iff's recently imposed in some European countries, Germany and France especially, the cost of food should remain normal or ascend. Laborers are feeling the effects of higher wages by eating more, clothing themselves better, and lodging in more wholesome houses. This, in return, reacts in making their labor more efficient and enables them to gain still more."

A prominent manufacturer of “Mülhausen remarked that he would be glad to have his laborers earn twice as much as they did and consume more, as he would certainly be the gainer thereby and be placed in a better position to compete with English labor. This higher standard of living, he thought, makes it next to impossible to reduce the wages of labor to any great extent in periods of depression.

The theory of European manufacturers is that piece wages have contributed much to the efficiency of labor. In times of depression, when it has been necessary to lower the tariff of wages, it is a well-known fact that the aggregate earnings of laborers have been as great and sometimes even greater under this system than before the depression.

The best European authorities agree that the circle of producing nations has been so enlarged as to make the means of production far in excess of the needs of consumption. The influence of this condition was perhaps first felt in the progress of the crisis of 1873-78. No leading industry has experienced a prominent stimulation since that time except the iron industry, which was due almost entirely to the demand for railroad iron in the United States during the years 1879-82. Twelve years ago a blast furnace producing 50 tons of pig-iron in twentyfour hours was regarded as a good furnace. Now a blast furnace produces as much as 200 tons in the same time. This exemplifies the tendency to increase the means of production far beyond the needs of consumption, and this increase in the great family of producing nations has been far in excess of the increase of population. Excessive production, in the opinion of M. Jules Duckerts, of Belgium, is the reason which every European manufacturer will give first of all as the cause of the prevailing low prices, and he will add that this over-production has been a growth nourished by permanent and not transitory phases of the industrial development of the last half century.

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Very many economists and manufacturers consider that the influence of the imposition of protective and prohibitory tariffs in Europe during the last few years cannot be overlooked in a view of the present industrial situation, for formerly England, Belgium, and France were the great producing nations for the rest of Europe, and then the United States commenced to manufacture for herself, and finally to a large extent shut out European products by the imposition of the war tariff. Next Germany entered the list as an industrial competitor on foreign ground, and since 1870 especially has sought a wider market than her own territory. She did not, however, sufficiently control the home market to suit herself, and so the German Government

enacted a stringent tariff law in 1879. Either in retaliation for this measure, or to share in the world's ambition to become industrially great, probably from both influences, Russia, Italy, Austria, Turkey, and even Switzerland have since hedged themselves in behind strong customs barriers. Among nations so intimately related geographically and commercially, these measures, in the opinion of very many men able to judge, have had a double effect: First, they have injured the export trade of the great producing nations, and, second, they have induced excessive domestic competition within each nation's boundaries. Both these influences have contributed to further augment the means of production, inducing over-production, or, as it is often called in Europe, faulty production, and lower prices. The manufacturers of Germany in 1878 demanded the tariff as a panacea for the then existing depression. It was given them, but prices were not raised, except the price of iron temporarily, due to the great demand in the United States for railroad iron from 1879 to 1882, in which latter year prices returned to the level of 1878, and they are now at the bottom. All over Germany one hears the complaint that although there is a fair amount to be done in industrial enterprise, it is not worth while to do it. The retaliatory measures of Russia, Austria, and Italy have hurt German export trade exceedingly, but their full effects have not yet been felt. The Russian and Prussian Governments are now engaged in the conciliatory work of expelling one another's subjects from their respective territories, the one mainly because the Russian Pole outbids his German competitor in the demand for labor, and the other because when the tariff went into operation many Prussians invested capital in mines and iron works just across the Prussian border from Upper Silesia. The South German states are also proposing to pour oil on the troubled waters by raising an agitation for the expulsion of Italian cheap labor from their territory.

The German Government considers that by the tariff of 1879 she gained a home market, with the chief exceptions of the lower grades of iron, machinery, and the finer qualities of cotton yarn and woollen cloth. She has also gained over $33,000,000 as annual customs dues, and the use of a great deal of English capital invested in some of the best-paying branches of manufacture from which England is excluded by the tariff. The prices of commodities, from having been permanently raised, are as low as they can be, and the wages of labor have been in no general respect increased. Domestic competition more than supplies the demand of the home market, and Germany, instead of competing with England and Belgium on her own soil, must try strength with them in colonial fields, and she is now trying in several ways to find outlets for her surplus goods, to take the place of the neighboring markets from which she has been largely excluded. Her colonial policy has for its object the establishment of German colonies in Africa and in the Pacific islands which shall be politically and industrially dependent upon the

Fatherland, and also the establishment by subsidy of regular steamship lines to China, Australia, and the East. A beginning in this direction was made in October last by the endowment of 4,500,000 marks (nearly $1,080,000) annually upon the North German Lloyd Steamship Company for a regular bi-monthly service to Australia and China. Germany has been slow to see the advantage of England's splendid equipment for oceanic transportation, but necessity has at last given her instruction. Her policy also includes the improvement of the character of the articles offered by her for export, and the establishment of a huge commercial agency-the Export Bank-with branches throughout the world, the object of which is to furnish trustworthy information to merchants on the state of foreign markets, the solvency of consignees, etc. She also contemplates changes in the laws governing joint-stock companies, with the view of making them more substantial and with greater responsibility toward debtors.

Belgium, whose prosperity in linen, coal, iron, and glass depends so largely upon the export trade, is very injuriously affected by these changes of economic policy by her neighbors.

The conditions relating to Germany have been thus dwelt upon at considerable length in this chapter for the lessons they teach, and because many of the features attending German industrial development are common to so many other nations, and because they illustrate the endeavors of other nations to not only supply their own market with manufactured goods as against the world through various policies, but in addition to gain a profitable export trade. If all the producing nations of the world succeed in supplying themselves with manufactured products, as they are so largely doing and in so many cases have succeeded in doing, and then all seek the relief which comes from selling their surplus products at low rates to their neighbors, the world has indeed reached an industrial epoch, and governmental policies and the rules of political economy must be changed to meet the new conditions resulting from the arrival at a novel industrial period.

CHAPTER IV.

SUGGESTED REMEDIES FOR DEPRESSIONS.

Very many remedies have been suggested for depressions in the past. In a general way, the remedies are very largely theoretical and not capable of statistical illustration as to their value. The testimony given before the three Congressional committees which have investigated industrial depressions, their causes and remedies, developed a very large number of suggested remedies, of course relating to depressions back of the present one. These rem edies are stated, alphabetically, as follows:

REMEDIES FOR DEPRESSIONS AS ELICITED BY COMMITTEES OF CONGRESS.

Abrogation of all treaties that interfere

with the practical enforcement of the Monroe doctrine, so as to secure the removal of obstacles that prevent our control of the trade of the South and Central American countries.

Civil service

revision of the.

Coal

public ownership of. Colonization.

Competition