Not only private enterprises such as railroads, but public bodies such as municipalities, being no longer able to borrow money, had not only to abandon work already voted, but to put a sudden stop to work already undertaken. Laborers were dismissed in batches of five thousand at a time, and every manufacturing and railroad plant was driven by the impossibility of borrowing money to cutting down expenses with a view to increasing the efficiency of the plant. Thus the Pennsylvania Railroad announced that it had so increased the efficiency of its plant that it was able to dismiss 30,000 men during the year; the New York Central during 1907 dismissed ten per cent of the staff upon its main line alone; seventy-six railroads, operating over 172,000 miles of railroad, report an economy of nearly $100,000,000, most of which constituted an economy in wages,[45] and Senator Guggenheim, in an interview published in the Wall Street Journal,[46] said:
"For the first time in many years the employer is getting from his men the 100 per cent in efficiency for which he pays. It is a safe assertion that prior to the panic the efficiency of labor was no higher than 75 per cent, perhaps not even that."
Special attention is directed to the foregoing because unemployment is ceasing to be a merely accidental and periodic phenomenon and is assuming not only larger, but more permanent proportions. In other words, the 30,000 men dismissed by the Pennsylvania Railroad were not dismissed because of a temporary cessation of traffic. They were dismissed because the Pennsylvania Railroad has succeeded in so raising the efficiency of their system that they can permanently run their lines with 30,000 less employees than they could before.
Let us endeavor to form some idea of the unemployment during the last two years. The only State that regularly publishes official reports on this subject is New York. The State of New York derives its information from such trade unions as report to it; and from these reports it seems that during 1908, the average unemployment has been about one-third.
As has been intimated, an average of one-third of organized labor reported by trade unions, means a very much larger proportion of unorganized labor. It is true that Mr. Beveridge disputes this in one passage,[47] but he himself furnishes the evidence of its truth in several others; as for example, where he says that "in practice, therefore, it is found that acute recurrent distress at times of seasonal depression is confined to the unskilled occupations";[48] and again, he points out how the lack of intelligence of unorganized and semi-skilled and unskilled workmen makes it impossible for them to take account of the fluctuations that produce unemployment. "The measure of their failure," he says, "is to be found in those periods of clamant distress which evoke Mansion House Relief Funds."[49]
In Chapter V, again, he points out the chronic distress of unskilled men and that unemployment is largely due to lack of organization. It stands to reason that whereas a factory owner thinks twice before dismissing a skilled workman he will not hesitate to dismiss an unskilled workman whom he can replace at any time.[50]
However much authorities may differ on this in Europe, there can be no question about it in America. It was impossible to read the daily papers in October, 1907, without being satisfied that the first men to suffer were the unorganized and unskilled. Hardly a day passed for weeks without papers announcing the discharge of workingmen in batches of thousands at a time. It was only later that factories shut down, and then for the most part, a day or so in the week. Unfortunately, because the unskilled workingman is unorganized, it is impossible to get any information regarding the extent of unemployment in their ranks; but it can be stated without fear of contradiction, that the percentage of unemployment is much larger in the ranks of the unorganized than in those of trade unions.
The one-third, therefore, as shown by the New York Labor reports, is below the mark, I will not undertake to say how much. In endeavoring to make an estimate as to the extent of unemployment throughout the entire Union, we must remember that the percentage of employment in New York is likely to be larger than in purely agricultural States. On the other hand, nowhere is the percentage of unemployment greater than in the States devoted to mining. The difficulty under which we find ourselves, therefore, in giving the exact figure of the extent of unemployment, makes it wise not to increase the one-third reported by trade unions in New York in consequence of the certainty that this proportion was far larger in unorganized labor; and on the other hand, not to decrease it out of the consideration that there were some States in which the percentage would not be as much as in the State of New York. Under these circumstances it may be assumed that the percentage reported by the trade unions to the Labor Department fairly represents the average unemployment throughout the whole United States of America. Taking the census figures of over 7,000,000 as that of the workingmen in the country, one-third of 7,000,000 is 2,333,333; add to this the number of persons dependent on these workingmen; four to each, 9,333,333; add this to the first figure and we get a population of 11,666,666 which for two years has been on the edge of starvation, and saved from it only through accumulated earnings, help from trade unions and charity. As the unskilled workingman can hardly ever save money owing to the low rate of his wages, and as he is not organized and never receives benefits from a union, it may be said that the large majority of these have been living for two years on the charity of their neighbors.
It is probable, too, that the trade union member has been reduced to depending upon charity; for the last report on savings banks shows that $25,000,000 have been withdrawn during the last year, and their presidents, when interviewed, recognized that this diminution was caused by the withdrawal of funds by the unemployed.
It was also due to the withdrawal of funds by the trade unions. In October, 1907, many trade unions had large sums accumulated which have been applied during the year to the support of the unemployed. The Union of Pressmen had $30,000 last October, all of which has gone to support the unemployed during the year, and this union has suffered comparatively little, only 20 per cent being now idle. This 20 per cent is supported by assessments on those who are at work.