Business Administration: Theory, Practice and Application. [Vol. 1] Business Economics
Part 20
Another important contribution made by steam power to the development 188 of the manufacturing industry was the decrease in cost of transportation. Before the development of the railway and the steamship the material of manufacture, unless produced within a short distance of some navigable water, canals, rivers, lakes or oceans, was of comparatively little value. It was not always practicable to plant the factory in the section which most readily produced the wool or cotton or flax or hemp or silk, or to place it alongside the iron or copper mine; and even if this were done the manufactured material was valueless unless it could be transported to those requiring it. Even the lighter articles of manufacture, such as wool or cotton or fibers or silk, could not be transported any considerable distance without greatly increasing the cost to the manufacturer, and thus proportionately advancing the cost of the manufactured article. But when, in the middle of the nineteenth century, the railways began to penetrate the continents and the steamships began to cross the ocean and extend their tours to the commercially undeveloped sections of the world, the manufacturers found new sources of supply open to them and quantities of raw material reaching them from distant lands at such comparatively low cost as to enable them to enlarge their output, increase the variety of their productions and reduce the cost of both the necessities and conveniences and luxuries which they were offering to the public. The railways of the world grew from 25,000 miles in 1850 to 500,000 miles in 1900 and 600,000 in 1909. The tonnage of steam vessels on the navigable waters of the world grew from less than one million tons in 1850 to 24 million in 1909; and the carrying power of the sail and steam vessels of the world, measured in sail tons, grew from 15 million tons in 1850 to 100 million in 1909. The general reduction in freight rates meantime is illustrated by the fact that the price of transporting wheat from Chicago to New York by rail 189 fell from 33½ cents per bushel in 1872 to 10 cents per bushel in 1900, and the charge for transporting wheat from New York to Liverpool fell from 17 cents per bushel in 1875 to 3 cents per bushel in 1905; and similar reductions were made in the charges for transporting manufacturers’ materials.
Thus the application of steam to manufacturing and transportation multiplied the power of production. The area over which it could be performed was greatly enlarged, the cost of materials was reduced through cheaper transportation, new devices and processes were developed as a result of the competition, cheaper raw material was obtained from countries where plentiful supplies and cheap labor give low prices, and the opportunity of locating the factory near the place of production or at some convenient meeting point between the various places of production--all these contributed to reduction of cost and increase of supplies of material of manufacture. The great iron and steel works of western Pennsylvania, and northern Ohio, Indiana and Illinois, for example, are located not at the iron mines or the coal fields, but at places between these two fields to which these materials can be cheaply carried from their respective places of production. The iron ore is chiefly produced in the Lake Superior region and carried at a very low cost by vessels especially constructed for this purpose to the southern shores of Lake Erie. The coal is chiefly produced in western Pennsylvania and central Ohio, Indiana and Illinois. The cost of transporting the coal from the mine to the lake shore, or the ore from the lake shore to the mine, or both coal and ore to some mutually convenient meeting point by river or canal or railroads constructed for this purpose across a comparatively level country, is extremely small, less in many cases than that of carrying material to the waterfall which is not infrequently located at places difficult of access. The vessels carrying the manufactures of the United States or the manufacturing countries of Europe to 190 South America, Africa and the Orient, bring back at a very low cost the india rubber, the tin, the fibers, the wool, the silk, the Egyptian cotton of those distant countries; and the manufacturer who a century ago was limited in his supply of raw materials to the immediate vicinity of his factory may now bring his material from all parts of the world, while the area in which he may sell his products has been correspondingly enlarged.
One very recent contribution to the convenience and cheapness of manufacture is found in the transmission of power in the form of electricity. Formerly the machines of the factory were operated by power obtained from the steam engine or the water wheel through lines of shafting, gearing, belts, friction pulleys, etc. This made it necessary that the factory operated by water power be placed alongside the waterfall, or at least within a comparatively short distance of the source of power. Recent inventions have made it possible to transform power into electricity, carry that electricity hundreds of miles on a wire, and transform it back into power for the operation of the machinery of the factory or the transportation of the raw material or the finished product. This has increased greatly the value of the world’s water power in its relation to manufacturing. Formerly only a small part of the waterfalls of the world were used at all, largely because of their comparative inaccessibility and the cost of transporting the raw material to them and the finished product from them. Now that power, generated at any point, however inaccessible for freight handling, may be transmitted in the form of electricity on a simple piece of wire to any convenient point within a hundred or even two hundred miles of the place of production, and by a simple process applied to the operations of machines small or large, simple or complex, the possibilities of the waterfall in supplying power for the manufacturer are greatly enlarged.
