COMPARATIVE WEALTH

Wealth the South possesses—large wealth, growing wealth, greater wealth than that section has ever before approached. So agreeable is this state of things that Southern writers are inclined not only to set forth their prosperity but to claim that theirs is the most prosperous part of the whole country and is soon to become the richest. As Edmonds puts it in his “Facts about the South”: “Against the poverty, the inexperience, the discredit and doubt at home and abroad of ourselves and our section of 1880, the South, thrilled with energy and hope, stands to-day recognized by the world as that section which of all others in this country or elsewhere has the greatest potentialities for the creation of wealth and the profitable employment of its people.” The Southern statements of the poverty of the South from 1865 to 1880 are more easily verified. The tracks of armies outside Virginia and parts of Tennessee were narrow; but at the end of the war the South had exhausted all its movable capital; the banks were broken; the state and Confederate bonds worthless; the railroads ruined; the cities disconsolate. And the labor system was, for a time, much disturbed, though never disrupted. As Henry Watterson, of Kentucky, puts it: “The South! The South! It is no problem at all. The whole story of the South may be summed up in a sentence: She was rich, she lost her riches; she was poor and in bondage; she was set free, and she had to go to work; she went to work, and she is richer than ever before. You see it was a ground-hog case. The soil was here, the climate was here, but along with them was a curse, the curse of slavery.”

The immense increase of wealth and productivity since 1880 is equally unquestionable. When it comes to the claim that it is the most prosperous part of the world, it cannot be accepted offhand. The fact that the South is well off does not prove that it is better off than its neighbors; the wealth and prosperity of the South are always limited by the character of its labor. Calculation of profits, adding of bank balances, cutting of coupons, have to some degree drawn men’s minds away from the race question; but on the other hand the demand for labor and the losses of dividends or of opportunities to make money because the labor is inefficient are ever renewed causes of exasperation. At all times the South is subject to reverses like those of other regions. The crisis of 1907 hit that section hard by cutting down the demand for timber, minerals, iron, and other staples, and was one of the factors in a decline in cotton which touched the pocket nerve of the South; and the railroads felt the loss of business. Still, most Southern enterprises weathered the storm, and in 1909 the tide of prosperity is mounting again.

If it be true that the South is the most prosperous part of the world, a disagreeable responsibility falls upon somebody for having less than the best schools, libraries, buildings, roads, and other appliances of civilization; if it be not true, there must be some defect in the social or industrial system which out of such splendid materials produces less than a fair proportion of the world’s wealth. To be sure a section or a state might lag behind in production and yet forge ahead in education, in the harmony of social classes, in respect for law, in good order. Switzerland is not a rich country, but it is an advanced country. The claims of superior productiveness can with difficulty be tested. The relative status of the two sections in intellectual and governmental ways has been examined in earlier chapters and the South cannot claim supremacy there. A similar comparison shall now be made as to the relative production and accumulation of the two sections.

A criterion of wealth much relied upon by Southern writers is the movement of commerce. We are told that two fifths of the inward and outward movement of foreign trade passes through Southern ports. The truth is that in 1907 that figure was $883,000,000 as against $2,432,000,000 in all Northern Atlantic, Lake and Pacific ports. The bulk of this Southern business, however, is in exports—$742,000,000—a third of the total. Not a tenth of all the imports came into Southern ports, and three fourths of that through the three ports of Baltimore, Galveston, and New Orleans, from all which a part goes into non-Southern states. The explanation is that through the Southern ports pour the staples, but that the return cargoes, especially of manufactures, go to Northern ports, even though part of it is later distributed to the South. A second correction is due to the fact that about $536,000,000 of the exports goes through the five ports of Baltimore, Newport News, Norfolk and Portsmouth, New Orleans, and Galveston, all of which are entrepots for immense trade originating beyond the limits of the South. For instance, New Orleans and Galveston together shipped 24 million bushels of the 147 millions of wheat exports—practically not a Southern crop. Even in such an unreckoned increment of income as the federal pension lists, the South is less forward than the North, which drew 113 millions a year against 25 millions in the whole South and 11 millions in the seceded states—most of that to colored soldiers.

