704 Natural resources of the United States [1860 commands access, as no other country does, to the two great oceans. Its eastern coast-line, indented with splendid harbours, stretches south till it meets the great southern gulf, which itself extends beyond the mouth of the Mississippi to the cotton-fields of Texas. To the north, the great Lakes, connected with the Atlantic seaboard by the St Lawrence and the Erie Canal, reach the wheat-fields and iron supplies of the West, and afford direct water-communication to the seaboard for cities more than a thousand miles inland in the centre of a great productive area. A third of the way across the continent and in the very middle of its most fertile region, the great Mississippi flows from the Canadian border to the Gulf. Into this river flow its vast tributaries, the Ohio, with the Tennessee and Cumberland rivers, from the east, the Missouri and Arkansas and Red rivers from the west, forming a single valley, which extends for 1800 miles at its widest part and includes over 1,000,000 square miles, within which lies more than half the arable land of the country. More than half the States drain into this one river. From the Alleghanies on the east a large number of rivers flow to the Atlantic and the Gulf. All told, it is estimated that there are 18,000 miles of navigable rivers in the whole United States. Within the area thus situated is to be found a greater variety of climate, soil, and mineral resources than in any equal area of the world. The arid plains which lie west of the 100th meridian are separated from the Atlantic by three great belts of arable land, broken only by the Alleghany Mountains, producing a vast variety of products, and roughly distinguished by their chief crops, the spring wheat-belt in the north, the central belt of winter wheat and Indian corn, and the southern cotton-belt. West of this fertile territory lie the plains which, though called the Great Desert, are the seat of vast cattle and sheep ranches; and beyond the great basin formed by the Rockies and the Sierras lie the Pacific States with their lumber and wheat and fruits. The mountain States are rich in valuable ores, gold, silver, and copper; while coal and iron, minerals even more important for industry, are widely distributed within the great belts of arable territory already described, throughout the Alleghany region, and even farther east. The supply of anthracite coal comes exclusively from a small area in north-eastern Pennsylvania; and most of the bituminous coal still comes from the great Alleghany deposit which stretches from western Pennsylvania to Alabama; but there are coal-beds of vast extent in Illinois and Indiana, in the prairie States beyond the Mississippi, and in the Pacific States of the North-west. Iron ore is also widely distributed, the chief deposits being found in the Alleghany region and on the southern shore of Lake Superior. The full extent of the mineral resources of the country is even yet not known. To the men who began to develop them at the beginning of the new era they may well have seemed inexhaustible, as ever new discoveries were made, not only of new deposits of known -1890] Railroad expansion and speculation 705 materials, but of such unexpected resources as the supplies of natural oil and gas. Within this area there existed no artificial barriers to the growth of commerce. Free trade between the States had been established by the Constitution; and the extension of a territorial division of labour was possible on a larger scale than had ever before been known. The next step was to overcome the natural barriers of mountain and wilderness. At the end of the war the railroad mileage of the country was 35,000 miles; and an area of great expansion at once began. It had become apparent early in the war that a transcontinental line, uniting California with the East, had become a necessity; and an Act incorporating the Union Pacific Company was passed in 1862. The tremendous difficulties of constructing a line across the desert and the Rockies called for government aid; and it was given in generous measure a bond subsidy of $27,000,000 in all and 12,000,000 acres of land. The Central Pacific received over $27,000,000 and 11,000,000 acres. The bonds were secured by a first mortgage on the road, changed later to a second lien to enable the road to raise further loans. Finally, in 1869, the last spike was driven, the two roads were united at Ogden, and the first line to join the Atlantic and Pacific was complete. In the meantime rapid building continued in all sections of the country, especially in the Middle Atlantic States, and in the Middle West. The progress, or its effects on particular sections, cannot be traced in detail. By 1870 the mileage had increased to 52,000 miles, by 1880 to 93,000, and by 1890 to 166,000. This continuous expansion of transport facilities brought new areas into cultivation, opened up new supplies of raw materials, and built up a market in the West for the products of the East. This rapid growth was attended, however, with considerable evils. In the first place, there occurred serious instances of corruption. Though