which it gave to men's minds of dealing with great sums without fear or trembling, and without being appalled by large debts.

The CHAIRMAN. Do you think that railway speculation, after the close of the war, was attributable to the war?

Mr. ATKINSON. I think that such an extension of railways as took place in this country was in some degree owing to the war, but more directly to the inflation of the currency.

The CHAIRMAN. I think that if you will compare the percentage of railway construction in Great Britain at the time when Hudson was king, you will find that the proportional addition to the railway mileage was quite as great there as it has been with us; and I think that on previous occasions (preceding 1857) there was as great an increased proportion of railroad mileage in this country as there was in the era between 1868 and 1872.

Mr. ATKINSON. But the percentage was upon a very much smaller basis.

The CHAIRMAN. Yes; but the question of percentages always has relation to the existing condition of society. In other words, the period between 1868 and 1872 was not the first era of railway speculation; and the previous ones occurred without refer

ence to wars.

Mr. ATKINSON. I can agree with you that railroad speculation would have had, to a great extent, the same effect; but, coming as it did on the top of the war demand, and coupled as it was with the continuous inflation of the currency, I think that it had a very much more aggravated effect than it would have had under other conditions.

The CHAIRMAN. I understood you to say that the war stimulated products enormously in the North. Then when the war ceased there would have been no adequate market for those products; but then there came in an era of railroad speculation which merely postponed the collapse.

Mr. ATKINSON. That is my theory. It postponed the collapse which would otherwise have followed the end of the war, and which we all predicted as likely to follow the end of the war, the deferring of which made us doubt the logic of events; but it did come, nevertheless, at a later period. Now, I think that this redistribution of population has practically accomplished itself, and that, with confidence and a stable currency, there will very soon cease to be any excess of labor found in any particular place in this country which will not very easily distribute itself without any artificial stimulus.

The CHAIRMAN. Have you considered the question as to whether the difficulty of distributing population in this country is greater or less than it is in European countries? Mr. ATKINSON. It is unquestionably vastly less. I wrote last week to one of my English correspondents, telling him that he could not imagine the fluid nature of the population in the United States, or the facility with which it changed itself from one place to another without artificial help.

The CHAIRMAN. Do you think that it is much easier in this country, after you have concentrated a large amount of population in constructive works, to deal with the problem of redistributing that population than it is in European countries?

Mr. ATKINSON. I judge so, as far as I can understand the cause. I have had no practical experience in those countries; but, from my study of the subject, I should say that it was vastly easier for us to dispose of any such concentration of labor.

The CHAIRMAN. Do you think that, in foreign countries, it is as easy as it is in this country to concentrate population in an unnatural way? In other words, do you think it possible to produce such an abnormal concentration in England as in this country?

Mr. ATKINSON. I think it has been proved in the recent concentrations in Lancashire, especially in the town of Oldham, where, in a few years, under what is called the cooperative plan of building factories (a name which merely indicates corporations of an ordinary sort with small shares), there have been concentrated 8,000,000 of cotton spindles, eight-tenths as many as we have in the whole United States. These factories were built on a more speculative basis than anything I know of in the United States. Half of the money was borrowed, and the money that was actually paid in on the stock was paid on partly in shares. The culmination appears, however, to have come. Nearly all of these factories are coming to grief at the present moment. The CHAIRMAN. And you hold that the surplus population which must be disposed of there will find it more difficult to be absorbed than would be the case in this country?

Mr. ATKINSON. Vastly more difficult.

The CHAIRMAN. What is the reason for that? What is our advantage over them? Mr. ATKINSON. The enormous area of unoccupied soil in many parts of this country, against which they have the only remedy of emigration. They cannot feed themselves from their own soil. They have to buy half the food which they consume; and there is no new occupation for the unemployed to take up. And, moreover, they are a class of people who are less versatile, and less able to change their position than any people

that we have in this country that I know anything about. A large portion of them would be entirely helpless on the land.

