The Online Library of Liberty

A project of Liberty Fund, Inc.

• Preface
• Part I: Introductory—some Principles
• Part I, Chapter I: Duties, Imports, Prices
• Part I, Chapter II: Protection to Young Industries
• Part I, Chapter III: The Principle of Comparative Advantage
• Part II: Sugar
• Part Ii, Chapter IV: Introductory—louisiana
• Part Ii, Chapter V: Hawaii
• Part Ii, Chapter VI: Porto Rico; the Phillipines; Cuba
• Part Ii, Chapter VII: Beet Sugar
• Part Ii, Chapter VIII: Refined Sugar and the Sugar Trust
• Part III: Iron and Steel
• Part Iii, Chapter IX: A Survey of Growth
• Part Iii, Chapter X: How Far Growth Was Due to Protection
• Part Iii, Chapter XI: Copper
• Part Iii, Chapter XII: Protection and Combinations. Steel Rails; Tin Plate
• Part Iii, Chapter XIII: Imports and Exports—dumping
• Part IV: Textiles
• Part Iv, Chapter XIV: The Growth of the American Silk Manufacture
• Part Iv, Chapter XV: The Silk Manufacture, Continued. European and American Conditions; Imports and Domestic Production
• Part Iv, Chapter XVI: The Silk Manufacture—some Conclusions
• Part Iv, Chapter XVII: The Cotton Manufacture. Progress of the Domestic Industry
• Part Iv, Chapter XVIII: The Cotton Manufacture, Continued. Contrasts With Other Countries; the Influence of the Tariff
• Part Iv, Chapter XIX: Wool
• Part Iv, Chapter XX: The Woolen Manufacture. the Compensating System; Woolens and Worsteds
• Part Iv, Chapter XXI: The Woolen Manufacture, (continued). Characteristics of the American Industry

Part IV

TEXTILES

Part IV, Chapter XIV

The Growth of the American Silk Manufacture

The silk manufacture is in a special sense the child of protection. Hazardous though it always is to undertake to say what would have happened if the conditions had been different, one may venture in this case to assert that if high duties had not been imposed during the civil war there would have been no considerable silk industry in the United States. The situation is different with the other textile manufactures. Cotton and woolen fabrics were made on a large scale under the moderate duties that prevailed for many years before the war; the régime of high duties during the last half-century has simply served to increase the volume and extend the range of industries already established. But the very existence of the silk manufacture is due to protection. To this general statement, it is true, there are some minor exceptions. Certain branches of the industry did develop before the war,—constituting exceptions which, as will appear presently, are instructive. But those parts of the industry which have come to be by far the most important, owe their rise to the tariff.

For other reasons than its origin under the influence of protection the history of the silk manufacture is significant. The industry not only was quite new in the United States, but soon developed along lines of its own. So great has been the transformation in some branches as to suggest at least the possibility of successful application of protection to young industries. Yet a parallel development on the Continent of Europe indicates that forces not peculiar to the United States, but of international scope, have been at work. Something like a belated industrial revolution took place in the industry, greatly altering the relations of the different producing countries. Further, the character and sources of supply for the raw material are unusual. And, finally, less attention has been given in our controversies to this industry than to others stimulated by protection. In many ways the case invites study.

During the civil war, the duty on manufactures of silk, which had before been moderate (25 per cent under the act of 1846, 19 per cent under that of 1857) was raised, and toward the close of the war, in 1864, was fixed at 60 per cent. The increase was solely for revenue, with no trace of that admixture of protectionism which was a factor in so much of the tariff legislation of the period. The 60 per cent rate remained in effect until 1883. In the general revision of that year, one of 50 per cent was substituted. The simple method of imposing a general ad valorem duty was retained (with a minor exception, presently to be noted) until 1897.

It is not to be doubted that undervaluation, largely fraudulent, was prevalent throughout this period, and that it caused the effective duty and the rate of protection to be less high than the figure on the statute book would indicate. As the domestic industry developed, those interested in it protested more and more strongly against this state of things and urged the adoption of specific duties. The extraordinary variety of silk fabrics, and the difficulty of grading them by external marks or physical qualities, were long thought to raise insuperable obstacles in the way of specific duties. Yet in 1897 specific rates were devised and applied; anticipated already in 1890 by rates of this kind on one special class of silks,—velvets and other pile fabrics. The elaborate system of specific duties applied in 1897, though advocated chiefly on the ground of checking fraudulent undervaluation, in fact served also the purpose of raising the duties on many goods, and even of making them quite prohibitory on the cheaper grades. A dragnet or stoppage clause was retained by which in any case silks were to be dutiable at a rate at least as high as 50 per cent; and the more expensive grades of silks, on which the specific duties might have been relatively low (such is always the tendency under specific duties), continued to be assessed for duty under this clause. No change in the system was made by the tariff act of 1909; the rates of 1897 were retained; the only change of some moment was that the dragnet or minimum rate became 45 per cent, not 50 per cent.

The revision of 1913 brought less incisive changes in the silk schedule than in almost any other part of the protective system. It is true that the specific duties were entirely swept away. None but ad valorem duties remained. But these ad valorem duties were left comparatively high,—45 per cent on most fabrics, 5o per cent on velvets and plushes. These were almost the identical rates previously in force on the more expensive goods. On the cheaper goods, the reduction seemed considerable, yet in fact signified little. As will appear in the course of the discussion, the previous specific duties had been extreme,—above the point of prohibition. The change to the ad valorem rate left the tariff so high, even after allowance for probable undervaluation, as still to keep out all imports of the ordinary grades of silks.

Summing up, we may say that the silk manufacture during the half-century that followed the civil war was sheltered by a high barrier on imports. In this case, as in others, duties originally imposed for emergency revenue purposes became protectionist in their effect, and then, with the accentuation and systematization of the protective system, were made more rigorous. Even the supposedly radical revision of 1913 left them little abated.

The growth of the silk industry under this long-maintained régime of high protection was not less extraordinary than that of the iron industry. It doubled in volume almost every decade. The appended tabular statement summarizes the story.1 The gross value of the domestic silk manufactures increased from an insignificant amount (and almost all of that attributable to a single specialty) in 1860, to nearly 200 millions of dollars worth in 1910. It is true that these large figures (given in the first column) need correction. The methods of the industry have undergone a change similar to that in other textile industries, in the direction of specialization. Separate establishments now carry on some processes (e.g., spinning or "throwing") which formerly were combined with other processes (e.g., weaving) in one and the same establishment. Where yarn is made in one mill, and reckoned as its product, and then is used in another mill which reckons the whole value of the woven fabric as its product, the same "product" is counted twice; and where a change in the direction of specialization takes place between census periods, there is obviously an exaggeration of the total output in the later period, and a deceptive appearance of rapid growth. Allowance for this sort of exaggeration is made in the second column of the table, in which the corrected product is stated; the census authorities having excluded what was counted twice in the later periods. Even so, the figures show a growth from nearly nothing to 172 millions by 1910. Quite a different qualification is made in the third column, where allowance is made also for the raw material used (chiefly the imported raw silk). The value of the expensive raw material accounts for about half the value of the finished silks; what may be called the separate product of American labor and capital is indicated by the third series.

In striking contrast with the rapid and unceasing increase of the domestic product is the virtually stationary volume of the imports. The figure of imports for 1910 is precisely the same (33 millions) as that for 1860, half a century before. In the intervening years the imports sometimes were considerably larger than this, sometimes considerably smaller; they increased in times of activity, diminished in times of depression. For the fifty years as a whole, they show no tendency to rise or fall, fluctuating above or below the same general level. The constituent elements in the imports have indeed changed very much, as will appear presently; but their volume has been virtually constant.

It follows that the imports have formed a steadily decreasing proportion in the total of silks used in the country. The domestic product has formed a larger and larger proportion of the whole. Comparison of the domestic and foreign quotas is not so simple as might appear. The figures to be considered are those in columns 2 and 4; since the imports, as well as the domestic product, are reckoned in these two on the same plan. But the imports, when they reach the purchaser, are weighted with the duties; and in reckoning the share of imports and domestic products in the country's consumption of silk goods, the stated imports must be swelled by the duties. Allowance must also be made for the fact that the imports have been much undervalued at the custom house; the stated value of the imports formed the basis for the imposition of ad valorem duties, but sales to purchasers were often on a different and higher basis. For the purposes of a rough comparison (quite sufficient for the present purpose) it will serve to add 60 per cent to the stated imports. So enlarged, the imports will be found to be more than triple the domestic product in 1870, about one and a half times that product in 1880, actually less in amount for the first time in 1890, and then a smaller and smaller proportion, until by 1910 they are but 30 per cent.2 In 1860 almost all the silk goods used in the country, and quite all of the woven fabrics, were imported; whereas during the last twenty years over two-thirds of the silk goods of all kinds have been supplied by the domestic manufacturers.

So much by way of general survey. We may proceed now to a more detailed consideration of the different branches of the industry.

Raw silk has always been admitted free. In this respect the silk manufacture developed under conditions essentially different from those of the wool manufacture. The application of the protective policy to wool brought in the latter case a complication from which the silk industry was exempt.

This freedom as regards the raw material was not always uncontested. From sundry quarters, at various times, there were suggestions for a duty on raw silk. Both material and finished product have long had a certain fascination: both have been regarded by protectionists as peculiarly enriching, and the acquisition of the industries as peculiarly desirable. For the earlier period (before the industrial revolution of the eighteenth century) this attitude no doubt was explicable on the ground that the high value of silk fabrics for small bulk brought them readily within the range of international dealings, and so made it feasible to apply to them the mercantilist policy. Yet for the earlier periods, and also for the later stage which set in with the industrial revolution, the predilection for a silk industry has probably been intensified by the supposed preciousness of the product: very much as a gold mine is thought to yield greater riches than a coal mine. During our colonial times there were repeated attempts to foster the cultivation of the mulberry tree, the culture of silk cocoons, the reeling of raw silk; all this being favored, among other reasons, because the industry was one of the then cherished household occupations. In the nineteenth century, there were recurring efforts to promote mulberry growing and silk raising. One curious episode was the furore in the decade 1830-40 concerning a tree, the morus multicaulis, which was supposed to be as well adapted for the silk worm as the white mulberry (the "true" mulberry), and which gave rise to a speculative mania comparable to the famed tulip mania.3

In 1890, at the time when the McKinley tariff bill stimulated the extension of protection in every direction, there was a movement for a duty on raw silk. It was opposed, of course, by the manufacturers; and, a duty being hopeless, a bounty of one dollar a pound was actually provided for in the bill as passed by the House, but was eventually dropped by the Senate. In later years, our Department of Agriculture, ever awake, under the policy so long dominant, to the possibilities of "acquiring" new industries, made experiments with mulberries and raw silk. Eggs and mulberry seedlings were procured from Italy, and manuals of instruction widely distributed. For a while the Department went so far as to buy cocoons from domestic growers (paying for them at current European prices) and caused the filaments to be reeled from the cocoons by its own employees.4 Finally Congress wearied of the fruitless efforts, and in 1908 discontinued the appropriation for them; and the country relapsed into untroubled acquiescence with the importation of every ounce of raw silk used by the domestic manufacturers.

The explanation of this complete failure to develop the production of raw silk is to be found in the principle of comparative advantage. The usual statement, especially by protectionists, is that the cheapness of foreign labor makes competition impossible with the countries whence the silk is imported. Here, as in other cases, this statement means simply that we do not find here an advantageous way of applying our labor.

The production of raw silk divides itself into two parts: raising the cocoons, and reeling the filament from them. There is no climatic obstacle to growing mulberry trees in the United States or to raising the cocoons. But the tending of the larvae, worms, and cocoons requires minute attention and wearisome labor. No use of labor-saving implements is feasible. It is carried on, in China, Japan, Italy, in rural districts, largely as an incident to other agricultural occupations.5 Even more clearly than in the case of the sugar beet,6 a comparative advantage is lacking. In other agricultural work, the American farmer uses agricultural machinery and those labor-saving devices which are adapted to extensive cultivation. The impracticability of applying them to cocoon raising means that here there is, not indeed a disadvantage, but complete lack of any special advantage.

This is still more the case with reeling. Raw silk differs from all other textile fibres in the length of the fibre unit. From the cocoon a long delicate filament is unwound; a number of filaments are combined into the thread, still delicate, which forms the raw silk of commerce. It comes on the market in a skein very like that of the loose-spun wool or "worsted" which women use for their knitting. The unwinding and combining of the filaments take place in filatures, with use of a reel on which is wound the thread or strand of raw silk. Filatures were long very small household affairs,—adjuncts to peasant agriculture; but in modern times have come to be, in Japan and in those European countries (Italy, for example) which produce raw silk, establishments of some size, with power for moving the reels. But whether small or of comparatively large size, they depend on deft handiwork and meticulous labor. The filament needs to be watched every instant. "In the treatment of the cocoons, the formation of the thread,—in short in the spinning7 and treatment of the silk itself,—no noteworthy change has been wrought, in spite of incessant study.... The winding of the single thread from the cocoon demands such a delicacy of treatment that so far only the manual dexterity and intelligence of the women reelers has (sic) been able to cope with it. All mechanical processes proposed in substitution of hand labor have failed."8

It is a striking and curious fact that silk reels have been greatly improved by American ingenuity, yet are not used by Americans at all. A type of reel devised by an American mechanic, a foreman in an American silk mill, has made its way all over the world.9 Yet no reeling is done in the United States. It remains essentially a handicraft operation, precisely of the kind to which American labor does not find it worth while to turn.

It may be noted at this point that the situation is quite different with another grade of silk,—spun silk. "Raw silk" proper is that just described,—the continuous thread reeled from the interior of the cocoon. The exterior hull of the cocoon, however, has broken fibres; in the innermost part of the cocoon, the fibre becomes so attenuated as not to be unwound profitably; and there are also pierced and imperfect cocoons whose filaments are broken. These "waste" fibres, as well as some other "wastes," are used in making spun silk. "In working spun silk there is no effort to use the continuous thread as spun from the silk worm within the cocoon; but the cocoon is treated as a bundle of fibres and spun the same as cotton and wool by special textile machinery, adapted to the characteristics of the particular fibre." Spun silk is more amenable to treatment by fast-moving machinery than reeled silk; and this circumstance, has had important consequences in the development and geographical distribution of the spun silk branch of the manufacture.

Raw silk proper, however, differs essentially from the other textile fibres. The filament from the cocoon, though continuous, is not even. Nature is always irregular, and the silk worm's thread has not the mechanical regularity of man's product. For this reason the silk manufacture retained its ancient characteristics for a century after the other textile industries had been transformed. Raw silk was not so readily amenable to the machine processes. The very fact that cotton and wool have short fibres, and that the fibres must be separated and evened by carding, then twisted together methodically by roving and spinning, makes these materials a ready prey to the machine. The tenuous and comparatively uneven silk fibre long resisted. The main processes in the manipulation of raw silk,—"throwing" (the process corresponding to spinning) and weaving,—remained handicraft and household industries long after power-driven machinery had conquered in the cotton and woolen industries.

For this reason, the industry had no hopeful prospect when introduced into the United States under the stimulus of the war duties. The peculiar qualities of the raw material seemed to make it ill adapted to the prevailing manufacturing methods. Apparently it was likely to be for an indefinitely long period at a comparative disadvantage, and therefore to remain in unceasing dependence on protection. During the early stages of the industry attention was repeatedly called to the special difficulties of the industry by a highly competent observer, Mr. W. C. Wyckoff, the first secretary of the Silk Association of America. The raw material, he pointed out, is uneven and irregular. It is likely to break in the course of weaving, indeed in any of the processes. "A loom may have to be suddenly stopped. It is always the same story,—breakage, stoppage, waste of time (labor) and material. The loss of time when machinery, running at high speed, has to be stopped, becomes a serious matter, from the mere fact that there is no production during the stoppage. 'It costs,' said a manufacturer, 'fully five times as much to tie a knot in this country as in France.' " And again: "it is necessary to have all the threads of warp and woof as perfect as possible, so that there shall be no stoppage of the power loom." In Europe, "the silk manufacturer is a mere contractor. He buys the tram and organzine—i.e., filling and warp—which have been made in a separate factory. He sends this material to another establishment, a dye-house. Finally he puts it out to weavers who have looms in their own homes."10 This is the familiar domestic system. The American manufacturer, however, was compelled by the social and industrial conditions surrounding him to try to substitute for it concentration in the factory, power-driven machinery, wage labor; yet the nature of the raw material imposed obstacles to carrying out the change with advantage.

Commenting on this situation, I remarked in 1889, in a passage which the subsequent course of events has not contradicted:11 "A struggle seems to be going on in the silk industry between large factories and machinery, on the one hand, and household industry and manual labor, on the other.... The nature of the silk fibre is an obstacle to that extensive use of labor-saving machinery which is characteristic of American industry. The field is not promising for the ingenuity and inventiveness which give American manufactures their distinctive advantages.... It may indeed happen that Yankee ingenuity will revolutionize the conditions of this industry. The attempts of the American manufacturers to get a more even supply of raw silk, and to apply machinery to its conversion into silk goods, may prove successful, if not throughout the industry, at least in many parts of it.... Should there continue in the future a progress such as has undoubtedly been made in recent years [1880-1888] in the American silk manufacture, it may happen in the end that most sorts of silks will be made here as cheaply as abroad, and that the abolition of protective duties would affect the silk manufacture as little as it would now affect the bulk of the cotton manufacture. If this proves to be the case, we shall have an example, and a striking one, of the successful application of protection to young industries."

These extracts anticipate in part what is to come; but they serve to show what are the special problems in the history of the American silk industry. The nature of these problems will appear more in detail as we proceed to consider step by step the several stages in the manufacturing operations.

After reeling, the next process is throwing. The long filaments of the raw silk,—continuous threads from beginning to end of the skein,—are doubled and tripled, and so given strength and consistency for enabling them to be used in weaving. Thrown silk, the material turned over to the loom, is sometimes called yarn, since it corresponds to cotton or woolen yarn; it is especially so called by Americans in very recent times, because the power-driven machine has succeeded in taking possession of silk throwing. But the term silk yarn is more commonly used to denote the spun silk which is really spun from the shorter fibres of the cocoon. Thrown silk is quite a different thread, and is generally known by names of its own. That used for weft, which is soft and comparatively open, is called "tram"; that used for warp, more closely twisted, is called organzine.

Silk throwing continued to be a handicraft operation until the latter part of the nineteenth century; just as carding and spinning had so remained until the corresponding part of the eighteenth century. It was carried on in the throwsters' homes, often as an accessory to agriculture or other occupations. Two generations ago the silk throwster was as important and characteristic a figure for this industry as the hand loom weaver was a century ago for the other textile industries. Like the hand loom weaver, he has been displaced by machinery. Not indeed entirely; for in some parts of Europe, and almost throughout the Orient, the silk throwster, like the silk weaver on hand looms, still holds a considerable place. But in the countries of advanced industrial methods, he has quite disappeared; more particularly in the United States and in England.12

The significant fact for our inquiry is that the American industry has gone ahead independently, not following the lead of other countries. Newly invented throwing machines came on the market in the United States during the decade 1880-0,—all in the direction of automatic action and great speed. As early as 1890 throwing spindles were operated at a speed no less than that of cotton spindles, 10,000 revolutions per minute; ten years later, by 1900, the number of revolutions had been raised to 11,000 and 12,000. A natural consequence of the perfection of the machines was a change in the character of the persons employed to tend them. The silk throwsters had been men. The new throwing machines were operated largely by women and children. The change had consequences similar to other historic transitions in textile manufacturing,—from hand loom weaving to power loom weaving, from the power loom to the automatic loom, from mule spinning to ring spinning.13 In its social aspects, it opened grave questions. But its cheapening effect was great and rapid. The cost of converting raw silk into tram and organzine was lowered to one-quarter and one-fifth of what it had been a generation before.14

Similar changes took place in weaving. Silk woven fabrics are divided into two classes, sharply separated as regards manufacture and commercial dealings: dress silks (broad goods) and ribbons (narrow goods). Of these, the latter, the ribbon branch of the industry, has proved the more amenable to the machine processes. The first ribbon looms in the United States were of German or Swiss pattern. In 1889 a high-speed automatic ribbon loom was invented in this country.15 It proved the beginning in a series of improvements in ribbon weaving. Double-deck looms succeeded single-deck looms. The "weaver" became, as he (or she) inevitably does with a perfected power loom, a mere machine watcher and tender, whose duty is mainly to keep up the supply of spools and tie broken threads. And the same sort of social consequence ensued as in throwing: in larger and larger proportion there was resort to the labor of women.

Similar changes took place in the manufacture of broad goods. Here too, the first looms, brought over from Europe, were soon superseded by looms of American make. As is known to every one conversant with the history of the textile industries of the United States, weaving machinery was from the outset and has remained a peculiarly inviting and fertile field for American ingenuity; and the advances in silk weaving have apparently been no less marked than in other industries. There have not been, indeed, such striking triumphs as those of the automatic loom in the cotton manufacture.16 But silk looms have been steadily improved in the direction of lightness, simplicity, swiftness of running, steadiness of product. The stage was reached before long where the weaver could be called to tend to more than one loom; a change which, as ever, caused rebellion among the operators, who nevertheless in the end had to accept the inevitable consequences of the march of invention.17 The rate of progress seems to have been especially rapid for broad looms in the opening years of the present century. Then an exceptional era of general activity and prosperity led to a sharply increased demand for silks,—these being among the articles which are peculiarly subject to fluctuations in demand between good times and bad times. It may be, also, that the high specific duties levied by the tariff act of 1897 added to the demands on the American silk makers, since they served to shut out effectually foreign competition in the grades which were chiefly made at home. The rate of advance hence was extraordinarily rapid in quantity of output; while invention improved both the efficiency of the machinery and the quality of the products.

No change in the silk industry of the United States, nay of any other country or any other industry, has been more striking than the rapid and complete displacement of hand looms. During the decade after the civil war, hand looms and their weavers were brought over from Europe. But the power loom appeared as a rival at once, and the hand loom rapidly disappeared. The contrast with other countries, as will presently appear, is marked: elsewhere the hand loom maintains a place almost equal to that of the power loom. The figures given below tell their own tale for the United States.18 The difference is strictly analogous to that in other industries, and the explanation is the same. In a country where labor is made effective and wages are kept high through the wide-spread use of labor-saving devices, a strictly handicraft occupation succumbs because it suffers under a comparative disadvantage. The power loom offers at least the chance of a comparative advantage on a par with the rest of the country's occupations.

It has already been pointed out that a natural consequence of these technical advances was a greater employment of women and children. This in turn affected the geographical distribution of the American manufacture. Being able to use in greater degree the labor of women and children, the industry has tended to move to the regions where such labor is easily got and the laws regulating it are loose or loosely enforced. Pennsylvania and New Jersey have the unenviable distinction of having become, partly for this reason, the important silk manufacturing states of the Union. In New Jersey, just one-half (49.6 per cent) of the employees in silk establishments are women; in Pennsylvania, nearly two-thirds (67.8 per cent). In New Jersey, the city of Paterson has long been a "silk town," and especially a ribbon center. Here as elsewhere, newly arrived immigrants, eager to swell the family incomes, send their women and children to the mills, where they are able to tend the quasi-automatic machines. In Pennsylvania, oddly enough, the anthracite region formed a favorable field for the silk manufacturers. The miners were mainly foreign born, recently arrived; they were more than willing to send women and children to the mills; labor laws were lax, the conditions of enforcement almost farcical. There could be no better illustration of the need of curbing and bridling the industrial forces of the time. The machine immensely increases the effectiveness of labor; but legislation and a strong conserving standard among the laborers are needed to prevent it from contributing to evil conditions. And yet, so far as the bare matter of advantage in production is under consideration, the case has but one side: perfected machinery, that needs to be tended only by a slip of a girl, means effectiveness and cheapness, and the country in which the greater mechanical perfection is reached has a comparative advantage in the industries where it is found.19

Still another consequence of the progress of invention, in quite a different direction, has been a change in the sources of supply for raw silk. Japan has largely supplanted China; and this under the influence chiefly of American demand and American suggestions. The irregularity of the raw silk fibre is, to repeat, an obstacle to its manipulation by power-driven machinery. Spindles and looms can be adjusted to the most tenuous threads, so long as they are homogeneous. No doubt the finer grades of goods always remain less easily subjected to rapid machinery; but as long as the material is even, the possibilities of delicate balance and adjustment are astonishing. Irregularities, however, always mean breakage, stoppage, loss of time, incomplete utilization of plant; they mean, also, greater need of specialized skill on the part of the individual operative. Hence the American manufacturers sought to secure supplies of uniform raw silk. The Chinese, who had long been the main producers and exporters, proved unwilling or unable to supply such raw silk as the Americans wanted; partly perhaps from pervading stolid conservatism, largely because of the impossibility, under existing political and social conditions, of spreading and enforcing the needed instructions. The Japanese rose to the opportunity. There is no more characteristic illustration of the industrial and intellectual uprising of that remarkable people,—the coöperation of a guiding oligarchy with a responsive mass. Instructions on the proper methods of reeling silk were spread through the country by the government and by the leading export firms. Model filatures for reeling were established. The Japanese prepared raw silk such as the American manufacturers could more advantageously use. Their country took the place of China as the main source of supply. Raw silk became a great article of export from Japan, and American supplies came preponderantly from that country.20

Part IV, Chapter XV

The Silk Manufacture, continued. European and American Conditions; Imports and Domestic Production

The principle of which so much has been made in the preceding chapter,—that of comparative advantage,—calls for a consideration not of the American silk industry only, but of that in competing countries as well. And the change from handicraft to machinery did not take place in the United States alone. A belated industrial revolution set in, affecting all the producing countries. But it affected them in different degrees, and with different results for the various branches of the industry. It is instructive to compare the course of development in the several countries.21

A general indication of the situation is got by comparing the use of hand looms and power looms. The following figures are given for the year 1900 by a competent authority.22

It appears that in each of those countries a large number of hand looms were still in use as late as 1900. The proportion in Germany, or at least in the Crefeld district, was less than in France, Switzerland, Italy; but everywhere hand looms persisted. The contrast is striking with the complete disappearance of hand looms in the United States.

In the Crefeld district of Germany, the most important and highly organized silk center of that country, the transition from household industry to the factory system set in during the last quarter of the nineteenth century. The power loom came into use in the decade 1880-90, and was increasingly used after 1890. It seems to have been perfected earliest for velvet ribbons. An invention of 1887 gave a great impetus to the velvet ribbon industry of the district, and by the beginning of the present century hand looms for these ribbons had almost entirely disappeared. For silks also the power loom made its way rapidly after 1885. Yet hand looms continued to be used for silks, both broad and narrow. Some specialties and goods of unusual pattern, of which but a small quantity of any one kind can be marketed, are still made to most advantage on hand looms. Heavy silks, such as wear long and well, are also so made. But the lighter, less durable fabrics, often made with an admixture of cotton or artificial silk, have come within the domain of the power-driven machine. These differences, as will presently be explained, are of no little significance for the problems of international trade and for the rivalry between the Continent and the United States.23

Somewhat similar to Germany is Switzerland, where Basel and Zurich are important silk manufacturing centers. That part of the German industry which is near the Swiss border, toward the south, belongs in reality to the latter country, being mainly conducted by enterprising Switzers who have transferred their establishments across the border because of the German tariff. Basel is a center chiefly for ribbons, Zurich for broad goods. It is in the latter that the machine seems to have conquered most decisively. In general, it is the Swiss and Germans who are the machine-using people of the Continent; and accordingly the power loom and all that goes with it have been introduced furthest in those two countries. But in Switzerland, as in Germany, household production maintains a place. In Basel the ribbon "manufacturers" are largely contractors, who supply material to scattered household weavers and buy from them the ribbons or other woven fabrics. The Swiss peasants, and especially the peasant women, continue to ply the loom during the long winters. This domestic industry holds its own tenaciously. As late as 1905 the number of power looms in Switzerland exceeded but little the number of hand looms.24

In France, which had so long been the leading silk manufacturing country, the industry clings even more to the old ways. The number of hand looms is about double the number of power looms; the domestic weaver holds his place. French silks, especially those made for the export trade, are of high quality. They depend for their sustained superiority on excellence of pattern and perfection of make. The cheap everyday silks, turned out in great quantities of one pattern, are characteristic of the machine industry of other countries, especially of the United States. Limited patterns and sterling quality, catering to the well-to-do and the rich, are the typical products of the French industry; and these are precisely the traditional characteristics of the silk manufacture as it was before the machine began to invade it.25

An interesting phase of the domestic industry in all the countries of the Continent is the application of electric power to the household loom; or rather, the introduction into domestic industry of a new type of loom driven by electric power. The possibility of dividing and transmitting the electric current makes it feasible to secure, in some degree at least, the advantages of power without the concentration and the large-scale operation which are the inevitable concomitants of the direct use of steam. Electricity has been parcelled out to small users in various branches of industry,—cutlery and other metal trades, and various branches of the textile industries. In silk weaving it has been thus utilized in Switzerland, in Germany, in France. The water power of Switzerland and her winter-bound yet industrious peasantry have led to an extended use of electric household looms, the wires transmitting the water-generated power to the deepest recesses of the mountain valleys.26 Observers differ on the potentialities of this movement. To some it seems to promise the salvation of the domestic industry, and its maintenance for an indefinite time,—nay, even a reaction against the factory. By others it is thought but a temporary phase, only delaying for a time the inevitable universalization of concentrated large-scale production. Doubtless the factory will prevail eventually in most industries; but in the silk manufacture the nature of the raw material and the peculiarities of the market seem to give unusual opportunities to household industry fortified by this utilization of electric power.

A peculiar situation has developed in England. The old silk industry has disappeared; but a new one has arisen in its place. Both the disappearance of the old and the emergence of the new are instructive.

The silk manufacture was introduced into England in the sixteenth and seventeenth centuries by Flemish and Huguenot refugees. Carried on as a typical "domestic" industry,27 it was especially favored by the protective legislation of the succeeding period. Even after the decisive blow had been dealt the protective system through the abolition of the corn laws in 1846, a considerable protecting duty was retained on silks. Not until the Franco-British commercial treaty of 1860 were they admitted free into Great Britain; this being the very last step in carrying into effect the policy of free trade.

The British silk manufacture, as it stood in 1860 succumbed under the new régime. It had been conducted by the same methods as when first introduced from France. It was a handicraft industry, and could not hold its own against the competition of the continental products of the same industrial type. An almost romantic part of it was carried on in the Spitalfields district of London, where the Huguenots had first gathered and where the industry had long been carried on by them and their descendants. The Spitalfields industry was decadent even before 1860; it had been handicapped by the soot and clouds of London and weakened by the drifting of its workpeople to other industries. After that fatal date, only a few hand loom weavers remained; and these still produce a few specialties for West End retailers,—a contrast to the 50,000 persons once employed in the district.28 Other places,—Coventry, Macclesfield, Manchester,—also had carried on a considerable silk industry; since 1860 it has shrunk or disappeared. Silk throwing, formerly a trade of importance, has been entirely given up. Most of the hand looms, once thousands in number, have gone. Macclesfield in the old days had 6,000 or 8,000 hand looms; perhaps a 1,000 such remain.29 In other silk centers of former days, a small industry, in odds and ends for local sales, continues to hold a place.30 But the remnant is of no considerable industrial importance, and it is dwindling.

