Mr. COFFIN. I do not know that the freight on a bale of cotton would be much less than that upon an equal weight of cotton goods.

The CHAIRMAN. Suppose, then, that when we were about to send them our goods the Chinese would say, "We will not take the goods; we will take the cotton itself"; would not the result be that they would take the cotton and make the goods for less money than they would pay to get the cotton?

Mr. COFFIN. I do not think that capital would ever go to China to make Chinese manufactures.

The CHAIRMAN. Will not capital go where it can make the most money?

Mr. COFFIN. I admit that it will go where it can make the most money and get it home safely.

The CHAIRMAN here remarked that in a letter recently received by a friend of his from Mr. Hague, the geologist, now engaged in China in surveying, the statement was made by that gentleman that he had found on the banks of a navigable river a bed of coal and iron ore of the very best quality, where labor was abundant at two cents a day, where the people are a strong, stalwart race, capable of doing good work, and that there was no difficulty whatever in producing pig-iron at four dollars a ton in our money. Under these circumstances he (the Chairman) was more apprehensive of danger than sanguine of any possibility of good to us from the demand that was likely to come from the direction indicated; for when the market in China was once opened we would be confronted with four hundred millions of people who could live at a cost of one-tenth of that paid by our own people, and who were quite as capable and intelligent as our own. We saw there a race of people who had learned to live upon so much less and learned to do so much more, comparatively with our own people, and where all the conditions for the manufacture of raw material were as favorable or more favorable than they were in any other place in the world.

Mr. COFFIN. That is, of the raw material on hand.

The CHAIRMAN. No; but of the raw material that may be imported. The difference in freight is so small that a bale of cotton could go, I believe, at as low a rate as could a bale of goods; and if that is the case, there is nothing to prevent the Chinese from working up the raw material which they have purchased from you and competing with you in the sale of your domestic manufactures.

Mr. JONES. Nevertheless, Mr. Chairman, we would get the value of the bale of cotton. Mr. RICE. You will sell the cotton, but we will not make the cloth.

Mr. JONES. Then so far as the interests of the South alone are concerned we would be benetited in securing a new market for our cotton.

The CHAIRMAN. Of course you of the South would not be injured, but I want to know where we, who make the cloth, are to come out..

Mr. COFFIN. I think it will be a long time before we are called upon to compete with the Chinese in cotton manufactures. They are imitative, but not progressive. The CHAIRMAN. It may be a long time coming, but it may come.

Mr. COFFIN. There is one element in connection with the subject of progress in China to which I would like to allude here. The Chinese religion is a barrier to progress. You go to China and you find it a vast graveyard. The resting places of the dead in that country are kept with reverential care. The people worship their ancestors, and they entertain the belief that their ancestors in the spirit world need the same things there that they needed when they were in this world. You will find, as you go along the streets, day by day, baskets hung out on the fronts of the houses as receptacles in which the people place their offerings for the benefit of the departed. They fashion their gifts after such patterns as will be most likely to indicate the particular employment which was followed by the departed in this life. They are made of paper, and may be a boat, may be a hoe, or any other implement; may be an article of clothing. These offerings are finally all gathered together and burned, and the popular belief is, of course, that with the burning they go into the spirit-world and the spirits have the benefit of them. Then, again, a Chinaman, before sitting down to his table to dinner, takes his food into the ancestral hall (in which tablets are arranged around in commemoration of his ancestors), and there he offers his prayers, burns his joss-sticks, and implores his ancestors to partake of the food. He believes that if he neglects any of these devotions his ancestors will punish him through reverses in his business or in other ways. My own belief is that so long as China in its religion is wedded to these superstitions, it will make but little progress in the way of adapting itself to modern improvements. I remember that when I was in that country, on one occasion, I went with a gentleman through the city of Shanghai, and that when we came to the north gate we passed through and came to a wall built almost directly across the highway. We were obliged to pass around and get behind this wall in order to proceed. I asked my companion what was the meaning of that wall, supposing it was intended for a defense, though it was very curiously constructed. He explained that the wall was the Fung Shuey (the meaning of which is good and bad influences), and that it was erected to prevent the bad spirits coming from the north from going any farther. It was popu larly supposed that those bad spirits always came from the north, and that they

