the very foundation of the industry, at the coal mine and the coke oven, we have a social sore. Perhaps it is but temporary; this great and vigorous organism of ours may absorb the foul matter, even though it be steadily fed from without by new accretions. But foul it is, and remains. When Jevons, a generation ago, surveyed, doubtless with some excess of pessimism, the coal trade of Great Britain, he warned his countrymen that their great structure of material wealth rested on a foundation of brutishness and pauperism. We have been wont to thank God that we are not as other peoples; but the plague is on us also, and we too must face the social responsibilities it involves.

Thus the growth of the iron industry illustrates all the extremes of the industrial revolution which has taken place in the United States since the Civil War. Unfettered enterprise, unrestrained competition, have worked their utmost. The eager search for new resources in the earth's crust has gone on with feverish haste. The march of the arts has led to unceasingly wider utilization of the forces of nature. Production on the great scale has advanced, until the huge enterprises seem almost ready to crush the foundations on which they rest, or topple over of their own weight. Fabulous riches and misery and squalor most abject alike have come with this marvelous transformation; and the twentieth century dawns with new conditions, new problems, new duties.

2. An International Survey of the Cotton Industry 1

1

Among the larger industrial changes of the last thirty years few exceed, in importance and interest, the marvelous growth of the manufacture of cotton by machinery. Not only in its original seats, but also in regions where its introduction came much later, the industry has expanded wonderfully. The progress in the several countries has, however, been far from uniform in regard either to its magnitude or to the description and quality of the fabrics produced. Nor are the circumstances under which

1 By Elijah Helm. Reprinted from the Quarterly Journal of Economics, May, 1903.

it has been realized at all alike, nor of similar significance when they are brought to bear upon the problem of the present and future international position. Each case must be separately examined; and we must determine the precise causes of the progress, and whether these have exhausted their force, or are likely to continue, or to be aided or checked by new influences. But a preliminary question arises. The establishment on a large scale, in recent years, of cotton mills near to the source of the principal raw material, in the American Southern States and in India, and its commencement in China and Egypt, have encouraged the assumption that the industry must tend to gravitate more and more to the cotton field. Thus, in his address delivered on 22d October last, as rector of the University of St. Andrew's, Mr. Carnegie said:

Capital, management, and skilled labor have become mobile in the extreme. The seat of manufacturing is now, and will continue to be more and more, simply a question where the requisite raw materials are found under suitable conditions. Capital and skilled labor have lost the power they once had to attract raw materials; these now attract labor and capital. The conditions are reversed. The cotton industry, for instance, was attracted from Old to New England, and is now attracted from it to the Southern States alongside the raw material.

There is much, no doubt, in a merely extrinsic view of southern and Indian progress to give a certain strong appearance of probability to the theory laid down by Mr. Carnegie. The facts are before our eyes. Capital and skilled labor have been applied on a vast scale to manufacture at the sources of the raw material. But many other things have to be considered before we can conclude that this new phenomenon is to be attributed to the greater mobility, in recent years, of capital and labor. Raw material, too, has become much more mobile. If the cost of transporting raw cotton to the older seats of manufacture were alone to be taken into account, it would appear that there is to-day far more reason for the supremacy of the industry in districts remote from the cotton fields than there was half a century ago. The cost of transport and marketing has been reduced to less than one eighth of what it was then. To this extent, at

least, the raw material has become very much more mobile; but this is not the only consideration, and other factors entering into the problem will receive attention presently.

