of exchange, or otherwise, has increased beyond accurate computation. The world’s stock of gold has, according to the estimates of experts, doubled in the last 25 years; and it is probable that the supplies of other forms of currency; which serve as money; have increased quite as rapidly.

All of this increase in the world’s supply of money has increased the amount available for investment in manufacturing, and the increased use of machinery meantime in that industry has required great increases in the investment. While there are no ways of accurately measuring the world’s investments in manufacturing, it is practicable to do so in the case of the United States, the only country which regularly takes a census of its manufacturing industries. Its figures for the census years from 1850 to 1905, as to number of establishments, persons employed, wages paid, capital invested and value of product, are as follows:

It will be seen from a study of this statement, which compares conditions in the manufacturing industries at each recurring census from 1850 to 1905, that while the number of establishments in 1905 was four and one-third times as many as in 1850 the number of wage-earners was six and one-half times as many, the wages paid twelve and one-third times as much, the value of the product sixteen and one-half times as much and the capital employed twenty-six times as much.

This gives at least a suggestion as to the growth of investment in manufacturing. So far as relates to the United States, the only country for which we have statistics on this subject, the enormous increase in the use of costly machinery in manufacturing has increased the sums required for carrying on the industry, and machinery has in a marked degree been substituted for man in the factory operations. The number of wage-earners employed increased, it will be seen, a little more than fivefold while the capital employed increased twenty-fivefold. The tendency to bring the manufacturing industries into large establishments is also shown in some degree in the fact that while the number of establishments increased but about threefold the number of employes increased fivefold and the value of the manufactures turned out increased twelvefold.

Even these figures do not, however, give a complete view of the relative growth in the number of large manufacturing establishments, the capital invested and the product turned out, because of the fact that the census enumeration of “manufacturing establishments” includes hand and household industries, such as blacksmith shops, wheelwright and wagon repair shops, boot and shoe repairers, harness makers, tailor shops, dress making, millinery, carpenter shops, custom, saw and gristmills, etc., etc., in all of which the capital invested or the product per establishment at this time averages probably little more than formerly. It is in the greater establishments, the factories, that the increase in investment and in producing power per factory has occurred. The Census of 1905, which was by law confined to manufacturing establishments conducted under the factory system, and that exclusive of neighborhood and mechanical industries, found that the number of establishments manufacturing for the general market and not merely for local orders or neighborhood consumption, and which could thus be considered as manufacturing establishments conducted under the factory system, was but 216,262, while under the former method of including hand and neighborhood industries the number of establishments would, it is estimated by the census, have been in 1905, 533,769. The 216,262 establishments enumerated as “conducted under the factory system” employed $12,686,000,000 capital and 5,470,321 wage-earners, or an average of 25 each, and turned out $14,802,000,000 worth of manufactures; while the 317,506 smaller establishments, the “hand and neighborhood industries” formerly included in the general census returns, are estimated as having employed $1,186,000,000 of capital and 687,430 wage-earners, or an average of about 2 employes each, and turned out $2,066,000,000 worth of manufactures.

It will thus be seen that the larger manufacturing establishments, those “conducted under the factory system producing articles for the general market as distinguished from the product made upon order for a customer,” are those proper to be included in a study of the development, capital invested, persons employed, wages paid, material used and value of the product turned out. Unfortunately a study in this form cannot be extended over any considerable term of years, because of the fact that the United States census only began in 1905 to make this distinction or separation of the true “factory” from the great mass of establishments turning out manufactured products. It did, however, present in 1905 an estimate for the year 1900 of the number of establishments properly comparable with those enumerated in the factory census of 1905. This estimate puts the total number of “establishments conducted under the factory system” in 1900 at 207,562, and in 1905 at 216,262, an increase of but 4.2 per cent in the number, while the capital employed in 1900 was $8,979,000,000, and in 1905, $12,686,000,000, an increase of 41.3 per cent; the wage-earners in 1900, 4,715,023, and in 1905, 5,470,321, an increase of 16 per cent; wages paid in 1900, $1,736,000,000, and in 1905, $2,266,000,000, an increase of 30.5 per cent; materials used in 1900, $6,578,000,000, and in 1905, $8,504,000,000, an increase of 29.3 per cent; value of product in 1900, $11,411,000,000, and in 1905, $14,802,000,000, an increase of 29.7 per cent.

It will thus be seen that even in the recent period, 1900 to 1905, the percentage of growth in “capital invested” was greater than in any other important branches of the industry, the increases being: in capital 41.3 per cent, in wages paid 30.5 per cent, in value of product 29.7 per cent, and in number of wage-earners 16 per cent, while the number of establishments increased meantime but 4.2 per cent. It is thus apparent that although the tendency of the past thirty years has been distinctly toward an enlargement of the factory through the increase in capitalization rather than an increase in the number of establishments, that tendency still continues as the most distinctly marked characteristic of the development of the period 1900 to 1905.

Unfortunately the facilities for comparing the capitalization, product, etc., in 1905 with that of earlier years only extends, in its relation to all the factory industries, to the Census of 1900. In a few of the important industries, however, it is possible to compare conditions in 1900 with those of earlier censuses. The Census of 1900 shows that the number of boot and shoe factories in the United States fell from 1,959 in 1880 to 1,600 in the year 1900, while the capitalization increased from an average of $21,957 per factory to $63,622 per factory, the number of wage-earners from 57 to 89 per factory, the wages paid from $21,951 to $36,985 per factory, and the value of the year’s product turned out from $84,763 per factory to $163,142 per factory. In cotton goods the number of establishments in 1880 was 1,005, and in 1900, 1,055, the capital per establishment in 1880, $218,412, and in 1900, $442,882, the number of wage-earners in 1880, 185 per establishment, and in 1900, 287, the wages paid in 1880, $45,387 per establishment, and in 1900, $80,180, the value of product in 1880, $209,901 per establishment, and in 1900, $362,349. In iron and steel the number of establishments was in 1880, 699, and in 1900, 668, average capital per establishment in 1880, $294,652, and in 1900, $858,371, wage-earners per establishment in 1880, 197, and in 1900, 333, wages paid per establishment in 1880, $78,020, and in 1900, $180,869, value of product turned out per establishment in 1880, $418,583, and in 1900, $1,203,545. In woolen goods the number of factories fell from 1,990 in 1880 to 1,035 in 1900, the capital per establishment increased from $48,289 in 1880 to $120,180 in 1900, and the value of the product increased from $53,755 per establishment in 1880 to $114,425 in 1900.

It will be seen from the figures above presented that in these four great industries the tendency from 1880 to 1900 was distinctly in the direction of reduction of the number of factories, and a greater increase in capitalization than in that of persons employed, wages paid or in value of product turned out; while the figures covering the operations of the entire factory system for the period 1900 to 1905 also show a continuation of this same tendency toward a greater growth in capital than in persons employed, wages paid or value of product turned out.

V. TRUSTS AND COMBINATIONS.

The great increase in the size of the manufacturing establishment and of the capital invested in the manufacturing industry which necessarily followed the adoption of expensive machinery for manufacturing purposes was followed by a tendency toward co-operation and mutual agreements among the great organizations engaged in similar lines of work, the purpose being to reduce expenses, increase profits and control prices. Originally the persons, firms or companies engaged in manufacturing disposed of their products as best they could and in direct competition with others in their own line of manufacture. If the market for their product was good they demanded higher prices. If there was an oversupply they sold for whatever profit they could get, or if necessary at cost or even lower than cost, in order to prevent accumulations of stocks or the closing of their factories. The competition thus grew intense. In order to dispose of their goods they must put many salesmen into the field, they must advertise freely, and often their orders came from such distances that the cost of delivery formed a large percentage of the cost of the goods by the time they reached the purchaser.

This competition of one manufacturer with another making the same line of goods was not only expensive but resulted in working at cross purposes in many ways, and in loss of energy and money. So certain of the companies or corporations engaged in like industries began to make agreements among themselves by which they could co-operate in distributing their supplies to a given field and reduce the expenses of supplying that field. It was argued that the people of any section would only use a given amount of any standard product, and that the expense which the various manufacturers were incurring in competing among themselves for their respective shares in that trade might be materially reduced by an agreement through which the extraordinary efforts to sell in competition with each other should be abandoned and each manufacturer receive the share of the sales to which his proportion of production would entitle him. Not only would this reduce unnecessary expenses but it would in some degree render possible the maintenance of prices as they might be mutually agreed upon.

The first steps in combinations or agreements of this sort are known as “pools.” “This form of agreement,” says J. Russell Smith, “provides that each of the makers of a certain material for a certain territory should make a stipulated proportion of the product to be sold at an agreed price. If a factory made more than its share the owner made a cash payment to the pool and the money went to some manufacturer who had made less than his share. The weak spot of these pools was their absolute lack of power of coercion and that no member had faith in the others.” Often members took advantage of technicalities to violate the spirit of the agreement, and the agreements were short-lived. The system, while it is still working satisfactorily in Germany under the name of the “cartel,” failed to give satisfactory results in the United States, and also met with disaster in the fact that the courts held it to be a combination in restraint of trade and therefore unlawful.

To overcome these defects and create a system of division of production, control of prices and distribution of profits in proportion to the value of the plants co-operating, a new form of agreement was devised. It provided that the companies or corporations entering the agreement for mutual operation and proportionate distribution of profits should transfer the shares of their respective properties to a new corporation with full powers to manage the same, receiving in lieu thereof certificates which should entitle the holder to his proportionate share of the net earnings of the new corporation. “Under this form of organization,” says the Universal Encyclopedia, “the stockholders of each of the separate companies assigned their stock to a few trustees, giving thus an irrevocable power of attorney. In lieu of the stock assigned the trustees issued stock certificates to the stockholders of the separate companies and upon these trust certificates profits were divided. All of the earnings of the different members of the company were pooled and each manufacturer received his proportionate share as evidenced by the certificates, regardless of the question whether his establishment was running or closed. The trustees, having in their hands the voting power of all the stockholders, elected whatever persons seemed to them best as officers of the separate companies. In this way the management was absolutely unified and the interests of all parties concerned became as one. The courts finally holding that this trust agreement was illegal, the plan was later adopted of organizing a new company which should buy up all of the separate plants of the different companies entering the combination, so that in this way a unified management was secured within the law. In order that a more convenient form of handling the properties of the different companies might be secured, a third form of organization was later adopted in which a new company is organized as a stockholding company. This company then buys up all, or a large proportion of, the stock of each of the companies coming into the organization and controls these stocks. The officers of the central organization are thus in a position, by voting the stocks of different companies, to elect the directors and officers of those companies and thus control their policy.”

The advantages of this combination over competition are summed up by the Encyclopedia Britannica, in its 1902 edition, as follows: (1) The cost of selling may be greatly lessened; (2) the salaries of commercial travelers and their traveling expenses can be largely reduced; (3) if different manufacturing establishments, scattered throughout the country, are brought under one management it will be possible for orders for goods to be distributed so that goods can be dispatched to customers in each case from the nearest establishment and freight expenses reduced; (4) when several establishments are combined the most skillful of the managers can be selected for the general manager; (5) each business manager is likely to have some special excellence in his methods of management, and by combining the establishments it is possible to so distribute this managerial skill as to give to each branch of the work the man best suited to its conduct; (6) it is also possible to distribute the various branches of the manufacturing to the various mills or factories of the combination best suited for that particular branch of the work; (7) the advantages of unifying in one establishment the machinery of selling the product of all; (8) the ability of an establishment to fill large orders on short notice gains and retains business; (9) the great financial and business strength and skill of the combined organization gives it special facilities for pushing its goods into foreign markets, as is shown by the success abroad of the Standard Oil Company, and the American Tobacco Company; (10) better facilities for dealing with credits and thus aiding the business community.

Whether trusts, through their control of prices of the particular commodities which they manufacture, have actually advanced the selling price to the consumer, has been and is still the subject of much discussion. It has been urged that the mere reduction of the cost of production and distribution which results from the combinations would enable them to realize larger profits than formerly, even if the manufactures are sold at former prices, and that although their profits have doubtless been large it has not been accomplished through an actual advance in prices to the public, but rather through economies of production and sale. Nelson’s Encyclopedia, issued in 1908, discussing this subject, says, “The weight of evidence indicates that, judged from the margin between price and finished product and cost of raw materials, prices are increased somewhat by the existence of trusts. It is a fair conclusion that the actual prices of goods have as a rule been somewhat increased by trusts, although not in the measure that was anticipated at the inception of the trust movement.” The Encyclopedia Britannica of 1902 in discussing this subject says, “Experience seems to show beyond question that whenever the combinations are powerful enough to secure a monopolistic control it has usually been the policy to increase the prices above those obtained during the period of competition which preceded the formation of the combination.”

As to the effect of trusts upon wages it may be said that up to the present time no very strongly marked change is perceptible in the matter of rates of wages paid by the trusts as compared with other employers in the same line. Doubtless the combinations of numerous establishments under one general management have reduced the numbers of employes in certain lines, but in those lines in which the trusts require labor for the carrying on of their work no marked changes in the rates of wages have been developed as a result of the combinations. In steadiness of employment for the men and women engaged in the work of the establishments it seems probable that the trusts or great combinations of this character offer certain advantages, since their business is less liable to fluctuations than that of the smaller, and even in the absence of orders they are more likely to continue work accumulating stocks for future use than is the small manufacturer with limited capital or credits. In the matter of relations with the labor organizations certain of the trusts have made long time agreements with the labor organizations, thus adding to the steadiness of employment, though in some cases the trusts have declined to recognize the demands of labor organizations.

