of food; it employed all the carts it could obtain ; but with all the means at their command it was found impossible to relieve the distress, and the government, to prevent a recurrence, has constructed railways, not simply as commercial enterprises, but in the interest of an advanced civilization and in accordance with humanitarian ideas.

We shall find, I think, when we examine this question closely, that the use of machinery instead of causing distress alleviates it, and that it will be seen that instead of supplanting labor creates ever a new demand for it by the opening of new fields. I would not be understood as saying that machinery does not necessitate a change of occupation; that is inevitable. It belongs to progress. If it is complained of as a hardship for one who knows only one occupation to be compelled to change it for another which he must acquire in old age, I admit it, and have only to say that there are a great many other hardships in life under the domain of physical law. The fire burns my house, the hail destroys my wheat, the sun scorches it, rust renders it valueless, and I am powerless under these forces of nature, just as I am when the introduction of a new machine forces me to seek other employment. Is it said that we cannot prevent fire, hail, rust, and mildew, but we can prohibit the use of machinery? Very well. Put on the prohibition and become Chinese, for that is what we shall be-stationary, utterly non-progressive.

Pardon me for elaborating this point at such length, but I have been led on in consideration of the loose ideas afloat in regard to it.

The CHAIRMAN. You do not deny that immediate distress is produced, but you think that ultimate benefit results?

Mr. COFFIN. That is the proposition. I would not have it understood as immediate relief.

The CHAIRMAN. On the contrary, immediate distress.

Mr. COFFIN. If it causes immediate distress, it produces ultimate benefit. It leads men to a higher plane of existence. With the capacity which our people have to change their occupations I doubt this immediate distress. I have never been able to find instances or proof of it. For illustration, blued screws, blued iron is much more used than a few years ago, and nickle finishing is a new art. In Lowell each factory building for thirty years has been increasing its product and diminishing its hands; but the city has increased several fold, and Lawrence, nearly as large, has grown up a few miles from it.

Take another illustration. Under the old process of cleaning cotton, before the invention of the Whitney gin, a man could clean four pounds a day. The gins now in use clean 4,000 pounds a day. The cotton crop of this country last year was estimated at 4,700,000 bales. It probably exceeded that. That would be 2,021,000,000 pounds. Under the old way it would have required 505,000,000 days' work at $1 per day (that is $505,000,000) to clean cotton-a work which is done at present by 1,614 men working 313 days in the year, and costing not over $500,000.

From this presentation it is clearly manifest, it seems to me, that through the employment of the forces of nature, through discovery, through invention, by capital and labor working together, there has been a great increase of accumulated earnings. Labor claims that it has done pretty much all that has been accomplished, and that capital is oppressive. Waiving for the present an examination of the claim, let us glance at some of the accumulations of labor and capital jointly during the last few

years.

The first savings bank in this country was established in Philadelphia in 1816. The deposits in 1830 in all the banks of the country were about six millions of dollars. In 1876, as by the American Almanac, they were a thousand million dollars. In general banking we have no data of capital in 1830, but the circulation in 1830 was $74,248,000, or $5.77 per individual. In 1874 the circulation (greenbacks and national bank notes) was $777,538,000. or $18.14 per individual. I suppose that to-day it would not be more than $16 per individual, but I have not the figures. The national bank exhibit for December, 1877, shows:

I have not been able to obtain, in regard to insurance, full data. Fire and marine insurance are of ancient origin. Life insurance belongs to the new civilization.

New York joint-stock companies in 1877 had gross assets to the amount of $59,661,000. The companies of other States doing business in New York had gross assets to the amount of $77,047,000. The Connecticut fire companies had gross assets to the amount of $100,000,000, the Connecticut life companies $97,000,000, and the Massachusetts fire and life companies $140,000,000, making a total of $414,047,000. It is probable that the assets of all the insurance companies in the country will aggregate about $800,000,000. In railroads, the stocks and bonds in 1878 amounted to $4,413,000,000. Of course there is a large amount of indebtedness on them. As to national and State securities, the amount of national securities in 1877 was...... State securities in 1870

County securities in 1870

The securities of 126 towns in 1876 (according to the American Almanac, page 382)......

Total......

