Popular Science Monthly/Volume 78/April 1911/The Cost of Living

THE COST OF LIVING
By HENRY PRATT FAIRCHILD

ASSISTANT PROFESSOR, YALE UNIVERSITY

"THE increased cost of living" is a phrase familiar to almost every American tongue in these days. Newspapers and magazines are full of the topic. A wide variety of investigators are earnestly searching for the causes, and divers explanations have been offered. Over-production of gold, the tariff, the trusts, cold storage and a host of other things have been mentioned—all, probably, with more or less of truth. Yet it is amazing to note how little attention has been paid to the most obvious and easily comprehended cause of the high prices of one great class of commodities, i. e., the food of the people. This is by far the most important aspect of the problem, and its primary and fundamental explanation lies in a perfectly simple and concrete fact—namely, the increasing proportion of the population of the United States which may be classed as city dwellers rather than country dwellers; in other words, the preponderance of the urban population.

The food element of the high prices problem is so thoroughly predominant in all discussions of the topic that one might almost say that, in the popular mind, the high cost of living is synonymous with the cost of food. The high prices which are causing such consternation in the families of the land are the prices of meat, eggs, butter, milk, bread and vegetables, and it is to this class of commodities that the following considerations apply most directly. These are all, primarily, the products of the country. We may then carry our analysis a step further and say that the cost of food is the cost of agricultural products. It may be observed, in passing, that many other necessaries of life, beside food, are products of the country. In fact, practically every commodity is derived ultimately from the land, and what is true of food is more or less true of other commodities, in proportion as they are the products of the extractive, rather than of the manufacturing industries. At the same time, most of the present discussion of this topic centers around that class of commodities, originally mentioned, which make up the food supply of the nation, and are directly the result of the application of labor to land. It is to this group that we wish to confine our main discussion.

Let us hasten, however, to disclaim any inclination to minimize the value of the contribution which is made to the wealth of society by the manufacturer, the merchant and others engaged in distinctively "city" occupations. The old idea of the school of French economists, known as the physiocrats, that land is the source of all wealth, undoubtedly served a useful purpose at the time, but was long ago abandoned. To-day we readily recognize that any person engaged in any occupation which adds to the total enjoyment of mankind is a truly productive laborer. The drygoods clerk, the manufacturer of shoes, the bank president and the opera singer all make additions to the wealth of society, just as truly as do the farmer and the dairyman. We even go further, and assert that the greatest total wealth of society can be produced only when the efforts of the agricultural classes are supplemented by a certain proportion of laborers in industrial, professional and mercantile fields—the avocations of the city. But there comes a point in the economic development of a nation when the number of those engaged in city occupations—including the occupation of spending time, indulged in by the idle rich and the unemployed poor, who throng the cities—becomes excessive, and overbalances the number of country workers. Have we reached this point in the United States?

The price of food stuffs, like that of every other commodity, is governed by the laws of supply and demand. Assuming stable conditions of fertility of soil, of climate, and of methods of production, the price of agricultural products depends on the proportion between those who produce them and those who consume them. Broadly stated, this is the proportion between the country dwellers and the city dwellers. This proportion in the United States has been rapidly changing within the last century in the direction of the preponderance of the urban class. When the first census was taken in 1790, there were only six cities with over 8,000 population each, containing in all 131,472 persons, or 3.4 per cent, of the total population of the United States. In 1840 the percentage in cities of the specified size was still only 8.4. But in 1900 there were 545 cities of over 8,000, in which dwelt 33.1 per cent, of the total population. The significance of these figures becomes more evident if we consider the proportion between the urban and rural populations at different dates. In 1790, for every inhabitant of the cities of the specified size, there were 28 persons living in the smaller towns and in the country districts. Fifty years later, there was one city dweller to every eleven country dwellers. By 1880 the proportion had reached 1 to 3.4 and at the last census, in 1900, for each inhabitant of the cities there were only two dwellers in the country! Is it any wonder that the cost of agricultural products has gone up? The marvel is that prices did not go up long ago, or that they have not reached a much higher figure.