The relative wealth of the two sections is best measured not by foreign trade but by internal production and by public income and expenditure, calculated on a per-capita basis. Of course conditions vary greatly from state to state; in Alabama there is steady farm work most of the year, while in North Dakota the winter is a time of comparative leisure; California uses agricultural machinery, South Carolina depends chiefly on hand tools; Wyoming is so young that it has had little time to accumulate capital, Tennessee has large accumulations. It would be unfair to compare Arkansas with Connecticut, or Illinois with Florida, on a strictly per-capita basis. The only way to equalize conditions for a fair comparison is to take groups of states and set them against other groups of equivalent population and of similar interests, so that local errors may neutralize each other.

As a basis for such a comparison of resources, three sets of tables have been made up. The first sets apart the group of eleven seceding states with 17,000,000 people (West Virginia not included) as being typically Southern; and places against them a group of agricultural states extending from Indiana to Oklahoma, also containing 17,000,000 people. The second tables include the whole South—viz., the fifteen former slaveholding states (excluding West Virginia), together with the District of Columbia, including a population of about 28,000,000 people; to which is opposed the Middle West and Pacific states from Indiana to the Coast, together with Vermont and New Hampshire, which are added to make up a full 28,000,000. To such comparisons the objection has been made that it averages the confessedly inferior rural negro population with the picked immigrants from the East and abroad in the Northwest. The objection is a concession of the lower average productive capacity of the South; but in order to compare the white elements of the two sections by themselves, a third set of tables compares the whole South containing 17,900,000 whites and 8,000,000 blacks against a group of Northern agricultural states with a population of 18,000,000 whites and 234,000 blacks.

The materials for such comparisons are various. Every traveler has his impressions of the relative prosperity of South and North based on what he sees of stations, public and private buildings, cities and stocks of goods, and on the appearance of farms and work-people throughout the country. For precise indications, the population of the states is estimated year by year in the Bulletins of the Census Bureau; estimates of accumulated wealth are made every few years by the Department of Commerce; returns of annual crops by the Department of Agriculture; banking statistics by the Treasury Department. The annual Statistical Abstract prints summaries of manufactures and other industry, and on these topics the Census Bureau issues valuable bulletins. For tax valuations there is no general official publication, but the World Almanac collects every year from state auditors a statement of assessments. Most of these sources must be accepted as simply a series of liberal estimates, but the factors of error are likely to be much the same in the Northern and the Southern communities, and at least they furnish the basis for a comparison in round numbers. The tax assessments are significant, because they are revised from year to year, and the methods of assessment are not very different in the various parts of the country and are likely to err by giving too low a value or omitting property, so that comparisons from tax returns are relatively more favorable to the poorer than to the richer communities.

I. The Eleven Seceding States.

Tabulation based upon the principles stated above will be found in the Appendix to this volume; and a study of those tables reveals some interesting comparisons between the eleven communities which formed the Southern Confederacy and nineteen Western communities, the two groups each having in 1900 about nineteen million inhabitants. The assessed taxable valuation of the Southern group in 1904 was 4,200 millions; in the Northern group it was 9,700 millions, or more than double. Four years later the valuations were 5,200 millions as against 13,800 millions. Since tax assessments are subject to many variations, perhaps a fairer measure of sectional wealth is banking transactions. The bank deposits of the National groups of the Southern group were, in 1906, 700 millions, in the Northern group, 2,400 millions. Bank clearings in the same year were respectively 4 billions and 8½ billions.

All the eleven seceding states together in 1906 valued their real estate at 2,900 millions, their personal at 1,800 millions, total 4,700 millions. A corresponding Northern group (in which the richest state is Indiana), counts its real estate worth 7,700 millions, its personalty, 2,700 millions, a total of 10,400 millions. That is, the Northern land and buildings are counted nearly thrice as valuable, and personalty about a half more valuable, though everybody knows that there is a vast deal of untaxed personalty in the North.