$2,060, 000, 000 868,000,000 157,955,000

644, 119, 000

3,730, 074,000

The national bonds held abroad are said to be no more than $200,000,000, and our total indebtedness held abroad is supposed to be about $500,000,000. The aggregate capital in banks and insurance, railroads, national, State and other bonds, thus gives an aggregate of about thirteen thousand million dollars. In 1870 the census gave the value of property in the United States at thirty thousand sixty-eight millions. A writer in an English statistical journal, in June, 1877 (Mr. Bouve), says that the wealth of England is increasing at the rate of twelve hundred and fifty million dollars per annum. Mr. Gladstone says that the development since 1800 is greater than that from Julius Caesar to that date. Mr. Edward Atkinson has shown you that labor takes 95 to 98 per cent. of the earnings, leaving to capital from 2 to 5 per cent. I have nothing to say on that point, and therefore pass it.

But capital is liable to utter annihilation. I have no data in reference to the amount lost by fire per annum, but several gentlemen conversant with insurance have given me their opinion that it amounts to at least $100,000,000. Invention destroys capital. The manager of the Amoskeag Mills, Manchester, N. H., informed me that no manufacturer could afford to take as a gift to-day a manufactory equipped as it was in 160. A gentleman from South Carolina informed me that one of the manufactories in that State was sold the other day under the auctioneer's hammer; that the men running it had been running the same machinery that was in use before the war, and that it had bankrupted them simply because invention had gone on so far and so fast, that no man can take the machinery as it was in 1860 and run it to-day and make a living. The CHAIRMAN. Our own iron-works at Trenton were begun in 1845. They have been rebuilt practically five times since 1845, absolutely rebuilt, not on account of destruction by fire, but in order to keep up with the improvements. I speak of rollingmills. Furnaces have had to be rebuilt in exactly the same way. For instance, no furnace that was in existence twenty years ago could be run to-day. No man could afford to take it as a gift and run it.

Mr. COFFIN. Progress destroys capital. Fashion destroys it. A few years ago there was a large amount of capital invested in the manufacture of hoopskirts, but the ladies took it into their heads not to wear hoopskirts any longer, and that capital was utterly annihilated. One remarkable thing, however, has come out of the capital invested in the manufacture of crinoline skirts. The inventions in the manufacture of the steel used (thin strips of steel) have been turned to good account in other departments of industry. Change of style destroys capital. If you go into one of our manufactories of mixed goods (cotton and wool), you will find that the change in taste is constantly compelling the owners to banish their old machinery and put up new. At first sight it seems to destroy the laborers' capital, the skill of handicraft which enables him to earn more than the wages of mere unskilled labor. But I think that the modern training of the workshop gives him something better than manual skill. namely, the intelligence to learn new things; and this is a capital which a change of fashion does not destroy. In order to show instances of the extinction of capital, I will state that in 1878 there were in this country forty-eight railroads in bankruptcy. These companies represented thirty-nine hundred miles of road and three hundred and twelve million dollars of capital. Last year twenty-seven railroad companies, representing thirteen hundred and twenty miles of railroad, had receivers appointed. The CHAIRMAN. Was there any extinction of capital in that case?

Mr. COFFIN. Yes; about one-half.

The CHAIRMAN. What kind of capital?

Mr. COFFIN. Bonds and stock.

The CHAIRMAN. Was it capital? Suppose I mark up my goods, have I a right to regard that as capital? The fixed capital was the railroad itself. That still survives. What was wiped out?

Mr. COFFIN. The real capital was what the road cost.

The CHAIRMAN. But after it became fixed, then the capital is not what the road cost, but what it was worth.

Mr. COFFIN. And if is not worth what it cost, or if it never will be worth what it cost, it is so much accumulated capital lost forever.

Mr. THOMPSON. Somebody lost the money invested in the bonds.
The CHAIRMAN. Provided they paid for them.

Mr. THOMPSON. Of course they paid for them, otherwise they could not have proceeded against the company.