always came in a straight line; that they could not turn at a right angle, and that therefore this wall stopped their farther progress. He informed me that almost thə entire litigation arising in China was because of this Fung Shuey. If a man built a house which would keep out from his neighbor the good influences which came from the south, or which would admit the bad influences coming from the north, his neighbor would go to law about it. That is the reason why the telegraph line was cut down between Woosung and Shanghai; it interfered with the Fung Shuey. The reason why the railroads cannot come in there is because it is supposed that their influence disturbs the graves of the dead, and that the effect of their introduction will be to bring disaster, trouble, and sickness to the whole country. My friend informed me that the opposition to railroads was predicated upon the belief that they would disturb the entire religious sentiment of the empire.

The CHAIRMAN. Suppose, Mr. Coffin, you were carried back to the middle ages in Europe (which have been appropriately called "the dark ages"), when there was but one church-you know what the influence of the church is supposed to have been— when all progress is supposed to have ceased for a thousand years. Is there anything in the tone of the Chinese polity that is any more repressive of progressive influences than was the domination of the church then?

Mr. COFFIN. It is not merely the Chinese polity; it is the character of the Chinese people. They are more cultivated, more cizilized in a material sense, than the western Europeans of A. D. 1000; but they have not that spirit which led to the crusades and which covered the land with cathedrals. The church repressed an active spirit which finally overcame it. In China the obstacle to progress is in the people and not in the government. But if we have two hundred to look forward to, that is enough. I can hardly compare the two epochs and people enough to give a precise opinion.

The CHAIRMAN. Yet it is a matter upon which we may readily base an opinion. Why may not a new era in religion be introduced into China with the new forces that accompany such modern appliances as railroads and telegraphs? To a man looking back from the standpoint of to-day, the prospect would certainly appear a very hopeless one that Europe would ever emerge from the obscurity of the middle ages; yet the world has come out of it very bravely.

Mr. COFFIN. I suppose that China will, eventually, come out of her religious darkness, but I do not expect to see it in my own lifetime.

The CHAIRMAN. A lifetime is comparatively a short period. Of course we are all looking ahead to the prospect of such a result. I agree with you that this country will get rid of her present difficulties at an early date. There is more labor unoccupied to-day than there was when the panic came upon us, but its presence is not so apparent, because the country has grown, and the necessities which are incidental to its expansion have given employment to additional labor; consequently, there is not so large a surplus of unemployed labor as there was at that time. The difficulty is but a temporary one; but, in looking ahead, I appreciate the fact that all the world has yet to face this fact, that population will finally grow up to the limit of the means of subsistence. That is the tendency. The reasons presented to this committee by the reformers, the gentlemen who have presented grievances here, are that there has not been a proper distribution of the fruits of human industry; that some men can get too much and others, quite as deserving, get none at all. That is the problem which they present to us. If you can throw any light upon that, as you have reached the end of your lucid statement, you will be conferring a benefit upon the committee, and upon the country as well, and we would be glad to hear any suggestions that may occur to you at this time on that point.

Mr. COFFIN. The condition that you have indicated has always been the condition of the human race. There always have been rich people and poor people, and there always will be. Some men can make money and some cannot. All who have the ability to earn have not the ability to accumulate. It is a question of natural condition. No legislative action ever will change those conditions. When the Saviour of the world said "the poor ye have with you always, and when ye will ye may do them good," he uttered an eternal truth. I do not see how there can ever be a complete solution of the question. I mean by that, I do not see how it is possible for society to exist without a difference in condition, but I fully believe that as the years roll on wealth will be more generally diffused, that the poor will be better cared for and will have more of the comforts of life. I think that I have shown that the tendency of the new civilization is in that direction. The moral and Christian sentiment of the world lead in that direction, but Christian and moral sentiment cannot set aside the physical conditions under which the Almighty has created human beings, nor the physical laws with which he has surrounded them. Many things can be done to reduce poverty to a minimum. Education may be an aid; so may charity, temperance, and legislative enactment; but all of them never will absolutely abolish poverty from the world, for there are conditions and influences beyond the control of all these ameliorative agencies that will make some men rich and others poor.

