-1890] Machinery and grain production. Meat trade

709

made the methods of the American grain trade unique in the world of commerce. From the moment when the grain is brought by the farmer to his local elevator to the moment when it reaches the docks of Liverpool, the only hand labour necessary to its movement is the pulling of the right lever to set the machinery going. The new process of handling and marketing the wheat was hardly less important than the new methods of harvesting.

Under these conditions the production of cereals and the accompanying production of provisions increased enormously. The wheat crop, which in 1870 had amounted to 235,000,000 bushels, averaged 310,000,000 from 1870 to 1879, and 450,000,000 from 1880 to 1889. Since then it has twice exceeded 600,000,000, and once 700,000,000. In the case of Indian corn, the average for the decade ending 1889 was 500,000,000 bushels greater than for the previous decade, and in recent years has averaged 2,000,000,000. The value of the products of the slaughtering and meat-packing industries increased from $75,000,000 in 1870 to $303,000,000 in 1880, and $561,000,000 in 1890. Meanwhile the amount of wool, produced primarily in the Western States, increased from an annual average of 177,000,000 lbs. in the seventies to about 275,000,000 between 1880 and 1889. Exports increased in even greater proportion than production. The average annual export of wheat (including flour) from 1867 to 1872 was 35,500,000 bushels; from 1873 to 1878 it was 73,400,000, and from 1879 to 1883 it was 157,600,000. The proportion of the total crop exported in these three periods was 16.53, 24-59, and 34.91 per cent. respectively. Such a phenomenal increase could manifestly not be long continued, and the average for the next ten years showed some falling-off. From 1884 to 1888 it was 122,400,000, and for the next five years 144,400,000 bushels. During the last decade it has again increased to a higher figure than ever. The export of Indian corn has never been so important in relation to production as that of wheat. It is primarily a feed-crop for the home market; and in fact 80 per cent. of the total crop, which in bushels is three or four times that of wheat, is consumed in the county where it is grown. Nevertheless a foreign demand has been stimulated; and the average annual exports increased from 14,200,000 bushels in 1867-72 to 73,400,000 in 1879-83. After a period of comparative uniformity the exports have begun to increase enormously in recent years, having risen, in one year, to over 200,000,000 bushels. The increase in the production of Indian corn made the growing export of provisions possible, while the improvements in refrigeration enabled the packing houses to ship immense quantities of fresh beef. The export in this line alone increased from 20,000,000 lbs. in the early seventies to 200,000,000 lbs. by 1890. The value of bacon and hams exported increased from $6,000,000 to $60,000,000 in the same period, and that of lard from $6,000,000 to $42,000,000.

710

Economic revolution in the South

[1860-90

The thirty years after the war also witnessed a great economic revolution in the Southern States. The abolition of slavery destroyed once for all the large-plantation system which had been the foundation of a patriarchal society; and the financial ruin of the large planters made its partial re-establishment under a wage system impossible. During the stormy days of reconstruction the growth of a new economic system was retarded; but the subsequent years saw an adaptation of Southern agriculture to the new conditions of free labour on lines which are likely to be permanent. While the large planters and their descendants were left helpless before the new problem, the small planters, the "poor whites," rose rapidly in importance, took over the land relinquished to them, and began the process of regeneration. The black population was for the time being not improved by emancipation; and its incompetence has been a serious check on the growth of the South. Strenuous efforts are being made to educate them on lines of industrial efficiency; and the better blacks are gradually learning that economic independence is their real need. It must be admitted, however, that the amount of skilled labour among the blacks at the present time is less than before their emancipation. The same difficulties have proved how chimerical were the early hopes that a body of independent farmers would grow up among the freedmen. Despite notable exceptions, they have not shown sufficient economic strength for the rôle of landowners. At first they were employed as wage-earners, but very soon the lack of capital on the part of the planters and of industry on the part of the black labourers led to the substitution of the system of share-tenancy, which is now the most prevalent method of tenure among the agricultural blacks. To these difficulties should be added the pressure of indebtedness due to deficient capital and falling prices, which has kept even the white planters from establishing that independent position which on the whole characterises the farmers of the North. Still the substitution of the small-farm system for the large plantations opens up to Southern agriculture the prospect of gradually attaining independent conditions.