An example of the causes and methods of the combination of kindred manufacturing interests under one general central organization is found in the United States Steel Corporation as described by J. Russell Smith, in his “The Story of Iron and Steel.” No industry, he says, is naturally so uncertain and consequently so competitive as the steel industry. The demand for the product is fitful and uncertain because most of it goes into new constructions and new enterprises, and these are notorious for the spurts and depressions of demand which affect them.... The uncontrolled iron and steel market can make wild rises unknown to many commodities, because it is difficult to suddenly increase the amount of manufactures in response to sudden demand. A wave of prosperity sends a thousand industries which must have iron and steel clamoring, begging for steel. When the industrial sky darkens purchases of iron and steel cease as suddenly as they began and the price must tumble if the output is sold. These were the normal conditions through which all steel makers lived down to the depression of 1893-98. The numerous independent manufacturers thought that if they could get together and agree upon prices they could improve their condition. Attempts to achieve this in the form of pools provided that each of the makers of a certain material should make a stipulated proportion of the product to be sold at an agreed price, and if a factory made more than its share, the owner made a cash payment to the pool. The weak part of these pools was their absolute lack of power of coercion, and the further fact that no member had faith in the other.

The failures in the attempt at price control resulted in the consolidation of many companies, formerly rivals, under one control. The chief companies which later became members of the United States Steel Corporation formed two distinct groups, each group classified according to the product. One group included the manufacturers of unfinished steel, such as ingots, billets, plates and slabs, and included the Carnegie Steel Company, the Federal Steel Company, and the National Steel Company. Other companies which purchased the product of these manufacturers of unfinished steel and turned it into the finished state included the American Tin Plate Company, the National Tube Company, the American Steel and Wire Company and others. The first thought which came to the minds of this finishing group when hard times compelled them to cut down costs was to cheapen their raw material (such as pig iron, steel ingots, billets, etc.) by becoming manufacturers of their own pig iron. The Carnegie Steel Company had already done this and had obtained facilities for transporting the ore to the coal fields of Ohio and Pennsylvania and facilities for transforming the ore into the classes of material which it supplied. The Carnegie Steel Company thus became independent of other companies in the supply of its fuel, its ore, and the transportation of the same, and all of the requirements of operation. When the finishing companies announced their purpose to also supply themselves with the same facilities for producing their own raw material through the ownership of ore lands, transportation, facilities for smelting, manufacture of pig iron and the steel which they themselves required, the raw materials group could not view this operation with unconcern. It meant the loss of their market and necessity of seeking new markets in the United States or in foreign countries. As a consequence, the companies designated as the raw materials group, making pig iron, steel billets, etc., announced that they would establish their own finishing plants and thus compete directly with the group of companies which had formerly occupied the field without interference by the great organizations transforming the ore into the earlier processes of pig iron and steel billets. Mr. Carnegie announced that he would build a finishing mill in northern Ohio at the end of his ore railway which would eclipse anything that the world had ever seen and would be in equipment without a rival in the world. The Federal Steel Company increased its holdings of ore and coal, of upper-lake railways, and of lake steamers, and prepared to establish its plants for turning out finished products. Thus was threatened a doubling of the capacity of production of iron and steel in all of its stages, a capacity already far beyond that of the markets of the United States. Pools had failed, and the earlier trusts, aiming at monopolizing each line of the iron trade, had in the first temporary depression come face to face with the immediate prospect of ruinous competition among themselves. Then came the supreme effort at controlling prices through the creation of the most stupendous corporation that man has yet dared to launch—the United States Steel Corporation. This combination included most of the companies of both groups referred to—the producers of unfinished steel and those transforming the same into the finished product. The combination formed under the leadership of Mr. J. Pierpont Morgan controlled two-thirds of the steel output of the country.

The new company began business in April, 1901, and a comparison of prices since that date with those of earlier years shows regularity and steadiness of prices rather than any marked decline or advance. “This price-steadying,” says J. Russell Smith, “is of incalculable benefit to the independent manufacturer (as well as to the combinations) even when it limits the heights to which a price spurt will go. Rapidly rising prices start a feverish, intoxicated condition of the market very pleasant while it lasts, but followed by a more unpleasant reaction; therefore the Trust tries to keep sober and keep its little brothers sober also, and all are profiting by the new temperance.... Despite its efforts at control, the Trust is not as near monopoly as it was the day it began. The four full years of its operation, 1902-1905, inclusive, did not indicate any increased share of production. The bulletin of the American Iron and Steel Association shows that during these four years there was an almost universal decline in the percentages of iron and steel products made by the Trust.”

VI. THE IRON AND STEEL INDUSTRY.

The history of the iron and steel industry of the world forms an excellent example of the recent advance in manufacturing. The manufacture of iron and steel has made perhaps a more rapid advance than have many others, and its development is due in such a marked degree to the use of machinery and the investment of large sums of capital in the industry that a detailed study of the history and causes of its development seems justified.

Pig iron is the basis of all iron and steel manufacturing, in whatever form, and the record of production of this single article gives at least a suggestion of the growth in the other lines of the industry, the growth in production of the finished articles ready for consumption. The pig iron production of the world in 1800 is estimated at 460,000 tons; in 1850, 4,422,000 tons; in 1895, 29,300,000 tons, and in 1903, 46,381,000 tons. The product of 1850 was thus nearly ten times as much as in 1800, that of 1895, 63 times as much, and that of 1903, 100 times as much as in 1800, while the figures for the year 1907, give a total of 50 million tons or 109 times as much as in 1800.

Great Britain was the world’s greatest pig iron producer in 1800 and in 1850. In 1800 she produced 41 per cent of the world’s pig iron, and in 1850, 50 per cent. By 1895, however, she had begun to take second place, the United States standing at the head of the list of pig iron-producing countries at that time, the product of Great Britain forming 27 per cent of the world’s total and that of the United States 32 per cent. In 1903 the United States showed a still greater lead in this industry, producing in that year 39 per cent of the world’s total product; while Germany, which held a low rank as a producer in 1800 and 1850, actually exceeded Great Britain in 1903, producing 22 per cent of the world’s total, while Great Britain produced but 19 per cent of the total. Great Britain’s production grew from 190,000 tons in 1800 to 8,935,000 tons in 1903; Germany, from 40,000 tons to 10,085,000 tons; the United States, from 40,000 tons to 18,009,000 tons; and all other countries, from 190,000 tons to 9,352,000 tons. In 1800 the United States produced but 9 per cent of the world’s pig iron; in 1903, 38 per cent; and in 1907, 41 per cent.

It will be seen from these figures that the greatest growth in the world’s pig iron production has occurred in the United States.

Turning from the comparison of growth in pig iron production in the leading iron-producing countries of the world and comparing the growth of the iron industry in the United States with that of other manufacturing industries, we find that the development in this line has been greater than that of other leading industries. The census figures show that the value of the product of the blast furnaces, steel works and rolling mills of the United States, combined, grew from 297 million dollars in 1880 to 906 million in 1905, having thus more than trebled in value in that period, while the value of the cotton manufactures grew from 211 million to 250 million, having little more than doubled; that of the woolen and worsted manufactures, from 194 million to 308 million; lumber and timber products, from 234 million to 580 million; boots and shoes, from 166 million to 320 million; leather, from 200 million to 253 million; and flour and gristmill products, from 505 million to 713 million in the same time. In the various branches of iron and steel manufacturing there was also a remarkable growth. Foundry and modern ship products grew in value from 215 million dollars in 1880 to 800 million in 1905; structural iron work, from 3½ million to 91 million; and wire and wire work, from 19 million to 71 million.

This increase in value of the various classes of iron and steel products does not by any means show the actual increase in quantity produced, because of the fall in prices meantime. Practically all of the important classes of iron and steel products have fallen greatly in price as the quantity produced has increased. Pig iron, for example, averaged $33 per ton in 1870, and $18 per ton in 1908; steel rails, $107 per ton in 1870 and $28 per ton in 1908; bar iron, rolled, $79 per ton in 1870 and $38 per ton in 1908; and cut nails, 4.4 cents per pound in 1870 and 2.2 cents in 1908. The iron ore production in the United States grew from 3 million tons in 1870 to 52 million in 1907; pig iron, from 1.6 million tons to 26 million; and from 69 thousand tons in 1870 to 23 million tons in 1907.

Another characteristic of modern manufacturing is exemplified in the study of the iron and steel industry and the relation of capital, labor and product, as is also the concentration of industries into great establishments and groups of establishments. As has already been noted, the value of the product of the iron and steel blast furnaces, steel works and rolling mills grew from 297 million in 1880 to 906 million in 1905, having thus a little more than trebled in that time. In the same period the capital invested in these same establishments increased from 231 million dollars to 936 million; the capital having quadrupled while the product was trebling in value. During the same time the same establishments increased the number of their employes from 140,978 to 242,640, the number of employes having therefore increased but about 75 per cent while the capital was increasing 300 per cent and the value of the product about 200 per cent. The wages paid to the employes increased from 55 million dollars in 1880 to 141 million in 1905; the total wages paid having increased 156 per cent while the number of employes increased 73 per cent, indicating a marked increase in wages paid per individual.

The tendency to concentrate the production of manufactures into great establishments is also strikingly shown in the record of the iron and steel industry in the past few years. The census figures show the number of establishments in the United States in the group, “Iron and steel, including blast furnaces, steel works and rolling mills” at 1,005 in 1880, 645 in 1890, 668 in 1900, and 605 in 1905. The 1,005 establishments in 1880 produced 297 million dollars’ worth of the product; the 645 establishments in 1890 produced 431 million dollars’ worth; the 668 establishments in 1900 produced 804 million dollars’ worth; and the 605 establishments in 1905 produced 906 million dollars’ worth of the product. Thus the average production per establishment was, in round terms, in 1880, $296,000 worth; in 1890, $668,000 worth; in 1900, $1,200,000 worth, and in 1905, practically $1,500,000 worth. This gives an average product in 1905 of 5 times as much value per establishment as in 1880, while the fact that prices of 1905 were less than those of 1880 indicates that the growth in product per establishment was even greater than the above figures of value would suggest. Prices of pig iron, for example, which averaged for “No. 1 foundry” $28.48 per ton at Philadelphia in 1880, averaged but $17.88 per ton in 1905; bar iron, rolled, $62.04 in 1880 and $38.49 in 1905; steel rails, $67.52 per ton in 1880 and $28.00 per ton in 1905; and cut nails, $3.68 per keg of 100 pounds in 1880 and $2.00 per keg in 1905. It will be seen from these figures that prices in 1905 were little more than half as much as in 1880 and that the figures which give an average of five times as much value of product per establishment in 1905 as in 1880 therefore really indicate an average product of probably ten times as much in quantity per establishment in 1905 as in 1880.

That the iron and steel industry is especially suited to production in large establishments is indicated by the fact that the value of the product of the steel works and rolling mills of the United States in 1905 averaged nearly four times as much per establishment as that of those engaged in cotton manufacturing.

Even these figures of value of product per establishment at the various dates and in the various industries do not, by any means, measure the degree of concentration of the industry which has come in recent years, because of the fact that under the most recent methods, many of the establishments are managed in groups, many large mills or factories which were considered by the census as separate establishments being, in fact, combined under one management, as is shown in another part of this work in which trusts and combinations are discussed.

This tremendous growth of the iron and steel industry of the United States—of the world, in fact, but more especially of the United States, seems to justify a somewhat detailed historical and descriptive account of iron and steel making, ancient and modern.

The manufacture of iron and steel is older than history. The material is so widely distributed over the surface of the globe that man in every part of the world and in nearly every stage of civilization long since learned its value. There is evidence that it was known to the Egyptians, the Assyrians, the Chaldeans, the Babylonians, the Israelites, the Greeks, the Persians, the Romans. Caesar found the Britons in possession of iron weapons which they had made, and the Scandinavians of that period were also acquainted with its manufacture. The people of Spain seem to have been early and successful workers in iron and steel, if the wonderful stories about the swords and other weapons of the early history of that country are to be believed.

Iron, wherever found in the native condition, is so mixed with rock, dirt and other foreign matter that it can only be utilized by heating and hammering or rolling until the pure iron is separated from the foreign substances. Originally the method seems to have been to heat the ore in fires built on the ground until it became softened, and by hammering it in this condition work out the foreign substances. Then man found that by building the fire in a hole at the top of a hill and leaving an opening at the bottom so that air could be forced into it, the heat could be intensified. Then he learned to build up a wall of mud and stones with an opening at the bottom, and by placing in it alternate layers of charcoal and iron ore and forcing in air at the bottom with rude bellows similar to those now used by blacksmiths, he was able to heat the ore until the iron melted and ran together into a mass which he worked into the steel with which the famous “Toledo blades” and other weapons of that early day were made. Later, the Germans, by building the walls higher and getting a greater mass of the fuel and ore, were able to melt it so that it ran in liquid form into little ditches at the bottom of the furnace. This furnace, which came to be known as the “stuckofen” and “blow oven,” was the precursor of the blast furnace. Meantime the English were developing the process, and before the year 1700 were manufacturing considerable quantities of iron in furnaces in which charcoal supplied heat sufficient, when a blast of air was introduced, to melt the iron. This method of manufacturing iron continued in the European countries during all of the seventeenth century and until the early part of the eighteenth century. Meantime the forests of England were being rapidly destroyed in the sections which produced the iron ore. Prior to that time it had not been found practicable to use coal in smelting the ore, because the weight of the ore was so great that the fire was extinguished as the coal grew soft from the heat. Then, in the early part of the eighteenth century, somebody tried the experiment of treating the coal in a manner similar to that by which wood is turned into charcoal, and coke was produced and found available for smelting the iron ore, the coke being substituted for charcoal. And so the manufacture of iron in Europe went on, developing most rapidly in England which had ore, timber from which to make charcoal, and coal from which to make coke.