Not only is this true of the waterfalls now in existence but of those 191 which may be brought into existence, for now that man has found a way to use the power thus generated he may readily increase the number of waterfalls by constructing dams at many places, and using the water over and over again in its flow from the place of origin to the ocean level. The great quantities of water stored up in the form of snow and ice in the mountain ranges of the world, and gradually liberated by melting may supply almost untold quantities of power as they flow down the mountain sides used not merely once but many times. The manufacturing power of Italy, Switzerland and southern France is now being greatly augmented by this process.
Another possibility of the use of this new distributor of power, electricity, is the multiplying of workshops and the return in some instances and certain articles to household or small shop manufacture. It is now so easy to introduce the electric wire and a small electric motor into the household or the shop adjoining the household and to so operate small machines for the various processes in many of the manufacturing industries, that this new use of electricity for the transmission of power is already making visible changes in the factory systems of the world, and promises still greater changes. In many lines of manufacture in which the machinery occupies small space and requires little power and the quantity of material handled is not great, such as watch and clock making, the manufacture of clothing, boots and shoes, toys, etc., a part or all of the work can now be performed in the household or small shop through the power generated miles away and brought into the workman’s home on a simple piece of wire.
On the other hand the use of electricity in the great factory or manufacturing establishment is equally important. Instead of transmitting the power of the engine to the various classes of machinery by belts, shafting and gearing, much of it is now 192 transmitted and applied in the form of electricity. Great cranes which handle many tons of material are operated by the electric motor without the intervention of the costly shafting, belting and gearing; and the great magnet, made such by electricity, picks up its ton of steel rails with the same ease that the toy magnet picks up the needle, and is managed with no greater physical exertion than the other.
Cassier’s Magazine, an accepted authority on engineering matters, publishes with favorable editorial comment, in its issue of September, 1909, a statement by Sylvester Stewart that “we could take out in regions where water power is needed at least a hundred times as much water power as is now employed, furnishing a safer and cleaner power than steam, at a lower cost, and thus prolong the existence of our coal fields. * * * A running stream may be compared to an endless driving belt only awaiting connection to the machinery it is capable of driving, but it has not been appreciated because we have become so familiar with it; if it had suddenly been discovered, doubtless it would have been harnessed immediately. Coal is passing away, but water flows continuously. A hundred thousand horsepower may be taken from a river and its place is still filled, but the coal vein once emptied is emptied forever.” Mr. Stewart adds that probably not one-thousandth part of the water power of the world is now utilized, and that while the greater part of this power is not at present available, because of its existence in out-of-the-way places, or in rivers so deep and sluggish that the energy obtainable from them would cost more than steam power, at least a hundred times as much water power as is now used could be, under present conditions, utilized in a manner to supply it at less than the cost of coal at present prices.
II. THE USE OF MACHINERY IN MANUFACTURING. 193
The statements made in this discussion that the great expansion in the production of manufactures came with the adoption of machinery for manufacturing must not be understood as meaning that no machinery was used in manufacturing prior to the period of expansion. Machines have been used in manufacturing for many centuries.
The spinning wheel, used many hundred years ago, was a machine, and so was the hand loom, by which the threads spun by the wheel were woven into cloth. Flax and wool were originally turned into thread by the use of the distaff, a stick to which the spinner attached a small portion of the fiber, and by revolving the stick against his body twisted the fibers into a thread. Then by letting the end of the stick drop downward he drew out the thread, and with another roll of the stick against his body again twisted the fibers and lengthened the thread, which he then wound around the distaff. After many years of this process it occurred to somebody that by setting the distaff in a frame and passing a cord or a piece of rawhide around it and also around a large wheel and turning the wheel he could get a much more rapid and regular revolution of the distaff. This was the beginning of the use of the “machine” in the making of yarn, for the spinning wheel was a machine, of a crude type, to be sure, but a machine. This served many generations of men and women for the manufacture of thread and yarn, from flax, from wool and from cotton.