Despite all these drawbacks the cultivation of cotton has grown enormously, enabling the Southern States to advance rapidly in population and wealth. The production of cotton increased from less than 2,000,000,000 lbs. in the early seventies to more than 4,000,000,000 in the early nineties, keeping pace with the world's demand, of which it supplies 80 per cent. Exports increased from about 1,000,000,000 lbs. to over 3,000,000,000 lbs. Furthermore, the Southern States have at last begun to utilise their other resources. Coal-mines and iron-works are being opened, while the growth of cotton manufacture in the old Slave States has been more rapid than in any other part of the country.

The last few years have witnessed in the United States an expansion of industry and a growth of material prosperity which have not been

1890-1902] Recent progress in the United States

711

equalled in any period of equal length in its history; and this has been accompanied by notable changes which demand special consideration. The long period of depression which followed the panic of 1893 came to an end in 1897. The enforced economy of that period had reduced production till the surplus stocks were exhausted. The country had grown up to its surplus silver currency, which had resulted from the dangerous experiments of 1878 and 1890; and, more important still, the election of 1896 had settled once for all the question of sound currency and ensured the legal maintenance of the gold standard. The prices of agricultural products began to rise in the autumn of 1896; and good crops, with a growing foreign demand, initiated that agricultural prosperity which has been the basis of the whole movement. Before considering the more striking developments in industrial production and organisation and in foreign commerce, a word may be said of the condition of the West.

A glance at the census map of 1900, showing the various centres of the country's economic activity, gives a vivid impression of the dominant position of the Mississippi valley. The centre of population has moved west during the last decade at a slower rate than in preceding years, and now lies near the southern boundary of Indiana at longitude about 85°49'. The centre of manufactures had crossed the Ohio before 1890, and now lies fifty-nine miles south-west of Cleveland, Ohio. The centre of agricultural production lies along the Mississippi. The centre of the "six cereals" is exactly on the river about half-way between Hannibal and Burlington; and the three points representing the centres of improved acreage, farm income, and corn-production fall almost together just above the junction of the Illinois and Mississippi. The centre of total farm-area has moved west to the ninety-third meridian; and the centre of wheat-production north-west across the Mississippi to a point seventy miles west of Des Moines, Iowa. This is the most noticeable change of all, and marks the increasing pre-eminence of the North-western wheat-fields. The population of North Dakota and Minnesota made large advances in the last decade, while the more southern States of Kansas and Nebraska did not increase at all, owing to the reaction from the abnormal settlement of the previous decades which had been followed by the agricultural depression. For the first time, the "North Central " division, including the chief wheat States, showed, as a whole, a smaller proportional increase in population than the North Atlantic division. On the other hand, a notable increase took place in the South Central division, especially in Arkansas and Texas, and above all in Oklahoma, to which district a wild rush took place on the opening of the new lands. The largest proportional increase has been in the Western division, including the three Pacific States and the growing districts of Montana and Colorado.

It will be seen, then, that the westward movement continues,

712

Migration and agricultural expansion

[1890although at a diminished rate; and the movement is continuing in the same way as formerly, that is, by steady pressure pushing the whole moving population. The same men who settled the earlier frontiers still advance, selling their farms at a profit to those who come behind. The pioneer element is constantly drawn forward, and the less adventurous enter into their heritage. This also explains the nature of the emigration across the border into north-western Canada, which has called forth gloomy comment. The virgin soils of the Canadian wheat-belt afford greater opportunities; and the same class of men who left Iowa for Minnesota or Dakota now move on to the north once more; but their places are continually filled. It is but a normal continuation of the general migratory movement.

