Part 3

Before the introduction of the factory system, under the so-called “domestic” system of industry, the laborer carried on his work in his own home, where he provided the raw material, owned his own tools, furnished the motive power--his muscles--and was his own master. Today every one of these conditions is changed--the work is carried on in the factory, the raw material, the tools, the motive power are all provided by the capitalist, the laborer contributing only his own more or less skilled labor, while the conditions under which he carries on his work are largely determined for him. He is no longer his own master. To protect himself against the growing power of capital the worker has organized with his fellows into trade unions. These seek to meet the monopolistic power of capital by exerting a monopolistic control over labor. While they realize that modern productive processes cannot be carried on without capital, they also insist that labor is equally essential. They claim that capital has received more than its fair share of their joint production and has exploited labor; consequently they insist that labor must now demand its just reward and enforce the claim by strikes and by raising wages. To enforce their monopoly, the policy of the closed shop is often enforced. The interests of capital and labor have thus often been made to appear antagonistic instead of complementary to one another. Frequently in their struggles the interests of the consumer have been entirely lost sight of.

These conflicts in the productive processes of modern economic society have led many people to look to the state as the regulator of industry 8 and to invoke state aid or state interference along many lines. Maladjustments in the labor contract, mistaken production, leading perhaps to speculation and financial panics, abuses of power by corporate interests, discriminations by railroads, and similar irregularities are made the excuse for an appeal to state authority. Some would even go so far as to have the state take over and manage all productive enterprises; but socialism is as yet a protest rather than a constructive force. In the last analysis the state is the regulator of all industrial undertakings, for they all concern society. The state must hold the balance even and see that fair play is given to all groups and all classes; but the greatest amount of freedom compatible with economic justice must be sought for. It is a difficult question how far the state must interfere in the conduct or management of industrial enterprises in order to secure social justice. There is a decided tendency at present to a strengthening of the regulative power of the state for the protection of the weaker classes of society. And yet on the whole the institution of private property, free competition, and a maximum of individual liberty remain the fundamental conditions of our economic life.

But while under the system of individualism, industrial activities have been multiplied, wealth has been enormously increased, and human progress has been greatly advanced, many abuses and evils still remain. Many practical economic problems still await solution. Some of these have already been suggested in the preceding paragraphs; others remain to be presented. It is the purpose of this text to apply to some of the more important practical current problems of our modern industrial life the principles of economic science, and to endeavor to reach fair and just conclusions on controverted points.

II. THE AGRICULTURAL RESOURCES OF THE UNITED STATES. 9

The land area of the United States, exclusive of Alaska and our island possessions, is a little less than 3,000,000 square miles, or an area somewhat less than the whole of Europe (3,700,000 square miles). Of this about 840,000 square miles, or a little more than one-fourth, still remains in the possession of the Federal Government and constitutes the public domain. The rest belonged to the original thirteen states, has been given to railways or to the states for educational purposes, or has been sold and given away to individual settlers. The policy of the Government in the disposition of the public domain has, on the whole, been to place it as rapidly as possible in the hands of cultivators, and also to use it as a fund to promote internal improvements and education. About 200,000,000 acres had been granted to railroads down to 1871, at which time land grants were discontinued, to secure their early construction. This policy has often been bitterly condemned, and it has been contended that the land should have been saved for actual settlers. It may however be said that without such grants the railroads would not have been built at as early a date as they actually were, and that without railroads the land was practically worthless, as it was too far removed from any navigable waterway to have access to a market. Moreover, the Federal Treasury lost nothing, for the sections of land alternating with those granted to the railroads were sold to settlers for $2.50 an acre instead of $1.25, the customary price for the public lands.

The grants of land for educational purposes have been generally approved. Upon such grants rests the establishment of our state agricultural colleges.

The unique and characteristic feature of the land policy of the United States has been the granting of land to the settler upon actual residence and cultivation for five years. Such a grant of 160 acres 10 is called a “homestead,” and since 1862 has been made to any citizen who is the head of a family or above the age of twenty-one years. In this way over 230,000,000 acres have been placed without cost in the possession of the actual cultivators. The newer public land states are peopled by proprietors, and there has never grown up in the United States a large class of rich land owners whose land is cultivated by a tenant peasant class, such as exists in England and parts of Europe. For this we must thank not only our land policy, but also the vast extent of unoccupied land that might be had almost for the asking.

