Samuel MacClintock, Ph. D. (continued 10)

Incident to indolence and ignorance are those vices of temper by which we wish to reach results without labor, or to reach them by the labor of others rather than by our own labor. As long as these vices are prevalent among men, whether in the upper or the lower strata of society, or, as is sure to be the case, in both, periods of arrest will come. Men will be baffled in their narrow aims, and will have no broader, more generous ones to put in their place. For a time they will lie idle till the customary impulses revive and once more set them in action. Industrial inactivity is like a financial panic. It is the result of the transient suspension of habitual feelings, and does not relax till men return to their usual frame of mind. These distrustful and apprehensive periods are liable to return as long as men are not pursuing sound purposes in a sober way. Any deficiency in fairness, integrity and mutual confidence divides society against itself, and renders a portion of its efforts futile. This is the more true as the division and subdivision of labor increases, and the final adjustment of returns is made by complicated exchanges. When a portion of the community finds its share of good things much reduced, when in the distribution of the rewards of labor, custom or cunning or force has robbed them of a reasonable portion, the motives of labor are greatly lessened, the means of exchange are lessened and the sense of unity and integrity of society is lost. There is in civilized society a large body of just and honest production which goes far to sustain the mind in renewed effort, and keep firm the ties which bind men together. Yet the element of distrust, as in a financial crisis, extends through the community and weakens the points of life.

The first condition of social, economic strength is that all the members of society shall find suitable occupation and by means of it become the givers and receivers of aid. This plain, simple fact has been much obscured by accepting competition, often in an unethical and unsocial form, as the general law of economic activity. This law it is not; and it needs at all times to be held in check by ethical impulses and by the welfare of the community. It is this welfare which is the supreme law. Labor owes much of its degradation to a rigid and unreasonable application of competition. As we go down in the scale of occupations, and in efficiency in those occupations, the greater is the injustice and injury that attend on competition till we reach a point at which large numbers are pressed by it to the very verge of life. Then comes in that mischievous generalization which tends to make human degradation a permanent product of nature. The increase of human life is said to be geometrical, the increase of the means of life arithmetical, and so the two tendencies grind eternally against each other. Our best sympathy is expressed in letting this collision come to the quickest, shortest results. Some of this crushing process obtains between ill-trained and sluggish, well-trained and active men. Let it have way.

Yet the agricultural products of the world have not only never given out, they have never been brought near a maximum. Food, raiment and shelter are most varied in kind and abundant in quantity where men are most numerous. The Algonquin Indian wandered in the forest in the winter, unfed and unsheltered. The foundation of his trouble was his indolence and ignorance. The inhabitants of India may perish by famine in large numbers. The distress arises not from the fact that the people have outstripped the productive power of the world, but because they have outstripped their wisdom in handling those powers.

Let men covet wealth, and at the same time use narrowly and competitively the means of attaining it, and the two strata of society, upper and lower, will shape between them a human life in which want will stand over against luxury, hatred over against contempt, and the two classes, oppressed by spiritual destitution and physical poverty, will wage with each a variable and hopeless warfare such as wisdom and good will can alone leave behind us.

A first remedy for unemployment is to make employment remunerative; so remunerative that the workman shall be the buyer of many things as well as the seller of one thing. When his single sale of labor stands in equipoise over against his many purchases, we shall have buyers as well as sellers and our production and traffic will never cease. We have in trade-unions a first step in the adjustment of exchange. Workmen strive to escape the competition of the incompetent and shiftless, to redirect distribution in ways more just and equal, and by this means to be able to play their own part in economic life more advantageously for themselves and for all. This effort is new in its breadth of application, but has never been new with the wise and thrifty. Personal skill and professional attainments have always lifted themselves above the storm-swept plain of competition, and gathered about themselves a prosperity and comfort resting on special and superior exertion. So long as we subject ourselves to the fortunes of the indolent and set up our standards of life at the very foot of the slope, we shall have a competition like that of the Chinese to contend with. We shall march so near the verge of the precipice that many will be pushed over it, and the least flurry will be disastrous. A sufficient return for diligence is the first claim and the safety of labor; it enhances its motives and fortifies it in the possession of what it holds.

With paucity of pay on the one side goes the superabundance of profits on the other side. The returns of management should be more moderate, more uniform, more consonant with the general welfare. We can hardly doubt that an industrial community, well-organized, with a fair share of intelligence, diligence and honesty, will commend reasonable prosperity extending to all its members. Indeed this is what actually takes place in the midway forms of effort. The very poor and the very rich complement each other. Healthy and wholesome activity is as possible to the community as to the individual. The chief difference lies in the increased complexity of communal action and the ease with which results are misunderstood and misinterpreted. The instinctive and voluntary life of the individual is replaced in the community by divided counsels. Men shape opinion and interpret results in view of their own interests rather than in view of the public welfare. The public welfare is as much within the scope of human thought, when attention is directed to it, as is individual well-being. Indeed the universal and stable prosperity of economic society is as much dependent on the diligence and sobriety of its members as is individual welfare on well-ordered labor. The qualities which enhance success in the one direction are much the same as those which cause it in the other direction. Extreme and intemperate action work the same mischief in the one field as in the other. Society is sufficient unto itself when its purposes and methods are truly social. A sudden suspension of labor, a large number out of employment, are the result of disturbing causes which have found their way into the ordinary processes of production. These causes are an unreasonable accumulation of power in single hands, speculative ventures and a social philosophy which holds in light esteem the immediate interests of the mass of the community. I have in mind a peculiar manufacture which had provided the needed buildings, and surrounded itself with the homes and help called for. There came a combination of those engaged in this industry. The works, comparatively new, were discontinued. Production sought a new center and the old community was left to suffer the loss of slow dispersion.