Meantime the making of iron began to develop in the United States. The early colonists found ore in Virginia and New England. Small quantities of pig iron were made in Virginia within a few years after the settlement of Jamestown, and in the latter half of the century New England began manufacturing iron from bog ore and charcoal made in the forests which were then so plentiful. Most of these early iron furnaces were “bloomaries,” merely heating the iron so that it formed a lump of 100 to 200 pounds weight at the bottom of the furnace, called a “bloom,” though there were some furnaces which heated the ore until the iron ran into little channels at the bottom and became “pig iron.” Before the year 1800 the State of Massachusetts alone had some 75 iron works, chiefly furnaces, making small quantities of iron. A little later there was built in that state a furnace then declared to be “the finest in America,” having two bellows twenty feet in length and operated by a water wheel. During the next century the size of the furnaces grew slowly and before the year 1800 there were furnaces capable of making two to three tons of iron per day each.

The history of the early iron industry in Massachusetts is not materially different from that of others of the colonies and early settlements. Connecticut, New York, New Jersey, Pennsylvania, Maryland, Delaware, Virginia, and the Carolinas all had numbers of small furnaces capable of making from a half ton to two or three tons of iron per day. They used charcoal altogether as the fuel, and it was estimated in Virginia and Maryland that for one furnace of average size four square miles of woodland and 100 slaves were required. The fact that there were then no means of transportation other than pack trains and that iron was too heavy to transport any considerable distances, encouraged every neighborhood to sustain its furnace and forge, and from these local factories of pig iron and iron bars the local blacksmith and others who aided him in supplying local wants drew their supplies. It is probable that the number of furnaces and forges in the United States at the beginning of the nineteenth century was much greater than at the end of the century, though the product of 1800 was but 40,000 tons of pig iron, against 14,000,000 tons in 1900 and 26,000,000 tons in 1907.

Meantime the English iron manufacturers had learned to smelt the ore with coke instead of charcoal. The quantity of wood required to make charcoal for smelting the ore had been so great that the forests of England were being rapidly destroyed, and a series of experiments had developed the fact that by heating coal in a pit or oven, in a manner similar to that by which charcoal was produced from wood, the charred coal, called coke, could be used as a substitute for charcoal in iron furnaces. This substitute for charcoal did not come into use in the United States until much later, however, for the reason that the people of the eastern part of the United States were still anxious to get the timber off their lands to use them for agricultural purposes, and so were glad to turn it into charcoal and dispose of it to the iron furnaces at a low cost. In time, however, the supply of charcoal began to run low and the Americans began to cast about for a substitute. After a series of experiments it became evident that the anthracite coal of Pennsylvania could be used for iron smelting, as it was hard enough to bear the weight of the iron ore piled upon it, and also made a much more intense heat than did the bituminous coal which grew soft as it was heated and was useless in the furnace. By 1840 the making of pig iron with anthracite coal became an established industry and by 1854 the quantity of iron made by the use of anthracite was as great as that from charcoal, about 350,000 tons for each. But as the supply of anthracite was limited to a comparatively small area, those sections which had no anthracite and had run short of the timber supply for making charcoal began to cast about for a substitute, and hearing of the success of the English, with “charred coal,” or coke, began its use in the United States; and by 1856 there were more than a score of furnaces making pig iron by the use of coke. It was also found that if the air which was forced into the furnace was heated before entering a much more intense heat could be obtained and the use of the hot blast was soon established.

With iron being made by the use of anthracite coal and coke made from bituminous coal, the people began to realize that the destruction of the forests to produce charcoal should not continue longer, and the making of charcoal iron rapidly decreased. Meantime the railways began to develop and were able to carry coal and coke to the places where the ore could be easily obtained, or to which it could be easily brought. Such a place was Pittsburg, for example. Iron ore was produced in certain parts of Pennsylvania and on the northern shores of the Great Lakes. Coal of a suitable quality for making excellent coke was produced at Connellsville, in western Pennsylvania. Limestone is required in great quantities in smelting iron ore, as the alkaline quality of the limestone neutralizes the acid of the waste matter forming a part of the iron ore and makes it melt at a lower temperature, the melted limestone also carrying off the impurities in the form of “slag,” and limestone was also plentiful near Pittsburg. Some of these materials could be floated down the rivers or on the Great Lakes, at least a part of the way from the place of production to the place at which they were combined, and for the remainder of the distance railways carried them over comparatively level or down-grade routes at small cost.

So, with the advent of the railway and the steamship the methods of iron making changed. The railway and the river or lake steamer could carry the finished product at such low cost that it was no longer necessary that each county should make its own iron, and more than that, they could carry the ore and the limestone and the coal or coke to any place convenient for assembling these necessary materials and distributing the finished product.

This combination of the raw materials and the manufacture of the iron in a few great establishments instead of many small ones encouraged the use of machinery in manufacturing. Machines were wanted for handling the ore, for handling the coal, for handling the limestone, for handling the molten material which issued from the furnace, and for turning it into the finished form, sometimes accomplishing this without allowing the material to grow cold and harden at any point between the time it trickles from the blast furnace and its completion as a steel billet, a rail for the railway, or a roll of barbed wire for the ranchero of South America.

The iron as it leaves the blast furnace is not in a condition in which it can be used for manufacturing. It contains so much carbon and other impurities that it is brittle and breaks easily. This condition is similar to that of the “blooms,” or chunks of metal which came from the early furnaces and which had to be refined by laborious processes of reheating and hammering until the impurities were worked out.

Before the year 1800 it had occurred to somebody in England that if flames could be forced across the surface of the molten iron and the iron kept in a state of constant agitation the flames would burn out the carbon. This was accomplished by making an open hearth to contain the molten material and “puddling” the iron as the flames were forced across the surface. Then a series of grooved rollers was devised, between which pieces of partially cooled iron could be passed and repassed, and this machine process worked out the “slag” and other impurities which had been formerly worked out with hammers. This puddling and rolling began in England before the year 1800 and “the puddle and the grooved roll,” says J. Russell Smith, “closed the era of the blacksmith’s supremacy and opened the era of machine manufacture.” It was an adaptation of these methods and combination of them with the concentration of the material at convenient centers that proved the beginning of the machine-manufacturing methods in the United States at a considerably later period than in England.

The most notable step in developing the use of iron, however, was that by which it was quickly and cheaply turned into the reliable form known as “steel.” As already explained, the iron when it leaves the blast furnace contains such quantities of carbon, silicon, sulphur, phosphorus, and other impurities that it is brittle and unreliable as to tensile strength, flexibility, or the qualities which make it available for edged tools. The puddling process already described deprived it of the carbon and sulphur, but left it too soft for immediate use. It required a small and fixed amount of carbon to give it the qualities of steel and this was replaced by reheating it in air-tight receptacles in combination with powdered charcoal. By this process steel was made, but it was a slow and expensive process. About the middle of the last century, William Kelly, of Pittsburg, conceived the idea that by forcing air through the molten iron as it came from the furnace the oxygen of the air would combine with the carbon of the iron and burn out the carbon, leaving the remainder pure iron. A series of experiments proved the accuracy of his theory, and he made steel by this process. About the same time Sir Henry Bessemer, of England, devised a similar process and it was put into practical operation in England and later in the United States. By this process, developed almost simultaneously in America and England by these two men, the transformation of iron into steel in a brief space of time and at a small cost was established, and the manufacture of steel developed with wonderful rapidity. The quantity of steel manufactured in the United States in 1870 was but 69,000 tons; in 1880, 1,247,000 tons; in 1890, 4,277,000 tons; in 1900, 10,188,000 tons; and in 1907, 23,363,000 tons. With this great development in manufacturing came a great development in the use of machinery for handling not only the finished steel itself but the pig iron from which it was manufactured, the iron ore from which it was produced and the coal and limestone used in its production. With this growing use of machinery in the manufacture and the great increase in the quantity used in the industries of the world have come the enlargement of the establishments and the increase in the capital invested described at the opening of this section.

This process of burning out the carbon and other impurities from the molten iron by forcing air and thus combining the oxygen of the air with the carbon of the iron, although it seems to have been devised almost simultaneously by Kelly in the United States and Bessemer in England, is usually denominated the “Bessemer process,” and while Kelly obtained certain patents and a half million dollars for his invention, Bessemer also obtained other patents and it is said ten millions of dollars for his.

The process of transforming iron into steel by the Bessemer process is described by Herbert N. Casson in “The Romance of Steel,” as follows:

“A converter is a huge iron pot twice as high as a man. It is swung on an axle, so that it can be tilted up and down. Although it weighs as much as a battalion of five hundred men, it can be handled by a boy. About thirty thousand pounds of molten iron are poured into it; and then, from two hundred little holes in the bottom, a strong blast of air is turned on, rushing like a tornado through the metal. Millions of red and yellow sparks fly a hundred feet into the air.

“The converter roars like a volcano in eruption. It is the fiercest and most strenuous of all the inventions of man. The impurities in the iron—the phosphorus, sulphur, silicon and carbon—are being hurled out of the metal in this paroxysm of fury. The sparks change from red to yellow; then suddenly they become white.

“‘All right!’ shouts the grimy workman in charge.

“The great pot is tilted sideways, gasping and coughing like a monster in pain. A workman feeds it with several hundred pounds of a carbon mixture, to restore a necessary element that has been blown out. Then it is tilted still farther; its lake of white fire is poured into a swinging ladle and slopped from the ladle into a train of huge clay pots, pushed into place by a little locomotive. The converter then swings up and receives another fifteen tons of molten metal, the whole process having taken only a quarter of an hour.... Today there are more than a hundred Bessemer converters in the United States, breathing iron into steel at the rate of eighteen billion pounds a year. It is well worth a visit to Pittsburg to see one of these tamed Etnas in full blast. Nothing else in the world is like it.”

Discussing the importance of the discovery of the method by which common iron is thus cheaply and quickly transformed into steel, J. Russell Smith, in his “The Story of Iron and Steel,” says:

“Archaeologists and ethnologists agree that before the dawn of datable history a milestone of progress was marked when our ancestors had, at enormous cost, won a pound or so of iron per capita and begun the iron age. The keen analyst of the present, seeing our railways, our ships, our cannon, our sky scrapers, has erected another milestone, and this he calls the Age of Steel.

“The close of the Civil War found the iron-making world in full possession of the Bessemer process of converting that metal into steel.... The variety of uses for this metal is absolutely beyond enumeration.... Within the space of a generation we have increased our iron consumption fourfold.... This is the age of power. Man has changed his economic and social conditions in that he has harnessed the forces of nature to make them do his work. Our main dependence, thus far, has been upon fuel, chiefly coal. The power in the form of the steam generated in the boiler is kept imprisoned in iron pipes until released in the steel cylinder, where a steel piston drives forward a steel rod, which communicates the force to a steel fly wheel, turning on a steel shaft, and sending the power away to various places where man wishes to use it.

“Portable engines, entirely made of iron and steel, are drawn about the country, or move themselves and carry loads.... The dynamo rests upon a heavy iron frame and swings its iron arms and iron magnets through space, whence it mysteriously winds out power.... The second of the great iron uses is to be found in the machines driven by the power that man has learned to harness.... Transport is the third member of the mechanical trinity which goes with power and machines to make the present epoch. For a long time the railways consumed half of man’s total iron product. The street railway of the city is also a heavy consumer. The elevated railway is nothing but a bridge spanning the city in all directions, and the subway, its latest rival, is but a steel tunnel burrowing beneath the ground. In the country, the erection of the trolley lines is now giving us a second set of railways, and even the poles are coming to be made of iron. Half a century ago iron ships began to be common, a quarter of a century ago the ship-builder turned to steel, and now there is almost nothing else afloat upon the high seas.... Our structures are becoming more and more dependent upon the products of the blast furnace and the steel mills. Our fathers contented themselves with brick and stone and wood. The limitation of wooden beams and the cheapness of Bessemer steel caused that material to be used in heavy structures in a limited way, and as wood increased in value and knowledge of the use of steel increased, we now see the modern sky scraper in which wood is eliminated and steel the absolute essential....

“It is therefore natural to expect that the blast furnace should be among the most thoroughly organized and most highly developed pieces of mechanism yet devised. It is certainly the most fearful of all man’s creations, and considering the character of the process which goes on within it and its unapproachable heat, it is under a wonderful degree of control. At the present time, the blast furnaces are a hundred feet high, consist of a great iron stack lined with some nonfusible material, and when in operation are filled from top to bottom with roaring fire. Into their fiery throats are fed alternately small carloads of coke and iron and limestone, and from the bottom there flows away at intervals two molten streams—one the precious iron upon which our civilization rests; the other the useless slag, to be got rid of in the cheapest possible way.... The burning of this modern furnace takes place under a forced draught of air blast from eight to twenty pounds per square inch. This pressure serves to drive the air upward through the hundred-foot mass which burns within the furnace. Otherwise, the fire would smother. The gas which results from the imperfect combustion within the furnace is a most valuable by-product and serves a valuable purpose in promoting the furnace operation, and sometimes leaves a product to sell. A part of the gas is taken to the boilers, where it generates power for the blowing engines. Another part of it is used in the so-called stoves to heat the air blast on its way to the furnaces.”