The miles of railroad in the Southern group were 55,000; in the Western, 94,000; the total value of agricultural products in the South was estimated at 1,060 millions, in the North at 1,945 millions. Even the cotton crop of the eleven states, worth 550 millions, was overbalanced by the Northern corn crop which brought 595 millions. The manufactures in the South for 1905 were 1,267 millions; in the Northwest 2,932 millions. The Southern group expended for schools 26 millions, the corresponding Northern states expended 91 millions. The value of Southern school property was 43 millions, of the Northern group it was 216 millions; the average annual expenditure per pupil in daily attendance in the South was $9.75; in the North about $28.45. For public benevolent institutions the South expended in 1903 net $3,000,000, the North $7,000,000; the Southern group had 1,070,000 illiterate Whites, of whom 76,000 were foreign born; the Northern group had 207,000 besides 389,000 illiterate foreigners. In the indices of accumulated property the comparison is about the same; the Southern deposits in all banks were, in 1906, 701 million dollars, the Northern 2,439 millions. In manufactures the Northern group, with a capital of 2,240 million dollars and 903,000 hands, produced 2,932 millions; against Southern capital of 1,140 millions, employing 659,000 persons and producing 1,267 millions.

The comparison of valuations brings out one unexpected result, namely, that several of the Southern states have actually less taxable property now than they had fifty years ago. This does not mean that they are poorer because they have lost their slaves. Leaving slaves out of account, in 1860 South Carolina had a valuation of $326,000,000; in 1906 of $250,000,000; in Mississippi the valuation of real estate in 1860 was $158,000,000; in 1906, with a population more than twice as great, it was $131,000,000; in the rich state of Georgia the valuation in 1860, deducting slaves, was $432,000,000 against $578,000,000 in 1906. The Southern people feel justly proud of the fact that the valuations of the eleven former members of the Confederacy between 1902 and 1906 increased by 962 millions, from a total of 3,799 millions to 4,761 millions, that their annual manufactures increased by 450 millions; from 819 millions in 1900 to 1,267 millions in 1905.

This increase in industry is so striking that the Southern states suppose they are unique in that respect; but the corresponding Northern group of equal population in the same periods gained 4,000 millions in valuations and 705 millions in annual manufactures. These figures may be checked off in various ways. Take, for instance, the annual value of crops; the South is very certain that with its cotton, its corn and other crops together it is far in advance of the North. In the Southern states which were in secession (excepting Texas) the value of farms and stock in 1900 was 2,100 millions, the value in an equivalent Northwestern group was 7,800 millions. The total farm product in the Lower South was 1,360 millions, in the Northern group of equal population 2,390 millions. If Texas be compared with a group of Pacific states, of equivalent population, the Texan farms are worth 960 millions, the Far Western 1,400 millions.

The Lower South has been saving money of late years and is proud of its growing bank deposits, from 168 millions in 1896 to 701 millions in 1906, an increase of 450 per cent; but the equivalent Northern population has increased from 716 millions to 2,439 millions. The Lower South in 1905 had 917 national banks with deposits of 308 millions and assets of 568 millions; the similar Northern states had deposits of 834 millions and assets of 1,418 millions. Let us see whether the South makes up this disparity by its state banks. In 1906 the Lower South, including Texas, had deposits of 700 millions in all banks; and total bank clearings of about 3,920 millions; the equivalent Northern group had deposits of over 2,400 millions, with total clearings of about 8,500 millions. Measured, therefore, by accumulated savings, by bank capital, by clearings, the South is poorer than the least wealthy section of the North. If we were to take the rich Eastern and Northwestern states, with their immense population, enormous manufactures (New York City contains over twenty thousand factories), and vast transportation lines, the fact that the South is far behind the North in things both material and intellectual would stand out even more clearly.

II. The Whole South

It might fairly be said that it is unreasonable to compare the former seceding states which have gone through the disruption of their labor by Civil War with new Western communities in which there has been no destruction of capital. Accordingly the second set of tables compares the whole South—fifteen states and the District of Columbia—with a Northwestern and Pacific Coast group of equivalent population. Since a part of the contention of Southern writers is that the South was richer than the North before the Civil War and is only returning to her rightful place of supremacy, it is worth while to examine the supposed wealth of the South in 1860. The assessed valuation of the Lower South was then 4,330 millions, which a Southern statistician attempts to show was 750 millions more than the combined wealth of New England and the Middle states; out of this sum, 3,100 millions was for personal property, including about 1,200 millions for slaves; but either the slaves should be left out or a capitalized value of Northern laborers should be added on a slavemarket basis.