We are protected against theft and criminal violence, but we are not protected against the unprovoked losses which come to us from the speculative aims of the adventuresome capitalist, though these losses may greatly exceed those of robbery. The stability of labor and the returns of labor are often affected in the great centers of production by opportunities, fanciful or real, which offer themselves to a few of achieving large wealth; opportunities not so much of creating wealth as of raking it together. The mass of men do not so much as conceive that they have any ground of complaint of operations which sweep out from under them the supports of well-devised industry. Wealth which in its making and use tends to break up the ordinary methods of industry, to throw off the minds of men from the familiar reconciliations of industry and, above all, to weaken the sense of responsibility which lies between labor and capital, must, from time to time, issue in industrial disaster to the confusion and loss of labor. Do the best we may and we cannot anticipate every disturbance, but we are inexcusable for overlooking the disasters we bring upon others who are working with us. Much of what is called enterprise renders those engaged in it almost wholly negligent of the incidental injuries which fall to those about them. The equilibrium of labor is dependent on the equilibrium of productive enterprises, and when these accept no restraints the disturbance will reappear here and there in the productive world very much at random. Labor presses at one point and is relaxed at another, subject to the speculative schemes of capital. Extreme wealth in the hands of a few lacks the economic and social and moral motives which make it a calculable and reliable means in the hands of many. When it is in the process of accumulation it is lawless; when it is accumulated it sinks into indolence.

While some gains are pretty sure to accompany the acquisition of great wealth, once acquired, it disturbs the even flow of economic forces, and may easily give rise to irregular occupation that brings serious disturbance to those whose daily wants are to be supplied by labor. It may be thought that these fluctuations in production arise from its very nature, and that if we leave men of very different degrees of intelligence to contend with each other for the prizes of industry, great inequalities of prosperity are sure to appear. We can escape them only by forcing back enterprise and making the moderate, medium men the standards of achievement. This presentation seems plausible, and will always be urged by those who are willing or eager to take large risks. Men of large productive power are easily stimulated, and their resources are kept, in reference to the community at large, in the most fruitful form when they are compelled to moderate their efforts, and are not left to the extreme and eccentric ways normal to them. The community is interested in habitual lines of industry more than in those which disturb the minds by sudden profits which cannot be emulated or repeated. Men will separate themselves from their fellows in the rivalries of production. Only thus is the power of intelligence fully disclosed, yet the ordinary arrangements of society, its privileges and opportunities, should be made as equal as possible; no unfair advantage should be given to one or another form of production; nor methods be allowed to the successful in achieving wealth which are not admissible in the community at large. The laws of the game should be wisely framed and firmly preserved. It is the able and ambitious who bring the most strain to safe restrictions, and for whom they are chiefly made. Equality of opportunity is the cardinal principle, and cannot be sacrificed in favor of enterprise. The enterprise that is wholesome keeps within this law. It may also be thought that this rigid restraint would deprive the community of some of the most prevalent means of welfare as well as of some of the most illustrious agents in prosperity, and that those great and efficient combinations which we have come to designate as trusts would be lost to us; that as the result of this loss we should quickly settle down into a sluggish routine, mediocre ideas ruling the public mind, and so miss that very prosperity of which we are in search. Industrial corporations are most efficient agents in wealth-making. We cannot for a moment think of throwing any real obstacle in the way of their formation. But while we need their aid, we should also remember the evils which are liable to come with them. They are the creatures of law, and the law in giving birth to them should assign them the form and restrictions which are most consistent with the public welfare. They are not to be allowed to fall into speculative hands, an instrument of unrestrained power.

Industrial corporations afford ready means by which small capital and moderate men are compacted into a service quite beyond the range of individual producers. The difficulty has been that much dishonesty has entered into the formation of corporations, and that unreasonable power has been exercised by those who have had them in charge. The responsibility of a corporation to the community, expressed in a sound financial organization and in the relation of its officers to its stockholders, would in no way restrain the usefulness of these industrial agencies, and would make them wholly consistent with extended and equal opportunities in production. Immense wealth has often been acquired in connection with corporations whose usefulness to the public has been thereby restricted and the profits of stockholders disregarded. Nowhere is the eagerness of personal enterprise so tempted, nowhere does it display itself more disadvantageously than in the large and oftentimes obscure undertakings of corporations. It is not in reduction of these agencies, but in behalf of their safe and profitable use, that the claim arises for uniform and well-regulated action. In large corporations, as in insurance companies, when the business itself has fallen into routine, extravagant salaries have been resorted to as a means of increasing the returns of officers. Oftentimes the plea for raising salaries is one which is self-propagating. Expenses have been greatly enlarged and the remuneration must keep pace with them. Yes, but will not this very increase lead to increased expenditure? Industrial corporations have been, in the present generation, a conspicuous means of production, but they have also conspicuously promoted a bad distribution of wealth, and so helped to promote irregularity and ultimate suspension in the productive process. There may never come a time in which the adventuresome capitalist will not magnify his own usefulness to the community, but there may come a time in which men shall see that the wealth of a few may be purchased at the expense of that general comfort which is the proper return of industry.

A possible rapidity in the acquisition of wealth inflames the speculative temper. We mean by the speculative temper, purchase and sale, not in reference to production but with the hope of making large profits independently of production. Speculation is an expression of a venturesome spirit which, in its impatience, lays light emphasis on the usually slow methods of increase, and promises itself a rapid road to success. This hope is often disappointed, and when disappointed carries with it a more or less extended retardation of business. When the annual losses by bankruptcy in the United States reach $200,000,000, the distress of those whose means of livelihood have been involved in this overthrow must become a very sensible factor. Such a sum would, in its successful use, provide for many households.

