But the disposition to save does not wholly depend on the external
inducement to it; on the amount of profit to be made from savings. With
the same pecuniary inducement, the inclination is very different, in
different persons, and in different communities.
(2.) All accumulation involves the sacrifice of a present, for the sake of
a future good.
This is the fundamental motive underlying the effective desire of
accumulation, and is far more important than any other. It is, in
short, the test of civilization. In order to induce the
laboring-classes to improve their condition and save capital, it
is absolutely necessary to excite in them (by education or
religion) a belief in a future gain greater than the present
sacrifice. It is, to be sure, the whole problem of creating
character, and belongs to sociology and ethics rather than to
political economy.
In weighing the future against the present, the uncertainty of all things
future is a leading element; and that uncertainty is of very different
degrees. “All circumstances,” therefore, “increasing the probability of
the provision we make for futurity being enjoyed by ourselves or others,
tend” justly and reasonably “to give strength to the effective desire of
accumulation. Thus a healthy climate or occupation, by increasing the
probability of life, has a tendency to add to this desire. When engaged in
safe occupations and living in healthy countries, men are much more apt to
be frugal, than in unhealthy or hazardous occupations and in climates
pernicious to human life. Sailors and soldiers are prodigals. In the West
Indies, New Orleans, the East Indies, the expenditure of the inhabitants
is profuse. The same people, coming to reside in the healthy parts of
Europe, and not getting into the vortex of extravagant fashion, live
economically. War and pestilence have always waste and luxury among the
other evils that follow in their train. For similar reasons, whatever
gives security to the affairs of the community is favorable to the
strength of this principle. In this respect the general prevalence of law
and order and the prospect of the continuance of peace and tranquillity
have considerable influence.”(128)
It is asserted that the prevalence of homicide in certain parts of
the United States has had a vital influence in retarding the
material growth of those sections. The Southern States have
received but a very small fraction (from ten to thirteen per cent)
of foreign immigration. “A country where law and order prevail to
perfection may find its material prosperity checked by a deadly
and fatal climate; or, on the other hand, a people may destroy all
the advantages accruing from matchless natural resources and
climate by persistent disregard of life and property. A rather
startling confirmation of this economic truth is afforded by the
fact that homicide has been as destructive of life in the South as
yellow fever. Although there have been forty thousand deaths from
yellow fever since the war, the deaths from homicide, for the same
period, have been even greater.”(129) The influence of the old
slave _regime_, and its still existing influences, in checking
foreign immigration into the South can be seen by the colored
chart, No. VIII, showing the relative density of foreign-born
inhabitants in the several parts of the United States. The deeper
color shows the greater foreign-born population.
The more perfect the security, the greater will be the effective strength
of the desire of accumulation. Where property is less safe, or the
vicissitudes ruinous to fortunes are more frequent and severe, fewer
persons will save at all, and, of those who do, many will require the
inducement of a higher rate of profit on capital to make them prefer a
doubtful future to the temptation of present enjoyment.
In the circumstances, for example, of a hunting tribe, “man may be said to
be necessarily improvident, and regardless of futurity, because, in this
state, the future presents nothing which can be with certainty either
foreseen or governed.... Besides a want of the motives exciting to provide
for the needs of futurity through means of the abilities of the present,
there is a want of the habits of perception and action, leading to a
constant connection in the mind of those distant points, and of the series
of events serving to unite them. Even, therefore, if motives be awakened
capable of producing the exertion necessary to effect this connection,
there remains the task of training the mind to think and act so as to
establish it.”
§ 3. Examples of Deficiency in the Strength of this Desire.