A silk industry, however, still remains in England, or rather a congeries of industries. Some are adaptations or growths from the old. Certain specialties continue to be made, more or less after the old methods: rich brocades, heavy damasks for furniture and decorative purposes. Large hand looms, run by skilled men, continue to be used for these goods. Irish poplins also (made of silk and wool mixed) are made on hand looms, and hold their own.31 But far more important is an industry quite new: the manufacture of spun silk yarns and fabrics. While the making of thrown silk has disappeared from England,—whatever thrown silk the English still use is imported,—that of spun silks flourishes. As has already been explained, spun silk is made from "waste" silk. As Americans in general do best in weaving, so the English do best in spinning; their special aptitude for this in all textile industries32 being due in part to climatic advantages, but in large part to causes less easy of discernment. The success of the English in spinning silk is in striking contrast with their abandonment of silk throwing. New machinery has been devised; a great industry has grown up. And not only does the spinning industry hold its own within the country, but exports of silk yarns take place to the Continent and the United States. The case is one among those, puzzling at first, where the same commodity moves two ways, being both imported and exported. The explanation clearly is that the goods which pass in these cross-currents are of different grades and qualities. It is the finest counts of silk yarns that are exported from England, just as are the finest counts of cotton yarns. Thrown silk meanwhile is imported into England. A few woven goods, especially goods of mixed materials, are again exported; so that, while the imports of silk goods into England have greatly increased, the exports of silks have on the whole held their own.33

From the protectionist point of view, the decline of the older silk manufacture in England is a clear national misfortune. An industry has gone; so much employment has been lost. In the evidence gathered by the Chamberlain Tariff Commission, this loss was pointed to as a convincing illustration of the harm caused by the free trade policy. The real question, however, is whether anything was lost which it would have been worth while to retain. England long occupied, in relation to the countries of the Continent, a position similar to that which the United States has occupied in relation to all Europe. She was the country of advanced industry and of general economic effectiveness, and therefore the country of higher wages. Her superiority is not so marked now as it was half a century ago. In comparison with some countries, notably Germany, it seems to be in process of ceasing; but certainly it persisted through the greater part of the period here under review. Silk throwing and silk weaving under the old methods were not industries in which the English excelled; they did excel in other industries; and labor and capital turned to the others, when no longer kept by legislative stimulus in those less adapted to the country's genius. Even before 1860 the older branches of silk manufacturing were declining. Under free trade, they went by the board. Part of the labor formerly occupied in them was turned to the new industry which has sprung up, notably that in spun silk yarns,—an industry based on the traditional excellencies of the British: specialization, effective use of good machinery, sterling quality in the product. But probably the greater part went not to those remaining specialties of the same industry, but to other industries. Thus Coventry, formerly a center for silks and expecially for silk ribbons, is now one for motors and bicycles, and is more prosperous than it was under the old régime. There has been not the net loss which the protectionist bemoans, but an adjustment to new conditions which the free trader may reasonably claim to be advantageous.

Turning now to a comparison between the European and the American silk industries, we find striking resemblances and yet differences equally striking: in some respects a similar course of development, in others a very different one.

An instructive situation is to be found in the manufacture of sewing silk. This is the one branch which is really old in the United States. It goes back to the first half of the nineteenth century. The transition from household industry to machine and factory production here began as early as 1829. Successive improvements in machinery were made from time to time; a great impetus came in the middle of the century from the invention of the sewing machine and the consequent demand for "machine twist," i.e., strands adapted for use on the sewing machine. By 1850 and 1860 the industry had reached dimensions large for those days. It continued to grow steadily in the modern period, mainly in the same localities and even in the same establishments as before the war.34

The exceptional position of sewing silk almost tells its own tale. Here is a machine product, peculiarly adapted to American methods of production and also to American needs. The machinery for turning it out is of the automatic type; the minimum of direct labor is required; mechanical ingenuity triumphs. This sort of thing the American can do better than any one else, and he goes ahead indifferent to tariff support. And for the same reasons, the English also have here some comparative advantage. Sewing silks have not disappeared from England under the free trade régime. Like spun silk, they hold their own easily against continental competition.

But as regards reeled silks,—which remain the most important of the silk products,—the resemblance between English and American conditions ceases. They are made in very great quantities in the United States; they are very little made in England. They have been protected in the United States, and left quite without tariff support in England. The march of invention and the conquests of the machine have been noteworthy in the United States, and in Germany also; no such advances in this branch of the industry have appeared in England. We have here somewhat different questions regarding the influence of protection or free trade, and the causes of the geographical distribution of the industry.

The branch of the silk manufacture which seems to have undergone the greatest changes and shows the greatest contrasts is that of ribbon making. Vast quantities of ribbons, both silk and velvet,—are made from start to finish by the power-driven machine; turned out in mass production by the factories of Crefeld and Paterson, the two great seats of the industry in Germany and the United States. They are standardized goods, made for a very wide public; often composed in part of other materials (especially cotton); not articles of luxury, except so far as anything used for adornment may be so regarded. In Great Britain, on the other hand, the ribbon manufacture, which played a considerable part in Coventry and elsewhere before the French treaty, is virtually extinct. Barring a few specialties, silk ribbons, like broad silks, are secured chiefly by importation.35

In the United States, again, the domestic manufacture of ribbons has almost complete command of the market. It is true that imports continue; but they are highly specialized imports. A few expensive goods of unusual patterns are alone procured from abroad. They come in partly for sale to the rich and fastidious, partly in order to serve as models for American manufacturers, who still take their cue from the French in matters of fashion. The household loom (hand or electric power), or a slow-moving power loom, can hold its own in making such goods, of which only a small supply can be marketed. Machinery can never be applied to advantage unless large quantities of one particular sort of article are to be produced. But the great mass of standardized ribbons,—by no means necessarily cheap goods, but goods not choice,—are made in the United States for domestic sale. Here the household industry has no place whatever; and such of its special products as continue to be in demand are procured by importation.

A position midway between that of France and that of the United States is held by Germany and Switzerland. Crefeld is the seat of a well-developed machine industry. Yet in the environs of Crefeld, and in Elberfeld, still more in southern Germany, there is much household weaving of silk ribbons. So, in Switzerland, the great ribbon industry of Basel is partly factory, partly household.36 In these two countries, both household and factory industry thus exist side by side. In part, they compete; the victory of the machine is not so assured as in the United States. But in part they tend to turn to the kinds of product to which they are severally adapted. Specialized ribbons, elaborated patterns, expensive grades, tend to be made on the smaller scale, and remain within the domain of household and handicraft production. Fabrics for wide markets and mass consumption are made in the factory.

Velvet ribbons tell a similar tale, though perhaps with a difference of degree in favor of the machine. The older methods of making velvets and pile fabrics were largely displaced in the decade 1880-90, by inventions which seem to have revolutionized this branch of the industry with great rapidity. Here again Crefeld is the seat of a highly developed industry, using much cotton in admixture with silk, and turning out cheaper grades of goods for sale to the masses. It is significant that spun silk ("Schappe") is largely used, both in the United States and in Germany, in the manufacture of these so-called "popular" fabrics. The machinery was early transferred to the United States, and there seems to have been remodelled and improved. In both countries the steady march of invention has enabled a wider range of goods to be turned out by machine processes than was at first thought possible,—figured goods, more varied patterns. Yet in both it is the standardized articles which are chiefly turned out by the machines. In the United States, velvet ribbons, like silk ribbons, are imported only when of special quality or design.37

Essentially the same situation appears with broad silks; but here apparently with less decisive conquest by the machine, and with somewhat greater persistence of methods and products of the handicraft type. The silks of half-a-century ago, made from hand thrown tram or organzine on hand looms, had a character and quality of their own, which the machine made article cannot fully rival. For various kinds of textiles,—woolens and linens, as well as silks,—fabrics of a certain solidity and durability do not seem within the competence of rapidly-driven machinery. The "home-spun" goods may lack the sheen and the even finish of the factory article, but their very uneven quality gives them a certain charm. And they "wear like iron." Such were the silks of older days, when a woman kept her best black dress for life. A piece of silk such as is woven on a hand loom in France, or for that matter a Chinese mandarin's similarly woven coat, is an extraordinary product. No wet or wear harms it; it holds its sober gloss year after year, even decade after decade. Such stuffs, too, have a certain touch and appearance never to be found in the factory article. The new types of factory-made broad silks fit in many ways into the whims of the modern woman and into the fast-changing social conditions. If they are cheap, they are dressy. If they wear out in a brief season, so do the current fashions of color and design. Being made in quantities and at comparatively low cost, they can be purveyed to a large constituency. In all the advanced countries, and especially in the United States, the steady democratization of society has caused dress silks as well as silk ribbons to be in wide and growing demand,—a circumstance which in itself tends to give victory to the machine made product.

Imports of broad silks into the United States continue; but, as in the case of ribbons, for specialized fabrics only. France still maintains her place as the country of excellent and expensive silks. Fabrics of high quality or of unusual design, such as are not made in large quantities for any single piece, still come from the looms of Lyons. The circumstance that dress silks give more scope for individuality and variety than ribbons enables the foreigner, and especially the French manufacturer, to hold his own, notwithstanding high duties, in supplying the American women of expensive tastes (no small constituency) with ornate or "distinctive" fabrics. It would seem, too, that broad silks are less successfully handled by the machine than the narrower goods. One reason is that they need more minute inspection, more careful finishing; and these ancillary operations always involve hand labor and minute attention, even where the more essential work has been relegated to the machine. So far as the American output and the continuing imports are concerned, the situation is again the same: the market is mainly supplied by the machine made domestic article, and only special qualities are imported, usually of the kind still made by handicraft or quasi-handicraft methods.

The continuance of imports for still other kinds of silks and the different relation between importation and domestic production38 for these other goods are explicable on the same principle. Silk laces, for example, are chiefly imported. The situation is the reverse of that just described for ribbons and broad silks: the domestic production is comparatively small. This, too, notwithstanding the fact that the duty on articles of this class was long kept unusually high; it remained 60 per cent even when the ad valorem duty on most silks was reduced (in 1909) to 50 per cent. Silk laces, embroideries, insertions and the like are made by hand, or on hand machines. Some simple patterns are indeed made within the country under the stimulus of the duty; but the tariff, high as it is, has no effect in securing the domestic production of most goods of this class. The comparative disadvantage is too great. A similar case is that of silk trimmings. Dress and cloak trimmings are mainly imported. They are usually made in small quantities and of patterns much varied; consequently it proves not worth while to make them in the United States. And it is characteristic, again, that certain other kinds of silk trimmings, used for upholstery purposes and the like, are made at home, not imported. These are more uniform in pattern, are more in the nature of standardized articles, give an opportunity for machinery and for operations on something approaching large scale: they afford some scope for the American industrial excellencies.

Part IV, Chapter XVI

The Silk Manufacture—Some Conclusions

Summarizing the results of the preceding chapters, we may say that an industry quite new has been brought into being by protection. Imports of great classes of articles have been supplanted almost wholly by domestic products. Not only this; the domestic industry has progressed in technical effectiveness as well. Great advances have been made in its appliances and organization. The further question may now be taken up: has the progress been such as to justify the protectionist policy, not merely on the vulgar mercantilist grounds, but on the more tenable ground that a young industry has been successfully nurtured?

In seeking to answer this question two considerations must be borne in mind. One is that the technical progress in the industry may not have been peculiar to the United States. It may have been,—to some extent beyond doubt it was,—but one phase of a general advance, observable in other countries as well as the United States. So far as the American manufacturers simply adopted those changes which their foreign rivals also were making, they did no more than keep abreast of the times. But to forge ahead is the essential desideratum under the young industries argument. And, second, even if some unusual and unexampled progress was made in the American industry, we must inquire whether it was carried so far as to bring the industry up to the full American standard,—whether it was so great as to enable the industry eventually to hold its own quite without protection. This result has been attained in the iron manufacture; but whether as the consequence of protection or of more general causes, we have found it difficult to determine. If attained at all in the silk manufacture, it is to the protective policy that the result must be fairly credited. Has it been attained to the full? Quite conceivably the technical and industrial improvements, though excelling those in other countries, have brought the industry only to a half-way stage, in which it has risen above the level of effectiveness in rival countries, yet not quite up to the prevailing and dominant level of effectiveness in the United States. It may have reached the stage where it could be maintained with duties lower than those imposed at the outset, yet would succumb to foreign competition if there were no duties at all.

Unfortunately the evidence on these points is far from conclusive; and there is much difficulty in weighing such pertinent evidence as is available. The decisive test of unaided competition with foreign rivals has not been applied; its full application at any early date in the future is beyond the bounds of political probability. On the other hand, the attitude of the American manufacturers,—assumed as a rule without consciousness of its economic significance,—would indicate that no progress whatever had been achieved and that the free traders' goal was not in sight. Not only removal of the duties, but the slightest reduction, is resisted tooth and nail. We are told that the retention of the protective barrier at its original height is indispensable for the very existence of the industry. Every endeavor to lower it is met by declarations that the result must be either a wholesale reduction of operatives' wages or complete abandonment.

Among the things that are clear, however, is the exaggeration in these protests. The case of the protectionists is not so bad as their own spokesmen make it out. As has been already pointed out,39 opposition of this sort is always offered when reduction of protective duties is suggested. It is due partly to a wish to take no chances,—to "play safe"; partly to mere bluff, with the expectation not so much of preventing reduction as of minimizing it; partly to a vague panicky feeling about the terrors of foreign competition, engendered by the frothy declamation on cheap foreign labor. These same manufacturers, if they are questioned in quiet and give answers without the fear of the terrible free trader on them, will admit that they are not averse to "scientific" reductions; that many duties could be lowered without harming them; that some articles they really can probably produce as cheaply as the foreigners, at least under the technical conditions existing for the time being (they will usually make reservations as regards the future); and that they simply do not know just how far the process of reduction or removal could be carried without disturbance. They will virtually say, though not using the phraseology of the economists, that there has been after all some approach to the free traders' goal.

Looking for evidence in other directions, I have sought to find facts of significance as regards technical conditions, and have also questioned persons presumably well informed, yet not biased, concerning the general conditions of the competition between domestic and foreign producers. The results so secured are not without haziness, but are not entirely inconclusive.

As regards technical progress, one fact of significance is the source of supply for the machinery. Is it made within the country, or is it imported? Any industry which steadily imports its machinery from other countries makes thereby a confession of the lack of a comparative advantage. Its appliances are ipso facto no better than those of its competitors. Not only this, but the appliances are likely to be less effectively utilized. Though machinery imported from elsewhere may be operated as skilfully as in the country of origin, the probability is the other way. The same ingenuity and watchfulness that cause it to be devised in one country cause it also to be worked to best advantage there. On the other hand any industry which in this regard has got quite beyond foreign tutelage,—for which the machinery is of domestic design and make,—can claim at the least full equality. And if the machinery is not only made within the country, but is sought for elsewhere, being exported to other countries or copied there, the claim may be for more than equality: there is evidence of superiority. Every student of economic history knows that such a position of superiority was held by England through the greater part of the nineteenth century. Then foreign manufacturers, and especially those of the Continent, secured their machinery from England, or copied English models. Yet they were very slow to get the full results from the British machines; and as fast as they did, the British had progressed a stage further, invented or improved still more, and retained their superiority indefinitely. A similar position of sustained excellence is now held by the Americans in the machine tool trades,40 and in wood working apparatus. How is it with the machinery used in the silk manufacture?

This situation, it appears, is creditable to the American industry,—indicative of real and sustained progress and at least some superiority. As has been noted,41 the first silk working machinery was imported. The industry began by following the familiar paths. But soon it struck out for itself, and quite left behind the old exemplars. For a decade or two, all the more important silk machinery has been made within the country; only certain specialties, presently to be described, have been imported. This cessation of imports of machinery cannot be ascribed merely to the fact that duties on the machinery itself have been high. True, protection has been applied here also; but by no means with the result of keeping out all machinery of every sort. In other textile industries, and especially in the worsted manufacture, much of the machinery continues to be imported notwithstanding the duties.42 The fact that it is otherwise for the silk industry,—that most of the equipment of the American mills is of domestic design and construction,—is significant. Still more significant is the exportation of such equipment; or, if not exportation, the copying of American models in foreign countries. Throwing machinery was invented in the United States, following the principle of cotton spinning machinery for which also American ingenuity had taken the initiative.43 It was developed to a high degree of perfection, and American throwing machines were sent to foreign countries, and introduced into the technical schools of England and Switzerland.44 Ribbon weaving machinery, already mentioned among those improved by Americans, was brought to a high pitch of automatic operation. It too was exported, or manufactured in European countries after American designs.45 So it was with broad looms. For all the textiles, weaving machinery has been a peculiarly fertile field for American invention. Looms for broad goods as well as for ribbons have been brought to an exceptional pitch of mechanical effectiveness. All thought of importing silk looms has ceased; and broad looms, like ribbon looms, have been exported, or manufactured abroad after American models. They have moreover been operated to best effect within the country. The example of the cotton and worsted industries has been followed: the weaver (in reality a loom tender and watcher) has been called on to take care of several looms, and usually of more looms than are allotted to the weaver of similar fabrics in European countries. Both in construction and in operation there is evidence of superiority,—of a comparative advantage.46

It is not inconsistent with this conclusion that certain kinds of machinery are still imported. On the contrary, the continuing partial reliance on foreign makers proves on careful scrutiny to be not inconsistent with a general trend to progress and emancipation. The machinery that continues to be imported is chiefly for finishing purposes. The rapid changes in fashion bring corresponding changes in these devices. An apparatus will be contrived to secure a particular appearance in the fabrics; in a season or two something else comes into fashion; then a new kind of apparatus comes into use. American manufacturers of machinery do not find it worth while to cater to such temporary and sporadic demands. It is a case of "specialties"; and these tend to be imported, whether they are tools or finished products. Such finishing machinery as is continuously used, year after year, is commonly of American make.47

Turn now to another kind of evidence. Repeatedly I have asked persons who buy and sell silks,48 what would happen if there were no duties? Are there any goods which are so cheaply made in the United States that they would in no event be imported? And as regards those which might be imported under free trade, how great is the present difference in price between the European goods and the American? Here, unfortunately, our prohibitive duties so veil the situation that it is difficult to secure satisfactory information. The question, are any silks as cheap in the United States as abroad, is usually answered unhesitatingly: yes, most domestic goods are cheaper than the imported. But a very little further inquiry shows the answer to mean that domestic goods are cheaper than duty-paid foreign goods. And when the question is again asked, with careful explanation of its precise bearing; how if the foreign goods were admitted free of duty?—the person in the business hesitates. This question he is not called on to consider in the ordinary course of his dealings. The purchase of most foreign goods, with the duty added, is quite out of the question and the dealer pays no attention to them or their prices. Certain classes of articles, and some specialties, are indeed so much cheaper abroad that they can be imported, even with payment of the duties; and reference is then made to the imported silks described in the preceding chapter. But how much cheaper are the foreign goods which are never imported? are these cheaper at all? One witness who impressed me as well-informed and judicious stated his belief that ribbons and broad silks are, as a rule, somewhat cheaper abroad; perhaps 25 per cent cheaper? yet as regards most goods admitted this to be but a guess. Some goods, he said, are certainly quite as cheap in the United States; such as spun silks and certain smooth-faced satins. And it is significant that another well-informed observer has publicly expressed the opinion that certain standard silk fabrics are so cheaply made that an export trade in them is among the possibilities of the early future.49

The fact that the makeup of the American purchasing constituency is different from that of foreign countries adds to the difficulties in comparing domestic silks with the imported. A merchant who had been lifelong in the trade remarked to me that it was almost impossible to compare American ribbons with foreign. The former, of the kind made "for our general trade," are of good quality; better than what is made for mass consumption in Europe, though not so choice as what is there made for the rich and is still exported to the United States for our own rich. The different conditions of the American market,—an enormous number of purchasers who are well-to-do, even though not affluent, and who buy a staple article of good quality,—has caused the American manufacturers to turn out great quantities of ribbons that are not expensive, yet not vilely cheap. These are made on very large looms, twenty or twenty-five feet wide,50 which are run faster than are looms in European countries, and enable a great yardage to be turned out at low cost per piece. All the witnesses unite in remarking on the great improvements in American silk goods during the last twenty years, the betterment of the quality and taste, the greater variety of goods, the steady lowering of prices.

On the whole, the conclusion seems warranted that there has been at least some approach to a successful application of protection to young industries. How near the approach is to complete success, how good the prospects for such success, would be difficult to say. But it seems beyond question that great advances have been made in the domestic industry, and that both in its technical appliances and in the adaptation of its products to the demands of the domestic market the characteristic American excellencies have been shown. The peculiarities of the raw material and the long-standing traditions of the industry interposed at the outset obstacles which would almost certainly have prevented ventures into this new field but for the stimulus from protection. Competition among the domestic producers stimulated invention, lowered prices, displaced the foreigners in the most important classes of goods, made the burden of the duties (so far as a burden remained at all) much less than the nominal rates indicated.51

This general conclusion is not weakened by a comparison with the course of development in other countries. The contrast both with England and with Germany and Switzerland is instructive. The older type of silk manufacture succumbed in England under free trade. It was no better adapted to the industrial conditions of England than of the United States; it did not offer the same advantages as other English industries; its disappearance cannot be reasonably a matter for regret. A new silk industry has indeed arisen in England, self-supporting, and profitable alike to the owners and to the country. But it is modest in size, limited in scope, not comparable to the young American giant. Who can say whether a similar great industry would have developed in Great Britain under high protection? Whether innovation, invention, rapid change and improvement, would have been stimulated such as to produce even that success,—still with an uncertain ultimate outcome,—which has been achieved in the United States? Bearing in mind the general character of British industries, their tenacious adherence to ways well-approved, their sustained excellence in the goods of established position, one is led to question whether any prospect existed of eventual gains under protection. The British have doubtless done their best under free trade. On the other hand, the Germans (and apparently the Swiss also) have shown in the silk industry, as elsewhere, a curious juxtaposition of the old industrial régime and the new. The machine has conquered larger and larger sections of the field; yet not to the complete displacement of the handicraft and the household. The quantitative growth of the German silk manufacture has been comparable to that in the United States; the qualitative advance also has been striking. Here also it would be difficult to say how far the protective policy has contributed to the growth and how far that policy can be justified on the ground of having nurtured the industry to independence. The case would seem less strong in Germany than in the United States. The German industry has old roots; the application of protection was less rigorous and stimulating; the machine has had no such sweeping victory. Yet the problem is part of the larger problem how to explain the extraordinary industrial burst which is transforming the German people. Great political and social forces have been at work. The unbiased historian, when he comes in later times to survey with the needed perspective this marvellous change, will probably conclude that the external commercial policy of the nation was among the least of the impelling causes. A conclusion in general similar is likely to be reached for the United States. Here also the share of protection in causing or even modifying the country's general industrial advance will be found much less than the vehemence of the present controversy would imply. But in the particular case we are here considering,—the American silk manufacture,—a dominant influence from the protective system is not to be gainsaid; nor can it be denied that this influence has shown more potentiality of eventual benefit than the free traders are disposed to admit.

Our survey of the silk industry thus raises more questions than it answers. It appears that protection has caused a great industry to spring up; and there are tenable grounds for maintaining that the growth has been qualitative as well as quantitative, and may illustrate the validity of the argument for protection to young industries. But the protection has been so high and so long-continued that it conceals from view many facts of essential significance. We cannot be sure how great has been the progress of the American silk manufacture. An incisive reduction of duties,—much sharper than that made in the tariff act of 1913,—would show whether its progress toward independence has really been as considerable and as promising as it has been inferred to be, from evidence more or less inconclusive, in the preceding pages. A complete abolition of duties, like that which England made in 1860, would alone show whether the eventual end of protection to young industries has been reached,—complete independence, ability to supply the commodities as cheaply as by importation.

Part IV, Chapter XVII

The Cotton Manufacture. Progress of the Domestic Industry

The cotton manufacture has a history very different in some important respects from that of the silk manufacture. It is not a young industry, but an old one. In the United States, as in England, it was the earliest of the textile industries to be reorganized for power-driven machinery, and for the modern factory system; the earliest, indeed, among manufactures of any kind. The epoch-making change was promoted in this case by the even and homogeneous quality of the raw material, as well as by its abundant supply. Cotton was subjected with comparative ease to the machine processes. The same causes which made the industry the first one and the typical one to be affected by the English industrial revolution, facilitated its early growth in the United States. Being preëminently a machine using industry, it was promptly taken up and successfully prosecuted by the Americans, and especially by the New Englanders.

The cotton manufacture grew up,—to recapitulate summarily,—during the period of interrupted foreign trade which preceded the war of 1812 and continued through the war until 1815. It was systematically and successfully developed during the time of the early protective movement which set in with the tariff of 1816; it maintained itself unshaken notwithstanding the gradual reduction of duties carried out in 1833-40 under the provisions of the compromise tariff act of 1833. A marked advance took place in the decade 1840-50, perhaps stimulated by the higher duties of the tariff act of 1842, but at all events not checked by the lower duties of the act of 1846. From 1846 to 1857 cotton goods were subjected to a simple ad valorem duty of 95 per cent, and from 1857 to 1861 to one of but 24 per cent. The industry progressed rapidly and grew to large dimensions during this period of moderate duties. Not only did it grow at home, but it reached out to foreign markets. A considerable export trade developed,—conclusive proof, if not of complete independence from protection in every branch, at least of a stage of development to which the young industries argument could no longer apply.52

Nevertheless the further growth of the industry since the civil war suggests some questions which are related to the arguments for protection to young industries, and some other questions which bear on the more general problems of the international division of labor. To these attention will be given in this present chapter.

The rates of duty on cotton goods since 1860 tell a somewhat curious story. In the tariff act of 1861, enacted before the war, specific duties were substituted for the ad valorem duties of 1846 and 1857; with the declared intention, and in the main probably with the effect, of simply changing the method of levy, not the height of the tariff.53 But the change to the specific system soon led to unexpected consequences. During the war, the price of raw cotton went up to extraordinary figures. The average price for 1864 was over fifty cents a pound in gold; and for more than ten years after the war it continued to be at a high level. Not until the close of the decade 1870-80 did it fall to something like the normal figures (ten to twelve cents a pound) that had prevailed before 1860. The prices of cotton goods went up correspondingly, the rise being, of course, most marked in the heavier and cheaper goods for which the raw material was the largest item in the expenses of production. Naturally the specific duties were raised correspondingly. As the prices of cotton and cotton goods had gone up five-fold, so the duties on the goods went up in a similar ratio. On the cheapest grade of unbleached cloth, for example, the rate in 1861 had been one cent per yard; it became five cents per yard in 1864.

The price of cotton began to decline as soon as the war closed; within a year or two it declined greatly. The duties on cotton goods as raised in 1864 became proportionately heavier. Even the rates fixed in 1861 had been prohibitory on the cheap goods; those of 1864 became very heavy, often prohibitory, on goods of medium and finer grades. A reduction was to have been expected; but it was long postponed, and when finally made, still left a high range of rates. Such was the case, as is well-known to all students of our tariff history, with all the protective duties of the war period: it was their prolonged retention, largely through inertia, that caused the protective system to become so extreme. In the case of cottons, the duties, raised to an especially high pitch in 1864, were not overhauled systematically until the general revision of 1883. Even then they were reduced to figures that left them prohibitory for all the cheaper grades of goods. The duty on the lowest class was left at two and one-half cents a yard, amply sufficient to shut out any possibility of importation; and those on most other grades remained correspondingly high. In the protective tariff acts that came after 1883,—those of 1890, 1897, and 1909,—the same process of cautious reduction of the duties on the cheaper grades was continued. By 1897 the duty on the lowest class had gone down to one cent a yard, precisely the figure of 1861. This was still a "safe" rate. So were the corresponding rates on the lower grades generally,—on yarns of the coarser counts, and on the cheap and medium grades of woven fabrics, whether in the gray, or bleached, or printed and dyed.

Meanwhile, as the protective system was extended and stiffened, another movement appeared. The specific duties were differentiated more and more; and side by side with the reduction of the rates on the lower classes of goods, there went a steady increase in those on the dearer goods. In each successive act the same general scheme (that of 1861) was maintained: the specific duties being adjusted first according to the number of threads per square inch of cloth and then according as the cloth was bleached, dyed, printed. In the acts of 1897 and 1909 still another method of differentiation was added,—the number of square yards to the pound, i.e., the weight per square yard; the fabrics within each class being subjected to higher duties as they were lighter in weight. It is not important for the present discussion to follow the changes in detail: it will suffice to indicate the general trend by noting the maximum duties on the finest fabrics. The maximum was in 1883 6 cents a yard; in 1890 6¾ cents; in 1897, 8 cents; and in 1909, 12½ cents.54 Part and parcel of the same tendency was the increase in the dragnet rate,—the general ad valorem rate on manufactures of cotton not specifically enumerated. The dragnet clause levied, in 1861, a duty of 30 per cent; in 1883, one of 35 per cent; in 1890, 40 per cent; in 1897 and 1909, 45 per cent. The cotton schedule, comparatively simple in 1861, became extremely complex,—so much so that the significance of the rates and gradations of duty was difficult to follow, and the rates became susceptible to the sort of manipulation indicated by the term "joker." The unusually intricate provisions in the cotton schedule of 1909 gave opportunity for veiled and disguised increases of duty which contributed much to the feeling of suspicion and revolt aroused by this last step in the ultra-protectionist series.55

The tariff of 1913, it need hardly be said, made a great breach in this huge and complicated structure. It substituted for the mass of intricate and heavy specific duties a simple system of moderate ad valorem duties. These were graded, ranging from a minimum of 5 per cent to a maximum of 30 per cent. The lowest rate imposed (5 per cent) was on the coarsest yarns; the highest (30 per cent) was on the finest woven fabrics.56 The change in the figures of the statute-book was very great. But, as will appear presently, the effect on the cotton manufacture was in most cases negligible. Only on the finer goods was the reduction of real consequence. At the date of writing these pages (1914) it is still uncertain what will be the effects of the changes on the finer goods.

What effects can be traced to the high duties maintained throughout the half-century that followed the civil war? Those on fabrics of cheaper grade,—the staple goods of the industry,—were quite prohibitory. Those on finer goods, though not in all cases prohibitory, were put up notch by notch in the successive protectionist acts, with the design of promoting the manufacture of such goods within the country. The free trader might be led to predict that the extreme rates on the ordinary goods, and the exclusion of foreign competition as regards them, would lead to something like stagnation in this part of the domestic industry. On the other hand, the high effective rates on the dearer goods might be expected by the protectionist not only to put an end to their importation and cause domestic goods to be substituted for them, but also to bring about some results of the young industries type,—improvements in the field newly opened for the Americans, and attainment of independence or at least indications of some approach to independence.

First a general survey may be made of the growth of the industry at large. The following figures indicate how steady and great was the increase in domestic production, how comparatively small were the imports.

