--SWEDE (From _The World
To-Day_)]

=Profits and Wages.=--We have now stated at some length in this and the
preceding chapter the two standpoints from which the immigration of
industrial races is viewed. One standpoint is that of the production of
wealth, the other the distribution of wealth. One is the development of
our natural resources, the other is the elevation of our working
population. If we inquire somewhat more critically and take into account
all of the circumstances, we shall find that the motives animating this
difference of policy are not really the above distinction between
production and distribution, but the distinction between two opposing
interests in distribution; namely, profits and wages. Unfortunately it
is too readily assumed that whatever increases profits does so by
increasing production. As a matter of fact it is only secondarily the
production of wealth and development of resources that is sought by one
of the interests concerned--it is primarily increase of profits at the
expense of wages. Cheap labor, it is asserted, is needed to develop the
less productive resources of the country--what the economists call the
margin of production. It is needed to develop the less productive
industries, like sugar beet, and the less productive branches of other
industries, like the construction of railways in undeveloped regions or
the reconstruction of railways in older regions, or the extension of a
coal mine into the narrow veins, and so on. Without cheap labor these
marginal resources, it is asserted, could not profitably be exploited,
and would therefore not be developed.

This argument, within limits, is undoubtedly true, but it overlooks the
part played by machinery and inventions where wages are high. The
cigar-making machine cannot extensively be introduced on the Pacific
coast because Chinese cheap labor makes the same cigars at less cost
than the machines. High wages stimulate the invention and use of
machinery and scientific processes, and it is machinery and science,
more than mere hand labor, on which reliance must be placed to develop
the natural resources of a country.

But machinery and science cannot be as quickly introduced as cheap
immigrant labor. Machinery requires accumulation of capital in advance
of production, but labor requires only the payment of daily wages in the
course of production. Consequently in the haste to get profits the
immigrant is more desired than machinery. B