The number of farms has increased more rapidly than the population, and the total acreage of improved land somewhat less. On the other hand, the total farm-area has increased more rapidly than in any decade since 1860 a fact, however, less significant than it might appear, since there has been an addition to the nominal farm-area of 130,000,000 acres of unimproved land in the South Central and Western divisions. In this connexion reference may be made to the problem of farm tenure. The public was surprised to hear, after the census of 1890, that the ratio of farms worked by owners to farms worked by tenants was decreasing. The independent farmer had been so long lauded as the main prop of a democratic society that the revelation was startling. An even more marked change in the same direction has taken place in the last decade, the number of owning operators having fallen from 71.6 per cent. in 1890 to 64-7 per cent. in 1900, while tenancy increased correspondingly from 28-4 per cent. to 35.3 per cent. Nevertheless, the gloomy forecasts to which the fact that over one-third of American farms were in tenants' hands has given rise, do not seem to be warranted. We have already noted the reasons for farm tenancy in the cotton-belt, where it causes less alarm. In the North-west there have doubtless been some cases of men losing their farms by foreclosure and becoming tenants, while some farms have been bought up for investment; but in the main the causes are different. In the first place, the break-up of the "bonanza" farms has come largely through division into tenantholdings, which simply means the extension of the small-farm system. In the next place, the facts show that the number of operating owners compared with the total farm population has not diminished since 1880, while the comparative number of farm-labourers has diminished in a marked degree. This would seem to establish the inference that the increase in tenants is due to the rise of labourers rather than the fall of owners. This conclusion is further strengthened by a study of the relative ages of operating owners, tenants, and labourers. The striking fact appears that 90 per cent. of all the farm-labourers are under 35 years of age, over two-thirds of the tenants are under 45, while about

-1902] Owners and tenants; independence of the farmer 713

60 per cent. of operating owners are over 45 years of age. In other words, there is a steady progress from the ranks of labourers up through tenancy to ownership. This certainly does not represent a dangerous reaction.

Despite wide variations in individual crops, the last five years have been years of large yields and good prices. Even the serious failure in the Indian corn crop in 1901 did not materially affect the situation, for this reverse was balanced by heavy crops in the other cereals, while it kept corn prices high for the corn crop of 1902. Only four times prior to 1897 did the wheat crop reach 500,000,000 bushels. In the last six years the crop has exceeded that amount each year, and in 1901 reached the unprecedented total of 750,000,000 bushels; while the range of prices has been higher than under the smaller crops of the three previous years. In the matter of cotton the conditions have been much the same. The average crop for the last five years has been over 10,500,000 bales, and in two years the crop was over 11,000,000, compared with crops ranging in the ten years previous from 6,500,000 to a maximum of less than 10,000,000 bales. Such statistics, however, give a less vivid idea of the recent change in Western conditions than facts for which no accurate figures can be given. The great change has been the raising of the farmers from a condition of burdensome debt to economic independence. In the decade from 1880 to 1890 millions of acres were taken up by settlers, who burdened themselves with mortgages both for the purchase price and the working capital, and found themselves, before they became firmly established, facing an agricultural depression of almost unprecedented proportions. The pressure of interest payments at a time when crops could hardly be sold at a profit accounts largely for the great hold of the free-silver movement in the campaign of 1896. In the last few years, however, mortgages have been paid off rapidly, while the enforced economy of the preceding years made saving out of increased income easy. The wheat-grower is no longer obliged to sell his crop at once or to mortgage it before harvest. He is in a position of economic solvency, with money laid by. It is this fact that gives more than a passing significance to the prosperity of the West. Mere fluctuation from time to time in farming incomes would hardly warrant extended comment; but the use made of the increased income, namely, the payment of debts, is sure to prove of permanent importance. The surplus may be dissipated, new settlers may incur new debts, but hundreds of thousands of the settlers of the earlier decade are now

for the first time in a position to bear reverses. At last they are really in possession of free homes.

We may now consider the industrial expansion. The census of 1900 attempts to determine the relation of manufactured to agricultural products in money value, and to establish the excess of the former, even after making proper deductions for the value of the raw materials.