The CHAIRMAN. Suppose that when monopolies tend to give those who control them

a larger price than they would otherwise be able to get, legislation, you say, cannot alter that. If we have a monopoly in any form disguised in our legislation, ought we not to eradicate it at once?

Mr. COFFIN. That is another and quite a different point. It is the duty of the legislator to protect every man in his rights, to see that no man who may hold a monopoly shall have the power to oppress you or any other man in his natural rights.

The CHAIRMAN. Yes; but that is only groping in the dark after all. What is law and legislation but the restriction of people in what may be called their natural rights? The natural rights of one man interfere with the natural rights of another man. Mr. Rice and I may go into and settle upon some unoccupied territory, and each may lay claim to a particular tract that is more desirable than any other tract because of the presence of water or something else. We get to fighting about our claim, and the law steps in or society steps in and establishes a rule by which his natural right and my natural right are subordinated to some general law. Therefore, when you say that no man can interfere with your natural rights, I answer that every man can interfere with your natural rights under the law.

Mr. COFFIN. Take the case of the railroads, for instance.

The CHAIRMAN. We will take the case of the railroads as you suggest. The allegation is that by legislation we have conferred large quantities of land upon railroad companies; that they have monopolized these lands and excluded settlements which would otherwise have been made upon them by holding the land at high prices; that what they have done is hostile to the natural rights of man; that this legislation is so vicious that we ought to repeal it; and that if they (the railroad companies) have acquired any rights under it they ought to be more specifically defined. On the other hand, if this legislation had not been passed, and this land conferred as it was, we should still have had this vast amount of land tied up in its unimproved and comparatively worthless state, as it was before. What would you do in that case?

Mr. COFFIN. There is another side to the question as you have stated it. There is a vast amount of land in this country, which, if those railroads had not been constructed, would not have been settled to-day. Take the Northern Pacific, for instance. I was one of a party who traversed the line of that road before a shovelful of earth had been thrown up. At that time there were not fifty individuals to be found along the whole proposed route, and the land was in exactly the condition in which nature left it. The men who built that road have increased the value of that land to the government to $2.50 per acre, and the government has received, I think, from the land offices along the line of that road nearly three millions of dollars. It was utterly worthless prior to the time when the projectors of that road, by their own individual enterprise and the use of their money, carried it forward to its present stage of completion. The question presents itself to ns whether these men who are regarded to-day as monopolists and land-grabbers are not really benefactors. They have given value to the land; they have given homes to more than fifty thousand people who live along the line of that road to-day; and they sent over to Europe during the past year over five million bushels of grain which would not have been produced but for the enterprise of the men who built the road. They have lost their capital, while the public has been greatly benefited. They are denounced as land-grabbers, whereas in fact they have opened a vast section to settlement and added millions to the national wealth. Instead of excluding settlements they have invited settlers. It is not true that they hold lands at high rates. Sales of the land-grant roads average between four and five dollars per acre, which certainly is not a high rate.

The CHAIRMAN. Yes; that is the argument of the men who have built up some of our great public works, and is applied with reference to the operation of the tariff. We are met on the other side by crowds of people who say to us that "With all your protection, all your land grants, we are in a wretched plight; before you did this everybody was comfortable, now we are suffering; you do not give us any consolation by telling us that somebody else is better off than he ought to be." What are you going to do in the case of those people?

Mr. COFFIN. I do not think that I will take up the questions of tariff and free trade, but I would say to these people that they are not any worse off than they have been at other periods of commercial depression; that such periods will occur in the future as they have in the past; that they are incident to civilization; that legislative action never will be able to wholly prevent their occurrence; that the legislative action that they ask for would give no permanent relief.

There are two or three points to which I have not alluded, but I will do so now as they touch upon the point which you have just suggested. I refer to disturbing elements. The production of gold and silver in this country since 1849 amounts to $4,500,000,000. That has been one disturbing element.

The CHAIRMAN. Do you mean as a benefit or an injury?