For instance: “Upon the banks of the St. Lawrence there are several little
Indian villages. The cleared land is rarely, I may almost say never,
cultivated, nor are any inroads made in the forest for such a purpose. The
soil is, nevertheless, fertile, and, were it not, manure lies in heaps by
their houses. Were every family to inclose half an acre of ground, till
it, and plant it in potatoes and maize, it would yield a sufficiency to
support them one half the year. They suffer, too, every now and then,
extreme want, insomuch that, joined to occasional intemperance, it is
rapidly reducing their numbers. This, to us, so strange apathy proceeds
not, in any great degree, from repugnance to labor; on the contrary, they
apply very diligently to it when its reward is immediate. It is evidently
not the necessary labor that is the obstacle to more extended culture, but
the distant return from that labor. I am assured, indeed, that among some
of the more remote tribes, the labor thus expended much exceeds that given
by the whites. On the Indian, succeeding years are too distant to make
sufficient impression; though, to obtain what labor may bring about in the
course of a few months, he toils even more assiduously than the white
man.”
This view of things is confirmed by the experience of the Jesuits, in
their interesting efforts to civilize the Indians of Paraguay. The real
difficulty was the improvidence of the people; their inability to think
for the future; and the necessity accordingly of the most unremitting and
minute superintendence on the part of their instructors. “Thus at first,
if these gave up to them the care of the oxen with which they plowed,
their indolent thoughtlessness would probably leave them at evening still
yoked to the implement. Worse than this, instances occurred where they cut
them up for supper, thinking, when reprehended, that they sufficiently
excused themselves by saying they were hungry.”
As an example intermediate, in the strength of the effective desire of
accumulation, between the state of things thus depicted and that of modern
Europe, the case of the Chinese deserves attention. “Durability is one of
the chief qualities, marking a high degree of the effective desire of
accumulation. The testimony of travelers ascribes to the instruments
formed by the Chinese a very inferior durability to similar instruments
constructed by Europeans. The houses, we are told, unless of the higher
ranks, are in general of unburnt bricks, of clay, or of hurdles plastered
with earth; the roofs, of reeds fastened to laths. A greater degree of
strength in the effective desire of accumulation would cause them to be
constructed of materials requiring a greater present expenditure, but
being far more durable. From the same cause, much land, that in other
countries would be cultivated, lies waste. All travelers take notice of
large tracts of lands, chiefly swamps, which continue in a state of
nature. To bring a swamp into tillage is generally a process to complete
which requires several years. It must be previously drained, the surface
long exposed to the sun, and many operations performed, before it can be
made capable of bearing a crop. Though yielding, probably, a very
considerable return for the labor bestowed on it, that return is not made
until a long time has elapsed. The cultivation of such land implies a
greater strength of the effective desire of accumulation than exists in
the empire. The amount of self-denial would seem to be small. It is their
great deficiency in forethought and frugality in this respect which is the
cause of the scarcities and famines that frequently occur.”
That it is defect of providence, not defect of industry, that limits
production among the Chinese, is still more obvious than in the case of
the semi-agriculturized Indians. “Where the returns are quick, where the
instruments formed require but little time to bring the events for which
they were formed to an issue,” it is well known that “the great progress
which has been made in the knowledge of the arts suited to the nature of
the country and the wants of its inhabitants” makes industry energetic and
effective. “What marks the readiness with which labor is forced to form
the most difficult materials into instruments, where these instruments
soon bring to an issue the events for which they are formed, is the
frequent occurrence, on many of their lakes and rivers, of structures
resembling the floating gardens of the Peruvians, rafts covered with
vegetable soil and cultivated. Labor in this way draws from the materials
on which it acts very speedy returns. Nothing can exceed the luxuriance of
vegetation when the quickening powers of a genial sun are ministered to by
a rich soil and abundant moisture. It is otherwise, as we have seen, in
cases where the return, though copious, is distant. European travelers are
surprised at meeting these little floating farms by the side of swamps
which only require draining to render them tillable.”
When a country has carried production as far as in the existing state of
knowledge it can be carried with an amount of return corresponding to the
average strength of the effective desire of accumulation in that country,
it has reached what is called the stationary state; the state in which no
further addition will be made to capital, unless there takes place either
some improvement in the arts of production, or an increase in the strength
of the desire to accumulate. In the stationary state, though capital does
not on the whole increase, some persons grow richer and others poorer.
