One of the greatest economic problems of our time is associated with
the double stream which has been setting westward across the Atlantic
with steady persistence for some two or three years, and which even
now does not seem to have passed its height. It is a stream which
is composed of the labour and the capital of the Old World. To the
number of many hundreds of thousands of individuals, some of the best
bone and sinew of the European states has been transplanted each
year to America. And latterly, this exodus has been accompanied by a
large volume of that without which labour can do little collectively.
During the last twelve months especially, the number of schemes for
the employment of British capital across the Atlantic has increased
enormously; and at the present time, there are many millions of money,
belonging to people still residing on this side, invested directly or
indirectly in land, and in industries connected with land in the States
of the Union and of Canada. The receptivity of the American continent
in respect both of labour and of capital is very great; but it is not
unlimited. Nor is the supply of either labour or capital unlimited
in the countries of the eastern hemisphere. There is not as yet any
imminent danger of excessive contribution in the one case and of
depletion in the other; but we are within sight of consequences which
it may be well to consider.
And first with regard to Emigration. It must not be supposed that
America—and for the present let us confine our attention to the
United States—welcomes without exception the human stream. There are
undoubtedly elements in it which would be objectionable anywhere. There
are hordes of paupers and loafers and ne’erdoweels, who are as little
likely to do any good for themselves, or to benefit the community, in
the New World as in the Old. But apart from these, there has been a
flow of shrewd workers and skilled artisans, which a certain section
of the American nation is disposed to regard with a sour look. The
reason is not far to seek. The dominant economic policy of America has
been, as we know, one of strict protection of their own industries.
For the benefit of the few, the many are heavily burdened, in the
belief—fallacious, and not always genuinely entertained—that in process
of time the many will reap the harvest. The conductors of these
domestic industries are glad enough to get all the experienced foreign
labour they can; but the domestic labourer says, very naturally, that
the importation is unjust to him. He says, in effect: ‘You tax foreign
products to shut out competition with yourselves; but you admit freely
foreign producers to compete with me. You raise the cost of living to
me by the imposition of taxes to foster your trades; yet you reduce
my means of living by suffering immigration which tends to reduce
the level of wages.’ Here is friction, and friction which is already
producing sparks. It is not difficult to foresee the result. The
working-classes cannot continue to burn the candle at both ends for
ever. It is not practicable for any country in these days to prohibit,
or even to restrict, the importation of human beings. Nor can America
say: ‘We will receive any number of farm-labourers, or miners, or
anybody disposed to squat in the backwoods and open up our country; but
we will draw the line at mechanics or any form of skilled labour which
we can ourselves produce to the extent of our requirements.’ The effect
of the supply of foreign labour would have been more apparent ere
this but for the suicidal policy of the American trades-unions, which
practically prohibit the evolution of domestic skill, by forbidding
apprenticeship to crafts. But, nevertheless, the effect must eventually
be to diminish ‘the reward of labour.’
A well-known American writer holds that the increase in the number
of labourers does not _tend_ to diminish wages, but the converse.
What in his opinion causes the tendency of ‘the reward of labour’
to a minimum in spite of increase in producing-power, is that rent
increases in a still greater ratio. The result is much the same, as
far as the labourer is concerned, and it proceeds, whether directly,
as is commonly held, or indirectly, as the American writer holds, from
there being three men to house and feed where there had been only two.
If, however, it be really the matter of rent or interest which affects
the price of labour, then the American citizen has all the more reason
to regard with attention the other portion of the stream, namely, the
flow of British capital for investment in land and cattle in the West.
We do not know the aggregate capital of the numerous Ranche and other
Companies which have been lately formed, but it is enormous; and with
private investments as well, the total British capital occupied in
them cannot be short of twenty millions sterling, and probably is even
considerably more. The actual amount is not material to our argument.
The effect of this tremendous diversion of capital is twofold. It
is increasing the value of older estates by the absorption of cheap
competitive lots, and it is arousing in the Americans themselves a
species of earth-hunger which promises to be very keen. There are
thoughtful, observing men on the other side of the Atlantic, who,
noting the disfavour into which investments in railroads have fallen,
because of their comparatively poor returns—and also because of the
distrust begotten by their scandalous management—and who noting, also,
the rapidity with which English capital is leading the way—predict
that America is on the eve of the most tremendous land ‘boom’ ever
known. That means, in plain English, that the enhancement in the
value of land, legitimately produced by settlement and cultivation—in
other words, by the employment of actual capital and labour—will have
an artificial enhancement of indefinite extent added to it _by the
action of speculation_. In all commodities dealt in by man, there is
an intrinsic value and a speculative value. When the speculative value
becomes inflated above the level of intrinsic value, there ensues a
period of dangerous excitement, which invariably ends in collapse and
disaster. This is especially the case with land, and it is precisely
towards such a critical time that America seems verging.
All this, however, seems to us to point to the probability of
free-trade becoming ere long the watchword of the working-classes
in the United States. With free-trade in labour concurrently with
land-speculation, subjecting them to diminution of wages, and at the
same time increase in the cost of living, they will have no alternative
but to demand the free admission of all materials bearing on their
industries and affecting the cost of living. It is possible that in
the present great land-movement may be germinating the seeds of the
next great commercial crisis; and upon the theory of periodicity, one
of these crises will be due in a year or two. So, also, it is probable
that the Emigration movement from the east has carried and is carrying
with it elements which will aid in bringing about the much to be
desired future of free-trade.