The temper which goes with sanguine and unscrupulous methods is a careless, and often a cruel, one. The democratic notion of equality is overridden, is pushed aside as of no significance in the business world. The same persons who insist on an open shop, and give free play to competition when it depresses labor, regarding it as a familiar and convenient principle in determining wages, may combine with each other to control products and enhance profits. The general welfare, which is the controlling idea, is lost sight of or readily forgotten. They have one standard when they look out on the community at large, and another standard when they are preparing the way to make and hold fast their own gains. The directors of business come easily to think that the welfare of the community is identical with their own welfare, and that the enterprise with which they sustain their own affairs is identical with that on which the public prosperity depends. They readily come to the conclusion that their activity, so essential to the community, should be cherished by the community. How possibly can production progress without them. Discrimination in their favor is a short cut to the common prosperity. Men of comfortable means and the poor even owe what they have to the enterprise which scatters wealth everywhere. There is sufficient truth in this feeling, when not too boldly put, to hide its failures. The expenditures of the very rich in the purchases and exchanges they involve do carry a measure of advantage to all, but they also bear with them an unjust distribution, a luxury and a poverty, which weaken the unity and sap the strength of society. It is the very gist of democracy that each man shall count one; that in spite of the diversities and the advantages among men they shall still remain units of the same value in the freedom and propagating power by which the gains of the race are stored. It is neither identity nor arbitrary difference that is admissible, but every man and every class of men carry with them the potentialities, the social and spiritual possibilities, which are the germs of historic development. This is the principle with which all petty social distinctions and all civic tyrannies have been at war.

While, therefore, the evil of monopolies may appear in various forms and be met in different ways, they cannot be permanently removed except by social conditions which equalize opportunities and compel wealth and power, in all their activity, to conform to general safety. Production in all its forms and in all its agents must be subject to that temper of fairness, and come under those principles of equal rights, which bind the parts of the community together, and make them one producing and one enjoying agency. Every assertion of settled superiority in persons, classes and races must be set aside, and the world in its physical, intellectual and spiritual wealth be left open to all. Thus history has treated men, and is more and more treating them, in their claims to consideration. This birthright of men is not to be denied or stolen; for they who steal it have nothing more than this same birthright to plead in extenuation, the combinations which look to the defense and extension of these original gifts are in order, and all combinations which carry them beyond the bounds of their own territory are another outbreak of anarchy.

The soundness of this assertion has been recently exemplified in the history of Pittsburg. Pittsburg is the center of an industry which has come, perhaps more than any other, under the domination of a few leading men. In the Homestead strike they succeeded in dealing a heavy blow to workmen in their efforts to secure something like a fair hold on production. A little inquiry into a community built up for a few and ordered by them discloses conditions quite at war with general well-being. Wages are kept down by the constant presence of the unemployed: the accidents of a dangerous occupation are left to fall upon workmen; the health of the community suffers great neglect, the remonstrances of workmen are met with the response, If they do not like the method let them quit; and the general good order and comfort of citizens receive but little attention. Here is an object lesson in which work, sure, skilful and unflinching; wealth, eager, unscrupulous and unsympathetic, have divided the world between them; no right gained, no power lost. Men may make wealth under these conditions, withdrawing it from the fitting returns of labor, but they cannot, wise as they may be or generous as they may seem to be, restore that wealth to the community in a form in which it will subserve the same living purpose it might have subserved if it had never been withdrawn. The life of a community is achieved where its activity is most intense and constant. Failing in our service at these vital centers, no extraneous effort will cover our fault. We might as well draw sap from a tree and then pour it out on its roots.

We have now given three constitutional remedies for the want of employment. The first is a more equal distribution of the rewards of production, thus making the demand for products as extended and uniform as their production. The second is increased restraints, especially in connection with corporations, in the action of the leaders of industry, rendering them more amenable to the wants of the community to which they belong. The third, arising from the other two and supporting them, is more unity, more harmony between the several agents of production.

There was a report not long since in England of an industrial commission, which had given protracted attention to the irregular demand for labor. The remedies offered were chiefly palliative. It may be thought that this form of cure is all within our reach; that what is here offered as constitutional correctives are beyond our power. There is some truth in the feeling, and would be much truth in it, were not the actions and the sentiments now enforced under urgent consideration for reasons of public welfare, not directly involved in unemployment. We cannot expect to remove so grave an evil as this, the wavering demand for labor, short of some important change in the organization of society. Society is a structure of so many and such delicate dependencies that its perfect action must include the general integrity of the current relations between men. Unwholesome results of frequent recurrence are the most direct proof of an unsound system. Palliatives may soften the evil but cannot overcome it. We should aim immediately to reduce the difficulty and ultimately to remove its causes.

QUESTIONS IN BUSINESS ADMINISTRATION.

BUSINESS ECONOMICS.

The Modern Industrial System.

1. Describe the three-field system of agriculture. Page 2.

2. What were the significant characteristics of a manorial society? Page 2.

3. What is said to justify the institution of private property? Page 4.

4. What is competition in modern industrial life? Page 4.

5. Why has the name “capitalistic production” been applied to modern industry? Page 6.

6. Compare the domestic system of industry with the factory system. Page 7.

7. What are the fundamental conditions of our economic life? Page 8.

The Agricultural Resources of the United States.

1. What has been the policy of the Government in its disposition of the public domain? Illustrate. Page 9.

2. What has been the unique and characteristic feature of the land policy of the United States? Page 9.

3. What has been the result of the land policy of the United States? Page 10.

4. What was the first effort toward the solution of farming in the arid soils of the West? Page 10.

5. Explain what is meant by dry-farming. Page 11.

6. How do the farms of the United States compare in size with those of European countries? To what is this difference due? Page 11.

7. What does the movement of the population from the farm to the city indicate? Page 13.

8. What change in method is agriculture undergoing in the United States? Give the reason for this change. Page 14.

9. Discuss the cereal production of the United States. Page 15.

10. Upon what question does the future of the cotton production depend? Page 17.

11. What movement is now put forth to aid in the preservation of our forests? Page 18.

The Mineral Resources of the United States.

1. Into what groups may the natural resources of a country be divided? Illustrate. Page 19.

2. What two answers are given to the problem of the conservation of a limited supply of resources? Page 20.

3. What steps have been taken towards stopping the devastation of our resources? Page 21.

4. What estimates are given as to the amount of coal in the United States and as to how long this supply will last? Page 22.