Mr. COFFIN. I am not prepared to make any remark upon that, only that it has been a disturbing element.

The CHAIRMAN. You call it a "disturbing element," but I ask you has the effect of its disturbance been for good or for evil?

Mr. COFFIN. It has disturbed values; it has had both a beneficial and an injurious effect upon them.

The CHAIRMAN. Its effect would be to enhance values, would it not?

Mr. COFFIN. Yes, sir.

The CHAIRMAN. Yet you have been endeavoring to prove to us all along that values are falling off?

Mr. COFFIN. Not quite, sir. Certain particular values have fallen off, because the cost of production has diminished, or because certain things have gone out of use. But wealth has accumulated. Labor has a higher value and will bring more comforts tban a hundred years ago. But I have not yet shown the applicability of this point in connection with my previous argument. I was going to remark that when I visited India a few years ago, I found that the cost of living was greater than it had been; and it is greater to-day than then. The same is true of China. Then the next consideration is that this great increase of the precious metals has been productive of speculation. The speculation in mining stocks which is going on to-day, on the Pacific coast, is the cause of a great deal of distress. The disturbing element manifests itself especially in that direction.

The Suez Canal is another disturbing element. Free labor is another. The amount of capital invested in the South before the war for raising one hundred bales of cotton was as great as that which is to-day invested for the raising of one thousand bales.

The CHAIRMAN. There never was in reality any capital in the slave; the war left the laborer in the South just where he was, and his master who thought that he had capital in his slave, found that he had never had any capital.

Mr. COFFIN. Then the petroleum product was another disturbing element. These brought on inflation. The war and the issue of paper money also came in as disturbing elements. Now, it is not probable that these same elements or anything like them will come in to disturb us in our immediate future. Therefore, I say that I look for a remarkable degree of prosperity in this country. I do not see how it is possible for the country the next twenty-five or fifty years to be disturbed by any causes such as those I have enumerated.

The CHAIRMAN. You think, then, that in a normal condition of things the distribution of labor and capital becomes well settled and will be harmoniously adjusted; that in the near future everything will go on smoothly and in proper relation, the one to the other, this being what you call a prosperous condition of the community?

Mr. COFFIN. Yes, sir.

The CHAIRMAN. And that when a disturbing element enters in dislocation ensues, which while it makes some people rich makes others poor?

Mr. COFFIN. That is the inevitable result.

The CHAIRMAN. Could not legislation contribute greatly to remove these disturbing causes?

Mr. COFFIN. I think so.

The CHAIRMAN. Could not legislation contribute to prevent these disturbing causes! Mr. COFFIN. I think not to prevent them.

The CHAIRMAN. I admit that legislation cannot wholly prevent them, but can it not accomplish that object in some degree?

Mr. COFFIN. Unquestionably; but it is a question which requires the highest states. manship. I do not think that commercial distress in the future will be avoided by the adoption of any of the theories or plans that have been presented to this committee, so far as I understand them.

The CHAIRMAN. One point of your testimony has been the proof that there has been an enormous increase in the productive power of the world within the last century; and you have shown it to be something so vast as to be simply fabulous. The world has been living after its fashion, and, as you have shown, has been growing in population at a moderate pace, while the increase of production has been enormous and very much out of proportion to the increase of population. What do you suppose has become of all this vast increase in the material wealth of the world-who has got it, where has it gone?

Mr. COFFIN. Much has been destroyed. It has been more widely diffused; but allow me to state some of the questions that arise in the course of industrial progress, and tend to and relate to increase of production for each day's labor. As regards the man there are four kinds of progress. He may accomplish more in a day than formerly, because he has become intrinsically a more capable man; more intelligent in the use of his brains; more rapid in the use of his hands, making no false motions and causing every stroke to tell; or more industrious. Or he may accomplish more because the material conditions under which he works make his labor more productive; i. e., many men are brought together under one head; they are better organized; their work is laid out for them, so that no time is lost; they become an organized army instead of an undisciplined mob. In the third place the material he works upon or the tools he works with may

