Edited by FREDERICK B. LUQUIENS of Yale University GRAMMAR PRACTICAL SPANISH GRAMMAR By Ventura Fuentes and Victor François of the College of the City of New York. A simple, systematic presentation of the Spanish language with special attention to the needs of those who are studying it with a view to business intercourse with Latin America. READERS ELEMENTARY SPANISH-AMERICAN READER By Frederick B. Luquiens of Yale University Short stories and selections graded as to difficulty. Questions and composition exercises. SPANISH READER OF SOUTH AMERICAN HISTORY= By Edward W. Supple of Yale University Stirring accounts of characters and events notable in South American history. LEYENDAS HISTORICAS MEXICANAS By James Bardin of the University of Virginia Thrilling narratives from the writings of Heriberto Frias. MÁRMOL'S AMALIA Edited by A. H. Corley of Yale University The dramatic story of political intrigue in Buenos Aires under the domination of General Rosas. A novel of high literary and historical value abridged for class reading. COMPOSITION MANUAL DE CORRESPONDENCIA By Ventura Fuentes and Alfredo Elías of the College of the City of New York A preliminary section on writing a letter is followed by eleven illustrative social letters and forty-five business letters, all helpfully annotated. The book is provided also with exercises and a verb review, tables of the Spanish numerals and the abbreviations used in correspondence. Boston THE MACMILLAN COMPANY 64-66 FIFTH AVENUE, NEW YORK San Francisco Dallas Atlanta Devoted to the Science, Art, Philosophy and Literature of Education VOL. XXXVIII. MARCH, 1918 No. 7 Some Economic Facts in the Development of Manufacturing in the United States. MALCOLM KEIR, ASSISTANT PROFESSOR OF INDUSTRIES, UNIVERSITY OF PENNSYLVANIA, PHILADELPHIA, PA. S TRIKES or lockouts, frantic appeals for labor, explosions in munition plants, fires, marvelous inventions, astounding records of production, all these thrust upon the attention of modern Americans the vital importance of our factories. When we travel we are amazed at the rapid construction of gigantic new mills, we are deafened by the roar of furnaces, appalled by the crash of hammers and our passage blocked by hurrying motor trucks burdened with raw materials or piled high with finished products. Through all our senses, it is borne in upon us that we belong to a manufacturing nation. It startles us, therefore, to realize that this activity is comparatively new in our national development; it is a shock for it to be brought home to us that throughout all the colonial period of our history, there was little manufacturing of any kind within our borders. We are slow to believe that until 1830 only cotton and iron manufacture made much progress in our country, and that even when the Civil War opened, we had but barely removed the heavy handicaps under which manufacturing labored. Hence it is only since 1870 that we have really discovered our great resources for manufacturing, and have begun to utilize them to our advantage. Manufacturing then, is a new feature in our economic life. How it has been brought from obscurity to such prominence is the question we now face. In the colonial era, manufacturing was hindered by both natural and artificial barriers; in fact the difficulties were so many that it is astonishing that the colonies were so persistent in their efforts to set this industry upon its feet. The overwhelming pre-eminence of agriculture was the foremost disadvantage at that time facing an enterprising man who endeavored to start manufacturing. In a new country, whose soil and climate permit, the first activity to which men turn their attention is farming. They must eat to live; they must farm for food. Hence this primary need of human beings is always reflected in the primacy of agriculture among all industries. In America, this natural predilection toward farming was heightened by the fact that the middle and southern colonies produced commodities for which they had either an exclusive monopoly or for which an excellent foreign market existed. Tobacco was an American plant, and Virginia with her neighbors had a virtual world monopoly in its cultivation. The profits in the business were so great that Virginians refused to consider any other form of industry. Living in a wooded country, they imported all their wooden ware; even birch brooms came from abroad. Pennsylvania and Delaware were the grain growing and flour milling communities. The West Indies plantations eagerly took the surplus of grain or flour, thus constituting a valuable market near at hand. New York was similar to Pennsylvania, while New Jersey was a grazing cattle feeding settlement. The West Indies and New England constituted ready markets for the grain or meat collected at New York. Consequently in all the colonies south of the Hudson, strong incentives were held before a man to devote his energies to farming. Land was cheap, the virgin soil was fertile, and a market was