Mr. COFFIN. I come now to the causes of the present depression. Under this new civilization an amount of capital has been called for far beyond the accumulations of the past, and the future has been drawn upon as never before in the world's history. The country tied up in mortgages all its past accumulations and all its prospective earnings for a long period of years. Everybody issued promises to pay. The outstanding bonds of the United States at present are to the extent of more than two thousand million dollars. The States, counties, cities, towns, villages, railroads, manufacturing companies, churches, societies, individuals, all issued promises to pay. We constructed railroads where they were not needed, in solitudes where there was no present and but little prospective revenue. We laid out towns in the wilderness, giving a fictitious value to land. That which had had no value suddenly became assets upon which we issued more promises to pay. Multitudes, instead of producing, turned their attention to creating fictitious values, upon which they issued promises to pay, adding nothing to real accumulations, but, instead, mortgaging prospective earnings. It was in no sense real capital, but it could be used as real. We purchased carriages, pictures, books, pianos, articles delightful to have, but which produce nothing and which are constantly depreciating, and we paid for them in more promises to pay, increasing the fictitious value, but adding nothing to real accumulations by the process. So long as we could meet our promises to pay by issuing more promises the miner went on mining, the furnaces blazed, the rolling-mills turned out iron, the railroadbuilders went on laying down tracks in the solitudes, trade was lively, and everybody seemed to be on the road to fortune. We bought and sold, scattered that which we called money right and left, losing sight of the fact that everything in the universe is under the domain of law, and that sooner or later the laws which govern human progress, which are powerful to build up, are equally powerful to destroy.

Society is so complex, so interwoven and interdependent under the new civilization, that any derangement of one wheel in the system will be felt in every part. We had used up so much of our past accumulations in unproductive enterprises, had issued such an enormous quantity of promises to pay, that, when in 1873, a firm that had issued large promises, failed to meet its obligations, the whole fabric tumbled; other firms failed to meet their promises, and there was a general stoppage of the entire machinery, throwing a multitude of men out of employment. There was nothing for them to do, nothing to pay them with. Then came the clearing away of the wreck by trustees, receivers, courts of insolvency, the wiping out of indebtedness of railroads, trust companies, and savings-banks. Men who had invested their earnings in them, who thought themselves rich, saw their assets disappear like the fog before the sun. addition, cities, towns, counties, and States openly repudiated their solemn obligations.

In

Amid this wreck and ruin labor complains, and we are brought to the question of present earnings and havings. I refer, in this connection, to the statement of factory operations given by Mr. W. A. Burke, of the N. E. Manufacturers' Association, showing that the factory operatives in 1838 worked seventy-six and one-half hours, and in 1-77 sixty hours per week; that in a factory in Nashua, N. H., with 6,100 spindles, the number of hauds employed was, in 1838, 28 males and 213 females, total 231; and, in 1877, males 15, females 75, total 90. The increase of wages comparatively was, for males 40 per cent., for females 47 per cent. The amount of production in 1838 was 1.01 and 3.33 pounds of cloth in 1877. The cost of production was 4.79 in 1838 and 2.58 in 1877. This advance of wages, this decrease of the cost of production, was brought about by annihilation of the original capital. The records show the earnings and the prices of board in 1860 and 1878. They are as follows: Average earnings of girls, per week, in 1838..

Board paid by the girls themselves...

$3.26

1 37

1 89

4 34

2.10

2.24

Their net earnings

The CHAIRMAN. How much is the present rate of board-that of 1878 ?
Mr. COFFIN. Two dollars and ten cents; that is what the girls pay.
The CHAIRMAN. It is very low.

Mr. COFFIN. Yes, sir. The quality of the board was probably better in 1878 than it was in 1838. Through the kindness of Col. Carroll D. Wright, of the Massachu

setts statistical bureau, I am able to present the following statement compiled from his forthcoming report on the increase and decrease of wages in Massachusetts in 1575, as compared with 1860:

The CHAIRMAN. It is interesting to observe in your running through the table that the higher the grade of intelligence-so far as I can judge from your reading therethe greater is the increase of the rate.

Mr. COFFIN. Yes, sir; in most cases you will find that to be the rule.
Mr. COFFIN (resuming):

The CHAIRMAN. In regard to the showing for paper, can you account for that? Mr. COFFIN. I presume that in these figures the compiler may have included under that head not only the manufacture of paper, but the business of paper-hanging, The CHAIRMAN. That is true; there may be the decorative part; I do not know what all may be in there.

Mr. COFFIN. I am also enabled, through the courtesy of Colonel Wright, to present a list of the average retail prices of articles of living for 1860, 1872, and 1878. I will not give them unless you desire to have them.

The CHAIRMAN. I was going to ask you what is the average rate of increase or de

crease.