To turn this thread or yarn into cloth another “machine” was used, the loom, which, by fixing the thread on certain frames and passing other threads back and forth as the frames were raised or lowered, formed the cloth. But this “machine,” the loom, was operated by human power, as was that other machine, the spinning wheel. The women and children spun the thread or yarn, the father and sons operated the loom, 194 chiefly in the winter months in which they had no occupation in the fields. If a man chose to give his time to weaving and became a weaver by trade he lightened his heavy labors at times by attention to the garden surrounding his workshop, performing the necessary work for the production of his food supply. “The workshop of the weaver,” says Ure in his History of the Cotton Manufactures, “was a rural cottage from which, when he was tired of the sedentary labor, he could sally forth into his little garden and with the spade or hoe attend to his culinary products. The cotton which was to form his weft was picked clean by the fingers of his younger children and was carded and spun by the older girls assisted by his wife, and the yarn was woven by himself assisted by his sons.” In the manufacture of woolen goods conditions were similar. “The work,” says James in his History of the Worsted Manufactures, “was entirely domestic, and its different branches widely scattered over the country. The manufacturer had to travel on horseback to purchase his wool among the farmers or at the great fairs or markets, and the wool, after being sorted and combed, was distributed among the peasantry and received back as yarn. The machine used by them was still the old one-thread spinning wheel, and in summer weather on many a village green might be seen the housewives plying their busy trade. Returning with his yarn the manufacturer had to seek out his weavers, who ultimately delivered to him his camelets or russells or calimancoes ready for sale to the merchant or delivery to the dyer.”
These are pictures of the manufacturing industry in England as late as 1770. “Machines” were in use, but of the simplest type, and all operated by the power of the man or woman using them, or at the best by human or animal power, and in most cases the work was performed in the household or a small shop adjoining the household.
The transformation to the “machine method” or factory system began 195 when some power greater than that of man or beast was applied to the operation of the machines, and the machines themselves were so enlarged as to multiply their producing power. “In tracing the effect of the application of modern machinery to English industry,” says Hobson in his Evolution of Modern Capitalism, “there appear two prominent factors, the growth of improved mechanical apparatus, and the evolution of extra-human motor power. We speak of the industry which has prevailed since the middle of the eighteenth century as ‘machine production’ not because there were no machines before that time but, firstly, because a vast acceleration in the invention of complex machinery applied to almost all industrial arts dates from that period, and secondly, because the application upon an extended scale of non-human motor powers manifested itself then for the first time.” “The water frame, the carding engine, and the other machines which Arkwright brought out, in a finished state,” says Cooke Taylor in his History of the Factory System, “required both more space than could be found in a cottage and more power than could be applied by the human arm. Their weight required them to be placed in strongly built walls, and they could not be advantageously turned by any power then known but that of water. Further, the use of machinery was accompanied by a greater division of labor, and therefore a greater co-operation was necessary to bring all the processes under a central supervision.”
The new and enlarged machines which were thus operated by water power and brought together in factories had been invented chiefly during the eighteenth century. John Kay, in 1738, invented what was known as the flying shuttle, which doubled the amount of weaving which could be performed by one man in a given time. Hargreaves, in 1764, invented 196 the spinning jenny, a machine which operated a number of spindles for spinning yarn, and so did many times as much as one spinner with a spinning wheel could do. Arkwright, a few years later, devised the water frame, by which the spinning jenny could be operated by water power. Crompton, a little later developed the “spinning mule,” which combined the important qualities of the spinning jenny and the water frame. Before the end of the century the steam engine began to supply power and was utilized in many cases where water power was not available. Then, in 1792, came Whitney’s cotton gin, by which the seeds were readily extracted from the cotton, and that valuable fiber rendered much more available for manufacturing purposes.