5. What is the most favorable situation for iron deposits? State reasons. Page 24.

6. Where is the most wonderful iron-mining region in the United States? What makes it such a remarkable region? Page 24.

7. Of what importance are the precious metals? What is the practical problem confronting American gold-mining companies at present? Page 25.

8. To what use was copper put in Homeric times? What has caused it to rise to the front rank in recent years? Page 26.

9. How does the present-day application of water power to machinery differ from its application prior to 1890? Page 28.

Capitalistic Production.

1. What five causes does the census report give for the rapid industrial development in the United States? Page 30.

2. Give Carroll D. Wright’s definition of a factory. Page 31.

3. Illustrate the two meanings which “division of labor” may indicate. Page 32.

4. Show how the subdivision of labor brings about the extension of labor-saving machinery. Page 33.

5. Name the economies of a large-scale production. Page 36.

6. What improvements have made large-scale production possible? Page 36.

7. In what lines of business is there little or no development toward large-scale methods? State the reasons. Page 37.

8. What is meant by standardization? What are the advantages of such a system? Page 38.

Trusts and Monopolies.

1. Enumerate the phases through which combinations for the purpose of fixing prices, have passed. Page 40.

2. What is the advantage of the corporation? Page 41.

3. Give a brief history of the trust movement. Page 42.

4. What economies are secured by a combined or federated industry? Page 43.

5. Name some of the savings which are peculiar to trusts. Page 44.

6. Give an illustration showing the profits of a successful trust promoter. Page 45.

7. What is the effect of industrial combinations upon competitors? Upon producers of raw material? Page 46.

8. Explain the two phases of the relation between trusts and labor. Page 47.

9. What conclusion as to the power of the combination over prices, does the Industrial Commission reach? Page 48.

10. From what two sources do the evils of combination come? What remedies have been suggested to meet both classes of evils? Page 50.

Speculation and Crises.

1. How does the speculator reduce for the merchant the speculative risk attaching to price fluctuations? Illustrate. Page 52.

2. What social value lies in the service of the speculator? Illustrate. Page 53.

3. Explain the difference between legitimate speculation and illegitimate speculation (gambling). Page 54.

4. What is a crisis? Page 55.

5. Discuss the immediate occasion of a crisis. Page 56.

6. What is W. S. Jevons’ theory as to the causes of crises? Page 58.

7. Explain the over-production theory which is given as a cause for crises. Page 58.

8. What is the credit theory of the cause of a crisis? Page 59.

9. Where is the true explanation of a crisis to be found? Page 60.

10. Is it possible to prevent the recurrence of crises? Page 60.

The Modern Wage System.

1. Give some beneficial results and some abuses of the factory system. Page 61.

2. Name five points which Mr. Hobson gives to show that, in the transition to the factory system, the position of the laborer has been one of increasing dependence. Page 62.

3. How does President Hadley define wages? Page 63.

4. Describe the systems of labor which preceded the modern wage system. Page 64.

5. How has the extreme individualism of Adam Smith’s theory been modified? Page 65.

6. What are the three peculiarities of the sale of labor? Page 66.

Labor Organizations and Collective Bargaining.

1. Why have labor organizations grown more rapidly in the United States and England than on the Continent of Europe? Page 69.

2. What are the two types of trade unions in the United States? Page 69.

3. Describe the two most important national organizations which have been in this country. Page 70.

4. What are the methods by which labor organizations monopolize the labor market? Page 71.

5. Why do labor leaders object to piece work? Page 72.

6. What are the two arguments in favor of shorter hours put forth by the trade unionist? Page 73.

7. What is the economic justification of the shorter working day? Page 74.

8. Give illustrations where unions have directly limited the amount of output. Page 75.

9. What is the attitude of the majority of the employers in the United States toward collective bargaining? Page 77.

10. What erroneous ideas exist as to the purpose of labor organizations? Page 78.

11. Describe the method of settling an industrial dispute by conciliation. Why is the principle of arbitration fast going out of favor? Page 79.

Women and Children at Work.

1. Describe the evils of the early factory system in England. Page 80.

2. Are the women crowding the men out of their occupations and taking their places? Page 81.

3. What is the most important reason for the low economic position which woman occupies in the industrial world? Page 83.

4. How does George L. Bolen justify the employment of women? Page 86.

5. How can the evil arising from child labor be cured? Page 87.

6. What obstacles have been in the way of efforts to improve labor conditions by legislation? Page 88.

7. Name, and give examples of, the two classes into which the factory acts may be divided. Page 88.

8. What has been accomplished in the United States in the way of labor legislation? Page 89.

Unemployment and Insurance.

1. Classify the unemployed. Page 91.

2. What are personal causes of unemployment? Page 92.

3. Name some industrial causes of unemployment. Page 93.

4. In what does the remedy for the normal unemployment in modern industry lie? Page 95.

5. Suggest some methods of alleviation of the evils of unemployment. Page 96.

6. State briefly the common law doctrine regarding liability for accident. Page 98.

7. What have foreign countries done toward placing the burden of industrial accidents upon the industry itself and not upon the laborer? Page 99.

8. Describe the establishment of compulsory insurance against sickness and old age in Germany; in Great Britain. Page 100.

Machinery and Industrial Efficiency.

1. What three evils are charged against machinery? Page 101.

2. How does the reabsorption of labor displaced by machinery depend upon the demand for an article? Page 102.

3. How may machine methods cause irregularities in wages and employment? Page 104.

4. Show the need of a system of industrial education in the United States. Page 107.

5. Describe the system of industrial education which exists in Germany. Page 107.

6. How does the English system of industrial education differ from the German? Page 108.

7. What is the character of the industrial schools of the United States? Page 108.

8. How have the people of the United States been aided in their industrial development? Page 109.

9. What two obstacles have been met by the movement for better industrial education in the United States? Page 109.

Profit-Sharing and Co-Operation.