It will be seen that the domestic industry grew rapidly and without check. The best single indication of the extent and growth of such an industry as the cotton manufacture is in the number of spindles; and on this the statistics have been sufficiently accurate. The spindles in 1910 were more than five times as many as in 1860,—twenty-seven millions as compared with about five millions. The same rate of growth is indicated by the consumption of raw cotton; this also increased five-fold. The value of the product (a figure to be used with much more caution) also increased nearly five-fold. The number of persons employed increased distinctly less, about three-fold,—an indication of a growing effectiveness of labor, such as any manufacturing industry may be expected to show. The stationary number of separate establishments is also in accord with the general trend of modern industry; production is on a larger scale, the individual establishment becomes greater, the total number of establishments does not keep pace with the growing volume of production.

The imports, on the other hand, show no considerable change, except in the very last decade. As in the case of silks, they remain not far from constant absolutely, and thus become a steadily diminishing proportion of the total supply. In 1860 they were, in value, still not very far from one-third of the domestic output; in 1910, little more than one-tenth.58 It will be shown presently that these general figures need much explanation. The continuing imports are in large part specialties; those which really compete with the domestic products are even less considerable than the figures would indicate. It is clear, however, that a very great increase in the cotton industry has taken place within the country. Here also the protective system would seem to have succeeded in attaining at least one object,—a great preponderance of domestic supply, a lessening dependence on imports.

Proceeding now to a more detailed consideration of the several branches of the industry, let attention be given first to the manufacturing of the cheaper grades. This was the earliest to be established, and the only one that flourished before the civil war. As has just been noted, it seems to have already reached in that period the stage of independence. The foreign (British) competitors were not feared, except possibly in times of exceptional depression in the foreign markets. Exports on a considerable scale had begun. Even the comparatively moderate duties of 1861 had been virtually prohibitory on the cheaper goods; they were prohibitory beyond doubt through the half-century after the war duties of 1864. The domestic manufacture in this branch has, therefore, gone its own way, quite untroubled by foreign competition.

This part of the cotton manufacture remained, after the war as before, quantitatively by far the most important. In 1905, the census report on the industry stated that "almost three-fourths of all the woven goods reported fall under the classification of coarse or medium counts,—print cloths, sheetings, and shirtings, drills, ticks, denims and stripes, duck and bagging."59 Over one-half of the yarn spun in American mills was in 1905 and in 1910 of the low counts (1 to 20) used for distinctly coarse goods. Five-sixths of the remainder was of counts still low (20 to 40),—what might be called low-medium counts.60 In other words, only one-twelfth of the quantitative output (pounds) could be reckoned as spun for the fine or better medium goods. The great growth which has taken place in the industry has therefore been predominantly in that branch already firmly established before the system of high protection was applied.

With this growth in the manufacture of the ordinary (cheaper) goods, a marked change has taken place in geographical distribution. Until 1880, New England and the middle states were almost the sole seats of the industry. After that date a rapid growth took place in the south (chiefly in South Carolina, North Carolina, and Georgia) until by 1910 this region became comparable in importance with the northern states. The goods made in the south have been almost exclusively of the ordinary grades; and this circumstance has much affected the character of the industry elsewhere. The northern mills, especially those of New England, felt the competition of the south on the cheaper grades and turned more than before to the finer. In the older seats of the industry, therefore, the diversification has been greater than the general figures indicate. The finer goods are made almost exclusively in the north, and chiefly in New England; and hence they form in the last mentioned region a much more important constituent than they do in the country at large. Yet even here much the greater part of the manufacture is still given to the cheaper goods.61 What causes have influenced the great growth in the south, and the tenacious hold even of the cheaper grades in the north, will be considered as we proceed.

More significant, however, than the volume of growth was the technical development of the cotton manufacture. Both the changes which took place in the American mills and those which failed to take place are instructive. It is chiefly in the manufacture of the cheaper goods that machinery and methods were remodelled; as regards dearer goods there has been least tendency to divergence from the practices of European rivals, especially of Great Britain. It will be convenient to describe briefly the technical changes that most affected the American industry, proceeding then to a consideration of their bearing on the tariff problems.

During the half-century the two fundamental processes in the mills—spinning and weaving—underwent changes almost revolutionary as regards the cheaper goods which constitute the bulk of the American output.

In spinning, the great change has been the extraordinary growth of ring spinning62 and the decline of mule spinning. The following figures show what sort of transition has taken place:

It will be seen that the number of ring spindles has increased without halt, both absolutely and relatively. The number of mule spindles, on the other hand, has hardly increased at all. Though there was some gain in the twenty years from 1870 to 1890, a loss followed from 1890 to 1910, so that in the last-named year the total of mule spindles exceeded but little that of 1870. At the outset (1870) the two kinds were in use half and half; at the close (1910) the ring spindles had increased nearly ten-fold, and constituted five-sixths of the total.

The mule spindle is in essentials that invented by the English pioneers in the industrial revolution of the eighteenth century. As perfected by Crompton, it involved the placing of a large number of spindles on a single stand or carriage which moves to and fro, spinning on its movement one way only, and getting ready for the next spinning on the return movement. Ring spinning is more recently invented, still more recently of wide use. The essential of the device is a small steel ring, through which passes the roving (the smoothed and partitioned sliver of flimsy cotton) and in passing is given the twist which pulls the fibres together into yarn. Of American invention (1828), it came into extensive use in the United States even before the war. After the war, and particularly in the decade from 1880 to 1890, it was immensely improved by a series of subsidiary changes, and took the commanding place in the industry indicated by the figures just given.64

The industrial differences between the two methods of spinning can be stated without entering on the complicated mechanical details. The ring, in brief, is better adapted for coarser yarns, for economy of space, for large-scale operations, for that combination of spinning and weaving in the same establishment which has always been the rule in American mills, and, last but not least, for the utilization of labor little skilled. The ring spins continuously, not intermittently as does the mule; and for this reason, as well as for others, the ring produces more per spindle. The ring puts more strain on the yarn, and hence is available primarily for the coarser yarns; yet the march of improvement has made it available for yarns less coarse than in the earlier stages of its use. It yields yarn comparatively harsh, and not acceptable where a softer quality is needed (e.g., for most hosiery) or where much sizing is to be put into the fabric (as is commonly done in England). The ring winds the yarn on wooden bobbins of appreciable size and weight; and the yarn thus wound and mounted is more expensive to transport than that which comes from the mule. Hence arises an obstacle to specialization between spinning and weaving; ring spinning strengthens the general American practice of combining the two in one establishment.

Perhaps most important of all is the difference in the kind of labor force required. Mule spinning is a trade, and mainly a man's trade. The spinner is a skilled workman, or at least comes close to that grade. In Great Britain the trade is often hereditary. It has been stated to the present writer, by conversant persons, that only a boy who has grown up in a mill can become a good mule spinner. The statement doubtless is exaggerated, but doubtless rests on a basis of fact. Mule spinners have strong unions; they cannot be readily replaced when they strike. They are often accused by the manufacturers of being a turbulent and unruly set, of clannishly opposing the entrance of recruits into the trade, of having a trade-union monopoly; all of which are indications that, though the degree of skill may be exaggerated, the men must have some of the qualities of the skilled handicraftsman. The ring, on the contrary, is more automatic, needs less continuous and alert watching, can be operated with little need either of strength or skill. Ring spinning has been very greatly improved in the United States during the half-century; and the improvements have taken the direction of making the machinery more self-acting, less in need of skilled attention, less liable to breakdown and repair. Ring spinners are always women and children, who can be easily trained and easily replaced.

The difference in the needed quality of labor goes far to account for the unequal distribution of mule spindles and ring spindles in the various seats of the American industry. Mule spinning in the United States is confined almost entirely to the north. Even there it is overshadowed by its rival; while in the south there is virtually no mule spinning at all. The figures from the Census of 1910 again tell the story.65

The progress of invention in ring spinning machinery has been characteristic. A series of Yankee machinists and manufacturers experimented with the various refinements of the device, vied with each other in offering the cotton manufacturers different variants, added improvement to improvement, until by a process of selection and survival the well-nigh perfect machine was developed. The number of revolutions per minute had been 5,500 in 1860, and became 9,000 by 1890. The operation of the spindle was declared by the foremost expert to be "so near absolute perfection that it would seem as though no changes were required."66 Yet after that date the speed of revolution was raised to 10,000 per minute, even to more in some cases; some such figure being apparently the maximum for the device as it now (1910) stands.67 No more labor, no more power, no more space were required for the improved spindle; the doubling of speed meant a doubling of output.

Even more important than the changes in spinning were those in weaving. As has already been noted, weaving was carried on by Americans with special aptitude and success from the very beginnings of the modern textile industries. The power loom was put into use—nay, virtually invented—in the cotton mills of the United States contemporaneously with its introduction in England.68 By the first third of the nineteenth century the weaving processes in American mills were found by a skilled observer to be at least equal to those in England, perhaps superior.69 And in the closing decade of that century a new invention, that of the automatic loom, was perfected in the United States and adopted almost universally for the cheap and medium goods.

The ordinary power loom in a sense is automatic; the weaver is no more than an attendant who simply sees that the machine runs as it should. The degree of attention, however, varies greatly according to the nature of the material turned out. On some goods the power loom weaver can operate but one loom, as did the hand loom weaver before him; and he must have some of the qualities of the skilled artisan. Such is the case with finer woolen and silk fabrics; and, as has already been noted for silks and will be pointed out presently for woolens also,70 these are the branches of the textile industries which are not easily domiciled in the United States. But on plain cotton goods of the cheaper grades the power loom had long been developed to the point where the mechanism largely took care of itself, and where a weaver could attend to six or eight looms, sometimes even more. One operation, however, had not been subjected to the machine, and thereby a limitation had remained on its uninterrupted working,—that of replacing the supplies of weft as they were exhausted. The yarn is wound on bobbins; as one bobbin is emptied by the loom, another must be put in its place in the shuttle, and the thread from this other must be attached to the shuttle which moves to and fro in the loom. The chief business of the weaver on the ordinary power loom is to replace bobbins as they are emptied, and to attach the thread of the fresh bobbin to the shuttle. On the average the loom has to be stopped once in eight minutes to accomplish these two closely-related steps. The automatic loom achieved the crowning triumph of carrying out both without the use of the human hand.71 A magazine is attached to the loom, containing a supply of filled bobbins, which are automatically transferred to the loom shuttle. The shuttle itself is automatically threaded by the motion of the loom; and this takes place whether the bobbin is completely emptied or whether its thread is by accident broken before emptying. In either case the shuttle automatically catches up a thread from a fresh bobbin, and the loom continues to work without interruption. The unhygienic process of attaching the fresh thread to the bobbin by the weaver's sucking it in is done away with.72 If a warp (not weft) thread breaks, the loom stops automatically, and the weaver ties the broken ends. The weaver now has become more than ever a mere attendant, keeping an eye on the looms and seeing what is wrong when they are brought to a stop by the automatic devices. The commonest cause of stoppage is the breaking of a thread, and the commonest task of the weaver is to tie a broken thread.

Weaving on the modern power loom, whether of the automatic type or the ordinary type, calls for no strength or special skill. It is not, to be sure, reducible to simple routine as completely as ring spinning. Some alertness is required; and the weaver gets the pay of the average factory worker. But women can be used as well as men, and they seem to be equally efficient. More important, so far as concerns the automatic loom, is the possibility of a more highly developed division of labor. A separate staff (of young persons, boys or girls) can be given the simple task of keeping the magazines charged with bobbins; the weaver can be relieved of this, and called on solely to keep his (or her) eye on the looms. The oiling of the looms and dusting of the floors can be turned over to another set of unskilled persons.73

Yet some skilled labor remains indispensable, and on the automatic loom perhaps even more so than on the ordinary loom. The loom fixer, a highly expert mechanic, must be in attendance, to correct any defect in the working of the complicated mechanism or order the transfer of a loom to the repair shop if something serious has happened. The skilled artisan is by no means dispensed with in the modern development of machinery. His sphere of action is merely shifted, and his skill is turned where most needed. This is one of the reasons why machinery which is dubbed "automatic" can never be transported to regions where there is abundance of cheap and unskilled labor, but labor of that kind only. It calls for much more than mere tending and feeding. It must be supervised and kept in order; there must be intelligent and experienced foremen and superintendents, and a staff of skilled mechanics, such as these very loom fixers. However perfected the machine,—nay, the more it is perfected,—the human hand and the human brain are still indispensable.

The Northrop automatic loom,—so named from one among the inventors by whom it was worked out,—illustrates several matters noteworthy in the history of modern inventions. In the first place, it was deliberately planned, and brought to the point of success after prolonged and expensive experimenting. A number of inventors were kept at work on it for years. Some sixty patents were taken out or applied for in the course of the experiments; and the instance is one among many to show that the patent system, however ill adjusted it may have been in some of its details, serves to stimulate invention and still more to promote investment in inventions calling for long and expensive trial. When finally ready to be put on the market, a demonstration of its efficiency had to be given; and the firm which developed it had to shoulder the additional experiment and investment of equipping a large cotton mill in which the loom was first used in manufacturing on a considerable scale. It required this kind of proof, highly effective, but necessitating a still further commitment of funds, to bring the automatic loom into wide use. Convincing the demonstration was. It became clear that, whereas a weaver could attend to eight ordinary looms, he could look after twenty, twenty-four, even thirty automatic looms. Though the capital outlay was larger (the automatic looms are much more expensive), the saving in current labor was so great that the cost of weaving was cut in two. The use of the loom spread with great rapidity, and soon this process dominated the manufacture of the ordinary grades of plain cotton goods.74

An instructive aspect of this development is that it has by no means stood alone. The Draper Company had competitors and imitators. A host of inventors and mechanics were vying with them. So it was with the ring spindle just described; there also the leaders did not stand alone, but were spurred on by many keen rivals. So it is, indeed, with every forward movement, whether in literature, in the fine arts, in science, in the mechanic arts. The genius who reaches the crowning achievement is not isolated; he is borne forward by the sweep of a large movement. And every such movement has a character of its own,—the impress of the influences, little understood as regards their relative strength or their channels of operation, of environment, historic growth, the inborn and inherited qualities of a people. So it has been with the various inventions and changes which have marked the industrial growth of the United States throughout its history, and not least during the last half-century.

In the case of the automatic loom—to return to this—rivals and improvers soon appeared. So far as concerned the original field of the Northrop loom, its primacy seems to have been little shaken; there was rivalry, possibly an improvement in one detail or another, but no marked advance. In a neighboring field, however, a striking advance was stimulated by its success. The Northrop loom and its direct rivals were suitable only for plain cloth, or goods with the simplest stripe or figure. They were not available for the ginghams and checks in which weft yarns of more than one color are used. Such fabrics were made on the so-called drop-box looms,—a variant of the ordinary power loom. Here again, systematic experimenting, continued over ten years and more, resulted in a further elaboration of the machine's competence, a further extension of the range of automatic action. Another well-known firm75 put on the market in 1905, a decade after the introduction of the Northrop loom, a gingham loom in which bobbins containing separate colors were held in a magazine and automatically selected for the insertion of the colored threads in the chosen pattern of cloth. Advantages of the same kind as from the Northrop loom, and apparently no less in degree, were secured by this mechanism, when compared with the previous looms for parti-colored fabrics. There was no interruption for putting in fresh bobbins; and the number of looms which one weaver could attend was increased from six to sixteen,—here also more than double. Limitations still remained; the finer and more variegated goods cannot be subjected to this sort of treatment; it was available only for goods of standardized pattern, turned out on a considerable scale. But for the production of quantities of uniform goods on a large scale another striking improvement was achieved.

Part IV, Chapter XVIII

The Cotton Manufacture, continued. Contrasts with Other Countries; the Influence of the Tariff

The consequence of the inventions and improvements described in the preceding chapter was that the cotton goods to which they were applicable came to be produced not only as cheaply in the United States as in Europe, but even more cheaply. The improved devices made their way slowly or not at all in the rival countries; they were adopted promptly and with full effect in this country. It has already been noted that there had not been, even before the war, any inferiority in cost for the American cotton manufacturers, as regards the simplest and cheapest grades of goods. This position of independence was strengthened by the subsequent improvements, and was extended to goods of higher price and quality. The change was greatest in the weaving process. It was here that the comparative advantage of the manufacture as a whole was most securely established; and the special superiority in weaving served to offset any lack of advantage in other processes.

On the general situation, the Report of the Tariff Board, made in 1912, gave invaluable evidence. So far as concerns spinning, it is true, the evidence was not entirely conclusive. The figures secured by the Board indicated that "labor cost," i.e., money expense for labor per unit of output, was slightly greater in the United States than in England. The English labor cost on yarns was found to be lower than American cost, but not much lower, 78 to 95 per cent of the American.76 In other words, the effectiveness of labor in the United States, especially on the lower counts of yarn, was found to be greater, but not quite so great as to offset the difference in money wages. Taken by themselves, the figures would indicate that the comparative advantage of the American cotton spinning industry almost measured up to the country's general standard, yet not quite. The data for the two countries, however, were not comparable without qualification. The English figures were for mule spun yarn, the American for ring spun yarn; and though they were for the same counts (fineness) of yarn, they were not necessarily for the same qualities. A comparison made by an unofficial inquirer seemed to show that, for ring spun yarn in the United States compared with ring spun yarn in Europe, the difference in labor cost was virtually nil,—the effectiveness of American labor was so much greater as quite to offset the difference in money wages.77

For weaving, however, and for the manufacturing processes as a whole, the Tariff Board's conclusions were unimpeachable. The effectiveness of American industry in weaving was so much greater than that in Europe as not only to offset entirely the difference in weavers' wages, but to leave a margin of superiority which sufficed to offset also various minor items in which there was no marked comparative advantage. The superiority in weaving was due largely to the wide use of the automatic loom; but not solely to this. "In the case of plain looms the English weaver seldom tends more than four looms, while in this country a weaver rarely tends less than six, and more frequently eight, or even twelve, if equipped with 'warp-stop motions.'... Whereas the output per spinner per hour in England is probably as great or greater than in this country,78 the output per weaver per hour is, upon a large class of plain goods, less, and in the case where automatic looms are used in this country and plain looms in England, very much less." Taking cost of production as a whole, "on many plain fabrics the cost of production [i.e., the money cost] is not greater than in England"; and the American prices of plain goods were in no case much above the English prices, while in the majority of cases they were lower.79

Taken as a whole, the result plainly is that, so far as concerns the plain goods and goods of medium quality which constitute the bulk of the output of the American mills, they have a comparative advantage. They pay higher wages than in England, but the effectiveness of the industry as a whole is such that they can yet turn out these goods at as low a price, if not at a lower price. To use the phrase applied elsewhere to this situation, they measure up to the general American standard of effectiveness. In this case, as in others, it must be borne in mind that the effectiveness of the industry depends not mainly, perhaps not at all, on the skill and vigor of the individual workers; not even on those personal qualities in combination with the tools and machines on which the operatives are put to work; it depends on the whole industrial outfit, in which ability for general organization is the greatest factor. As the Tariff Board stated, with reference to weaving, it is a matter not of individual superiority on the part of the American weaver, but of difference in industrial policy.80

It goes without saying that goods of the classes to which these inventions and improvements have been applied were quite unaffected by the high duties maintained until 1913. They would not have been imported even in the absence of duties. So far from being imported, they have been exported steadily in considerable volume,—sure proof of established independence. The exports of cotton goods began before the civil war, and were even then no negligible item in the total product.81 The war, with the consequent complete overturn of the industry through a decade or more, put an end to the exports for the time being, and it was not until 1880 that they rose to the volume of the earlier period. They increased rapidly in later years, and in the first decade of the twentieth century ranged from fifty to sixty millions (of dollars). Both unprinted goods and printed figure among the exports. A considerable market is found in the Orient, especially for unbleached heavy fabrics in northern China. The exports show an uneven course, sometimes swelling abruptly and then shrinking as abruptly. They present some curious problems, much debated by those to whom the export trade seems peculiarly precious. For the purposes of the present discussion it suffices to note that the cotton manufacture in its largest branch reached the stage not only of superiority at home, but of aggressiveness abroad.82

Still another indication of strength and superiority is found in the conditions of supply for the machinery used. As has been elsewhere stated83 the source of the machinery is a significant clue to the position of an industry as a whole. If the machinery is not only made within the country, but made on native models and with native improvements; still more, if it has reached that stage of excellence that it is sought for export abroad,—then we have strong evidence of superiority. Precisely this sort of evidence is found for the cotton manufacture. In both of the dominant departments of the manufacture, spinning and weaving, American machinery, as it has been improved for the manufacture of the cheap and medium goods, has come to be exported. The "Rabbeth" spindle, the most widely used of the American ring spindles, was early sent abroad.84 The automatic loom has been sent abroad on a considerable scale, and a foreign market for it systematically cultivated. What is not less significant, it has been copied by foreign makers of machinery, especially in Germany; a form of tribute which naturally is irritating to the American pioneers, but is not the less conclusive evidence of their originality and leadership.85

The automatic loom, however, has not come into large use either in England or on the Continent. Various causes have prevented its wide adoption; causes partly technical in the strict sense, partly related to the general industrial environment. Among the technical obstacles is the circumstance that in England, still the most important competitor, the automatic loom does not work to full advantage for goods heavily "sized," i.e., much weighted with starch. This heavy weighting, common for the cheap English fabrics made for export to the Orient, has often been condemned as a kind of dishonest adulteration; it seems to be in fact an adaptation of the goods to the preferences and purses of the customers.86 But it does bring difficulties in the way of using the mechanism of the automatic loom, and thus impedes the spread of that improvement. Among obstacles from the environment, in all European countries, is the absence of that concentration of work on large orders which characterizes American business and gives scope to the special industrial talents of the Americans. The European manufacturer, in England and even more on the Continent, accepts willingly and habitually small or moderate orders, and prefers a system and an equipment which makes it easy to shift from one order to another and different one. The American aims to turn out large quantities of a single product, reducing to a minimum the readjustments of the labor force, and bringing to a maximum the efficiency of all labor-saving devices. The automatic loom fits into the prevailing American practices; it does not fit into the prevailing European practices.87

A different obstacle, the force of which is not easy to estimate, but which beyond question is strong in England, is the attitude of the labor organizations. A well-informed observer has written to me in so many words that "in England the cotton weavers are thoroughly organized, and the union will not permit the English weavers to operate more than four looms each, and will not permit the use of the automatic looms."88 This perhaps is put too strongly; but it has a large basis of truth. Even for ordinary looms the English weavers oppose rearrangements and reductions in piece rates when improvements make it possible for a weaver to operate with the same effort and attention a larger number of looms. Hence, as was noted a moment ago, the effectiveness of labor is less in England even where power looms of the same general type as in the United States are used. This difficulty is accentuated in the attitude of the English weavers toward the automatic loom. The weavers are afraid of the new device; it threatens to make employment less. They are not disposed to work the looms to their maximum output; they are loth to accept reduced piece-work rates, even though they can earn as much, even more. It is the familiar and almost inevitable disposition to "make work," the hostility to labor-saving appliances. It may not take the form of overt and unqualified refusal (as was stated in the letter just quoted), but it leads to a silent, stolid opposition. Against this the employer cannot make headway without friction and loss, expecially when his power of discharge and his ability to insist on the full productivity of machinery are hampered by a strong labor union. The same situation has already been considered with reference to the iron industry, and the same perplexities must be admitted.89 The labor union movement has it good sides and its bad sides. Indispensable as it doubtless is for securing to the workmen a "fair" share in the gains from material progress, the dispassionate observer must face the fact that it leads them often to put checks on that very progress. For all the exaggeration in the statements that English unionism has sounded the death-knell to English industrial leadership, it remains true that the absence of firmly entrenched unions in the cotton and iron manufactures has facilitated the march of improvement in the United States.

The endeavors of the American makers of automatic looms and of other machinery to develop an export business and to secure the adoption of their devices in foreign countries, have led to gloomy forebodings. Similar alarm has been expressed under the analogous conditions in the machine tool trade.90 What will happen, it is asked, when the foreigners are equipped with our very best machinery, and can still secure operatives at much lower wages to work that very machinery? Will not the American manufacturer, compelled to pay wages at the higher rates of this country, be inevitably forced out of the field? The theoretic aspects of this question have already been considered in the introductory chapters of the present volume.91 The history of the automatic loom, its rapid adoption in the United States, its slow progress in England and on the Continent, its prompt ultilization to full capacity here, its halting utilization in the rival countries, the restless and unflagging march of improvement in the originating people,—these circumstances all tend to confirm what was there said. The comparative advantage now possessed in the United States does not seem in danger of being lost at any period about which its people need have present concern. What will happen in the more distant future, it would be rash to predict. The time may come when all the advanced civilized countries will have the same equipment in their major manufacturing industries, and the same organization; the same enterprise, ingenuity, skill, among both the leaders of business, and the rank and file. Then their social and industrial conditions will be equalized, wages will be on the same plane throughout, and trade between them will be restricted to a much narrower volume than now. But that time, if it ever is to come, is at all events long distant. Such differences as the present case illustrates seem likely to persist for a long time; as long a time as a country need wisely consider in shaping its commercial policy. American enterprise and ingenuity will continue to find opportunities in which these qualities tell to the utmost, a comparative advantage will persist in the congenial industries, the international division of labor will be affected by the same forces that have operated in the past and operate in the present.

One further phase of the American development of machinery has been illustrated in the cotton manufacture as well as in the silk manufacture.92 I refer to the utilization,—one should hesitate to use the condemnatory term exploitation,—of a great stratum of cheap labor. Not only has the influx of immigrant labor been turned to account in the north, but in the south the supply of cheap native labor. The growth of the cotton manufacture in the south since 1880 has rested chiefly on the discovery of the possibility of using in the mills the ignorant rural whites, previously half-idle. Wages were low at the start and the quality of labor was low; both rose as time went on; yet in neither regard does the northern level seem to have been quite reached. Lamentable as have been some of the concomitants of this development,—long hours, child labor, low wages,—it stands for a stage in progress toward better things; as indeed is the case with the immigrants in the cotton mills of the north. At all events, alike in north and south, the cheap labor was turned to account in those branches of the industry in which machinery had been brought most completely to the automatic stage.93

It would not be easy to say which was cause and which effect; whether the character of the labor supply caused the development of machinery adapted to it, or whether the development of the machinery led to the utilization of the labor supply. Probably there was an interaction. The attention of inventors and manufacturers was naturally turned toward adapting the machines to the labor available for this particular industry; at the same time the general industrial trend in the United States was toward automatic labor-saving devices. What would have been the course of invention in the cotton manufacture if the labor supply had been of a different and higher quality must be an open question. In other industries, such as the boot and shoe manufacture and the machine making trades, there has been no lack of advance in machinery adapted to operatives more intelligent and more alert. Given the conditions obtaining in the textile industries, the advances were most striking where profits could be made by utilizing the existing supplies of low-grade labor.

The development of the cotton manufacture, again, illustrates how greatly the effectiveness of industry is influenced by industrial leadership. Repeatedly one hears it stated that the efficiency of labor is no greater in American textile mills than in European; nay, it is said, the European manufacturer has operatives who are more skilful and better trained, not less so. And yet, in such branches of the textile manufacture as have been considered in the preceding pages, the effectiveness of labor as a whole is greater than in Europe. It is greater, not because the operatives are of better quality, but because they are put to work on more highly developed machinery, and are organized and guided better. The cause of superiority is to be found mainly in the inventors and mill managers. Where the machines and tools are the same in the United States as in Europe, there is not necessarily, perhaps not usually, an advantage. When some special sort of artisan's work is required, there may even be a positive inferiority among the Americans. True, barring these cases of special handicraft skill, there is probably some degree of higher efficiency in the United States, due to the general industrial environment. The pace is faster throughout; exertion is more continuous and more strenuous. The American weaver tends more looms even of the ordinary type than the English; the American girl tends more ring spindles than the German. But this sort of efficiency is itself dependent on the management and the oversight of the leaders. It is dependent on the appropriate arrangement of tools and of plant, and it is almost always supplemented by labor-saving machinery. In common pick and shovel work, no one can see the American apparatus for sewer construction or rough railway work without observing the combination of labor-saving plant with management that drives the labor at full speed.

I need hardly repeat what I have already said on the larger social aspects of this problem. Driving at speed has its evil sides as well as its good. The just mean is not easy to strike between the pace that wears the laborer out at fifty and the slack and irritating gait of the work-making trade-unionist; nor is it easy to say which extreme most kills the intrinsic satisfaction from well-directed activity. The ideal doubtless would be alert and strenuous labor for so long a working day as can be steadily maintained without irrecoverable fatigue or a premature old age. A concomitant of the American practice should be a shortening of the working day, and with it the wise restriction of the labor of women and children. In no country is there more solid ground for welcoming the eight-hour system. Oddly enough, the shortened working day obtains much more in Great Britain, where the pace is slacker. These aspects of the question are not to be overlooked, even though they lie apart from the main subjects of the present inquiry.

Compare now the general situation for ordinary cottons, as described in the preceding pages, with that for the more expensive grades. We find a contrast, accentuated as the goods become finer. Imports of these did not cease during the period from 1883 to 1913, notwithstanding the successive increases of duty made in the tariff acts of 1883, 1890, 1897, and 1909. Foreign supplies of fine goods, though checked by the high duties, continued to come in. The domestic manufacturers insisted that they could not turn out these goods unless aided by high duties; and they urged the "acquisition" of the new industries through greater protection. The reduction of duties in the tariff act of 1913, accepted almost with indifference by the makers of the cheaper grades, was the cause of grave forebodings among those of the finer.

One aspect of the contrast between the different branches of the industry appears in the relation between imported and homemade machinery. In the note94 are given figures collected by the Tariff Board, not indeed for the whole cotton manufacture, but for a number of establishments large enough to indicate the general situation. So far as weaving goes, the situation is obviously one of independence; we have seen that it is even more,—one of superiority. Weaving affords a favorable field for American industrial talent. Not only as regards the new automatic looms, but as regards the older and more familiar power looms, the American has nothing to learn from the foreigner, and usually something to teach. All the ring spindles also are domestic built. The carding machinery is again predominantly domestic; and the same is the case with the "jack" spindles. On the other hand, much the larger part of the mule spindles are imported.

Let it be recalled that mule spindles are adapted for the finer counts of yarn, and are the only ones that can be used for the finest counts. The jack spindles, for which figures are given, serve also for fine yarns. That the mule spindles are chiefly foreign built,—which means, British built,—does not necessarily indicate an absolute inferiority in the effectiveness of American industry. It points to the lack of superiority, the lack of a comparative advantage. Using the same machines, and having operatives no more skilful or efficient,—nay, it is stoutly maintained, operatives less skilful,—the American spinners of fine yarns cannot pay higher wages than British competitors and hold their own without tariff support. So far as weaving goes, the makers of fine fabrics would seem at the least to be at no absolute disadvantage. It is true that automatic looms cannot be used for very fine goods; it is true also that even with ordinary looms the weaver cannot take care of so large a number as when coarse goods are made. I judge that, on the whole, there is some superiority in weaving fine goods, though by no means so marked a superiority as in coarse and medium goods.95 In spinning, however, if the statements of the manufacturers themselves are to be accepted, there is a distinct inferiority; and even if allowance is made for the habitual exaggerations of protected producers, there remains little indication of any comparative advantage. In the manufacture of the expensive cotton fabrics as a whole the characteristic industrial aptitudes of the Yankee find no favorable field.