The effect of the development of the machine and factory system, through the devices of these thoughtful men, enormously increased the manufacturing industries of England and later of the other parts of the world. The importations of cotton into England prior to the invention of the spinning jenny averaged less than 2 million pounds per annum. With the invention of the spinning jenny and the water frame the importation of cotton and cotton manufacture quickly doubled and trebled and then grew at such rapid rate that by 1800 the importation was about 40 million pounds, by 1830, 260 million pounds and by 1840 over 400 million pounds. The importation of wool grew from less than 2 million pounds in the latter part of the eighteenth century to 150 million pounds in 1860 and over 700 million pounds in 1890, though in this article of manufacture the growth in importation was less strongly marked than in cotton because of the fact that much of the wool used in manufacture was produced at home, while all of the cotton used was imported.
In the iron and steel industry the growth in the use of machinery was even more closely connected with the great development of recent years than in that of textiles. It was quite natural that man should seek 197 the use of machinery in the iron and steel industry. The material to be handled was of such great weight that it could not be handled in quantities without the aid of extra-human power, and the fact that it must be manipulated while at an intense heat necessitated the use of devices of some sort for its handling. Yet a long time, a very long time, elapsed after the beginning of the manufacture of iron and steel before men developed the machinery which has resulted in such a wonderful development in the manufacture. The slow rate of growth in the earlier centuries, and the rapid rate in the past century may be measured in some degree by the world’s production of pig iron, the basis of all iron and steel manufactures. Mulhall estimates the world’s production of pig iron in the year 1500 at 60,000 tons, in 1700 at 100,000 tons, and in 1800 at 460,000 tons. Then the increase began to be more sharply defined, the production reaching 1 million tons in 1820, 2½ million in 1840, 7 million in 1860, 18 million in 1880, 40 million in 1900 and nearly 60 million in 1907. The increase in the eighteenth century was about one third of a million tons, and that of the nineteenth century was 39½ million tons, or more than 100 times as much as that of the eighteenth century. The great development in the transformation of iron into steel did not come until the second half of the nineteenth century, the world’s production of steel in 1850 being, according to Mulhall, 71,000 tons, in 1870, 540,000 tons, in 1880, 4 million tons, in 1890,12 million, in 1900, approximately 20 million, and in 1907 about 40 million. The growth in production of pig iron and steel was more rapid in Europe than in the United States in the earlier part of the nineteenth century, but in the latter part of that century the United States outstripped all her rivals, and her production of iron and steel is now more than that of any other two countries of the world.
These wonderful developments in the production of iron and steel were 198 even more dependent upon the development of machinery for transporting the material and handling it in the factory than was the case with the textiles. Pig iron cannot be made without having in immediate conjunction three natural materials, iron ore, limestone and some material to produce intense heat. The iron is only found in the form of “ore,” being iron mixed with rocks, earth or other matter which must be removed in order to use the iron. To do this the ore must be heated. Formerly this was done by placing small quantities of charcoal in a hole in the ground and placing the iron on top of it, and then more charcoal on top of the ore. By fanning the burning charcoal or blowing the fire from the lungs through a reed the heat was increased and the ore was softened, and by hammering it while hot the useless material was worked out. Then by further heatings it could be hammered into such form as desired. After a while it occurred to men to build a wall of stones and mud and place the ore and charcoal in this, and to make a bellows of the skin of some animal (the prototype of those which blacksmiths and other workers in metals now use), and so force the air into the bottom of the mass of charcoal and iron. With this the iron could be so heated that it actually melted and ran to the bottom of the furnace, and when cooled was ready for the finer processes by which it was made into the desired articles. After a time the walls of the furnace were built higher and if it could be located near to a waterfall the shaft of the water wheel was so adjusted as to operate the bellows and keep the stream of air flowing into the fire, for the heat of the burning charcoal was not sufficient to melt the iron without this forced draft.
This was the process by which men made iron for many generations. But it was a very expensive process, for the quantity of wood which must be used to produce the charcoal was so great that the forests were 199 soon depleted, especially in England, where iron making became active. Efforts were made to use coal instead of charcoal, but the weight of the iron ore was so great that it crushed out the fire in the coal which softened as it burned. Then after a time it occurred to somebody to treat the coal in a manner somewhat similar to that by which the wood had been transformed into charcoal, and coke was produced and successfully substituted for charcoal in heating the iron ore and making iron.