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THE

BY S. N. D. NORTH.

(Chief Statistician.)

HE twelfth census of manufactures was a gigantic statistical work, more difficult and complicated than any similar inquiry ever undertaken. It has been completed within two years from the date upon which the fieldwork began. This is in accordance with the mandate of Congress, which fixed a two-year time limit in the census act. It is less than one-half the time consumed in the compilation of similar statistics of previous censuses. Congress was impressed with the idea that industrial statistics, to be of practical and contemporaneous value, should be available within a reasonable time from the period to which they relate. The manufacturing statistics of the census of 1860, taken just before the Civil War, were not published until after that war had closed. The data had been knocked somewhat awry by intervening events. The world moves so fast, the statistical data supplied from commercial sources is so complete and so prompt, that census figures of industry have heretofore possessed some points in common with last year's birds' nests. A great advance in celerity of publication has now been achieved; and those who have watched and pushed the work are convinced that under the favorable conditions created by the establishment of a permanent cen sus office, it ought to be possible, at the thirteenth census of 1910, to gather, compile, and publish the statistics within one year. Nothing is impossible when there is money enough to do the work and skillful and experienced clerks to handle it. It has taken Congress a long time to discover that a permanent census office will prove a great money saver, while incidentally adding materially to the accuracy and the value of the census statistics.

COST OF OUR INDUSTRIAL INVENTORY.

It has cost $1,200,000, in round numbers, to take and collate the statistics of manufactures for 1900. It is a goodly sum of money; but it is worth what it cost to find out in definite and tangible figures just where the United States stood, industrially, in the last year of the nineteenth century. It is the national stock-taking, -and it is interesting to note that the United States was not only the first nation to take an industrial census, but remains the only one to take such a census in a manner at all comprehen

sive and satisfactory. Our census of manufactures is due to Albert Gallatin, who, when he was Secretary of the Treasury in 1810, suggested to Congress that $30,000 out of the $150,000 appropriated for the third census be set aside for this purpose. The modest sum proved sufficient. and the difference between this $30,000 and the $1,200,000 expended for the manufacturing census of 1900 is a good measure of the industrial growth which has intervened.

A CENTURY'S MARVELOUS RECORD.

The balance sheet, as we strike it from the census figures, tells a story of progress and prosperity so impressive as to be almost startling. The average American is no doubt too much addicted to bumptiousness when he talks or writes about our achievements as a people.

But

he has his census to justify his statements, for the statistics show that, however much he may seem to be given to exaggeration, he does not in fact exaggerate when he measures our progress by that of other nations.

It is difficult to reduce the great mass of census figures to simple concrete terms that tell the whole story at a glance; but the brief table on the next page compresses a good deal of the industrial history of our country for the last fifty years into small compass. It embodies what may be called a bird's-eye view of the progress of manufactures during the half century.

The manufacturing statistics of the censuses prior to 1850 were too imperfect and fragmentary to make it proper to accept them as a measure of industrial growth in the first half of the century. But Tench Coxe, analyzing the manufacturing statistics of the census of 1810, and reading into them 25 per cent. of products beyond what was actually returned, ventured to estimate the total value at something less than $200,000,000, including in that total the products of the household industries, which then embraced a great preponderance of the articles now manufactured under the factory system. Contrasted with that figure, we now have a gross total of $13,014,287,498, or an increase of more than sixtyfold. There is nothing in history which approaches or approximates this increase. It must remain for all time to come the unique and phenomenal chapter in the world's economic development.

COMPARATIVE SUMMARY, 1850 TO 1900, WITH INCREASE PER CENT. FOR EACH DECADE.

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Measuring progress by long periods of time, it suggests that it has been possible, in one century. in one nation, statistically to record an advance nothing at all equivalent to which occurred in any one thousand years in any other country, at any preceding epoch. It appears to be a satis factory answer to the contention that the condition of the masses does not improve with the advance of civilization. For, however true it may be that a large part of the increment has gone to comparatively few, the figures represent not merely an increase of wealth, but a distribution and diffusion of wealth such as the world has not known before or elsewhere.

GROWTH OF MANUFACTURES SINCE 1850.