Mr. THOMPSON. You speak of the want of versatility on the part of the laboring class of Europe to redistribute themselves as compared with a like class of persons in this country suffering from like causes. State whether a very large proportion of those who are now suffering in this country are not made up from the same class-are not men who have sought to better their condition by coming to this country, and who, in your judgment, lack that versatility which you speak of.

Mr. ATKINSON. Yes, sir; I think they are mostly foreign born, or persons of foreign extraction.

Mr. THOMPSON. Then how do you mean that the unemployed in England, as compared with the same class here, lack versatility and adaptation?

Mr. ATKINSON. When hard times affect a given community in this country a large proportion of that community consists of persons who are sufficiently intelligent and versatile to take themselves away to other regions, and leave room for the grade below to come up and fill their places. That is what has happened in Massachusetts to a great degree. A great many of the most intelligent of the working people, and mechanics, and of the manufacturing population of Massachusetts have moved away (more than I wish had done so); and in that way we shall train up from a lower grade people to fill their places. Americans have gone; Irish and French Canadians have come in.

The CHAIRMAN. Where have the people who haved moved away gone to, as a rule; have they gone out West to the land?

Mr. ATKINSON. A vast number of the mechanics and artisans of Massachusetts have, I think, gone West to the land.

Mr. RICE. What caused the excessive concentration of population in Oldham, Lancashire?

Mr. ATKINSON. The great inflation of prices which followed the war here, and the wars in Europe, and the excessive demand for goods.

Mr. RICE. Then the same causes that were at work here were also operative there! Mr. ATKINSON. Yes; it seems to me that similar causes have been at work the world

over.

Mr. RICE. There was no war in England.

Mr. ATKINSON. No; but there were wars in other countries which threw a great demand for goods on England.

Mr. RICE. The spirit of invention which was here was also there?

Mr. ATKINSON. Yes; and I hold that, whenever one nation has had an inconvertible currency, a nation which adheres to the gold standard for a long period gets the advantage.

Mr. RICE. It does not seem to have been a great advantage to England.
The CHAIRMAN. You say that the industry there has collapsed?

Mr. RICE. They are in a worse condition even than the operatives at Fall River. Mr. ATKINSON. But they got a great advantage for the time being. Of course, if people do not look out and take cognizance of the temporary character of the demand in other countries, and if they do not anticipate the return of other nations to a stable currency, then they will come into as bad condition, when trading on a specie basis, as if they were trading on a paper basis.

The CHAIRMAN. You say that there has been a great concentration, and, of course, a great development of manufacturing industry in Oldham, Lancashire; that it is beyond the capacity of the world at present to absorb the products of industry, and that a collapse has taken place. I suppose that, before they utterly break down, they run their works as long as they can, and reduce the prices and wages so as to try to keep the market?

Mr. ATKINSON. Yes.

The CHAIRMAN. Of course the effect of that is to react on this country and make us also put down prices and wages. And, of course, we are subject to the consequences of the error, which these people made in putting such a large amount of capital into business, and in diverting such a number of laborers to Lancashire. We suffer by

that.

Mr. ATKINSON. To a certain extent.

The CHAIRMAN. Is there any method by which any nation can protect itself from the consequences of the errors of other nations? Is there any remedy that we can apply that will protect us from the evil consequences of the error of judgment of these people in England?

Mr. ATKINSON. I do not know of any method of legislation that could possibly be adopted to have that effect.

The CHAIRMAN. You think that there is no way in which we can fence out the evil. can quarantine it, for instance?

Mr. ATKINSON. I do not see any possibility of it. Take the cotton industry (with which I am most familiar). There was a long period of extreme prosperity in that

industry in England, and a long period of fluctuating prosperity in this country ensuing after the war; and, during that period, neither in England nor in this country was much attention given to economy, or to the question of wages, or to the improvement of machinery. There was no time to stop to attend to the small economies. The hard times come on, and at once every one is thrown back upon the necessity of economy, of saving, of making profits by savings rather than in any other way, and in the last five years there have been greater improvements made in the processes of manufacture than were made for fifteen years before. All the inchoate inventions, so to speak, of fifteen years previously have been taken up and concentrated into five years; and I should say that in a cotton mill to-day seventy-five hands can do the work which it took one hundred hands to do before the war. The reduction of cost by this means is very large, and at the same time it is coupled with higher earnings to those who continue to be employed.