The iron obtained by this Bessemer process, by which the carbon and other impurities are burned out, is, when it leaves the converter and cools, merely soft, malleable iron, and to transform it into steel there must be re-inserted a small but fixed and definitely determined amount of carbon. “Steel,” says J. Russell Smith, “is simply a mixture of iron with a small amount of carbon, very intimately and evenly associated in its mass. The carbon content of steel varies from .40 per cent to 1.50 per cent. Steel making is, therefore, a process of mixing carbon and iron in proper proportions. Inasmuch as it cannot be made satisfactorily in a puddling furnace, by reducing the carbon to a proper point and then stopping the furnace, it has been found necessary to burn the carbon all out, making wrought iron, and then working it back to steel by recarbonizing under such conditions that the carbon can be controlled. The iron, after having all of its carbon and other impurities burned out by the Bessemer process, is raised to steel by having thrown into it spiegel iron or ferro manganese. Both are rich in manganese and carbon. As the iron content of the Bessemer converter is known and the content of the spiegel iron is known, the carbon in the steel is under perfect control. The workman watching the flames cuts off the blast at the moment when the changing color tells him the carbon is gone. The carbon of the added material makes steel, and the manganese gives to the steel a toughness needed to make it stand the strain of being rolled into desired shapes while red-hot, without breaking....

“The steel for the greater industries is shaped in a rolling mill. It comes from the Bessemer or open-hearth converter molded into a great billet like a piece of a large wooden beam, and this billet is carried red-hot to a so-called soaking pit, where the tongues of a flame from a gas-fire keep it heated until it is ready to start on its journey through the mills. This soaking pit is the starting point of many roads through the mill. It goes off in one direction, and successive rollers squeeze it, crush it, and lengthen it into steel rails, in which form it emerges a thousand feet away. Other sets of rolls make the billet into flat beams for bridges or elevated railways. A third set of rolls, also starting near the soaking pits, send the product out of the distant door of the steel mill in the form of great flat plates to make the boiler of a locomotive, or a marine engine, or the sides of a steamship, and yet other sets of rollers will make square rods which finally pass under heavy shears and are chopped into pieces called billets or blooms. These pieces of steel are the raw material for other mills which may make wire, nails, or manufacture steel of any other of a thousand forms. Some billets are as big as cord wood, some no larger than lead pencils—thus it passes out into the manifold world of manufacture.”

VII. THE TEXTILE INDUSTRY.

Cotton manufacturing is an important illustration of the growth in the textile industries of the world during the period in which the use of machinery has multiplied the producing power of man in the industrial lines. In all lines of textile manufacture the growth has been rapid, but especially so in cotton, which has made greater gains in the work of supplying man with the necessary requirements of life, in clothing for his body and the comforts of life, than other branches of the textile industries and than many other branches of manufacture. Mulhall estimates the consumption of cotton by all nations at 303 million pounds in 1800 and 5,900 million pounds in 1896; wool, 460 million pounds in 1800 and 2,400 million pounds in 1896; flax, 600 million pounds in 1800 and 200 million pounds in 1896; silk, 30 million pounds in 1800 and 50 million pounds in 1897. It will be seen from these estimates that the growth in consumption of cotton has been far in excess of that of any other of the important fibers. Cotton consumption in 1896 was, according to these figures, 5,900 million pounds, against 303 million in 1800, or practically 20 times as much in 1896 as in 1800, while wool consumption is set down at 2,400 million pounds in 1896, against 460 million in 1800, or only about 5 times as much in 1896 as in 1800; while in the other materials used in textile manufactures the growth has been much less than that of cotton.

Before entering upon a discussion of the growth in cotton manufacturing and the causes thereof, it is proper to say that the value of all textile manufactures in the principal countries of Europe has, according to Mulhall, grown from £96,000,000 in 1800 to £660,000,000 in 1896, and in the United States, from £3,000,000 in 1800 to £188,000,000 in 1896, the value of textile manufactures produced in Europe having thus increased about sixfold in the period in question, and in the United States about sixtyfold. It is apparent from these figures that the growth in the manufacture of cotton during the last century has far outstripped that of any other of the textiles. It is also quite apparent that the capital invested in cotton manufacturing is much greater than that in other textiles. The United States Census reports the capital invested in the manufacture of cotton goods in 1880 at 320 million dollars; in 1905, 613 million; the value of the products of these manufacturing establishments in 1880, 211 million dollars, and in 1905, 450 million dollars. Even these figures of increased production—from 211 million dollars’ value in 1880 to 450 million in 1905--do not fully indicate the increase in quantity of products, since prices in 1905 were materially less than those of 1880. The average price of standard sheetings in the New York markets was quoted at 8½ cents per yard in 1880 and 7 cents per yard in 1905; of standard drillings, 8½ cents per yard in 1880 and 7 cents per yard in 1905; of New York mills bleached shirtings, 12¾ cents per yard in 1880 and 9 cents per yard in 1905; of standard prints, 7.4 cents per yard in 1880 and 4¾ cents per yard in 1905; and of 64 by 64 printing cloths, 4½ cents per yard in 1880 and 3.6 cents per yard 1905. This indicates that the increased valuation in cotton products from 211 million dollars in 1880 to 450 million dollars in 1905, fails to fully reflect the increased quantity produced in 1905, and suggests that the quantity produced in 1905 was probably approximately three times as great as in 1880.

The disposition to increase production through enlargements of existing factories rather than by the establishment of new ones, or the combination of existing factories as an offset to the establishment of new ones, is indicated by the fact that the total number of establishments, which was reported in 1880 at 1,005, was, in 1905, but 1,154, an increase of about 12 per cent in the number of establishments, while capital was increasing nearly 200 per cent, the value of product more than 100 per cent, and quantity of product probably nearly 200 per cent.

Great Britain is in proportion to population the greatest cotton-manufacturing country of the world. She was earliest in the field as a manufacturer, developing that industry while the countries of continental Europe were engaged in wars and while the United States, now the leading producer of cotton, was developing her agricultural industries and had scarcely as yet entered upon the development of her manufacturing possibilities. The United States, by far the largest producer of raw cotton, ranks second as a manufacturer of cotton goods.

Accurate estimates of the relative standing of the various countries in the manufacture of cotton are difficult, almost impossible, especially in view of the fact that no country other than the United States takes a periodic census of its industries. There are, however, three ways by which the production of cotton manufactures in the various countries can be approximately measured: first, by the number of spindles in cotton mills; second, by the quantity of cotton used; and, third, a method which has been suggested in some quarters, a measurement of the quantity or value of cotton goods exported. This, however, would not give at all an accurate picture of the quantity produced, since the population of the cotton-manufacturing countries varies so greatly and, what is more important, the habits of life, the climatic conditions, and therefore the quantities of cotton cloths and cotton manufactures of various sorts used by their respective populations renders the third method of estimate of little value. Even the first and second methods mentioned—the determination of the number of spindles and the determination of the quantity of cotton used—do not, by any means, give an accurate picture of the relative quantity or value of cotton goods manufactured. In the United States, where cotton is plentiful, much larger quantities of cotton are used per spindle than in the European countries, and greater quantities of cotton are also used for each 100 yards of cotton manufactured than is the case in other countries. This is due, in part, to the fact that the manufacturers of the United States are producing cotton goods for their home population, living in a temperate zone climate and requiring, therefore, heavy cottons; while many of the factories of Europe are manufacturing for exportation to tropical countries, where cottons of very light weight are required. As a consequence, the European manufacturers use a less quantity of cotton per spindle and a less quantity of cotton per square yard of product than is the case with the manufacturers of the United States. The number of spindles in cotton mills in Great Britain is estimated at 44½ million in the season 1896-7 and 52 million in 1906-7, an increase of 16¾ per cent; in continental Europe, 30⅓ million in 1896-7 and 35¾ million in 1906-7, an increase of 18 per cent; in the United States, 17¼ million in 1896-7 and 25¾ million in 1906-7, an increase of 50 per cent; and in India, 4 million in 1896-7, and 5⅓ million in 1906-7, an increase of 33 per cent. The annual consumption of cotton in cotton mills is estimated, in Great Britain, 3¼ million bales of 500 pounds net in 1896-7, and 3-9⁄10 million bales in 1906-7, an increase of 21 per cent; in continental Europe, 4⅓ million bales in 1896-7, and 5½ million bales in 1906-7, an increase of 44 per cent; in the United States, 2¾ million bales in 1896-7, and 4-5⁄6 million bales in 1906-7, an increase of 77 per cent; and in India, 1 million bales in 1896-7, and 1½ million bales in 1906-7, an increase of 50 per cent.

It will be noted that although the number of spindles in the cotton mills in the United States was but 25¾ million, against 52 million in Great Britain, or about half as many in the United States as in Great Britain, the quantity of cotton used in the United States was greater than in Great Britain, being 4,822,000 bales, against 3,915,000 bales in Great Britain.

The textile industry of the United States, according to census reports, represented in 1900 investments amounting to 1,043 million dollars, employed 661,000 wage-earners, paid 209 million dollars per annum of wages, used 521 million dollars’ worth of materials, and turned out products valued at 931 million dollars. The number of establishments was 4,312. Cotton manufactures formed a larger share of these enormous totals, both as to investment, wages paid, and value of products, than did any other of the manufacturing industries included under the general term of textiles. The value of cotton manufactures in 1900 was 339 million dollars, while that of wool manufactures was 297 million; silk manufactures, 107 million; hosiery; and knit goods, 95 million; and flax, hemp and jute manufactures, 48 million. Adding to this 45 million for dyeing and finishing of textiles, the value of the combined textiles in 1900 is set down at $931,494,566.

“Textiles,” or “textile fabrics,” may be properly described as stuffs made by weaving together of threads of any sort to produce a material with a nearly solid surface. “A fishing net,” says the Encyclopedia Americana, “is not a textile, because the cords which compose it are not woven together but merely cross one another at equally distant intervals and are strongly knotted at those points. But mosquito-netting is a textile, although very open, because the threads are merely held by their own friction.” Textiles in the usual sense are made of the twisted fibers spun into thread of flax or linen, cotton, hemp, jute, silk or wool, woven together by the use of a loom. “The general nature of a loom,” says the above quoted authority, “is that the threads of the warp are divided into two sets, one of which is thrown upward, while the other is thrown down, and at the same moment a shuttle carrying a thread of the woof is driven through between the two sets of warp threads. The next movement of the loom reverses the two sets of warp threads, throwing the upper one down and the lower one up, compressing and drawing tight the woof thread into the loops which show on the surface of the stuff and go to form the surface, and the shuttle is driven through again in the opposite direction. The constant repetition of this forward and backward movement of the shuttle gives a strip of woven fabric which constantly grows: and as each movement of the shuttle is made, an appliance drives the last thread of the woof back against the others, so that this growing strip of woven stuff is kept at a uniform state of firmness and solidity. It is in this way that the simplest fabrics of linens and cottons are made. If it be desired to produce a somewhat more elaborate weave, this is done by raising two threads of the warp and dropping one; or by raising three threads of the warp and dropping one, and so on. In this way the threads of the woof are seen lying in loops, or what seems to be stitches longer than those of the simplest weave.... If we take a step further and use three or four warp threads, say, of red, while the rest remain white, and do the same thing with the woof threads, we produce stripes and where these stripes cross one another there will be a little square of the solid color of the three or four threads, while the stripes elsewhere remain of the half-way tint.... In such weaving of patterns it is here assumed that the threads are dyed before the weaving is begun. The matter of printing colors upon calico, thin silk, or the like, is entirely apart from consideration of the textile fabric. Printing is done from blocks (or rolls) with color almost exactly as if the material receiving the pattern were paper instead of a woven stuff.”

The above description of the method of producing textiles is sufficiently elaborate for a study of this character. The methods of producing brocades, satins, velvets and other elaborately figured textiles of any sort may be studied more in detail by reference to any standard encyclopedia or work of this character.

The fact that cotton is, as has been already shown, the most important of the textile industries, utilizing larger sums of capital, turning out greater values of product, distributing its products over a wider area and to a larger number of people than any other of the textiles, justifies a somewhat more elaborate discussion of this industry and its development during the period in which the manufacturing industries of the world have been transferred from hand labor to that of machines, and in which capital has come to form so important a factor in production.

The manufacture of textiles from cotton is, like that of iron and steel, “older than written history.” The art of cotton spinning and weaving is believed to have been practised in India, still a great cotton-producing section of the world, from 20 to 30 centuries ago. From India the production of cotton and manufacture of cotton goods moved westward into Persia, thence to the area immediately east of the Mediterranean, then to Egypt, and even southern Europe. The Moors are said to have introduced the cultivation and manufacture of cotton into Spain during their control of that section of Europe, but the cotton-manufacturing industry which existed at Seville, Cordova and Grenada fell into decay after their expulsion from Spain and was only resumed after the British, followed by the French and Germans, had developed the art of manufacturing cotton goods by machine methods. While the manufacture of yarn or threads from cotton declined in Spain, it later made its appearance in Italy in the fourteenth century and in Germany, Prussia, the Netherlands and England in the sixteenth century, and France in the seventeenth century, but it was not thought practicable to manufacture cloth exclusively from cotton until toward the close of the eighteenth century, the cotton yarn being used only for woof, while the warp used in conjunction therewith was either wool, flax, or silk. The so-called “Manchester cottons” of earlier date were composed in part of cotton and in part of wool or linen. The first acquaintance of western Europe with cloths made entirely from cotton seems to have been in those brought from Calcutta, India (and therefore called calicoes); but the calicoes made in Europe at that time and for more than a century after were made, in part at least, of wool or linen.