It may appear that the foregoing explanation is inadequate to account for the suddenness of the rise in prices within the last year or two. To this objection, there are two or three replies. During the last half of the nineteenth century the tendency of prices to rise was offset by improvements in the arts of agriculture, and by the cultivation of new and better lands in the west. The crisis of 1907, by depressing conditions in general, caused a temporary retardation in the upward movement, making it more pronounced as prosperity returns. Moreover, the critical point in the proportion between the urban and rural classes is one which may be reached and passed in a brief period of time. Apparently we have just reached, or are just passing, this juncture in the United States. Finally, the explanation herein offered does not claim to be a complete one. For such a complicated phenomenon, there is undoubtedly a variety of causes, each with its own importance. But the division of population between city and country is the underlying condition which has made the operation of the other causes possible.

At this point the question naturally arises, why does not this state of affairs work out its own cure? Why does not the high price of farm products, bringing, as it apparently must, large profits to the farmer, make country life more attractive, and check the rush to the city, or even entice some of the urban dwellers back to the soil?

The first and most obvious answer to this query is that by no means all the profits accruing from the high price of food ever find their way. back to the pockets of the original producer. Farmers have never been able to secure for themselves, for long periods of time or over large areas, the benefits of combination. Under our modern system of supply, the products of the soil pass through a number of different hands before they reach the consumer, and each of the intermediaries must have his profit. A large part of the excess of price over the actual cost of production is absorbed by transportation companies, commission merchants, packers and retail dealers—themselves mainly city dwellers.

But this is only a very partial explanation. The factors which determine residence in city or country are something more than the financial advantages which this or that locality has to offer. That the opportunities for achieving marked success in business, and amassing huge fortunes are greatest in the centers of population is undoubted, and the decision of many a country lad to break away from the familiar home surroundings is forwarded by the hope that he may be one of the fortunate ones who find their place in the city, and win great rewards. Occasionally it turns out so. But it is a question whether the average young man stands a better chance of making a comfortable living in the city than on the farm, and monetary considerations alone could hardly exert such an attractive force as we see in operation.

The lure of the city is something infinitely more complex and intricate than this. A complete and adequate explanation of its power has long been sought in vain. Some of the elements of its irresistible charm are obvious, and may be easily stated—the excitement and variety of metropolitan life, the opportunities for recreation and diversion, the comforts of city houses, the chances for achieving success and fame in many fields, the busy whirl of commercial and social life—but after all, what is all this more than to say, "the fascination of city life"?

There is one condition, however, which has undoubtedly done much to intensify the situation and aggravate the difficulties. That is the immense immigration of the last quarter of a century, particularly of the last decade. The immigrants of an earlier generation—the Germans and the Scandinavians—went west in large numbers and took up farm lands, making an effective and valuable addition to the ranks of agricultural producers. Our modern immigrants settle in the most densely populated states, and in the largest and most congested cities. In 1890, 61.4 per cent, of the foreign-born population of the United States were living in cities of at least 2,500 population. In 1900 the percentage of foreign-born in cities of like size was 66.3, while of the 10,341,276 foreign-born residents of the United States in that year, 38.8 per cent, were huddled in the few great cities having a population of over 100,000. When we consider that only 15.5 per cent, of the native-born population were in cities of that size, it becomes evident how seriously the immigration movement affects the proportion between city and country dwellers—in other words, the cost of living. The census of 1910, after a decade of immigration unparalleled in the history of the nation, will undoubtedly show conditions even more striking and appalling.

The comparatively small increase in the proportion of city dwellers from 1890 to 1900 (from 29.2 per cent, to 33.1 per cent.) may be partially explained by the very slight gain in population through immigration during that decade, while the tremendous immigration of the last few years may largely account for the suddenness of the jump in prices.

To discuss possible remedies for the situation is apart from the purpose of the present paper. A few years ago, when the country telephone, rural free delivery, and the inter-urban trolley began to come into common use, great hopes were expressed that together they would help to solve the situation by promoting communication and fellowship among rural families, breaking up their isolation, and thus making country life more attractive. The results so far seem to have fallen far short of the anticipations. As for the immigrants, a few of the Italians are beginning to take up market gardening in the neighborhood of the great cities, but this movement is very slight as yet. All the efforts of colonization or removal societies, philanthropic organizations, and of the United States government, have produced almost inappreciable effects in securing a better distribution of the foreign-born.

What the future may bring forth in the way of increasing the attractiveness of the country for natives or aliens, time alone can tell. But as long as the rush to the cities continues with unabated or increasing force, it is vain to hope that the cost of food will fail to augment at a corresponding rate.