It is commonly supposed that, in the earlier years of the mechanical spinning and weaving of cotton, Great Britain had for a long time the start before other nations. This belief is not strictly accurate. Machinery was used in both branches almost if not quite as soon in the United States as in England. From priority of establishment, therefore, the English industry gained little. Indeed, during the Napoleonic wars at the end of the eighteenth and in the earlier part of the nineteenth century, when cotton spinning by steam and water power began to be important, the advantage was with the Americans, since they were then, and for a long time afterwards, free from the heavy customs duties on raw cotton and most of the other materials of production, coal, of course, excepted, besides the excise duty on printed cotton goods, which oppressed the spinners and manufacturers of the United Kingdom. Moreover, the brief war of 1812-1815 between the states and the old country gave a strong impetus to the American industry. The prices of cotton goods, on the western side of the Atlantic, rose to four times their previous amount; and cotton-spinning mills there were multiplied so excessively that, after the restoration of peace in 1815, many of them were closed, and became for a time almost worthless. In the following year protective duties were imposed, mainly by the influence of the southern representatives in Congress, for the purpose of reviving and encouraging home manufactures, the cotton industry of the North being mostly opposed to them. Before 1813 steam and water power had been applied only to the spinning branch in both countries, but in that year the first mechanical looms were erected in the United States. Comparatively few were then in existence in Europe, and in 1816 there were but two thousand power looms in Lancashire.

In Switzerland, France, Germany, and even in Austria, Italy, and Belgium also, the factory system of spinning was developed almost as early as in Great Britain; but weaving by

power looms was hardly established in the continental countries on an important scale by 1830, except in a few particular districts, such as Alsace, the Vosges, Rouen, Elberfeldt, and two or three Swiss cantons. This tardier development of mechanical weaving on the continent continued long after 1830, and it has had important consequences, as

presently see.

we shall

Bearing in mind the fact that, regarded as a completely mechanical industry, cotton spinning and weaving had not become thoroughly rooted in Great Britain until towards the close of the first quarter of the last century, one is drawn to the conclusion that at that period it had not gained an appreciable priority in time of its American rival. Its position in 1831-1835, in relation to the cotton industries of the continent and the United States, is approximately indicated by a few figures. In those five years the average annual consumption of cotton was:

So important had been the progress of the industry in Europe and America between 1820 and 1835 as to prompt the following significant remarks, written in 1836, in the Introduction of Dr. Ure's "Cotton Manufacture of Great Britain":

The encroachment of foreign competition upon the cotton trade of the United Kingdom has become so rapid of late as to excite alarm for its supremacy, under our heavy taxation, in any mind not besotted by national pride. The continent of Europe and the United States of America, for some time after the peace of 1815, possessed factories upon so small a scale that they could not be regarded as our rivals in the business of the world. But now they work up nearly seven hundred and fifty thousand bales of cotton wool, which is about three fourths of our consumption, and have become formidable competitors to us in many markets exclusively

our own.

This was written in 1836. Another instance of alarm at the supposed relative decline of the English cotton industry occurred in that year when the Board of Trade (the official Department

of Commerce) forwarded to the Manchester Chamber of Commerce a number of samples of various descriptions of cotton piece goods, including prints produced in Germany and Switzerland. These were examined by a committee, of which Richard Cobden, then a director of the Chamber, was a leading member. The report shows that he and his colleagues were deeply impressed by the excellence and cheapness of these productions; and there is conclusive evidence, in a memorial to Parliament which he drafted two years later upon British Customs. and Excise Policy at that time, that he had begun almost to despair of the English cotton industry as a competitor with the corresponding industries of the continent, unless the oppressive fiscal burdens then laid upon it were removed. But even since the advent of free trade fears of approaching decline have on a few occasions been expressed more or less loudly.

What is the relative position of the industry in the United Kingdom, the continent, and the United States to-day, measured by the quantity of raw cotton consumed in each? In the last cotton season- the year ended on September 30, 1902the consumption in these three great divisions was

Judged, therefore, by the test of the amount of raw material consumed, Great Britain has fallen from the highest to the lowest position within the last seventy years.

We have, unfortunately, no trustworthy statistics of the number of spindles at work in each of these divisions during the period 1831-1835. The number now at work, however, it is possible to state; and the result of a comparison presents a striking contrast with that just arrived at from the statistics of cotton consumption. Here they are: