PART TWO ECONOMIC LIFE

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CHAPTER ELEVEN The Spirit of Self-Initiative

“The spirit aids! from anxious scruples freed, I write, ‘In the beginning was the deed!’” Others might write: In the beginning was the inexhaustible wealth of the soil; and still others, if their memory is short, might be tempted to say: In the beginning were the trusts! One who wishes to understand the almost fabulous economic development of the United States must, indeed, not simply consider its ore deposits and gold mines, its coal and oil fields, its wheat lands and cotton districts, its great forests and the supplies of water. The South Americans live no less in a country prospered by nature, and so also do the Chinese. South Africa offers entirely similar conditions to those of the North American continent, and yet its development has been a very different one; and, finally, a consideration of the peculiar forms of American industrial organization, as, for instance, the trusts, reveals merely symptoms and not the real causes which have been at work.

The colossal industrial successes, along with the great evils and dangers which have come with them, must be understood from the make-up of the American character. Just as we have traced the political life of America back to a powerful instinct for self-determination, the free self-guidance of the individual, so we shall here find that it is the instinct for free self-initiative which has set in motion this tremendous economic fly-wheel. The pressure to be up and doing has opened the earth, tilled the fields, created industries, and developed such technical skill as to-day may even dream of dominating the world.

But to grant that the essentials of such movements are not to be found in casual external circumstances, but must lie in the mental make-up of the nation, might lead in this case to ascribing 230the chief influence to quite a different mental trait. The average European, permeated as he is with Old World culture, is, in fact, convinced that this intense economic activity is the simple result of unbounded greed. The search for gold and the pursuit of the dollar, we often hear, have destroyed in the American soul every finer ambition; and since the American has no higher desire for culture, he is free to chase his mammon with undisguised and shameless greed. The barbarity of his soul, it is said, gives him a considerable economic advantage over others who have some heart as well as a pocket-book, and whose feelings incline to the humane.

Whether such a contemptuous allegation is a useful weapon in the economic struggle, is not here in question. One who desires to understand the historical development of events in the New World is bound to see in all such talk nothing but distortion, and to realize that Europe could face its own economic future with less apprehension if it would estimate the powers of its great competitor more temperately and justly, and would ask itself honestly if it could not learn a thing or two here and there.

Merely to ape American doings would, in the end, avail nothing; that which proceeds from intellectual and temperamental traits can be effectively adopted by others only if they can acquire the same traits. It is useless to organize similar factories or trusts without imitating in every respect the men who first so organized themselves. Whether this last is necessary, he alone can say who has understood his neighbours at their best, and I has not been contented to make a merely thoughtless and uncharitable judgment. A magnificent economic life such as that of America can never spring from impure ethical motives, and the person is very naïve who supposes that a great business was ever built up by mere impudence, deception, and advertising. Every merchant knows that even advertisements benefit only a solid business, and that they run a bad one into the ground. And it is still more naïve to suppose that the economic strength of America has been built up through underhanded competition without respect to law or justice, and impelled by nothing but a barbarous and purely material ambition. One might better believe that the twenty-story office buildings on lower Broadway are supported merely by the flagstones in the street; in point of fact, 231no mere passer-by who does not actually see the foundations of such colossal structures can have an idea of how deep down under the soil these foundations go in order to find bed-rock. Just so the colossal fabric of American industry is able to tower so high only because it has its foundation on the hard rock of honest conviction.

In the first place, we might look into the American’s greed for gold. A German observes immediately that the American does not prize his possessions much unless he has worked for them himself; of this there are innumerable proofs, in spite of the opposite appearances on the surface. One of the most interesting of these is the absence of the bridal dower. In Germany or France, the man looks on a wealthy marriage as one of the most reliable means of getting an income; there are whole professions which depend on a man’s eking out his entirely inadequate salary from property which he inherits or gets by marriage; and the eager search for a handsome dowry—in fact, the general commercial character of marriage in reputable European society everywhere—always surprises Americans. They know nothing of such a thing at home. Even when the parents of the bride are prosperous, it is unusual for a young couple to live beyond the means of the husband. Everywhere one sees the daughters of wealthy families stepping into the modest homes of their husbands, and these husbands would feel it to be a disgrace to depend on their prosperous fathers-in-law. An actual dowry received from the bride’s parents during their lifetime is virtually unknown. Another instance of American contempt for unearned wealth, which especially contrasts with European customs, is the disapproval which the American always has for lotteries. If he were really bent on getting money, he would find the dower and the lottery a ready means; whereas, in fact, the lottery is not only in all its forms forbidden by law, but public opinion wholly disapproves of games of chance. The President of Harvard University, in a public address given a short time since, in which he spoke before a large audience of the change in moral attitude, was able to give a striking illustration of the transformation in the fact that two generations ago the city of Boston conducted a lottery, in order to raise money for rebuilding a university structure which had been destroyed by fire. He 232showed vividly how such a transaction would be entirely unthinkable to-day, and how all American feelings would revolt at raising money for so good a cause as an educational institution by so immoral a means as a public lottery. The entire audience received this as a matter of course, apparently without a suspicion as to how many cathedrals are being built in Europe to-day from tickets at half a dollar. It was amusing to observe how Carnegie’s friend, Schwab, who had been the greatly admired manager of the steel works, fell in public esteem when news came from the Riviera that he was to be seen at the gaming-tables of Monaco. The true American despises any one who gets money without working for it. Money is not the thing which is considered, but the manner of getting it. This is what the American cares for, and he prizes the gold he gets primarily as an indication of his ability.

At first sight it looks as if this disinclination to gambling were not to be taken seriously. It would signify nothing that the police discover here and there a company of gamblers who have barricaded the door; but a European might say that there is another sort of speculative fever which is very prevalent. Even Americans on the stock exchange often say, with a smile: We are a gambling nation; and from the point of view of the broker it would be so. He sees how all classes of people invest in speculative securities, and how the public interests itself in shares which are subject to the greatest fluctuations; how the cab-driver and the hotel waiter pore nervously over the quotations, and how new mining stocks and industrial shares are greedily bought by school teachers and commercial clerks. The broker sees in this the people’s desire for gambling, because he is himself thoroughly aware of the great risks which are taken, and knows that the investors can see only a few of the factors which determine prices.

But in the public mind all this buying and selling looks very different. The small man, investing a few dollars in such doubtful certificates, never thinks of himself as a gambler; he thinks that he understands the market; he is not trusting to luck, but follows the quotations day by day for a long time, and asks his friends for “tips,” until he is convinced that his own discretion and cunning will give him an advantage. If he were to think of his gain as matter of chance, as the broker thinks it is, he would 233not only not invest his money, but would be no longer attracted by the transactions. And whenever he loses, he still goes on, believing that he will be able the next time to figure out the turn of the market more accurately.

The same is true of the wagers which the Anglo-Saxon is always making, because he loves excitement. For him a wager is not a true wager when it is merely a question of chance. Both sides make calculations, and have their special considerations which they believe will determine the outcome, and the winner feels his gain to be earned by his shrewdness. An ordinary game of chance does not attract the American—a fact which may be seen even in the grotesque game of poker. In a certain sense, the American’s aversion to tipping servants reveals, perhaps, the same trait. The social inferiority which he feels to be implied in the acceptance of a fee, goes against the self-respect of the individual; but there is the additional disinclination here to receiving money which is not strictly earned.

There are positive traits corresponding to these negative ones; and especially among them may be noticed the use to which money is put after it is gotten. If the American were really miserly, he would not distribute his property with such a free hand. Getting money excites him, but keeping it is less interesting, and one sees not seldom the richest men taking elaborate precautions that only a small part of their money shall fall to their children, because they think that the possession of money which is not self-earned is not a blessing. From these motives one may understand at once the magnificent generosity shown toward public enterprises.

Public munificence cannot well be gauged by statistics, and especially not in America. Most of the gifts are made quietly, and of course the small gifts which are never heard about outweigh the larger ones; and, nevertheless, one can have a fair idea of American generosity by considering only the large gifts made for public ends. If we consider only the gifts of money which are greater than one thousand dollars, and which go to public institutions, we have in the year 1903 the pretty sum of $76,935,000. There can be no doubt that all the gifts under one thousand dollars would make an equal sum.

Of these public benefactions, $40,700,000 went to educational 234institutions. In that year, for instance, Harvard University received in all $5,000,000, Columbia University $3,000,000, and Chicago University over $10,000,000; Yale received $600,000, and the negro institute in Tuskegee the same amount; Johns Hopkins and the University of Pennsylvania received about half of a million each. Hospitals and similar institutions were remembered with $21,726,000; $7,583,000 were given to public libraries, $3,996,000 for religious purposes, and $2,927,000 to museums and art collections. Any one who lives in America knows that this readiness to give is general, from the Carnegies and Rockefellers down to the working-men, and that it is easy to obtain money from private purses for any good undertaking.

One sees clearly, again, that the real attraction which the American feels for money-making does not lie in the having but only in the getting, from the perfect equanimity, positively amazing to the European, with which he bears his losses. To be sure, his irrepressible optimism stands him in good stead; he never loses hope, but is confident that what he has lost will soon be made up. But this would be no comfort to him if he did not care much less for the possession than for the getting of it. The American chases after money with all his might, exactly as on the tennis-court he tries to hit the ball, and it is the game he likes and not the prize. If he loses he does not feel as if he had lost a part of himself, but only as if he had lost the last set in a tournament. When, a short time ago, there was a terrific crash in the New York stock market and hundreds of millions were lost, a leading Parisian paper said: “If such a financial crisis had happened here in France, we should have had panics, catastrophies, a slump in rentes, suicides, street riots, a ministerial crisis, all in one day: while America is perfectly quiet, and the victims of the battle are sitting down to collect their wits. France and the United States are obviously two entirely different worlds in their civilization and in their way of thinking.”

As to the estimation of money and its acquirement, France and the United States are indeed as far apart as possible, while Germany stands in between. The Frenchman prizes money as such; if he can get it without labour, by inheritance or dowry, or by gambling, so much the better. If he loses it he loses a part of himself, and when he has earned enough to be sure of a 235livelihood, he retires from money-making pursuits as soon as possible. It is well known that the ambition of the average Frenchman is to be a rentier. The American has exactly the opposite idea. Not only does he endure loss with indifference and despise gain which is not earned, but he would not for any price give up the occupation of making money. Whether he has much or little, he keeps patiently at work; and, as no scholar or artist would ever think of saying that he had done enough work, and would from now on become a scientific or literary rentier and live on his reputation, so no American, as long as he keeps his health, thinks of giving up his regular business.

The profession of living from the income of investments is virtually unknown among men, and the young men who take up no money-making profession because they “don’t need to,” are able to retain the social respect of their fellows only by undertaking some sort of work for the commonwealth. A man who does not work at anything, no matter how rich he is, can neither get nor keep a social status.

This also indicates, then, that the American does not want his money merely as a means for material comfort. Of course, wealthy Americans are becoming more and more accustomed to provide every thinkable luxury for their wives and daughters. Nowhere is so much expended for dresses, jewelry, equipages and service, for country houses and yachts, works of art and private libraries; and many men have to keep pretty steadily at work year in and year out in order to meet their heavy expenditures. And the same thing is repeated all down the social scale. According to European standards, even the working-man lives luxuriously. But, in spite of this, no person who has really come into the country will deny that material pleasures are less sought after for themselves in the New World than in the Old. It always strikes the European as remarkable how very industrious American society is, and how relatively little bent on pleasure. It has often been said that the American has not yet learned how to enjoy life; that he knows very well how to make money, but not how to enjoy it. And that is quite true; except that it leaves out of account the main point—which is, that the American takes the keenest delight in the employment of all his faculties in his work, and in the exercise of his own 236initiative. This gives him more pleasure than the spending of money could bring him.

It is, therefore, fundamentally false to stigmatize the American as a materialist, and to deny his idealism. A people is supposed to be thoroughly materialistic when its sphere of interests comprises problems relating only to the world of matter, and fancies itself to be highly idealistic when it is mainly concerned with intangible objects. But this is a pure confusion of ideas. In philosophy, indeed, the distinction between materialistic and idealistic systems of thought is to be referred to the importance ascribed to material and to immaterial objects. Materialism is, then, that pseudo-philosophical theory which supposes that all reality derives from the existence of material objects; and it is an idealistic system which regards the existence of matter as dependent on the reality of thought. But it is mere play on words to call nations realistic or idealistic on the strength of these metaphysical conceptions, instead of using the words in their social and ethical significations. For in the ethical world a materialistic position would be one in which the aim of life was enjoyment, while that point of view would be idealistic which found its motive not in the pleasant consequences of the deed, but in the value of the deed itself.

If we hold fast to the meaning of materialism and idealism in this ethical sense, we shall see clearly that it is entirely indifferent whether the people who have these diametrically opposed views of life are themselves busy with tangible or with intangible things. The man who looks at life materialistically acts, not for the act itself, but for the comfortable consequences which that act may have; and these consequences may satisfy the selfish pleasure as well if they are immaterial as if they are material objects. It is indifferent whether he works for the satisfaction of the appetites, for the hoarding up of treasures, or for the gratification to be found in politics, science, and art. He is still a materialist so long as he has not devotion, so long as he uses art only as a means to pleasure, science only as a source of fame, politics as a source of power; and, in general, so long as the labour that he does is only the means to an end. But the man who is an idealist in life acts because he believes in the value of the deed. It makes no difference to him whether he is working on material or intellectual 237concerns; whether he speaks or rhymes, paints, governs, or judges; or whether he builds bridges and railroad tracks, drains swamps and irrigates deserts, delves into the earth, or harnesses the forces of nature. In this sense the culture of the Old World threatens at a thousand points to become crassly materialistic, and not least of all just where it most loudly boasts of intellectual wealth and looks down with contempt on everything which is material. And in this sense the culture of the New World is growing to the very purest idealism, and by no means least where it is busy with problems of the natural world of matter, and where it is heaping up economic wealth.

This is the main point: The economic life means to the American a realizing of efforts which are in themselves precious. It is not the means to an end, but is its own end. If two blades of grass grow where one grew before, or two railroad tracks where there was but one; if production, exchange, and commerce increase and undertaking thrives, then life is created, and this is, in itself, a precious thing. The European of the Continent esteems the industrial life as honest, but not as noble; economic activities seem to him good for supporting himself and his family, but his duty is merely to supply economic needs which are now existing.

The merchant in Europe does not feel himself to be a free creator like the artist or scholar: he is no discoverer, no maker; and the mental energy which he expends he feels to be spent in serving an inferior purpose, which he serves only because he has to live. That creating economic values can itself be the very highest sort of accomplishment, and in itself alone desirable, whether or not it is useful for the person who creates, and that it is great in itself to spread and increase the life of the national economic organization, has been, indeed, felt by many great merchants in the history of Europe, and many a Hanseatic leader realizes it to-day. But the whole body of people in Europe does not know this, while America is thoroughly filled with the idea. Just as Hutten once cried: “Jahrhundert, es ist eine Lust, in dir zu leben: die Wissenschaften und die Künste blühen,” so the American might exclaim: It is a pleasure to live in our day and generation; industry and commerce now do thrive. Every individual feels himself exalted by being a part of such a mighty whole, and the 238general intellectual effects of this temper show themselves in the entire national life.

A nation can never do its best in any direction unless it believes thoroughly in the intrinsic value of its work; whatever is done merely through necessity is never of great national significance, and second-rate men never achieve the highest things. If the first minds of a nation look down with contempt on economic life, if there is no real belief in the ideal value of industry, and if creative minds hold aloof from it, that nation will necessarily be outdone by others in the economic field. But where the ablest strength engages with idealistic enthusiasm in the service of the national economic problems, the nation rewards what the people do as done in the name of civilization, and the love of fame and work together spur them on more than the material gain which they will get. Indeed, this gain is itself only their measure of success in the service of civilization.

The American merchant works for money in exactly the sense that a great painter works for money; the high price which is paid for his picture is a very welcome indication of the general appreciation of his art: but he would never get this appreciation if he were working for the money instead of his artistic ideals. Economically to open up this gigantic country, to bring the fields and forests, rivers and mountains into the service of economic progress, to incite the millions of inhabitants to have new needs and to satisfy these by their own resourcefulness, to increase the wealth of the nation, and finally economically to rule the world and within the nation itself to raise the economic power of the individual to undreamt-of importance, has been the work which has fascinated the American. And every individual has felt his co-operation to be ennobled by his firm belief in the value of such an aim for the culture of the world.

To find one’s self in the service of this work of progress attracts even the small boy. As a German boy commences early to write verses or draw little sketches, in America the young farmer lad or city urchin tries to come somehow into this national, industrial activity; and whether he sells newspapers on the street or milks the cow on a neighbour’s farm, he is proud of the few cents which he brings home—not because it is money, but because he has earned it, and the coins are the only possible proof that his activities 239have contributed to the economic life of his country. It is this alone which spurs him on and fills him with ambition; and if the young newspaper boy becomes a great railroad president, or the farmer’s lad a wealthy factory owner, and both, although worth their millions, still work on from morning till night consumed by the thought of adding to the economic life of their nation, and to this end undertake all sorts of new enterprises, the labour itself has been, from beginning to end, its own reward. The content of such a man’s life is the work of economic progress.

Men who have so felt have made the nation great, and no American would admit that a man who gave his life to government or to law, to art or science, would be able to make his life at all more significant or valuable for the ends of culture. This is not materialism. Thus it happens that the most favoured youths, the socially most competent talents, go into economic life, and the sons of the best families, after their course at the university, step enthusiastically into the business house. One can see merely from ordinary conversation how thoroughly the value of economic usefulness is impressed on the people. They speak in America of industrial movements with as much general interest as one would find manifested in Europe over politics, science, or art. Men who do not themselves anticipate buying or selling securities in the stock market, nevertheless discuss the rise and fall of various industrial and railroad shares as they would discuss Congressional debates; and any new industrial undertaking in a given city fills the citizens with pride, as may be gathered from their chance conversations.

The central point of this whole activity is, therefore, not greed, nor the thought of money, but the spirit of self-initiative. It is not surprising that this has gone through such a lively development. Just as the spirit of self-determination was the product of Colonial days, so the spirit of self-initiative is the necessary outcome of pioneer life. The men who came over to the New World expected to battle with the natural elements; and even where nature had lavished her treasures, these had still to be conquered; the forests must be felled and the marshes drained. Indeed, the very spot to which the economic world comes to-day to celebrate the hundredth anniversary of the Louisiana Purchase, the city of St. Louis, which has to-day 8,000 factories, 240it must not be forgotten was three generations ago a wilderness.

From the days when the first pioneers journeyed inland from the coast, to the time, over two hundred years later, when the railroad tracks were carried over the Rocky Mountains from the Atlantic to the Pacific Ocean, the history of the nation has been of a long struggle with nature and of hard-earned conquests; and for many years this fight was carried on by men who toiled single-handed, as it were—by thousands of pioneers working all at once, but far apart. The man who could not hold out under protracted labour was lost; but the difficulty of the task spurred on the energies of the strong and developed the spirit of self-initiative to the utmost. It was fortunate that the men who came over to undertake this work had been in a way selected for it: for only those who had resolution had ventured to leave their native hearth-stones. Only the most energetic risked the voyage across the ocean in those times, and this desire to be up and doing found complete satisfaction in the New World; for, as Emerson said: “America is another name for opportunity.”

The heritage of the pioneer days cannot vanish, even under the present changed conditions. This desire to realize one’s self by being economically busied is indeed augmented to-day by many other considerations. Both the political and the social life of the democracy demand equality, and therefore exclude all social classes, and titles, and all honourary political distinctions. Now, such uniformity would, of course, be unendurable in a society which had no real distinctions, and therefore inevitably such distinguishing factors as are not excluded come to be more and more important. A distinction between classes on the basis of property can be met in monarchial countries by a distinction in title and family, and so made at least very much less important than in democratic nations. And thus it necessarily comes about that, where an official differentiation is objected to on principle, wealth is sought as a means to such discrimination. In the United States, however, wealth has this great significance only because it is felt to measure the individual’s successful initiative; and the simple equation between prosperity and real work is more generally recognized by the popular mind than the actual conditions justify. Thus it happens also that the 241American sets his standard of life high. He wishes in this way to express the fact that he has passed life’s examination well, that he has been enterprising, and has won the respect of those around him. This desire for a high standard of living which springs from the intense economic enthusiasm works back thereon, and greatly stimulates it once more.

One of the first consequences of this spirit of initiative is, that every sort of true labour is naturally respected, and never involves any disesteem. In fact, one sees continually in this country men who go from one kind of labour to another which, according to European ideals, would be thought less honourable. The American is especially willing to take up a secondary occupation besides his regular calling in order to increase his income, and this leads, sometimes, to striking contrasts. Of course there are some limits to this, and social etiquette is not wholly without influence, although the American will seldom admit it. No one is surprised if a preacher gives up the ministry in order to become an editor or official in an industrial organization; but every one is astonished if he becomes agent for an insurance company; amazed if he goes to selling a patent medicine, and would be positively scandalized if he were to buy a beer-saloon.

It is much the same with avocations. If the student in the university tutors other students, it is quite right; if, during the university vacation, he becomes bell-boy in a summer hotel, or during the school year attends to furnaces in order to continue his studies, people are sorry that he has to do this, but still account him perfectly respectable; but if, on the other hand, he turns barber or artist’s model, he is lost, because being a model is passive—it is not doing anything; and cutting hair is a menial service, not compatible with the dignity of the student. And thus it is that the social feeling in the New World practically corrects the theoretical maxims as to the equal dignity of every kind of labour, although, indeed, such maxims are very much more generally recognized than in the Old World. And everywhere the deciding principle of differentiation is the matter of self-initiative.

The broadly manifest social equality of the country, of which we shall have to speak more minutely in another connection, would be actually impossible if this belief in the equivalence of 242all kinds of work did not rule the national mind. Whether the work brings much or little, or requires much or little preparation, is thought to be unimportant in determining a man’s status; but it is important that his life involves initiative, or that he not merely passively exists.

A people which places industrial initiative so high must be industrious; and, in fact, there is no profounder impression to be had than that the whole population is busily at work, and that all pleasures and everything which presupposes an idle moment are there merely to refresh people and prepare them for more work. In order to be permanently industrious, a man has to learn best how to utilize his powers; and just in this respect the American nation has gone ahead of every other people. Firstly, it is sober. A man who takes liquor in the early part of the day cannot accomplish the greatest amount of work. When the American is working he does not touch alcohol until the end of the day, and this is as true of the millionaire and bank president as of the labourer or conductor. On the other hand, the American workman knows that only a well-nourished body can do the most work, and what the workman saves by not buying beer and brandy he puts into roast beef. It has often been observed, and especially remarked on by German observers, that in spite of his extraordinary tension, the American never overdoes. The working-man in the factory, for example, seldom perspires at his work. This comes from a knowledge of how to work so as in the end to get out of one’s self the greatest possible amount.

Very much the same may be said of the admirable way in which the Americans make the most of their time. Superficial observers have often supposed the American to be always in a hurry, whereas the opposite is the case. The man who has to hurry has badly disposed of his time, and, therefore, has not the necessary amount to finish any one piece of work. The American is never in a hurry, but he so disposes his precious time that nothing shall be lost. He will not wait nor be a moment idle; one thing follows closely after another, and with admirable precision; each task is finished in its turn; appointments are made and kept on the minute; and the result is, that not only no unseemly haste is necessary, but also there is time for everything. It is astonishing 243how well-known men in political, economic, or intellectual life, who are loaded with a thousand responsibilities and an apparently unreasonable amount of work, have, by dint of the wonderful disposition of their own time and that of their assistants, really enough for everything and even to spare.

Among the many things for which the American has time, by reason of his economical management of it, are even some which seem unnecessary for a busy man. He expends, for example, an extraordinary large fraction of his time in attending to his costume and person, in sport, and in reading newspapers, so that the notion which is current in Europe that the American is not only always in a hurry, but has time for nothing outside of his work, is entirely wrong.

This saving of strength by the proper disposal of time corresponds to a general practicality in every sort of work. Business is carried on in a business-like way. The banker, whose residence is filled with sumptuous treasures of art, allows nothing unpractical to come into his office for the sake of adornment. A certain strict application to duty is the feeling one gets from every work-room; and while the foreigner feels a certain barrenness about it, the American feels that anything different shows a lack of earnestness and practical good sense. The extreme punctuality with which the American handles his correspondence is typical of him. Statistics show that no other country in the world sends so many letters for every inhabitant, and every business letter is replied to on the same day with matter-of-fact conciseness. It is like a tremendous apparatus that accomplishes the greatest labour with the least friction, by means of the precise adaptation of part to part.

A nation which is after self-initiative must inspire the spirit of initiative in every single co-operator. Nothing is more characteristic of this economic body than the intensity with which each workman—taking the word in its broadest sense—thinks and acts for himself. In this respect, too, outsiders often misunderstand the situation. One hears often from travellers in America that the country must be dwarfing to the intelligence of its workmen, because it uses so much machinery that the individual workman comes to see only a small part of what is being done in the factory and, so to say, works the same identical lever 244for life. He operates always a certain small part of some other part of the whole. Nothing could be less exact, and a person who comes to such a conclusion is not aware that even the smallest duties are extremely complex, and that, therefore, specialization does not at all introduce an undesirable uniformity in labour. It is specialization on the one hand which guarantees the highest mastery, and on the other lets the workman see even more the complexity of what is going on, and inspires him to get a full comprehension of the thing in hand and perhaps to suggest a few improvements.

Any man who is at all concerned with the entire field of operations, or who is moving constantly from one special process to another, can never come to that fully absorbed state of the attention which takes cognizance of the slightest detail. Only the man who has concentrated himself and specialized, learns to note fine details; and it is only in this way that he becomes so much a master in his special department that any one else who attempts to direct him succeeds merely in interfering and spoiling the output. In short, such a workman is face to face with intricate natural processes, and is learning straight from nature. It is in the matter of industrial technique exactly as in science. A person not acquainted with science finds it endlessly monotonous, and cannot understand how a person should spend his whole life studying beetles or deciphering Assyrian inscriptions. But a man who knows the method of science realizes that the narrower a field of study becomes, the more full of variety and unexpected beauties it is found to be. The triumph of technical specialization in America lies just in this. If a single man works at some special part of some special detail of an industrial process, he more and more comes to find in his narrow province an amazing intricacy which the casual observer looking on cannot even suspect; and only the man who sees this complexity is able to discover new processes and improvements on the old. So it is that the specialized workman is he who constantly contributes to perfect technique, proposes modifications, and in general exercises all the intelligence he has, in order to bring himself on in his profession. Just as we have seen how the spirit of self-determination which resides at the periphery of the body politic has been the peculiar strength of American political life, so this free initiative in the 245periphery, this economic resourcefulness of the narrow specialists, is the peculiar strength of all American industry.

The spirit of self-initiative does not know pettiness. Any one who goes into economic life merely for the sake of what he can get out of it, thinks it clever to gain small, unfair profits; but whosoever views his industry in a purely idealistic spirit, and really has some inner promptings, is filled with an interest in the whole play—sees an economic gain in anything which profits both capital and labour, and only there, and so has a large outlook even within his narrow province. The Americans constantly complain of the economic smallness of Europe, and even the well-informed leaders of American industry freely assert that the actual advance in American economic culture does not lie in the natural resources of the country, but rather in the broad, free initiative of the American people. The continental Europeans, it is said, frustrate their own economic endeavours by being penny-wise and observant of detail in the wrong place, and by lacking the courage to launch big undertakings. There is no doubt that it was the lavishness of nature which firstly set American initiative at work on a broad scale. The boundless prairies and towering mountains which the pioneers saw before them inspired them to undertake great things, and to overlook small hindrances, and in laying out their first plans to overlook small details. American captains of industry often say that they purposely pay no attention to a good many European methods, because they find such pedantic endeavour to economize and to achieve minute perfections to be wasteful of time and unprofitable.

The same spirit is found, as well, in fields other than the industrial. When the American travels he prefers to pay out round sums rather than to haggle over the price of things, even although he pays considerably more thereby than he otherwise would. And nothing makes him more angry than to find that instead of stating a high price at the outset, the person with whom he is dealing ekes out his profit by small additional charges. This large point of view involves such a contempt of petty detail as to astonish Europeans. Machines costing hundreds of thousands of dollars, which were new yesterday, are discarded to-day, because some improvement has been discovered; and the best is everywhere found none too good to be used in this magnificent 246industrial system. If the outlay is to correspond to the result, there must be no parsimony.

A similar trait is revealed in the way in which every man behaves toward his neighbour. It is only the petty man who is envious, and envy is a word which is not found in the American vocabulary. If one’s own advantage is not the goal, but general economic progress, then the success of another man is almost as great a pleasure as one’s own success. It is for the American an æsthetic delight to observe, and in spirit to co-operate with economic progress all along the line; and the more others accomplish the more each one realizes the magnificence of the whole industrial life. Men try to excel one another, as they have to do wherever there is free competition; and such rivalry is the best and surest condition for economic progress. Americans use every means in their power to succeed, but if another man comes out ahead they neither grumble nor indulge in envy, but rather gather their strength for a new effort. Even this economic struggle is carried on in the spirit of sport. The fight itself is the pleasure. The chess-player who is checkmated in an exciting game is not sorry that he played, and does not envy the winner.

This conviction, that one neither envies nor is envied, whereby all competitive struggle comes to be pervaded with a certain spirit of co-operation, ennobles all industrial activities, and the immediate effect is a feeling of mutual confidence. The degree to which Americans trust one another is by no means realized on the European Continent. A man relies on the self-respect of his commercial associates in a way which seems to the European mind almost fatuous, and yet herein lies just the strength and security of the economic life of this country.

It is interesting, in a recently published harangue against the Standard Oil Company, to read what a high-handed, Napoleonic policy Rockefeller has pursued, and then, in the midst of the fierce accusations, to find it stated that agreements involving millions of dollars and the economic fate of thousands of people were made merely orally. All his confederates took the word of Rockefeller to be as good as his written contract, and such mutual confidence is everywhere a matter of course, whether it is a millionaire who agrees to pay out a fortune or a street urchin 247who goes off to change five cents. Just as public, so also commercial, affairs get on with very few precautions, and every man takes his neighbour’s check as the equivalent of money. The whole economic life reveals everywhere the profoundest confidence; and undoubtedly this circumstance has contributed, more than almost anything else, to the successful growth of large organizations in America.

The spirit of self-initiative goes out in another direction. It makes the American optimistic, and so sure of success that no turn of fortune can discourage him. And such an optimism is necessary to the man who undertakes great enterprises. It was an undertaking to cross the ocean, and another to press on from the coast to the interior; it was an undertaking to bring nature to terms, to conjure up civilization in a wild country, and to overcome enemies on all hands; and yet everything has seemed to succeed. With the expansion of the country has grown the individual’s love of expansion, his delight in undertaking new enterprises, not merely to hold his own, but to go on and to stake his honour and fortune and entire personality in the hope of realizing something as yet hardly dreamed of. Any Yankee is intoxicated with the idea of succeeding in a new enterprise; he plans such things at his desk in school, and the more venturesome they are the more he is fascinated.

Nothing is more characteristic of this adventurous spirit than the way in which American railroads have been projected. In other countries railroads are built to connect towns which already exist. In America the railroad has created new towns; the engineer and capitalist have not laid their tracks merely where the land was already tilled, but in every place where they could foresee that a population could support itself. At first came the railroad, and then the men to support it. The freight car came first, and then the soil was exploited and made to supply the freight. Western communities have almost all grown up around the railway stations. To be sure, every railway company has done this in its own interest, but the whole undertaking has been immediately productive of new civilization.

Any person who optimistically believes that a problem has only to be discovered in order to be solved, will be sure to develop that intellectual quality which has always characterized the American: 248the spirit of invention. There is no other country in the world where so much is invented. This is shown not merely in the fact that an enormous number of patents is granted every year, but also where there is nothing to patent, the Yankee exercises his ingenuity every day. From the simplest tool up to the most complicated machine, American invention has improved and perfected, and made the theoretically correct practically serviceable as well. To be sure, the cost of human labour in a thinly settled country has had a great influence on this development; but a special talent also has lain in this direction—a real genius for solving practical problems. Every one knows how much the American has contributed to the perfection of the telegraph, telephone, incandescent light, phonograph and sewing-machine, to watch-making machinery, to the steamboat and locomotive, the printing-press and typewriter, to machinery for mining and engineering, and to all sorts of agricultural and manufacturing devices. Invention and enterprise are seen working together in the fact that every new machine, with all its improvements, goes at once to every part of the country. Every farmer in the farthest West wants the latest agricultural machinery; every artisan adopts the newest improvements; in every office the newest and most approved telegraphic and telephonic appliances are used; in short, every man appropriates the very latest devices to further his own success. Of course, in this way the commercial value of every improvement is greatly increased, and this encourages the inventor to still further productiveness. It so happens that larger sums of money are lavished in perfect good faith in order to solve certain problems than any European could imagine. If an inventor can convince a company that his principle is sound, the company is ready to advance millions of dollars for new experiments until the machine is perfected.

The extraordinarily wide adoption of every invention does not mean that most inventions are made by such men as Edison and Bell and their colleagues. Every factory workman is quite as much concerned to improve the tools which his nation uses, and every artisan at his bench is busy thinking out this or that little change in a process or method; and many of them, after their work, frequent the public libraries in order to work through technical books and the Patent Reports. It is no wonder that an 249American manufacturer, on hearing that a new machine had been discovered in Europe, conservatively declared that he did not know what the machine was, but knew for sure that America would improve on it.

Only one consequence of the spirit of self-initiative remains to be spoken of—the absolute demand for open competition. In order to exercise initiative, a man must have absolutely free play; and if he believes in the intrinsic value of economic culture, he will be convinced that free play for the development of industrial power is abstractly and entirely right. This does not wholly exclude an artificial protection of certain economic institutions which are weak—as, for instance, the protection of certain industries by means of a high tariff—so long as in every line all men are free to compete with one another. Monopoly is the only thing—because it strangles competition—which offends the instinct of the American; and in this respect American law goes further than a European would expect. One might suppose that, believing as they do in free initiative, Americans would claim the right of making such industrial combinations as they liked. When several parallel railroads, which traverse several states and compete severely with one another, finally make a common agreement to maintain prices, they seem at first sight to be exercising a natural privilege. The traffic which suffers no longer by competition is handled at a less expense by this consolidation, and so the companies themselves and the travelling public are both benefited. But the law of the United States takes a different point of view. The average American is suspicious of a monopoly, even when it is owned by the state or city; he is convinced from the beginning that the service will in some way or other be inferior to what it would be under free competition; and most of all, he dislikes to see any industrial province hedged in so that competitors are no longer free to come in. The reason why the trusts have angered and excited the American to an often exaggerated degree is, that they approach perilously near to being monopolies.

This spirit of self-initiative under free competition exists, of course, not alone in individuals. Towns, cities, counties, and states evince collectively just the same attitude; the same optimism and spirit of invention and initiative, and the same 250pioneer courage, inspire the collective will of city and state. Especially in the West, various cities and communities do things in a sportsmanlike way. It is as if one city or state were playing foot-ball against another, and exerting every effort to win: and here once more there is no petty jealousy. It was from such an optimistic spirit of enterprise, certainly, that the city of St. Louis resolved to invite all the world to its exposition, and that the State of Missouri gave its enthusiastic approval and support to its capital city. The sums to be laid out on such bold undertakings are put at a generous figure, and no one asks anxiously whether he is ready or able to undertake such a thing, but he is fascinated by the thought that such an industrial festival around the cascades of Forest Park, near the City of St. Louis, will stimulate the whole industrial life of the Mississippi Valley. One already sees that Missouri is disposed to become a Pennsylvania of the West, and to develop her rich resources into a great industry.

We must not suppose, in all this, that such a spirit of initiative involves no risk, or that no disadvantages follow into the bargain. It may be easily predicted that, just by reason of the energy which is so intrinsic to it, self-initiative will sometime overstep the bounds of peace and harmony. Initiative will become recklessness, carelessness of nature, carelessness of one’s neighbour, and, finally, carelessness of one’s self.

A reckless treatment of nature has, in fact, characterized the American pioneer from the first. The wealth of nature has seemed so inexhaustible, that the pioneers found it natural to draw on their principal instead of living on their income. Everywhere they used only the best which they found; they cut down the finest forests first, and sawed up only the best parts of the best logs. The rest was wasted. The farmers tilled only the best soil, and nature was dismantled and depleted in a way which a European, who is accustomed to precaution, finds positively sinful. And the time is now passed when this can go on safely. Good, arable land can nowhere be had for nothing to-day; the cutting down of huge forests has already had a bad effect on the rainfall and water supply, and many efforts are now being made to atone for the sins of the past by protecting and replanting. Intensive methods are being introduced in agriculture; but the work of thoughtful minds meets with a good deal of resistance 251in the recklessness of the masses, who, so far as nature is in question, think very little of their children’s children, but are greedy for instant profits.

The man, moreover, who ardently desires to play an important part in industry is easily tempted to be indifferent of his fellows. We have shown that an American is not jealous or distrustful of them, that he gives and expects frankness, and that he respects their rights. But when he once begins to play, he wants to win at any cost; and then, so long as he observes the rules of the game, he considers nothing else; he has no pity, and will never let his undertaking be interfered with by sentimental reasons. There is no doubt at all that the largest American industrial enterprises have ruined many promising lives; no doubt that the very men who give freely to public ends have driven their chariots over many industrial corpses. The American, who is so incomparably good-natured, amiable, obliging, and high-minded, admits himself that he is sharp in trade, and that the American industrial spirit requires a sort of military discipline and must be brutal. If the captain of industry were anxiously considerate of persons’ feelings, he would never have achieved industrial success any more than a compassionate and tearful army would win a victory.

But the American is harder on himself than on any one else. We have shown how, in his work, he conserves his powers and utilizes them economically; but he sets no bounds to the intellectual strain, the intensity of his nervous activities, and only too often he ruins his health in the too great strain which brings his success. The bodies of thousands have fertilized the soil for this great industrial tree—men who have exhausted their power in their exaggerated commercial ambitions. The real secret of American success is that, more than any other country in the world, she works with the young men and uses them up. Young men are in all the important positions where high intellectual tension is required.

In other directions, too, the valuable spirit of self-initiative shows great weaknesses and dangers. The confidence which the American gives his neighbour in business often comes to be inexcusable carelessness. In reading the exposures made of the Ship-Building Trust, one sees how, without a dishonest intent, crimes can actually be committed merely through thoughtless 252confidence. One sees that each one of the great capitalists here involved relied on the other, while no one really investigated for himself.

There is another evil arising from the same intense activity, although, to be sure, it is more a matter of the past than of the future. This is the vulgar display of wealth. When economic usefulness is the main ambition, and the only measure of success is the money which is won, it is natural that under more or less primitive social conditions every one should wish to attest his merits by displaying wealth. Large diamonds have then much the same function as titles and orders; they are the symbols of successful endeavour. In its vulgar form all such display is now virtually relegated to undeveloped sections of the country. In the parts where culture is older, where wealth is in its second or third generation, every one knows that his property is more useful in the bank than on his person.

In spite of this, the nation expends an unduly large part of its profits in personal adornment, in luxuries of the toilet, in horses and carriages and expensive residences. The American is bound to have the best, and feels himself lowered if he has to take the second best. The most expensive seats in an auditorium are always the best filled, and the opera is thinly attended only when it is given at reduced prices. It is just in the most expensive hotels that one has to engage a room beforehand. Everywhere that expenditure can be observed by others, the American would rather renounce a pleasure entirely than enjoy it in a modest way. He wants to appear everywhere as a prosperous and substantial person, and therefore has a decided tendency to live beyond his means. Extravagance is, therefore, a great national trait. Everything, whether large or small, is done with a free hand. In the kitchen of the ordinary man much is thrown away which the European carefully saves for his nourishment; and in the kitchens of the government officials a hundred thousand cooks are at work, as if there were every day a banquet. Even when the American economizes he is fundamentally extravagant. His favourite way of saving is by buying a life insurance policy; but when one sees how many millions of dollars such companies spend in advertising and otherwise competing with one another, and what prodigious amounts they take in, one cannot doubt 253that they also are a means of saving for wealthy men, who, after all, do not know what real economy is.

If the whole outward life is pervaded by this pioneer spirit of self-initiative, there is another factor which is not to be overlooked; it is the neglect of the æsthetic. Any one who loves beauty desires to see his ideal realized at the present moment, and the present itself becomes for him expressive of the past, while the man whose only desire is to be active as an economic factor looks only into the future. The bare present is almost valueless, since it is that which has to be overcome; it is the material which the enterprising spirit has to shape creatively into something else. The pioneer cannot be interested in the present as a survivor of the past; it shows to him only that which is to do, and admonishes his soul to prepare for new achievement. On Italian soil one’s eye is offended by every false note in the general harmony. The present, in which the past still lives, fills one’s consciousness, and the repose of æsthetic contemplation is the chief emotion. But a man who rushes from one undertaking to another seeks no unity or harmony in the present; his retina is not sensitive to ugliness, because his eye is forever peering into the future; and if the present were to be complete and finished, the enterprising spirit would regret such perfection and account it a loss—a restriction of his freedom, an end to his creation. It would mean mere pleasure and not action. In this sense the American expresses his pure idealism in speaking of the “glory of the imperfect.”

The Italian is not to be disparaged for being unlike the American and for letting his eye rest on pleasing contours without asking what new undertakings could be devised to make reality express his own spirit of initiative. One must also not blame the American if he does not scrutinize his vistas with the eye of a Florentine, if he is not offended by the ugly remains of his nation’s past, the scaffolding of civilization, or if he looks at them with pride, noting how restlessly his countrymen have stuck to their work in order to shape a future from the past. In fact, one can hardly take a step in the New World without everywhere coming on some crying contrast between mighty growth and the oppressive remains of outgrown or abortive activities. As one comes down the monumental steps of the Metropolitan Museum, in which 254priceless treasures of art are collected, one sees in front of one a wretched, tumbled-down hut where sundry refreshments are sold, on a dirty building-lot with a broken fence. It looks as if it had been brought from the annual county fair of some remote district into this wealthiest street of the world.

Of course such a thing is strikingly offensive, but it disturbs only a person who is not looking with the eye of the American, who can therefore not understand the true ethical meaning of American culture, its earnest looking forward into the future. If the incomplete past no longer met the American’s eye in all its poverty and ugliness and smallness, he would have lost the mainspring of his life. That which is complete does not interest him, while that which he can still work on wholly fascinates and absorbs him. It is true here, as in every department of American life, that superficial polish would be only an imitation of success; friction and that which is æsthetically disorganized, but for this very reason ethically valuable, give to his life its significance and to his industry its incomparable progress.

255

CHAPTER TWELVE The Economic Rise

Introite, nam et hic dii sunt—here, too, the gods are on their throne. The exploiting of the country, the opening of the mines, the building of factories and railroads, trade and barter, are not in question here as the mere means of livelihood, but as a spontaneous and creative labour, which is undertaken specifically in the interests of progress. In this confession of faith we have found the significance of American industrial life, in the spirit of self-initiative its greatest strength. Only such men as desire to take part in the economic era of creation, to meet their neighbours openly and trustingly and to rely on their spoken word, in short, to believe in the intrinsic worth of industry—only such men can weave the wonderful fabric of New World industry. A race of men carrying on commerce merely in order to live, feeling no idealism impelling them to industry, would never, even in this richly-endowed America, have produced such tangible results or gained such power.

Nevertheless, the country itself must not be forgotten by reason of its inhabitants. It was the original inducement to the inhabitants to turn so industriously to the spade and plough. Where the spade has dug, it has brought up silver and gold, coal and iron; and where the plough has turned, it has evoked a mammoth growth of wheat and corn. Seas and rivers, bays and mountains have produced a happy configuration of the land and pointed out the routes for traffic; oil-wells have flown freely, and the waterpower is inexhaustible; the supply of fish and fowl, the harvests of tropical fruits and of cotton have been sufficient to supply the world. And all this was commenced by nature, before the first American set his foot on the continent.

And while it was the lavish hand of nature which first brought 256prosperity to the inhabitants, this prosperity became, in its turn, a new stimulus to the economic exploitation of further natural resources. It provided the capital for new undertakings; it also helped on the extraordinary growth of economic demand, it made the farmer and the artisan the best patrons of thriving industries, and made the economic circulatory system pulsate with increasing strength through the national organization.

There are, besides the purely economic conditions, certain political and administrative ones. American history has developed in a free atmosphere such as cannot be had in countries with ancient traditions, and which, even in the New World, at least in the eastern part of it, is disappearing day by day. Of course, such elbow-room has not been an unqualified blessing. It has been attended by evils and has made sacrifices necessary. But these have always touched the individual. The community has gained by the freedom of economic conditions. For instance, railroads, such as were built through the whole West during the pioneer years of America, would not be permitted for a moment by a German government. Such flimsy bridges, such rough-and-ready road-beds, such inadequate precautions on crossings were everywhere a serious menace; but those who were injured were soon forgotten, while the economic blessings of the new railroads which transported hundreds of thousands of people into uninhabited regions, and left them to gather the treasure of the soil, continued. They could never have been built if people had waited until they were able to construct by approved methods. After the great pioneer railroads had accomplished their mission, the time came when they were replaced by better structures. And they have been built over many times, until to-day the traffic is sufficiently safe. It still belongs, in a way, to the confession of faith of this religion of self-initiative that each man shall be free to risk not only his property, but also his own life, for the sake of enterprise. No board of commissioners may interfere to tell an American not to skirt a precipice.

Such instances of complete freedom, where life and limb are unsafe, disappear day by day. Guide-posts are put at every railroad crossing, and civil authorities take more and more interest in safety appliances for factories and in the security of city buildings; in fact, hygienic regulations in some Eastern cities to-day go 257even further than they go in Germany. Nevertheless, in such matters as involve not dangers, but merely traditions or preferences, a large amount of democratic freedom can still be had in the New World. Over the broad prairies there are no signs lawfully warning persons to turn to the right and not to walk on the grass. The American himself not only regards this country as the land of “unlimited possibilities,” but more specially he regards the European Continent as the country of impossible limitations. Bureaucracy is to his mind the worst enemy of industrial life, because it everywhere provides the most trivial obstacles to that spirit of adventure and daring which seeks to press on into the future; and in the end it is sure to bring all enterprise to a standstill. It is important for this freedom that the whole economic legislation is regulated, first of all, not by the Union, but by the several states, and that thus every variety of industrial life going on in any state shall be so well represented that every attempt to bring up artificial restraints shall be nipped in the bud.

To this negative factor is to be added a positive one. Every one knows that the mighty growth of the American industry and of its whole commercial life would not have been possible without the carefully adapted protective tariff of recent years. The Dingley and the McKinley tariff laws have not, of course, produced that great advance, but they have powerfully aided it. And at the same time enormous sums have been derived therefrom and expended by the government in improving the water-ways and harbours. The government has spent vast sums in helping agriculture, and done much to irrigate the arid portions of the country. Economic problems in general receive great consideration in Washington and in every state capital. Besides such general political activities, there are more special ones. The nation’s agriculture, for instance, is tremendously assisted by scientific researches, which are carried on by the Department of Agriculture. The army of American consuls is incomparably alert in seeking out favourable openings for American trade with other nations, and the consular reports are distributed promptly and free of charge from Washington to all parts of the country.

The political attitude of the nation works in still another way 258to favour general prosperity. The country has a unified organization which favours all economic enterprises. Although seventeen times as large as Germany, the country is nevertheless one splendid unit without internal customs barriers, under one law, and free from sectional distrusts. For, wherever commercial intercourse goes on between different states, the common federal law is in force.

Perhaps even more important than the national unity is the democratic equality throughout the population. However diverse these eighty million people may be, they form a homogeneous purchasing public. Every new style or fashion spreads like wild-fire from New York to San Francisco, and in spite of their differences, the day-labourer and the millionaire both have a certain similarity of tastes and requirements, so that the industrial producer and the distributor find it easy to make and keep in stock all articles which are called for. Instead of the freakish and fanciful demand which makes the European industrial life so difficult, everybody in America wants the same pattern as his neighbour, perhaps a little finer and better, but still the same general thing. And this brings it about that producers can manufacture in large quantities, and wholesale production and the ease of placing wares on the market encourage again the uniformity of taste and requirement, and help on the popular tendency toward mutual imitation throughout the country.

But now, instead of recounting the conditions which have helped to make the story, we must narrate the story itself. The German can listen to it with pleasure, since it is about one of Germany’s best patrons—a nation which always buys from Germany in proportion to its own prosperity, and one whose adversity would bring misfortune to Germany. The story can be most quickly told in figures, as is the favourite American way; for, if the American has a special mania, it is to heap up all sorts of statistics.

We shall best study the statistical variations through long intervals of time, in order not to be led astray by temporary fluctuations. When, a few years ago, an industrial and financial relapse had set in in Germany, and England was suffering from the war in the Transvaal, while America was undertaking a gigantic work of organization which promised to have marvellous 259results, the United States suddenly appeared as the economic mistress of the world, to the astonishment and apprehension of all other countries. Soon after that German trade and industry began to revive and England recovered itself, while in America industrial extravagance and financial inflation were bringing about their necessary evil consequences. Then the public opinion of other countries swung at once to the other extreme, as if America’s success had been entirely spurious. People suddenly turned about and believed that the time of American prosperity was over, rejoiced with ghoulish glee over the weakness of the enemy, despised his foolhardiness, and gossiped about his industrial leaders. But it was only in other countries that men like Schwab, the president of the Steel Trust, had been looked on as a Napoleon of industry; and when he was not able to retain his position, European papers were as pleased as if a Napoleonic army had been wiped out. Such insignificant events of the day are able to distort the judgment of great movements; picturesque mishaps strike the attention, and are taken to indicate great movements.

