-1890]

The tariff and Protection

699

accounts for the continuance of the excessive features of the war tariff in time of peace. There was, to be sure, a reaction from the low tariff policy even before the war, and many of the rates of the war tariff were avowedly protective; but no such customs system could have been built up except under the pressing necessity of enormous revenue; and, on the easy assumption that high duties meant high revenue, the most extreme demands of the manufacturers were readily granted. It is equally true that there was a strong feeling for Protection at the close of the war; but it would be absurd to say that the extreme emergency measures adopted in a great conflict represented the deliberate commercial policy of any party for the time of peace. It was fully expected that the rates would be rapidly reduced as soon as the proper adjustment could be made; but the manufacturers had tasted the fruits of monopoly; and with each year's delay the problem became more difficult. Without entering into an account of the different Acts, and the occasional attempts at tariff reform, it may be said in general that the duties repealed or lowered were revenue duties, and that, wherever the pressure of competition was still felt, the duties were maintained and even raised. At no time since the war has the average rate on dutiable goods been less than 40 or more than 50 per cent. In the case of many of the most important articles, however, the duties have been much higher.

For many years the idea still prevailed, even among Republican leaders, that the need of Protection would pass with the full establishment of home manufactures; but by 1890 the doctrine that Protection was a permanent necessity had made its appearance. The infant-industry argument could hardly be advanced in support of protecting industries which had been long established; and the argument as to the social advantages of a diversified industry, which Hamilton had expressed so sanely and persuasively, and which formed the basis of a whole social philosophy in the hands of Carey, was not applicable to a nation which had already become one of the greatest industrial powers of the world. This argument, to be sure, was extended to the point of insisting that nothing should be purchased abroad that could be made at home; but the chief argument of the later period has been the necessity of permanently maintaining tariffs sufficient to balance the higher wages paid by American employers. A strong appeal was thus made to the wageearning class, who were convinced that a reduction of duties would be followed by a reduction of wages. This argument was equally applicable to all lines of industry, and was carried out logically in the tariff. Duties were put on farm and dairy products to protect the residents on the Canadian border; and those on raw materials gave a convenient pretext for giving additional protection to manufactures by excessive "compensating duties."

It would be an error to attribute even the extreme features of the American tariff entirely to the sinister influence of private interests on

700

Causes of industrial growth

[1860legislation. In the first place many industries, partially if not wholly dependent on the tariff, had been established before the occasion for readjustment came; and, these being once established, even the most conscientious members of the dominant party shrank from the responsibility of causing their downfall. Furthermore, the fact of rapid industrial expansion was patent to both the people and their legislators; and, convinced as they were of the soundness of the principle of Protection, it seemed wiser to leave well alone, than to run the risk of experimental changes. That the tariff was an influential factor in this development is beyond question. In some cases entirely new industries were established under its shelter, for example, the manufacture of silk, and the tin-plate industry, the most recent illustration of a new industry created outright by conscious effort. The initial costs necessary to the production of iron and steel on a large scale would have delayed the wonderful development in these lines, had it not been for the protected prices of the early period. On the other side, however, must be placed the increased costs to other manufactures, and the diminished purchasing power of the farmer. These are problems which need not be discussed here; but it may be asserted with confidence that the power of the tariff, whether for good or evil, has been vastly overrated. It has not been that oppressive burden on the public that some critics maintain; for many of its rates have been nominal and the home market has, ultimately and in the main, been adequately supplied with the home product. On the other hand, the main causes of industrial growth lie deeper than the regulations of commercial policy. These causes may now be briefly considered.

The primary causes of industrial growth in the United States are to be found in the character of the people and the natural advantages of the country. It is not necessary to enlarge upon those general qualities of nervous energy, alert intelligence, directness in method, independent initiative, and daring enterprise, combined with an eager absorption in the pursuit of material success, which, partly inherited but largely acquired during a century's command of unlimited resources, have marked the people of the United States perhaps above all others. A special characteristic, however, of the American, which has had an important influence on the industrial advance of the country, is his ingenuity in invention, combined with a peculiar aptitude in the use of machinery. He possesses neither the laborious patience of the handlabourer nor the aesthetic sense of the true artisan; but his practical sense finds full scope in the production of large quantities of uniform commodities by quick machine methods. A further characteristic of the aptness of the race in these respects is the promptness with which the inventions of others have been adopted and brought to greater perfection. The history of many typical American industries is the history of inventions first made by Europeans, which remained without

-1890]

Inventions and patents.-Immigration

701

economic result till perfected and made financially successful in the United States. The practical sense of the American has been quick to turn ideas into dollars. Sewing machines and typewriters, for example, though first experimented with abroad, are practically the products of American ingenuity. Further, Americans have shown a peculiar capacity, not only for improving old processes, but also for inventing new instruments with purposes never before known, and for applying machine methods to industries into which they had not previously entered, as, for example, in the manufacture of watches, shoes, and silk-goods, in which hand-labour has been entirely displaced. To enumerate the inventions in the greater industries is impossible. In the manufacture of iron and steel, railroad supplies, electrical machinery, and the like, they have been countless, although frequently following an example first set by foreign investigators. In the manufacture of hardware and tools, frequently of a complicated nature, the Americans have easily led all other peoples. It is here, perhaps, that American ingenuity has found its most fertile field.

No small share of the credit for this constant succession of inventions belongs to the system of patent right, which, despite occasional abuses in the undue maintenance of monopolies, has been a powerful incentive to constant improvement. The patent law is based on the Act of 1836, its chief characteristics being a careful investigation of the claim to novelty and priority, and the grant of monopoly right for a considerable period, at present seventeen years. Whether we maintain that a patent should protect the discoverer of the invention or the capitalist who risks his money in putting the invention on the market, the system has been. justified by its results.