1. Name the three principal methods of profit-sharing. Page 110.

2. What is the economic theory of profit-sharing? Page 111.

3. What are the objections against the profit-sharing system? Page 112.

4. Why is the system of profit-sharing comparatively limited? Page 113.

5. According to President Hadley, where is there more chance for the success of profit-sharing? Page 113.

6. How does co-operation differ from profit-sharing? Page 114.

7. What are the reasons for the lack of success of co-operation in this country? Page 115.

8. Describe the methods of the Rochdale Society. Page 115.

9. How does producers’ co-operation differ from consumers’ co-operation? Page 116.

10. Give three examples of successful productive co-operation in the United States. Page 116.

11. Enumerate the advantages of co-operation. Page 116.

12. What is the ultimate ideal of enthusiastic co-operators? Page 117.

13. Discuss the defects of co-operation. Page 117.

Problems of Distribution.

1. What are the three great problems of economic society? Page 119.

2. Define functional distribution; personal distribution. Page 119.

3. What views are given as to whether functional distribution is actually governed by natural law? Page 121.

4. Discuss briefly the distribution of rent. Page 122.

5. What is the socialists’ idea as to the profits which a business manager receives for his services? Page 123.

6. State three theories which have been developed to explain the distribution of wages. Page 124.

7. How was the wealth of the United States distributed in 1893? Page 125.

8. Are the poor becoming poorer? Page 127.

Saving and Spending.

1. What is the relation between saving and spending? Page 129.

2. What is the real goal of all rational economic endeavor? Page 130.

3. Give the arguments which are put forth condemning luxury. Page 132.

4. What arguments are put forth to show that luxury is an indispensable stimulus to progress? Page 133.

5. What is the attitude toward luxury taken by economists? Page 133.

6. What is meant by “a socialization of luxury”? Page 135.

7. Give an illustration of a waste in consumption due to lack of knowledge and training. Page 135.

Money and Banking.

1. What determines the value of money? Page 137.

2. Give the attempts made in the United States to create a slow, steady inflation. Page 139.

3. State three arguments in favor of bimetallism. Page 139.

4. Where can we find a sufficient answer to the arguments in favor of government paper money? State the answer. Page 141.

5. Of what does the money of the United States consist? Page 141.

6. What essential quality of good bank money do bank notes lack? Explain. Page 143.

7. Enumerate the suggestions which have been made as to a new basis for the issue of bank notes. Page 143.

8. Name two other problems connected with the banking system of the United States. Page 144.

Transportation and Communication.

1. Describe the three kinds of discrimination. Page 147.

2. How do the state commissions differ in power? Page 148.

3. Explain the monopoly character of express companies. Page 149.

4. Show the importance of the internal natural waterways of the United States. Page 151.

5. What problem is offered by our canal system? Page 151.

6. Show why the causes for the decline in tonnage of American vessels are economic rather than political. Page 152.

Taxation and Tariff.

1. What is John Fiske’s definition of taxes? Page 154.

2. What rules of taxation were laid down by Adam Smith? Page 154.

3. What is the benefit theory of taxation? How does this theory fail? Page 155.

4. What is the faculty principle of taxation? Page 155.

5. What measures have been suggested as to how to measure ability? Give the objection to each. Page 155.

6. What are the arguments supporting progressive taxation? Page 156.

7. Where does the Federal Treasury derive its revenue? Page 157.

8. What tax is the main reliance of the state and local governments? Page 158.

9. Describe an ideal system of taxation for the United States. What is the advantage of such a system? Page 159.

10. What is the character of the considerations in determining tariff policies? Page 160.

11. Explain the home market argument in support of protection; the wages argument. Page 161.

12. What is the doctrine of comparative costs? Page 162.

13. How do free traders answer the home market argument? The infant industries argument? Page 162.

The Functions of the Government.

1. Name the economic functions of the Government. Page 163.

2. What is the theory of anarchism? Page 165.

3. Explain Herbert Spencer’s theory of extreme individualism. Page 165.

4. What is the theory of government most generally held by economists and writers in the United States? Page 166.

5. In what country is the culture state theory very generally held? Explain the theory. Page 167.

6. What does the view known as state socialism advocate? Page 167.

7. Give Professor Ely’s definition of socialism. Page 167.

8. Explain the cardinal and distinctive element of socialism. Page 168.

9. Enumerate the socialists’ criticisms of our present methods of production. Page 168.

10. What do socialists urge as bases of distribution? What basis do socialists of today agree is the best one to meet the requirements of justice? Page 170.

11. What were Henry George’s arguments against private ownership of lands? Page 171.

12. What is the real issue as to the municipalization of local public utilities? Page 172.

Economic Progress.

1. What improvement has been made in the condition of the working class in the United States? In Great Britain? Page 173.

2. What factors have aided in the enormous expansion of production? Page 174.

3. Give two reasons why labor has not profited more by the great increase of wealth. Page 175.

4. State some lines along which reform is needed. Page 176.

Manufacturing.

1. How does the word “manufactures” as it is ordinarily used today differ from its original meaning? Page 180.

2. What conditions have made western Europe and the eastern part of the United States great manufacturing sections? Page 183.

Modern Manufacturing Systems.

1. What new occupations did the factory system develop? Page 186.

2. How did the use of steam affect the location of factories? Page 187.

3. What factors made the price of silk so high before the nineteenth century? Page 188.

4. Why is Gary, Indiana, an advantageous location for a manufacturing center? Page 189.

5. How is it possible to operate by water power, a factory located a hundred miles from a waterfall? Give two examples. Page 190.

6. Illustrate the use of electricity in a typical modern factory. Page 192.

Use of Machinery in Manufacturing.