The actual advance in economic life of the United States was not such a sudden thing as it seemed to nervous Europe, nor was there any reverse such as Europe delighted to record. To be sure, America has passed through several great crises; but her history is nevertheless one of steady, even and healthy development in economic organization. The American himself is inclined to believe that severe crises are not to be feared any more; but however that may be, the long-predicted downfall has not come to-day, and is not even in sight. The general progress persists, and the decline in stock-market securities, which has been here and there abroad the signal for alarm, is itself a part of the sound development. When one looks at the whole rise one realizes that the young nation’s development has been great and powerful, and such as was never before known in the history of civilization. Figures will show this better than adjectives. What now do the United States produce? The wheat of the country amounted, in the year 1850, to only 100 million bushels; in 1870 to 235 millions; 522 millions in 1900; 637 in 1903. The corn harvest was 592 millions in 1850; 1,094 in 1870; 2,105 in 1900; 2,244 in 1903. There were 52 million pounds of 260wool in 1850; 162 in 1870; 288 in 1900; 316 in 1902. But cotton is “king.” In 1850 the cotton harvest amounted to 2.3 million bales; 3.1 millions in 1870; 9.4 in 1900 and 10.7 in 1903; 110,000 tons of sugar were produced in 1850 and last year 310,000 tons. The dreaded American petroleum was not flowing in 1850. It appears in the statistical tables of 1859 in the modest quantity of 8,400 gallons; in 1870 there were 220 million gallons; in 1900, 2,661 million, and in 1903 there were 3,707 million gallons. The coal output of the country began in 1820 with 365 tons and amounted in 1850 to 3 million tons; in 1870 to 33 million; in 1900 to 240 million; in 1902 to 269 million tons. In the middle of the last century 563,000 tons of iron ore were mined; 1.6 million tons in 1870; 13.7 in 1900, and 18 million in 1903. The manufacture of steel began in 1867 with 19,000 tons and in 1870 amounted to 68,000 tons, to 10.1 million tons in 1900; 14.9 millions in 1902. Of copper, 650 tons were mined in 1850; 12,000 tons in 1870; 270,000 tons in 1900; and 294,000 tons in 1902. The silver production in the middle of the century was estimated at $50,000; in 1870 at $16,000,000, and in 1900 at $74,000,000; in the last three years it has gone back to $71,000,000. The highest point was reached in 1892, with $82,000,000. On the other hand, the production of gold has grown steadily in the last twenty years, although it had reached its first high point back in the fifties. In the year 1853, $65,000,000 worth of gold was produced. The amount decreased slowly but steadily to $30,000,000 in the year 1883, and has since risen almost steadily until in 1903 it amounted to $74,000,000. The total output of minerals was valued at $218,000,000 in 1870, and $1,063,000,000 in 1900.

This steady growth of natural products is repeated in the agricultural and industrial spheres. The number of farms was given at 1.4 million in the middle of the last century, with the total value of $3,967,000,000; in 1870 there were 2.6 million farms valued at $8,944,000,000; and in 1900 there were 5.7 million, valued at $20,514,000,000. In 1870, 5.9 million people engaged in agriculture; 10.4 million in 1900. The total value of agricultural products amounted, in 1870, to $1,958,000,000, and in 1900 to $3,764,000,000. All domestic animals—cattle, horses, mules, sheep and pigs—amounted in 1850 to $544,000,000; 261in 1870 to $1,822,000,000; in 1900 to $2,228,000,000, and in 1903 to $3,102,000,000.

The greatest growth, however, is shown in industry. In 1850 there were 123,000 industrial plants with 957,000 employees, paying wages of $236,000,000, and with an output worth $1,019,000,000. In 1870 there were 252,000 factories, with 2 million workmen, paying $775,000,000 in wages, and with an output worth $4,232,000,000; in 1890 there were 3,550,000 factories, 4.7 million workmen, a salary list of $2,283,000,000, and a product worth $9,372,000,000. In 1900 there were 512,000 factories, with 5.7 million workmen, a pay-roll of $273,500,000, and an output worth $13,039,000,000. Statistics here cannot be brought up to the present time, since a careful industrial census is made only every ten years; but this glance over the half century shows at once that there has been a very steady increase, and that it is no mushroom growth due to the recently enacted protective tariffs.

The economic rise of the nation is well reflected in its foreign commerce. If we disregard the imports and exports of precious metals, the international commerce of the United States shows a total import in the year 1903 of $1,025,719,237, and a total export of $1,420,141,679. We must analyze these two figures in several ways, and compare them with similar figures in the past. In one way they show a decrease, since in the year 1903 the exports exceeded the imports by over 394 millions, but in the preceding year by 477 millions. This unfavourable change is not from any decrease in exports, but from a remarkable increase in imports; in fact, the exports were 38 millions more than during the previous year, while the imports were 122 millions more.

Thus, in the year 1903, the total foreign trade of the United States exceeded that of all previous years, and reached the astonishing figure of $2,445,000,000. Although before the year 1900 the total trade was less than two billions, it reached the sum of one billion as early as the year 1872; exports and imports together amounted in 1830 to 134 millions; in 1850 to 317 millions; in 1860 to 687 millions; in 1870 to 828 millions; in 1880 to 1,503 millions; in 1890 to 1,647 millions, and in 1900 to 2,244 millions. During this period the balance of trade shifted frequently. In 1800, for instance, there was an import balance 262of 21 millions, and similarly in the decades ending in 1810, 1820, and 1830. In the decade which ended in 1840 there was an average export balance of 29 millions. The tables turned in the next decade ending in the year 1850, when there was an average import balance of 29 millions; in the decade ending 1860, of 20 millions, and in the following decade, of 43 millions. But then the exports suddenly increased, and have exceeded the imports for the last twenty-five years. In 1880 the imports were 667 millions, and the exports 835 millions; in 1890 the imports were 789 millions, and the exports 857 millions; in 1900 the imports were 849 millions, and the exports 1,394 millions; in 1901 the imports were 823, and the exports 1,487; in 1902 the imports were 903, and the exports 1,381; and in 1903, as given above, the imports were 1,025, and the exports 1,420 millions.

Let us now look at the American imports more closely. Letting all our figures represent million dollars, we learn that during the last year imports of breadstuffs and live animals were 212; of raw materials 383; of half-finished products 97; of manufactured products 169, and of articles of luxury in general 145. The food products imported, which comprise to-day 21 per cent. of all imports, comprised 31 per cent. in 1880; and at that time the necessary manufactured articles were also a larger proportion of the whole, being then 20 per cent. against 16 per cent. to-day. On the other hand, raw materials, which were then 25 per cent., are to-day 38 per cent., and articles of luxury have increased from 10 to 14 per cent. of the total imports. Of the half-manufactured products imported, the most important were the chemicals, valued at 38 millions; then come wooden wares worth 11, oil worth 10, iron worth 8, skins and leather worth 5 millions. Of raw materials the most valuable were skins and furs, which amounted last year to 58 millions; raw silk was next, with 50; vegetable fibres, such as hemp, 34; rubber 32, iron and steel 30. This last figure is an exceptional one, and is due to the fact that during the year the American steel industries were taxed to their utmost by consumers’ demands. In the year 1902 the iron and steel imports were only 9, and in 1901 only 3 millions. The imports of raw chemicals amounted to 23 millions, and tin the same; wool 21, copper 20; wood 11, and cotton 11.

The exports, arranged according to the sources of production, 263amounted, last year, to 873 million dollars’ worth of agricultural products, 407 of factory products, 57 of products of the forest, 39 of mines, and 7 from fisheries. Of the remainder, 6 millions were from other domestic sources, and 27 had come from other countries. The agricultural exports reached their highest point in 1901, when they amounted to 943, and also the export of manufactured articles is now 3.4 less than in 1901 and 26 less than in 1900. But the statistics of manufactures show sufficiently that there has been no decrease in output, but merely that the home consumption has increased. Apart from these accidental fluctuations of the past three years, the exports have steadily increased. In 1800 the agricultural exports were 25 millions; the industrial 2; in 1850 the former were 108, the latter 17; in 1880 they were 685 and 102 respectively, and in 1900 they were 835 and 433.

If we look at the foreign trade with regard to the countries traded with, we shall find Europe first in both exports and imports. In the year 1903 the imports from Europe to the United States were 547, the exports to Europe 1,029; the imports from Canada and Mexico were 189, and the exports thereto 215. From South America the imports were 107, the exports 41; from Asia the imports were 147, the exports 58; from Australia they were 21 and 37, and from Africa 12 and 38.

The trade balances with individual countries in Europe were as follows: England bought from the United States 523 million dollars’ worth, and sold the value of 180; then comes Germany, which bought 174 and sold 111; France bought only 70 and sold 87; Austria bought 6 and sold 10; Russia bought 7 and sold the same amount. After England and Germany the best purchaser was Canada, which imported from the United States 123 and exported thereto 54. Germany imports more from the United States than from any other country. Germany imports very much less from Russia, and still less from Austria and Great Britain. Among the countries to which Germany exports her wares the United States has third place, England and Austria having the first and second. America imports from Germany firstly drugs and dye-stuffs, then manufactured cotton, silk, and iron goods, books, pictures, and works of art, clay ware, china, lithographs, toys, etc. No other class amounts to more than 10 million marks. 264There is a steady increase in almost every class, and the total imports from Germany were 17 per cent. larger last year than during the year previous; 71 per cent. more than in 1898; 138 per cent. more than in 1880; 198 per cent. more than in 1875, and 343 per cent. more than in 1870.

The principal export of the United States to Germany is cotton. Ten years ago the amount exported was 34 million dollars’ worth; in 1901, it was 76; in the following year only 70, but in the year 1903, 84, the amount exported in that year being 957,000,000 pounds. The exports of wheat to Germany amounted in 1896 to only 0.608 million dollars; in the following year to 1.9; in the next year to 3.1; in 1899 to 7.6; and in 1902 to 14.9; but in 1903 to only 11.1. The exports of corn fluctuate still more widely. In the year 1901 Germany bought 17 millions, in 1903 only 6.6. The exportation of petroleum reached its largest figure in 1900, with 8 millions, and in 1893 was 6.3.