the charges of political bribery in the matter of the aid given to the transcontinental lines were not substantiated, there is no doubt that fortunes were made by the manipulation of construction companies for the benefit of railroad directors rather than stockholders. In the next place, the rate of building was not only rapid, but excessive. An area of speculation began which led to the construction of parallel lines, fierce competition, destructive rate wars, and bankruptcy. The new enterprises were on so gigantic a scale, and the demoralisation due to excessive competition was so destructive of values, that the openings for stock speculation were greatly increased; and, as vultures flock unerringly to carrion, a new group of financiers appeared who made fortunes by wrecking enterprises instead of by making them prosper. The scandals of that period will always remain a blot on the commercial history of the country, and they sowed evil seed in the mind of the public, who were frequently unable to distinguish between the beneficial C. M. H. VII. 45 706 Power of railway companies [1860 labours of the great entrepreneurs whom the situation brought forth, and the machinations of the audacious plunderers who were mixed up with them in the market. Furthermore, it was through the railroads that the people were for the first time brought face to face with the problem of the new capitalism and the power of monopoly. When a railroad entered a new region, it seemed by some magic "sesame "to create wealth in its course; but the very fact that that wealth was the creation of the road involved a serious danger. For the first time the people of a large area found their welfare dependent on the action of a single corporation. Wherever competition appeared, discrimination followed; and in the scramble for business the stronger shippers were favoured at the expense of the weaker. Where there was no competition, the public felt that they were being oppressed by a monopoly, to make up for sacrifice rates elsewhere a feeling which was intensified by the absentee ownership of the Western roads. The "Granger movement " against the railroads, which in some of the Western States was the result of these conditions, was unreasoning in its prejudice, misguided in its efforts at legislative reform, and injurious in its immediate results; but it was the natural protest of a democratic community against the domination of corporate capital. The actual offences of the roads were less important than they were made out to be at the time; but the masterful men who controlled them, conscious of the great development they were advancing, and eager for their rewards, were little tolerant of public feeling. To them the interference with their property seemed an insolent invasion of private rights. Although the lesson has often been disregarded, it was nevertheless made clear that, if it comes to a struggle between capital and the people, the people can dominate when they will. With such a combination of advantages as has now been briefly described, the progress of industry was inevitably rapid. Some figures for the recent development in special industries will be given in the next section, and it will suffice for the present to point out that almost every industry that had been in existence at the time of the war continued to grow, while a large number of entirely new industries sprang into prominence as the result of new discoveries and inventions. While the population was, roughly speaking, doubled between 1860 and 1890, the capital invested in manufactures increased six-fold, from $1,000,000,000 to over $6,000,000,000, the value of the products above five-fold, the number of persons employed three-fold, and their wages nearly five-fold. Such a growth of the factory system as this could not fail to introduce all the problems of organised labour. Trade unions and strikes had been known at an early date; and the literature of the fifty years before the war shows that our conceptions of the idyllic conditions of the labourer of that period as a democratic artisan are somewhat exaggerated. -1890] Labour troubles 707 Still it is true that the system of production on a large scale was not widely prevalent till after the war; and in the later period the problem of labour assumed a new phase. The first warning the country had of the new power was the series of railroad strikes in 1877, which were accompanied by serious outbreaks of disorder, necessitating a resort to Federal troops. Then followed the appearance of the "Knights of Labour," and the first exhibition of their power in the serious strike on the Missouri Pacific line in 1886. By this time the movement towards labour organisation was rapidly progressing; and strikes became frequent. Occasionally there occurred great conflicts such as those already mentioned, followed by the Homestead and Chicago strikes (1892 and 1894), when the public again stood aghast before the spectre of an industrial war which amounted to armed insurrection. Such excesses were perhaps inseparable from the rise of a powerful new organisation in economic life, carried away by its first consciousness of strength; but