1. Describe the first machine used in the making of yarn. Page 193.

2. Enumerate some of the machines invented in the eighteenth century. Page 195.

3. How did the invention of machinery affect the importation of cotton? Page 196.

4. Show the need of machinery in the iron and steel industry. Page 197.

5. Describe the earliest process of making pig iron. Page 198.

6. What is the Bessemer process of making steel? Page 201.

7. What have been the causes of the great development of the iron and steel industry? Page 201.

8. What is the difference between English and American steel works? Page 202.

Development of the Factory System.

1. State reasons for the early development of the factory system in England. Page 204.

2. Why was the United States slow about developing manufacturing industries? Page 205.

3. Why is any comparison of the value of the manufactures of the United States with that of other countries defective? Page 210.

4. Name an article which is the product of one factory but which becomes the manufacturing material of another. Page 211.

5. What factors have contributed toward making the United States the world’s greatest manufacturing nation? Page 212.

6. How can it be judged as to whether the value of manufactures of a country is in excess of the consuming capacity? Page 214.

Capital in Manufacturing.

1. Show the part capital plays in building up a company. Page 214.

2. What are the advantages gained by having a business in the hands of a company or corporation? Page 215.

3. Compare the durability of gold with that of other products. Page 217.

4. What was the amount of capital employed in manufacturing industries in 1850? In 1905? Page 218.

5. How did the Census of 1905 differ from previous censuses in the matter of manufacturing establishments? Page 219.

6. How does the growth in capitalization rank with that of the other important branches of manufacturing? Page 220.

Trusts and Combinations.

1. What principle was the cause of the origin of the modern company or corporation? Page 222.

2. Explain the provisions of a pool. Page 223.

3. How were the defects of the pool overcome? Page 224.

4. What are the advantages of a trust or combination? Page 225.

5. What has been the effect of trusts on prices? On wages? Page 226.

6. Name and classify according to product the companies of which the United States Steel Corporation was formed. Page 228.

The Iron and Steel Industry.

1. What was the number of establishments for the iron and steel industry in the United States in 1880? In 1905? What does this show? Page 233.

2. What method was used by the early Germans for extracting the iron from the ore? By the English in 1700? By the early American colonists? Page 236.

3. Why was coke used in the smelting of iron ore in England much earlier than in America? Page 238.

4. How did the development of railways aid in the preservation of our forests? Page 239.

5. What is the puddling process? Why is it necessary? Page 240.

6. What process took the place of the puddling process? Page 241.

7. What is steel? How is iron obtained by the Bessemer process made into steel? Page 245.

The Textile Industry.

1. What is the most important of the textile industries? Page 247.

2. Compare the value of textile manufactures in the principal countries of Europe during the period from 1800 to 1896, inclusive, with that of the United States during the same period. Page 247.

3. Define textiles. How are they made? Page 251.

4. What were the so-called “Manchester cottons”? Page 254.

5. Who invented the spinning jenny? What was its use? Page 255.

6. Up until the invention of the water frame, why was the making of cloth entirely from cotton impracticable? Page 256.

7. What was the spinning mule? By whom was it invented? Page 257.

8. What is the purpose of the cotton gin? Page 257.

9. What factors have made cotton the most important textile? Page 258.

10. Why is the cotton industry moving toward the South? Page 262.

Manufacturing Industries of the United States.

1. Why was manufacturing neglected by the early settlers of the United States? Page 263.

2. What manufactories sprang up in the nineteenth century? Page 266.

3. Name the four greatest producers of manufactures for exportation. Page 270.

4. When was the largest growth of agricultural exports in the United States? Of exports of manufactures? Page 272.

5. What articles are the chief requisites of manufacturing? Page 272.

6. How do you account for the rapid growth of copper as an export of manufacture? Page 277.

7. Illustrate the fact that the United States does not need to invade foreign markets with its manufactures. Page 278.

8. Distinguish between the gross value of the factory product of manufactures and the net value of the same. Page 284.

9. Compare the growth of the exportation of manufactures with that of the production. Page 286.

10. Under what head does the Bureau of Statistics classify boots and shoes; flour; salted meats; illuminating oil; pig iron. Page 287.

Concrete and Steel.

1. How do concrete and steel supplement each other? Page 322.

2. Of what is the standardization of concrete applications indicative? Page 323.

3. What is a corrugated bar? Page 324.

4. Give an example showing the durability of the Hennibique construction. Page 326.

5. What advantages over the wooden bearing pile has the concrete bearing pile? Page 327.

6. How may the resistivity of usual concretes be reinforced? Page 329.

7. Explain the use of wales in reinforcing a water front. Page 331.

8. How are the bearing piles of a wharf in the tropics made? Page 332.

9. Enumerate various uses to which concrete has been put in construction. Pages 333, 334.

10. What is the problem of the concrete telegraph pole? How may this be overcome? Page 336.

11. How is the Corell tie made? The Percival tie? Page 337.

12. What part does steel play in the construction of the Gatun Locks of the Panama Canal? Page 337.

13. Give an illustration of the use of steel for molding concrete. Page 339.

Chemistry and the Industries.

1. Why has it been necessary to put industry on a scientific basis? Page 342.

2. Why is chemistry so closely related to the industries? Page 343.

3. Tell in your own words the story of the development of the soda industry. Page 344.

4. Name three important industries which grew out of the soda industry. Page 346.

5. Give an example of how science has led the way for industry. Page 348.

6. What are the great achievements before the chemistry of the future? Page 350.

The Producer-Gas Power Plant.

1. What was the drawback to the early development of the gas engine? Page 353.

2. Why was the suction producer not practical? Page 354.

3. What led to the introduction of the pressure producer? Page 355.

4. What is the advantage of the down-draft producer? Page 355.

5. What is the ideal relative efficiency of the producer-gas plant and the steam plant? The actual relative efficiency? Page 360.

6. What defects in producer-gas plants were learned from the inspection in 1908? Page 364.

7. Where are the producer-gas plants of England located? Page 366.

8. How can the price of power developed from fuel be kept down? Page 369.

Efficiency in Shop Operations.

