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those whose last permanent residence has been in some foreign country and who have come to the United States with the expressed intention of residing here permanently. Nonemigrant aliens are of two classes, those whose last permanent residence was in the United States, but who have been abroad for a short time, and those whose last permanent residence was abroad, but who come to the United States without the intention of remaining permanently, including aliens in transit. Emigrant aliens are those whose last permanent residence has been in the United States and who are going abroad with the intention of residing there permanently. Nonemigrant aliens are of two classes, those whose last permanent residence has been in the United States and who are going abroad for a brief visit, and those whose last permanent residence has been other than the United States but who have been here for a short time, including aliens in transit. In all cases, the expressed intention of the alien is accepted in regard to residence, and an intended residence of twelve months constitutes a permanent residence either in the past or future. Thus there are six distinct classes of aliens, coming and going, and the way is open for some very complicated comparisons. For our present purposes, however, it is not necessary to make these comparisons. As far as aliens in transit are concerned, they are counted as arrivals at the port of entry, and as departures at the port of exit, so that they cancel, and do not affect the net increase or decrease of population. They do not affect the labor market, as they are supposed to pass by a direct and continuous journey through the territory of the United States within thirty days, otherwise the head tax is not refunded. The other classes of nonimmigrant and nonemigrant aliens should rightfully be included in the table for the present study, as they affect the labor market. Particularly those incoming aliens who are "nonimmigrant" because their last permanent residence was in the United States, and those "nonemigrant" aliens who are such because they are leaving the country only for a short time include, to a great extent, just those individuals in whom we are most interested. The tables of arrivals and departures by months do not differentiate the two classes of nonimmigrant, and the two classes of nonemigrant, aliens, so that it is impossible to make monthly comparisons of these factors. Fortunately, as stated above, it is not necessary for our present purpose; the totals of arrivals and departures of all classes of aliens are a sufficient general indication of the movements which

we wish to study. A more detailed examination of the make-up of the stream of arrivals and departures, by years, will be given later. Turning then to the table, we observe that the monthly average of arrivals during the first six months of 1907 was a high one. Following a large immigration during the last six months of the preceding year, this made the fiscal year ending June 30, 1907, the record year for immigration in the history of the country. For the next four months the stream of immigration continued high, considering the season, and the number of departures was moderate. Early in October, however, there were signs of disturbance in the New York Stock Exchange. On the sixteenth there was a crash in the market, and within a week the panic had become general. It reached its height on October 24, and continued for many weeks after. The response of the alien population to this disturbance was almost immediate, and manifested itself first in the emigration movement. In November the number of departures almost doubled. But the immigrants who were on the way could not be stopped, and in spite of the large exodus, there was a net gain of 38,207 during the month. The next month, December, however, saw a marked decrease in the stream of arrivals, which, accompanied by a departure of aliens almost as great as in November, resulted in a net decrease in population of 11,325 for the month. During the first six months of 1908 the number of arrivals was small, and the departures numerous, so that, with the exception of March, each month shows a net loss in population. During July the number of departures began to approach the normal (compare the months in 1908 with 1907 and 1910), but the arrivals were so few that there was still a decrease for the months of July and August. In September, 1908, the balance swung the other way, and from that time to the present every month has shown a substantial increase in population through the movement of aliens.

Thus we see that the period during which the number of alien laborers in the United States was decreasing was confined to the months December 1907 to August 1908 inclusive. By the end of July, 1908, the effects of the crisis were practically over as far 'White, Money and Banking, (third edition), ch. xviii.

The fact that in March, 1908, there was a gain of 31 is not a coincidence. The month of March is always a busy one in immigration, as it opens the spring season, and this influence was sufficient to check the prevailing movement temporarily.

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as departures are concerned. It is evident, then, that the effects of the crisis on emigration were immediate, but not of very long duration. During the months of November and December, 1907, when the distress was the keenest, there were still large numbers of aliens arriving. But when the stream of immigration was once checked, it remained low for some time, and it was not until about January, 1909, that it returned to what may be considered a normal figure. The reasons for this are obvious. The stream of immigration is a long one, and its sources are remote. It takes a long time for retarding influences in America to be thoroughly felt on the other side. The principal agency in checking immigration at its source is the returning immigrant himself, who brings personal information of the unfortunate conditions in the United States. This takes some time. But when the potential immigrants are once discouraged as to the outlook across the ocean, they require some positive assurance of better times before they will start out again.

Now what catches the public eye in such an epoch as this, is the large number of departures. We are accustomed to immense numbers of arrivals and we think little about that side of it. But heavy emigration is a phenomenon, and accordingly we hear much about how acceptably our alien population serves to accommodate the supply of labor to the demand. But if we stop to add up the monthly figures, we find that for the entire period after the crisis of 1907, when emigration exceeded immigration, the total decrease in alien population was only 124,124-scarcely equal to the immigration of a single month during a fairly busy season. This figure is almost infinitesimal compared to the total mass of the American working people, or to the amount of unemployment at a normal time, to say nothing of a crisis.5 It is thus evident that the importance of our alien population as an alleviating force at the time of a crisis has been vastly exaggerated. The most that can be said for it is that it has a very trifling palliative effect.

The really important relation between immigration and crises is much less conspicuous but much more far-reaching. It rests upon the nature and underlying causes of crises in this country. These are fairly well understood at the present time. A typical

*Mr. F. H. Streightoff shows that at the time the census of 1900 was taken, 2,634,336, or 11.1 per cent of all males over ten years of age who were engaged in gainful occupations in the United States were unemployed three months or more during the year. See Standard of Living, p. 35.

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crisis may be said to be caused by speculative over-production, or over-speculative production. Some prefer to call the trouble under-consumption, which is much the same thing looked at from another point of view. Professor Irving Fisher has furnished a convenient and logical outline of the ordinary course of affairs." In a normal business period some slight disturbance, such as an increase in the quantity of gold, causes prices to rise. A rise in prices is accompanied by increased profits for business men, because the rate of interest on the borrowed capital which they use in their business fails to increase at a corresponding ratio. If prices are rising at the rate of two per cent annually, a nominal rate of interest of six per cent is equivalent to an actual rate of only about four per cent. Hence, doing business on borrowed capital becomes very profitable, and there is an increased demand for loans.


This results in an increase of the deposit currency, which is accompanied by a further rise in prices. The nominal rate of interest rises somewhat, but not sufficiently, and prices tend to outstrip it still further. Thus the process is repeated, until the large profits of business lead to a disproportionate production of goods for anticipated future demand, and a vast over-extension of credit. But this cycle cannot repeat itself indefinitely. Though the rate of interest rises tardily, it rises progressively, and eventually catches up with the rise in prices, owing to the necessity which banks feel of maintaining a reasonable ratio between loans and reOther causes operate with this to produce the same result. The consequence is that business men find themselves unable to renew their loans at the old rate, and hence some of them are unable to meet their obligations, and fail. The failure of a few firms dispels the atmosphere of public confidence which is essential to extended credit. Creditors begin to demand cash payment for their loans; there is a growing demand for currency; the rate of interest soars; and the old familiar symptoms of a panic appear. In this entire process the blame falls, according to Professor Fisher, primarily upon the failure of the rate of interest to rise promptly in proportion to the rise in prices. If the forces which give inertia to the rate of interest were removed, so that the rate of interest would fluctuate readily with prices, the great temptation to expand business unduly during a period of rising prices would be removed. It may well be conceived that there are other · Fisher, The Purchasing Power of Money, p. 58 seq.

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