The CHAIRMAN. Do you think that there is a market for the employment of so many workmen ?

Mr. ATKINSON. I think that the market has managed to absorb the products of as many workmen, but not to increase the number materially.

Mr. RICE. While people in England are working at the low prices to which you have referred (caused by excessive production), and while they are seeking to find a market for their low-priced productions here, cannot our laborers be protected against those low prices while England is running herself out, or running herself clear? Can we not in that way be enabled to avoid, to some extent, the evil results that have been caused there?

Mr. ATKINSON. So far as the great mass of staple cotton goods is concerned, I do not think that any artificial method of exclusion would have much effect one way or the other.

Mr. RICE. Are there any English cotton goods sold in our market now?

Mr. ATKINSON. In order to consider that question, you must discuss what are cotton goods. The great mass of the cotton goods-nine-tenths of the cotton manufactures— consist of staple articles for the use of the million, and one-tenth consists of a nicer article depending upon its style, its weave, its color, or on how it is woven. We shall continue to import the fine laces, lawns and organdie, and fine muslins, and extremely fine threads from France, Switzerland, and England; but we shall not import sheetings or drills, or the common wear of every day people, under any circumstances. If you take the common sheetings and common drillings that are now exported from this country to China, South America, and other countries, you will find that the labor cost-the mill cost of the fabric is only a cent a yard, or even less. Now you have brought, by the application of machinery (coupled with adequate wages, in comparison with any previous period, and coupled with wages, to those who are at work, of greater purchasing power than they ever received before; and coupled also with shorter hours of labor than existed before), the labor cost down to a cent a yard, or less-down to such a minimum that no difference that can exist between this country and Great Britain on that article can make any change in the traffic.

Mr. RICE. Is the labor cost less here, or less in England?

Mr. ATKINSON. I am not speaking now of where it is the least; but I say that it is down to so low a point here that, even if the labor cost could be reduced in England twenty-five per cent. less, to three-fourths of a cent a yard, it would not make any difference. Our fabrics supply the home trade, would still go to China in exchange for tea, and to South America in exchange for hides, because it is better for our merchants here to have a direct traffic with those countries, and even to pay a quarter of a cent a yard more for their cotton cloths than to undertake to do business through London where they would have to pay exchange.

The CHAIRMAN. We cannot avoid paying the exchange in London for hides. Mr. ATKINSON. I do not know so much about hides; I suspect that depends more on navigation acts; but I am speaking of the trade with China for tea.

The CHAIRMAN. I do not know about the China trade, but I do know about the other.

Mr. ATKINSON. The American tea merchant to-day buys American drills and sends them to China, not as an undertaking out of which to make profits, but as an exchange for tea, and we have already evened our traffic in China, exporting to China as much as we import.

The CHAIRMAN. I was not aware of that.

Mr. THOMPSON. You started by saying that the war developed activity in inventions and in the production of labor-saving machinery, and that that, to a certain extent, compensated for the draught made upon the labor itself; in other words, that the great demand for products stimulated the productive energies of the people. Now you say that the depression in business has stimulated the improvement of machinery within the last five years more than in the fifteen years previously. How do you reconcile the two statements, that prostration has stimulated improvement in machinery to that

extent, and that the war and the unnatural demand also stimulated improvements in machinery?

