supply side, of the market equation. The disposition of a seller to insist upon a certain price expresses merely the fact that at less than this price he would prefer the thing in hand to anything else that the money would buy. Other exchange relations, an established system of prices for other commodities, are really involved in the fixation of the price at which any one commodity will be offered for sale by any individual.

Cost of production likewise, as lying behind the reservation prices of any seller, points commonly and mainly to the price productiveness open to the entrepreneur in other lines of production. The farmer, for example, must have a certain price per bushel for his wheat, else he will produce corn or hay or wool. The cost of producing one value fact must commonly afford an indemnity for not producing an alternative value fact. The supply of any commodity is, therefore, inseparably connected with the prices of all other producible goods, precisely as the paying disposition for any particular line of goods is inseparably connected with the paying dispositions for all alternative goods.

What then can be done? If both the demand concept and the supply concept are valid to explain a particular market price only upon the assumption of an otherwise complete and adjusted price situation; if the usual interpretations of costs are incomplete, superficial, and circular; and if any amended doctrine of costs can be better only in being made exhaustive and actual, but must be equally open to the charges of superficiality and circuitywhere shall be found an explanation causally ultimate and logically adequate?

It is still necessary to explain things in terms of the actual process in which they take place. Our explanations must be formulated consistently with the existing entrepreneur on-going of things and at the same time must be formulated in terms of the causes which determine and direct this actual on-going. We are not to rest satisfied with the fact that, for example, the rent is high or low or the wage outlay this or that; we must go farther than the entrepreneur goes in explaining what the entrepreneur does. We must, that is to say, appeal to the human wants which in terms of price-demand are making call upon the productive powers, human or environmental, which the entrepreneur employs for hire. On the costs side of the case, not the rents paid for land, but the lands available for the supply of product, are the explana

tion of this supply and of its price. So with wage costs. It is the labor supply and not the wages which are fundamental in the situation. In collectivistic production the problem would present essentially the same determinate influences, but the process would be another. In the present price system, the process is the entrepreneur process. It is the entrepreneurs whose gain-making activities furnish the guidance and the direction under which the underlying conditions and causes reach expression. It is the entrepreneurs who distribute the productive agents and instruments into their different channels in response to the pressure of human needs as expressed in competing price demands.

It is through the bidding of competing entrepreneurs that prices are attached to the materials that enter into the productive process and that the various hires accrue to the various productive factors. But the fundamental facts that face the entrepreneurs, the conditions within which they work, the energies that they supervise, the forces that they adjust into a market equilibrium, are these fundamental situation facts,-on the demand side, human needs; on the supply side, productive equipment and productive ability. In the cost computations of the entrepreneurs we are studying the case in the form of the actual process in which the thing takes place. There is nothing possible here in the way of further explanation than fully and accurately to describe the process.

But the process is something larger in its reach than the activity of any individual entrepreneur: It is each entrepreneur in face of all the others, and all together in face of the general situation of needs and equipment and human productive power. Out of this total situation, of which the entrepreneurs make a part and over which at the same time they are the supervisors and directors, there emerges the resultant price adjustment. To the individual entrepreneur not merely these underlying and determinate facts, but the market adjustment flowing from these facts stand as definitive data which he is powerless to change and to which he must make such gainful adjustment for himself as he may. But none the less it is to these entrepreneurs as an aggregate that this market adjustment is due, the underlying situation being taken as assumed. Collectively they are the cause of an adjustment which appears as directive and controlling for each individual entrepreneur in the process. But each of these individuals in turn helps to bring about this aggregate adjustment. Thus the activity of

each appears to be a derivative of that which each in his own small share has contributed to establish. If again this seems to confuse cause with effect, think again of the boy and the raft. The entrepreneur is mainly director and supervisor. But in part he creates the situation which he directs and supervises. H. J. DAVENPORT.

University of Missouri.

IMMIGRATION AND CRISES.

Amid all the diverse views on the various aspects of the immigration problem, there is coming to be a practical unanimity of opinion on one fundamental proposition-namely, that immigration today is essentially an economic phenomenon. However strongly the desire for political or religious liberty, or the escape from tyranny, may have operated in the past to stimulate emigration from foreign countries, the one great motive of the present immigrant is the desire to better his economic situation. Even in cases where political and religious oppression still persists, it usually expresses itself through economic disabilities. The great attraction of the United States for the modern immigrant lies in the economic advantages which it has to offer. The latest authoritative recognition of this fact is that given by the Immigration Commission, which emphasizes it in numerous places in its report. If, then, immigration is so closely bound up with the industrial situation in this country, it would seem that there should be some relation between immigration and the industrial depressions or crises which are such a characteristic feature of our economic life. It is the purpose of this paper to seek to determine what this relation is. One aspect of the matter is perfectly obvious and has been thoroughly recognized for a long time, namely, that the volume of the immigration current is regulated by the industrial prosperity of this country. A period of good times brings with it a large volume of immigration, while hard times reduce the current to a minimum. This has been worked out statistically by Prof. John R. Commons, and is presented in graphic form in a chart in his book, Races and Immigrants in America.1 Imports per capita are taken as the best indication of prosperity in this country, and the curve which represents this factor is shown to be almost exactly similar to the one representing the number of immigrants per 10,000 population.

Another fact which is equally obvious, and which has been given much prominence in recent years, is that a period of depression in this country is followed by a large exodus of aliens. The popular interpretation of this fact is that this emigration movement serves to mitigate the evils of the crisis by removing a large part of the surplus laborers, until returning prosperity creates a de1Opposite p. 64.

999

mand for them again. The Italian, who displays the greatest mobility in this regard, has been called the safety valve of our labor market. Thus the movements of our alien population are supposed to be an alleviating force as regards crises. How well this interpretation fits the facts will appear later. Prof. Commons takes a different view of the matter, and in another chapter of the book quoted demonstrates how immigration, instead of helping matters, is really one of the causes of crises. His conclusion is that "inmigration intensifies this fatal cycle of 'booms' and 'depressions,' and "instead of increasing the production of wealth by a steady, healthful growth, joins with other causes to stimulate the feverish over-production, with its inevitable collapse, that has characterized the industry of America more than that of any other country." The few pages which Prof. Commons devotes to this topic are highly suggestive, and so far as the present writer is aware, contain the best discussion of the subject which has yet been offered. Prof. Commons, however, at the time this book was written, was handicapped by the lack of certain data which have since become available. Up till 1907 no official records were kept of departing aliens, and no exact information as to their number was available. But beginning with July of that year, the reports of the Commissioner-General of Immigration have furnished these figures, and the recent reports contain tables almost as complete for departing as for arriving aliens. Furthermore, within this period the United States has experienced, and recovered from, a severe depression, so that the material is at hand for a concrete study of the matter in question.

First of all, it will be desirable to see just what the facts of immigration and emigration during this period are; then we shall be prepared to attempt their interpretation. The accompanying table (p. 755) gives the number of aliens admitted to and departed from the United States, and the net increase or decrease of population resulting therefrom, by months, from January 1907 to December 1910 (with the exception of the figures of departures for the first six months of 1907, which are not available).

The figures for arrivals given in this table include both immigrant and nonimmigrant aliens, a distinction which has been observed with some care since 1906. The column of departures also includes emigrant and nonemigrant aliens. Immigrant aliens are

'Pp. 155-159.