third column in Table II indicates that the per capita value of active capital has steadily grown larger until, in 1910, it has become more than four times as great as in 1860. Only in the Civil War period has this apparent increase been due wholly to changing prices, for, if the per capita value is divided by the price index, we obtain an index of amount which climbs upward until the quantity per capita existing

TABLE I

THE ESTIMATED VALUE OF THE SUPPLY OF ACTIVE CAPITAL IN THE CONTINENTAL UNITED STATES, IN MILLIONS OF DOLLARS

QUANTITY OF ACTIVE CAPITAL IN THE UNITED STATES

(Outlying possessions excluded)

in 185 is more than quadrupled. The only backward step shown is in the decade 1860 to 1870, and this was due, probably, to the wholesale destruction of capital by the Civil War, a blow from which the Southern States had only begun to recover in 1870. The more or less chaotic conditions of the South in 1870 may also have resulted in some incompleteness in the Census returns.

162. THE BRIEF REIGN OF THE MACHINE'

How recent in the world's history these improvements in technical processes really are, is strikingly illustrated by the following diagram:

Time during which the hand spindle was the only form
of spindle known.

Spinning wheel also known.

Steam has been applied to spinning.

1500 A.D.

163. WHY ENGLAND LED IN MACHINE INDUSTRY

The chief factors in determining the order of the development of modern industrial methods in the several countries may be classified as natural, political, economic.

a) NATURAL. (1) The structure and position of the several countries. The insular character of Great Britain, her natural facilities. for procuring raw materials of manufacture and supplies of foreign food to enable her population to specialise in manufacture, the number and variety of easily accessible markets for her manufactures, gave her an immense advantage. Add to this a temperate climate, excellent internal communication by river (or canal), and an absence of mountain barriers between the several districts. These advantages were of greater relative importance before steam transport, but they played a large part in facilitating the establishment of effective steam transport in England. Extent of seaboard and good harbourage have in no small measure directed the course of modern industry, giving to England, Holland, France, Italy an advantage which the levelling tendency of modern machinery has not yet been able to counteract. The slow progress of Germany until recent years, and the still slow progress of Russia, is attributable Taken by permission from the First Report of the Labor Museum at Hull House, Chicago, 1901-2, p. 9.

2

Adapted by permission from J. A. Hobson, The Evolution of Modern Capitalism, pp. 94-100. (The Walter Scott Publishing Co., Ltd., 1912.)

more to these physical barriers of free communication, internal and external, than to any other single cause that can be adduced. Inherent resources of the soil, quality of land for agriculture, the proximity of large supplies of coal and iron, and other requisites of the production of machinery and power rank as important determinants of progress.

(2) Race and national character.-Closely related to climate and soil, these qualities of race are a powerful directing influence in industry. Muscular strength and endurance, yielding in a temperate climate an even continuity of vigorous effort; keen zest of material comfort, stimulating invention and enterprise; acquisitiveness, and the love of external display; the moral capacities of industry, truth, orderly co-operation; all these are leading factors determining the ability and inclination of the several nations to adopt new industrial methods. Moral qualities in English workmanship have indisputably played a large part in securing her supremacy.

b) POLITICAL.-Statecraft has played an important part in determining the order and pace of industrial progress. The possession of numerous colonies and other political attachments in different parts of the world, comprising a large variety of material resources, gave to England, and in a less measure to France, Holland, Spain, a great advantage. The tyrannical use these nations made of their colonies for the purpose of building up home manufactures enabled them to specialise more widely and safely in those industries to which the new methods of production were first applied.

The large annexations England made during the eighteenth and early nineteenth centuries gave her a monopoly of many of the finest markets for the purchase of raw materials and the sale of manufactured goods. The large demand thus established for her textile and metal wares served not only to stimulate fresh inventions, but enabled her to utilise many improvements which could only be profitably applied in the case of large industries with secure and expanding markets.

