erally complain of scarcity of farm labor during the agricultural season. Nevertheless, the wages of farm laborers are lower than the wages of unskilled laborers in mines and mills, where the proportion of recent immigrants is rapidly increasing. Scarcity of labor has not forced the farmer to pay scarcity wages, but has merely retarded the growth of farming. In many places the area under cultivation has actually decreased. On the other hand, the problem how to increase production with the same supply of labor has been solved by labor-saving machinery. The shuttingout of unskilled immigrants would have similar effects in manufacturing and mining.

At present more than one half of the output of bituminous coal in the United States is still mined without machinery (58.26 per cent in 1910). Scarcity of unskilled labor would hasten the general introduction of mining machinery. The labor that would thus be displaced would form one substitute for immigration.

The coal mines of Alabama and other Southern States which have failed to attract immigrants utilize the labor of farmers and their sons. The 2,300,000 tenant-farmers in particular offer great possibilities as an industrial reserve available during the winter months when the demand for labor in the coal mines is most active. The farm being their main source of subsistence, they are able and willing to offer their labor during the idle winter months more cheaply than freshly-landed immigrants. The efforts of trade-union organizers among this class of Englishspeaking workers have met with scant success. With the farmer who works in a mine during the winter months, the dominating interest is his farm, whereas his interest in his employment is but transitory. He may not return to the mine the next winter; he accordingly expects no benefit from an eventual gain in wages, whereas a protracted strike may deprive him of his earnings which are needed immediately to pay interest on a mortgage or to buy a machine. He is therefore reluctant to enter into a

labor contest. The substitution of the cheap labor of the American farmer for the labor of the Slav or Italian immigrant would tend to weaken the unions and to keep down wages.

The discontinuance of fresh supplies of immigrant labor for the cotton mills of New England would give a new impetus to the development of the cotton industry in the South, where there is an abundant supply of child labor. Should the supply of immigrant labor be cut off from the shoe factories of Massachusetts, the shoe manufacturing industry would spread to the rural districts of Missouri and other agricultural States with an available supply of cheap female and child labor of the farmhouse.

The employment of all these substitutes for regular wage-earners certainly has its limitations. Summer is the most active season in many manufacturing industries. Other industries are localized and cannot spread out to agricultural districts. But there is in the United States, as in all industrial countries, a steady flow of labor from rural to urban districts. In the absence of immigration of unskilled laborers the depopulation of the rural districts would be accelerated. A stimulated movement of labor from the farm to the factory must act as a drawback on the growth of farming, and the prices of foodstuffs would rise in consequence, which would tend to offset the advantages to the wage-earners from a possible rise of wages.

Still, should all the substitutes for immigrant labor prove inadequate for the needs of the employers, it does not necessarily follow that scarcity prices would rule in the American labor market. It must be borne in mind that capital is international. Parallel with the immigration and emigration of labor to and from the United States there has been going on an immigration of European capital to the United States and an emigration of American capital abroad. It is estimated that the total amount of European capital invested in permanent securities and loans in the United States is approximately six and a half billion

dollars ($6,500,000,000). This is equal to about fourteen per cent of the total capital invested in American industries (exclusive of agriculture). The foreign-born population constitutes about the same percentage of the total population of the United States.3 In other words European capital came together with European labor to assist in the development of American industry. Should there arise a scarcity of labor in the United States, new investments of European capital will seek other fields.

On the other hand billions of American capital are already invested in Mexican and other foreign undertakings. At present this is but a minor item compared with the profits of American industries annually reinvested at home. If, however, a scarcity of labor were created in the United States, more American capital would seek investment abroad. Instead of investing their profits in new mines and mills in the United States, American capitalists would export their money to open up new mines and build railways in Mexico, in Mesopotamia, in Manchuria, in Siberia.