Leaving figures more or less apocryphal, we may profitably confine ourselves to those from the census of 1850. In comparison with that census there has been an increase in capital invested in manufactures approximating seventeenfold; in the average number of wage earners, about four and one-half fold; in amount of wages paid about ninefold, and in value of products about twelvefold. The population of the country has in the meanwhile increased two and one-quarter fold. and the value of agricultural products something less than twofold. While these comparisons must be made with many reservations, they nevertheless afford an approximate exhibit of the enormous increase in manufactures which oc curred in the United States in the last half of the nineteenth century. They are particularly suggestive as an indication of the increasing productive capacity of labor, due chiefly to the increased effectiveness of machinery and the largely increased investment of capital. The apparent value of products per wage earner has increased from $1,065 in 1850 to $2.448 in 1900. An other way of putting it may be illustrated by the textile industries, in which it appears that all the cloth necessary to clothe 76,000,000 people was made by 640,548 persons, or much less than one person in a hundred. Machinery involves a constantly increasing investment of capital, to make possible this increased efficiency of labor; and the increased horse power employed in manufac turing is, on the whole, the most striking fact brought out by the twelfth census. The total horse power so employed was reported in 1890 as 5,954,655; in 1900 as 11,300,081, an increase of 89.8 per cent. in ten years, -altogether the largest increase shown at any point in the statistics. It is commonly calculated that onehorse power, whether water, steam, electric, or what not, is equivalent to the labor of ten men, — a very low average, since it makes no allowance for the fact that the engine never tires and never

varies. It means that the horse power employed in our manufactures in 1900 was equal in its pro ducing capacity to the labor of 113,000,000 able-bodied men, working every day in the year. How insignificant in contrast appears the contribution to industrial wealth of the 5,316,802 men, women, and children, the actual average number of persons employed in the census year to direct and supplement this tremendous power. It needs figures of this definite magnitude to enable us to understand how rapidly powerdriven machinery is increasing its relative ascendency over hand labor in American manufacturing, and how enormously the power of man has increased to develop the wealth which nature holds in store.

ADVANCE OF ELECTRIC POWER IN A DECADE.

One interesting phase of these statistics of power should be noted in passing. The electric motor is just beginning to make itself felt in manufacturing. The number of such motors in use in 1890 was not reported; but they were credited with 15,569 horse power. In 1900 the number of motors was 16,923, with a horse power of 311,000-only 2.7 per cent. of the total horse power employed, but an increase of nearly nineteenfold in ten years, and a prophecy of what is to come, and to come quickly. For already, since the census was taken, electric power has made giant strides in our manufacturing establishments, and everywhere it means an economy of power and an increase of efficiency. The census makes record of the results of the utilization of the water power at Niagara, at the Sault Ste. Marie, and at many other points, for the generation of electricity to drive the machinery of mills located at distant points. Thus it happens that the new motive power, instead of superseding water power, is bringing into use many such powers not advantageously situated for mills, but which can be utilized at great distances, in the centers of industry and transportation.

MACHINERY REPLACES HAND LABOR.

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To the much more general use of power-driven machinery in this country may safely be attributed the remarkable advance of the United States to the first rank among the manufacturing nations. The late Michael G. Mulhall, the English statis. tician, states that (in 1896) nearly all American manufactures are produced by machinery, while in Europe more than one-half is still handwork ;" and this is his explanation of the fact he concedes, that the United States, although the last of the manufacturing nations to enter upon the factory system of production, and holding the fourth rank in production in 1860, being then

surpassed by Great Britain, France, and Germany, in the order named, has now jumped to the first place, Germany having also passed France in the interval.* If we can accept Mr. Mulhall's basis for estimating the value of the manufactures of the United Kingdom, they reached a total of $5,400,000,000 in 1900, which was nearly $3,000,000,000 less than the net value of the manufactured products of the United States as shown by the twelfth census.

"NET" AND 66 GROSS VALUES AS DETERMINED

BY THE CENSUS.

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It should be here explained that the "net" value, as ascertained by the census, is the value that remains after deducting from the "gross value of $13,000,000,000, the value of all the partially manufactured products which became the materials of other establishments in an ascending series of industrial conversions, and were thus duplicated and sometimes reduplicated · in the tabulation of the individual returns. The amount of the duplication and reduplication thus occurring was $4,633,804, 967, the cost of partially manufactured materials used, leaving a "net" value of $8,370,595,176, which represents the original cost of raw materials, plus the value added by all manufacturing processes. this net value the raw materials represent 28.5 per cent., and the remainder practically represents the labor cost of manufacture, in one form or another.