It is not easy to give a single general reason why the English maintain their undoubted supremacy as manufacturers of the finest yarns, and on the whole of the finest woven fabrics also. Something was due at the outset to the damp and equable climate of Lancashire. This may still be a factor, though in modern times one of much lessened consequence, since ways have been found of humidifying the mills artificially at slight expense. Special skill among the operatives is often alleged. The class of factory workpeople in Lancashire is stable. Children succeed their parents in the mills; they do not often strive to rise in the industrial scale, as is commonly the case in the United States. Something like handicraft skill is said to be transmitted from generation to generation.96 It is probably true that, so far as the spinning staff goes, the American manufacturers are right in maintaining that they have operatives less efficient, not more so. Another factor is the extreme specialization of the cotton industry in Great Britain. Not only are weaving and spinning commonly separated,—to this, as already noted,97 the technical characteristics of mule spinning contribute,—but the spinning of the different counts, and the various finishing processes, such as bleaching, dyeing and printing, are carried on in independent establishments. With this more highly elaborated partition of labor between establishments goes a great specialization in fabrics. In the nature of the case, the finer goods cannot be produced in great quantities; no large supplies of any one pattern and grade are called for. An industry concentrated in a small district, split up into multitudes of differentiated establishments, with a trained and mobile labor supply, is adapted to such a product. The case is one (in Professor Marshall's phrase) of marked external economies. Not improbably, it is also one of adaptation to national bent and talent. At all events, a superiority in the manufacture of the finer goods, and especially of the finer yarns, Great Britain does possess; as is shown not only by the exports to the United States in face of high duties, but by the continued exports to the Continent. To quote a phrase of Adam Smith's, "whether the advantages which one country has over another be natural or acquired, is in this respect of no consequence. As long as the one country has those advantages, and the other wants them, it will always be more advantageous for the latter, rather to buy of the former than to make."98 The acquired advantage has persisted long in England for this particular industry and bids fair to persist long in the future.

The usual explanation, among manufacturers and technical writers, of the exceptional position of the finer goods, is that the question is simply one of labor. More labor, we are told, is required for the finer goods; the wages bill forms a larger item in the expenses of production, the raw material a smaller one; hence the American producer is handicapped in special degree by the higher scale of wages in the United States. The business men who argue in this way have in mind, as such persons almost always do, the field with which alone they are conversant, and generalize at once from their own experiences. Only in the rarest of instances do they consider the problem as a whole. They do not reflect that in other industries, such as the manufacture of boots and shoes and of machine tools, raw material is no important item in the expenses, direct labor is a great item; yet here the Americans easily hold their own and even export. What remains true throughout is that high wages constitute no insuperable obstacle for the American producer if all the labor is effective,—that applied to the operation of machinery as well as that applied to its construction. It is not the mere use of machines that enables high wages to be paid and a product nevertheless turned out at low cost; it is the fact that the machines are well devised and well run. Wherever there is no favorable opportunity for introducing labor-saving methods, high wages cannot be paid unless there be high prices for the goods; and with prices high, foreign competitors who pay low wages cannot be met on even terms. Tariff support is then needed.

Precisely in what industries the favorable opportunity exists cannot safely be predicted in advance. In the case of the silk manufacture an unexpected field was found, or at least seems to be in process of finding. In the case of the finer cottons,—and it will be seen that the case of finer woolens is similar,—no such favoring conditions have yet appeared. And the nature of these branches of industry seems to indicate that they are not likely to appear. A considerable standardization is essential for the successful application of machine methods. The mere fact that raw material is a large item in the expenses of production does not make possible such standardization; it may be feasible where raw material plays a large part, as with ordinary cottons, or where it plays a small part, as with machine tools or sewing machines. But a need of individual attention to each product or pattern, or of handicraft skill trained for the particular trade, constitutes an obstacle for the American employer. Under these conditions he works with no superior effectiveness. The obstacles seem to be found insuperably in the finer grades of all the textile fabrics; they explain the striking contrast between the manufacture of the cheap and medium grades of cotton goods and that of the finer grades.

One topic, referred to in the earlier part of this chapter, remains to be considered. The manufacture of all but the finest grades of cottons has had protection even to the point of prohibition. Is there any indication that this extreme of government support had deadened progress?

The tale told in the preceding pages gives an unequivocal answer: no. The cotton manufacture, so far from giving any evidence of a slackened pace, has shown striking advances. Whatever may have been the influence of protection, it has not been enfeebling. The case is clear beyond cavil as regards the staple goods which occupy the bulk of the industry. If in the manufacture of finer goods there has been imitation of foreign exemplars and appearance of backwardness, the explanation is to be found not in any lack of enterprise or vigor among the American producers, but in the fact that the field was unfavorable.

To generalize from this instance would be rash. A case of the opposite kind,—lack of progress under a rigid protective system,—seems to be discernible in some branches of the woolen manufacture;99 and beyond question still others could be adduced. But on the whole the evidence is that, in the United States at least, high protection has not been inconsistent with enterprise, invention, forging ahead. There is ground, on the contrary, for saying that it has in some degree contributed to such progress. What has been set forth in the preceding pages of the development of the iron and silk industries points that way. It would be going quite too far to say that the protective system has been the main cause of the advance in organization and in technical equipment which has appeared in so many American industries and in the cotton manufacture among them. The general sweep of the country's industrial movement,—the vast resources waiting to be exploited by an enterprising people, the keen atmosphere of democracy, the free scope for every talent, the concentration on money making and wealth producing of the enormous influence of social emulation,—here are underlying forces much more powerful. But it is not to be denied that these forces have been directed by protection into some fields which they might not otherwise have touched, and in which they have operated with effects similar to those wrought in American industry at large.

On the other hand, it can hardly be maintained that anything in the nature of protection to young industries has been applied with good effect in the particular case here under consideration,—the cotton manufacture. What has been accomplished for the industry during its stage of trial was accomplished in the first third of the nineteenth century, when the industry was really young. Thereafter, so far as its staple branches were concerned, it grew and prospered without danger from foreign competitors or need of support against them. Even before the civil war, still more after it, whether duties were moderate or were extreme, the development of these branches was affected by the domestic surroundings alone. A field favorable for the talents of the Yankee, a great population ready to purchase staple goods by the million, a labor supply adapted for the utilization of quasi-automatic machines,—here we have the explanation of the progress made in the industry, with no discernible influence either favorable or unfavorable from the tariff system.

Another suggestion has been made: that the manufacture of cotton machinery, both for spinning and weaving, has been promoted by the duties not so much on the goods as on the machinery; with the effects of successful protection to a young industry.100 The case seems to me at least doubtful. The manufacture of textile machinery began in the United States as early as the textile industries themselves. Both in spinning and weaving, independent progress was made before the war brought in the régime of extremely high duties. The same general causes which stimulated the invention of labor-saving machinery in other industries brought about their consequences in this field also. The patent system may be adduced among the favoring factors with much more plausibility than the tariff system. The whole spirit of industrial leadership has been toward precisely the sort of mechanical progress which the textile inventions have illustrated. The inventors and business men who ascribe their successes to protection fail to give due credit to themselves.

The general conclusions to be derived from this inquiry on the cotton manufacture have been sufficiently indicated in the preceding pages. In its staple branches the industry possesses advantages; it measures up to the general American standard of effectiveness. It can pay wages higher than those in competitive industries abroad, and yet sell its products as cheaply. It needs no tariff support. But for the finer grades of goods, and for many specialties, the situation is different; here there has not yet been a comparative advantage, nor does there seem to be a prospect of competing with the foreigner on even terms in the future. The staple branches alone seem to offer good opportunities for the characteristic industrial qualities of the American inventor and business man. The course of development in the industry, both in its successes and its failures, serves as an illustration of the principle of comparative effectiveness.

Part IV, Chapter XIX

Wool

Before proceeding to the woolen manufacture, the third among the great textile industries, something must be said of wool and the duties on wool. The woolen manufacture has differed from that of silks and cottons in at least one important respect: through almost the entire period covered in the present inquiry, its raw material has been subject to duties. The influence of the tariff system on the industry has thus been complicated by the fact that wool itself has been affected. There are independent reasons for examining the development of wool production and imports; the working of the duties here also serves to illustrate general principles. The present chapter accordingly will be given to a consideration of this part of the protective system.101

In the tariff acts from 1867 to 1909 (neglecting for a moment the brief period of free admission from 1894 to 1897) wool was divided into three classes: clothing wool, combing wool, carpet wool. For reasons which will be indicated below, the first two classes may be thrown together; though distinguished in the tariff, they are to be treated as one for trade purposes. Moreover, these two classes were subjected to nearly the same rates of duty, and rates which remained nearly constant in the several protectionist tariffs. The details of the changes in the successive acts are of no great moment. Both classes were dutiable throughout at about eleven cents per pound. In relation to the usual foreign price of wool, this was equivalent to something like fifty per cent;102 the ad valorem equivalent of course fluctuated with the ups and downs in price. The specific duties on carpet wool, a much cheaper grade, were always lower than those on the other classes. But for them also the ad valorem equivalent was in the neighborhood of fifty per cent. This régime, needless to say, came to an end in 1913, when wool was again put on the free list.

The general relation of imports to domestic production during the thirty odd years of high protection is shown in the chart on page 298. The upper line shows the course of domestic production. The two lower lines show the imports. The imports are separately indicated for two classes, corresponding to the trade differences; clothing and combing wool (classes I and II in the tariff acts) being thrown together as one class; while carpet wool (class III in the tariff) has a separate line.

Looking first at domestic production, it will be seen that during a period of ten or fifteen years after 1870, there was a marked advance. From 1870 to 1885 the wool grown in the United States doubled in amount. But after 1885 the upward movement ceased. There was more or less variation from year to year. The clip diminished considerably under the influence of free trade in wool under the tariff act of 1894; it increased again after 1897; for some of the early years of the present century it attained a figure above that for 1885. But on the whole it remained stationary. Whatever stimulus was given by the duties would appear to have exhausted its effect after the first fifteen years.

The imports, on the other hand, during this period after 1885 show a tendency to increase, especially during the latter part of the period. They never ceased entirely, for any class; and as the years went on, they became larger. Among the extraordinary fluctuations some are obviously accounted for by the tariff changes of 1894-97. The free admission of wool in 1894 and the re-imposition of duties three years later necessarily caused great shifts. In the year just before the act of 1894, when it was almost certain that wool would become free, imports naturally shrank almost to nothing. They then rose abruptly as soon as the abolition of the duty went into effect. Again, After the election of McKinley in the autumn of 1896 it became in turn almost certain that the duty would be restored. Consequently during the fiscal year 1896-1897, imports were rushed in from every possible quarter while wool was still free. They then fell abruptly after the passage of the tariff act of 1897. For several years after 1897 the stocks of wool from these heavy importations weighed on the market, and prevented the price of wool from rising as promptly and fully as had been expected. During the interval imports were naturally small, and confined to special qualities. Not till 1900 were the effects of this abnormal situation out of the way. Then, as the chart shows, imports mounted for all classes. After 1900—setting aside the changes due to ordinary trade fluctuations,—the general trend was clearly toward an advance in the imports. The larger quantities of wool needed by the growing population came not from increase of the domestic output, but from increase of the foreign supplies.

The simplest case is that of carpet wool. It is simplest because here the entire supply was foreign throughout. Therein carpet wool stands by itself. This absence of any domestic production, notwithstanding long-continued duties of considerable weight, is easily explicable on the principle of comparative advantage.

Carpet wool is of coarse grade, clipped from sheep neglected as to breed or pastured with poor fodder or under harsh climate. It comes to the United States from all parts of the world: from China, India, the interior of Asia, Africa, South America, Russia, Portugal, Spain, even from the Highlands of Scotland. Its coarse quality is usually due to poor care of the sheep and indifference as to breeding. The main sources of supply are the semi-civilized regions,—India, the interior of Asia, China, Asiatic Turkey, southern and southeastern Russia. In other regions, where wool growing is carried on by the highly-civilized races or under their guidance, the poorer grades of sheep are displaced by the better, which yield a fleece commanding a higher price. The careful, intelligent, and well-informed wool grower can produce these better fleeces with the same labor and investment as the inferior grades; he naturally confines himself to the former. Sheep from which carpet wool is clipped are left to the stolid and ignorant Mongolians, Turkomans, Russians; in part also to the growers in mountainous regions (like the Pyrenees and Scotch Highlands) in which the more valuable sheep cannot be sustained.103

The American wool grower hence confines himself to the sheep and wools of the better qualities,—clothing and combing wools,—leaving the cheaper grades to be secured by importation. It would not be accurate to say that he has a comparative advantage in the better grades; for, as will appear shortly, there is at least doubt whether the use of the land for sheep is as advantageous as its use for other agricultural or pastoral purposes. But he certainly has a less disadvantage in growing clothing and combing wool than in growing carpet wool. The tariff stimulus is sufficient to cause him to produce the former; it would need to be much greater—preposterously greater—to induce him to breed poor sheep and bring carpet wool to market.

The fact that all carpet wool was imported caused the debate on this part of the protective system to take a turn of its own. Why not admit such wool free, since there was no competition with any domestic product? The answer of the wool growers,—who were throughout the most uncompromising and even fanatical among the protectionists,—was that part of this wool in fact did compete with the domestic product. Some fraction was used not for carpets, but for cloths.104 True, the amount was not considerable; moreover, what was so used was always mixed with other and better wools, chiefly domestic, sometimes also with the various substitutes, such as shoddy or noils or cotton. But even the slightest competition of this sort with the domestic wool growers was regarded as fraudulent, almost criminal. Not only was the repeal of the carpet wool duties steadily resisted, but an increase in them was demanded, and indeed was secured to some degree in the tariff acts of 1890 and 1897. The acrimonious contentions before congressional committees between the wool growers and the carpet makers all rested on a premise which a consistent free trader could not accept,—namely, that so far as the imports in fact did not compete with domestic wool, so far was there a special ground for admitting them free. Precisely no, must the free trader say. A duty of this sort, on a commodity not produced within the country, is a revenue duty. It is not indeed one of the simplest sort or of the best sort, being imposed on a raw material, and hence cumulative in effect as it is eventually paid in the higher price of the finished product. But at least it is not open to the objection that an additional tax is imposed through the higher price of the supply produced at home. The last-named effect does appear as regards wool of the other classes; and if a choice must be made between exempting from duty the carpet wool on the one hand or the clothing and combing wools on the other, the free trader should prefer the latter. It was natural that the protectionists, from their point of view, should think only of admitting free so much of the cheaper wool as was used in fact for carpet making, not the portion used in the manufacturing of cloth. No such discrimination between the two classes, however, was at any time made in the tariff laws enacted by either party. When the opponents of high protection came into power, in 1913, as in 1894, wool of every kind was admitted free.105

The other classes of wool—clothing and combing—must be considered together. They present some intricate economic problems; they were the occasion of prolonged and bitter controversy. Protection to wool of this sort was the center of the protective system during the greater part of the period covered in the present volume.

Something should first be said on the qualities and uses of the two classes. Clothing wool, as defined in the tariff acts from 1867 to 1913, was wool from sheep of the merino breed, or from sheep having an admixture of this strain. Pure merino wool is short in fibre and fine in quality. Cross-breeding affects the length and quality of the fibre, and hence the textile uses to which it can be put. But the tariff definition and classification throughout regarded every wool with the slightest merino strain as "clothing wool"; even though it was used in the woolen manufacture in a way quite different from that contemplated when the tariff distinctions were first made. What was put in class II, "combing wool," on the other hand, was wool from sheep, pure bred, of the typical English strain: long in fibre, not short like merino wool; coarse in quality, not tenuous and fine; lustrous and somewhat harsh. The differences in the characteristics of these wools bring corresponding differences in the fabrics made from them. Merino wool is used for making "cloths," or "woolen cloths," in which the strands cling to each other as the short fibres touch and interlace; which are compacted and closely woven, often thick and heavy. Cloths have a "nap," or yielding surface, more or less smoothed off in the finishing processes, yet giving the fabric a character of its own due to the short fibre of the wool. Combing wool, on the other hand, serves to make "worsteds" and "dress goods,"—smooth fabrics, with an even and perhaps glossy surface, usually stiffer than cloths made from merino wool, and usually lighter in weight.

Quite as important as the difference in the fleece of the two kinds of sheep is the difference in their flesh. The English (combing wool) animals are mutton sheep; their meat is excellent; for this primarily they are bred, not for wool. Merino sheep, on the other hand, are scrawny creatures, with a tough and scant covering of flesh; they are bred primarily for their magnificent fleece. The two varieties differ, again, as regards habitat and herding; and these differences also have economic consequences of some importance. The combing wool (mutton) sheep flourish in a cool moist climate like that of England, their country of origin. The merino sheep, of a strain perfected first in Spain, adapt themselves readily to very diverse conditions, yet on the whole do best in a dry, warm climate, and are specially fitted for arid or semi-arid regions.106 As regards herding, the merino sheep keep together, moving and cropping in bands; whereas the English sheep are apt to stray singly. The former, therefore, are more easily cared for and protected in frontier countries and in regions where lack of sufficient precipitation makes cultivation of the soil impossible.

All these differences, however, are smoothed away, and indeed sometimes quite wiped out, by cross-breeding. Sheep having a strain of either blood show in varying degrees the characteristics of both, according to the preponderance of one or the other strain. The profit through securing from the same animal saleable mutton and desirable wool has caused growers in most countries, and especially in the United States, to turn to cross-breeding. At the same time improvements in machinery have made it quite feasible to use most cross-bred wool in either of the main manufacturing processes,—for making either cloths or worsteds.107 Consequently much wool,—probably the larger part,—which was classed by our tariff as "clothing wool" was used in fact for the same purposes as "combing wool." The tariff classification, as has already been said, became quite out of accord with the trade classification, which was based not on blood, but on the industrial uses of the fibre. Both domestic and imported wool was largely cross-bred; and imported wool competed in much the same way with domestic wool, whether classed at the custom houses as clothing or combing. In comparing the imports with the domestic output, the tariff classes I and II may be, therefore, thrown together,—as has been done in constructing the chart.

Comparing now the total imports of wool used for clothing with the domestic production of wool (all used for the same purpose) it is obvious that a substantial contribution to the supply came throughout from the imports. At no time did they cease; as the years went on, they tended to grow.108 The conclusion would seem warranted that the whole supply, domestic as well as foreign, was raised in price by the full amount of the duty. The proximate economic loss which may be ascribed to a protective tariff seems in this case susceptible of accurate calculation: multiply the domestic output by the rate of the duty.

Some of the qualifications which must be borne in mind when making such calculations do not seem applicable in the case of wool. There were no peculiarities of transportation, no geographically distinct markets, such as explain the exceptional imports of iron and steel, and show them to be of little significance. Foreign and domestic wools were marketed in the same places, namely, in the large cities of the Atlantic seaboard. Nor were there differences in quality which might require them to be regarded as distinct for industrial purposes. It is true that during the earlier part of our period, say from 1870 to 1885, allowance perhaps would have had to be made for differences in quality. Then the imported quota seems to have been usually of finer grade than the domestic. The latter was then said to be in the main good ordinary merino wool, suited for the medium grades of fabrics chiefly made within the country; while the imported wool was either strictly combing wool or a fine grade of clothing wool. But these differences, if ever they were important, ceased to be so before the close of the period. Domestic wool came to be largely cross-bred; a considerable portion of it was available for all the uses of combing wool; nor was there any marked lack of fine fibres. Wool varies to an extraordinary degree in quality. It is affected not only by the breed of the sheep, but by many and various causes, such as food, climate, shelter, care, and time of shearing.109 Of all the textile fabrics, it seems least standardizable; and for that reason, it may be remarked, it cannot be made the object of organized speculation. But the gradations were and are very much the same for domestic wool as for imported. Whatever general differences in quality existed in the years 1870-90 ceased to be of much significance during the later period. Though the particular way in which our tariff duties were assessed (as will presently appear) operated to exclude some sorts of foreign wool, they did not restrict the imports to any one quality or grade, or prevent the imported quotas from being comparable on the whole with the domestic.

In one direction, however, the application of the formula: economic loss = domestic product × rate of duty, must be modified. A point of difference between imported and American wools was that almost all the former were virtually improved in quality, and in that sense graded, by "skirting." A long controversy on skirted wools raged between wool growers and manufacturers. "Skirting " means that some inferior parts of the fleece have been cut off. The better parts are packed separately; a simple and convenient process, the natural result of the different uses of the varying fibres. Skirting is commonly practised in Australia, and the better wool thus differentiated of course commands a somewhat higher price than wool quite unsorted. The tariff acts previous to 1890 had imposed double duties on wool "imported in any other than the ordinary condition"; but in 1890 skirted wool was specifically made subject only to the normal wool duty; and it was similarly treated in 1897 and 1909. American fleeces, on the other hand, were never skirted; all the wool from a sheep was sold (and is) in one batch and at one price. By custom, the process of sorting was left entirely to the dealer or manufacturer.110 Skirted Australian wool of course commanded a higher price than the unassorted American; and in comparing prices, and gauging the effect of the duty, something must be allowed for this circumstance. Competent persons in the trade have concluded that a deduction of about three cents from the stated duty must be made in order to offset the effect of skirting; the duty of eleven cents a pound on skirted wool was equivalent to one of (roughly) eight cents a pound on wool not thus assorted. If all the imported wool had been skirted, the duty of eleven cents would thus have been the same in effect as one of eight cents on wool strictly comparable to the American fleeces. The burden or loss ascribable to the tariff would then be calculated on a basis somewhat lower than that of the full duty.111

We may proceed now to a more detailed examination of the history of the domestic production of wool, and more especially of the lessons from the geographical distribution of different periods.

A glance at the table on page 308 will show that the number of sheep (a sufficient indication of the wool clip) in different parts of the country has undergone great and apparently irregular variations. Yet the variations in fact conform to some general tendencies; and these tendencies are instructive.

It will be seen that in the entire region east of the Allegheny mountains there was a marked and uninterrupted decrease in the number of sheep from the middle of the nineteenth century to 1910. The decline is most striking in New England and in New York. It is great also in Pennsylvania, even though, as will appear presently, the tariff has operated in special degree to maintain wool growing in some parts of that state. In the group of states which represent the great northern central region of the country, a somewhat different movement appears. The number of sheep increases from the middle of the nineteenth century until about the year 1880, but thereafter undergoes a progressive decline. Ohio is by far the most important of these states, so far as wool growing is concerned. Even in Ohio the number of sheep, though it still remained considerable, showed an unmistakable decline after 1890. Turning to the region west of the Missouri river, we find still a different movement. In some states there is an almost continuous increase; in others, fluctuations not dissimilar to those of the eastern region. In California and Texas, for example, during the twenty years from 1860 to 1880, the figures show an extraordinarily rapid increase. But during the next generation the movement is reversed. The number of sheep in each of these states declined during the ensuing thirty years, and in 1910 was hardly one-third of what it was in 1880 and 1890. Oregon belongs, on the whole, in the same group. Here, too, there was a rapid increase until 1890; thereafter, the number remained virtually stationary. On the other hand, the characteristic ranching states, like Montana, Colorado, and Wyoming, show an almost continuous growth. Here the number of sheep in 1910 was much greater than it had been twenty years before. New Mexico also holds her own.

The main explanation of these variations is that wool has been and is characteristically a frontier product. It is easily transportable; it is not perishable; sheep raising is a ready and profitable use of the land when land is plenty, population scarce, and transportation expensive. During the earlier stages in the development of New York, Ohio, and Illinois, wool growing was an important industry. As population thickened, other uses of the land became more advantageous, and the pastoral use of the land for sheep was displaced. Precisely the same transition has taken place within the last generation in California and Texas. During the first period of settlement, sheep were herded in these states by the million. As settlement progressed, agriculture took the place of ranching; and sheep and wool declined.113

Reference has been made to the rapid and striking increase of the American wool clip which took place during the years from 1870 to 1883. This was a period, as it happened, of unusually rapid extension of the frontier. In 1869, the first transcontinental railway was completed,—the combined Union Pacific-Central Pacific line. During the ensuing decade, several other great systems, the Burlington route, the Northern Pacific, the Atchison, the Southern Pacific, were building rapidly across the western plains. A vast grazing region was opened; the lands upon which the great herds of buffalo had wandered were gradually stocked with sheep. This rapid movement accounts for the growth of the wool clip. Elsewhere, wool growing was on the decline; it was the rapid growth in the then territories which made up for the loss. After 1885, the decline in the country at large continued, and the growth in the great grazing region, though maintained, was at a slackened rate; consequently, the country's clip as a whole remained stationary.

The great pastoral region west of the Missouri river obviously cannot have the same future as the agricultural region to the eastward. Rainfall becomes progressively less toward the west, until, at about the one hundredth meridian, toward the western edge of Kansas and Nebraska, it becomes insufficient for agriculture. Doubtless it cannot be said just how far the tillable area extends; the methods of "dry farming" may stretch it somewhat farther than was long supposed. But beyond lies the arid and semi-arid country. Patches of it may be reclaimed by irrigation, but patches only. In the main, it must always be a pastoral region. Here sheep herding and wool growing have a chance for permanent lodgment.

The displacement of sheep growing as one of the main uses of the land in the eastern region is simply one further illustration of the working of the principle of comparative advantage. During the frontier stage, this pastoral use of land is advantageous. But as population thickens, settled agriculture becomes unmistakably more advantageous, and displaces the other use. Precisely the same movement is taking place the world over. Sheep growing has declined throughout western Europe,—except in England, where some special conditions prevail, sheep being kept primarily for mutton. For wool, the main supply of England as well as of the manufacturing countries of all western Europe comes from various outlying regions, such as Australia, Argentina, South Africa. These correspond for economic purposes to the successive frontier areas of the United States. In Europe, as in the United States, the use of agricultural land for wool growing has given place to other and more advantageous uses.114

It would seem that the great arid and semi-arid plains and mountains which stretch from the western edge of the Missouri valley almost to the Pacific coast might become permanent sheep pastures and permanent sources of wool supply. But here once more the principle of comparative advantage comes into play. Use of the land for another pastoral purpose seems likely to displace wool growing. The grazing plains which can support sheep can support cattle also. Meat is in more insistent demand than wool and cattle pay better than sheep. The modern changes in transportation serve to increase the trend toward cattle raising. Cattle as well as meat can be transported with an ease undreamed of a half a century ago. Before the days of highly developed railway transportation, wool was the one product which could be easily carried from the frontier. Now cattle are carried their thousands of miles. The practice of rearing them on the plains, and then transporting them to the corn belt of the Mississippi valley for fattening, has attained great proportions. Wool growing has met in the pastoral region a competitor as formidable as tillage proved to be in the Mississippi valley itself.

Nevertheless, there are considerable parts of the western region which are unavailable for cattle, and which apparently will always be left to the sheep grower. Sheep need less water than cattle, and hence will always retain their place in the drier parts, especially in the southwest. They can be herded in hilly and mountainous regions where cattle cannot be kept; they flourish on herbage which is too scant for the larger animals. Similar causes, it may be remarked, bring about the dominance of sheep growing in Australia. In the vast interior of that continent, precipitation is even less than it is in the greater part of our western region. Moreover the hot and dry climate is better adapted for sheep and especially merino sheep, than for cattle. There is a natural division of labor,—natural in the sense of resting on physical causes,—when sheep are herded and wool is produced in the interior of Australia and in the similar parts of our west, while cattle raising dominates those parts of the west where the climate and topography are adapted to them.

There is, however, another and entirely different aspect of wool growing. In the preceding paragraphs regard has been had to those pastoral conditions under which wool growing is the main use of the land. Quite different is the situation when sheep are kept as a by-product of general farming. Sheep in small numbers can probably be kept with profit on almost any farm. They are certainly kept with profit on very many. Their keep costs little; they enrich the soil; and what is got for their wool and mutton is so much extra gain. The gain from keeping a few sheep perhaps becomes greater as farming becomes more intensive; though the circumstance that sheep growing has almost disappeared in the western part of Germany, where cultivation is highly intensive, indicates that generalization on this topic must be guarded.

At all events, in the United States, farmers in considerable number, especially in the northern central region, maintain each a few sheep as a by-product. These are most profitably the cross-breds. Though the pure English strain is not adapted to the food or climate, sheep of mixed breed do well, kept with a view rather to meat than to wool. In the pastoral region of the west the merino strain long predominated. Even there, however, a movement similar to that in cattle growing has taken place; cross-bred sheep are reared on the ranches, and then sent eastward to be fattened in the corn belt. It is in the farming region proper, however, that the keeping of sheep primarily for mutton has most developed. Here the sheep are a by-product of general farming; and the wool itself is a by-product of that by-product.

To the general tendency that wool growing on a large scale tends to disappear from thickly populated countries, being relegated to frontier regions or to those regions whose climatic conditions condemn them to a perpetual frontier state, there are two striking exceptions. One, already referred to, is in England, where more sheep are permanently maintained than in any other thickly settled country. The favoring circumstances are unusual: a great demand for mutton, a climate suited to the mutton breed, soils which seem to benefit unusually by the enrichment from sheep. Wool is much the less important of the chief products. The maintenance of sheep growing in England in face of complete free trade and heavy wool imports indicates that this use of the land is advantageous. The other analogous region is in the northern and eastern part of Ohio, with adjacent districts in Pennsylvania and Michigan. Here also sheep raising remains, not on a small scale as a by-product of general farming, but as an important part, even the most important part, of agricultural operations. Here merino sheep were long maintained; and even though cross-bred sheep kept for mutton have in good part replaced them, wool and the price of wool still bulk large in the farmers' eyes. Here was the main seat of a vehement protectionist feeling. Here lived President McKinley, and here he imbibed that devotion to the principle of protection with which his name is linked in history. The case is unlike the English case, in that the maintenance of wool growing was dependent on protection. It happens that considerable parts of the Ohio area are hilly and easily eroded, and not so advantageous for general agriculture as the typical prairie land of the Mississippi valley. It was natural that wool growing, once established here under frontier conditions, and much promoted by the exceptional need for wool during the civil war period, should be clung to almost with desperation, and should become the basis of an intense and uncompromising demand for protection.

Comparing now the different wool growing regions of the United States, it is clear that the conditions were very diverse in the several seats of the industry. One could hardly find a better illustration of an industry conducted not with constant costs, but with costs greatly varying. On this phase of the wool situation the Tariff Board's inquiries of 1909-12 a led to some striking results. The special subject to which the Board directed its attention was the cost of wool within the country and without,—with reference to that principle of "equalizing" costs of production which then played so large a part in the tariff debate. Untenable as is the principle itself, the inquiries to which it gave rise served to supply illustrations on the principles really essential in the controversy.