The usual answer to this is that the mines of Idaho and Colorado cannot be moved to Mexico. But it must not be overlooked that a mine will be operated only so long as, after paying all operating expenses, it leaves a margin of profit on the investment. If the cost of mining and trans

I

George Paish, The Trade Balance of the United States, pp. 174, 175 (Sen. Doc. 579, 61st Congress, 2d Session).

The wealth invested in mines and quarries, factory land and improvements, manufacturing machinery, products of mining and manufacturing in stock, steam railroads, canals and shipping, telegraphs, telephones, street railways, central electric light and power stations, private waterworks, and other business property, was estimated for 1904 at $46,900,000,000.-Wealth, Debt, and Taxation (Bureau of the Census), pp. 12, 17, 22, 27.

3 The value of farm property is not taken into consideration in this comparison, the amount invested by Europeans in American farm property being unknown. But the proportion of foreign-born among the farmers in the United States was 13.2 per cent in 1900 (Occupations at the XII. Census, Table xxxvi., p. cxiii.), i. e., approximately the same as among the population at large.

portation does not leave a “reasonable profit" to the owner of the mine, he shuts it down. The many abandoned silver mines of the United States bear witness to the truth of this proposition.

Such

The increased investment of American capital in the industrial development of foreign countries with cheap labor must eventually react upon labor conditions in the United States. Certain of the most important American industries depend in part upon the export trade. Such is, e. g., the manufacture of agricultural implements. It has recently been reported that American manufacturers of agricultural machinery were planning to establish plants in Russia that would supply the Russian trade. a plan would not be a new departure in the world of industry. English, French, Belgian, and German manufacturers have found it more profitable to establish factories in Russia than to export their products to that country. A scarcity of labor in the United States would induce many American manufacturers to imitate that policy. At present the great smelting works of New Jersey import ore from Mexico and employ Slav immigrants to smelt and refine it into lead and copper, a great deal of which is then exported to Europe. Should the immigration of Slav laborers be barred the lead and copper producers could accommodate themselves to the situation by erecting plants in Mexico and exporting the refined lead and copper directly to London.

Such an emigration of American capital would materially affect the export trade of the United States and eventually throw out of employment a number of American wageearners dependent upon that trade.

It is evident that while restriction of immigration can limit the supply of labor, it is powerless to prevent a corresponding limitation of the demand for labor.

The Immigration Commission holds that "a slow expansion of industry," in the absence of "the immigration of laborers of low standards," will raise "the American standard of wages." Yet the Commission does not explain

how a mere Platonic desire to maintain a high standard of living could of itself raise the rates of wages, unless the relation of demand and supply in the labor market were favorable to the wage-earner. The recent crisis has furnished a practical illustration bearing upon this point. When the operations of the steel mills were reduced, a great many men were laid off. The companies, however, offered their skilled men positions as laborers.1 Neither their high American standard of living, nor their high standard of wages, nor their efficiency enabled them to insist upon higher wages than those which had been paid to unskilled laborers before the crisis. "A slow expansion of industry" is synonymous with an inactive demand for labor, and it is an elementary maxim of Political Economy that an inactive demand for labor is unfavorable to increases in wages.

It was assumed in the preceding discussion that "a sufficient number" of immigrants had been excluded "to produce a marked effect upon the present supply of unskilled labor." We shall now examine whether the methods recommended by the Immigration Commission would have such an effect.

The majority of the Commission recommended "the reading and writing test as the most feasible single method of restricting undesirable immigration." The minority held that "restriction should be limited to unmarried male aliens or married aliens unaccompanied by their wives and families."2

The test favored by the minority was apparently intended to be selective, rather than restrictive. As most

“The few unskilled places that were open were filled by Americans who were normally skilled workmen, but who at the time of the depression were compelled to take any kind of work they could get."-Reports of the Immigration Commission, vol. 8, pp. 39, 40.

...

"Skilled American employees . . . were glad to turn to unskilled occupations at twelve to fifteen cents an hour."-Ibid., p. 597.

2 Ibid., vol. 1, p. 40.