Prior to the latter part of the eighteenth century all cloths, whether of wool, cotton, silk, or flax, were manufactured by hand labor. The natural fabrics were, as described elsewhere in this work, spun into threads by the use of the simple spinning wheel, chiefly by the labor of women who were termed “Spinsters.” The threads thus obtained were made into cloth by the use of a loom upon the general principles above described, but of extremely simple design and operated solely by human power. Up to this time the making of threads or yarn and their transformation into cloth by the weavers, chiefly men, kept pace fairly with one another, the supply of thread or yarn being about equal to the demand by the weavers. “One good weaver,” says Dr. Ure, “could keep three active women at work spinning weft. In operating the loom, the shuttle which carried the thread back and forth between the raised and lowered sections of the warp was thrown back and forth with the hand, which required a constant extension of the hands to each side of the warp. In 1738 John Kay, an Englishman, devised a system by which the shuttle was thrown back and forth by means of strings attached at opposite ends of the lathe in which the shuttles ran, enabling a weaver to double the amount of cloth which he could manufacture within a given space of time, thus making the demand for yarn in excess of the supply.” “It was no uncommon thing,” says a writer on that subject, “for a weaver to walk three or four miles in a morning, and call on four or five spinners, before he could collect weft to serve him for the remainder of the day.”

This stimulated active minds in those industries to devise some method for increasing the facilities for turning the wool or cotton or flax into the needed yarn, and James Hargreaves, a weaver, devised about 1764 a machine which he called the “spinning jenny,” in which were set eight spindles in a frame put in motion by a single wheel, and by moving backward and forward a moveable carriage containing a horizontal clasp to hold the material being twisted into threads, the quantity of yarn which one person could produce in a given length of time was greatly increased. Subsequently the number of spindles in the frame was increased to 20 or 30, and in time to more than 1,000. Hargreaves kept this invention secret for a time, using it merely to manufacture yarn for his own weaving, but it finally became known and the spinners of the neighborhood, believing that it would throw many out of employment, broke into his establishment and destroyed the machine. He, however, retired to Nottingham, erected a small mill and took out a patent for the “spinning jenny,” and in time it became to be an established method of manufacturing yarn and in a more elaborate form is the principal factor in the manufacture of cotton yarns in the great factories today, the number of spindles which a modern machine of this character now uses being often in excess of 1,000, instead of the 8 utilized by the original spinning jenny.

Meantime another method was being utilized and brought into operation, by which a stronger yarn could be produced. It seems to have been originally devised by John Wyatt, of Birmingham, England, and operated upon a system entirely different from that of the jenny. “The method adopted,” says Ellison, in his “Cotton Trade of Great Britain,” “was to pass the cotton through pairs of small grooved rollers placed horizontally, the upper and lower roller of each pair revolving in contact, the sliver of cotton, after passing through these rollers, being caught by another pair of rollers placed immediately in front which revolve with three, four, or five times the velocity of the first pair and therefore draw out the sliver of cotton into three, four, or five times its former length and degree of fineness. After passing through this second pair of rollers it was attached to a spindle, the rapid revolutions of which twisted it into a thread and at the same time wound it upon a bobbin.” This method, devised by Wyatt in 1730 and patented in 1738, was perfected by Arkwright 30 years later and was known as the “spinning frame,” but since it was operated by water power, received the name of the “water frame.” By the use of this process the cotton yarn was made of sufficient strength to permit its use for the warp as well as for the woof, and thus, for the first time, the making of cloth entirely from cotton became practicable.

“With the invention of the jenny and water frame,” says Ellison, “commenced a new era in the history of the cotton trade; in fact, so far as Europe is concerned, it may be said that the history of the cotton manufacture, as a separate and distinct industry, began with the invention of these two machines; for until the introduction of Arkwright’s contrivance for spinning by rollers, it was impossible to produce a piece of cloth composed wholly of cotton.”

Still another important device for use in the manufacture of cotton cloths was the “carding machine.” Originally the raw cotton was prepared for spinning by the use of brushes made of short pieces of wire instead of bristles, the wire being stuck into a sheet of leather at a certain angle, the cotton being spread upon one piece and combed with another until the fibers were laid straight, when it was ready for the use of the spinner. In 1748 a carding machine was devised to supersede the hand process, but it was not until toward the close of the century that carding machines took such form as to become an important factor in the cotton-manufacturing industry. Even in the closing quarter of the eighteenth century the prejudice on the part of hand laborers against machines was so great that for several miles around Blackwell every spinning jenny containing more than 20 spindles was destroyed, while a mill erected by Arkwright near Chorley was destroyed by a mob. A little later another machine was invented by Samuel Crompton, which he designated the “spinning mule,” which combined the drawing rollers of Arkwright and the jenny of Hargreaves; and it was looked upon as an improvement upon the machines of Arkwright and Hargreaves. These devices—the spinning jenny of Hargreaves, the water frame of Arkwright, and the combination of those principles in the spinning mule of Crompton—revolutionized the cotton-manufacturing industry and the principles thus embodied are still the chief factors in the great cotton-manufacturing establishments of the world today.

Another device which added greatly to the manufacturing possibilities with reference to cotton was the invention by Eli Whitney in America of the cotton gin, a machine for stripping the cotton fiber from the seeds and technically called the “gin,” probably a contraction of the word engine. It performs its work through the operation of a series of revolving saws which come in contact with the cotton through openings sufficiently narrow to prevent the passing of the seeds but permitting the fibers torn therefrom to pass downward into a receptacle, while the seeds, freed from the fiber, pass through another opening and are subsequently utilized in the manufacture of oil; though this utilization of the seeds did not develop until long after the cotton gin had become an important factor in the cotton-manufacturing industries of the world.

Through the application of these machines—the spinning jenny, the water frame, the spinning mule, and the cotton gin, driven by power generated by water or steam, and in more recent years applied, in some cases in the form of electricity—the cotton manufacturing of the world has been transferred from hand work to that of machines, and the world’s consumption of cotton today is many times as much as that of the period in which these machines were being perfected, while the quantity of cotton goods produced from a given amount of cotton is, through the refinement of machine processes, much greater than formerly. The quantity of cotton cloth produced at the present time through the development of machinery and the encouragement which its use has given to production of cotton and consumption of cotton goods multiplies many times that of the period in which the transformation from hand to machine production began, and has made cotton the leading textile material of the world.

True, other branches of the textile industry have also benefited by the application of machine methods of spinning and weaving similar to those above described; but no other important textile has seen such a remarkable growth under the stimulus of machine production as has cotton. Even as late as 1830 the cotton consumed by those sections of the world for which statistics are available only amounted to about 500 million pounds, against 8,500 million in 1907, while, as already indicated, a pound of cotton under present conditions of manufacture produces probably twice as much of a given line of manufactures as a century ago. When it is remembered that the population of the world has only doubled since 1830 and the consumption of cotton is 17 times as great as at that time, the relative growth of cotton consumption to population will be seen to have been very great.

The above figures relating to consumption of cotton and to comparison of present consumption with that of a century ago relate chiefly to Europe and the United States. Statistics of consumption are available, in addition to Europe and the United States, for India and Japan, and a few communities in which the consumption is small, such as Canada, Mexico and Australia. In addition to this, however, it must be remembered that large quantities of cotton goods are still being manufactured in certain parts of the world by the crude processes which prevailed in Europe and the United States before the adoption of the machine methods above described. In China, for example, large quantities of cotton are turned into yarn by hand spinning, and into cloth by hand weaving, and there is reason to believe that the quantity of cotton cloth manufactured in China by hand weaving, partly from yarns spun by hand and partly from yarns manufactured by machine methods, is greater than that manufactured by modern machinery. In many of the oriental countries, in large portions of South America, in large sections of Africa, and in the islands of the Pacific, millions, hundreds of millions of people are still clothed with textiles—cotton, wool, silk, or fibers—manufactured by hand processes or by simple machines operated by man power. In Europe and the United States, however, the system has been completely transformed, and machinery and money, in combination with a steadily decreasing percentage of human labor, now manufacture the cotton goods worn not only by their own people, but by large sections of the inhabitants of the oriental countries and the continents of Africa, South America and Australia.

The relative growth in the manufacture of cotton in recent years by the principal countries in which this industry has developed is indicated by the fact that the quantity of cotton consumed in Great Britain in 1887 was 2,955,000 bales and in 1907, 3,900,000 bales; that of the continent of Europe, in 1887, 2,912,000 bales, in 1907, 5,460,000 bales; in the United States, in 1887, 1,939,000 bales, in 1907, 4,950,000 bales; in India, in 1887, 569,000 bales, in 1907, 1,600,000 bales; in Japan, in 1892, the first year for which statistics are available, 99,000 bales, and in 1907, 925,000 bales; and in all other countries for which figures are available, in 1891, 106,000 bales, and in 1907, 171,000 bales.

With this elaborate use of machinery and increase of cotton production, manufacture and consumption, has come great reduction in cost of production and in prices. “In the last half of the nineteenth century,” says S. N. D. North, late Director of the Census, in the Encyclopedia Americana, “there was an increase in value of textile products in the United States of about six times and not less than ten times if it were possible to measure this product by quantity instead of by value. Even the largest figures convey an inadequate idea of the relative importance of our textile mills in the industrial economy of the nation, for those mills supply the materials for a great group of subsidiary factory industries, such as the wholesale clothing manufacture, etc. When we aggregate these, and add to them the value of the products of the linen, jute, hemp, and bagging mills of the country, we find that the product of our textile mills is larger in value than that of any single line of related industries, iron and steel excepted. The decrease in the cost of goods during the last half of the century has been one of the most striking phases of the development. This decrease is due—in some measure, of course, to the decreased price of the raw materials, but in even larger measure to the remarkable advance in methods of manufacture—to the new and more perfect machinery employed, in the invention of which American mechanical genius has contributed certainly as much as that of any other people, and perhaps more. All the fundamental inventions in spinning-machinery were of English origin. The French and Germans have also done much in the invention of labor-saving textile machinery, but the American record may be shown to have surpassed them all. The wool-carding machinery of all countries owes its chief improvement over the machines of a century ago to the invention of John Goulding, of Worcester, Mass. The modern cotton spindle, making 10,000 revolutions a minute, is an evolution of our own mechanics, and the saving effected by new forms of spindles invented and adopted in the United States since 1870, when 5,000 revolutions per minute was the average speed, has been more than equal to the capacity of all the warp-spinning machinery in use in this country in that year. In structural equipment, the modern American mill,” continues Mr. North, “is, in some respects, superior to the average foreign mill. It is not so massive a structure, nor so solidly built, brick being used here while the English usually use stone; and in the lightness and airiness of its rooms, in economy of arrangement and general completeness of equipment and care for the comfort and convenience of the operatives, it is usually superior. While many parts of the machinery required for the equipment of our textile mills are still necessarily imported from England because not made, or less perfectly made, in the United States, our machine manufacturers have been advancing as rapidly in recent years as the textile mills themselves, and the time cannot now be far distant when every new mill built in America will be equipped throughout with American-made machinery. The American textile mills now supply practically every variety of fabric made in the world, with the exception of linens and the very finest grades of other fabrics.”

The Census of 1905 shows the value of cotton manufactures of the United States in 1850, 62 million dollars; in 1860, 115 million; in 1880, 192 million; in 1900, 331 million; and in 1905, 442 million; the capital invested in 1850, 75 million dollars; and in 1905, 605 million; the wages paid in 1860 (no figures for 1850), 24 million dollars; in 1905, 94 million; the number of wage-earners in 1850, 122,000; in 1905, 310,000; the number of spindles, in 1860, 5¼ million; in 1905, 23 million; the number of looms, in 1860, 126,313; in 1905, 540,910; the cotton consumed, in 1860, 423 million pounds; in 1905, 1,873 million pounds.

A marked characteristic of the cotton industry of the United States in recent years has been the gradual movement of the industry away from New England, where it was originally established, toward the cotton-producing section, the South. The number of cotton-manufacturing establishments in the New England States fell from 439 in 1880 to 308 in 1905, while those in the South increased from 161 to 550 in the same time. The number of spindles as shown by the Bureau of Statistics of the Department of Commerce and Labor, in the Northern States as a whole, increased from 10 million in 1880 to 17⅓ million in 1908, while those in the Southern States increased from a little over a half million in 1880 to over 10 million in 1908. In the principal cotton-manufacturing countries of the world the increase in spindles during the last decade has been as follows: Great Britain, from 44½ million in 1897 to 52 million in 1907; continental Europe, from 30⅓ million in 1897 to 36 million in 1907; the United States, from 17 million to 25¾ million; India, from 4 million to 5⅓ million; and Japan, from a half million to a little over 1½ million. The 36 million cotton spindles in continental Europe are, according to Ellison, distributed as follows: Germany, 9 million; Russia and Poland, 7 million; France, 6 million; Austria-Hungary, 3¾ million; Italy, 3 million; Spain, 2¾ million; Switzerland, 1½ million; Belgium, 1⅓ million, and the remainder distributed among Switzerland, Holland, Portugal and Greece.

