Part 4

There is one other natural resource the conditions of whose supply resemble those of forestry and of agriculture in general; this is the fisheries. With careful use, providing for depreciation, and restoring the elements destroyed, all of these should prove inexhaustible and 19 should continue to furnish man with food and lumber for all time. But as in the case of the other two industries, so with the fisheries, we have been using up our capital and declaring enormous dividends at the expense of the future. The value of the annual catch of fish is $40,000,000, which is exceeded only by that of Great Britain. The problem of the better conservation of this resource has been taken in hand by the Federal Government, through the Fish Commission, and much has been done to repair our early prodigality by restocking lakes and streams with fish. More stringent fish and game laws have also been passed by most of the states, designed to prevent the extermination of the supply.

III. THE MINERAL RESOURCES OF THE UNITED STATES.

The natural resources of any country may be divided into two broad groups, which call for different treatment and give rise to very different problems. There are, on the one hand, resources which are exhaustible but which can be restored again; and on the other, resources which, once exhausted, can never be replaced again by human agency. Under the first head come the soil, the forests, the fisheries, and even the water power, for all of these can be made to yield steady returns to man for thousands of years, if used intelligently. Under the second head belong coal, petroleum, natural gas, and all the minerals; man may discover substitutes, he may economize in the use of these substances, but he can never augment their supply. In the previous section we considered some of the problems that arise in the use of the soil in agriculture, and those connected with our forests and fisheries. For the most part they had to do with the intelligent use of these agencies and the restoration or repair of the elements destroyed. In this section we are met by a very different problem, namely, the conservation of a limited supply 20 of resources and their most economical application to the needs of mankind.

We can distinguish two contrasting answers to this problem, one careless and optimistic, and the other pessimistic and fearful of the future. According to the former point of view we should not borrow trouble of the future; man’s career has been one of constant progress; when he has been confronted with a difficulty he has invariably met it. Indeed necessity has been the most prolific mother of invention. If our coal supplies are exhausted, man will devise means of utilizing the heat of the sun, the force of the tides, the motion of the waves, the stores of electrical energy in the air, all of which will yield inexhaustible supplies of heat and energy. If our stores of iron should fail, some enterprising inventor would surely discover a practicable and commercially profitable method of extracting aluminum from clay. New sources of raw materials will undoubtedly be discovered before the old ones give out, and we may confidently expect that, while the material bases of a high civilization may shift somewhat, they will never crumble and fall.

The other school has sounded a louder note of alarm. At the present rate of consumption the coal and iron deposits of Europe and America must soon be exhausted. The supplies of copper, lead, and other metals in favorable locations are also being consumed at an alarming rate, and no other known supplies are in sight. Within the past century scientific knowledge and engineering skill have combined to unlock the storehouses of the geologic ages, and now like prodigals we are dissipating our fortunes. To treat these exhaustible sources of supply as permanent sources of income, without regard for the future, is based upon unsound theory and must lead to reckless practice.

As so often in opposing counsels, there is an element of truth in each 21 of these contrasting points of view. But the safer plan is not to wait until we have exhausted our natural resources before remedying the evil, but to heed the warnings now. A long step in this direction was taken in May, 1908, when a conference of the governors of all the states, together with college and railroad presidents, business men and others, was held at the White House upon invitation of President Roosevelt. As a result of this gathering a National Conservation Commission was appointed, which will make an exhaustive investigation into the amount and rate of consumption of the natural resources of the country and suggest measures for their better utilization and preservation through national, state, and local action. In line with this movement two other commissions have been established, one on inland waterways and one on country life. As a result of the national awakening we may expect to see a more rational use made of the gifts of nature, and a better organization of our national life. Heretofore the ideal of our business men has been to exploit, one might almost say pillage, the stores of nature as rapidly as possible; it was a pioneer stage of industry, inevitable but wasteful. From now on the new conception must be the restoration where possible of exhausted elements, as of the soil and the forests, and the careful use of the non-renewable stores of wealth so that at least we shall not make them engines of destruction, as in the case of floods and devastation occasioned by careless hydraulic mining in the West. Let us now turn to a more detailed consideration of the separate items in our inventory of national wealth.

