Page images

- - o, From a photograph copyright by Ewing Galloway, New York


All parts are standardized, so that replacement of worn parts is easy


capital which may be employed on an acre of land in manufacturing is very great as compared with that which can be employed in agriculture and the point of diminishing returns is, therefore, reached more slowly in manufacturing. But the point of diminishing returns comes in manufacturing. It does not pay to build factories beyond a certain height nor to crowd them with machinery beyond a certain degree. When the maximum employment of capital and labor consistent with economy of production has been reached on a given area of land, it becomes desirable and necessary to buy new land and put up new buildings, rather than enlarge old buildings or crowd them more. In mining the expense increases rapidly with the increased depth of the mine. The higher an elevator is run, the more rapidly the expense of instalment and operation increases. The last knot that is obtained from a fast steamboat costs more than any other knot. The law of diminishing returns has a universal application, but the point of diminishing returns is reached sooner in some industries than in others. Summary.—The industrial revolution gave rise to the factory system. The policy of laissez-faire, or non-interference, was at first followed in England, but was abandoned in the first half of the nineteenth century. The factory system was introduced into America before the close of the eighteenth century, but was not fully established until about 1840. The substitution of factory-made goods for goods of home production has not ceased. There are several reasons why to-day there are large factories. Among these are: (1) Greater economy in the use of capital, (2) a greater division of labor, (3) economy in the making of by-products, (4) the large factory may control the source of its raw material and other supplies. However, the advantages are not all in favor of the large producers. A small factory may have the following advantages: (1) Personal interest of the proprietor, (2) in many industries as great an efficiency of plant as the large producer, (3) electric power tends to aid the small producer, (4) waste material may be sold to those who specialize in its use. Machinery has been a benefit to laborers and to the whole population. The law of diminishing returns applies to manufacturing, but a much larger investment on a given area of land may be made than in agriculture.


I. Show the immediate effects of the industrial revolution in England. References: Beard, The Industrial Revolution; Toynbee, The Industrial Revolution; Ely, Outlines of Economics, pp. 51–56; Shapiro, Modern and Contemporary Europe, pp. 49-52.

2. Give an account of the rise of the factory system in America. References: Coman, Industrial History of the United States, pp. 180–193; Bogart, Economic History of the United States, chap. XI; Taussig, Tariff History of the United States, pp. 17–67.

3. What factory-made articles used in your own home were homemade a few years ago? What electric appliances are now used in homes?

4. What small factories are there in your community? How long

- have they been in existence? What advantages do they possess?

5. Visit some factory and make a report on use of machinery in the factory.



In the United States we have seen three stages in the development of transportation: (1) The turnpike; (2) canal and river; (3) railroad.

The Turnpike Period.—In colonial times roads were few and local. The first long-distance roads were constructed during the last decade of the eighteenth century. These long-distance roads were built by private companies, usually aided by public funds, and tolls were charged for their use. They were called turnpikes, from the bar that closed the road and was turned to let a wagon pass after the toll had been paid. The cost of transportation by turnpike was very high. It cost about 33 per cent of the value to send goods from Philadelphia to Kentucky. The average expense for transportation of goods by turnpike was ten dollars a ton for every 1oo miles. In his famous report of 1807, Gallatin recommended that the Federal Government build roads and canals. Considerable money was thus expended by the government, notwithstanding objections raised to this use of Federal funds on account of its alleged unconstitutionality. State governments also aided in road construction and the principal cities of the United States were connected by roads as early as 1840.

The Revival of Long-Distance Roads.-After railroads were built, wagon-roads were used only for short-distance

hauls and state and national aid ceased. To-day there is

From a photograph by Ewing Galloway

The Columbia River Highway here runs under a sheer cliff. A fine example of a modern long-distance road

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