VIII. THE MANUFACTURING INDUSTRIES OF THE UNITED STATES.

The fact that this story of the world’s manufactures is intended primarily for the information of people of the United States, coupled with the further fact that the United States is itself the world’s largest producer of manufactures, seems to justify a somewhat detailed study of the manufactures of this country, the growth of the manufacturing industry, and especially the part which they bear in our foreign commerce. Originally the United States, like all new countries, devoted its attention chiefly to agriculture. The products of the soil are man’s first requirements. He must have food. When he obtains food his next thought is of clothing, but that he can obtain temporarily from the skins of the beasts whose bodies supply him with food. So the production of manufactures was of secondary importance in the early development of that part of the North American Continent which is now known as the United States. The eastern part of the area being densely wooded, the work of the first and second and third generations of our forefathers was to fell the trees and prepare the ground for agriculture for the production of the wheat and corn and other foodstuffs which they must have to sustain life. If there came as a result a given quantity of potash and pearlash and leather and other manufactures of this crude type which could be utilized by the people or exported to foreign countries they accepted this thankfully, but made no special effort to develop the manufacturing industry. During the colonial days little effort was made in the development of manufacturing, except to supply the household requirements. The housewife spun and wove the wool and flax into threads and cloth, and a large part of the population was clothed in “linsey-woolsey,” produced in this manner. Even during the period of the Confederation, which immediately followed the Revolutionary War, conditions in the manufacturing industries did not materially change and nobody seems to have thought them of sufficient importance to justify any governmental attention or action. Shortly after the adoption of the Constitution, however, Alexander Hamilton, the first Secretary of the Treasury, submitted to the Congress of the United States, in 1791, a “Report on Manufactures,” which pictured manufacturing conditions in this country at that day. He enumerated some 17 industries which had “grown up and flourished with a rapidity which surprises, affording an assurance of success in future attempts.” These 17 industries were as follows:

1. Skins.—Tanned and tawed leather, dressed skins, shoes, boots and slippers, harness and saddlery of all kinds, portmanteaus and trunks, leather breeches, gloves, muffs and tippets, parchment and glue.

2. Iron.—Bar and sheet iron, steel, nail rods and nails, implements of husbandry, stoves, pots and other household utensils, the steel and iron work of carriages, and for shipbuilding, anchors, scale beams and weights, and various tools of artificers, arms of different kinds; though the manufacture of these last has diminished for want of a demand.

3. Wood.—Ships, cabinet wares and turnery, wool and cotton cards and other machinery for manufacture and husbandry, mathematical instruments, coopers’ wares of every kind.

4. Flax and hemp.—Cables, sail cloth, cordage, twine and pack thread.

5. Bricks and coarse tiles and potters’ wares.

6. Ardent spirits and malt liquors.

7. Writing and printing paper, sheathing and wrapping paper, pasteboard, fullers’ or press papers, paper hangings.

8. Hats of fur and wool and mixture of both, women’s stuff and silk shoes.

9. Refined sugars.

10. Oils of animals and seeds, soap, spermaceti and tallow candles.

11. Copper and brass wires, particularly utensils for distillers, sugar refiners and brewers; andirons and other articles for household use, philosophical apparatus.

12. Tinware for most purposes of ordinary use.

13. Carriages of all kinds.

14. Snuff, chewing and smoking tobacco.

15. Starch and hair powder.

16. Lampblack and other painters’ colors.

17. Gunpowder.

In addition to the industries above enumerated, which were carried on as regular trades in many localities, Mr. Hamilton went on to describe—“a vast scene of household manufacturing, which contributes more largely to the supply of the community than could be imagined without having made it an object of particular inquiry—” and he continues—

“Great quantities of coarse cloths, coatings, serges and flannels, linsey-woolseys; hosiery of wool, cotton and thread; coarse fustians, jeans and muslins; checked and striped cotton and linen goods; bed ticks, coverlets and counterpanes; tow linens; coarse shirtings, sheetings, toweling and table-linen, and various mixtures of wool and cotton, and of cotton and flax are made in the household way and, in many instances, to an extent not only sufficient for the supply of the families in which they are made, but for sale, and even, in some cases, for exportation. It is computed in a number of districts that two-thirds, three-fourths and even four-fifths of all the clothing of the inhabitants are made by themselves. The importance of so great a progress as appears to have been made in family manufactures within a few years, both in a moral and political view, renders the fact highly interesting. Neither does the above enumeration comprehend all the articles that are manufactured as regular trades. Many others occur, which are equally well established, but which, not being of equal importance, have been omitted. And there are many attempts, still in their infancy, which, though attended with very favorable appearances, could not have been properly comprised in an enumeration of manufactories already established. There are other articles, also, of great importance, which, though, strictly speaking, manufactures, are omitted as being immediately connected with husbandry, such as flour, pot and pearl ashes, pitch, tar, turpentine and the like.”

The “manufactories carried on as regular trades,” and included in Mr. Hamilton’s category, says the U. S. Census Report of 1900, comprised such as would naturally spring up in a new country to supply the immediate necessities of the inhabitants, together with those whose materials were most abundant and inviting. Agricultural implements and other tools of industry were made in quantities fully equal to the demand. Firearms were also made. The dressing of skins, especially tanning, had become an important industry, and was carried on both in establishments exclusively devoted to the purpose, and by many shoemakers and farmers as a subsidiary occupation. The number of brewers and distillers was remarkable, and nearly the entire domestic demand for beverages was supplied by home production. Sawmills, gristmills, brick kilns, wool-carding mills, and fulling mills existed in great number, but always on a small scale, supplying only local needs. The manufacture of paper, which had been a successful colonial industry, also supplied the domestic requirements, and several glass works existed. “Iron works have greatly increased in the United States,” said Mr. Hamilton, “and are prosecuted with much more advantage than formerly.” The shipbuilding industry was particularly well developed and widespread. In 1793 the tonnage of the United States exceeded that of every other nation except England. In the main, however, the people had confined themselves to such manufactures as could not be imported to advantage. Foreign goods, chiefly textiles, were largely imported in exchange for agricultural products.

Such was the general condition of our manufactures at the opening of the nineteenth century. Although some progress in this direction has been made, the occupations of the people were chiefly agricultural; commerce was becoming a factor of constantly increasing importance in the development of the industrial resources of the country, while manufactures occupied the third and subordinate position.

In 1810 Albert Gallatin, Secretary of the Treasury, in response to a resolution of the House of Representatives of June 7, 1908, made a report which is an admirable summary of the condition of American manufactures at that date. Secretary Gallatin estimated that in 1809 the value of the products of American manufactures exceeded $120,000,000. Tench Coxe’s estimate, based upon the returns obtained at the Census of 1810, was $198,613,471. The censuses of 1810, 1820, 1830 and 1840 gave certain figures on the manufacturing industries of the United States, but they did not approach the completeness of the censuses of recent years, and the figures of those earlier records must be accepted only with this view of their incompleteness. Tench Coxe, as already shown, estimated the real value of the manufactures of 1810 at a little less than 200 million. The censuses of 1820 and 1830 were confessedly incomplete and their showing of manufactures does not compare favorably with the Coxe estimate for 1810. In 1840 the value of the manufactures was put at about 500 million dollars; in 1850, at one billion; in 1860, a little less than 2 billion; in 1870, 4¼ billion; in 1880, 3⅓ billion; in 1890, 9⅓ billion; in 1900, 13 billion; and in 1905, 16 billion—a sum three times the estimated value of manufactures of the next great manufacturing nation, the United Kingdom.

It must be remembered, however, that these figures of the value of the manufactures of the United States are “gross values,” or, in other words, contain many duplications, as explained elsewhere, and that the net or real value of the manufactures of the country was but two-thirds of the figures above named. Even this estimate which puts the net or true value of the manufactures of the country at about two-thirds of the census gross valuation still leaves the United States so far in the lead that there can be no doubt that it is the greatest manufacturing nation of the world. Tables printed elsewhere in this text show that her production of manufactures is, even under an acceptance of the “net” value and an exclusion of certain articles not classed as manufactures by other countries, far in excess of that of any other country.

The growth by industries cannot be shown in detail in a work of this character. Suffice to say that every line of manufactures is now produced in the United States, save only those in which the work is wholly, or chiefly, performed by hand labor. The growth of the more important industries, such as iron and steel, textiles, etc., is pictured in sections devoted to those industries, and an outline of the growth in the principal articles is shown in the table on another page which presents official figures of the number of factories, persons employed, capital invested and product turned out in the principal manufacturing industries of the country in 1880, 1890, 1900, and 1905.

The increase in the production of manufactures in the United States, far in excess of home requirements, has forced our manufacturers to seek markets in other parts of the world for their surplus product. The result has been a rapid increase in the exportation of manufactures. The total value of manufactures exported from the United States has grown from less than 8 million dollars in 1820 to 23 million dollars in 1850, 48½ million in 1860, 70 million in 1870, 122 million in 1880, 179 million in 1890, and 485 million in 1900, since which time the annual total has not fallen below the 400-million-dollar line, while in the year 1908 the total exceeded 750 million dollars. In the fiscal year 1908, the latest period for which detailed figures of the exports by countries are available, the exports of manufactures were valued at 750 million dollars, of which 368 million dollars’ worth went to Europe, 188 million to North America, 72 million to South America, and 71 million to Asia, while the remainder was divided between Oceania and Africa.

That this growth has been especially marked in recent years is shown by the fact that the actual increase by decades in exports of manufactures has been as follows: During the decade ending with 1830, 1.8 millions; 1840, 5.8 millions; 1850, 7.8 millions; 1860, 25.2 millions; 1870, 21.6 millions; 1880, 51.8 millions; 1890, 57.2 millions; 1900, 305.9 millions; and during the eight years ending with 1906, 265 millions. Thus the growth of exports of manufactures in the eighteen years following 1890 was practically three times as great as that of the entire seventy years preceding that year.

Exports of manufactures from the United States now exceed 750 million dollars per annum and have doubled in value in a single decade. Not only has the exportation of manufactures doubled in a decade, but the share which products of the factory form of the total exports is steadily increasing. In 1880 manufactures formed but 15 per cent of the total exports of domestic products; in 1890 they formed 21 per cent, in 1900, 35 per cent, and in 1908, 41 per cent.

With the rapid increase of population in the United States, and therefore of the consumption of natural products, the quantity of food and raw materials remaining for distribution to other parts of the world has not increased proportionately; and with the development of manufacturing facilities and the trend of population to the manufacturing centers, production of manufactures has rapidly increased, and the surplus of these manufactures which may be spared for foreign markets has also increased. Foodstuffs, which in 1890 formed 42 per cent of the total exports of domestic products, formed in 1908 but 28 per cent of the total; articles in a crude condition for use in manufacturing, which in 1890 formed 36 per cent of the totals, formed in 1908 but 30 per cent; while manufactures, as already indicated, increased their share in the exports from 21 per cent in 1890 to 41 per cent in 1908.

In the decade ending with 1905 exports of manufactures from the United States increased 198 per cent, while those from Germany increased 75 per cent, those from the United Kingdom 40 per cent, and those from France 25 per cent. This rapid increase in the exports of manufactures from the United States has brought her to the third rank in the list of the world’s exporters of manufactures. The four greatest producers of manufactures for exportation and the value of manufactures exported by each of them in 1906 are as follows: The United Kingdom, 1,400 million dollars; Germany, 1,000 million; the United States, 700 million; and France, 500 million.

To Europe the exports of manufactures from the United States in 1892 was 76 million dollars, in 1901, 213 million, and in 1908, 368 million. To North America the exports of manufactures from the United States in 1892 were 33 million dollars, in 1908, 189 million; to Asia and Oceania the total was 25 million dollars in 1892 and 112 million in 1908; to Africa, in 1892, less than 4 million dollars, in 1908, more than 10 million; to South America, in 1892, 17 million, in 1908, 72 million. Considering the distribution by principal countries, it may be said that the total exports of manufactures from the United States to the United Kingdom was, in 1892, 40 million dollars, in 1902, 100 million; to British North America, in 1892, less than 10 million, in 1902, over 54 million; to Germany, in 1892, 14 million, in 1902, 30 million; to Mexico, in 1892, less than 8 million, in 1902, over 26 million; to British Australasia, in 1892, less than 9 million, in 1902, over 23 million; and to China, in 1892, 5½ million, in 1902, more than 23 million.

Considering the exports by great articles or groups of articles, it may be said that manufactures of iron and steel as a group form the largest item in the exports of manufactures, having grown from 52 thousand dollars in 1800 to 322 thousand in 1830, 1 million dollars in 1850, about 6 million in 1860, 13 million in 1870, 25 million in 1890, 121 million in 1900, and 184 million in 1908. Mineral oils form the second largest item among the groups of manufactures, having grown from 30 million in 1870 to 98 million in 1908. Copper manufactures rank third, the total exports having grown from 1½ million dollars in 1860 to 2⅓ million in 1890 and 104 million in 1908. Leather and its manufactures have increased their exportations from 1½ million in 1860 to 6¾ million in 1880, 12 million in 1890, 27 million in 1900, and 41 million in 1908. Exports of agricultural implements have grown from 1 million dollars in 1870 to 4 million in 1890, 16 million in 1900, and 24 million in 1908. Thirty articles or groups of articles exceeded 1 million dollars in the value of their respective exports in the fiscal year 1908. Of these thirty groups now exceeding 1 million dollars each in value annually, not one aggregated as much as a million dollars in 1820, and only three groups exceeded 1 million in 1850; in 1860 eight groups exceeded each 1 million; in 1880 the number of groups exceeding 1 million in value was 13; in 1890, 20; and in 1908, as already indicated, 30 exceeded 1 million each in the value of their annual exportations.