Those whose degree of providence is below the usual standard become
impoverished, their capital perishes, and makes room for the savings of
those whose effective desire of accumulation exceeds the average. These
become the natural purchasers of the lands, manufactories, and other
instruments of production owned by their less provident countrymen.
In China, if that country has really attained, as it is supposed to have
done, the stationary state, accumulation has stopped when the returns to
capital are still as high as is indicated by a rate of interest legally
twelve per cent, and practically varying (it is said) between eighteen and
thirty-six. It is to be presumed, therefore, that no greater amount of
capital than the country already possesses can find employment at this
high rate of profit, and that any lower rate does not hold out to a
Chinese sufficient temptation to induce him to abstain from present
enjoyment. What a contrast with Holland, where, during the most
flourishing period of its history, the government was able habitually to
borrow at two per cent, and private individuals, on good security, at
three!
§ 4. Examples of Excess of this Desire.
In [the United States and] the more prosperous countries of Europe, there
are to be found abundance of prodigals: still, in a very numerous portion
of the community, the professional, manufacturing, and trading classes,
being those who, generally speaking, unite more of the means with more of
the motives for saving than any other class, the spirit of accumulation is
so strong that the signs of rapidly increasing wealth meet every eye: and
the great amount of capital seeking investment excites astonishment,
whenever peculiar circumstances turning much of it into some one channel,
such as railway construction or foreign speculative adventure, bring the
largeness of the total amount into evidence.
There are many circumstances which, in England, give a peculiar force to
the accumulating propensity. The long exemption of the country from the
ravages of war and the far earlier period than elsewhere at which property
was secure from military violence or arbitrary spoliation have produced a
long-standing and hereditary confidence in the safety of funds when
trusted out of the owner’s hands, which in most other countries is of much
more recent origin, and less firmly established.
The growth of deposit-banking in Great Britain, therefore,
advances with enormous strides, while in Continental countries it
makes very little headway. The disturbed condition of the country
in France, owing to wars, leads the thrifty to hoard instead of
depositing their savings. But in the United States the same growth
is seen as among the English. The net deposits of the national
banks of the United States in 1871 were $636,000,000, but in 1883
they had increased more than 83 per cent to $1,168,000,000.
Deposit accounts are the rule even with small tradesmen; and the
savings-banks of Massachusetts alone show deposits in 1882-1883 of
$241,311,362, and those of New York of $412,147,213. The United
States also escapes from the heavy taxation which in Europe is
imposed to maintain an extravagant army and navy chest. The effect
of institutions, moreover, in stimulating the growth of material
prosperity is far more true of the United States than of England,
for the barriers raised against the movement from lower to higher
social classes in the latter country are non-existent here, and
consequently there is more stimulus toward acquiring the means of
bettering a man’s social condition.
The geographical causes which have made industry rather than war the
natural source of power and importance to Great Britain [and the United
States] have turned an unusual proportion of the most enterprising and
energetic characters into the direction of manufactures and commerce; into
supplying their wants and gratifying their ambition by producing and
saving, rather than by appropriating what has been produced and saved.
Much also depended on the better political institutions of this country,
which, by the scope they have allowed to individual freedom of action,
have encouraged personal activity and self-reliance, while, by the liberty
they confer of association and combination, they facilitate industrial
enterprise on a large scale. The same institutions, in another of their
aspects, give a most direct and potent stimulus to the desire of acquiring
wealth. The earlier decline of feudalism [in England] having removed or
much weakened invidious distinctions between the originally trading
classes and those who had been accustomed to despise them, and a polity
having grown up which made wealth the real source of political influence,
its acquisition was invested with a factitious value independent of its
intrinsic utility. And, inasmuch as to be rich without industry has always
hitherto constituted a step in the social scale above those who are rich
by means of industry, it becomes the object of ambition to save not merely
as much as will afford a large income while in business, but enough to
retire from business and live in affluence on realized gains.