Wool being a product supplied jointly with mutton, the Board's first task was to demarcate if possible the separate cost of wool. In this task it followed the method approved in economic theory, deducting from the total cost (supply price) of the whole the price obtained (the demand price) for the products other than wool.115 The total cost of sheep rearing was first ascertained or approximated; then the receipts from products other than wool (chiefly mutton) were deducted; the residue was taken to be the separate cost of wool. Obviously the "cost" of wool, thus made out, was a figure to be used with caution. It was the " derived " cost of wool, not an independent cost. It was directly dependent on the receipts obtained from the mutton; yet none the less, nay, for that very reason, a significant figure. It meant that wherever much was obtained from the sale of mutton, so much less was needed to make it worth while to supply the wool; and conversely that where little was got from mutton, so much more would have to be got from wool in order to make the rearing of sheep worth while.

Calculated in this way, the "cost" of wool showed extraordinary diversities. The summary statement made by the Tariff Board, giving the results in the most general form, ran as follows:116

These figures, however, not only showed an extraordinary range,—from nineteen cents a pound to nothing at all,—but were themselves averages made up from widely varying figures. Thus, in the most important of the three regions (the western), for which an average cost of eleven cents was given, the individual costs whence the average was deduced varied from a maximum of twenty-four cents a pound to a minimum of four cents. For the Ohio region, the average for the merino sheep there investigated was similarly made up from figures mounting to forty-two cents at the highest and falling to six cents at the lowest.117 The simple fact is that wool growing in some parts of the United States is carried on under advantageous conditions,—as, for example, in the dry southwestern districts where the climatic conditions are favorable for merino sheep and for nothing else;118 while in other parts of the country, as for example in the Ohio region, the conditions are distinctly disadvantageous. The lesson even for the staunch protectionists was obvious: the favorite formula of "equalizing cost of production" could not be applied in this case. And the lesson for the staunch free trader was equally obvious: there was no ground for fostering a domestic supply of wool produced at high cost, and no ground for worry about the consequences of abolishing the duty as regards the wool produced at low cost.

The contrast between the last two groups,—the Ohio region with a "cost" of nineteen cents, and other parts of the north central region with a "cost" of nothing at all,—brings out most strikingly the differences. When it was figured out that for cross-bred sheep kept in connection with general farming the wool cost nothing at all, the fact simply was that the proceeds from mutton covered all separable expenses incurred for the sheep, such as feeding, care, and the like. Both wool and sheep were a by-product (joint product) of general farming, and the "cost" of wool was more distinctly a derived cost, and even more elusive, than in the ordinary cases of joint cost. In whatever way calculated, however, it could not be more than nominal. On the other hand, there were in the Ohio region farmers who clung with a certain obstinacy to rearing merino sheep solely for their heavy fleece of short fine wool. Much of the land so used seems to have been not easily available for general agricultural purposes. But much of it was turned to wool growing of this sort through persistent habit, and also, of course, through the influence of the duty on wool. The indications were that where the breeding was chiefly or largely for mutton (cross-breds), even farms on which sheep and wool were the main products were little affected by the price of wool or the wool duty. But as regards farming chiefly for merino wool, it was found that "the highest average cost of production of such wool in the world is in the state of Ohio and contiguous territory"; which from the unflinching protectionist point of view may be a reason for maintaining a high duty on wool, but to the free trader seems a conclusive ground for not endeavoring to stimulate its domestic production at all.119

One other phase of the wool situation deserves attention. It was pointed out, in the first part of this chapter, that the orthodox formula (so it may be called) for ascertaining the national loss from protection seems in this case applicable; due allowance being made for the complication arising from skirted wool.120 Imports continue, in quality similar to the domestic product. There are no complications from exceptional conditions of transportation or of geographical distribution. Apply then the formula; multiply the domestic product by the full (effective) rate of duty; and you have the national loss. The assumptions underlying this sort of inference are two: first that the domestic price is in fact raised by the duty,—and this cannot be doubted; second that the foreign price will maintain itself at the same level after abolition of the duty. The second assumption raises a debatable question. It may be asked, will not the foreign price itself be raised, in consequence of the additional pressure on foreign sources of supply due to increased importations into the United States? We may disregard that crude form of the contention which looks simply to temporary results. Whenever a duty is remitted, the immediate effect is greater resort to foreign supplies and some rise in foreign prices. As time goes on, however, foreign prices will ordinarily be reduced to their former level; and then the full benefit of remission of taxation will inure to the domestic purchaser. There is the possibility, however, that the enlargement of the foreign supply will take place in the face of obstacles,—with increasing costs, diminishing returns. There may be pressure upon limited sources of supply, resort to less advantageous sources, and consequently some permanent enhancement of price. The case is familiar in economic theory: an increase in demand for a commodity produced under conditions of diminishing returns causes a permanent advance in normal price.

It appears, however, that this result, though quite within the bounds of theoretic possibility, is not likely in fact to ensue; and this because of the expansibility of the supply from the one region which is most important,—Australia. During the last two generations the extraordinary extension of grazing into frontier regions seems to have well-nigh exhausted the other available areas. South Africa, necessarily limited in productive capacity by an unusually arid climate, apparently has reached its limit. In Argentina a development seems to have taken place essentially similar to that which has already taken place in our Mississippi valley. The plow is displacing the ranch; settled agriculture succeeds grazing. And grazing itself is found more profitable for cattle than for sheep. What with the competition of grain and of cattle, the wool clip of Argentina seems likely to diminish rather than to increase. But in the interior of Australia a large extension of supply may be expected without an increase in cost. Wool production in that vast area is declared by observers who are competent, and who cannot be supposed to have a bias against the maintenance of our wool duties, to be susceptible of very considerable expansion. It would seem that from this region additional quantities can be procured without resort to poorer natural resources, and consequently at costs and prices similar to those which have prevailed in the past. The Australian interior, it is true, is fickle, because of the narrow margin of safety in its precipitation. The rainfall is so scant that a slight deficiency causes immense losses among the sheep. A year or two of drought in Australia affects the wool supply of the whole civilized world, and so the course of wool prices. A conjuncture of Australian drought with the abolition of American wool duty might bring it about that for the time being the American purchaser would experience no lowering of prices. But in the long run, and under the normally prevalent conditions, this combination of circumstances cannot be regarded as probable. The Tariff Board, in the same sentence in which it declared our Ohio region to be the most expensive region in the world for producing wool, declared Australia to be the least expensive in the world; and there appears to be no reason for anticipating that under altered conditions of demand it will cease to be the least expensive source of supply,—that is, the most advantageous.121

There is, however, another qualification, of some practical as well as theoretic significance, which must be attached to the general conclusion concerning the "national loss" ascribable to the wool duty. It results from the great variety in the conditions under which the domestic wool, not the foreign, is grown; it is one which must be borne in mind whenever a raw material, a commodity belonging to the extractive group,—is subjected to a protective duty. A part of the domestic output of such a commodity is likely to be produced within the protecting country so advantageously that it would hold its place even without the duty. Not the whole output then leans on protection, but only the part which is made under less advantageous conditions. But to this latter part alone can we apply the reasoning about national loss. Here, and here only, is it true that the consumer is taxed, and that the producer yet does not profit; that the extra price which the duty enables the producer to get merely enables him to carry on operations he would not otherwise turn to. As regards the domestic producers who would carry on the same operations in any case, there is nothing in the nature of a national loss; there is merely transfer from one pocket to another. What the consumer pays to them in the way of enhanced price, they really gain. Under these conditions, and to this extent, there is some justification for saying that protection robs Peter to pay Paul. But, by the same token, the free trader is not justified in saying that under these conditions there is wasteful diversion of industry from the more profitable channels into the less. There may be unjustifiable taxing of one set of persons for the advantage of another set,—whether it is deemed unjustifiable must depend on one's convictions regarding the general benefit or lack of benefit from protection. But there is only a transfer from one to another, no net economic loss. In this direction the reasoning about the economic loss from a duty like that on wool must be qualified.122

From this sketch of the history and conditions of domestic and foreign production, it will be seen that wool growing in the United States is partly an industry depending upon tariff support, and partly not. The keeping of sheep as a by-product of general farming will be continued whether or no there be a duty upon wool. The trend toward mutton, and the diminution of sheep raising with a view primarily to wool, are inevitable. In the pastoral region of the west, cattle will displace sheep in the long run wherever the climate and the lay of the land make possible the change. Wool growing of the sort which long held its own in the Ohio region was an artificial industry, probably unable to hold its own even against the stress of domestic forces, and almost sure to give way in face of unfettered foreign competition. Yet even under free wool a considerable clip is likely to be forthcoming in the United States. Partly it will be derived from many small flocks of sheep maintained in connection with general farming; supplies of this sort will probably increase as agriculture becomes more intensive. Partly it will come from those regions in the arid west which are not suitable for cattle and can be used for sheep only.

Surveying the situation as a whole, it is difficult to see any ground for the maintenance of duties upon wool, except that of extreme and even fanatical protectionism. The arguments to which economists give a respectful hearing are not applicable. There can be no question of protection to young industries. The physical and industrial obstacles which stand in the way of complete supply of the market from domestic sources are unalterable. It is the steady and growing strength of these forces which explains the increase in the imports of wool after 1900 in face of high duties. Neither do any social or political arguments tell in favor of duties on raw wool. It is, indeed, conceivable that political or social disadvantages may be alleged to ensue from complete reliance on foreign sources of supply for this important material. Yet it is striking that even in Germany, where most stress has been laid on considerations of this kind, absolute dependence on imported wool is accepted by all parties with equanimity.123 So far as the United States are concerned, however, the question is merely one of more or less. Even under free wool, the domestic supply will not disappear; it will simply shrink to smaller dimensions. To repeat, the only grounds on which a wool duty can be defended are those of a crass mercantilism: that the international division of labor brings no gain, importation in itself means loss. If foreign supply is admitted ever to be advantageous, it must be so in the case of wool.

Part IV, Chapter XX

The Woolen Manufacture. The Compensating System; Woolens and Worsteds

The main products of the woolen manufacture are woolen and worsted fabrics, and to these attention will be given in the present chapter. To them the much-discussed compensating system was applied, as indeed it was to all woolen products. That system, though initiated as early as 1861, was not fully developed until the passage of the wool and woolens tariff act of 1867. As then elaborated, it remained in operation without essential changes (barring the years 1894-97) until 1913. The questions that arise regarding the effects of protection on the industry cannot be followed without some understanding of the method by which the woolen manufacturers were "compensated" for the charges laid on them through the wool duties. The whole system, be it remembered, was swept away in 1913. The very fact that this episode in protection is closed, at least for the time being, makes its study profitable.124

In essence, the system was simple. A duty on wool raises the price of that material for the American manufacturer. He is compelled to pay more for it than is his foreign competitor. To equalize the competition between domestic and foreign manufacturers, a duty should be levied on imported woolens equivalent to the increased price of wool used in making domestic woolens. In the same way,—to state an analogous case,—if an internal tax is put on a commodity, an equal tax should be put on the same commodity when imported; otherwise the importer would be given an advantage, and would undersell the domestic producer. Once a duty was imposed on wool, an equivalent duty was clearly called for on woolens,—known in this case as the compensating duty.

The compensating duty on woolens was fixed, in general, on the supposition that it required four pounds of wool to make one pound of cloth. This large proportion, always surprising to persons not cognizant of the peculiarities of the industry, is due mainly to the amount of fatty matter contained in wool as it comes from the sheep's back. In the scouring process, most wool loses at least one-half of its weight. Often the loss is two-thirds, sometimes even four-fifths; though it is true that there are grades of wool on which the loss is considerably less than half. It is not feasible to take into account the variations in shrinkage by fixing a different compensating duty for each several kind of cloth; some general average, a fair approximation to the usual shrinkage, must be made the basis. The kind of wool most largely used in the United States in 1867, when the system was put in the shape which proved permanent, lost about two-thirds of its weight in scouring; the same was the case with the wool which was then expected to be imported. Further allowance had to be made for some wastage of the fibre in the manufacturing process. The upshot was that four pounds of wool were reckoned to be needed for making one pound of cloth. If, therefore, the duty on wool was eleven cents a pound, a duty on foreign cloths of four times that amount (forty-four cents a pound on the cloth) would put the foreign manufacturer who used four pounds of similar wool in the same position as the domestic manufacturer who also used them and paid duty on them.

A figure not far from this (forty-four cents a pound) appeared as compensating duty on woolen cloths in all the protective tariff acts from 1867 to 1909. Some changes and readjustments were made from time to time. At the very start, in 1867, the compensating figure was swelled, in order to offset some internal taxes then still left over from the civil war levies, though abolished shortly afterwards. In 1883, when the general trend was toward abating somewhat the high range of duties, the figure was reduced to thirty-five cents; the duty on wool itself being also reduced slightly in that year. In 1890, a differentiation was made. Cheap goods, it was admitted, used less wool (some admixture of cotton) and less expensive wool, than dearer goods; the compensating duty was accordingly graded, from thirty-three cents on the cheapest goods to forty-four cents on the dearest. In the tariff acts of 1897 and 1909 no change of note was made in the compensating figures. On the whole, the changes in the several tariffs brought no serious modification of the general system based on the ratio of four to one.

Over and above this compensating duty came the protective duty proper. The former simply put the manufacturer in the same position, relatively to his foreign competitor, as if he, like the foreigner, secured his wool free; it gave him no favor. But the essence of the protective system is to favor the domestic producer. An additional duty was therefore imposed on foreign woolens, which was designed to be the protecting element in the combination, and the sole protecting element. This additional or protecting duty was always ad valorem. In 1867, the manufacturers who framed the scheme modestly alleged that they wished a net protection of but 25 per cent; this had been the rate fixed 1861, just before the civil war. To be sure, the actual duty requested and secured in 1867 was not 25 per cent, but 35 per cent, because allowance was asked here, as in the case of the compensating duty itself, for some additional charges due to the internal taxes of the war. But this moderation soon was forgotten; the supposed standard of a net protection amounting to no more than 25 per cent was early put aside. If one cared to use an analogy from biology, one might say that in the propitious environment a rapid development took place from the original form, until a variety was evolved which, though like its ancestor in structure, quite out-topped it in size. The ad valorem or protecting duty not only was retained at 35 per cent long after all the special war charges had disappeared, but was increased (on all but the cheaper goods) to 40 per cent in 1883, to 50 per cent in 1890, and to 55 per cent in 1897 and 1909. The increase and accentuation of protection was nowhere more striking than in the woolens schedule.

In its application to a considerable number of fabrics, the compensating system lost some of that simplicity which it had when both cloth and wool were subjected to specific duties on the same basis,—that is, by the pound. It was not deemed feasible to apply the pound duty to all woolens. Dress goods,—for example, lighter fabrics for women,—were made dutiable by the yard; a fixed sum per yard was calculated which was supposed to be equivalent to the higher price of wool used by the domestic manufacturer in producing a yard of such dress goods. Similarly the compensating duties on carpets were fixed by the yard, not by the pound. These adjustments, already complicated in the tariff act of 1867, became still more so in the later acts; until schedule K became extraordinarily intricate, full of compensations based on approximations twenty or thirty years behind the times, inviting attack, yet difficult to reconstruct without danger of collapse to the entire edifice.125

Throughout, in sum, there was the system of double duties: specific duties by the pound (in some cases by the yard) which constituted "compensation" for the effect of the duties on the raw wool; and superimposed on them, ad valorem duties, reaching at the maximum 55 per cent, which were alone supposed to give protection. What now was the real weight of the duties, the real outcome of the system? What was the degree of protection actually given the wool manufacturers? These questions must be answered before proceeding to the further and more important question of the economic consequences.

It is probable that the compensating duties were fixed at the outset in good faith and with sufficient accuracy. The charge was often made, by those free traders who see nothing but robbery and corruption in the protective system, that they were manipulated from the start. No doubt the manufacturers whose calculations were then used made sure that the compensating figures were quite high enough; but there seems to have been no deliberate manipulation on the staple goods, and probably no serious excess.126 But as time went on, the system got completely out of gear. The compensating duties, so far from being merely sufficient for their avowed purpose, came to be very much more so. In consequence, the duties on woolens as a whole proved to be so much higher than the supposed and avowed rate of protection as to reach the extreme height in the entire tariff system. They became the particular object of attack by its opponents; and they served as still another illustration of the difficulty of ascertaining the real effect of duties that are quite prohibitory to importation.

For this divergence between plan and outcome there were several causes. Attention has already been called to those which must be considered in gauging the effect of the wool duty itself. It did not in fact cause all domestic wool to rise in price by the full amount of the duty. It was quite natural that the framers of the compensating system should have proceeded on the assumption that it would; not only because the assumption underlies the usual discussions of protection, but because the circumstances of the time (1865-70) doubtless warranted it. But, as we have seen, the domestic wool clip grew rapidly during the years 1870-1885, and imports were comparatively small; and during these years there was probably a difference between the quality of the imported wool and most of that grown within the country. And in later years also a difference of the same sort persisted. It is true that after 1890 the domestic supply remained on the whole stationary, while the imports increased; true also that the intrinsic qualities of the two ceased to show considerable differences. But the "skirted wool" complication set in after 1890. Its consequence was, as already noted, that imported wool, in the form in which it came to market, was better in quality than domestic; the latter accordingly did not rise in price by the full amount of the duty on foreign wool.127 Except for some special wools, used for particular grades of cloth, it was probably never true that the American manufacturer when buying domestic wool (that is, for the great bulk of his purchases) was handicapped as against the foreigner by the wool duty to its full extent.

Even more important, and also of special effect during the later years, was the change in the character of the wool commonly used. This again was a consequence of the great change in the woolen manufacture itself to which attention will presently be given,—the transition from woolens to worsteds. It led to greater use of combing and cross-bred wools, and less use of clothing wools. The latter, it happens, have the highest shrinkage, and alone justify the four-to-one basis of calculation. The strict combing wools, from sheep of the pure English breed, shrink at the most 30 per cent, often as little as 18 or 20; cross-bred wools a little more, but rarely in excess of 33 per cent. Merino wools (clothing wools in the strictest sense) alone shrink as much as 60 per cent; on some of these the scoured wool content goes even as low as 25 per cent, i.e., 75 per cent is lost in scouring.128 When the compensating system was established, the woolen manufacture was engaged almost exclusively on "cloths," and was using almost exclusively merino wool subject to shrinkage of 60 per cent or more. But in proportion as the worsted branch of the manufacture grew, and the older branch of the industry itself used more and more of cross-bred wool, the computations of the compensating system became quite inapplicable to the prevalent conditions. And yet there remained parts of the woolen industry to which those computations did remain applicable, and for which the four-to-one adjustment was barely sufficient for equalization, occasionally even less than sufficient. Some very fine wools are extremely "heavy," i.e., contain a great proportion of grease; and not only four pounds of such wool, but more, are used in making a pound of (say) fine broadcloth. The rigid simplicity of the compensating was quite out of accord with the great variety and complexity of the industrial conditions.129

Another circumstance that contributed much to the misfit was the large use of substitutes or adulterants. This took place more particularly in the woolen branch of the industry. It was in the worsted branch that the low shrinkage of the wool served most to make the compensation excessive; in the other and older branch it was the extensive use of substitutes for wool. Chief among these are shoddy, noils, cheap grades of wool, cotton. Shoddy is the wool fibre got from woolen rags torn to pieces; by no means so worthless as is implied by the familiar connotation of the word, but still poorer and cheaper than wool. Noils are short fibres culled from the longer fibres of combing wool in the process of combing.130 Different both from shoddy and noils in not being a second-hand or quasi-discarded product, yet of similar significance for the compensating system, are the cheaper grades of wool which the tariff system classed as carpet wool and admitted at rates of duty lower than those on the other wools. Though most of this wool was in fact used in the carpet manufacture, a substantial amount was and is used in making the cheaper grades of woolen cloths. Last but not least among the substitutes is cotton, which forms the warp in many of the cheaper woolens and worsteds.131

There was much foolish recrimination between free traders and protectionists concerning these so-called adulterants. The free traders maintained that it was the tariff system which caused them to be resorted to, thus depriving the people of all-wool fabrics; while the protectionists alleged that the foreign manufacturers were the greatest adepts in using shoddy and that the high duties served to keep out flimsy and worthless stuff. The obvious truth was that within the country as well as without the pressure for using any available substitute for the expensive wool was enormous, and that every device was tried in order to manufacture presentable fabrics from the cheapest possible material. Probably the tariff, by making wool even dearer than it had to be because of the natural conditions that operate on all animal products, drove American manufacturers to substitute somewhat more than would have been the case under free wool. On the other hand, the very limitations which the wool duty caused in the choice of the various grades may have prevented the domestic makers of woolens from securing as good results as their foreign rivals from the deft mixture of coarse fibres with fine. But the influence of the protective system in these directions was much exaggerated by both sides.

So far as concerns the compensating system, however, the consequences from the use of substitutes were great. Obviously, to the extent they were resorted to, four pounds of wool were not required in order to make one pound of cloth; and the compensating duty based on that assumption; liberal even in the case of most all-wool goods, was grossly excessive on that large portion of the domestic output for which there was use of shoddy, noils, carpet wool, or cotton. A niggardly allowance for this obvious defect in the system was made in the tariff acts passed subsequent to 1867; woolen goods were graded after 1883 according to the value, and those having the lowest value were subjected to compensating duties based on a proportion of three to one instead of four to one. But the allowance was quite insufficient; the compensating duty remained much higher than would have sufficed for its avowed purpose.132

The consequence, to repeat, was that the whole system got out of gear within a few years after its adoption in 1867. At an early date it was easily seen that the apparent simplicity and frankness of schedule K covered a vast amount of complexity and pretense.133 In its actual working the system was intricate, not simple; the compensating duties did not merely compensate, they added very much to the manufacturers' protection. During the short period of free wool from 1894 to 1897 this fact was brought home to the manufacturers, and then was freely admitted.134 After 1897, when protectionism revived in full force, and the good old times seemed to have returned without prospect of relapses to tariff reduction, the system in all its details was again accepted as part of the unalterable order of things. But in 1909, in the debates on the tariff act of that year, it was again sharply attacked. The unwillingness of the manufacturers to consider the slightest modification (it will be remembered that in the tariff of 1909 Schedule K was left quite intact) added to the bitterness of the critics. The most important investigation by the Tariff Board was on this schedule; and the conclusions stated in its Report laid bare the anomalies of the compensating system in a way to leave it quite indefensible. The Board unequivocally concluded that "the specific duty is more than compensatory for manufacturers using wools of lighter shrinkage"; and in the more detailed portions of the Report the excesses were made clear beyond a shadow of doubt.135

The further course of events need not here be recounted in detail. The free admission of wool in the tariff act of 1913 necessarily brought with it the complete abolition of the system. All the specific duties on woolen manufactures were swept away; there was no longer occasion or excuse for compensation. Not only this; the ad valorem or protective duty was much reduced. From a range of 50 and 55 per cent it went down to 35 per cent. This simple duty of 35 per cent replaced the previous elaborate compound duties, bringing not only a marked reduction in the nominal protection, but a much greater reduction in the really effective protection. A new chapter was opened in the history of protection and probably in the history of the woolen industry itself.

The outstanding fact in all this tortuous development is that for a long period the duties on most woolens were not only high, but high to the point of prohibition. So far as the range of duties goes, the case is similar to that of cottons; in both instances prohibition on most classes of goods. There is similarity, too, in that the extreme height of the duties was in neither case really designed by the legislators. Those on cottons became undesignedly high because left so long at the figures fixed when the civil war caused the great rise in the price of raw cotton; those on woolens became high because of the unforeseen working of the compensating system. Were the consequences or concomitants of extreme protection similar for the two industries? The answer to this question calls for an examination of the history and characteristics of the woolen manufacture.

The growth of the two main branches of the industry—woolens and worsteds—is shown by the appended tabular statement.136 As regards the relation between domestic production and volume of imports, the figures tell a tale essentially the same as for cottons and silks. The value of the domestic product enormously increased during the half-century; that of the imports at no time showed a substantial increase and in the later years an unmistakable decline. The imports have been a steadily diminishing quota in the total supply, and in recent times an almost negligible fraction. Only certain selected grades have continued to be procured from foreign countries—a few specialties and certain sorts of fine fabrics. Even for these, it may be remarked, the domestic manufacturers have been supplanting their foreign rivals more and more. Concerning the imports which still come in and their significance, more will be said later. It suffices for the present to point out that, if the test of success in a protectionist policy be the mere substitution of domestic products for foreign, almost complete success in this case also has been achieved.

Looking at the figures for domestic production more closely, it will be seen that a marked change took place in the relation between the two branches. Woolens lost ground, absolutely and still more relatively. Worsteds, comparatively insignificant in 1860, increased with extraordinary rapidity, and came to be by far the most important part of the manufacture as a whole. In the older branch an extraordinary and abnormal growth took place between 1860 and 1870, in consequence of the exceptional demand during the civil war period; and the unusual figure of product which was reached in 1870 was still maintained in 1880. But since the latter year, the output of woolens has declined, while that of worsteds has mounted without interruption.

No doubt the stated figures of value of product somewhat exaggerate the extent of the growth in the worsted branch. As in other cases, allowance must be made for the increase of specialization. A tendency in this direction appeared more especially in the worsted branch. It has become more common than in former times for a worsted mill to buy material in partly-manufactured state,—as tops or as yarn. Then the yarn (say) appears in the census reports as product for the spinning mill, and presently appears again in the value of the cloth turned out by the weaving mill. A curious and unexpected stimulus to specialization was given by the tariff act of 1883, which admitted some yarns (by a miscalculation on the part of those who adjusted the details in the duties) at low rates and tempted domestic mills to buy imported yarns; the practice, once begun, was continued to a large extent even after later tariff acts raised the yarn duties and caused the weaving establishments to turn to domestic spinners. These questions of organization, important and interesting as they are, lie in the main outside the scope of the present inquiry. The extent to which they must be borne in mind when referring to the census figures of "value of product" is indicated by other supplementary figures, such as those for numbers of persons employed, machines, and the like. A glance at such corrective data, given in the note, shows that they lead to no great modification of the general conclusions. It still appears not only that the domestic industry in general has grown greatly, but that the woolen branch has sensibly declined.

For this great shift two explanations have been offered. That which is doubtless most in accord with the facts ascribes it to general industrial causes,—changes both in the demand for goods and in the methods of production.137 The other ascribes it, at least in large part, to the tariff system, and more particularly to the way in which the duties on wool and woolens were adjusted. Attention may first be given to the latter explanation, since it is closely connected with what has just been said of the compensating system.

The mode in which the duty was levied evidently led the American manufacturers to refrain from buying foreign wools whose shrinkage was high and whose scoured content was low. It proved to be prohibitory on wools whose shrinkage was very high; these could not be profitably imported at all. Now, as has been pointed out, the short fibre wools of the merino type shrink most, and are the wools used by the makers of carded goods, or woolens. These manufacturers were virtually prohibited from using some grades of foreign wool suitable for their branch of the industry.

Not only this: but the compensating system in their case did no more than compensate on the all-wool fabrics, nay, on some grades did not suffice for compensation; whereas on worsteds it quite overshot the mark and gave an additional concealed protection. The cross-bred wools, still more the combing wools, used in the making of worsteds, yielded a larger proportion of scoured wool than was assumed by the four-to-one ratio, and the compensating duties based on this ratio were quite excessive. The real protection to the manufacturers of worsteds was much greater than to the manufacturers of the carded woolen goods.138

All this is true; but it does not go far toward explaining the differences in the development of the two branches. Beyond question the duty on wool, difficult enough to defend in any case, was made the more indefensible because of the way in which it was levied. Beyond question, too, the compensating system favored the manufacturers of worsteds more than those of woolens. But the long-continued trend toward worsteds cannot be ascribed to these causes alone or to these chiefly. True, it is probable that during the first decade or two after 1867 the excessive duties on worsteds contributed to rapid growth in this branch. It is always during the period just after the establishment of protection that it most serves to give high profits to the domestic producers and most stimulates the growth of the domestic industry. As time goes on, however, competition sets in and unusual profits disappear (barring of course the case of monopoly, which is not found in this instance). The notion that a particularly high duty continues to bring particularly high profits to the protected producers really rests on the other notion that the tariff necessarily causes a rise in domestic price by the full amount of the duty imposed. But where the rate is amply high enough to keep out the foreign rivals, it matters little whether it be 50 or 150 per cent. The domestic price is then determined, under competitive conditions, solely by the domestic conditions of supply and cost. As regards woolens and worsteds, though the duties on the latter were particularly high, the duties on woolens were quite high enough. On them also there was not a little concealed protection in the compensating system; on them also the rates in general were prohibitory. Exception must doubtless be made for certain classes of woolen goods, particularly for all-wool fabrics made from fine merino wool of heavy shrinkage. On these the compensating duty achieved no more than its avowed purpose, sometimes failed to achieve it fully. Neither was the net protection here pushed to the point of prohibition; some imports continued. But the great bulk of the domestic manufacture of carded woolens was devoted throughout not to these finer goods but to cheaper grades, on which the duties were as prohibitory as they were on most grades of the rival worsteds. If under the circumstances the older branch of the manufacture was surpassed by its younger rival, the explanation must be sought elsewhere than in the peculiarities of the tariff system.

This conclusion is confirmed by the fact that the same general trend appeared in other countries. In free trade England, in protectionist Germany and France, the worsted branch also gained on its rival. Promoted and hastened though the change may have been in the United States by our tariff, it rested on causes of wider operation.

Among these causes, the vagaries of fashion played a large part, and indeed are often declared to have played the leading part. Next to the silk manufacture, that of woolens is most affected, among textiles, by this psychological element. In the last quarter of the nineteenth century fashion turned largely from the close-matted comparatively heavy woolens to the less compacted, lighter, smoother worsteds; and the direction of production necessarily followed the course of demand.139

More important, however, and fundamental after all, were changes in the technique of production. These favored the worsted branch both by giving it wider scope and by enabling it to attain in greater degree the advantages of the machine processes,—homogeneity of material and product, standardization, large-scale operation. The changes center about the invention and improvement of the combing machine, from which have flown industrial consequences so great as to entitle this to be reckoned among the revolutionary changes in the textile arts. Moreover, they have an important bearing on our tariff problems, and therefore deserve to be considered more fully than would otherwise be pertinent to the present inquiry.

Reverting for a moment to the difference between woolens and worsteds, let it be recalled that in general woolens are made with short staple wool, worsteds with long staple wool. Woolens are carded goods; that is, the fibres of the wool are pulled apart and interlaced by the card,—strips of leather armed with protruding short teeth. The old hand card was succeeded at a comparatively early period in textile development by the machine card, in which the teeth are set on cylinders that revolve at different speeds. In carding, whether of wool or cotton or silk, the aim is to secure a sheet of smoothed, interlacing fibres, ready for the subsequent operation of spinning. The comb also prepares the fibre for spinning, but in a different way and with a somewhat different object. It selects the longer fibres, pulls these out, and arranges them parallel to each other, rejecting the short fibres. The selected long fibres, laid together in a soft, loose, rope-like strand, are called tops; the rejected short fibres are called noils. These noils, it may be noted, are used in the other, rival branch; they are short fibres, such as the carded industry primarily uses; they are a natural substitute, or complementary material, by no means an adulterant, serviceable in making the woolen goods proper.