Our modern civilization may be said to rest upon coal, for upon its possession depends man’s ability to utilize most of the other items of his wealth. Passing over its utility as a fuel to heat our houses, without coal it would be impossible to smelt the iron needed in all our industries, to drive the machinery, to run our locomotives or 22 steamboats, or in a word to carry on the manifold activities of our industrial life. According to the United States Geological Survey there are 335,000 square miles of coal-bearing strata in this country, but the larger part of it is too thin or impure to be useful for industrial purposes; it serves in many localities however as domestic fuel, as in the case of the lignite deposits of the Northwest. An estimate of Professor Tarr places the coal-producing area in the United States at not over 50,000 square miles. At the present rate of consumption--over 350,000,000 tons in 1905--it has been estimated that the anthracite coal deposits will last for only fifty years longer, while we have only enough bituminous coal for one hundred years.

The large deposits of coal in England and their early development gave that country a great advantage over Europe. But as long ago as 1861 Professor Jevons, a noted English economist, sounded a note of alarm: he prophesied that because of the superior size and character of the coal deposits of America, industrial supremacy must inevitably pass to this country. His prediction has already been verified in the case of coal and iron production, and will probably soon prove true of textiles also. The coal deposits of the United States are thirty-seven times as great as those of England, but at the present rate of mining are threatened with exhaustion at no distant date. It has been estimated that there are in China coal deposits capable of supplying the world with fuel for another thousand years. But such estimates are, in the present state of our knowledge about China, the merest guesses, and if true would seem to point rather to the future industrial supremacy of that country in the world’s markets.

Two-thirds of the coal mined in the United States is obtained from the Appalachian field, extending from New York to Alabama, Pennsylvania being the largest coal-producing state in the Union. In the iron and steel industries most of the coal is coked, as it is better for 23 blast-furnace use in this form, giving greater heat and containing less sulphur or other injurious substances than coal. Owing to the smaller bulk and cost of transporting ore, most of the iron and steel industries are situated in the vicinity of the coal supply, as in Pennsylvania, Ohio, Alabama, etc.

Petroleum or coal-oil is closely allied to coal in its origin and distribution and must be classed with it as a most important product, not only for industrial uses, but also because of the contributions it has made to the comforts of living. In its production the United States ranks first, being closely followed by Russia; together these two countries furnish over 90 per cent of the world’s supply of petroleum. Enormous economies have been effected in its production and distribution, which is done by piping the crude oil underground to the refineries. For illuminating purposes it is the cheapest form of artificial light; as a fuel it is supplanting coal, where the latter is dear or its cost of carriage high, as on ocean steamers. Finally, the construction of light and convenient gasoline motors has given it great importance as a source of motive power. Natural gas is closely related to petroleum, but the supply has been so reduced by rapid and reckless use that it has but a limited economic outlook and is of local significance only.

Of all the metals iron must be considered the most useful for man, far surpassing the so-called precious metals in economic importance. Its great value is so evident that its production and use have often been taken as a criterion of the material progress of a community. Iron is the only metal that can be welded, and is accordingly of great significance, whether in making strong machinery, as the shafts of ocean steamships or the framework of a twenty-story building, or, in the form of steel, the most delicate surgical instruments or watch springs. Judged by the test of iron ore production the United States 24 ranks high, for it turns out about four-fifths of the world’s supply; all of this is used for domestic consumption, in its own blast furnaces, though much of it is afterwards exported in the form of pig iron or structural iron or steel. Though iron is universally distributed throughout creation, it must occur in large beds or deposits before it can be profitably mined. “The most favorable situation of an iron ore for profitable extraction is near good coking coal for smelting and limestone for a flux, as in the Birmingham district of Alabama; and in such a situation even low-grade ores can be worked profitably. Unless this is the case, iron ore cannot be extensively mined excepting under conditions of great abundance and economical methods of transportation, as in the Lake Superior district, where thick and remarkably uniform beds of good ore occur in such a position that water transportation to the market is possible. Where these conditions do not exist, iron-mining is feasible only on a small scale for the local market. Thus, in the Rocky Mountains there are almost inexhaustible supplies of iron, often of a high grade, which are at present of no value whatsoever.”[1]