Mr. COFFIN. I will give you the average rate of a few of the articles in 1878 as compared with 1860. In the matter of groceries, the increase was 7 per cent.; provisions, 28 per cent.; fuel, 5 per cent.; in dry goods, a decrease of 9 per cent.; boots, increase of 18 per cent.; rents, increase of 25 per cent. ; board, increase of 49 per cent. The average increase of the cost of living is 14 per cent. I will run over a few of the articles that are given here in the table showing the average retail prices. These are as follows: Flour (superior and family), rye flour, corn-meal, codfish, rice, beans, tea, coffee, sugars,

molasses, soaps, starch, beef (rump steak), mutton, pork, ham, lard, mackerel, butter, cheese, potatoes, milk, eggs, coal, wood (hard and pine), shirtings, sheetings, cantonflannel, and so on.

The CHAIRMAN. He arrives at his average by dividing all those articles into the total amount, I suppose.

Mr. COFFIN. I do not know how the average has been obtained.

The CHAIRMAN. That would be the ordinary way of obtaining it; yet the staple articles alone ought to be the ones he would take in order to arrive at a decision on that point.

Mr. RICE. Do you think, Mr. Chairman, that the staple articles show an increase? The CHAIRMAN. My experience is that such is not the fact. Indeed I may say that my own books show that at no time since the concern in which I am interested has existed have the prices of pork and flour been as low as they are to-day.

Mr. RICE. Those are the two things that enter most largely into daily consumption. The CHAIRMAN. My conclusion is that pork and flour are cheaper now than they have been since 1861.

Mr. COFFIN. The figures given in this table for flour in 1861 are: In 1860, $7.61; in 1872, $10.75; in 1878, $8.63.

The CHAIRMAN. Flour is rated very high there, it seems to me; but then he has possibly given the retail prices.

Mr. COFFIN. The "Haxall" flour is probably here given.
The CHAIRMAN. That flour is not in general use.

That which we use at our works is the New York State superfine flour. It is a grade which we buy now at a little less than $5 a barrel, and we buy pork at 8 cents a pound. It is incredible, but we are doing it.

Mr. COFFIN. From this exhibit we see that so far as labor in Massachusetts is concerned the increase of earnings since 1860 is 24.4 per cent. and the increase of expense 14.5 per cent.; this on a basis of sixty hours per week against seventy-six and one-half hours per week in 1860.

The CHAIRMAN suggested the propriety of some such revision of the figures just read as would show more definitely the facts which they purported to substantiate. As a case in point, he referred to the matter of sugar, upon which in 1860 there was a very low tariff, while now we have a very high tariff; the effect of this upon the price and necessarily upon the expense of living to the workingman, being one of the points which required more explicit demonstration.

Mr. COFFIN. I concur fully in the suggestion.

The showing here given is based upon sixty hours per week as against seventy-six and a half hours in 1860.

In this connection I give a statement taken from the Charleston News and Courier of January 8, in regard to prices in that city and the effect of resumption. It is as follows: "The United States is now standing on a gold basis, and every transaction measured by that. To this the country has been tending for three or four years. On January 1, 1878, in Charleston, a pound of bacon, a pound of lard, a bushel of corn, a pound of sugar, a gallon of molasses, a pound of coffee, a bushel of salt, a pound of rice, and a barrel of flour, bought at wholesale prices, cost altogether $7.31. These same things can be bought to-day for $5.55. The reduction is per cent. That is, every dollar now earned goes as far in buying necessaries of life as a dollar and a quarter went a year ago. Wherever wages have not been reduced since last January, they who earn them are really getting a fourth as much more as they were getting then."

Referring again to New England, we find that in 1845 farm hands received ten dollars per month, with board in summer, and lived in enforced idleness in winter. In 1878 they received from sixteen dollars to eighteen dollars per month, with board, though they had not, probably, much more to do in the winter season now than they had in 1845.

Mr. RICE. In many sections they are kept working in the winter upon the bottoming of chairs and in many other kinds of labor sent out from the factories. The shoe business also is carried on more extensively in the winter than in the summer.

Mr. COFFIN. The shoe business is spasmodic. The hands have more work in the winter than in the summer, as a rule, I think.

I wish to call attention to the fact that no farmer, East or West, could now afford to pay to a laborer who can only use his muscles even such wages as he could afford to pay in 1845. The crop would cost too much to export, too much to be freely used at home. In point of fact he does pay more wages per day, which shows that the demand for labor has not fallen off; he raises each bushel of grain at a less cost for labor. Machinery enables him to reconcile these two conditions.

The complaints of distress that reach this committee come from laborers; but there is another class in the community who have not asked for relief, whose distress is quite as great as that of those who ask that the government shall give them employment. I refer to that large class, made up in a great degree of women, who have seen