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The "gross" and "net" values of our manufactures, as reported by the census, have hitherto been the source of much misapprehension of the statistics, and have led to many charges that the census greatly exaggerates the volume of our manufactures. The criticism has some foundation, and the twelfth census has sought to avoid it. At the same time it remains the fact that gross value truly represents the volume of commercial transactions involved in manufacturing enterprise, in much the same way that the total transactions of the bank clearing house of a city represent the actual bank transactions of that city. Wholesale and retail trade in the products of manufactures represent another series of transactions, involving values much greater than the gross value of products; it consists of the distribution, selling, and reselling of these products as they pass directly, or through middlemen, into the possession of the ultimate consumers. The total volume of these transactions in the United States is unquestionably greater than that of the international trade of the principal countries of the world, which amounts to the sum of $20,000,000,000 (exports and imports added to

*Industries and Wealth of Nations," by Michael G. Mulhall. 1896.

gether), and which likewise represents, very largely, the duplicated value of articles in various stages of manufacture sold twice or thrice.

AGRICULTURE GIVES WAY ΤΟ MANUFACTURES AS THE CHIEF SOURCE OF NATIONAL WEALTH.

Another interesting fact brought out by these statistics is the advance of manufactures to the first place among the sources of national wealth, exchanging places with agriculture, which has heretofore been the chief contributor to the annual national increment. Until the census of 1890, the supremacy of agriculture was not open to question. But somewhere in the decade preceding that census, manufactures passed agricul ture, after making all possible allowance for deficiencies and duplications in the statistics. The census of 1890 placed the value of the products of agriculture at $2,460,000,000; but it omitted. the value of live stock on farms, of stock sold for slaughter, etc., and statisticians have accordingly increased the figure to $3,289,000,000. The gross value of the products of manufactures were returned at the same census as $9,372,000,000. By deducting the value of all materials consumed in 1890, whether raw or partially manufactured, there remained a residue of $4,210,000,000, which may be called the value added to raw materials by the several processes of manufacture. It is a sum just about one billion dollars in excess of the highest estimate of the value of the agricultural products of 1890 ; and no room is left for doubt that agriculture had thus been left in a subordinate position. This is greatly emphasized by the census of 1900. Agriculture reports a gross value of $4,740,000,000; manufactures a "net" value of $8,370,000,000, or nearly twice that of agricul

ture.

This is a demonstration entirely at variance with the common understanding and belief. The development of our agricultural resources has been so rapid, and has become so important in the food supply of the world, that economists have overlooked the much more rapid growth of manufactures in the last twenty-five years. M. Emile Levasseur, the distinguished French economist, whose studies of census statistics, in connection with his great treatise, "The American Workman," brought him face to face with it, simply refused to accept it. "I cannot believe, he wrote, that a value greater than that of the product of agriculture has been added by the processes of manufacture."

TRANSFERENCE OF INDUSTRY FROM FARM TO FACTORY.

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M. Levasseur's incredulity is due to his failure to appreciate the remarkable advance of manu

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factures into the domain of agriculture. The factory system gradually destroyed the household and neighborhood industries, and it steadily pursues its encroachments upon the farm. great Southern industry of cotton ginning, for merly performed exclusively on the plantation, is rapidly passing over to large and thoroughly equipped establishments, which gin the crops of great areas. In 1870, the census did not report a pound of butter made in factories; in 1880, 30,000,000 pounds, out of a product of 807,000,000, was factory made; in 1900, the factory product of butter was 420,126,000 pounds, out of a grand total of 1,492,699,000 pounds, the factory product being 28.2 per cent. of the whole. Cheese making shows a still more remarkable transformation. In 1860, there was no cheese making in factories reported. In 1870, the factories made more than one-half our cheese; and in 1900, the farms made but 16,372,000 pounds, or less than 6 per cent. of the whole product of 300,000,000 pounds.

Illustrations might be multiplied indefinitely to show the encroachment of the factory upon the function of the farm. Indeed, it is becoming a most difficult matter for the census makers to determine where to draw the line between agriculture and manufactures in many branches of industry. But the farm is the twin sister of the factory; they flourish or are depressed in perfect sympathy; and American supremacy in manufactures is due, in very large degree, to the abundance of our agricultural products. Of the raw materials consumed in manufactures, agriculture supplied $1,940, 727,000 in value, or 81.2 per cent. of the total; the mines supplied $319,975,000, or 13.4 per cent. in value; and the forests $118,803,000, or 5 per cent. of the total; while from ocean, lake, and river came only $9,635,000, or 0.4 per cent. The farmer and the manufacturer are bound by an umbilical cord, and together they share prosperity or depression.

THE SCIENTIFIC GROUPING OF STATISTICS.

