Between 16 and 59 the number of males unaccounted for is 921,333 [or 7 per cent]. This number is made up chiefly of the following classes: First, those students who are pursuing courses of study beyond the age of 16; second, those who are afflicted by permanent bodily or mental infirmities, disqualifying them from participating in the industry of the country; third, the members of the criminal and pauper classes. The number of men of this period of life, not disabled, who are not returned as of some occupation by reason of inherited wealth or of having retired from business is hardly important enough in this country to be mentioned. The number of females between 16 and 59 not accounted for in these tables is, naturally, vastly larger, and amounts to 11,093,887 [or 83.5 per cent]. That body is made up of the three classes just mentioned when speaking of the males of this period of life, and of the far greater classes of women wives, mothers, or grown daughters, keeping house for their families or living at home without any special avocation. . .

CHAPTER XXIII

ECONOMIC PROGRESS, 1860-1915

I. WEALTH OF THE PEOPLE OF THE UNITED STATES

National Wealth, 1850-19121

In an effort to gauge the economic progress of the last half century we may properly begin with an estimate of the increase in the wealth of the people of the United States. This has grown from a total of 7 to 187 billion dollars, between 1850 and 1912, while the per capita amount has increased from $308 to $1965 in the same period. The character of this wealth and its amount in comparison with that of other countries are also shown in this extract. All the facts show a large and rapid increase in the wealth of the nation as a whole.

These estimates have been prepared upon two different bases and by a number of different methods. The estimates for 1850, 1860, and 1870 were confined to taxable real property and the personal property of private individuals, firms, and corporations. They did not include any estimates of the value of the public domain nor of other exempt realty, nor of the value of the furniture or equipment of public buildings of governments nor of charitable, religious, or educational institutions, all of which were included in the estimates for 1880, 1890, 1900, 1904, and 1912.

Estimates for 1912 and 1900.

Table 2, which follows, affords a ready means of comparing the total values of the several classes of wealth in 1912 with those of 1900.

1 Estimated Valuation of National Wealth, 1850-1912. Census Bulletin (Washington, 1915), 14-16, 18–20.

Privately owned waterworks.

Privately owned central electric light and power stations

All other:

Agricultural products..

1 Includes wireless systems.

Estimated wealth of different countries. Owing to the insufficiency of official and trustworthy data pertaining to the subject, it has been impossible to prepare a summary of the aggregate wealth of all nations. The following statement summarizes the information concerning the wealth of the principal nations as it has been assembled by Augustus D. Webb, Fellow of the Royal Statistical Society, and published in "The New Dictionary of Statistics" for 1911. The authority referred to gives the values in pounds sterling. The reduction to dollars is at the rate of $4.8665 per pound sterling. It will be observed that the figures for the United States are those compiled by the Bureau of the Census for the year 1904. The data presented are far from comparable because of the difference in dates for which the estimates were made and the character of the data included. . . .

A. Labor's Share in the Net Product of Industry, 1850-18801

It is not enough to show that there has been an increase of wealth in the United States during the past half-century. Even more important from a social point of view is the answer to the question, "Who gets this wealth?" An effort was made to answer this question in an early report of the Massachusetts bureau of statistics of labor, by Carroll D. Wright, who afterwards became the United States commissioner of labor. Mr. Wright concludes that as a result of the improvements in machinery the relative share of labor in the net product of industry has declined from 51 per cent in 1850 to 48.1 per cent in 1880.

Net product, or value of product remaining after deducting value of raw materials of manufacture, represents the direct result of the productive forces in the given industry; or, in other words, it represents the value created over and above the value of raw materials by the effective operation of labor and capital united.

The value of net product forms, as we have said, a fund divisible into interest on capital, interest on loans, insurance, freights, rents, commissions, wages, and profits. Now if the relative share paid to

1 History of Wages and Prices in Massachusetts: 1752-1883. Sixteenth Annual Report of the Massachusetts Bureau of Statistics of Labor, Parts III and IV (Boston, 1885), 34-36.

labor in the form of wages is decreased, it is, of course, obvious that the share remaining for the other purposes mentioned is increased. If capital is also relatively decreased, then it is fair to suppose that the share chargeable to interest is also diminished. It is well known that the relative cost of freights and insurance has decreased. Allowing, then, for a possible increase in rents and commissions, it would seem probable that, in the industries last examined, the share drawn out as profits has relatively increased, though such an assumption is perhaps unwarranted in the absence of definite data. It is, however, clearly inferential from the tables.

It is well established that the proportionate cost of labor in the finished fabric has been greatly reduced through the use of machinery. This reduction of actual labor cost has been an important element in reducing the price of product to the consumer, while permitting at the same time a liberal increase of wages to the laborer. An examination of these two tables would, we think, lead to the conclusion that although in every case money wages have considerably increased, yet in certain industries in which the principles of the factory system (i.e., sub-division of labor, co-ordination of processes, and the application of a series of mutually dependent and practically automatic machines) have been most effective, such, for instance, as in the cotton and woollen industries, the relative share of net product gained by the workman tends to decrease. That is to say, in these industries perfection of machines and processes constantly tends to create a larger product with less capital, and the ratio of increase in productive capacity tends to outrun the ratio of increase in wages, so that of this larger product labor obtains a less relative share, although it is produced at less expenditure of time and effort, and rewarded by a constantly increasing wage.

From the following presentation which exhibits the same data for all the industries in the United States, for 1850 and 1880, it appears that, when the field is broadened so as to include the entire manufacturing industries of the country, labor's share of net product has declined from 51 to 48.1 per cent. This slight decrease, however, is more than offset by the relative increase in capital.

It appears probable, then, that when all industries are considered money wages have not only increased, but that a slight increase has also taken place in the relative share of net product secured by labor after payment of interest on capital invested.