1. What is the reason for the failure of many cost systems? Page 371.

2. Upon what does the efficiency of a workman depend? Page 372.

3. What should be used as a standard for the measurement of time? Page 373.

4. When should a bonus begin? Page 375.

5. What effect does the giving of bonuses have on the efficiency of the foreman? Page 375.

6. What advantages are gained from having proper time cards for the workmen of a concern? Page 377.

7. To be successful, how should efficiency methods be introduced? Page 379.

The Bridge between Labor and Capital.

1. What is the chief cause at the bottom of all labor disputes? Page 380.

2. When and how was the labor problem brought about? Page 381.

3. What three methods of solution are proposed for the present problem of distribution? Page 382.

4. In your opinion which method is the best?

The Unemployed.

1. What is the central cause of the want of employment? Page 385.

2. Show the evil effect of ill-advised charity upon the unemployed. Page 387.

3. What does the practice of giving old-age pensions indicate as to the fairness of the distribution of the returns of production? Page 387.

4. Name three ways in which the problem of the unemployed can be reduced. Page 389.

5. What are the effects of ignorance and indolence upon society? Page 391.

6. If employment were remunerative, what would be the results? Page 393.

7. What lines of industry should society court? Page 396.

8. What are the evils connected with industrial corporations? Page 397.

9. Summarize the remedies for the want of employment. Page 401.

INDEX

BUSINESS ECONOMICS

ACTS— factory, 88, 89.

AGRICULTURE— character of, in U. S., 14. most important branch of, 15. reorganization of, 15.

ANARCHISM— theory of, 165.

AREA— land, of U. S., 9.

BANKING, 142-145.

BAR— corrugated, 324.

BARGAINING— collective, 77.

BESSEMER— process, 201, 241-246.

BIMETALLISM— arguments in favor of, 139, 140.

BOARD— of arbitration, 79. of conciliation, 79.

BONUS— use of, 375.

BRIDGES— construction of, 324-326.

CAPITAL— and labor, bridge between (article), 380-383. in manufacturing, 214-222.

CEMENT— Portland, 340.

CEREALS— production of, in U. S., 15.

CHEMISTRY— and the industries (article), 341-351. a utilitarian science, 341. how it creates industries, 348. how it influences industries, 342.

CHILDREN— at work, 86-89.

CLASS— wage-earning, 61.

COAL— waste of, 352.

COMBINATION— advantages of, 43, 225. causes of, illustrated, 227-230. effects of, 46-49, 226. upon competitors, 46. upon consumers, 48, 226. upon labor, 47. upon opportunity, 49. upon wages, 226. forms of, 223-225. in the railroad world, 146. methods of, illustrated, 227-230. phases of, 39, 40.

COMMISSION— mandatory, 148. supervisory, 148.

COMPANIES— express, monopoly character of, 149.

COMPETITION— defined, 4. in modern industrial life, 4, 5.

CONCRETE— and steel (article), 322-340. applications of, 324-339. as material of construction, 322. chimneys of, 328. effect of water on, 330, 333. rapidity of construction of, 330. resistivity of, 329.

CONSUMPTION— economy in, 135, 136.

CO-OPERATION— advantages of, 116, 117, 222, 223. consumers’, 114. defects of, 117, 118. producers’, 116.

CORN— production of, in U. S., 16.

CORPORATION— advantages of, to industry, 41, 215. industrial, 397. United States Steel, 44, 227-230.

COTTON— gin, 257. manufacturing of, 247-262. production of, in U. S., 17, 304. world’s production of, 291.

CRISES— credit theory of, 59. defined, 55. immediate cause of, 56. must be regarded as unpreventable, 60. over-production theory of, 38. periodicity of, 57, 58.

DISCRIMINATION— kinds of, 147.

DISTRIBUTION— of interest, 122, 123. of profits, 123. of rent, 122. of wages, 123, 124. of wealth, functional, 119-121. of wealth, personal, 120, 125-127.

DOMAIN— public, 9.

DRY-FARMING, 11.

ECONOMICS— practical (article), 1-178. progress in, 172-178.

EDUCATION— industrial, 106-110.

EFFICIENCY— application of, to department heads, 375-377. defined, 371. increased, illustrated, 374. in shop operation (article), 370-379.

ELECTRICITY— applied to manufacturing, 190-192.

ENGINE— gas, development of, 353-356.

EXCHANGES— of natural products, 182.

EXPORTS— from U. S., 269-288.

FACTORY— acts, 88, 89. described, 31. system. (See System.) town, rise of, 186.

FARMS— number and size of, 11.

FISHERIES— wasteful use of, 18, 19.

FREE TRADERS— arguments of, 162.

GOLD— production of, 216, 217.

GOVERNMENT— functions of, 163-172.

HOMESTEAD— defined, 9, 10.

INDIVIDUALISM— extreme, 65, 165. modified, 166.

INDUSTRY— causes of rapid development in, 30. cotton, 247-262. how carried on, 41. iron and steel, growth of, 198-202, 230-246. localization of, 33. manufacturing. (See Manufacturing.) relation between chemistry and, 341-351. soda, 344-346. specialization of, 32, 33. textile, 247-262.

INSURANCE— against sickness and old age, 100. compulsory accident, 99, 100.

IRON— processes of making, 198-201, 235-246.

IRRIGATION, 10, 11.

LABOR— American Federation of, 70. and capital, bridge between (article), 380-383. child, 80, 86-89. division of, 32, 33. Knights of, 70. legislation, purpose of, 68. organizations, 68-77. previous systems of, compared with modern wage system, 64. sale of, peculiarities of, 66, 67. woman, 80-86.

LEGISLATION— factory, 97. labor, purpose of, 68. of child labor, 87-89.

LIBERTY— industrial, 5. natural, theory of, 166.

LIVE STOCK— production of, in U. S., 16.

LUXURY— attitudes toward, 132-134. socialization of, 135.