Passing by the figures of 1870, which are discredited by all statisticians, in 1880 the total property valued for taxes in the Lower South was 1,880 millions, in the whole South was 3,420 millions; while in similar blocks of Northwestern population they were respectively 2,712 millions and 4,640 millions. This is a splendid record for a people who had given their all in a civil war and who had to build up nearly every dollar of their personal property from the bottom. The land, of course, was always there, but was worth much less per acre in 1880 than similar good land in 1860.

How far has this rate of progress been continued since 1880 as shown by the inexorable method of comparing groups of Southern states with groups of Northwestern states of equal population? The tax valuation shows about the same proportion, so far as can be ascertained, to real values in one section as in the other. The local differences of mode of assessment when averaged would probably not disturb the result by more then ten per cent. The whole South (16 communities) as compared with a Northern group of the same number of people in 1907 showed 8.5 billions of assessed property against 13.7 billions in the North. It may therefore be set down as proven that the taxable wealth of the lower agricultural South is less than half that of similar agricultural communities in the North; so that while mining and manufacturing states like Maryland, Kentucky, and Missouri have about the same wealth as similar Northern communities, the South as a whole has not one half the wealth. Take the former slaveholding states all together, including such a rich commonwealth as Missouri, and the farm value in the whole region in 1900, with 28 millions of people, was under 5,000 millions; while 28 million people in the West and Northwest owned farms to the amount of about 11,000 millions, or more than double. The total Southern crops in 1899, the last year in which the totals are obtainable, were worth 1,360 millions, the Northern crops counted up to 2,390 millions. The value of the Southern corn crop in 1905 was 416 million dollars; the equivalent population in the Northwest raised 601 million dollars’ worth of corn. The whole South raises about 32 million dollars’ worth of oats; the North raises 201 millions. The Southern potato crop is worth 19 millions; the Northern, 76 millions. Southern hay counts up to 66 millions and Northern to 258 millions. Even in tobacco, the North furnishes 7 million dollars’ worth against 35 million dollars in the South. Cotton is the one crop that is exclusively Southern, and the crop of 1905, the year that we are considering, including the seed, was worth 632 million dollars. The Southern group had 127,000 teachers, school property of 84 millions, and total school revenue of 45 millions, against competing Northern figures of 199,000, of 293 millions, and of 120 millions. It is difficult in these figures to find justification for the notion that the South as an agricultural region is richer than the North, or is likely ever to rival it.

The actual figures for the present conditions of the South are sufficiently attractive. During the four years 1904-1907 the big crops and high price of cotton gave to the South such prosperity as it had never known before, the total output being nearly fifty million bales, which sold, in cash, for about 2,700 million dollars. This happy result was reflected in every city and every county of the rural South, for old debts were paid, new houses built, land doubled or even trebled in value, and a spirit of hopefulness pervaded the whole population. A buoyancy is reflected in the press, and particularly in the Manufacturers’ Record of Baltimore, the leading Southern trade paper. “The South,” says the Record, “is now throughout the world recognized as the predestined center of the earth, based on greater natural advantages that can be found anywhere else on the globe.” Or as another Southern paper put it some years ago: “In 1860 the Richest Part of the Country—In 1870 the Poorest—In 1880 Signs of Improvement—In 1889 regaining the position of 1860.”

Nobody can be more pleased with Southern prosperity than New Englanders, who have long since found out that the richer other sections of the country become, the more business Northerners have with those sections; if there are directions in which the South is making more rapid progress than the North, it should be candidly acknowledged. Nobody can visit thriving cities like Richmond, Atlanta, Birmingham, Memphis, New Orleans, and the galaxy of future centers of population in Texas, without hearty pleasure in the increasing evidences of civilization, but it is very unevenly distributed. Off the main lines of transportation the towns are still ill-built and unprogressive, and the greater part of the area of the South is no farther along than states like Illinois and Minnesota were in the late sixties.

It is, however, a ticklish thing to make these comparisons, because many Southerners, and particularly Southern newspapers, consider it an attack upon the South to intimate that it is still much improvable. As the Macon Telegraph said a few months ago: “After all what does it matter that a Harvard professor should consider us lazy and not even excuse us on the ground that we are victims of the hookworm? We still have the right to go on expanding the figures relating to our remarkable industrial upbuilding, until we have driven New England out of the business of cotton manufacturing.”