But the most important factor determining the priority of England was the political condition of continental Europe at the very period when the new machinery and motor-power were beginning to establish confidence in the new industrial order. When Crompton's mule, Cartwright's power-loom, Watt's engines were transforming the industry of England, her continental rivals had all their energies absorbed in wars and political revolutions.

c) ECONOMIC.-The transformation of English agriculture, the growth of large farms, drove great numbers of English peasants into

the towns, and furnished a large supply of cheap labour for the new machinery.

Another great economic advantage which assisted England was the fact that she, more than any other European nation, had broken down the old industrial order, with its guilds, its elaborate restrictions, and conservative methods. Personal freedom, security of property, liberty to work and live where and how one liked, existed in England to an extent unknown on the Continent before the French Revolution.

In particular the cotton trade, which was in the vanguard of the movement, being of recent growth and settling outside the guild towns, had never known such restrictions, and therefore lent itself to the new order with a far greater facility than the older trades. Moreover, England was free from the innumerable and vexatious local taxes and restrictions prevalent in France and in the petty governments of Germany.

Lastly, the national trade policy of England was of signal advantage in her machine development. Her early protective system had, by the enlargement of her carrying trade and the increase of her colonial possessions, laid the foundation of a large complex trade with more distant parts of the world, though for a time it crippled our European commerce. While we doubtless sacrificed other interests by this course of policy, it must be generally admitted that "English industries would not have advanced so rapidly without Protection." But as we built up our manufacturing industries by Protection, so we undoubtedly conserved and strengthened them by Free Tradefirst, by the remission of tariffs upon the raw materials of manufacture and machine-making, and later on by the free admission of foodstuffs, which were a prime essential to a nation destined to specialise in manufacture.

164. THE INDUSTRIES BEST FITTED FOR MACHINE

INDUSTRY.

The following are some of the principal characteristics of an industry which determine the order, extent, and pace of its progress as a machine industry:

a) Size and complexity of structure. The importance of the several leading textile manufactures, the fact that some of them were highly centralised and already falling under a factory system, the control of

Adapted by permission from J. A. Hobson, The Evolution of Modern Capitalism, pp. 90-92. (The Walter Scott Publishing Co., Ltd., 1912.)

wealthy and intelligent employers, were among the chief causes which enabled the new machinery and the new motor to be more quickly and successfully applied than in smaller, more scattered, and less developed industries.

b) Fixity in quantity and character of demand.-Perfection of routine work is the special faculty of machine production. Where there is a steady demand for the same class of goods, machinery can be profitably applied. Where fashion fluctuates, or the individual taste of the consumer is a potent factor, machinery cannot so readily undertake the work.

c) Uniformity of material and of the processes of production.Inherent irregularity in the material of labour is adverse to machinery. For this reason the agricultural processes have been slow to pass under steam power, especially those directly concerned with work upon the soil, and even where steam-driven machines are applied their economy, as compared with hand labour, is less marked than in manufacturing processes. To the getting of coal and other minerals steam and other extra-human power have been more slowly and less effectively applied than in dealing with the matter when it is detached from the earth. The displacement of a less uniform material, wood, by the more uniform steel for building structures, railroad cars, barges, ships, furniture, etc., marks a great advance for machine-production.

d) Durability of valuable properties.-The production of quickly perishable articles, being of necessity local and immediate, demands a large amount of human service which cannot economically be replaced or largely aided by machinery. The work of the butcher and the baker has been slow to pass under machinery. Where butchering has become a machine-industry to some extent, the direct cause has been the discovery of preservative processes which have diminished the perishability of meat. So with other food industries, the facility of modern means of transport has alone enabled them to pass under the control of machinery. Until quite recently cakes and the finer forms of bakery were a purely local and handicraft product.

e) Ease or simplicity of labour involved.-Where abundance of cheap labour adequate to the work can be obtained, and particularly in trades where women and children are largely engaged, the development of machinery has been generally slower. This condition often unites with (b) and (c) to retain an industry in the "domestic" class. A large mass of essentially "irregular" work requiring a certain delicacy of manipulation, which by reason of its narrowness of scope