Now, however, the public lands available for agriculture have been exhausted; practically all that remains is situated in the arid zone, and needs systematic irrigation before it can be made available for any use except that of grazing. There are still about 100,000,000 acres of choice land in Indian reservations, and as a consequence of the pressure upon this resource and also because of the unwisdom of the old reservation system, the policy has now been adopted of dividing these lands among the Indians in individual ownership, under careful safeguards, and of assimilating the Indians to the rest of the population.

The exhaustion of the fertile and well-watered lands of the Mississippi Valley has forced the later comers to have recourse to the arid soils in the almost rainless region west of the one hundredth meridian of longitude. The character of farming under such climatic conditions must of necessity be very different from what it is in the rainy districts, and the versatility and adaptability of the American farmer is well illustrated by the development which has taken place there. The first effort at the solution of the problem was in irrigation, a method which had been early practised by the Pueblo Indians, and later and most successfully by the Mormon settlers in Utah. By 1900, according to the census, 7,539,545 acres were under 11 irrigation. While most of the work up to that time had been done by private initiative, a demand arose for irrigation at government expense, in response to which Congress in 1902 provided for the building of irrigation works out of the proceeds of the sales of public lands. Regulation and conservation of the limited water supply by governmental authority, either state or national, is indeed essential to the success of irrigation and will probably be the policy of the future.

A second and even more interesting development of American agriculture is the so-called dry-farming which is being successfully introduced into the semi-arid regions. Carefully selected seeds and plants of crops especially adapted to these climatic conditions are used, and then a very careful and intensive method of tillage is followed. The soil is plowed deep and thoroughly pulverized so that the roots can strike down to the deeper levels and absorb all the moisture available. Extraordinary results have already been attained, and the region that the older geographies labeled “The Great American Desert” bids fair to become one of the most flourishing districts in the country.

That part of the area of the United States which has already been reduced to private ownership is divided into 5,700,000 farms. As almost half of the land in these farms is uncultivated, being forest, waste land, or pasture, it is evident that there is still room for a great increase in the agricultural production of the United States without bringing additional land into the field. The average size of these farms is 146 acres, which looms large indeed when compared with the 20-acre farms of France and the 60-acre farms of Great Britain. The difference is of course due to the difference in the methods of agriculture and the character of the crops, the European conditions demanding intensive cultivation while our methods are still largely extensive.

A more important question even than the number and size of farms, from 12 an economic point of view, is that of ownership. In 1880, when for the first time the federal census collected the statistics of farm tenure, the gratifying result was announced that three-quarters (74.5 per cent) of the farms in the United States were cultivated by their owners. The last census however showed that the proportion had fallen to 64.7 per cent in 1900, and alarm has been expressed that our democratic conditions of land ownership are giving way to a system of tenantry, that the ownership of our farms is being concentrated in fewer hands, and that methods of large-scale production in agriculture are crushing out the independent farmer as effectively as they have crowded out the small manufacturer and retailer in other fields. Correctly interpreted, however, the statistics seem to indicate that the growth of the tenant class marks the endeavor of farm laborers and farmers’ sons to establish themselves as independent farmers rather than the fall of former owners to the rank of tenants. The great majority of the young men are laborers, the majority of those in middle life are tenants, while the older men are for the most part owners of farms. There seems to be a healthy progress upward in the advancement of wage laborers and farmers’ children, first to tenancy, and finally, with increased ability and capital, to farm ownership. Moreover most of the rented farms are hired by negroes, the change in whose status from slave to tenant marks a great advance.

Another change in our farming population that has been viewed with considerable misgiving is the movement from the farm to the city and the decline in the proportion of the agricultural population to the whole. Indeed the change has been startling, as the United States has passed from a primitive agricultural stage of development to a highly organized manufacturing and commercial stage. From 86.3 per cent of the population in 1820 the percentage of those engaged in agriculture 13 fell steadily until it reached 35.7 per cent in 1900. Many persons have thought that such a movement indicated the desertion of our farms owing to the greater attraction of the cities, and the disappearance of a healthy agricultural population. It has indicated rather a great improvement in the arts of agriculture, whereby one person today, working with improved machinery and better knowledge, can produce nearly three times as much as his grandfather did. The labor set free has gone to the cities--cities of over 8,000 inhabitants now contain one-third of our population as compared with one-thirtieth one hundred years ago--and there produces the thousand and one things which contribute to our modern well-being. A smaller number can now raise all the food necessary to feed the population; that the rest are free to do other things must certainly be counted again, though the conditions under which work in the factory and life in the city are at present constructed leave much to be desired.