The best measure of comparative wealth would be a statistical statement of accumulations. On this subject there are many wild guesses. The Manufacturers’ Record in January, 1907, makes claims for the South which deserve especial examination: “England’s wealth, according to the London Express, is increasing at the rate of $7,000,000 a week. That is less than one seventh of the rate of the increase of wealth in the South. The increase in the true value of Southern wealth in the past twelve months was $2,690,000,000, or about $7,300,000 for every day in the year, including Sundays and holidays. Not only is the speed of increase in the South so much greater than that in England, but the South possesses resources, agricultural and mineral, that make certain in the future even a much greater rate of increase than England.”

Except poor old poverty-stricken New England, all the world will welcome this prodigious accretion of wealth. Think how many opera tickets you might buy for two and a half billions of dollars! The only attempt at exact figures of our national wealth is the estimate of the Statistical Abstract, published about every four years, and not based on any exact figures. Such as it is, it is relied upon by the Southern writers; and it sets forth that in the four years from 1900 to 1904 the total national wealth increased by less than 20 billions, an average of 5 billions a year; it is hardly likely that a third of the population, which in other respects is below the Northwest, was contributing more than half this annual gain. The only ground for the assertion seems to be an alleged increase in the Southern tax valuation from 7 billions in 1906 to 8 billions in 1907; assuming that the average proportion of valuation to actual value is forty per cent, you have your two billions and a half.

The first comment on this statement, which is selected as typical of the broad claims which float through the Southern press, is that the figures furnished the World Almanac for 1908 by the state authorities show that the Southern valuations in 1906 were 7,813 millions, and in 1907, 8,474 millions; so that the increase of assessments is 650 millions instead of 1,000 millions. In the second place, the estimated true value by the Statistical Abstract in 1904 was about 20 billions for the whole South; and on a basis of comparison of the valuations of 1904 and 1907, the increase in the whole three years would be at best only two and a half billions. In the next place, two and a half billions a year means that every man, woman, and child, black and white, is on the average laying up a hundred dollars, which is an amazing rate of saving.

Having thus proven that the material progress of the South is exaggerated, the next logical step is to show that perhaps it has foundation, inasmuch as the equivalent 28,000,000 people in the Northwest in 1905 are gaining wealth still more rapidly, having increased their estimated “true value” from 44 billions in 1904 to at least 50 billions in 1907. The South, which supposes itself to be getting rich faster than any other part of the globe, has in the last few years actually added less to its wealth than a similar Northwest agricultural region. In the year 1906-7, while the South added 650 millions to its tax duplicate, the North added 850 millions. If, as may be the case, the 650 millions of valuation meant 1,700 millions of new wealth, the Northwest was adding at least 2,300 millions.

In all this array of figures there is no criticism of the South, no denial that it is more prosperous than it has ever been before; no desire to minimize its splendid achievements which are helping on the solution of the race problem; but it is essential that the Southern people should measure themselves squarely with their neighbors. The single state of New York, with less than a fifth the population of the South, has as much property as the whole South (leaving out Missouri), and adds every year to its wealth as much as is added by the whole South (leaving out Texas). The South is really at about the same place where the Northwest was thirty years ago; it is developing its latent resources; building its cities; perfecting its communications; starting new industries; and in much less than thirty years it will come to the point that the Northwest has now reached; but that section is still driving ahead more rapidly, and thirty years hence may be proportionately richer than it is to-day. If the South is saving four millions a day, the Northwest is saving five millions; and the Middle and New England states, the other third of the country, are saving eight or ten millions a day. If the South is to range up alongside the Northwest, to say nothing of the Northeast, it must increase its production still faster, and the only way to accomplish that purpose is by improving the average industry, thrift, and output of its people.