In [the United States,] England, and Holland, then, for a long time past,
and now in most other countries in Europe, the second requisite of
increased production, increase of capital, shows no tendency to become
deficient. So far as that element is concerned, production is susceptible
of an increase without any assignable bounds. The limitation to
production, not consisting in any necessary limit to the increase of the
other two elements, labor and capital, must turn upon the properties of
the only element which is inherently, and in itself, limited in quantity.
It must depend on the properties of land.
Chapter IX. Of The Law Of The Increase Of Production From Land.
§ 1. The Law of Production from the Soil, a Law of Diminishing Return in
Proportion to the Increased Application of Labor and Capital.
Land differs from the other elements of production, labor, and capital, in
not being susceptible of indefinite increase. Its extent is limited, and
the extent of the more productive kinds of it more limited still. It is
also evident that the quantity of produce capable of being raised on any
given piece of land is not indefinite. This limited quantity of land and
limited productiveness of it are the real limits to the increase of
production.
The limitation to production from the properties of the soil is not like
the obstacle opposed by a wall, which stands immovable in one particular
spot, and offers no hindrance to motion short of stopping it entirely. We
may rather compare it to a highly elastic and extensible band, which is
hardly ever so violently stretched that it could not possibly be stretched
any more, yet the pressure of which is felt long before the final limit is
reached, and felt more severely the nearer that limit is approached.
After a certain, and not very advanced, stage in the progress of
agriculture—as soon, in fact, as mankind have applied themselves to
cultivation with any energy, and have brought to it any tolerable
tools—from that time it is the law of production from the land, that in
any given state of agricultural skill and knowledge, by increasing the
labor, the produce is not increased in an equal degree; doubling the labor
does not double the produce; or, to express the same thing in other words,
every increase of produce is obtained by a more than proportional increase
in the application of labor to the land. This general law of agricultural
industry is the most important proposition in political economy. Were the
law different, nearly all the phenomena of the production and distribution
of wealth would be other than they are.
It is not generally considered that in the United States, where in
many sparsely settled parts of the country new land is constantly
being brought into cultivation, an additional population under
existing conditions of agricultural skill can be maintained with
constantly increasing returns up to a certain point before the law
of diminishing returns begins to operate. Where more laborers are
necessary, and more capital wanted, to co-operate in a new country
before all the land can give its maximum product, in such a stage
of cultivation it can not be said that the law of diminishing
returns has yet practically set in.
When, for the purpose of raising an increase of produce, recourse is had
to inferior land, it is evident that, so far, the produce does not
increase in the same proportion with the labor. The very meaning of
inferior land is land which with equal labor returns a smaller amount of
produce. Land may be inferior either in fertility or in situation. The one
requires a greater proportional amount of labor for growing the produce,
the other for carrying it to market. If the land A yields a thousand
quarters of wheat to a given outlay in wages, manure, etc., and, in order
to raise another thousand, recourse must be had to the land B, which is
either less fertile or more distant from the market, the two thousand
quarters will cost more than twice as much labor as the original thousand,
and the produce of agriculture will be increased in a less ratio than the
labor employed in procuring it.
Instead of cultivating the land B, it would be possible, by higher
cultivation, to make the land A produce more. It might be plowed or
harrowed twice instead of once, or three times instead of twice; it might
be dug instead of being plowed; after plowing, it might be gone over with
a hoe instead of a harrow, and the soil more completely pulverized; it
might be oftener or more thoroughly weeded; the implements used might be
of higher finish, or more elaborate construction; a greater quantity or
more expensive kinds of manure might be applied, or, when applied, they
might be more carefully mixed and incorporated with the soil.
The example of market-gardens in the vicinity of great cities and
towns shows how the intensive culture permits an increase of labor
and capital with larger returns. These lands, by their situation,
are superior lands for this particular purpose, although they
might be inferior lands as regards absolute productiveness when
compared with the rich wheat-lands of Dakota. New England and New
Jersey farms, generally speaking, no longer attempt the culture of
grains, but (when driven out of that culture by the great railway
lines which have opened up the West) they have arranged themselves
in a scale of adaptability for stock, grass, fruit, dairy, or
vegetable farming; and have thereby given greater profits to their
owners than the same land did under the old _regime_. Even on
lands where any grain can still be grown, corn, buckwheat, barley,
oats, and rye, cover the cultivated areas instead of wheat.