Enough of these dry figures. They would look still more striking if compared with the statistics of other countries. More wheat grows in the United States than in any other country, and more corn than in all the other countries put together; more cattle and hogs are slaughtered than in any other country, and three-fourths of the world’s cotton harvest is grown in the United States. No other country mines so much coal, petroleum, iron, copper, and lead, or produces so much leather or charcoal. In short, the most important articles entering into manufactures are more plentiful than in any other country of the world. But even on looking over these figures of international trade, one does not get so adequate an impression of the immense economic activity as by actually seeing the wheels of this great machine in motion. One must see the power stations at Niagara, the steel works of Pittsburg, the slaughter-houses of Chicago, the textile factories of New England, the printing-presses of New York, the watch factories of Massachusetts and Illinois, the grain-elevators of Buffalo, the mills of Minneapolis, the locomotive and ship works near Philadelphia, and the water front of New York City, in order to understand the tremendous forces which are constantly at work.

A single factory turns out 1,500 locomotives every year. A Chicago factory which makes harvesting machinery covers 140 acres, employs 24,000 men, and has made two million machines 265which are now in use. It has fifty ships to bring its wood and iron, and every day loads a hundred freight cars with its finished products. And enterprise on this large scale is found not merely in staple articles, but in more trivial wares. It is a familiar fact that in Germany the large department stores make very slow progress against small shops, while in America the great shops meet at once with popular favour. Their huge advertisements in newspapers and magazines vie with their shop windows in attracting trade. It is nothing uncommon for the manufacturer of a breakfast food or some chemical preparation to spend over a million dollars a year for humorous advertisements. In the Ladies’ Home Journal one insertion on the advertising pages costs six dollars per line, and the lines are short. A short time ago a soap concern leased the back outside cover of a magazine for a period of time and paid $150,000 therefor.

More impressive, however, than anything that the traveller is able to see to-day is the comparison with what existed yesterday. Our figures have very well shown that the speed of development has been rapid everywhere and sometimes almost explosive. A typical example of this is found in agricultural machinery. The manner of tilling the ground was wholly revolutionized in 1870, when the first ploughing-machine was offered for sale to the American farmer. Since then improvements have been made continually, until to-day every farmer rides on his machines; and the steam-plough, which sows and harrows at the same time, has reduced the amount of time spent on these processes to one-fifteenth of what it formerly was, and the cost of every sheaf of wheat to one-quarter. The machines of to-day sow and fertilize at the same time, and place the seeds at just the desired depth beneath the surface. There are other machines which take the corn from the cob, at the same time cutting up the cobs, and turn out a bushel of corn in a minute, for which a good labourer used to take two hours.

The threshing-flail was abandoned long ago, and the combined mowing and threshing machine is perhaps the most clever invention of all. It cuts the kernels from the stalk, threshes and winnows them, and packs them in bags; and all this as quickly as the horses are able to travel down the field. The machines which separate the cotton from the cotton seed are the only thing that 266makes it possible to gather a harvest of ten million bales. In former times it took a person about ten hours to remove the seeds from a pound and a half of cotton. The machine cleans 7,000 pounds in the same time.

In just the same way the inventive genius of the American has everywhere increased the output of his factories. His chief aim is to save labour, and hence to devise automatic processes wherever they are possible, so that turning a crank or touching a lever shall accomplish as much as hard work once accomplished. This continual process of invention and improvement, and the fertile resourcefulness of every workman and capitalist, their readiness to introduce every improvement without delay and without regard to expense, have contributed more to the enormous economic progress than all the protective tariff or even than the natural resources of the soil itself.

Extreme jingoes see in this huge growth only the beginning of something yet to come, and in their dreams imagine a day when America shall rule the markets of the world. But no one should be deceived by such ideas. The thoughtful American knows very well that, for instance, the great increase of his export trade has by no means overcome all obstacles. He knows that American wages are high, and that prosperity makes them more so, because the American workman is better able than the European to demand his share of all profits. Also the thoughtful American does not expect to gain the European market by “dumping” his wares. In the apprehension of dull times he may snatch an expedient for getting rid of accumulations which the home market will not take off his hands. In ordinary times industry will not do this, because it knows the demoralizing effect produced on the home country when it is known that the manufacturer is selling more cheaply abroad than at home. The American is afraid of demoralizing the domestic market more than anything else; since, owing to the strong tendency toward industrial imitation, any economic depression spreads rapidly, and can easily cause a general collapse of prices. Even the elaborate pains taken to replace human labour in the American labour-saving machines are often quite made up for by the thoughtless waste of by-products and by the general high-handedness of conducting business.

267While America has a tremendous advantage in the fact that coal can be readily brought to the industrial centres, and that the products can be delivered cheaply throughout the country, it stands under the disadvantage that most of its exports are shipped in foreign bottoms, so that the freight charges go to foreigners; for the American merchant-marine is wholly inadequate to the needs of American trade. If America is strong by reason of protective tariff, England intends, perhaps, to remind her daughter country that the American game can be played by two. Protection is no monopoly. While the natural wealth of this country is inexhaustible, the American knows that the largest profits will go to the country which manufactures them; and while the American is energetic and intelligent in getting a foothold in foreign markets, he finds that other nations also have some counterbalancing virtues which he neither has nor can get. First of these is the patience to study foreign requirements, and then the ways of guarding against wastefulness. He has one incomparable advantage, as we have seen—his economic idealism, his belief in the intrinsic value of economic progress, his striving to be economically creative in order to satisfy the restlessness which is in him. The economic drawback of this point of view is not far to seek. The spirit of individual initiative awakens in the workman the demand for equal rights, and intensifies the fight between capital and labour more than in any other country, and puts such chains on industry as are spared to America’s competitors in the markets of the world. In short, the thoughtful American knows very well that the markets of the world are to be won for his products only one by one, and that he will meet competitors who are his equals; that there will be difficulties on difficulties, and that the home market from time to time will make heavy imports necessary. He knows that he cannot hope simply to overthrow the industry of all Europe, nor to make the industrial captains of the New World dictators of the earth.

That which he does expect, however, is sure to happen; namely, that the progress of America will be in the future as steady as it has been in the past. The harvests of all the states will not always prosper, nor speculators be always contented with their profits, but the business life of the nation as a whole, unless all signs fail, need fear no setbacks or serious panics.

268The United States have gone through six severe crises—in 1814, 1819, 1837, 1857, 1873, and 1893. There is much to indicate that the trite idea of the rhythmical recurrence of crises will be given up henceforth. And although just now, after years of great expansion, contraction is setting in, still the times are not to be compared with preceding crises, and particularly not with the bitter days of 1893. Let us examine what happened in that year. The unhappy experiences of the early nineties resulted naturally from an abnormal expansion of credit. Five or six years of prosperity had gone before, and therewith every industry which contributed to personal gratification was stimulated to excess. An unreasonable craze for building went over the country, and real estate rose constantly. But the country had not developed economically in other directions to a corresponding degree. Too many superfluous undertakings had been started, and houses and lands were everywhere heavily mortgaged. As early as 1890 things began to tremble, and three years later the final crash came. More than 15,000 bankruptcies followed one another during that year, of which the total obligations were $350,000,000; and in the three following years matters were hardly any better. Everything was paralyzed. The farmer was in debt, the artisan out of employment, the miner had to be fed by charity, and since the purchasing power of millions of people was destroyed, there was no one to support industry and trade. It was a veritable economic collapse, with all the symptoms of danger; but the organism recovered without the aid of a physician, by its own healthy reaction, and in such wise that a relapse will hardly take place in the future.

The catastrophe prepared for the return to strength by destroying many business concerns which were not fit to survive, and leaving only the strongest in the field. But this result is, of course, not a lasting one, because in prosperous years all sorts of poor businesses start up again; good years stimulate superfluous production. The permanent result was the lesson which industry learned, in prudence and economy. There is very much in this direction still to be learned, yet the last crisis accomplished a great deal. For instance, in the stock-yards a single company had formerly thrown away annually portions of the animals which would have yielded six million pounds of 269lime, 30 million pounds of fat, and 105 million pounds of fertilizer, and a few years later the total dividends of that company were paid by the by-products which had been thrown away a short time before. The same thing has happened in the mines and oil-wells, in the fields and in the forests.

Owing to the special gift which the American has for invention, this period brought out a great number of devices looking toward economy. In iron factories and coal mines, and in a thousand places where industry was busy, expenses were cut down and profits were increased, more labour-saving devices were invented, and all sorts of processes were accomplished by ingenious machines. American industry derived advantages from this period in which the nation had to be economical, which it will never outlive.