The most wonderful iron-mining region in the United States and probably in the world lies in the northern part of Michigan and Minnesota, where five ranges or lines of hills contain immense deposits. These lie so near the surface that they can be dug out of open pits at a cost of from 10 to 50 cents a ton, against $1 a ton in a shaft or underground mine. Three-quarters of the iron ore produced in the United States is mined in this district. Its proximity to the lake ports makes possible its transportation to the iron and steel manufacturing centers at very low rates. Machinery has been applied on an immense scale to the work of mining, loading and unloading the ore. Steam shovels scoop up the ore from the open pit, filling cars at the 25 rate of almost one a minute; the work of loading this into the ore ships at the ports is equally expeditious, only about two hours being required to load an ore ship of 6,000 tons, while the work of unloading is performed for the most part by an endless chain of buckets and traveling cranes. By these means an ultra-intensive exploitation of these magnificent deposits is taking place and it is a question whether they will not soon be exhausted. “But the Americans,” writes Professor Leroy-Beaulieu, a friendly but keen critic of our industrial development, “relying on the constant good-will of nature, are confident that they will discover either new and productive ranges in this district, or rich deposits in other districts.”

The precious metals have received more than their fair share of attention, for the industrial progress of the world is much less dependent upon their presence in large and easily obtained quantities than it is upon the more common metals. Nevertheless they are of importance both in the arts and especially because of their use as money. In their production the United States stands second, being surpassed in the output of gold by the Transvaal in Africa and in that of silver by Mexico. The production of these metals has always in the world’s history proceeded spasmodically, and a speculative spirit has usually been present. More recently, however, scientific geological knowledge and improved metallurgical methods are removing the industry of gold and silver mining from a gambling venture to a legitimate industry. The practical problem at present confronting American gold-mining companies is to reduce expenses, some of the principal bearings having for some years shown signs of exhaustion, as for instance in the Cripple Creek district of Colorado. There is always a chance however that new gold fields may be discovered to make good the exhaustion of the old. In the case of silver, on the other hand, the metal is found in such abundance that the present rate of production 26 seems almost indefinitely assured; a slight increase of the price or improvements in the art of extracting the metal will at any time bring enlarged supplies on the market. Africa, Australia, and the United States produce almost all the world’s supply of gold, Colorado being the leading state in the last-named country. Mexico and the United States together produce over two-thirds of the world’s silver, the leading rank in this country being held by Montana.

Among the other metals copper is by far the most important. In primitive civilizations, before the art of smelting iron had been discovered, copper was indispensable as it was so easily malleable; in Homeric times, for instance, armor, utensils, money, etc., were made of copper or alloys of copper (bronze and brass). After an eclipse of some centuries copper has again risen to the front rank by reason of its qualities as a conductor of electricity. The new use of electricity to transmit power and the development of electrical industries has greatly increased the demand for this metal and has caused a great expansion in its production. Here again the United States holds first rank, contributing over half of the world’s copper supply. As in the case of iron the northern peninsula of Michigan is the most important center of copper production, with Montana a close second and Arizona contributing most of the remainder. Like petroleum, copper production is controlled by a small number of operators, five mining companies alone furnishing one-half of the American supply. It is far from being monopolized, however, as petroleum is, for new and rich supplies lie just on the margin of profitable working and will always be brought into the market whenever the price is artificially raised. One reason for American pre-eminence, aside from the rich stores of the metal, lies in the progress made in the art of refining it by the electrolytic process, considerable foreign ore being brought here to be treated by this method.

Nature has not blessed the United States so abundantly with the minor 27 metals, lead, zinc, and aluminum, while almost all the tin used here has to be imported.

It is apparent from even this brief and hasty survey of the mineral resources of the United States, comprising those extractive industries which once exhausted can never be restored by man, that this country is wonderfully well equipped with the material means of civilization. Minerals and metals are remarkably abundant and accessible. The wonderful material progress of the United States during the nineteenth century is abundantly explained by this fact, though due credit must also be given to the enterprise, industry, and genius of those who developed these natural resources. The industrial supremacy of the American nation seems well assured, founded on such a stable material basis. We of this country have been rather inclined to boast of our industrial progress and our material bigness, whereas it must now be apparent that we owe much, if not most, to the bounty of nature. We should therefore see to it, in a proper spirit of humility and thoughtfulness, that we do not waste our heritage, but hand it on as nearly undiminished as possible to our children.