Mr. ATKINSON. The war demand stimulated agricultural machinery and the making of the things which constituted the rude and comparatively coarse work of war. That has gone by. While that was going on, all the nicer improvements, in regard to the nicer demands of peace, were neglected, and there was very little improvement or change in that respect. Now the war demand of beef, corn, pork, guns, and coarse fabrics having gone by, all the work is going into the nicer demand, and into an improvement of the more delicate manipulations which constitute the demand of peace. Mr. RICE. Why may we not raise up the highest present grade of our laborers into that still higher grade of manufacturing those finer goods which you say we must always import? Could we not, by doing that now, by protecting our entire laboring population from the influx of foreign products, bring about the time when we shall not import even those nicer fabrics?

Mr. ATKINSON. I did not mean in this discussion to consider the question of protection or free trade, as I do not consider it to be the one now at issue.

Mr. RICE. We have so considered it. The question is a very grave one. You stated in the commencement of your remarks that the tariff put upon foreign imports (to be sure, you qualified it by saying what we shall all agree to, that it was not a well-adjusted tariff) had done something towards bringing about the present depression in industry. Mr. ATKINSON. I meant by that the extremely bad adjustment of the tarifi adopted at that time. I am not considering the tariff question as a whole.

The CHAIRMAN. But you have also stated another fact-that at Oldham, in Lanca-' shire, there has been an enormous development of cotton production, an abnormal and unnatural one; that capital had been invested there under the co-operative system, so that there has been a great surplus of production there, and consequently a fall in prices; a collapse which has reduced the prices of cotton goods unnaturally. Assuming that we were going on normally here (only supplying the normal demand of the country) with machinery quite as good as any machinery that they had in England, and therefore with no misdirection of labor, and suddenly this collapse (which is due to their error in judgment and to their bad policy) takes place, is there no method by which we can protect our own people from the consequences of such bad judgment and policy on the part of the people on the other side? That is the question.

Mr. ATKINSON. I do not think that we can protect ourselves from that, because that competition meets us in neutral markets, not in our own market.

The CHAIRMAN. But our own market is the great market for those goods.

Mr. ATKINSON. Yes; but I do not think that the particular fabrics which are in excess in Lancashire can be unloaded here under any circumstances. But they are unloaded in India, China, and South America, and are sold at a loss, thereby preventing the extension of our own commercé.

The CHAIRMAN. Suppose that we had free trade in cotton goods, would not this excess of production be unloaded here?

Mr. ATKINSON. I do not think that they make to any great extent the kind of fabrics which our market consumes. They are making the coarse and medium fabrics, not

the extremely fine fabrics.

The CHAIRMAN. But we are using a large quantity of coarse and medium fabrics, Mr. ATKINSON. Our coarse and medium fabric is very different from the English coarse and medium fabric. When the tariff was lowered in 1846 there was in 1847 a very large importation of British cottons of that sort, and there was a good profit made upon them. The next year there was a larger importation, and they could not give their goods away.

The CHAIRMAN. Is there anything to prevent them manufacturing the same kind of cotton goods as we manufacture?

Mr. ATKINSON. There is nothing to prevent them; but the cost of carrying the cotton to that side and bringing the goods back would burden the goods with such expenses that they would lose heavily by the experiment.

The CHAIRMAN. You have estimated, of course, how much the freight is on a yard of cotton goods. How much would the freight both ways be?

Mr. ATKINSON. In the importation of goods from Great Britain the necessary charges that cannot be avoided amount to about 5 per cent.

The CHAIRMAN. If the competition were to take place, the English would have to pay freight on the raw cotton and on the cotton goods back?

Mr. ATKINSON. I have collated the figures in regard to cotton, extending over a long period, and I find that the cotton-spinner of New England has the advantage of at least half a cent a pound over the cotton-spinner of Lancashire, which advantage cannot be wiped out.

The CHAIRMAN. You mean on the raw cotton?

Mr. ATKINSON. On the raw cotton; and if it is half a cent per pound on the raw cotton, it must be half a cent a pound on the goods sent back. In a mill constructed

to-day for making a coarse fabric of cotton in this country a cent a pound would allow the payment of 6 per cent. on the capital invested.