the educated public, which was still marvelling at the material triumphs of the capitalistic system, was little prepared for the sudden problem which followed logically in its train. Gradually better leaders have arisen; and the harder lessons have been at least partially learned by the unions. If they have been slow in appreciating the necessary limits within which alone they can hope for success, the employing class on the other hand has been equally slow in recognising the utter futility of the attempt to crush the new organisation; and the public have as much to forgive on the one side as on the other. The problem is the same in America as in every industrial nation to-day. Combination has arisen to meet combination; and only as the rights of each are recognised will the bitterness of the conflict cease. There are special reasons why this is to be hoped for in the United States, before a sense of social cleavage becomes more acute. For though the masses are easily roused by a sense of injustice and incited by that spirit of independence, which has been their chief pride, to resist promptly even at the expense of law and order, class divisions are not yet permanently fixed, and the consciousness of class is still subordinate to the sense of national unity. Little space has been left for the consideration of the agricultural development of the country during this period, although that development has been the true basis of its prosperity. Even all the advantages for industrial growth which have been enumerated would have been insufficient for the establishment of a great system of manufactures, had not the home market been constantly expanding. The period from 1860 to 1890 is indeed as notable for the way in which the United States became the chief source of supply for food-products and raw material to Europe as for the extent to which the country achieved its independence of European industry. Between 1860 and 1870 the population of the grain States (the "North Central" division) increased by more than 42 per cent., and in the next 708 Agricultural development [1860 decade by nearly 34 per cent. a total addition in twenty years of over 8,000,000 inhabitants. Even in the older States of Illinois, Iowa, and Missouri the growth was more rapid than the general rate of increase, while in the newer States of the North, the population of Michigan more than doubled, and that of Minnesota increased more than four-fold. Over 130,000 settlers took up farms in the unknown Dakotas, while, farther south, the population of Kansas increased more than nine-fold, and that of Nebraska rose from 28,841 in 1860 to 452,402 in 1880. the same time the Gulf States were rapidly growing with the constant extension of cotton culture. The greatest proportional advances were made in the "Western division," where the new mines were opened up by the transcontinental lines. This division, which includes roughly the States west of the Kansas boundary, was, with the exception of California and Oregon, practically unsettled in 1860. Exclusive of these two States, a population of less than 200,000 was scattered over a territory covering one-third of the whole area of the country. By 1880 half a million settlers had come into these States, while the population of California had increased by almost as many more. During the next decade this movement continued, till in 1890 California had 1,200,000 inhabitants and the rest of the Western division nearly 2,000,000. Flourishing cities had grown up; and the extension of mining and cattle-raising had now gone so far that the census of 1890 announced that there was no longer a line of frontier. In the same decade the increase in the new grain States continued as before. The population of Minnesota, the Dakotas, Nebraska, and Kansas increased by nearly 2,000,000, or over 80 per cent. This growth of population in the grain States was made possible by the extension of the railroad system, which opened new areas for cultivation and, combined with improvements in ocean navigation, brought the prairie farms into direct connexion with the factories of Europe. The westward movement was also stimulated by the further extension of the land policy of the government as expressed in the Homestead Act of 1862, which permitted the acquisition of title to lands actually settled, by the payment of a nominal fee - the last step in the policy of free homes. In the meantime great improvements were made in the methods of production and in handling the crops. Agricultural machinery, which had begun to work its transformation before the war, was applied on a still larger scale; a great extension of terminal and railroad elevators facilitated storage; and a system of grading and classification was established under the influence of the speculative market, which made it possible to handle grain in the most economical manner. This was especially important in view of the great distances in transport and the many reshipments necessary. Grain could now be handled in bulk without regard to small specific lots; and, in the case of wheat, owing to its fluid quality, the application of machinery in its handling has |