IMMIGRATION AND CRISES1

HENRY PRATT FAIRCHILD, PROFESSOR OF THE SCIENCE OF SOCIETY, YALE UNIVERSITY

A

MID 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 to-day 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 Professor John R. Commons, and is presented in graphic form in a chart in his book, "Races and Immigrants in America." Imports per capita are taken as the best indication of prosperity in this country,

1 From The American Economic Review, December, 1911

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 demand 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. Professor 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 "immigration 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 overproduction, with its inevitable collapse, that has characterized the industry of America more than that of any other country." The few pages which Professor 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. Professor 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.

Immigrant aliens are 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. Nonimmigrant 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. 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 makeup 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 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. 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 crisis may be said to be caused by speculative overproduction, or overspeculative production. Some prefer to call the trouble underconsumption, 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.