Endowed with such qualities for industrial success, the people were rapidly increasing through natural causes while receiving enormous additions to their labour force through immigration. The influence of immigration on the economic conditions of the country has been a subject of much discussion; but that it has materially hastened industrial expansion can scarcely be disputed. The first great wave of immigration came in the nine years following 1845, and was largely Irish and German, due to the conditions of distress in those countries. This movement continued, but at a reduced rate, down to the Civil War. As soon as hostilities closed, immigrants again came in large numbers down to the depression following 1873, when the numbers again decreased, only to rise again in a still greater wave in the years from 1880 to 1884. In 1882 the enormous total of 789,000 was reached. Down to this time nearly 90 per cent. of European immigrants were from the good stock of western Europe. They were chiefly unskilled labourers, but vigorous, quick to learn, and easily assimilated; and a large percentage were in the ages of greatest productivity. The quick rise of the capitalistic system of production is not easy where a vigorous and independent

702

Employments of immigrants

[1860population have the opportunity of taking up free land of great fertility; but this influx of labour made possible an extension of industry on a great scale, at the periods of particular speculative activity, which might otherwise have been checked. The vast extension of railroads and the accompanying growth of coal and iron mining required large quantities of both skilled and unskilled labour; and, in the main, during the early period the filling-up of the lower branches with foreign labour still left ample opportunity in the higher branches for the native population. The almost automatic machine processes made the employment of immigrants in factories possible; and in the manufacture of textiles, for instance, it was not long before the immigrants employed numbered one-half of the total.

Nor were these the only economic effects of immigration during this period. The settlement of the West was hastened by the influx of immigrants, but in a less degree than has sometimes been supposed. The colonising movement has been carried out primarily by native stock. Even of the German immigrants hardly more than 25 per cent. have become agricultural settlers or farm-labourers, and of the Irish not more than 12 per cent. The Scandinavians, constituting a smaller absolute number, are relatively more inclined to agriculture, nearly 40 per cent. of that race choosing that occupation. This, however, is less than the percentage of the native population. Special sections of the country, however, have been largely colonised by special nationalities, notably such States as Wisconsin by the Germans, and Minnesota by the Germans and Swedes. In the main, however, the tendency of the foreign population has been towards city life, and mechanical and mining occupations, or personal service, hand-trades, and shopkeeping. An important reason for this is the necessity on the part of the newcomer to seek paid employment at once; and it should be noted that this tendency, while hastening the expansion of industry, has also hastened the establishment of a more permanent and dependent wage-earning class than had formerly existed. It would, however, be a one-sided picture which showed only the effect of relatively unskilled labour on the growth of manufactures. Although the proportion of skilled labourers to other immigrants has been small, their actual numbers have been considerable, especially from Great Britain; and their skill has been an important factor in many industries, notably in iron and steel manufactures and in shipbuilding. Furthermore, the contribution of individuals of high talent has been immeasurable; and Americans, attributing too much to the native character, are frequently inclined to forget that many of the most striking cases of success in the industrial and commercial world have been those of poor immigrants who have distanced the dominant nationality in the race for wealth.

The effect of this movement on the growth of population presents yet another problem. The population of 1870 was 38,558,371,

-1890]

Immigration and population

703

showing an increase of 7,000,000, or 22.6 per cent., during the decade of the war. Of this population nearly 5,000,000 were negroes, about 5,500,000 foreign-born, and about 5,000,000 native-born of foreign parents. The latter two classes together formed over 28 per cent. of the population. By 1880 the total population had increased to over 50,155,183 (or 30 per cent.), among whom the foreign-born and nativeborn of foreign parents numbered nearly 15,000,000, or 29.8 per cent. The percentage of foreign-born, however, diminished, the total number increasing to 6,679,543, being now less than the descendants of foreignborn in the first generation. The decade from 1880 to 1890 brought a relative increase in the population of both classes. Out of a total population of over 62,000,000 (an increase of 24.9 per cent.) the number of foreign-born was 9,250,000, and of foreign-born plus nativeborn of foreign parents over 20,000,000, being 14.8 per cent. and 33 per cent. respectively of the total population. In other words, while the total population increased about 25 per cent., the foreign element increased about 38 per cent., whether the foreign-born alone, or all those born of foreign parents, are considered. Immigration fell off again in the nineties; and the proportion of foreign-born fell by 1900 to 13.7 per cent. of the total population (actual numbers 10,460,085), while the percentage of all those of foreign parentage increased to 34.3 per cent. of the total, in actual numbers about 26,000,000. This shows an increase over the numbers of 1890 of about 30 per cent. compared with an increase of 20-7 per cent. for the whole population.

Despite these figures, however, it may be doubted whether, in the long run, immigration into the United States has added so largely to the population as is commonly believed. Speculations of this nature are not very fruitful; but it is certain that if the rate of increase between 1790 and 1840 had been continued to the present time, without any immigration whatsoever, the present population would be far greater than it is. The causes which lessen the rate of increase are the economic limits of production; and, in view of these facts, it was the opinion of the most eminent of American statisticians, General Francis Walker, that immigration in the long run had not reinforced the population, but had merely "replaced native by foreign stock." This theory, however, even if accepted in modified form, would not alter the fact that the great waves of immigration in the periods 1867-72 and 1880-4 were of material assistance in supplying the immediate demand for labour at the beginning of two periods of great industrial activity.

The second great factor in the industrial growth of the country has been its unparalleled command of natural resources. The area of the United States at the close of the Civil War was the same as its present area, exclusive of Alaska and the island possessions, namely, 3,025,600 square miles. A mere glance at the map shows the wonderful geographical advantages which this country enjoys. Stretching across a continent, it