The machine processes were applied to combing, at a date comparatively recent. The comb remained a hand tool longer than the card. Indeed, the hand card, being simple, and managed with comparative ease, never became the tool of a separate trade. The comb required specialized skill; the wool combers formed a craft, and were important figures in the early history of the worsted manufacture. Like the hand loom weavers, they did not give way to the machine until the middle of the nineteenth century. The fact that machinery triumphed so much later than in carding is in itself an indication of greater complexity in the operation, and so an explanation of the unusual intricacy of the modern combing machine. That machine, or the "comb," as it is now commonly called, was developed by a series of inventors about 1850 and thereafter, exhibiting in its course the characteristic features that appear in the history of most modern inventions. There was a preparatory period of tentative groping, and then an almost simultaneous perfecting of the main processes by several hands; while business shrewdness and enterprise were necessary to bring to full fruition the work of mechanical genius. The main seat of the industry and of the changes in it was Bradford in Yorkshire. As England was the habitat of the long-wool combing breed of sheep, so it was in England that the worsted manufacture began and continued. Bradford was and is still the most important worsted center in the world.140

The combing machine greatly changed the worsted industry in two respects. In the first place, it served to standardize the conditions of manufacture and so to stimulate a tendency to large-scale operation. The tops turned out by the comb are a homogeneous material; so much so that they have been systematically dealt with on exchanges, and are often the occasion of contracts for future delivery. They are commonly made in Europe by separate top-makers, who sell to the spinners. Here, as with other processes, specialization in the textile industries is much more marked in Europe than in the United States. The very possession of a homogeneous material facilitates the use of highly-perfected and quasi-automatic machinery in the later manufacturing stages. In all countries the worsted branch of the industry is conducted on a larger scale than the woolen branch; it is more capitalistic, more in line with the general trend of modern industry. Thus in England, there were in 1899 about eighty persons employed in the average woolen mill, but as many as two hundred in the average worsted mill.141 In the United States, the worsted mills turned out on the average (in 1909) a product more than four times as great per establishment as the woolen mills.142 This contrast is the more striking because in both countries specialization has gone further in worsteds than in woolens. The typical worsted mill confines itself to a less number of manufacturing operations, and yet is larger in size than the woolen mill whose operations are split up into a greater number.143 The worsted offers greater opportunities for the economies of large-scale production, and grows at the expense of the branch which offers less opportunities in this direction.

Quite a different consequence of the combing machine was an extension of the range of the industry, both as regards the quality of the wools which could be used and the quality of the fabrics which could be turned out. The hand comb had been available only for wool which is combing wool strictly,—the long staple wool of English sheep. The same was the case with the combing machine when first put into use. But gradual improvement made the machine applicable to wools having fibres not so long. Cross-bred wools could be put through it, their shorter fibres eliminated as noils, their longer fibres laid together as tops. It is for this reason that the classification of wool so long maintained in our tariffs,—"clothing" wool in class I, "combing" wool in class II,—became quite out of accord with the industrial facts. Merino wool proper is still too short to be used in the worsted manufacture. But a large part, probably the larger part, of the wool which the tariff classed as clothing wool was in fact put through the combs. The worsted industry thus had at its disposal a very great and varied mass of raw material, and was able to turn out goods resembling closely those of the other branch. The typical worsteds of former days were smooth and lustrous, somewhat harsh in quality. With the improvement in the combing machine softer and suppler goods could be made, having some of the excellences of both kinds. The two in fact came to overlap, and the worsted industry was able to turn out fabrics of much greater variety than in former times.

All these factors were in operation in the United States, and some of them to an exceptional degree. The worsted industry was equipped with machinery at once perfected and expensive, and its material was standardized; so it secured the technological basis for large-scale operations. A wide range of raw material was brought to its disposal. The changes in fashion were toward its products. In the United States an additional factor probably was that the lighter and looser worsteds were better adapted to climate and habit,—a warm summer and in winter houses amply heated. No doubt during the earlier stages the extreme protection which was extended to worsteds under the compensating system gave a special impetus, and caused some manufacturers to reap unusually large profits. But the continued growth and eventual predominance of this branch indicate that, even though stimulated by the tariff and perhaps steadily dependent on the tariff for existence, the protective system alone could not account for its position relatively to the other branch.

Part IV, Chapter XXI

The Woolen Manufacture, (continued). Characteristics of the American Industry

Having surveyed the growth of the two great branches of the American wool manufacture, we are prepared to consider the more difficult problems concerning the effects of protection: the technical development of the industry in this country and in Europe, the effectiveness of the labor and capital engaged, the prospect of attaining independence of tariff support. Was the growth similar to that in other textile industries? As regards cottons, we have seen that extremely high duties can be fairly said to have been almost without effect either for good or evil: they did not check industrial progress, nor did they serve to promote it. The history of the silk manufacture suggests, even if it does not quite prove, that a newly-established industry may not only grow in size under the influence of protection, but advance in effectiveness. What does the evidence indicate in the case of woolens?

The preceding account of the history and characteristics of the worsted and woolen branches would lead one to surmise that the first named, young though it is, would have proved more likely to give scope to the special industrial excellences of our inventors and business leaders, and more promising as regards eventual independence. The woolen branch, on the other hand, seems to have characteristics that indicate less adaptability to American conditions, a field less favorable for American enterprise. Yet it is not clear that distinctions or conclusions of this sort can be maintained. The course of development in both branches has been different from that in the other textile industries; the situation in many respects is puzzling.

First, as regards worsteds. Here, to repeat, the opportunities for American industrial talent seem promising. Yet it appears that in precisely the direction where one looks for advance by Americans,—the invention of new machinery or improvement of old,—the worsted manufacture showed least indication of progress or of independence. On the contrary, it seems to have remained under European tutelage, content to import and to use European machinery. This at all events was the case in those departments of the industry which are most distinctive,—combing and the operations closely connected with combing. The facts brought out by the Tariff Board in 1912 were surprising. It appeared that in the worsted mills hardly any machinery, in all the processes up to and including spinning, was of domestic make. Almost all the combing machines were imported, almost all the drawing frames (these begin the manipulation of the tops as delivered from the combs, reducing the tops to a thin sliver ready for spinning), almost all the frame spinning machinery, and absolutely all of the mule spindles. Such small fraction of the combing and spinning machinery as was of American make was a direct copy of that imported. Leadership in the industry was clearly on the other side of the water.144

Nor did it appear that there was anything in the organization of the working force or in the efficiency of the individual operatives which gave any advantage to Americans. The evidence on this topic, taken at its face, pointed to but one conclusion. It is true that here, as elsewhere, the turn taken by the protective controversy caused the manufacturers to lay stress on their own disabilities or failings. The notion current among protectionists for many years, that duties should be so levied as to cover higher cost of production in the United States, led their spokesmen to dilate on disadvantages and on the absence of any factors making for advantage or special effectiveness. The mill operatives, it was said, were chiefly of foreign birth, and not of the best foreign birth,—raw agricultural laborers from southern and eastern Europe, suddenly transplanted to factory towns; not equal in steadiness, skill, even tractableness, to the English, German, and French who remained in the competing mills of these several countries.145 The American mills were said to have the same equipment; the operatives performed the same tasks and performed them no better, nay, not so well; how could the industry possibly maintain itself, paying American rates of wages, without protection? On the principles of protection, the argument was unanswerable; its applicability in this case apparently was beyond cavil. It raised unequivocally the fundamental questions that underlie the whole controversy. Is it worth while to support industries that have no superiority over their foreign competitors, and show no prospect of attaining any? If all American industries were in the same state as the worsted manufacture (in the departments here under consideration),—if all machinery were quite the same as in Europe, all workmen no more efficient, all management no better,—could the product of American industry be larger, and could wages in general be higher? Was not the industry one in which the effectiveness of industry failed to measure up to the general American standard of effectiveness, which alone makes possible a high general rate of wages?

In some other departments of the manufacture the situation was not so unpromising. As in the textile industries at large, weaving stood in a position apart. Here the conditions as regards domestic and imported machinery were quite reversed. Only one-fifth of the looms were imported; the great majority were of American make.146 Not only this, but the striking American improvements in weaving had been found applicable, not indeed throughout, but at least in some directions. The automatic loom was used in weaving certain kinds of worsteds, and cut down cost, i.e., increased effectiveness, in this part of the manufacturing processes. From the nature of the case it could be used to advantage only where thousands of yards of a single kind of fabric were turned out; such as "blue serges" and the like for women's wear, having a cotton warp, comparatively cheap and sufficiently serviceable,—goods which could be steadily marketed in great quantities.147 Worsteds and woolens are in general not of uniform pattern or quality, and are much subject to the vagaries of fashion; hence mass production of this sort is not susceptible of the same extension as in the case of cottons. Indeed, as will appear presently, there are peculiarities in woolen weaving which seem to militate against any wide-spread adoption of the methods which have so profoundly affected the cotton manufacture. The apparently exceptional cases in which the automatic loom was used in weaving worsteds served rather to emphasize the contrast between them and the more typical American conditions. It is not to be supposed that this industry was quite outside the main current, and quite uninfluenced by the pervasive tendency in the United States to extend the use of labor-saving devices.148 Yet the available evidence indicates that, as regards machinery, the advances over competing foreigners were less, and surprisingly less, than in other textile industries.

It is possible that forward strides were taken in other directions,—in the more general economies from large-scale operation. In the worsted manufacture, as elsewhere, a contest has been going on between different systems of organization and management,—between the large mill and the very large mill, between integration and specialization, between the single establishment and a combination embracing many establishments. In these respects the American industry shows contrasts both with its European rivals and with other textile industries in the United States.

In the mere fact of a comparatively large scale of production it is not peculiar; worsted mills in Europe also are larger than woolen mills, and as large as cotton and silk mills. But some of the American mills are of such extraordinary size that they may be called giants; they endeavor to secure the advantages of large-scale operations on a scale not elsewhere dreamed of. The much-discussed Wood Mill, erected by the American Woolen Company at Lawrence, Mass., is said to be the largest textile establishment under a single roof in the world. Others, such as the Arlington mills in the same city, are of similar size; there is a well-known list of other great mills. Side by side with them are a number of establishments of more moderate size, comparable with the typical European establishment. It is not certain which type is gaining in the United States; but the huge concern seems at the least to hold its own. Its methods are in accord with those of American industrial triumphs. The worsted industry, or at least some branches of it, may be thought to be on the way to securing a comparative advantage.

Possibilities of the same sort may be considered as regards the effects of integration and combination. The American tendency on the whole is toward integration. Certain it is that specialization is carried less far than in Europe, in the worsted industry itself as well as in textile industries at large. In some respects there are signs of some reaction toward specialization in the United States; the trend toward integration is by no means without exceptions; but there is nothing like the division of labor between distinct branches,—scouring, combing, dyeing, spinning, weaving, finishing,—which is the established European organization.149 It remains to be seen in this matter also whether management and organization after the American plan will hold their own, or whether specialization will extend; and further, whether the great integrated establishment will prove to have advantages not only over its specializing competitors at home, but over its competitors of the same character abroad.

So it is with regard to combination. In this industry, as in others, the United States is the scene of a bold experiment in great-scale management. The American Woolen Company is a combination of a number of mills of different character, united under single control, and endeavoring to secure various potential advantages. Among these are economy in the purchase and allotment of materials, standardization of equipment, and specialization among the several establishments,—not specialization of the kind referred to in the preceding paragraph, but in the sense that each mill is confined to one class of goods, operates continuously on its specialty, and makes no endeavor to turn out a "line" of varied products such as the independent manufacturer commonly thinks it necessary to offer. All sorts of mills are combined in this great agglomeration; not only worsted mills, but woolen mills in the narrower sense (carded wool mills); scattered moreover in many far-separated places. The experiment is of no little interest to the economist, quite apart from any bearing it may have on the tariff question. Does this method of organization really conduce to effectiveness in production? It seems to raise no question of monopoly. However important and even dominant is the position of the American Woolen Company, it has not even a quasi-monopolistic control of the industry or of any branch of it. It has to meet competition on every side; the contest is a direct uncomplicated one between the single concern and the great combination of similar concerns. The traditional reasoning does not point to any certain or even probable advantage for the latter in this particular case. It is true that large-scale production is growing in the worsted industry; but its advantages are not proved to progress indefinitely with enlarging scale. Integration, though carried on to an unusual extent in American establishments, has to compete with specialization in this country, and even more with the specializing industry of Europe. The goods produced are of great variety, and subject to the whims of fashion; hence standardization of equipment and sweeping application of machine methods cannot be carried as far as, for example, in the manufacture of the ordinary grades of cotton goods. It is to be observed, moreover, that in the two other leading textile industries there has been found no promising field for a great combination: neither for cottons, where mass production has been carried so far, nor for silks, where there are conditions resembling those of woolens as regards variety of goods and irregularity of fashion.150 It would seem that only certain parts of the woolen manufacture give any prospect of gains from horizontal combination; more particularly those parts of the worsted branch which produce on a large scale great quantities of homogeneous fabrics. But on this subject it is well to refrain from prophecy, perhaps even from speculation. The whole question of the technical and managerial possibilities of combined enterprises awaits solution, and not least so in this industry.

Turn now to the other branch of the woolen industry, that of carded woolen goods. Here the conditions are in many ways different; in some ways they seem more promising for the American producers, in others less so.

This is the older part of the industry, and therefore, it might be supposed, the one less likely to be dependent on the tariff. The manufacture of worsteds, like that of silks, grew up after the civil war, and was the direct product of high protection. The woolen branch is the oldest of all in the textile group; it goes back to the "domestic" system of colonial days. True, it is younger, as a machine using industry, than the cotton manufacture, since the epoch-making inventions of the eighteenth century were first applied to the latter. But carding, spinning, and wearing machinery was adapted to wool at an early date in the nineteenth century, both in England and the United States. The American tariff controversy of the first half of the nineteenth century was concerned as much with the duties on wool and woolens as with any other single set of duties. The manufacturers were encouraged by high rates during earlier years, and then compelled, after 1846, to adjust themselves to rates decidedly low. Under the tariffs of 1846 and of 1857 the effective duty was less than 25 per cent.151 Yet the industry did not succumb. Though the imports formed in 1860 a much larger proportion of the total supply than they did in later years, the domestic product even then exceeded the imports, and the manufacturers looked to the future with courage under duties so low that they would be adjudged rank free trade by the modern protectionists.

If this was the situation in the middle of the nineteenth century, it would seem inferable that the degree of dependence on protection would have become less rather than greater after the lapse of another half-century. All manufacturing industries grew and strengthened after the civil war. The textile industries that were well established at the earlier date, as well as other industries then in a firm position, continued to hold their own. The high rates of the later period would seem unnecessary; and the carded woolen manufacture, mature and settled as early as 1860, might be expected to show in 1910 greater independence of tariff support than the newer worsted manufacture which owed its origin to extreme and comparatively recent protection.

Confirmation of this impression would seem to be afforded by a comparison between the two branches as regards one point on which stress has been laid,—namely, the relative use of imported and domestic machinery. The carded woolen branch was found by the Tariff Board to be in a different position from its younger rival, in that it relied but little on imported machinery. Carding is the step in the woolen industry which corresponds to combing in the worsted. The Board's inquiries showed a sharp contrast between the sources of supply for combs and cards. Whereas almost all the combs were imported, the carding machines were preponderantly (92 per cent) of American make. It is noteworthy also that the somewhat modified carding machines used in worsted mills (they prepare wool of comparatively short fibre, such as cross-bred wool, for the combing operation) were also largely of foreign make; here again the worsted branch relied much more on imported equipment. In spinning there was the same contrast. Much the greatest part (85 per cent) of the mule spindles in the woolen mills were made in the United States. But in the worsted mills absolutely every mule spindle was imported. It may be noted also that of the "cap" spindles used in the worsted branch, and there used only (being inapplicable to carded wool), the proportion of American machinery was insignificant,—only 8 per cent, as compared with 92 per cent imported. Here again the worsted branch relied almost exclusively on foreign apparatus.152

The significance of this contrast, however, is affected by some other facts brought out in the same investigation. It appeared that the machinery in the worsted mills was the more modern, i.e., had been in use for a shorter period than that in the woolen mills. The cards in the latter were, it is true, of American make; but they were old. Nearly one-half of them (47 per cent) had been in use twenty-five years or more. The cards used by the worsted makers were distinctly more modern,—of foreign manufacture, it is true, but comparatively new. Only 7½ per cent were twenty-five years old or more, as compared with the 47 per cent just stated for the woolen mills. A similar difference, though not so marked, appeared as regards the age of the mule spindles. This part of the equipment of the woolen mills, while chiefly American, was older than the same equipment, all of it imported, in the worsted mills.153 The combs in the latter, it will be remembered, were almost all of foreign make; but these also were comparatively new. The preponderant use of American machines by the woolen mills might thus be a sign not of progress, but of lack of it. It would be so if the domestic machines were inferior to the foreign, or at least not superior. And similarly the preponderant use of foreign machines by the worsted makers might indicate that they were using the best that was obtainable. This throws the question of the comparative effectiveness of foreign and domestic industry one stage farther back,—to the machine makers who supply the manufacturers. So far as concerns the final outcome, the problem remains the same. Whether an American industry can hold its own against foreign competition depends, to repeat, on the combined effectiveness of all the factors,—climate, power resources, and raw material; quality of workmen; ability in organization and management; and, finally, the technological equipment. But in comparing the woolen and worsted branches within their own circle of operations, the mere use of domestic machinery by the one, of foreign by the other, does not necessarily measure their relative progress or effectiveness. Apparently the worsted branch, using imported equipment, simply turned to the best that was to be had;154 while it is conceivable that the domestic equipment used by the woolen branch failed to keep pace with the general American progress in labor-saving devices, perhaps even failed to keep pace with progress in foreign countries.

It must be borne in mind that during the period here under review the woolen branch was virtually at a standstill, while the growth in worsteds was rapid and continuous. The retention of old equipment in the former may seem a natural result of adverse conditions due to shifts in fashion and other extraneous causes. Yet adverse conditions do not necessarily have a deadening effect on industry. It is often said that severe competition and trade crises tend to have the opposite effect,—to compel economies and put every producer to his trumps. In this case, as in the converse case of favoring conditions, there seems to be no a priori ground for saying that either progress or stagnation will be promoted. High protection, for example, is said by the free trader to conduce to laxness, by the protectionists to stimulate domestic improvements. Under either set of conditions,—depressing or encouraging,—the only helpful method of inquiry seems to be the examination of the available historical and statistical material, and also of the indications of adaptation, or lack of adaptation, to the country's general industrial environment.

It happens that in this instance there has been some direct testimony to stagnation. It cannot be said that American experience in general verifies the free trader's prediction concerning this sort of consequence from high duties. On the contrary, the history of many industries (such as iron, silks, and cottons) indicates that protection and progress are not incompatible.155 But there are indications that in the carded woolen branch backward establishments were enabled to hold their own under tariff shelter. The long-continued use of old machinery would seem to point that way. More significant is the fact that the protectionist spokesmen themselves have sounded notes of warning. During the civil war the abrupt increase of demand for woolen cloths inevitably caused all sorts of mills to make profits even with poor equipment and slack management. Notwithstanding a process of weeding out which set in after the war (the wool and woolens act of 1867, with its elaborate compensating system, was in reality an endeavor to stave off the inevitable readjustment) this abnormal stimulus seems to have left its impress on the carded woolen industry throughout the ensuing half-century. During the brief period of free wool and lowered woolen duties under the Wilson tariff act (1894-97) some plain speaking came from the protectionist ranks. It was said that the carded wool branch had been backward, and consequently had been hit by the lowered duties more than the worsted branch. A general overhauling was not to be avoided.156 This period of low duties and of stress proved short,—shorter than the protectionists themselves expected; or else such confessions would hardly have been forthcoming. In 1897, the tariff barrier was put up again, high and strong as before; and behind it the industry was enabled to go its way for another long period (from 1897 to 1913) without paying attention to any possibilities of foreign competition.

What now is the explanation of the situation which has come to view in this account of the American woolen manufacture? In general, the tale is one of backwardness; how explain it?

One explanation often given is that all is chargeable to the duties on raw wool. This is the outstanding factor not present in the other textile industries. For silks and cottons the raw materials never were subject to duty. The woolen industry alone labored under the handicap of taxes on its material. The free traders, and especially those who preached the gospel of free materials, laid stress on this circumstance. The wool duty, it was said, handicapped the manufacturers, narrowed the range of the industry, stood in the way of diversification. This explanation was particularly acceptable to the free traders because as a rule they were reluctant to go the full length of their own creed and to admit that the manufacture itself might be in danger if their policy were adopted. No: it was thought that, given free wool, the manufacturing industry would hold its own, and even expand and progress.

But I cannot believe that this tells the whole story. No doubt the wool duty did operate as a handicap on the manufacturing industry. The qualities of wool are extraordinarily diverse; the particular way in which the duty was so long levied served to prohibit many grades, and to hamper the use of others. Probably there was some effect in keeping the manufacture in routine grooves, even in a rut. But the wool duty was so completely offset by the compensating system, and the characteristics of the manufacturing industry appear in so many matters that are little related to the duty, that this cannot be judged a decisive or even commanding factor. After all, though the compensating system proved to be ill adjusted, and unequal in its effect on different branches of the industry, the duties on woolens as a whole,—compensating and "protective" taken together,—left a generous margin for protection in almost all cases. Just as the wool duty does not serve to explain the greater growth of the worsted branch as compared with that of carded woolens, so it does not explain the general characteristics of both branches. It has sins enough of its own to answer for, without being held accountable for everything that seemed to go wrong. The question persists: how account for the seeming failure of the woolen manufacture to keep in line with the general march of American industrial effectiveness?

To this question, as to so many in the field of economics, it is easier to give negative answers than positive; easier to say what was not the cause than to say precisely what was. The phenomena are perhaps most puzzling in that the historical sequence in the manufacture seems out of accord with its contemporary position and prospects. The woolen branch (carded woolen) is much the older; apparently it was firmly established at an early date; yet it has been beaten by its younger rival, the worsted branch, not only in size but apparently in adaptability to the general industrial conditions. Yet it is in the last-named circumstance,—adaptability to American conditions in general,—that the solution of the problem is most likely to be found.

The historical anomaly in the carded woolen branch,—its growth and assured position at an early date, contrasting with the more precarious modern stage,—is perhaps to be explained on the ground that in the course of time the industrial environment itself underwent a change. In the United States of the first half of the nineteenth century an industry of small or moderate scale was more likely to hold its own securely than in the United States of the twentieth century. Intelligence and handicraft skill on the part of the individual workmen, which play so marked a part in this branch, had not then found so many other fields for advantageous application. Add to this the circumstance that the industry had traditions and an established basis, inherited from the domestic spinning and weaving of colonial days, with their necessary adjuncts in the fulling and finishing mills,—and it is not so difficult to understand the contrast between the middle of the nineteenth century and the beginning of the twentieth.

The worsted industry, on the other hand, exhibits in all countries the more dominant characteristics of modern industry,—highly-developed and quasi-automatic machinery, standardized material, large plant, a dominance of organization, and (in comparison with the older branch) a lack of individuality. These characteristics appear most sharply in the manufacture of the staple grades of fabrics, turned out in large quantities and at prices low enough to make possible their sale to multitudes of purchasers. It is in accord with the general trend of American industry that our manufacturers should have turned chiefly to goods of this sort, while those calling for more detailed care, more variety, more individual finish continued to be imported even in face of the extremely high duties levied so long. It is in accord, too, with the general international division of labor that the more highly-finished goods should be produced in France more than in Germany, and in Germany more than in England. Thus it would seem that the manufacture of staple worsteds was the most promising part of the industry for the Americans, giving favorable opportunities for the methods and appliances which they have learned to apply better than others. And yet, to repeat, the evidence points little to progress. The record on the whole is one of imitation, not of independent advance, still less of leadership. While the carded woolen branch may be said to have been left behind by the American industrial current, the worsted branch simply kept up with the general European movement, and showed little sign of keeping pace with that in the United States.157

It is true that protection veils the situation, as it does in the case of the silk manufacture. Behind it the American worsted industry may have achieved more than can be readily seen, more than the manufacturers are aware of, or (if aware) are ready to admit. Some allowance must doubtless be made for that timorousness with regard to foreign competition which protected producers show at all times and in all countries. Invariably they exaggerate their own deficiencies and exhibit a panic fear of foreign competitors. But even after making allowance for this sort of exaggeration in the general accounts given by the protectionists, such specific facts as the Tariff Board brought to light regarding the importation of machinery point to a real basis for their fears. It would seem that the American wool manufactures, as a rule, are not able to meet foreign competition on even terms, and have little prospect of doing so. And the question recurs, why not?

I cannot but believe that there is something in the quality of wool fibre which has affected fundamentally the course of development; just as the quality of silk fibre affected the silk industry. It is in this direction that we are most likely to find some explanation of the peculiarities in the history of both branches of the American wool manufacture.

It is certain that in some respects at least wool is not amenable to machinery of the quasi-automatic kind. As regards spinning, for example, the ring spindle, which dominates the cotton manufacture of the United States, has not been found available for wool. All carded wool is spun on the mule; and in this branch of the textile manufacture, as has been already pointed out, the Americans have no advantage either in the machinery itself or in its operation.158 Most combed wool is also spun on the mules. A method of spinning similar to that with the ring—cap spinning—is used for some combed wool in Yorkshire and in the United States.159 But the absence of any American improvements, and presumably of any special adaptability to American industrial conditions, is indicated by the fact that almost all the spinning machinery of this kind used in the United States is imported from Great Britain. There is no sign of such American inventions and improvements as have so profoundly affected the spinning departments of the other great textile industries,—silks and cottons.

As has been repeatedly pointed out in these pages, weaving is the textile operation in which American manufacturers have long been most proficient. So far as concerns the sources of supply for weaving machinery, the situation in the woolen mills was found by the Tariff Board to be quite different from that in the spinning department. Over three-quarters of the looms were of American manufacture. Those that were imported,—a very few from Germany, the larger quota from England,—were used chiefly in the manufacture of fine goods, of which more will be said presently.

Nevertheless, even with respect to weaving, there is a great difference between the woolen and cotton industries. Woolen looms are usually wide,—five feet wide or more; and for this reason, and also because of the less automatic character of the work, it is rare that a weaver is given charge of more than two looms, at most three. Only where there is large-scale production of uniform goods, on narrow looms, is any attempt made to put a weaver in charge of a considerable number of woolen looms; an endeavor which of course is made with most effect where the automatic loom has been found applicable to some worsteds. It would seem that the nature of wool and the yarn spun from it, as well as the more diversified character of the fabrics, stand in the way of any sweeping application of the methods which have proved of such far-reaching effect in the weaving of cottons.

Another consequence of this general situation is a difficulty in finding and keeping the sort of weaver who can run a woolen loom well. The Tariff Board in the course of its inquiries elicited from manufacturers a number of instructive statements. Repeatedly it was declared that the woolen weaver must have the qualities of a mechanic; that quickness, a good eye, a skilful hand, are called for; that the good weaver is a high-priced man; and not least, that one who is highly capable tends to drift away into other occupations, in which his services command higher pay.160 Similar statements are made about the weavers of fine grades of cotton goods. These also are a selected group among the textile operatives, skilled by nature or by training, paid at a comparatively high rate, and able to find ready employment in other industries.161

All this serves to illustrate the principle of comparative effectiveness. Workmen who have the qualities of the skilled mechanic are needed in woolen mills and in the cotton mills making the finer fabrics; but they seem to add no comparative effectiveness there. In American industry at large, the man of mechanical capacity and training is in great demand,—for instance, in the wire fence and automobile industries mentioned in the letters just quoted. It is among the characteristics of our general industrial conditions that the gap between the wages of skilled and unskilled is greater than in other countries. The mechanic, the craftsman, the man of quick eye and deft hand, gets an unusually high rate of pay, and has an unusually favorable position in the adjustment of wages between non-competing groups. And he has this advantageous position because in general his labor is applied with unusual effect. No doubt the reasons are complex; partly that he is individually skilful, efficient, strenuous, more largely that inventors and employers have found ways of making his labor tell better than in other countries. But tell it does; and hence it commands high pay. Any industry which calls for such men must pay wages at the current rates; and if it cannot secure from them results commensurable to the pay, and if its products are subject to foreign competition, it "needs" protection and clamors for it. Precisely this seems to be the case in the woolen manufacture.

As machinery becomes more automatic, the skilled workman is needed only to construct it, keep it in repair and supervise. It can be tended by an unskilled immigrant, perhaps a woman. The cause of comparative effectiveness in industry,—if there be such,—must then be sought primarily in the ingenuity of inventors and the organizing leadership of business managers. The wages of the rank and file among the factory operatives who are thus directed and led are low in the United States relatively to those of mechanics, though high relatively to those of similar operatives in European mills. Such is the social stratification in the typical cotton mill; it tends to be such also in the typical silk mill and the great standardized worsted mill. A lower grade of operative can be utilized in the weaving departments of these than in the weaving departments of woolen mills proper. The proportion of women employed in the worsted mills is considerably higher than in the woolen mills (49 per cent against 35);162 nor are any such statements as those just quoted to be found from manufacturers of worsteds. It is significant, too, that in the operation of cotton looms for ordinary goods no difference is found between the efficiency of men and women as weavers; at piece rates they earn the same total.163 It is only for the finer cottons that the weaver needs those mechanical abilities in which men excel and which cause them to be preferred in woolen mills. In this regard also the technical conditions would seem to be less favorable to the industrial acclimatization of the carded woolen manufacture.

Still another factor works in the same direction. The finishing processes are of the first importance for carded woolen fabrics. They are of great variety, and they are almost decisive as regards the character and saleability of the goods. Typical of the various manipulations is the ancient one of "fulling,"—the cloth being passed between rollers and through liquid soap, or soap and water. It is thus shrunk and felted. In essentials, the process remains a handicraft operation, even though no longer carried on, as it was in earlier days, in a separate fulling mill.164 It is little aided by machinery, and is dependent on the skill and unrelaxing attention of the individual workman. The same is the case with the raising of a surface by teazles, the stretchings and dryings and beatings and ironings. To quote from Professor Clapham's excellent account of the industry in England, where finishing has been carried to greatest elaboration and perfection: "The variety of finishing processes is singularly great. New ones are constantly being devised, many of which are kept more or less secret." But worsteds are much less subject to them than woolens. "Light worsted dress materials are not milled at all.... Generally speaking, worsted materials are altered but slightly at this stage. As they appear in the loom, so they appear in the warehouse; colour of course excepted in the case of piece-dyed goods.... With woolens, the reverse is often true. Only an expert in these cases, could identify the finished cloth with the loose and altogether different substance that came out of the loom. In one case finishing is a subsidiary, in the other a primary process."165 And this primary process, it is to be emphasized, is little under the influence of modern machinery and labor-saving devices; in other words it is one in which American industrial talent finds no tempting or remuneratory field.