MACHINERY— evils of, 101-106. in iron and steel industry, 196-201. in textile industry, 196.

MACHINES— carding, 256. early forms of, 193-196.

MANOR— English, 1-3. characteristics of, 2, 3.

MANUFACTURES— census of, 207-211. why misleading in U. S., 207, 211, 268. concentration of, 33, 34. exported from U. S., 269-272. growth of, 30, 205-214. growth of investment in, 218-222. statistics of, 229-321.

MANUFACTURING— application of electricity to, 190-192. application of steam to, 187-189. areas of the world, 181. (article), 179-320. capital in, 214-222. cotton, 247-262. establishments, 219-222, 233. growth of, 205-214. growth of investment in, 218-222. industries of the U. S., 263-288. machinery in, 193-203. statistics of, 229-321. systems of the world, 185-192.

MARINE— merchant, 152-154.

MONEY— government paper, 140, 141. kinds of, in U. S., 141, 217. value of, how determined, 137, 138.

MOVEMENT— trust, 42.

OPERATIONS— change in, opposition to, 372. shop, efficiency in, (article), 370-379.

ORGANIZATIONS— forms of, 223-225. labor, 68-77. growth of, 69. objects and methods of, 71-77.

PARTNERSHIP, 41.

PENSIONS— old-age, danger in, 387.

PILES— bearing, 327. sheet, 327.

POLICY— land, of U. S., 9, 10.

POOLS, 40, 223.

POPULATION— agricultural, decline in, 12, 13.

POWER— water, of U. S., 27, 28.

POWER PLANT— producer-gas, 352-369. conditions favorable to, in U. S., 368, 369. location of European, 366-368. number and class of, 363. relation of, to conservation of fuel resources, 352-369. relative results of steam plant and, 356-363.

PRODUCTION— capitalistic, 6, 29-39. concentration of, 34. large-scale, 35-37. economics of, 35, 36. peculiar to trusts, 44. industrial effects of, 37. in manufacturing, 36. in retail trade, 37. social effects of, 38. of cotton, 291. of cotton in U. S., 17, 304. pig-iron, 230, 231.

PROFITS— of promoters, 45.

PROFIT SHARING— defined, 110. economic theory of, 111. methods of, 110, 111. objections against, 111, 113. origin of, 113. purpose of, 110.

PROPERTY— private, 3, 4.

PROTECTION— arguments in support of, 160-162.

RAILROADS— public nature of, 148. public ownership of, 149. rates, 147.

RATES— railroad, 147.

REGULATION— legislative, of trust evils, 50, 51.

RESOURCES— agricultural, of U. S., 9-19. forest, destruction of, 18. mineral, of U. S., 19-29. alarming condition of, 20-22.

REVENUE— sources of, 157-159.

REVOLUTION— industrial, 5, 6.

ROTATION— three-year, 2.

SAVING— relation of, to spending, 129, 130. why necessary, 131.

SERVICE— Forest, work of, 18.

SOCIALISM— as a scheme of distribution, 170. defined, 167, 168. difficulties of establishing, 169. state, 167.

SOCIETY— industrial, 1-8. Rochdale, 115.

SPECULATION, 51-55.

SPECULATOR— social value of, 53.

SPENDING— relation of, to saving, 129, 130.

SPINNING JENNY, 196, 255.

STANDARDIZATION— system of, 38.

STANDARD OIL TRUST— when formed, 42.

STATE— as a regulator of industry, 7, 8. culture, theory, 167. ownership, 171, 172.

STATISTICS— accidents in German industries traceable to different causes, 97. cause of idleness, members of trade unions (1900), 93. cause of poverty, 92. course of wages during 19th century, 173. expenditures for different purposes in different places, 128. growth of manufactures in 19th century, 30. hand and machine methods compared, 103. industrial and commercial gas trusts in U. S., (1860-1900), 42, 43. of commerce in U. S., 308, 309. of manufactures, 229-321. annual value of, 289. capital invested, 313, 314. exportation of, 291. importation of, 289. summary of, in U. S., 299. value of products of, 318-321. wage-earners employed (1900), 315. of population engaged in manufacturing in U. S., 310.

STEEL— and concrete (article), 322-340. as material of construction, 322. re-inforcement, styles of, 324-326.

STRIKE— defined, 78. losses from, in U. S., 78.

SYSTEM— canal, 151, 152. domestic, 7. factory, beneficial results of, 60, 61. development of, 203-214. in England, 214. in U. S., 205, 206. evils of early, 80, 101-106. origin of, 185. independent treasury, 144. industrial, modern, 1-8. characteristics of, 3. of interchangeable parts, 38, 39. of standardization, 38. three-field, 2. wage, modern, 60-68.

TAX— defined, 154. general property, 158. inheritance, 159.

TAXATION— powers of, 154. problems of, 155, 156. rules of, 154, 155.

TEXTILES— described, 251, 252. manufacturing of, 247-262.

TRADE UNIONS— local, 69. national, 69. object and methods of, 71-77.

TRANSPORTATION, 145-154. inland water, 151. ocean water, 151.

TRUSTS— advantages of, 225. and combinations, 222-230. defined, 216. economics of production peculiar to, 44. effects of, upon competitors, 46. upon consumers, 48, 226. upon labor, 47. upon opportunity, 49. upon wages, 226. evils of, remedied by legislative regulation, 50, 51. industrial and gas, organized in U. S. (1860-1900), 42, 43. reasons for growth of, 43, 45, 46.

UNEMPLOYED— classified, 91. the (article), 384-402.

UNEMPLOYMENT— a permanent problem, 95. cause of, 91-95, 384-386. extent of, 90. remedies for, 95, 387-390, 393-401.

WAGES— iron law of, 124.

WATER FRAME, 256.

WEALTH— functional distribution of, 119-121. personal distribution of, 120, 125-127.

WOMEN— at work, 80-86. economic position of, 84.