There is one other asset in our national wealth which has already contributed much to our progress, and is destined to play an even more important role in the future--and that is our water power. In colonial days, before the invention of the steam engine and the use of coal, this was of prime importance and determined the location of many a town, most of them being located at the “fall line” of the rivers, where water power was obtainable. With the invention of the steam engine and the use of steam as a motive power, industry became less dependent upon water power and moved away from the rivers to the vicinity of coal mines. Now again has come another swing of the pendulum, and with the rise of electricity as a motive power and the harnessing of our streams and waterfalls for the creation of 28 electrical energy, we are beginning to value more highly this source of power. Here again we find the United States wonderfully blessed as compared with other countries. “It is probable,” says Shaler, “that, measured in horse power or by manufactured products, the energy derived from the streams of this country is already more valuable than those of all other lands put together.” The total amount of direct water power used by manufacturing establishments in 1900 was 1,727,000 horsepower.

Prior to 1890 the largest use of water power was in its direct application to machinery at the immediate point of development. Since that time, however, the use of electricity as an agency whereby the energy developed by falling water can be transformed and applied to the driving of machinery has entirely changed the conditions under which the power of our streams can be utilized. The practical possibility of transmitting electrical power over long distances--for example, over 200 miles from the Sierras to San Francisco--has removed the necessity of building factories immediately adjacent to water powers, but permits its utilization where most convenient and often where the lack of coal has made the use of steam power impracticable. The best-known example of the development and transmission of electrical energy for industrial purposes is the case of Niagara Falls, but more striking illustrations may be found on the Pacific coast, while the existence of enormous opportunities on the Atlantic seaboard give brilliant promise for the future of manufacturing in this region. So valuable indeed are these sources of power now seen to be that there is danger that their control may be monopolized by a few shrewd and far-sighted individuals before the general public awakes to a realization of their importance. It has recently been asserted in a reputable magazine that there is a “water power trust” already organized for this purpose. The opportunities for wealth-getting have hitherto been so great in this country, and the great task of the 29 American people has thus far been so exclusively the task of developing its wonderful natural resources, that we have grown careless of our common rights and have permitted the monopolization by private individuals of a number of limited resources of this character. One of the great practical problems of the future is that of securing the growing value of these natural monopolies to the whole people, without at the same time retarding the energy and industrial development of the American people.

IV. CAPITALISTIC PRODUCTION.

Modern production is usually called capitalistic because it involves in its processes the use of a large amount of capital. In a primitive stage of culture man appropriated directly from nature’s bounty the food and shelter which he required. But today man has adopted long and roundabout methods of producing goods, involving numerous steps between his first efforts and the turning out of the finished articles. He invents tools and machinery to assist him in his work, and while he multiplies the processes of production he also enormously increases the results. Capital has become absolutely indispensable in modern production and is yearly playing a more important role. At the same time various problems, born of the new conditions, have arisen, such as the growth of large-scale production, the elimination of the small producer and the independent artisan, the growth of trusts, the rhythmic recurrence of speculative periods and industrial crises, the relations of labor and capital, and others similar in character.

The most striking phenomenon of the nineteenth century was the great industrial progress of the more developed nations; this is best shown in a table taken from Mulhall’s “Industries and Wealth of Nations,” which follows:

Growth of Manufactures in the Nineteenth Century. 30

==================================================== | Millions of Dollars. Countries |----------------------------------- | 1820 | 1840 | 1860 | 1894 ----------------+--------+--------+--------+-------- United Kingdom | 1,411 | 1,883 | 2,808 | 4,263 France | 1,168 | 1,606 | 2,092 | 2,900 Germany | 900 | 1,484 | 1,995 | 3,357 Austria | 511 | 852 | 1,129 | 1,596 Other States | 1,654 | 2,516 | 3,455 | 5,236 Europe | 5,644 | 8,341 | 11,479 | 17,352 United States | 268 | 467 | 1,907 | 9,498 ----------------+--------+--------+--------+-------- Total | 5,912 | 8,808 | 13,386 | 26,850 ----------------------------------------------------

Extraordinary as has been this universal growth, the development of manufactures in the United States has been still more marvelous, both absolutely and in relation to other branches of industry Between 1850 and 1900 the population and the products of agriculture both trebled; but the value of manufactured products increased twelvefold and that of capital invested in manufactures nineteenfold The United States, though politically younger than the countries of Europe, is industrially one of the most advanced The application of labor-saving machinery and of improved and economical methods of production and distribution has probably proceeded further here than in any other place Nowhere can we study to better advantage, therefore, than in America the problems that have grown out of this advanced capitalism.