ready to absorb what was produced. It paid to ship raw materials and with them purchase manufactures from Europe. The commanding position of agriculture, therefore, held manufacturing in abeyance. The poor showing of colonial manufacturing, however, was not entirely due to men's prejudice in favor of land tillage. Manufacturing had to struggle against a shortage of labor, a lack of capital, an absence of market and exhorbitant transportation charges. Added to all these natural limitations upon manufacturing was the English policy of prohibitions to any activity that threatened her own home workmen. In a country so sparsely settled, yet so extensive in area as America, it was natural that labor would be scarce. Land was to be had for the taking, so why should any man work for another? As a consequence, wages were very high. Farmers could afford high wages because there was no capital outlay for land, hence no interest charges; there were no tithes and taxes were low. On the other hand, the land gave a large increase and the market absorbed all that was grown. Yet even farmers had trouble securing permanent labor and had to resort to importing convicts, indentured servants or slaves. If farmers in a superior situation could not secure labor, how much more of a handicap was it to manufacturers in an inferior natural position. It costs so much to train workers that manufacturers must have a permanent labor force, yet in America the high wages paid, plus the cheapness of living, enabled wage-workers to set up for themselves as proprietors of land in a very short time. Hence a manufacturer's force was always a succession of learners. This condition operated forcibly in restricting manufacturing enterprises. Furthermore the labor was not collected in masses in towns or cities but spread out thinly over a wide area. This was particularly true in the southern colonies where the type of agriculture demanded large land holdings but did not call for town facilities because each plantation owner sold his own produce over his own wharves. Even at the opening of the Revolution, there were only three million people in the colonies and these few were scattered all the way from Maine to Georgia. The result of this wide dispersal of labor, together with its high price, effectively checked any tendency toward manufacturing. Abundance of capital is just as essential to manufacturing enterprises as an ample supply of labor. Just as the newness of America made labor well nigh non-available, so also the recent origin of the colonies created a dearth of fluctuating capital. It is not true that there was an absolute lack of capital in the colonies, but it is a fact that whatever capital was present, constantly as sumed fixed forms. It went into buildings, cattle, work-animals, or tools and left but little free to conduct a going business. Hence manufacturing might start, but it could not borrow capital for running expenses or for expansion. What small amount of capital was available, constantly tended to flow abroad to pay for imports. The result of these facts in respect to capital is shown in the statement that in 1781 there were but three banks in America, one at Philadelphia, one at New York and a third at Boston. A lack of free capital might have been met by a system of long term credits. But in a country so new, where capital was in such demand for establishing homes and farms, it was compulsory to make a small amount do a large aggregate of work. In short, the turnover of capital had to be large and quick. Hence long term credits were unknown to American capitalists. Without labor. without free capital and without credit, maufacturing could make but little headway in the colonial era. There was so little private enterprise that at the time of the Revolution, the Congress was forced to erect and operate the little forges and furnaces that furnished munitions of war. Even if there had been an adequate labor force and a supply of capital, still there would have been little manufacturing in colonial America because of the absence of market. Our industry was still on the household basis. Each homestead produced its own raw materials, manufactured its own necessities and consumed its own products. There was no need or desire to leave the home place in order to satisfy men's wants. Furthermore, workers here were not paid in money, whereas in England that system was compelled by law. In this country artisans were rewarded in kind. Just as in Biblical times, Abraham gave Joseph a percentage of the increase in the flocks, so in America the miller took his toll in grain, the spinner in yarn and the cobbler in food, leather or agricultural products. The lack of money, then, operated against extensive exchanges at a distance. Trade was by barter between individuals. These two facts-the economic independence of farmers and the absence of money wages-practically eliminated any general market. Hence a manufacturer was strictly limited to his own neigh |