III. Comparative Efficiency of White Populations North and South

Some Southern statisticians, while admitting these indubitable figures, contend that the South is improving at a much more rapid rate, and hence must in no long time overtake the North; but it must be remembered that in most of these fields of comparison the North not only shows from two to two and a half times the output, but that its annual or decennial increase is absolutely larger than in the South; that is, that the annual amount which the South must add to its present output, in order to catch up with the North, is larger than it was a year ago, or at any previous time. A conventional explanation of this state of things is that the Negroes constitute a large part of the Southern working force, and are much below the average of Americans in their productive output; but when comparisons are made between similar aggregations of white population, results are not very different. If the whole South (including the District of Columbia) be compared, not with a block of about 28,000,000 Northern people, but with a block of about 18,000,000 white people corresponding to the 17,900,000 Whites in the South (both figures for 1900), the results are still startling; although the South has all the advantage of the labor and production of 8,000,000 Negroes besides the Whites. The debts of the Southern communities in 1902 were 374 million dollars; of the Northern, 301 millions. The total taxes raised in 1902 were: South, 116 millions; North, 202 millions. The estimated Southern wealth in 1900 was 16.7 billions; in 1904, 19.8 billions, an increase of 3.1 billions; in the North the corresponding figures are 25.8 billions and 31.4 billions, an increase of 5.6 billions. The Southern assessed valuation of 1907 was 8.5 billions, of the Northern group 10.7 billions.

What makes these differences? It certainly is not because the South is deficient in natural resources, in fertility, in climate, in access to the world’s markets, in the enterprise of its business men. What is the reason for this discrepancy between the resources and the output of the South? Some of the Southern observers insist that the North is made rich through its manufactures. In order to eliminate that condition the comparisons in this chapter are all with Western and Northwestern states (Vermont being included simply to equalize the numbers); some of these states, as the Dakotas and Oregon, are very similar in their conditions to the purely agricultural and timber states of the South; in other states, such as Indiana and Wisconsin, there are large manufactures, which, however, are no more significant in proportion than those of Maryland and Missouri. The Northwestern states have more manufactures than the Southern, but they have more of everything, which indicates industry and prosperity. The obvious reason is that laborers in the South, both white and colored, are inferior in average productive power to Northern laborers; and the obvious remedy is to use every effort to bring up the intelligence, and the value to the community of every element of the population.

While the proof sheets of the foregoing chapter are passing through their revision there appears in Collier’s Weekly for January 22, 1910, an article by Clark Howell of the Atlanta Constitution who makes, in italics, the statement that “the trend of Southern development is incomparably in advance of that of any other section of the continent.” The opportunity to apply the cold bath of statistics to such torrid statements can still be taken, by adding to the tables in the Appendix some figures for 1907 and 1908, and even 1909, together with some generalizations based on figures not included in the tables. For example, the figures for public school education in 1907 show for the ten seceding states 78,000 teachers against 153,000 in the corresponding Northern group; school property to the value of 19 millions as against 41 millions; annual revenue of 24 millions as against 90 millions. The rich state of Texas, with 18,000 teachers, is balanced by the Pacific group with 28,000; its school property of 15 millions by 64 millions; its annual expenditure of 7 millions by 25 millions. Even the richer border state group of five communities, and an average daily attendance of a million school children, has school property of 48 millions against 86 millions in the corresponding Northwestern states; and the school revenue of 21 millions must be placed against the revenue in the corresponding group of 38 millions.

The assessed valuations of the states, as reported to the World Almanac for 1910, are as follows: the whole South in 1909 was assessed on 10,051 millions—a gain of 2,200 millions in three years; in the equal Northwestern group it was 19,884 millions—a gain in three years of 7,000 millions (out of which perhaps 2,500 millions should be deducted, on account of a bookkeeping increase in the assessments in Kansas and Colorado). The cotton crop of 1908 sold for 675 millions and the corn crop of the North for 886 millions. The railroads in the South in 1908 totaled 71,790 miles and in the Northwestern group 123,332 miles. The South “has just harvested a billion-dollar cotton crop” says Clark Howell, and he predicts twenty-cent cotton. The actual crop for 1909 was probably less than 11 million bales, and at the average price for the season of about 14 cents, it sold for something like 770 million dollars. The corn and wheat crops of the whole North (not the equivalent group) sold in the same year for 2,091 million dollars.

No good can result to anybody either from belittling or exaggerating the productivity of the South. That section is progressing, and the more it progresses the less become its difficulties of race and labor problems, the greater its connection with neighboring states, the larger the advantage to the whole nation. Still, on any basis of comparison with the least wealthy states and sections of the North—whether it be made between the total population of equivalent groups or between the white populations only, leaving out of account the productivity of the Negroes, the South is below the national standard of wealth and progress; it grows constantly in accumulations and in productivity, but its yearly additions are less than those of the Northwestern states, and much less than those of the Northeastern states.