The causes of the rapid growth in the exports of manufactures from the United States are not difficult to determine. The growth as already indicated, has occurred chiefly since 1880, and especially in the last decade. From 1790 to 1880 the growth was a hundred million in ninety years’ time. This was a period which was devoted to the development of the agricultural resources of the country and to the construction of railroads. The value of agricultural products exported grew in this period from 19 million dollars to 686 million, an increase of 667 million, while exports of manufactures were increasing 100 million. From 1880 to 1900 agricultural exports showed a gain of 206 million dollars and those of manufactures 330 million. Thus the development of domestic exports from the United States has occurred in definitely rounded periods: The first, a long period of growth of agricultural products; the second, a shorter and more recent period, in which the largest growth, and especially the largest proportionate growth, has been in exports of manufactures.

A study of the production in the United States of a few of the great articles which form the basis of manufactures and the manufacturing industries offers ready explanation of the great increase in the production of manufactures and the consequent marked increase in the exportation of manufactures. Six great articles supply the principal requisites for manufacturing, viz, iron, copper, wood, cotton, wool, and coal as the material which supplies the power by which they are first assembled and afterwards converted into manufactures. The production of pig iron in the United States which up to 1880 had never reached 4 million tons, was by 1890, 9 million; in 1900, 13½ million, and in 1907, 25 million. Of steel, the production in the United States in 1880 for the first time exceeded 1 million tons; in 1890 it exceeded 4 million tons; in 1900, more than 10 million, and in 1907, more than 23 million. Of copper, for which the demands of the world are now great, the United States produced in 1880, 27 thousand tons, in 1890, 116 thousand tons, and in 1906, 409 thousand tons. The total value of the mineral products of the United States was in 1880, 369 million dollars; in 1890, 619 million, and in 1908, 2,069 million, or 5½ times that of 1880. The cotton production of the United States was in 1880, 5½ million bales, in 1890, 7½ million, and in 1908, over 13½ million. In 1880, American mills took 31 per cent of the total American production of cotton, and in 1907 they took 32 per cent of the greatly increased total. Of wool, the production of 1880 was 232½ million pounds; of 1890, 276 million, and that of 1908, 311 million. Of coal, which has an important relation to manufactures, both in supplying the motive power for the assembling of materials and heat for smelting ores and other features of manufacturing work, as well as the power for operating the machinery of manufacture, the production in 1880 was 64 million tons; in 1890, 141 million; in 1900, 241 million; and in 1907, 428 million.

Of the six great articles here enumerated as the chief requisites of manufacturing, the United States is the world’s largest producer of all except wool. Of cotton, the United States produces three-fourths of the world’s entire supply; of copper, fully one-half; of pig iron and steel, the United States produces 40 per cent of the world’s entire supply; and in 1907 produced more than Germany, the United Kingdom, and Belgium combined, these three countries being, in the order named, the world’s next largest producers of pig iron. Of timber and wood suitable for use in manufacturing, the United States is the world’s largest producer at the present time. Of wool, the United States is only exceeded in its production by Australasia, Argentina and Russia, its total product being in 1901, 302 million pounds against 360 million in Russia, including Poland, Argentina, 370 million, and Australasia, 510 million.

In transportation, for assembling these great natural products for use in manufacturing, the facilities in the United States by far surpass those of any other country. The railroads have grown from 30 thousand miles in 1860 to 53 thousand miles in 1870, 93 thousand miles in 1880, 166 thousand miles in 1890, and 240 thousand miles in 1908, giving to the United States two-fifths of the entire railway mileage of the world; while in transportation upon the Great Lakes the registered tonnage of vessels passing through the Sault Ste. Marie Canal alone in 1907 was 44 million tons, or practically three times as much as the tonnage passing through the Suez Canal in the same year.

Proportionately the growth in exports of manufactures has been even greater than that in production of manufactures. The census figures show that the gross value of manufactures produced in 1850 was, in round terms, 1 billion dollars, and in 1905, nearly 17 billion, so that the product of 1905 may be said to be about seventeen times as great as that of 1850; while the exportation of manufactures, which in 1850 was $17,580,456, was in 1908, $750,000,000, or forty-two times as great as in 1850, indicating that the percentage of growth in exportation has been more than twice as great as that in the production of manufactures.

Of the articles which form the great and growing export trade of the United States, those grouped under the term “manufactures” number over two hundred distinct articles, though many of these are included within the special groupings, such as agricultural implements, iron and steel manufactures, mineral oils, leather and its manufactures, etc. The group agricultural implements, for example, is subdivided into mowers and reapers, plows and cultivators, and “all other,” the latter term including numerous articles which are not of sufficient value to justify at present a separate statement. The group cotton manufactures includes cloths colored and uncolored, wearing apparel, waste cotton, and all other. The group iron and steel includes pig iron, bar iron, wire rods, billets, ingots and blooms, hoop, band and scroll iron, rails for railways, tin plates, structural iron and steel, wire, locks, hinges, saws and tools, car wheels, castings, table cutlery, firearms, cash registers, electrical machinery, laundry machinery, metal-working machinery, printing presses, pumps and pumping machinery, shoe machinery, locomotives (stationary and railway), typewriters, nails (cut and wire), pipes, safes, scales, stoves and ranges, each of which is separately stated, and following these a class “all other,” which includes the less important articles not separately enumerated. Under the group leather and its manufactures are included sole leather, glazed, kid, patent, split, and other upper leather, boots and shoes, harness and saddles. Under the general title of refined or manufactured mineral oils are included naphthas, illuminating oil, and lubricating and heavy paraffin oil. Under the general title of musical instruments are included organs, pianos, and all other. Paper and its manufactures include paper hangings, printing paper, writing paper, envelopes, and all other. Manufactures of tobacco include cigars and cigarettes, plug tobacco, and all other. Wood manufactures include doors, sash and blinds; furniture; hogsheads and barrels; trimmings, moldings and other house finishings; woodenware, wood pulp, and all other. Wool manufactures include carpets, dress goods, flannels and blankets, wearing apparel, separately stated, and all other.

Taking up the various groups or classes, and with them the articles which are not subdivided, it may be said that thirty general articles show a total exceeding $1,000,000 in the exports of recent years. Exports of iron and steel manufactures as a whole amounted in 1908 to 184 million dollars; manufactured or refined mineral oils, 99 million; copper manufactures, 100 million; cotton manufactures, 25 million; leather and its manufactures, 27 million; agricultural implements, 24 million; chemicals, drugs and dyes, 21 million; cars and carriages, 22 million; paraffin, 8 million; paper and its manufactures, 8 million; tobacco manufactures, 5 million; scientific instruments, 11 million; fiber manufactures, 5 million; india-rubber manufactures, 7½ million; books, maps and engravings, 6 million.

Tracing the more important of these articles through the period from 1790 to 1908 it may be said that iron and steel manufactures, which began their record in 1790 with a total exportation of $117,060, did not reach $1,000,000 until 1840, when the total export was $1,127,877. Even in 1850 it was only $1,953,702, but by 1860 was $5,870,114; in 1870, $13,483,163; in 1880, $14,716,524; in 1890, $25,542,208, and in the decade from 1890 to 1900 it increased nearly fourfold, the total for 1908 being $183,982,182 against $25,542,208 in 1890. The growth in the exportation of manufactures of iron and steel has been more strongly marked than that in any other important article of export except copper. It has been coincidental with the development of the great iron mines of the United States and the production of pig iron and steel.

The next article in the order of its magnitude in our exportations is refined mineral oil, which only became an article of export after the great oil discoveries in the decade 1860-1870. Its first appearance in the list of exports was in 1864, in which year the total amounted to $6,918,502, the small quantities exported in preceding years not having separately enumerated in the list of articles exported. The value of the exportations of mineral oil increased very rapidly, the total for 1864 being slightly less than 7 millions; for 1865, nearly 10 millions; 1866, over 18 millions; 1867, 22 millions; 1870, 30 millions; 1880, 34 millions; 1890, 44 millions; 1900, 68 millions, and 1908, 99 millions.

Copper, which forms the third article in rank in the exports of manufactures, is of recent date as an article of importance in the export trade. The existence of large copper deposits in the United States had been known for many years, but it was only upon the greatly increased demand for copper owing to the developments in the use of electricity as a motive power that the world began to demand copper in greatly increased quantities; and to this demand the mines of the United States promptly responded. The copper production of the United States had never reached as much as 20,000 tons prior to 1877. By 1887 it was 81,000 tons; by 1897, 220,000 tons; and in 1907, 410,000 tons. The most strongly marked increase occurred during the period of 1890-1907, the production of 1890 being 115,000 tons, and in 1907, 410,000 tons. The growth in exportation was coincidental with the growth in production. The value of copper manufactures exported in 1890 was but $2,349,392; in 1891, it was $4,614,597; in 1892, $7,226,392; in 1895, $14,468,703; in 1896, $19,720,104; in 1897, $31,621,125; and in 1908, $104,064,580 or nearly fifty times as much in 1908 as in 1890.

Leather and manufactures thereof grew from 1½ million in 1860 to 6½ million in 1880, 12½ million in 1890, 27 million in 1900, practically 30 million in 1902, and 42 million in 1909. Agricultural implements have also shown a rapid increase in exportation. In 1870 they amounted to only 1 million dollars in value; in 1880, to a little over 2 million; in 1890, nearly 4 million; in 1900, 16 million; and in 1902, 16¼ million.

Chemicals, drugs, dyes, etc., formed the largest single item of exports in 1790, pot and pearl ashes being then the principal article in the list, and have slowly but steadily increased, reaching a million dollars in 1830, 2½ million in 1870, 5½ million in 1890, 12 million in 1902, and 21 million in 1908. It is proper to add that in the later years patent medicines, which are included under this general classification of chemicals, etc., have formed a considerable proportion of this increase, the total value of patent medicines exported being in 1902, 3 million dollars out of the total of 12 million. The chemical industry of the United States has not made as rapid gains either in the relative value of its products, in the supply of the home market, or in the distribution of exports as accomplished by many other industries. The total value of the chemical productions of the country, according to the census, was in 1880, $38,640,458; in 1890, $59,352,548; and in 1900, $62,676,730, having less than doubled the value of the product from 1880 to 1900, the increase being but 60 per cent, while manufactures as a whole increased 142 per cent.

Considering the grand divisions and countries to which we send this $750,000,000 worth of manufactures exported from the United States, it may be said that literally every country of the world is a purchaser of American manufactures. In each grand division and in every country of the world the manufactured products of the United States are being consumed in steadily increasing quantities and varieties; and this consumption of the products of the manufacturing establishments of the United States by other parts of the world is a voluntary one, and not an “invasion” in the ordinarily accepted sense of the term. The growth in the consumption of American manufactures in other parts of the world is quite as voluntary as is the consumption of American flour, or meat, or cotton. This is illustrated by the fact that, while the iron and steel manufacturing establishments have been unable to meet the orders of the home consumers, and, therefore, have made little effort to “invade” other markets, more than $184,000,000 worth of iron and steel manufactures was exported in 1908, presumably, in most cases, to fill orders from other parts of the world. The fact that the home demand for iron and steel manufactures was in 1907 so great as to more than double the importation of iron and steel manufactures in a single year, shows clearly that the condition of a home market was such that the iron and steel manufactures of the United States needed make no effort to “invade” the markets of other parts of the world, and that whatever sales they made in those lines outside of the United States were, as a rule, in response to calls from the countries to which these classes of merchandise are sent. The exportations of iron and steel manufactures from the United States in the fiscal year 1908, were: To Europe, 47 million dollars; North America, 72 million; Oceania, 14 million; South America, 22 million; Asia, 25 million; and Africa, 3 million. Of American copper the purchases by Europe were, in 1891, $4,433,015 in value, and in 1908, $97,324,230. For agricultural implements the home demand is large and active, yet the exportation of agricultural implements, presumably all or nearly all orders, was in 1908, to Europe, 13 million dollars; to North America, 2½ million; to South America, 5 million; to Oceania, over 1 million; and to Asia and Africa, 13 million. The railroads of the United States were in 1906 and 7, according to repeated statements, unable to obtain cars in sufficient number to meet their requirements, yet the exportation of cars for steam railways in the fiscal year 1908 amounted to about $5,000,000.

The large share which manufactures form in the exports of the United States is shown by an analysis by the Bureau of Statistics of the Department of Commerce and Labor of the trade, by articles and groups of articles, with every country and grand division of the world. These figures show that manufactures formed 86 per cent of exports to South America in 1906, 85 per cent of the exports to Oceania, 75 per cent of the exports to Asia, 66 per cent of the exports to Africa, 62 per cent of the exports to North America, while even to Europe manufactures formed 27 per cent of the total domestic merchandise sent in the fiscal year 1906.

This general group, “manufactures,” upon which the above percentages are based, includes both manufactures ready for consumption and manufactures for further use in manufacturing. The first group includes all manufactures in the fully completed form and ready for immediate use. The second is made up chiefly of chemicals, leather, naval stores, lumber, copper in pigs, bars, and ingots, and various grades of iron and steel which have passed through a process of manufacture but are to be further used in manufacturing, such as steel bars, billets, ingots, blooms, sheets and plates, tin plate, wire rods, and pig iron.