Inferior lands, or lands at a greater distance from the market, of course
yield an inferior return, and an increasing demand can not be supplied
from them unless at an augmentation of cost, and therefore of price. If
the additional demand could continue to be supplied from the superior
lands, by applying additional labor and capital, at no greater
proportional cost than that at which they yield the quantity first
demanded of them, the owners or farmers of those lands could undersell all
others, and engross the whole market. Lands of a lower degree of fertility
or in a more remote situation might indeed be cultivated by their
proprietors, for the sake of subsistence or independence; but it never
could be the interest of any one to farm them for profit. That a profit
can be made from them, sufficient to attract capital to such an
investment, is a proof that cultivation on the more eligible lands has
reached a point beyond which any greater application of labor and capital
would yield, at the best, no greater return than can be obtained at the
same expense from less fertile or less favorably situated lands.
“It is long,” says a late traveler in the United States,(130) “before an
English eye becomes reconciled to the lightness of the crops and the
careless farming (as we should call it) which is apparent. One forgets
that, where land is so plentiful and labor so dear as it is here, a
totally different principle must be pursued from that which prevails in
populous countries, and that the consequence will of course be a want of
tidiness, as it were, and finish, about everything which requires labor.”
Of the two causes mentioned, the plentifulness of land seems to me the
true explanation, rather than the dearness of labor; for, however dear
labor may be, when food is wanted, labor will always be applied to
producing it in preference to anything else. But this labor is more
effective for its end by being applied to fresh soil than if it were
employed in bringing the soil already occupied into higher cultivation.
The Western movement of what might be called the “wheat-center” is
quite perceptible. Until recently Minnesota has been a great
wheat-producing State, and vast tracts of land were there planted
with that grain when the soil was first broken. The profits on the
first few crops have been enormous, but it is now said to be more
desirable for wheat-growers to move onward to newer lands, and to
sell the land to cultivators of a different class (of fruit and
varied products), who produce for a denser population. So that (in
1884) Dakota, instead of Minnesota, has become the district of the
greatest wheat production.(131)
Only when no soils remain to be broken up, but such as either from
distance or inferior quality require a considerable rise of price to
render their cultivation profitable, can it become advantageous to apply
the high farming of Europe to any American lands; except, perhaps, in the
immediate vicinity of towns, where saving in cost of carriage may
compensate for great inferiority in the return from the soil itself.
The principle which has now been stated must be received, no doubt, with
certain explanations and limitations. Even after the land is so highly
cultivated that the mere application of additional labor, or of an
additional amount of ordinary dressing, would yield no return proportioned
to the expense, it may still happen that the application of a much greater
additional labor and capital to improving the soil itself, by draining or
permanent manures, would be as liberally remunerated by the produce as any
portion of the labor and capital already employed. It would sometimes be
much more amply remunerated. This could not be, if capital always sought
and found the most advantageous employment.
§ 2. Antagonist Principle to the Law of Diminishing Return; the Progress
of Improvements in Production.
That the produce of land increases, _cæteris paribus_, in a diminishing
ratio to the increase in the labor employed, is, as we have said (allowing
for occasional and temporary exceptions), the universal law of
agricultural industry. This principle, however, has been denied. So much
so, indeed, that (it is affirmed) the worst land now in cultivation
produces as much food per acre, and even as much to a given amount of
labor, as our ancestors contrived to extract from the richest soils in
England.