The CHAIRMAN. And you think, therefore, there is no longer any necessity for any duties at all on cotton goods?

Mr. ATKINSON. I am speaking now of those coarse fabrics. I do not advocate the entire removal of duties on cotton goods. The kind of cotton goods that are imported here are a perfectly fit subject for a revenue tariff, and the imposition of a revenue tariff on goods does no harm, even from a free-trade standpoint, because it makes no difference whether it is imposed or not.

The CHAIRMAN. In a time of great depression in business, when the English manufacturers want to get rid of their surplus, might not a tariff under such circumstances (for the producer would then have to pay it, not the consumer) be a protection to us? Mr. ATKINSON. A moderate revenue tariff would be undoubtedly a certain protection against that abnormal condition of affairs.

The CHAIRMAN. Do you think it legitimate legislation for one nation to make provision against such cases of glut?

Mr. ATKINSON. Not unless there was another reason for it. In other words, if you did not need the revenue, you would not need a revenue tariff; but, needing the revenne, and considering the revenue standard point of view in imposing your duty, you compass the other object at the same time.

Mг. THOMPSON. Would you not, for the purpose of encouraging infant manufactures in a new country, make a partly prohibitory tariff for the time being, without regard to revenue; or would you permit infant manufactures to be broken down by competition with established manufactures abroad?

Mr. ATKINSON. I would not, from my study of history, impose a protective tariff where one had not existed. I would let the infant grow up on its own legs and become strong.

Mr. THOMPSON. Has any manufacture in this country grown up on a free basis in competition with foreign manufactures?

Mr. ATKINSON. Unquestionably.

Mr. THOMPSON. What one?

Mr. ATKINSON. The iron manufacture in this country began when we were colonies, and, under the repressive acts of Great Britain, grew to so large an extent that it had to be put down by absolute law; and yet it could not be put down. The CHAIRMAN. I do not understand that to be history.

Mr. THOMPSON. Do you mean to say that the iron business in this country grew up, and not only in the absence of protection, but in the face of repressive measures the part or Great Britain?

Mr. ATKINSON. I so understand it as a matter of history.

on

The CHAIRMAN. At the time you speak of (the colonial history), the only kind of iron manufactured was charcoal iron. At that time pig-iron was made with charcoal, none with mineral coal. England was short of forests, and tried to encourage the manufacture of iron in this country so as to be able to procure it from her colonies rather than from foreign nations. Charcoal furnaces thus grew up in Massachusetts, Pennsylvania, New York, and Virginia, and pig-iron was exported in considerable quantity (comparatively) from this country to the other side, although the largest record of its exportation that I can discover, was 7,000 tons in one year. The result was that the American manufacturers undertook to use the pig-iron themselves and convert it into finer forms. They were allowed for a long time to convert it into bar-iron, and considerable quantities of bar-iron were sent to the other side; but they were not allowed to manufacture it into nails and other articles. That was prohibited by the famous act to which you have referred, just before the revolutionary war, and was undoubtedly designed to preserve the colonial market to Great Britain. There never was any repression on the part of Great Britain; but, on the contrary, there was every encouragement to the production of iron in this country, and yet the business was so small that when the Revolution broke out there was considerable difficulty in supplying the American army with the necessary iron.

Mr. ATKINSON. So I believe there was, at the beginning of the war of the rebellion, considerable difficulty in this country, notwithstanding the extension of the iron industry, in procuring the exact kinds of iron needed.

The CHAIRMAN. Yes. For one year there was a deficiency in the iron needed for gun-barrels, because, while we made it in this country, we were not making it on a sufficiently large scale. But there was no iron business worth talking about in this country at the time of the revolutionary war. The iron business first obtained con

siderable development in the war of 1812. That did give a great deal of encouragement to the iron industry; and from that time on (rising more or less irregularly) there has been a steady growth in the business.

Mr. THOMPSON. Is there any other branch of manufactures that you can instance to have grown up without protection in this country?