Of the 75 million dollars’ worth sent to South America, 72.4 per cent was manufactures ready for consumption and 14.02 per cent manufactures for further use in manufacturing. Of the 105 million dollars’ worth sent to Asia, 65.79 was manufactures ready for consumption and 9.14 per cent manufactures for further use in manufacturing. Of the 35 million dollars’ worth sent to Oceania, 72.97 per cent was manufactures ready for consumption and 11.78 per cent manufactures for further use in manufacturing. Of the 20 million dollars’ worth sent to Africa, 58.79 per cent was manufactures ready for consumption and 6.85 per cent manufactures for further use in manufacturing. Of the 295 million dollars’ worth exported to North America, 50.46 per cent was manufactures ready for consumption and 11.37 per cent manufactures for further use in manufacturing. Of the 1,189 million dollars’ worth of domestic merchandise sent from the United States to Europe in 1906, 12.72 per cent was manufactures ready for consumption and 14.06 per cent manufactures for further use in manufacturing.

Thus, more than one-half of the domestic merchandise sent out of the United States to each grand division except Europe goes in the fully manufactured form, ready for consumption; in the case of South America and Oceania practically three-fourths, in the case of Asia practically two-thirds, and in the case of North America practically one-half goes in the fully manufactured form.

Taking up the principal countries, the figures of the Bureau of Statistics show that 11.85 per cent of the exports of the United Kingdom was manufactures ready for consumption and 11.22 per cent manufactures for further use in manufacturing. Of the exports to Germany, 10.98 per cent was manufactures ready for consumption and 12.96 per cent manufactures for further use in manufacturing. To France, 12.67 per cent of the exports was manufactures ready for consumption and 18.44 per cent manufactures for further use in manufacturing. To Canada, 48.8 per cent of the exports was manufactures ready for consumption and 13.1 per cent manufactures for further use in manufacturing. To Mexico, 58.77 per cent was manufactures ready for consumption and 11.61 per cent manufactures for further use in manufacturing. To Cuba, 45.94 per cent of the exports was manufactures ready for consumption and 9.31 per cent manufactures for further use in manufacturing. To Argentina, 79.93 per cent of the exports was manufactures ready for consumption and 18.67 per cent manufactures for further use in manufacturing. To Brazil, 72.9 per cent of the exports was manufactures ready for consumption and 10.24 per cent manufactures for further use in manufacturing. To Chile, 74.82 per cent of the exports was manufactures ready for consumption and 10.71 per cent manufactures for further use in manufacturing. To China, 85.12 per cent was manufactures ready for consumption and 10.65 per cent manufactures for further use in manufacturing. To Japan, 45.89 per cent of the exports was manufactures ready for consumption and 10.28 per cent manufactures for further use in manufacturing. To the Philippine Islands, 59.75 per cent of the shipments was manufactures ready for consumption and 9.13 per cent manufactures for further use in manufacturing. To Australia, 76.48 per cent of the exports was manufactures ready for consumption and 12.26 per cent manufactures for further use in manufacturing.

Foodstuffs and manufacturers’ material form the larger share of the merchandise sent to Europe and a considerable percentage of that sent to North America, while to the other grand divisions neither foodstuffs nor raw material for manufacturing form any considerable per cent of the total. To Europe, foodstuffs (chiefly wheat flour, corn and meats) formed 36.3 per cent of the total merchandise sent in 1906, while raw materials for use in manufacturing (chiefly cotton) formed 36.83 per cent of the total, the remainder being, as above indicated, manufactures ready for consumption or manufactures for further use in manufacturing. To North America, foodstuffs formed 20.23 per cent of the total and manufacturers’ raw material 16.12 per cent. To South America, foodstuffs formed 13.32 per cent of the total and manufacturers’ raw material less than 1 per cent. To Asia, foodstuffs formed 13.83 per cent and manufacturers’ raw material 11.2 per cent, this larger percentage of the raw material being due chiefly to sales of raw cotton to Japan. To Oceania, foodstuffs formed 9.65 per cent of the total and manufacturers’ raw material 4.96 per cent. To Africa, foodstuffs formed 28.39 per cent of the total exports and manufacturers’ raw material 5.86 per cent.

Taking up the analysis of exports to other parts of the world, the figures show that of the exports to the United Kingdom 34.07 per cent was crude materials for use in manufacturing; 27.29 per cent foodstuffs partly or wholly manufactured, including in this group flour, meats, dried and preserved fruits, etc.; 15.46 per cent foodstuffs in a crude condition, and food animals; 13.1 per cent manufactures for further use in manufacturing, and 11.85 per cent manufactures ready for consumption. Of the exports to Germany, 48.28 per cent was crude materials for use in manufacturing; 19 per cent foodstuffs partly or wholly manufactured; 8.65 per cent foodstuffs in a crude condition, including food animals; 12.96 per cent manufactures for further use in manufacturing, and 10.98 per cent manufactures ready for consumption. In the case of France, 55.38 per cent of the total was crude materials for use in manufacturing; 5.52 per cent foodstuffs partly or wholly manufactured; 7.96 per cent foodstuffs in a crude condition; 18.44 per cent manufactures for further use in manufacturing, and 12.67 per cent manufactures ready for consumption. In the case of Canada, 24.39 per cent was raw materials for use in manufacturing; 4.74 per cent foodstuffs partly or wholly manufactured; 6.23 per cent foodstuffs in a crude condition, and food animals; 13.1 per cent manufactures for further use in manufacturing and 48.8 per cent manufactures ready for consumption.

Summing up this study of the share which manufactures formed of the exports of the United States to the principal countries and grand divisions in 1906, the figures show that 151 million dollars’ worth of manufactures ready for consumption went to Europe, 149 million dollars’ worth to North America, 69 million dollars’ worth to Asia, 54 million dollars’ worth to South America, 26 million dollars’ worth to Oceania, and 11 million dollars’ worth to Africa; while of the manufactures for further use in manufacturing 167 million dollars’ worth went to Europe, 33 million to North America, 10 million to South America, 10 million to Asia, 4 million to Oceania, and a little over 1 million dollars’ worth to Africa. Thus while manufactures formed but a comparatively small percentage of the exports to Europe because of the large quantities of foodstuffs and raw material demanded by that country, they actually aggregated a greater sum than the manufactures sent to any other of the grand divisions, though in the other cases the percentage which manufactures formed of the total was much larger than in the trade with Europe.

Even with this large production of manufactures in the United States it may safely be said that less than one-tenth of our manufactures are exported, while those imported equal in stated value about one-twentieth that of the home product. This statement is the result of a comparison of the figures of production, exportation, and importation of manufactures in the United States presented by the Statistical Abstract of the United States, issued by the Bureau of Statistics of the Department of Commerce and Labor.

The Census of 1905 shows the gross value of the factory product of manufactures in 1904 at 14,802 million dollars, and estimates the value of all other manufactures, mechanical and neighborhood, at about 2 billion, making the gross value of all manufactures produced in the United States in 1904, 16,867 million dollars. This gross valuation, however, includes many duplications, because the products reported by one manufacturer often become the manufacturing material of another, who also includes their cost in the report of the value of the products of his factory. By deducting from the gross valuation the value of this manufacturing material used in a partly manufactured form, the Census Office states the net or true value of the manufactures of the country in the census year. This process reduced the valuation of the factory product of 1904 from the gross figure of 14,802 million, to a net valuation of 9,821 million; and an application of the same method of reduction to the non-factory manufactures would place the net value of all manufactures in 1904 at 10,892 million dollars. The Census of 1900, which reported the gross value of all manufactures in 1899 at 13,014 million dollars, places the net value for that year at 8,371 million.

The Bureau of Statistics’ figures show that the exportation in the year ending June 30, 1905, of all articles classed by the census as manufactures, amounted in value to 895 million dollars, a sum which equals 8.2 per cent of the 10,892 million estimated as the net value of all manufactures in 1904. The imports in the year ended June 30, 1905, of all articles similar to those classed by the census as manufactures, were valued at 576 million dollars, which equals 5.3 per cent of the net value of the domestic manufactures of 1904.

Even these figures, which show that the valuation of manufactures exported equals 8.2 per cent of the valuation of the manufactures produced, and that the valuation of the manufactures imported equals 5.3 per cent of the valuation of the manufactures produced, are, however, only approximate, in an attempt to determine the true relation of imports or exports of manufactures to the home production. The valuation of manufactures, supplied to the Census Office, by the various manufacturers, states the value of the product at the place of production; while the Bureau of Statistics’ figures of exportations state the wholesale market value of the article at the port from which exported. Thus the stated values of the articles exported are doubtless in most cases higher than the stated values of the same articles at the place of production since the cost of transportation and dealers’ profits are presumably added in the valuations at which the domestic merchandise in question is wholesaled at the various ports whose current prices determine the valuation placed upon the articles when exported. On the other hand, the values of the imported articles quoted by the Bureau of Statistics are by law “the actual market values or wholesale prices of such merchandise in the principal markets of the country whence imported,” and if freights and profits are added to this figure the valuation at the point where it actually enters the United States would be somewhat in excess of that quoted. Thus the value of manufactures produced are those of the place of production, the figures of exports are those of the wholesale markets of the port from which exported, and those of importation are those of the wholesale market of the country whence imported. Could production, exports, and imports be brought to a common basis of valuation, the percentage which exports bear to the total production would be slightly reduced and that which imports bear to the total production be slightly increased; and the percentages which exports and imports, respectively, bear to the total production would become more nearly identical than those above quoted, of 8.2 per cent on the export side and 5.3 per cent on the import side.

The share exported of the manufactures of the country seems to have slowly but steadily increased. The gross valuation of manufactures produced was, speaking in very round terms, in 1850, 1 billion dollars; in 1860, 1¾ billion; in 1870, 4¼ billion; in 1880, 5⅓ billion; in 1890, 9⅓% billion; in 1900, 13 billion; and in 1905, 16¾ billion. Reducing these gross valuations to net value at the same ratio as that indicated by the census reduction of 1900, the net value of manufactures in 1850 would stand at ⅔ of 1 billion dollars, in 1860 at 1¼ billion, in 1870 at 2¾ billion, in 1880 at 3½ billion, in 1890 at 6 billion, in 1900 at 8⅓ billion, and in 1905 at a little less than 11 billion. The exportation of all articles now classed by the census as manufactures was in 1850, 43 million dollars; in 1860, 87 million; in 1870, 160 million (currency values); in 1880, 315 million; in 1890, 404 million; in 1900, 803 million; and in 1905, 895 million. These figures of net products and exports, when compared statistically, show that the exports equalled in 1850, 6.6 per cent of the figures of net production; in 1860, 7.2 per cent; in 1870, 5.9 per cent; in 1880, 9.1 per cent; in 1890, 6.7 per cent; in 1900, 9.6 per cent; and in 1905, 8.2 per cent. That the exportation has grown even more rapidly than the production is also apparent from a comparison of the figures of 1905 with those of 1850, since the production of manufactures in 1905 was practically seventeen times as great as that of 1850, while the exportation of manufactures in 1905 was twenty-one times as great as in 1850.

On the import side the ratio of imports of manufactures to production has steadily fallen. Imports of all articles now included by the census classification of manufactures amounted in 1850 to 143 million dollars, in 1860 to 267 million, in 1870 to 433 million (currency values), in 1880 to 426 million, in 1890 to 481 million, in 1900 to 470 million, and in 1905 to 576 million. The percentage which imports of manufactures bore to production of manufactures was, in 1850, 21.8 per cent; in 1860, 22 per cent; in 1870, 15.9 per cent; in 1880, 12.3 per cent; in 1890, 8 per cent; in 1900, 5.6 per cent; and in 1905, 5.3 per cent.

It is proper to add that the figures above cited as representing the exportation of articles classed by the census as manufactures do not coincide with the usual statement of “Manufactures Exported,” as issued by the Bureau of Statistics from month to month and year to year, but includes many articles classed as manufactures by the census, but ordinarily classed by the Bureau of Statistics as “Foodstuffs Partly or Wholly Manufactured.” The Bureau of Statistics in its import and export statements groups under one title of “Manufactures Ready for Consumption” all articles completely manufactured and ready for use, such as boots and shoes, cars and carriages, and illuminating oil; under another head, “Articles for Further Use in Manufacturing,” all articles in a partially manufactured state, but requiring further processes before ready for final use, such as pig copper, pig iron, pig tin, lumber, etc.; while the group “Foodstuffs Partly or Wholly Manufactured” includes food articles which have undergone certain processes of preparation for use, such as salted meats, canned fruit and vegetables, dried fruits, flour, sugar, and other articles usually classed by the great importing and exporting nations under the general title of foodstuffs. The two groups, “Manufactures Ready for Use,” and “Manufactures for Further Use in Manufacturing,” are usually included by the bureau in its statements of exports of manufactures, while the third group, “Foodstuffs Partly or Wholly Manufactured,” is not usually so classed. In the above statement, however, in which the attempt is made to compare imports and exports with the census figures of manufactures, the third group, “Foodstuffs Partly or Wholly Manufactured,” is included under the general title of manufactures, in order to make the import and export figures comparable with the census figures of production.

Turning to the individual articles forming the great mass of manufactures produced or exported, the percentage of the product exported varies greatly with the various articles or groups of articles. Comparing the Bureau of Statistics’ figures of exports for the fiscal year 1905 with the census figures of production in the calendar year 1904, the percentage which the export figures bear to those of production are, in the case of agricultural implements 18.5 per cent, bicycles and tricycles 26.8 per cent, cash registers 20.6 per cent, sewing machines 29.3 per cent, and typewriters 44.6 per cent; while in a large proportion of articles the percentage is very much less—boots and shoes 2.5 per cent, carriages and wagons 2.7 per cent, structural iron 4 per cent, furniture of wood 2.6 per cent, flour and gristmill products 5.6 per cent, and automobiles 8.3 per cent.

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