The law of diminishing returns is the physical fact upon which the
economic doctrine of rent is based, and requires careful
attention. Carey asserts, instead, that there is a law of
increasing productiveness, since, as men grow in numbers and
intelligence, there arises an ability to get more from the
soil.(132) Some objectors even deny that different grades of land
are cultivated, and that there is no need of taking inferior soils
into cultivation. If this were true, why would not one half an
acre of land be as good as a whole State? Johnston(133) says: “In
a country and among poor settlers ... poor land is a relative
term. Land is called poor which is not suitable to a poor man,
which on mere clearing and burning will not yield good first
crops. Thus that which is poor land for a poor man may prove rich
land to a rich man.”(134) Moreover, as is constantly the case in
our country, it often happens that a railway may bring new lands
into competition with old lands in a given market; of which the
most conspicuous example is the competition of Western
grain-fields with the Eastern farms. In these older districts,
before the competition came, there was a given series of grades in
the cultivated land; after the railway was built there was a
disarrangement of the old series, some going out of cultivation,
some remaining, and some of the new lands entering the list. The
result is a new series of grades better suited to satisfy the
wants of men.
This, however, does not prove that the law of which we have been speaking
does not exist, but only that there is some antagonizing principle at
work, capable for a time of making head against the law. Such an agency
there is, in habitual antagonism to the law of diminishing return from
land; and to the consideration of this we shall now proceed. It is no
other than the progress of civilization. The most obvious [part of it] is
the progress of agricultural knowledge, skill, and invention. Improved
processes of agriculture are of two kinds: (1) some enable the land to
yield a greater absolute produce, without an equivalent increase of labor;
(2) others have not the power of increasing the produce, but have that of
diminishing the labor and expense by which it is obtained. (1.) Among the
first are to be reckoned the disuse of fallows, by means of the rotation
of crops; and the introduction of new articles of cultivation capable of
entering advantageously into the rotation. The change made in agriculture
toward the close of the last century, by the introduction of
turnip-husbandry, is spoken of as amounting to a revolution. Next in order
comes the introduction of new articles of food, containing a greater
amount of sustenance, like the potato, or more productive species or
varieties of the same plant, such as the Swedish turnip. In the same class
of improvements must be placed a better knowledge of the properties of
manures, and of the most effectual modes of applying them; the
introduction of new and more powerful fertilizing agents, such as guano,
and the conversion to the same purpose of substances previously wasted;
inventions like subsoil-plowing or tile-draining, by which the produce of
some kinds of lands is so greatly multiplied; improvements in the breed or
feeding of laboring cattle; augmented stock, of the animals which consume
and convert into human food what would otherwise be wasted; and the like.
(2.) The other sort of improvements, those which diminish labor, but
without increasing the capacity of the land to produce, are such as the
improved construction of tools; the introduction of new instruments which
spare manual labor, as the winnowing and thrashing machines. These
improvements do not add to the productiveness of the land, but they are
equally calculated with the former to counteract the tendency in the cost
of production of agricultural produce, to rise with the progress of
population and demand.
§ 3. —In Railways.
Analogous in effect to this second class of agricultural improvements are
improved means of communication. Good roads are equivalent to good tools.
It is of no consequence whether the economy of labor takes place in
extracting the produce from the soil, or in conveying it to the place
where it is to be consumed.
The functions performed by railways in the system of production is
highly important. They are among the most influential causes
affecting the cost of producing commodities, particularly those
which satisfy the primary wants of man, of which food is the
chief. The amount of tonnage carried is enormous; and the cost of
this service to the producers and consumers of the United States
is a question of very great magnitude. The serious reduction in
the cost of transportation on the railways will be a surprise to
all who have not followed the matter very closely; the more so,
that it has been brought about by natural causes, and independent
of legislation. Corn, meat, and dairy products form, it is said,
at least 50 per cent, and coal and timber about 30 per cent, of
the tonnage moved on all the railways of the United States. If a
lowered cost of transportation has come about, it has then cost
less to move the main articles of immediate necessity. Had the
charge in 1880 remained as high even as it was from 1866 to 1869,
the number of tons carried in 1880 would have cost the United
States from $500,000,000 to $800,000,000 more than the charge
actually made, owing to the reductions by the railways. It seems,
however, that this process of reduction culminated about 1879. In
order to show the facts of this process, note the changes in the
following chart, No. V. The railways of the State of New York are
taken, but the same is also true of those of Ohio:
Chart V.