In accord with the same general trend, it appears that the finer grades of goods are more likely to be imported, while the cheaper and medium grades are more likely to be made at home; and this, notwithstanding efforts to promote the manufacture of the finer grades by making the duties on them particularly high.166 The case is alike with all the textiles; the finer goods of all kinds are more apt to be imported. The same explanation is invariably given: they need to be more carefully finished, they call for more labor, and high wages are therefore felt to be an obstacle in particularly great degree. The more fundamental explanation has already been indicated: goods of the most expensive sort fail to be made within the United States because labor is applied to them with less machinery, less of labor-saving devices, less effective organization,—in sum, with less advantage than to the cheap and medium grades. So it is with woolens and worsteds. In both branches the protective policy was throughout more effective on the cheaper goods. It is characteristic also that not only the finer fabrics themselves, but the machinery for their manufacture had to be imported,—for carding, combing, and spinning, even for weaving, where the Americans in general are superior. A large German firm, engaged in making fine goods, was tempted by the high duties of 1897 to transfer a plant to the United States. It had to import machinery of every kind; and not only this, but found that the factory labor of this country was also ill adapted to its methods of manufacture. From the then-accepted protectionist point of view, all these disadvantages, and the consequent high expenses of production, should have been offset by correspondingly high duties; the industry was to be "acquired" on any terms necessary to domesticate it. But these special conditions would seem to be in reality but evidences of the unsuitability of this particular branch of textiles to American conditions.167

It deserves to be noted that during the last decade of the extreme protective policy there were signs of improvement in the quality of American woolen fabrics, and especially of worsteds. That some change in this direction set in, I am convinced by repeated testimony from all sorts of persons conversant with the trade,—manufacturers, dealers, tailors. Though the bulk of the American woolens remained of medium grade, an increasing proportion, and one not inconsiderable, was of better grade and finish than during the nineteenth century; the improvement being most marked in worsteds. Just what this tendency signified, it would be difficult to say. The obvious explanation would ascribe it simply to extreme protection. Make your duties high enough, and you can bring about the domestic production of anything and everything. The most elaborately finished woolens and silks and cottons will be made within this country if a sufficiently heavy handicap be imposed on foreign producers; even though the outcome may be delayed somewhat by lack of habituation among the manufacturers and by a long-lingering prejudice among consumers in favor of imported fabrics. Presumably the change here noted was the effect of precisely this cause,—extreme protection. But possibly it was due, in part at least, to some beginning in improved processes, better organization, greater effectiveness. Yet the evidence pointing this way is slight; nor is it on general grounds probable that forward steps by American manufacturers would be first taken in this part of the industry. It is in the production of the standardized fabrics of medium grade that the opportunities are most promising for advances by Americans.168

On the whole, the best conclusion I can reach is that the difficulties and the apparent backwardness of the wool manufacture rest partly on the physical characteristics of the raw material and partly on the impossibility of standardizing its fabrics to the same degree as, for example, cotton goods. Both of these circumstances stand in the way of mass production and so of the sweeping use of labor-saving machinery. The silk manufacture long encountered the same obstacles; it has still to face them in a large part of its product; yet, as we have seen, the march of invention appears to be removing the first obstacle, and at all events gives some promise of enabling the American industry to progress to independence. The absence of indications of similar progress in the wool manufacture is not easy to explain. Possibly this is no more than a sporadic episode, standing apart from the general industrial movement. Not everything in economic history can be ascribed to the uniform action of the same causes. It remains puzzling why the machine processes were not applied with more decisive success to this material, and why Europeans and not Americans took the lead in the considerable success which was achieved in the worsted branch. Another half-century may bring independent advances in this country; we may still witness considerable changes in the existing relations between the wool manufacturing countries and districts. Possibly free wool will have greater effect in promoting the development of the American manufacturing industry than would be expected in view of the foregoing analysis of the influence exercised by the wool duties in the past. A considerable period must elapse before it will appear how the industry may adjust itself to such new conditions as were established in 1913. The sober-minded investigator will be slow in laying too much stress on single causes, slow in generalization, slowest of all in prediction.

[1.]

The figures of product are taken from the Census Reports, and refer in each case to the year preceding; thus, the census enumeration of 1910 gives the facts for the industry as it stood in 1909. The imports are given for the fiscal years ending in the census year; thus, the figure for 1910 is that of the fiscal year 1909-10.

The census figures for the earlier years can make no pretensions to statistical exactness. Beginning with 1890 they can be used with reasonable confidence in their accuracy. They are taken from the Census Bulletin of 1910, Statistics of Silk Manufacture.

[2.]The comparison would stand thus; the first column giving the "net" domestic product, with deduction for duplication due to increased specialization, i.e., column 2 of the previous table; the second column giving the imports supplemented by 60 per cent, i.e., the figures in column 4 of the preceding table, with 60 per cent added.

This comparison, needless to say, can make not the slightest pretence to statistical accuracy; but it shows the general trend, and is more accurate than would be one based on the bare Treasury figure for imports.

How far the imports, when compared with the domestic product, should be enlarged by adding the duties, raises some nice questions. Evidently they should be thus weighted if we wish to compare what is paid by consumers for the domestic supply with what is paid by consumers for the imports. It is not so clear that the same correction should be made if we wish merely to compare the quantities supplied. If the prices of domestic goods are raised to the same extent as those of imported goods,—by the full amount of the duties,—the correction must be applied in the same way and to the same extent as in comparing consumers' payments. If the prices of domestic goods are quite unaffected by the duties, then no weighting or correction at all would seem to be called for. Neither extreme,—complete effect of the duties in raising price of the entire domestic output, or complete absence of any effect at all,—is likely to appear in fact. Hence a comparison of the quantitative relation of the imported and domestic quotas can rarely be deduced from the statistics of the money value of the two.

[3.]Those who may be interested in this little-known episode will find a full account in a volume on Silk Culture in the United States, New York, 1844.

[4.]The efforts of the Department extended through two periods, one from 1884 to 1891, and another, more important, from 1902 to 1908. They were on a considerable scale; large quantities of cocoons were raised, and thousands of mulberry seedlings planted. See the Yearbook of the Department for 1903, and also an article by Dr. L. O. Howard, in the Cyclopaedia of American Agriculture, iii, p. 641.

[5.]In Lombardy "the wives of the peasants engage in the business, as the wives of American farmers in their domestic work"; in Japan it is "usually an auxiliary industry of the farmers"; in China, "the vast mass of silk produced comes from China houses where all members of the family take part in the work." I quote from Sericulture in Italy, Japan and China, published by the Silk Association of America (1905), pp. 5, 11, 18.

In France, as is well known, bounties have been given since 1892 on raw silk; a compromise between the demands of the producers in the south for protection and those of the manufacturers for cheap material. Because of the method by which it was allotted, the bounty seems to have stood in the way of technical advance in the industry; at all events, the output of raw silk has barely held its own. The bounty was extended in 1909, without change of method, for a twenty-year period, i.e., till 1929. Hungary has also encouraged raw silk production, by supplying eggs gratis, buying and distributing cocoons, and building filatures which are let to reelers on cheap terms. See Antonelli, in Revue Economique Internationale, March, 1910.

In Switzerland the production of raw silk has steadily declined since 1870 and now maintains itself only in the Italian cantons. Reichesberg, Handwörterbuch d. Schweiz. Volkswirtschaft, p. 962. I have no doubt the explanation is the same as for the American situation: the industry lacks a comparative advantage in Switzerland also.

[6.]See the discussion of beet growing, chapter vii, p. 88 and passim.

[7.]"Spinning" would seem here to be a misnomer; the term is not usually applied to the process of unwinding from the cocoons, nor even (see p. 228, below) to the subsequent preparation of the raw silk for weaving.

[8.]Sericulture, p. 9.

[9.]The Grant reel, which originated in the well-known Cheney mills. Cf. Mason, The Silk Industry, p. 12. The reels are not manufactured in the United States; the design is simple, and the reels are made in various parts of the world, wherever used.

[10.]See the passages from Wyckoff quoted by me in the Quarterly Journal of Economics, iii, pp. 271-273 (1889); also in my Tariff History of the United States, 4th edition, pp. 381 seq.

[11.]Quarterly Journal of Economics, iii (1889), pp. 273-276.

[12.]Silk throwing in Italy and France was long carried on in small quasi-handicraft establishments with the aid of water-power; hence called in France "moulinage." It is still in France an industry on a very small scale; petty factories with an average of less than 2,000 spindles, working universally on orders from the manufacturers. Beauquis, Histoire économique de la soie, p. 150. In England, though silk throwing has ceased, the Silkthrowsters' Company, established in 1629, still maintains a nominal existence among the Livery Companies of London.

[13.]See below, pp. 270, 273 on the automatic loom and ring spinning. In the Census of 1900, it is stated in the Report on Silks (p. 218) that the cost of converting one pound of raw silk into organzine was lowered from $4.50 in 1870 to 60 @ 75 cents in 1900. On the employment of women and children, see ibid., p. 209.

[14.]Allen, Silk Industry of the World, p. 29.

[15.]See below, p. 273.

[16.]The much-discussed strike of 1913 among the Paterson silk operatives, in which the Industrial Workers of the World (I.W.W.) took so active a part, began among the broad silk weavers, in opposition to the introduction of a three loom and four loom weaving system.

[17.]The Silk Association Reports show that new looms were installed in the United States as follows:

The extraordinarily rapid growth between 1900 and 1905 is shown by the following census figures:—

[18.]The following figures state the number of hand and power looms in the two branches of the industry.

Allen, Silk Industry of the World, p. 31.

The comparatively slow increase in the number of looms for narrow goods between 1890 and 1905 is to be interpreted in the light of the circumstance that each individual loom became larger, quicker, more automatic. The longer persistence of hand looms in this branch of the industry (1,334 such looms as late as 1890) is more apparent than real. These looms were used in 1890 mainly for trimmings, a special and limited branch of the narrow goods trade,—one which proved a decadent part of the silk manufacture. See below, p. 247.

[19.]On labor conditions, see Mason, Silk Industry, pp. 50 seq.; and the Federal Report on Woman and Child Wage-Earners, 1912, iv; summarized in the Survey, May 18, 1912. In Pennsylvania only 9 per cent of those employed in the silk mills of the state are men; 67.8 per cent are women, 23.2 per cent are children.

[20.]See on this subject the account in Mason, Silk Industry, pp. 15 seq. On the continued endeavors of the American manufacturers to improve the quality of Chinese raw silk, see Thirty-eighth Report of the Silk Association, pp. 24, 25. "A great proportion of the Canton silks cannot be economically handled by the American manufacturer on account of defective reeling.... We suggest that the system which has improved the working qualities of Japan silks, i.e., re-reeling the skeins, if used in Canton, would so vastly enhance the value of Canton filatures that the American buyers would gladly pay such additional price as to more than compensate the reelers." L. Duran, in his trade book on Raw Silk (1913), writes: "It is gratifying to see the Japanese reelers doing their utmost to improve the quality of their silks" (p. 114).

[21.]The descriptions of European conditions which follow rest on scattered notes gathered from various sources, and make no pretense of exhaustiveness. So far as I know, this interesting phase of recent industrial history has received scant attention.

[22.]Allen, Silk Industry of the World, p. 41. The figures for Germany are not for the whole of that country, but only for the district of Crefeld, the chief manufacturing center.

[23.]On the German transition, see H. Brauns, Der Uebergang von der Handweberei zum Fabrikbetrieb, Schmoller's Forschungen (1906), pp. 33-37, 44. Cf. Bötzkes, Seidenwarenproduktion and Seidenwarenhandel (1909), p. 28.

[24.]In Basel there were in 1908

Three-quarters of the household weaving was done by women; and agriculture was the main occupation of those engaged in weaving. See Thürkauf, Die Basler Seidenindustrie, pp. ix, 77, 181. For Switzerland as a whole I find these figures for 1905 (Bötzkes, p. 25):—

[25.]A well-informed American (or Americanized?) observer wrote thus of the French silk industry in 1913:—

"Until 1875 the looms of Lyons were exclusively worked by hand. At present there are yet about 15,000 jacquard hand looms in Lyons and surrounding villages, making special kinds of goods, mostly high-class brocades. In more recent years, especially the last two decades, a number of manufacturers have built large mills in order to weave larger quantities of pile fabrics, but the majority of manufacturers are still placing orders outside 'à façon.'...

"How long Lyons will retain her present supremacy over her formidable competitors is a hard thing to guess. Silk manufacturing is growing in such enormous proportions in the United States, Germany, and Switzerland, that perhaps they may manage eventually to put the French out of business through cheaper workmanship and larger output. The economists say that the silk business in Lyons has not progressed during the last decade, but they still recognize that it is in Lyons alone that can be found the highest grades of silks and the most beautiful designs (one has only to pay a visit to the Lyons Art Museum to be convinced of this assertion). The royalties and courts of all nations, for their pageants, cannot find elsewhere silks sold at hundreds of francs per yard and worth it."—L. Duran, Raw Silk, pp. 75, 77.

Beauquis, Histoire économique de la soie, p. 245, gives the following figures for the Lyons region:

[26.]See the interesting map prefixed to Thürkauf, Die Basler Seidenindustrie; Cf. p. 211. See also, on the general possibilities, Brauns, loc. cit., p. 130, and Wilbrandt, Die Weber in der Gegenwart (1906), pp. 95, 109.

[27.]On the eighteenth century, see the memoranda in Held, Zwei Bücher zur sozialen Geschichte Englands, p. 560. On the continuance of the "cottage factories" through the middle of the nineteenth century, see the Report of the (Chamberlain) Tariff Commission, "Evidence on the Silk Industry," paragraph 3390. A former silk manufacturer of Coventry remarked, "The cottage factories were generally built to hold two or three looms, and generally the husband, wife, or eldest son or daughter used to attend the two or three looms.... I have seen the High Street in front of our warehouse crowded with carriers' carts [bringing silk goods from the neighboring villages] for several hundred yards up the street." This Tariff Commission, organized under the leadership of Joseph Chamberlain as part of the "tariff reform," i.e., protectionist movement, is not to be confounded with official commissions.

[28.]On the remnant of the Spitalfields industry, see Booth's Life and Labour in London, vol. iv, ch. viii (edition of 1897); and an excellent paper by Mr. F. Warner, a silk manufacturer, in the Journal of the Society of Arts, 1903-04, pp. 124, 131. Mr. Warner remarks, "In the Spitalfields the weavers, draughtsmen, jacquard machinists, loom builders, card cutters, and other mechanics, possessing a knowledge which had for generations been handed down from father to son... were competent and skilful." But he adds that the "manufacturers" were inefficient, and had "no taste, natural or acquired."

[29.]See the Report of the (Chamberlain) Tariff Commission, "Evidence on the Silk industry," paragraph 3260. The whole of the evidence in this publication is instructive.

[30.]For example, the town of Leek; see Report of the Tariff Commission, paragraph 3275.

[31.]See the Report of the Tariff Commission, paragraphs, 3377, 3378 3396, 3398; Warner's paper, cited above, p. 128.

[32.]Cf. what is said below of cotton and woolen spinning, pp. 290, 357.

[33.]Mr. Warner, in the paper already cited, said (pp. 128, 130, 136): "Silk throwing as a separate industry is now but little carried on in this country.... Spun silk is a very large industry, and our spinners make the finest qualities and counts in the world, and their products are extensively used in the lace trade of Calais, St. Etienne, Lyons." The growth of the spun silk industry is due largely to the inventive genius of Lister (raised to the peerage, after the British fashion of enoblement, under the title of Lord Masham). The firm, Lister & Co., has a world-wide reputation; it turns out not only spun silk goods, but tapestries, velvets, pile fabrics, for which much reeled silk is used. It not only perfected spinning, but made a patent loom, described as an "automatic" loom, which the Germans are said to have copied when the patent ran out. Tariff Commission Report, paragraph 3319.—The head of the firm, Lister, also took a leading part in the development of the British worsted manufacture; see below, p. 339.

Very few fabrics are made entirely of spun silk. The yarns are used mainly as cotton is used in silk manufacturing,—for admixture. They supply the pile for cotton-back pile fabrics; and they are used as warp or as weft (filling) with reeled silk.

[34.]For an account of the early history of the sewing silk manufacture, see Wyckoff, Silk Manufacture in the United States (1883), pp. 32 seq. See also the book of 1844 on Silk Culture in the United States (noted above, p. 223) at p. 9. The invention of the first machines began as early as 1828. The Census of 1850 reported sewing silk made to the value of $1,209,000; that of 1860, to the value of $3,600,000. In the Census of 1860, (Report on Manufactures, p. xciv), it is said that the chief seat of the industry is Connecticut, "where sewing silk was first made by machinery upwards of twenty-five years ago." An acquaintance whose memory goes back to ante-bellum days has told me of the highly-developed quasi-automatic machinery which he then saw in operation in the sewing silk mills.

[35.]In the Tariff Commission Report (Chamberlain) on the Silk Industry, there are many complaints of the extinction of the Coventry ribbon industry; see paragraphs 3239, 3392, 3511. "Previous to the French treaty there were about seventy rich manufacturers in the ribbon trade; now (1905) there are six very poor ones" (paragraph 3511). "Ribbons and silks are practically all foreign-made now" (paragraph 3471).

[36.]Bötzkes, p. 26.

[37.]On pile fabrics in general (velvets, plushes, and the like), I have found it difficult to get satisfactory information. As has already been remarked, these were subjected to high specific duties as early as 1890 (see p. 218, above, and my Tariff History, p. 269); one of the provisions in the McKinley tariff which is said to have been a return for heavy contributions by manufacturers to Republican campaign funds. A considerable industry developed in the United States, yet imports continued on a large scale. Rapid changes in fashion here introduce a peculiarly complicating factor. In Europe, the English have the lead in manufacturing plushes, the Germans and French in velvets. In both classes, and especially in velvets, the more expensive qualities tend to be imported into the United States. I have been told by well informed and apparently unbiased observers that the Americans made distinct improvements in the machinery for pile fabrics. What stage in the rivalry between domestic and foreign producers has been reached in this industry it is not easy to make out. Nor is it easy to find indications on the problem more particularly considered in the next following chapter,—the prospects of an eventual surpassing of the foreigners by the developing American industry.

[38.]Some figures on the domestic production and the imports of silk laces:—

[39.]See chapter ii, above, p. 23.

[40.]See chapter xiii, p. 197, above.

[41.]See chapter xiv, p. 230. A Coventry (England) manufacturer said in 1905 that in 1870-80 "a great number of looms and other machinery were sent to America, and at Paterson (N. J.) there are in full operation the very same kinds of looms and other machinery as were used in Coventry thirty and sixty years ago." Tariff Commission Report, paragraphs 3275, 3391. It is quite true, I am told, that some old English looms, solidly built, continued to be used thus long, even though it would have paid to substitute new and more efficient looms. The ribbon looms in use at Coventry in 1860 seem to have been made in Basel and exported thence to England. Timmins, The Resources... of Birmingham (London, 1866), p. 187.

[42.]Cf. what is said below, chapter xxi, p. 343, on woolen and worsted machinery.

[43.]The throwing machine ("spindle") was an adaptation of the ring spindle which has played so important a part in the American cotton manufacture. "A little after Rabbeth's invention [of a much-improved ring spindle for cotton] Mr. John E. Atwood of Stonington, Conn., made a sleeve whorl spindle in which the bolster and step were made in one piece, and attached 'in a yielding manner' to the surrounding shell or bolster case. This structure has gone into use to an extent of hundreds of thousands in silk spinning, but not extensively in cotton spinning.... In silk spinning... the process is entirely different from that necessary in spinning cotton. The silk is spun off the spindle and the cotton is wound upon it." See the historical account of cotton spindles given by W. F. Draper, in Proceedings, Twenty-sixth Anniversary Meeting New England Cotton Manufacturers Association, p. 31.

[44.]Allen, Silk Industry of the World, p. 27. The leading American firm that manufactures this machinery writes me: "For a number of years we have been exporting throwing machinery to various silk producing European and Asiatic countries. It seems to be a constant trade, although not large, but is gradually extending into different fields of silk manufacturing."

[45.]For reference to the high-speed automatic ribbon loom, invented in the United States in 1899, see Allen, Silk Industry, p. 29, and Census Report on Manufactures, 1900, p. 209. A large American firm making ribbon looms writes to me thus (1913) "For a number of years we exported our ribbon looms to Europe—to Switzerland, France, and Germany—but we are now represented in Europe by a large manufacturing concern who build our machinery over there from our models."

[46.]On broad looms, the spokesman of the industry wrote thus in 1900 (Allen, Silk Industry, p. 27): "In weaving perhaps there has been more progress in improved machinery the last decade than in the three preceding decades. The improvements have produced a loom of very high efficiency, equipped with mechanical devices designed for saving time, labor, material, such as numerous multipliers, two weave, leno, swivel, embroidery motions, and many others, all arranged to work automatically. Special mention should be made of the improvements by which all classes of taffeta effects, formerly made on hand looms only, are now made on power looms" (the italics are mine; the passage deserves emphasis).

Here again I can refer to correspondence (1913) with a great loom making firm. "We commenced exporting silk looms many years ago and as soon as they became established in some of the foreign countries they were copied and are being made there today, exact copies of our machine. The labor cost is so much less there that it is impossible for us to continue to export, although we have sent from time to time quite a lot of machinery into the different countries, but as above stated, as soon as they get well established they get a local maker to manufacture.... Were it not for the fact that we have been able, by an enormous expenditure of money and skill to invent improved machinery, we should never have been able to take the position we have amongst the silk manufacturers of this country." It should be added that this firm, like most makers of machinery, expressed its objections to "any appreciable change" in the tariff as it stood in 1912.

Another manufacturer (one making silk fabrics, not machinery) writes me that "in the knitting industry,—silk underwear, hosiery, neckties,—the American machinery is vastly superior to the foreign machinery, against which there is still a considerable prejudice abroad. This prejudice will undoubtedly be broken down within another decade." Here is again the assertion of superiority, and again the fear that it will not be maintained. Cf. the same state of mind among the makers of other machinery, chapter xii, p. 196, above.

[47.]A conversant American dealer writes me: "In the finishing departments... a good deal of machinery is imported. This is largely due to the fact that new fabrics are brought out abroad, many of which require special apparatus to produce the desired results in the finishing, and it takes some time before the American producer of finishing machinery begins to manufacture such apparatus. This machinery may be of such limited usefulness that its manufacture is never taken up here at all, and at other times the usefulness of such machinery may be transitory. The ordinary run of finishing machinery, such as spraying machines, paper dryers, can dryers, tentering frames, calenders, singeing machinery... are largely made on this side of the water, and there must be few of such machines now (1913) imported." An importer of finishing machinery confirms these statements.

[48.]These inquiries have been addressed chiefly to jobbers and to the managers of silk departments in the large retail establishments. Both manufacturers and importers are likely to be biased, even though not consciously; the importers are often the representatives of foreign manufacturers.

[49.] "Where labor enters most largely, we are visibly outclassed.... With plain goods, made on a large scale, the unit of labor cost is much decreased. Where a mill is running many hundreds of looms on the same fabric, three or four looms to a weaver, and at high speeds, both the weaving cost and the general expense item fall to a really low figure, and it is in these directions we must look [for possible exports].

"There are many fabrics such as liberty satins, cotton back satins, crêpes de chine, taffetas, etc., that have been so specialized on here as to encourage the belief that their cost is so low that an export business might be done in them." From a chapter on "Finding Foreign Markets" in Chittick, Silk Manufacturing and its Problems (1913), p. 324.

The exports of silks, as recorded in the Treasury statistics, were as follows:—

The only countries besides Great Britain and Canada to which any considerable quantities went, were Cuba and Mexico. The exports to Great Britain were chiefly of knitted silks, for which some newly-devised American machinery had caused a considerable foreign market (cf. p. 254., above). Those to Canada have been explained to me as due largely to mere propinquity; a Canadian merchant whose stock is depleted can send a buyer to New York and get what he wants over night, disregarding for such sporadic purchases a comparatively high price. With all allowance for these exceptional circumstances the recent increase in exports of silks remains striking and apparently significant.

[50.]The ordinary "double deck" loom for ribbons is about 16 feet wide. These wide looms are "single deck." The modern ribbon loom weaves a great number of ribbons side by side in long parallel strips.

[51.]Notwithstanding occasional suggestions that American silk manufacturers should in some way combine, and cease their "senseless" competition, nothing in the nature of a trust or combination has appeared in the industry. In the Thirty-ninth Report of the Silk Association, p. 46, are some expressions of vain longing for a curtailment of competition. In Germany, the Kartel has become, in the silk manufacture as in others, a permanent part of industrial organization; yet, it would seem, mainly as a "condition" Kartel, not one effective in raising prices. Beckerath, Kartelle der Seidenweberei-industrie, p. 187 et passim.

[52.]For an account of this earlier period in somewhat more detail, I refer the reader to my Tariff History of the United States, pp. 25-36, 135-142, and to M. T. Copeland, The Cotton> Manufacturing Industry of the United States, chapter i. I shall have frequent occasion to refer to Dr. Copeland's able volume, which makes it unnecessary to consider in detail some important matters on which he has told the whole story.

In my Tariff History, p. 34 and elsewhere, I have stated, with less qualification than I should now make, the conclusion that the duties of 1816 were not clearly needed for protection to the then young industry. As intimated in chapter ii of the present volume (see p. 22), I am disposed to allow a longer time for the trial of protection to young industries, and to admit the probable usefulness not only of the imposition of duties in 1816, but of their retention in 1824, 1828, and 1832.

[53.]Such was the opinion, for example, of Samuel Batchelder, the well-known manufacturer and chronicler, expressed in letters written to the Boston Commercial Advertiserin 1861.

[54.]The marked increase of the maximum rate in 1909 was due to still another refinement in the elaboration of the specific duties. In previous acts there had been a dragnet clause on cotton cloths: all cloths above a certain value were subjected to one ad valorem rate. This ad valorem rate had been 25 per cent in 1861, 35 per cent in 1864, 40 per cent in 1883, and again 40 per cent in 1897 and 1909 (45 percent in 1890). In 1909 it was further provided that the very finest and most expensive goods, if valued over 25 cents a yard, should be charged 12½ cents a yard, but in no case less than 40 per cent.—This dragnet clause, or omnibus ad valorem duty, on cotton cloths is not to be confounded with the similar dragnet clause on miscellaneous cotton manufactures "not otherwise provided for," to which reference is made in the text.

[55.]On the changes of duty in 1909, see an instructive article by S. M. Evans, in the Journal of Political Economy, December, 1910, "The Making of a Tariff Law"; and a careful analysis by M. T. Copeland, in the Quarterly Journal of Economics, February, 1910. For an elaborate statement of the duties on cottons from 1890 to 1909, see the Tariff Board's Report on Cotton Manufacture (1912), pp. 290 seq.

The Tariff Board Report gave abundant illustrations of the high range of the duties on cottons until 1913, pointing out that in most cases the duties on cotton cloths were higher than the total "conversion cost" of the goods,—i.e., higher than the total expenses of production over and above the raw material. See the Board's introductory statement or analysis, pp. 10-14, and more detailed statements at pp. 440, 458, 503 passim.

[56.]The plan on which the duties on cotton goods were fixed in 1913 is indicated by the following tabular statement:—

This is a symmetrical arrangement; the duty on plain cloths is always 22 per cent higher than that on the yarns with which they are woven, and the duty on cloths printed, etc., is always 22 per cent higher still. The symmetry, however, is more in appearance than in reality. The arrangement left the duties on some cheap cloths in effect higher than on many dear cloths; since raw cotton enters so largely in the price of the former, and causes an ad valorem duty to be high in relation to manufacturing (or "conversion") cost.

[58.]In comparing domestic and foreign supply, attention must be given to the effect of the duties in adding to the price paid by consumers for the foreign goods. How far allowance should be made, and can be made, for this circumstance has been considered in the similar case of silks; see p. 222, note, supra.

[59.]Quoted by Copeland, p. 21. The situation appeared to be the same in the census figures of 1910, from which I have compiled the following figures (Bulletin on Cotton Manufactures, 1910, p. 16):—

[60.]Copeland, p. 21. The figures of 1910 (Census Bulletin, p. 20), again tell the same story:—

The proportion of fine yarns (forty-one and over) was reported even less in 1910 than in 1905.

[61.]Thus in 1910 the New England states were reported to produce three-quarters of all the fine yarn, and Massachusetts alone over two-fifths (41.5 per cent). Yet in Massachusetts the coarse and medium counts still very greatly exceeded the fine (Census Bulletin, p. 20).

[62.]Also designated "frame spinning."

[64.]A detailed account of the development of ring spinning is in a paper by W. F. Draper in Transactions New England Cotton Manufacturers' Association, no. 50 (1891). The date of first invention is there given as 1828; other dates near this are also given (cf. Copeland, p. 9). The Draper Company took the lead in manufacturing ring spindles, incorporating improvements of their own into the most promising of previous spindles; and spindles of their make came into use by the million. Compare what is said below (at p. 276) of the same company's primacy in developing the automatic loom.

[65.]Census Bulletin of 1910 on Cotton Manufactures, p. 22.

[66.]W. F. Draper's paper, p. 38.

[67.]Copeland, p. 67.

[68.]See my Tariff History of the United States, p. 29, and the reference there given.

[69.]Ibid., p. 138; Copeland, p. 83; see also James Montgomery, The Cotton Manufacture of the United States (Glasgow, 1840), p. 101.

[70.]See above, p. 230, on silks, and below, p. 362, on woolens.

[71.]"In simple terms, these inventions cover a shuttle changing device, a filling hopper from which bobbins or cop spindles containing filling yarn are automatically transferred to the loom shuttle,—a peculiar shuttle which can be threaded automatically by the motion of the loom,—devices that act to stop the loom, or prevent damage in case the shuttle is not in proper position to receive new filling or the hopper is exhausted, and a warp stop motion to prevent the loom from making poor cloth when not watched by the weaver." George O. Draper, "Development of the Northrop Loom," in Transactions of the New England Cotton, Manufacturers' Association, no. 59, p. 91. Cf. Copeland, pp. 84-88.

[72.]The weaver's act of thus sucking the thread carries bits of lint and dust into the lungs, and the irritation increases the danger of tuberculosis. "A weaver on eight common looms stands a chance of inhaling cotton fibre about one thousand times a day. It is no wonder they are a shortlived, consumptive class." Ibid., p. 100. The danger, which persists on the ordinary power looms, is real, though often exaggerated. It is in accord with frequent experience in matters of this kind that mechanical devices for threading the shuttles, even when put freely at the weavers' disposal and with urgent advice to use them, are left unused; it is easier and quicker to suck.

[73.]The practice in mills varies. In one mill which I visited, each weaver was in charge of thirty automatic looms, there being separate staffs of magazine-fillers and oilers. In another, twenty looms were allotted to each weaver, but he (or she) was compelled to see to the charging of the magazines. When the Northrop loom was first put on the market, its makers predicted that a weaver could manage twenty-four looms and also attend to his magazines. Something depends on the character of the fabrics.

A loom fixer can attend to about 150 ordinary looms, 100 automatic looms; this item of expense is higher for the automatics.

[74.]The Northrop loom is associated with the name of the Draper Company, whose works are at Hopedale, Mass. The experiments that led to it were spread over a period of seven years. The first loom was ready for trial in 1889. A number were run experimentally at Hopedale in 1893; the demonstration mill referred to in the text was constructed at Burlington, Vt., in 1894. An interesting and authoritative account of the history of the invention was given by Mr. G. O. Draper in the paper already referred to in the Transactions of the New England Cotton Manufacturers' Association., no. 59.