Writing about 1865 an eminent English traveler, Sir S. Morton Pets, apologized for calling the United States an agricultural country; today he would be spared this worry, for the Census of 1900 gave the net value of products of the farm as $3,764,000,000 and of pure manufactures as $5,981,000,000. Indeed since 1890 the value of the manufactures of the country has been larger than of the farm products, and the United States now ranks as one of the leading manufacturing nations of the world. Nevertheless the value and amount of the agricultural products are stupendous; the United States leads all countries in the production of dairy products, corn, and wheat, and the greater part of the lumber, meats, tobacco, and cotton which enter into the world’s trade come from her forests and fields.

While the territory of the United States is well adapted by nature to the cultivation of a great variety of agricultural products, as a 14 matter of fact only four branches of agriculture showed a total product in 1900 of more than one million dollars. These were the raising of live stock, and the production of hay and grain, cotton, and dairy produce. The regional distribution of these products was fairly well marked, over half of the live stock and of the hay and grain farms being situated in the North Central States, nearly half of the dairy farms being located in the North Atlantic division, while practically all the cotton is confined to the southern zone; the same may also be said of tobacco and sugar. The semi-arid region of the West is given over almost exclusively to stock-raising. Iowa and Illinois lead as agricultural states.

The character of agriculture in the United States, as in all new countries, has hitherto been extensive, that is, a small amount of labor and capital has been applied to a relatively large amount of land, and only the cream of the soil has been skimmed off, as it were. Where labor is dear and land is cheap this is the most economical method for the farmer; and, although European critics have severely criticized our system of “earth butchery,” whereby the fertility of the soil has been exhausted by constant cropping, with no effort to restore the exhausted properties by fertilizing, the practice has been justified by the conditions which produced it. Already the practical exhaustion of the free public domain has had the effect of raising the price of lands in the Middle West, and this in turn will cause a more careful and intensive system of cultivation. In other words, as our social and industrial conditions approach those of Europe more closely, we may expect our agricultural methods to do so also. One of the most serious practical problems now confronting the American farmer is the change from the old, wasteful, extensive methods to the new, careful, intensive methods of farming. Those who cannot make the change will complain of the unprofitableness of agriculture, but to those who successfully meet the new conditions the future offers 15 much greater rewards than even the era of free land could produce.

It has been said that the year 1887 marked the beginning of a new stage of development in American agriculture--that of reorganization-- because in that year Congress passed the Experiment Station Act. This marked the application of the principles of experimental science to agriculture on a more comprehensive and systematic scale than had ever been attempted before. Stimulated by the increased activity of the government experiment stations, the agricultural colleges have expanded their work. They are offering practical courses to the farmers, and in co-operation with the railroads, some of them have recently been sending out special lecturers, with moving laboratories, to bring the teachings of science as close home to the producers as possible. Finally, the wonderful work being done by Burbank and others in selecting and crossing, by travelers for the federal Agricultural Department in securing plants from all over the world suited to our varied climatic conditions, and by the experiment stations and agricultural colleges in spreading the new knowledge among the farmers and putting it into actual practice--all these departures promise to revolutionize agriculture, and to make it, as one writer has said, a learned profession.

The production of cereals is the most important branch of agriculture, comprising corn, wheat, oats, barley, rye, buckwheat, and rice. Since the building of the trunk railroads, by which the western territory was given access to a market, the progress of cereal production has been extremely rapid, nor does there seem to be any observable slackening. With the introduction of improved varieties of spring wheat, cereal production is being pushed further up into British Canada and our own Northwest. The center of cereal production has moved steadily westward, from eastern Indiana in 1860 to eastern Iowa in 1900. With the practical exhaustion of unoccupied land suitable for grain-raising in the United States, it is clear that the future 16 extension of the industry depends rather upon improvements in the methods of agriculture than upon the addition of new lands. The very practical problem here presented to the American farmer if he wishes to maintain his supremacy in the world’s markets is being nobly and successfully met by the agricultural experiment stations. They are teaching the farmer how to increase his yield of wheat, for example, by scientific seed selection and more careful methods of tillage, from an average of 12.5 bushels per acre for the whole country in 1900 to treble that amount.