_Cost of 20 Barrels of Flour, 10 Beef, 10 Pork, 100 Bushels Wheat,
100 Corn, 100 Oats, 100 Pounds Butter, 100 Lard, and 100 Fleece
Wool, in New York City, at the Average of each Year, Compiled by
Months, in Gold; Compared Graphically with the Decrease in the
Charge per Ton per Mile, on all the Railroads of the State of New
York, during the Same Period._
Year. Price in Charge for Decrease in Decrease in
gold of carrying one the railroad the profits
staple farm ton one expenses per of the
products. mile. ton. (Cents) railroads
(Dollars) (Cents) for carrying
one ton.
(Cents)
1870 776.02 1.7016 1.1471 .5545
1871 735.33 1.7005 1.1450 .5555
1872 675.92 1.6645 1.1490 .5155
1873 662.50 1.6000 1.0864 .5136
1874 748.54 1.4480 .9730 .4750
1875 696.40 1.3039 .9587 .3452
1876 651.74 1.1604 .8561 .3043
1877 751.95 1.0590 .7740 .2850
1878 569.81 .9994 .6900 .3094
1879 568.34 .8082 .5847 .2295
1880 631.32 .9220 .6030 .3190
1881 703.10 .8390 .5880 .2510
1882 776.12 .8170 .6010 .2160
1883 662.11 .8990 .6490 .2500
In 1855 the charge per ton per mile was 3.27 cents, as compared
with 0.89 in 1883.
Tons moved 1 m. in 1883 by 9,286,216,628
railroads of N.Y.
At rate of 1855, would cost $303,659,283
Actual cost in 1883 83,464,919
Saving to the State $220,194,364
The explanation of this reduced cost is given by Mr. Edward
Atkinson(135) as (1) the competition of water-ways, (2) the
competition of one railway with another, and (3) the competition
of other countries, which forces our railways to try to lay our
staple products down in foreign markets at a price which will
warrant continued shipment. Besides these reasons, much ought also
(4) to be assigned to the progress of inventions and the reduced
cost of steel and all appliances necessary to the railways.
The large importance of the railways shows itself in an influence
on general business prosperity, and as a place for large
investments of a rapidly growing capital. The building of
railways, however, has been going on, at some times with greater
speed than at others. Instead of 33,908 miles of railways at the
close of our war, we have now (1884) over 120,000 miles. How the
additional mileage has been built year by year, with two distinct
eras of increased building—one from 1869 to 1873, and another from
1879 to 1884—may be seen by the shorter lines of the subjoined
chart, No. VI.
That speculation has been excited at different times by the
opening up of our Western country, there can be no doubt. And if a
comparison be made with Chart No. XVII (Book IV, Chap. III), which
gives the total grain-crops of the United States, it will be seen
that since 1879, although our population has increased from 12-½
per cent to 14 per cent, our grain-crops only 5 per cent, yet our
railway mileage has increased 40 per cent.
The extent to which the United States has carried
railway-building, as compared with European countries, although we
have a very much greater area, is distinctly shown by Chart No.
VII. This application of one form of improvement to oppose the law
of diminishing returns in the United States has produced
extraordinary results, especially when we consider that we are
probably not yet using all our best lands, or, in other words,
that we have not yet felt the law of diminishing returns in some
large districts.
Chart VI.
_Miles of Railroad in Operation on the 1st January in each Year, and the
Miles added in the Year Ensuing._
Year. Miles of Railroad. Miles added.
1865 33,908 1,177
1866 35,085 1,716
1867 36,801 2,449
1868 39,250 2,979
1869 42,229 4,615
1870 46,844 6,070
1871 52,914 7,379
1872 60,293 5,878
1873 66,171 4,107
1874 70,278 2,105
1875 72,383 1,713
1876 74,096 2,712
1877 76,808 2,281
1878 79,089 2,687
1879 81,776 4,721
1880 86,497 7,048
1881 93,545 9,789
1882 103,334 11,591
1883 114,925 6,618
Railways and canals are virtually a diminution of the cost of production
of all things sent to market by them; and literally so of all those the
appliances and aids for producing which they serve to transmit. By their
means land can be cultivated, which would not otherwise have remunerated
the cultivators without a rise of price. Improvements in navigation have,
with respect to food or materials brought from beyond sea, a corresponding
effect.