The twelfth census is the first to divide the manufacturing industries of the country into groups, or families, on the basis of the raw materials employed, or the kindred uses to which products are put. The relative importance of the several families of industry is thus clearly shown. There are fifteen of these great industry groups, six of which reveal a gross value of products exceeding one billion dollars each. These great family groups of industries are divided into numerous classes, 354 in number, regarding each of which the census gives detailed statistics. These 354 classes of industry correspond, in a

measure, to the "species" of natural history, while the fifteen grand groups are analogous to the "genera," the whole making the great "order" of manufacturing industry. Thus the twelfth census has found it possible to treat the statistics of manufactures by scientific methods, unifying the fundamental resemblances, and measuring the relative importance of each distinct group.

We can thus trace in the statistics the most notable of all the modern tendencies of manufacture, that toward greater specialization in every group, a movement in which the single establishment tends more and more to confine itself to one product, or even to single parts of a product, -to the making of yarn for mills which simply weave, as an illustration. This specialization permits the successful utilization of smaller capital, in individual mills, than would be necessary if each establishment must begin with the raw material and carry it forward, through many expensive processes, to the finished article. The processes are fewer, the turn-over quicker, and the results are often better, through closer supervision and the concentration of expert skill upon the perfecting of a single article. It is specialization, therefore, which enables an increasing number of comparatively small establishments to exist and to flourish side by side with an increasing number of very large establishments.

It is spe

cialization which justifies the belief that the giant corporation, or industrial combination, is not destined to swallow up and obliterate all the smaller mills and factories of the land.

At the head of the fifteen grand groups of industries stands the manufacture of food products, producing $2,277,702,010, or 17.5 per cent. of the total gross value of products. The other groups are (2) textiles and their re-manufacture, with products valued at $1,637,484,484, or 12.6 per cent. of the whole; (3) iron and steel, and their multitudinous products, valued at. $1,793,490,908, or 13.8 per cent. of the total; (4) lumber and its remanufactures, $1,030,906,579, 7.9 per cent.; (5) leather and its products, $583, 731,046, 4.5 per cent.; (6) paper and printing, $606,317,768, 4.7 per cent.; (7) liquors and beverages, $425,504, 167, 3.3 per cent.; (8) chemicals and allied products, $552,891,877, 4.3 per cent.; (9) clay, glass, and stone products, $293,569,235, 2.3 per cent.; (10) metals and metal products other than iron and steel, $748,795,464, 5.8 per cent.; (11) tobacco, $283,076,546, 2.2 per cent.; (12) vehicles for land transportation, $508,649, 129, 3.9 per cent.; (13) shipbuilding, $74,578,158, 0.6 per cent.; (14) miscellaneous industries, $1,004,092,294, 7.7 per cent.; (15) hand trades, $1,183,615,478, 9.1 per cent.

This grouping is necessarily somewhat empirical; but it serves in a general way to bring out the relative importance of industries, from the point of view of the value of products. That this is not the true measure of relative importance from the economic view-point is shown from a further analysis. analysis. While the manufacture of food products stands first, in value of products, by reason of the intrinsic value of the raw materials operated on, it sinks to the seventh rank in number of persons employed, and to the eighth in amount of wages paid. Textiles and their re-manufacture rank first in number of employees, and second in amount of wages paid; while iron and steel, ranking second in number of employees, stands first in wages paid. It is evident, therefore, that, in an economic sense, these two are the most important among the great industrial groups.

THE PRODUCTS OF HAND LABOR.

The last of these groups includes what are known as the hand trades, as distinguished from manufactures proper, and they are now for the first time segregated and treated as a separate and distinct form of industry. They embrace the building trades, like carpentering, masonry, painting, etc., and millinery, repairing, custom boot and shoe making, etc.; they employed 559,130 persons, in addition to 242, 154 proprietors, and returned a product of $1,183,000,000, or less than 10 per cent. of the whole. As recently as 1869,

in an article in the Atlantic Monthly, Gen. Francis A. Walker, the superintendent of the ninth and tenth censuses, stated that the contribution to the wealth of the country by its artisans or hand workers was far more valuable than that of its factory workers. If this was true at so late a date as 1869, the change from hand trade work to factory production has since been tremendous.

STATISTICS OF THE TRUSTS.

Perhaps the most interesting showing made by the twelfth census of manufactures is that regarding the so-called "trusts," or industrial combinations. The census makes a separate report for these corporations, of which it was able to locate 185, controlling 2,040 plants, located in many States, employing 400,046 persons, or 8.4 per cent. of the 4,749,276 employed in all the manufacturing industries, exclusive of the hand trades, which obviously are not susceptible to this form of organization; paying $195, 122, 980 in wages, out of a total wage of $2,034,215,456, or 9.6 per cent., and producing goods to the value of $1,667,350,949 out of $11,820,784,665, or 14.1 per cent. of the whole. These figures indicate with approximate accuracy the proportion of our manufactures that was controlled by

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