Both Messrs. W. F. Draper and G. O. Draper, in the two papers quoted, referred to the importance of the patent system in stimulating and sustaining invention. No less than 373 patents for ring spindles were taken out between 1870 and 1903 (so stated by Copeland, in Quarterly Journal of Economics, vol. xxiv, p. 127), and 60 for automatic loom devices (Draper, in Transactions, no. 59, p. 90).

It is a curious fact that an important part, perhaps the most important, in these inventions was taken by men who had had no previous experience in weaving rooms. "Neither Mr. Northrop, Mr. Roper, or Mr. Stimson [three among the inventors] ever had any practical knowledge of weaving. Mr. Northrop had never examined a loom prior to our [the Draper Company's] start, and Mr. Roper had probably never seen one." G. O. Draper, as cited above, p. 92. Similarly, one of the important improvements in the ring spindle came from a clergyman, the Rev. Mr. Allen. W. F. Draper, in Transactions New England Cotton Manufacturers, no. 50, p. 34.

It may be noted also that Cartwright, the inventor of the power loom, "if he had ever seen weaving by hand, had certainly paid no particular attention to the process." Memoir of Cartwright (1843), p. 57.

[75.]See the account in Dr. Copeland's article on "Progress of the Automatic Loom," Quarterly Journal of Economics, vol. xxv, p. 746 (August, 1911), to which also I refer for the other matters here noted.

[76.]Tariff Board Report on Cotton Manufactures (1912), "Letter of Submittal " (Summary), p. 9. Elaborate figures are given elsewhere in the Report, pp. 398 seq. A chart opposite page 416 shows the differences between "labor costs" and "total conversion costs." The differences become progressively greater as the yarns become finer; they are least on the coarse yarns, greatest on the fine. The phenomenon is in harmony with the general trend in all these comparisons; it is in the finer and more tenuous qualities that the Americans show no special effectiveness. The comparison between mule spun yarns in England and ring spun yarns in the United States was explained by the Board on the ground that mule spinning was the prevalent method in the former country, ring spinning in the latter; but, as noted in the text, it introduces an element of doubt, making the results not absolutely comparable.

[77.]See Copeland, pp. 289, 299. Ring spindles were found to run a trifle faster in the United States than in Europe,—10,000 revolutions per minute compared to 9,000. A spinner in the United States commonly had in charge 750 to 1,000 spindles; in England 400 to 800; in Germany on the average, 500. There was no more breakage and interruption in the United States. Wages per week were $6.50 to $7.50 in New England, about $6.00 in the South. In England they were $3.75 to $5.50; in Germany, $3.75 to $4.25. Money wages thus seemed to vary almost precisely in proportion to the effectiveness of labor, i.e., to the comparative advantage; the "labor cost" was virtually the same in all three countries.

[78.]This general statement seems to me not justified by the Board's own figures, as cited earlier in the text. It holds doubtless for some kinds of spinning, and especially for the finer mule spun yarns.

[79.]Report, "Letter of Submittal," pp. 11, 13. See also pp. 479 seq.

[80.]Report, p. 12.

[81.]The exports in 1850-60 ranged from $7,000,000 to $10,000,000; the census reported the total value of the domestic product (manufactures of cotton) as $62,000,000 in 1850, $116,000,000 in 1860.

[82.]An excellent analysis of the export trade in cotton goods is in Copeland, chapter xii.

[83.]In chapter xvi, above, p. 251.

[84.]W. F. Draper's paper in Transactions, American Cotton Manufacturers' Association, no. 50 (1891), p. 41.

[85.]For some reference to the German automatic looms, see the article by Dr. Copeland, Quarterly Journal of Economics, vol. xxv, p. 747.

[86.]See Copeland, p. 79.

[87.]Copeland, pp. 320-326, for some interesting figures and comments. For Switzerland, I find it stated (in 1911) that the "great technical novelty, the Northrop loom, though introduced finds its way into use very slowly... it is adapted to the mass production of simple goods, but not to the Swiss industry, which is mobile and subject to great changes in detail; it is least adapted to fine or fancy fabrics." Reichesberg, Handwörterbuch der Schweizerischen Volkswirtschaft, vol. iii, p. 895.

[88.]I quote from a private letter, written by a person highly conversant with the American industry, who had also made inquiries on the spot in England.

[89.]Cf. what was said in chapter xii, p. 185, of the similar attitude of the English tin plate workers.

[90.]See chapter xiii, pp. 197 seq.

[91.]See chapter iii, pp. 44 seq., above.

[92.]See chapter xiv, pp. 232 seq.

[93.]A good indication is given by the exclusive use of ring spindles in the south, see the figures given in the preceding chapter. Ring spindles, it will be recalled, can be operated by young girls, mule spindles by men only.

[94.]

Report of Tariff Board on Cotton Manufactures, p. 473. The figures are for "the mills from which such data were obtained"; by no means all of the American mills, but representative of the whole.

Jack spindles (also called "fine roving spindles") are used where fine yarn is to be spun from sea island and other long fibre cotton; they make the roving (attenuated sliver) fine enough for spinning high counts of yarn. They are roving spindles, not spinning spindles.

[95.]The Tariff Board (Report, p. 11), after explaining that with plain looms, whether ordinary or automatic, the output per weaver per hour is greater in the United States, remarks: "In the case of other methods of weaving, such as dobby, jacquard, box dobby, box jacquard, lappet, etc., the difference in output is by no means so great. In the case of dobby looms (without automatic attachment) on some classes of fabric, the American weaver will tend eight or more looms against four in England; but with the more complicated weaves the ratio seems to be nearer that of six to four, and in the case of certain fancy fabrics, where the number of looms tended is necessarily four or less, the output per weaver is about the same in both countries."

[96.]Cf. the statement regarding mule spinning, quoted in chapter xvii, p. 271.

[97.]Chapter xvii, p. 271.

[98.]Wealth of Nations, Book IV, chapter ii (vol. i, p. 423 of Cannan's edition).

[99.]See chapter xxi, p. 353.

[100.]This is maintained,—though without the use of the phrase "young industries,"—by W. F. Draper, in the paper on the development of spinning machinery already cited; Transactions New England Cotton Manufacturers' Association, no. 50.

[101.]The literature on the wool duty is voluminous. Two recent contributions are of signal importance, and supersede those of earlier date: Professor C. W. Wright's Wool-growing and the Tariff, in Harvard Economic Studies (1910); and the Report of the Tariff Board on Wool and Woolens (1912), vol. ii. To both of these frequent reference will be made. Among the earlier discussions, reference may be made to a frank statement from the wool manufacturers' point of view, by Mr. S. N. D. North, then Secretary of the Wool Manufacturers Association, in the Bulletin of that Association, December, 1900.

[102.]The following tabular statement shows what the wool duties were from 1867. It will be observed that the duties on classes I and II (clothing and combing wools) were split into two, according to the value of the wool, in 1867 and in 1883, but not thereafter. The duties on class III (carpet wool) were similarly split, according to value, throughout; they were ad valorem in the act of 1890, but specific in all the other acts.

[103.]See the account of carpet wools in the Tariff Board Report on Tool, pp. 413 seq.

[104.]On the extent to which carpet wool was used in this way, see Tariff Board Report On Wool, pp. 413, 436.

[105.]In the tariff bills introduced by the Republicans during the 62d Congress (1911-13) it was proposed that the duty on carpet wools should continue to be collected on its importation, but that the carpet manufacturers should get a drawback of the amount paid in duties to the same extent (99 per cent) as if they exported carpets; thus securing virtual exemption for so much of the wool as was actually used in carpet making. This proposal, of course, had no chance of adoption, during the Congress of 1911-13; then the Democrats controlled the House, the Republicans the Senate, and no tariff legislation was possible. But it represented the consistent protectionist policy.

[106.] "The merino is beyond question the most cosmopolitan of the sheep tribe. No breed has passed into all countries and thriven as the merino, and still further no other breeds have been able to become so closely identified with their environment as to become the progenitors of native families as in the instance of the merino. This would seem to be due to the migrating habits that characterize the merino in Spain, where the flocks are driven towards the north in summer and southward in winter, thus becoming inured to all the variations of a diversified country." Craig, Sheep-Farming in North America, p. 34. On the hardiness of the merino and its tendency to herd in large numbers (hence less need of shepherding) see Tariff Board Report, pp. 605-607. Cf. the note to p. 315, below.

[107.]Cf. what is said below, at p. 327.

[108.]The proportion of imports to domestic product is shown summarily by the following figures:—

[109.]"The superior purity of the Australian wools, their softness, lightness, and lustre, are attributed to the climatic conditions of that country....Spanish merinos were introduced, and it soon became noticeable that the wool from the Australian flocks was of a finer quality than that grown upon the sheep fed upon the pastures of Spain. Dr. Bowman considers that an even temperature and a certain amount of moisture are necessary for the retention of lustre [that is, for sheep of the English mutton types], and he cites New Zealand wool as illustrative of this relationship.... It is known that some soils color wools so that they cannot be washed white. Territory wool has a characteristic bluish tinge that detracts greatly [?] from its market value. Scott asserts that the best wool growing land is generally that on a sandstone foundation, as it gives the wool the quality of being bright and clean, while he considers that volcanic or limestone soils are thought to favor harshness." Craig, Sheep-Farming in North America, pp. 38-39.

[110.]On skirted wool, see Wright, pp. 284-286, and Tariff Report on Wool, p. 337. It is a. curious fact that American wool not only comes to market quite unassorted, but is often fraudulently or carelessly mixed with rubbish, twine and scraps. "Australian and New Zealand wool is packed more honestly than American wool" (I quote from the Textile World Record, June, 1908). American cotton is also said to come to market in bad condition. "Poor ginning [of American cotton] injures the staple; baled cotton is left uncovered and is damaged by the weather; the bagging is the heaviest and poorest that ingenuity can devise and it is charged at the same price as cotton....An Egyptian bale is a model of neatness and compactness, with a light and strong covering, held together by proper hoops, and both bagging and hoops are deducted as tare." (From the presidential address of Mr. J. R. MacColl, before the Cotton Manufacturers' Association, April, 1906.) I suspect these defects in both domestic materials are ascribable to the unbridled individualism of the American planter and wool grower. Some form of coöperative organization for sales might bring improvement.

[111.]Thus for 1912 we should have the following figures:—

Charges on the domestic consumer:—

Some figure between the last two would seem to give with a sufficient approach to accuracy the prima facie national loss from protection to wool.

From statements made to me by wool dealers I gather that practically all the imported wools of class I (which greatly preponderate in the imports) are skirted.

[113.]"The decline in the number of sheep with the advent of the farmer is nowhere more noticeable than in California." In 1880 that state had 7,500,000 sheep; in 1910, only 2,250,000. Tariff Board Report on Wool, p. 602.

[114.]The history and explanation of the displacement of wool growing by tillage constitute the main theme of Professor Wright's volume, so often referred to in the preceding pages (Wool-growing and the Tariff). See particularly, pp. 135 seq., on the middle west in 1840-60; pp. 250 seq., on the opening of the far west; and pp. 258 seq., on the general competition between wool growing and other agricultural operations. Instructive maps, showing the westward movement of wool growing, are in a paper by Professor H. C. Taylor, published by the Wisconsin Agricultural Experiment Station, June, 1911.

For some further illustrations of the working of the principle of comparative advantage,—grain and dairying being found more profitable than sheep,—see the Tariff Board Report on Wool, pp. 563 (Illinois), 571 (Wisconsin), 581 (Nebraska).

[115.]See the elegant analysis of this case, as well as of the case of joint demand, in Marshall's Principles of Economics, Book V, ch. vi, §§ 1, 4 (6th edition).

[116.]Report, p. 377. Cf. also the Summary, at p. 10.

[117.]See the analysis of the Tariff Board's figures made by Mr. W. S. Culbertson (who had been himself a member of the Board) in American Economic Review, March, 1913, p. 66. It should be added that for the Ohio region, though the variation from extreme to extreme was great, most of the figures fell within a smaller range (12 to 27 cents). For the western region, however, the varying figures of cost were distributed from highest to lowest without noticeable concentration in a middle range.

[118.]"The Southwest is still, as it has always been, the home of the range merino. But little of the mutton blood has been introduced into the flocks of this region, and the indications are that for obvious reasons,—climate, range, etc.,—these conditions will continue to exist for many years to come." Tariff Board Report, p. 602.

[119.]The sentence quoted is from the Tariff Board Report, p. 10. On the Ohio situation in general, see pp. 548 seq. A certain note of impatience with the merino wool producers of this region is discernible in the Report. After pointing out that well-managed sheep farms on which wool was not the chief source of income rarely failed to show a profit, the Report goes on (p. 548): "Why, then, do not all of the sheep breeders of the Ohio valley follow this system? The answer is that on hill farms especially it is not easy to grow the corn necessary to fatten lambs. Then, the owners of many flocks have not learned to adapt their systems of agriculture to this practice; they have long been accustomed to looking to wool for their chief profit from sheep breeding." The truth seems to be that this sort of wool growing was a survival from the frontier days of Ohio, maintained, precariously and beyond its time, first by the civil war demand for wool and then by the high duties. Cf. Wright, pp. 148, 183, 247.

[120.]See p. 306, above.

[121.]See Tariff Board Report, p. 10. The possibilities of increase in foreign supplies are considered in the Report at pp. 490, 522 et passim. There were in 1910 less than one hundred million sheep in Australia; it is supposed the number can be increased without difficulty to at least one hundred and fifty million (p. 492).

[122.]Compare what was said in chapter i, pp. 14 seq., on extractive commodities, and in chapter v, p. 63, on the Hawaiian sugar situation.

[123.]In 1898 Germany imported ten times as much wool as was produced at home (177 mill. kilograms against 17 mill.). Michaelis, in Handbuch der Wirtschaftskunde Deutschlands, vol. iii, p. 629.

[124.]On the history of the compensating system I have summarily repeated here what is said more fully in my Tariff History of the United States, where the various modifications of the system are described in detail for the successive tariff acts.

[125.]The development of the system is shown by the following figures, which state the duties on "woolen cloths," the typical class of goods and the one still most important in Schedule K.

The wool duty is here stated approximately; for details see the table given above, p. 297. On the splitting of the compensating duty which begins in 1883 and is maintained until 1913, see. p. 330 below.

[126.]This I judge to have been the case, at all events, as regards woolen cloths of the kind chiefly made at that time within the country. The compensating duties on dress goods (levied by the yard, and not by the pound, and therefore not easily subject to check) seem to have been designedly excessive even from the start. See the Tariff Board Report, p. 148. Cf. ibid., p. 184, for a curious manipulation and increase in the duty on rugs in 1897,—fairly to be dubbed a "joker."

[127.]Cf. what was said in the preceding chapter, p. 306.

[128.]See the excellent generalized statement in the Tariff Board Report, Summary, p. 12. Elsewhere (p. 89) it is remarked that "a fleece from an Angora goat or Lincoln sheep may shrink in scouring only 10 or 20 per cent, leaving 80 or 90 per cent of clean wool; a Cape or Australian merino fleece, on the contrary, may shrink as high as 50 to 70 per cent, yielding only 20 to 30 per cent of clean wool."

[129.]It was by parading the exceptional cases that the representatives of the woolen manufacturers were able in later years to make a show of validity for the basis of four to one in the compensating system. See, for example, their statement before the Ways and Means Committee in 1909; Tariff Hearings of 1909, p. 7257. The stubbornness of the Association of Wool Manufacturers in clinging not only to the principle but the details of the act of 1867 (they interposed a veritable non possumus to all proposals for change) must be regarded as a strange piece of political ineptitude. As late as 1911, the President of the American Woolen Company made the following extraordinary statement in an address to his fellow-manufacturers: "Schedule K, much maligned, much misunderstood, if properly understood would be the most appreciated of any schedule in the tariff; and if all schedules in the tariff were as scientifically based and as well poised and balanced as Schedule K, it would be the most remarkable document, next to the Constitution of the United States, that the human mind has ever produced"! I quote from a pamphlet reprint of the address.

I have not referred in the text to another episode which played a considerable part in the attacks on Schedule K. Throughout the period of wool duties, the ordinary or normal duty (about eleven cents a pound) was double on wool which had been washed, and triple on wool scoured. Hence most imports were of unwashed wool. But on combing wool (class II) the duty was the same whether washed or unwashed; though still triple when scoured. Hence wool of class II was almost always imported in the washed state. This exceptional treatment of combing wool was the occasion of not a little controversy. It was sought to be justified on the ground that such wool in fact was almost always washed on the sheep's back, and could not well be imported in any other condition; and also justified frankly on the ground that in 1867, when the exception was instituted, the branch of the manufacture using such wool (the worsted branch) was of small dimensions and in its early stages, and so deserving of special consideration. In any case, the discrimination proved of less importance than might have been expected, because almost all wool actually combed, and actually used in the worsted manufacture, came to be not strict "combing wool" as defined in the tariff, but cross-bred wool classed in the tariff as "clothing wool." Nevertheless some millions of pounds of strict combing wool were imported each year, and in occasional years much more; and as regards this, the compensating arrangement never could pretend to be accurate. — Cf. what is said in the Tariff Board Report, p. 89.

[130.]Cf. p. 388, below.

[131.]The importance of these substitutes or "adulterants" is shown by the fact that little more than half of the woolens made in the country was all wool. The Tariff Board gave the following figures, based on census returns (Report, pp. 220, 224, 226, 230):—

The quantity of the various materials used in

I have condensed these figures from the table in the Board's Report, p. 228. There was a marked increase in the use of the substitutes between 1900 and 1910: one among the indications that the woolen branch of the industry was in a declining and precarious state.

[132.]See the tabular statement on p. 325. Cf. the Tariff Board Report, p. 124.

[133.]I said as much in an essay published in 1885; reprinted in my Tariff History (pp. 208 seq.).

[134.]In the spring of 1894, when the tariff bill of that year was being debated and the abolition of the compensating system was impending, the American Cotton and Wool Reporter wrote (May 24, 1894): "The specific duty under existing law is more than compensatory. It furnishes a large measure of protection, and in fact is the substance of the protection on medium and low-grade goods.... The proper thing to do now for the manufacturers is to confess to a little deception regarding the make-up of the specific duty, admit the truth, and ask for recognition of the actual facts. The protection was needed, and the only sin committed was in the way it was obtained."

[135.]See the Summary, p. 13; and such a concise statement as this (p. 125): "If all wools lost 75 per cent from greasy wool to cloth, this four-to-one ratio would be perfect as a basis for compensation, but only in making the best fabrics from heavy-shrinking wools is so much compensation necessary. Cotton-mixed woolens, cotton warp worsteds, in fact the majority of woolen and worsted fabrics made in the United States do not require compensation equal to four times the duty on class I wool."

[136.]

The figures of domestic product in the fourth column are for all the manufactures of wool, including carpets, blankets and flannels, and some minor branches, as well as the two leading ones. With these figures (in column four) the imports should be compared, since the figures are for all the imports, not those of worsted and woolens alone. Both in the domestic product and in the imports the woolens and worsteds dominate. — The figures are derived from the Census Bulletin of 1910 on the Woolen Manufacture; see also the Report of the Tariff Board, pp. 190, 226.

[137.]The best unit of productive capacity is, for woolens, the set of cards; for worsteds, the combing machine. Between 1900 and 1910 the numbers of these were reported as follows: —

The data confirm the conclusion that the woolen branch was virtually stationary till about 1900, and thereafter declined; while the worsted branch grew rapidly and continuously.

[138.]The National Association of Wool Manufacturers, the compact and influential organization which represented the industry before Congress and the public, was dominated for many years by the worsted makers. This was natural, not only because of the size and rapid growth of their branch, but because the individual enterprises in it were on a larger scale, and were conducted by the more ambitious and dominating personalities. During the period of general tariff revolt which followed the act of 1909, the manufacturers of carded woolens formed an independent organization of their own, protesting against the favored treatment given to their rivals by the wool duty and the compensating system. See the Statement of the Carded Wool Manufacturers.

[139.]See the Tariff Board Report, p. 85; cf. Clapham, The Woolen and Worsted Industries, pp. 9, 142.

[140.]See the excellent account of the inventions in Burnley, History of Wool and Wool-combing. Cf. what is said by Clapham, The Woolen and Worsted Industries, p. 136. Among the conspicuous inventors were Donisthorpe, Lister, Holden, Heilmann, and Noble,—all English, with the exception of Heilmann (an Alsatian). The start was made by the versatile and indefatigable Cartwright as early as 1790; but it was not until half a century later that machines constructed on his principle were brought to working efficiency. At still later dates various minor improvements were added. Lister (Lord Masham) played in the main the rôle of the business man, appreciating and guiding the inventors, and profiting handsomely. The whole episode is typical of the course of mechanical progress in modern times.

[141.]Clapham, p. 131.

[142.]The Tariff Board Report gives the following figures (p. 220):—

The increase in the average output in woolen mills between 1899 and 1909 is ascribed to the disappearance of a large number of small country mills.

[143.]Clapham, pp. 134 seq.: "The commonest type of woolen mill... combines all processes, from opening the new wool to dyeing,—when it is piece-dyed,—and finishing the cloth." So the Tariff Board reports (p. 220) that "in the woolen industry the typical mill combines all processes from raw wool to finished cloth."

[144.]The Tariff Board stated in its Summary (p. 16) that "87 per cent of all the machinery [in worsted mills], from the scouring of the raw wool through to the finished yarn, was imported." More in detail (pp. 1026 seq.), it appeared that

In spinning worsted yarn, both mule spindles and "cap" spindles are used; in spinning woolen yarn, mules alone. "Cap" spindles are in principle similar to ring spindles, and like them are often spoken of as "frame spindles." Ring spinning proper has never been found applicable to worsteds, still less to woolens. Cap spindles are largely used in England, and indeed predominate in the English worsted manufacture; whereas the mule alone is used in the French worsted industry. Cf. Barker, Textiles (London, 1910), pp. 101, 111.

[145.]Cf. what is said below, p. 363, note.

[146.]Tariff Board Report, p. 1042.

[147.]"In American worsted and woolen mills the weavers, male and female, operate one or two looms as a rule, excepting where worsted dress goods are made with cotton warps. Cotton warp being stronger than woolen or worsted makes it possible to use automatic or weft-replenishing looms, so that one weaver can operate as many as twelve looms in the manufacture of worsted dress goods." Tariff Board Report, p. 1045. This has been confirmed to me by conversations with the head of a large company which has put in the automatic looms. I have been told, again by a large manufacturer, that the automatic loom has been used with success for all-wool worsteds also.

[148.]Thus the Arlington mills, one of the largest and most conspicuous of the American worsted establishments, has erected a huge and highly efficient plant for saving the grease formerly lost in the process of scouring wool and securing thereby a valuable by-product. The same thing is done in Germany, where wool scouring with utilization of grease is a separate specialized industry. In accord with the American tradition this is done in the Arlington mills as part of great integrated operations, on a larger scale than in Germany, and probably with higher efficiency. It is said also that the labor force necessary for spinning and for tending combs has been cut down in this establishment; but whether in greater degree than in foreign countries does not appear. See a small advertising pamphlet, entitled "Tops," published by the Arlington mills (1898), pp. 56, 96. The Tariff Board concluded that the cost (in money) of converting wool into tops was nearly twice as great in the United States as in England; in other words, found no indication of special effectiveness in the United States. Report, pp. 639 seq.

[149.]See Clapham, The Woolen and Worsted Industries; and Michaelis, "Die Woll Industrie," in Handbuch der Wirthschaftskunde Deutschlands, vol. iii.

[150.]There may be an exception in the cotton manufacture as regards the production of yarn, in which the New England Cotton Yarn Company is carrying on an experiment at once in combination and in specialization; and perhaps another exception is the Cotton Duck Consolidation. See Dewing, Corporate Promotions and Reorganisations, chs. xii, xiii. On silks, compare what was said above, chapter xv, pp. 246, 254.

[151.]The duty on woolens under the tariff of 1846 was 30 per cent. But wool also was dutiable at 30 per cent, which lessened the net protection for woolens. Just how much net protection remained would be difficult of calculation. In 1857 the rate on woolens was reduced to 24 per cent; but wool having a foreign value of twenty cents or less was admitted free.

The history of the woolen manufacture before the war is little known; it offers a promising field for investigation. Some indications of its position in 1846-60 I have gathered in my Tariff History, pp. 144, 159 note. On imports and domestic production in 1860, see, the figures given above, p. 333.

[152.]The figures are as follows (Tariff Board Report, p. 1042):—

On combing machines, cf. the figures already given, p. 343, note. On cap spindles, cf. the footnote to p. 343, above.

[153.]The figures for the various machines here mentioned were as follows (Tariff Board Report. p. 1042):—

[154.]"The explanation of the great use of foreign machinery in the mills (in some departments its exclusive use) given by the establishments visited was that while the importation of these machines increased their cost more than 60 per cent above that of their foreign competitors in the woolen and worsted industry, it was necessary to buy abroad, since with the exception of looms and some few other machines American manufacturers had not been able to furnish machines approaching in result the work done by the foreign machines." Tariff Board Report, p. 1043.

[155.]Compare what has been said on this topic in chapter ii, pp. 28, 29.

[156.]Mr. S. N. D. North, then Secretary of the National Association of Wool Manufacturers, wrote in 1894:—

"Many manufacturers will find themselves compelled to change altogether the character of their products.... At present it seems as though the hardest struggle was before the mills which have been engaged in making the medium cassimeres and similar goods for the masses. These mills have had the American manufacture to themselves and they have been able to determine in large measure the character of the goods made to supply it. That great advantage will no longer be theirs. It follows that radical adjustments will be necessary; much machinery which sufficed for the old conditions of manufacturing will be found to be useless. Many mills will have to be reëquipped throughout; there are many in which it will be found cheaper to abandon them altogether than to incur the expense of a complete overhauling.... It has been charged against our manufacturers that they are behind those of other countries in their knowledge and application of modern economies. The charge has been that the high protective tariff has saved them from the necessity of learning those lessons to which the attention of foreigners has largely been directed of late years. There is probably some truth in this statement, though not so much as those who make it believe." Bulletin Wool Manufacturers, xxiv, p. 258.

[157.]This is the general conclusion reached by Mr. T. 'W. Page, one of the members of the Tariff Board, an able economist quite without bias. In an address reported in the Wool Manufacturers' Bulletin (June, 1913, p. 172) he summed up the situa tion thus: "Some of our industries are more prosperous than others; they afford higher profits and higher wages, and can hold their own in competition with the world. The woolen industry is not one of these. It appears to have no single advantage not enjoyed in equal or greater degree by the same industries abroad, and it lacks many important advantages possessed by other industries at home."

[158.]Cf. what was said on the Cotton Manufacture, pp. 271, 279, 289.

[159.]It is worth noting that in France (and I believe in Germany also) the mule only is used: cap spinning of worsted yarns is confined to England and the United States. Clapham, The Woolen and Worsted Industries, pp. 51 seq.; Barker, Textiles, p. 101. Cf. also the note to p. 343, above. England's relation to the Continent is analogous to that of the United States to Europe in general; the machine tends to dominate, and processes that involve direct labor tend to give way.

[160.]See the series of letters printed in the Tariff Board Report, pp. 1666, 1073, 1074. I select a few passages from the abundance of illustrative material. "A good weaver must be quick, with nimble fingers, good eyesight, clean and methodical." "What will make a good weaver will make a good workman in almost any line, especially mechanical." And precisely because such a man has mechanical aptitude, he is drawn away into other occupations where his qualities tell to the full and where in consequence he gets higher pay. "The best weavers go into some other line of industry where the pay is better. Many of our 'stars' of past years went into the wire fence industry. Many more, during the past three or four years, have gone into the automobile industry." Another manufacturer says that "as to our expert weavers, they seldom stay longer than three years."

[161.]As regards weavers in cotton mills I am confirmed by private communications from persons engaged in the manufacture of the finer grades of cotton goods.

[162.]The figures are from the census returns of 1910. In England also the weavers on worsted looms are chiefly women, those on woolen looms chiefly men. See Report on the Woolen and Worsted Industries, etc., by W. A. G. Clark, made to the Department of Commerce and Labor, 1900, p. 49.

[163.]See, for example, the Tariff Board Report on Cottons, ii, p. 495. Conversations of mine with manufacturers have confirmed the statement.

[164.]The small fulling mill of colonial times finished the home-spun and home-woven cloths of the country folk.

[165.]Clapham, The Woolen and Worsted Industries, p. 74.

[166.]See the sketch of the rates of duty given in chapter xx, p. 325. The ad valorem (protective) rate on the dearer goods was pushed up a notch in 1890, and still another in 1897, reaching 55 per cent in the latter year.

[167.]The account given by the representative of this firm seems to me so instructive on various aspects of the textile situation that I quote from it with some freedom.

"Many European woolen enterprises have existed for generations, and even those of more recent origin can draw their help from mills which have had such a long existence. The employers, and in very many cases their fathers and grandfathers before them, have been born and brought up in the business; and as a rule the children and grandchildren of the workpeople are also trained to the same trade.

"And what is true of the firms, and the workers and their families, is also true of the communities. The older seats of the woolen industry, like Bradford and Huddersfield in England, parts of the Rhine province, the Lausitz, Silesia and Saxony in Germany, Roubaix, Tourcoing, Elboeuf and Sedan in France, to mention a few of the best known, having gathered about them for centuries a group of trained and efficient workers, possess an inestimable advantage over the centers of the woolen industry in America, the latter being, in comparison with those of Europe above named, themselves still in their childhood and their workers more or less migratory.... The operatives in American woolen mills, in spite of the very much higher wages paid, are largely drawn from the ranks of unskilled labor. And whence does this unskilled labor come? There is little of it among native-born Americans. It is taken from the steady flow of immigrants into this country....

"When establishing our enterprise in Passaic, N. J., we were obliged, in order to be able to compete, not only as to price, but also with respect to quality and technical perfection, with the best European mills, to import most of our machinery, because a great deal of American spinning, weaving, dyeing, and finishing machinery is not yet so highly developed as the European. This is especially true of the machinery used in what is known as the French system of worsted spinning, which is being adopted more and more each year. [The French use the mule exclusively, and a drawing system of their own; the whole adapted to making soft fabrics from fine wool of comparatively short fibre. See Barker, Textiles, p. 247; Tariff Board Report, p. 1031.] Also our entire woolen spinning machinery had to be imported to enable us to compete with the best European manufacturers.

"A great part of our looms could be bought here, while others had to be imported on account of special requirements; but those purchased in this country were nearly as expensive as the imported ones, so that in buying them we had to bear our share of the protection of the textile machinery of this country. Dyeing and finishing machinery used in our mill also had mostly to be imported." From a memorial to Congress, by J. Forstmann, reprinted in Bulletin Wool Manufacturers, September, 1921, pp. 416-417.

[168.]I am glad to record that my general conclusions are similar to those reached by Mr. T. W. Page of the Tariff Board and stated by him in the address already referred to; see Bulletin Wool Manufacturers, June, 1913, p. 169.