§ 4. —In Manufactures.
From similar considerations, it appears that many purely mechanical
improvements, which have, apparently, at least, no peculiar connection
with agriculture, nevertheless enable a given amount of food to be
obtained with a smaller expenditure of labor. A great improvement in the
process of smelting iron would tend to cheapen agricultural implements,
diminish the cost of railroads, of wagons and carts, ships, and perhaps
buildings, and many other things to which iron is not at present applied,
because it is too costly; and would thence diminish the cost of production
of food. The same effect would follow from an improvement in those
processes of what may be termed manufacture, to which the material of food
is subjected after it is separated from the ground. The first application
of wind or water power to grind corn tended to cheapen bread as much as a
very important discovery in agriculture would have done; and any great
improvement in the construction of corn-mills would have, in proportion, a
similar influence.
Those manufacturing improvements which can not be made instrumental to
facilitate, in any of its stages, the actual production of food, and
therefore do not help to counteract or retard the diminution of the
proportional return to labor from the soil, have, however, another effect,
which is practically equivalent. What they do not prevent, they yet, in
some degree, compensate for.(136)
Chart VII.
_Ratio of Miles of Railroad to the Areas of States and Countries—United
States and Europe. The relative proportion is 1 Mile Railroad to 4 Square
Miles of Area._
No. Name. Rank in Size. Relative.
1 Massachusetts 67 98
2 Belgium 62 96
3 England and 29 88
Wales
4 New Jersey 62 81
5 Connecticut 68 80
6 Rhode Island 71 65
7 Ohio 44 60
8 Illinois 32 59
9 Pennsylvania 40 55
10 Delaware 69 53
11 Indiana 50 52
12 New Hampshire 65 45
13 Switzerland 59 44
14 New York 39 41
15 Iowa 33 39
16 German Empire 4 38
17 Scotland 52 37
18 Maryland 63 36
19 Vermont 64 35
20 Ireland 51 29
21 Michigan 31 28
22 France 5 27
23 Denmark 60 26
24 Netherlands 57 25
25 Missouri 26 24
26 Wisconsin 34 23
27 Austrian 3 21
Empire
28 Virginia 45 19
29 Italy 13 18
30 Georgia 30 17
31 Kansas 22 16
32 Kentucky 46 15
33 South 49 14
Carolina
34 Tennessee 42 14
35 Minnesota 21 13
36 Alabama 36 13
37 West Virginia 55 12
38 Roumania 41 12
39 North 37 12
Carolina
40 Maine 48 12
41 Nebraska 23 10
42 Mississippi 38 9
43 Spain 6 9
44 Portugal 47 9
45 Sweden 7 9
46 Arkansas 35 8
47 Louisiana 43 8
48 Colorado 16 8
49 California 8 7
50 Turkey 27 7
51 Texas 2 7
52 Utah 20 6
53 Florida 28 6
54 Dakota 7 6
55 Russia in 1 5
Europe
56 Nevada 15 5
57 Norway 11 5
58 Oregon 18 4
59 Bulgaria 54 4
60 New Mexico 12 3
61 Wyoming 17 2
62 Indian 25 2
Territory
63 Washington 24 1
64 Arizona 14 1
65 Idaho 19 1
66 Greece 58 0
67 Montana 10 0
68 Bosnia and 53 0
Herzegovina
69 Servia 56 0
70 Eastern 61 0
Roumelia
71 Montenegro 70 0
72 Andorra 72 0
(The United States have substantially one mile of railway to each 540
inhabitants. Europe has one mile to each 3,000 inhabitants, if Russia be
included; about one mile to each 2,540, exclusive of Russia.)
The materials of manufactures being all drawn from the land, and many of
them from agriculture, which supplies in particular the entire material of
clothing, the general |
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