Of the separate crops corn is by far the most important, representing 60 per cent of the total value of all cereals produced in 1900. Most of the corn is fed to stock throughout the so-called “corn belt” and comes to market in the form of pork and beef. Although corn is very nutritious and is a favorite article of diet in this country in various forms, astonishingly little of it is exported. The development of a foreign market still awaits the enterprise of the American farmer and food manufacturer.

The production of live stock is essentially a frontier industry, and while it will probably always be carried on in the semi-arid grazing districts of the West, which can be reclaimed for agriculture only at considerable expense, it already shows a relative decline. Owing to the great growth of the population the domestic demand now consumes almost all the meat produced and the exports are declining. This is one of the reasons for the recent rise in the price of meat. The industry is extensive. Quite the opposite is true of the dairy industry, which is intensive, being carried on for the most part in the vicinity of large cities where land is expensive. The changing character of agriculture and the fact that it is itself a business enterprise demanding a knowledge of market conditions and business methods is well illustrated by the nature of the dairy industry. 17 Dairies are inspected and must conform to certain standards, the milk must be sterilized and shipped, often by special trains, to the cities. Over a third of the butter and practically all of the cheese is now made in factories instead of on the farm, so that it is a question whether the latter at least should not be classified as a product of manufacture rather than of agriculture.

Of the last of the four important branches of agriculture, namely cotton-raising, there is not so much to be said. Owing to the intensive nature of its cultivation, machinery has never been applied on a large scale to its production, as was done in the case of hay and grain. The wasteful methods that prevailed before the Civil War in the South have been largely corrected, and the tendency to sterility of the soil has been met by the increased use of fertilizers. The statistics of cotton crops for the past thirty years do not indicate any decrease in productiveness, and show that the point of diminishing returns has not yet been reached. A peculiar and interesting feature about cotton production is that it is largely in the hands of tenants. The old slave plantations of the South have been broken up into small holdings and many of these are operated by tenants, negroes and whites, who are too poor or too improvident to buy the land outright. The main problems connected with cotton culture are labor problems; and the question has often been anxiously asked whether the free negro will produce as much as the former slave. This can now be confidently answered in the affirmative, though it yet remains to be seen whether he can be made as efficient a producer as his white competitor. Upon the answer to that question depends not merely the future of cotton production, but the economic salvation of the negro himself. The constantly expanding use of cotton goods assures a brilliant future to the cotton-growing states of the South, for not merely is there an assured market in America and Europe, but the primitive peoples of Asia and Africa may be depended upon to absorb increasing quantities 18 of cotton fabrics.

Hand in hand with the heedless extensive methods of agriculture in the past went wasteful use and even destruction of our forest resources. The annual cut of lumber in the United States is today about forty billion feet board measure; at this rate of consumption it is estimated that the present available supply will last only 35 to 50 years. It will doubtless surprise most readers to learn that about three-quarters of the annual wood cut is consumed as fuel, probably half of our population still depending upon wood instead of coal for fuel. The rapid exhaustion of our forest supplies, with the attendant effects upon moisture, floods, etc., has brought the question of forest preservation to the front as a practical economic problem. We have been squandering the heritage of our children and efforts are now being made to repair some of the loss before we are declared bankrupt. In 1898 the Federal Government began practical work in the introduction of forestry; this received a great stimulus in 1905 when the care of the national forest reserves, embracing over 60,000,000 acres, was put under the control of the Forest Service. Over 150 trained foresters are employed, who manage the forests on the public lands and co-operate with private owners in the introduction of scientific forestry. Several states have taken up the movement, and there is every indication that scientific methods of culture such as prevail in Prussia and other European states, will supplant our destructive denudation of the land. That it is high time to devote attention to the better conservation of this natural resource is made evident by the high and increasing price of lumber.