be so improved that he can accomplish more in a day; and these tools may be handtools, as the plane, the saw, the center bit, the steel shovel, or hoe, or pitchfork, or scythe, or cradle, or plow, as compared with the rude stone implements and the crooked stick of the primitive man; or, fourth, they may be machine tools or machines, broadly (though not for all purposes precisely) distinguished from tools by the fact that the power, instead of being furnished by the hand that guides, is supplied from some other source, which may be a treadle or crank, and may be a steam-engine or water-wheel. (E. g., the old blacksmith gave power to his hammer by his arm and directed his arm by his will. It is hardly a figure of speech to say of the Nasmyth steam-hammer that the boiler supplies the power and the hand of the engineer, raised one step in the scale, becomes itself the intelligence which controls.) The popular mind makes a distinction between those improvements of the three first kinds, which better utilize the muscular force of man, and those improvements of the fourth kind (including discoveries in chemistry and physics), by which the forces of nature are utilized. But for the purposes of this inquiry the distinction cannot be made, because greater intelligence, more skillful organizations of labor, and better tools are the result of or form part of the mental progress of civilization as much as the invention of machinery does; and it is probable that their results in greater product from a day's labor have been larger than the results from the use of machinery in the modern sense of the word. And although the phrase "labor-saving" is popularly applied to machinery alone it belongs equally to all four lines of progress. If the welfare of the community requires that all progress shall be stopped which will enable the worker to produce more to-morrow than he did yesterday, or enable a given product to be obtained by less labor, then progress not only on the fourth line, but equally on all must be forbidden. Civilization would not do this if it could, for it will not destroy itself; with man to stop is to rust, to recede. It could not if it would, for the mind of society cannot tie itself up in inaction; and if it once did it, it could not long stay in fetters of which itself kept the key. Since this tendency certainly cannot be (and I am sure that it ought not to be) repressed, let us see what questions arise in its progress.

During the last thousand years the production in the industrial arts in civilized countries has increased vastly faster than the population. The comforts and conveniences of life have vastly increased. In other words, each household has more and better material things to use and to consume than it had formerly; the increase in consumption has kept pace with the increase of production. I mean taking it in the long run. This is quite different from the question of increase of wealth. The large manufacturer of to-day may not grow rich-may not accumulate-any faster than the master workman of five hundred years ago. The laborer, at the end of his career to-day may have laid up nothing, but it is a good deal that during his life he has lived in a wooden house with a carpet and decent furniture produced by the manufacturer instead of in a hovel with a dirt floor and logs to sit on. This increased production he has consumed. He has not destroyed it as a fire destroys; he has worn it out in enjoying it, and this is the fate of most things that are produced for the use of man. Increased consumption and production is therefore intrinsically a public benefit, even where the producer grows no richer. This is seldom denied. The outcry sometimes made against increased production refers to a production in excess of the consumption. This trouble does not come (necessarily) because production grows, but because consumption does not; and an increase in the latter is as legitimate a way of meeting the difficulty as a diminution of the former; more legitimate and more natural because it is in the direction of the invariable and irresistible progress of mankind and not in opposition to it; and improvements in society must take place along a natural line of progress and not contrary to the logic of events.

At any given time there are two methods of increasing production. One is to duplicate the producing establishments, making no change in their character; they will manufacture more, but at the same cost per piece. The other is, by some of the means already described to increase the production from a given number of operatives. The first has the apparent advantage of employing more labor, but is only an apparent advantage, for if the increase exceeds the natural growth of population and wealth, i. e., if it increases faster than the number and means of the consumers, there will be failures, stoppages, and hands thrown out of employment. Historically this has been the case at the periods of great industrial depression. The high price of iron and consequent profits eight years ago led many men independently to put up new works, and when one found himself just ready to supply the unsatisfied demand, he discovered a dozen others equally ready, and this meant disaster for all, and the operatives just drawn to this industry were thrown out of work. And so with other branches. So with railroads. The impetus of apparent or real great demand showing itself in great profits carried the pendulum too far.

The other method is to increase the production of an establishment of a given size and given number of operatives by improvements in organization or machinery. This ineans larger production at the same cost for the total and a smaller cost per piece, i. e., it means a cheaper product. Now a cheaper product always means a larger consump