THE WARES OF COMMERCE
=371. Effect on commerce of technical progress.=—It is now time to
discuss the effects on commerce of the technical changes which have
been described in preceding chapters. Following back the substance
of those chapters, the effects may be briefly summarized as follows.
First, an improvement in the means of communication and transportation
which has brought men and goods of different regions vastly nearer to
each other than they have ever been before in the world’s history.
Second, a control over the forces and materials of nature which has
enabled men to manufacture old wares more cheaply and new wares which
were before unknown. Third, as a result of the development of the
transportation system, the settlement of new countries with virgin soil
and rich mineral resources, and the connection of these countries with
each other and with the countries of the Old World.
Of these three factors any one alone would be a powerful stimulus to
trade; the three working together account for the astounding growth
of commerce during the nineteenth century. Comparing the present and
earlier periods we may characterize the advance by saying that in the
Middle Ages commerce concerned itself almost entirely with the luxuries
of life; that in the modern period (1500-1800) it served mainly
men’s comfort; while in the recent period, since 1800, it has become
necessary to the very existence of a considerable part of mankind.
=372. Growth of the sphere of commerce and resulting specialization of
production.=—The world has gone far toward realizing the ideal of the
early free trader, that wherever a man might be, he should share in
the productive advantages of all other men, wherever they might be.
Customs tariffs have been able to check the movement of commerce; they
have been powerless to stop it. The sphere of ordinary trade, which was
once the manor, a mere hamlet or village; which grew in time to be the
town with its surrounding country; then included the whole nation; and
became in the modern period international,—this sphere of regular and
ordinary trade is now the world. Whole countries now specialize in the
production of different articles, as individuals or small districts
once did.
Northwestern Europe has become a great factory, drawing its food
supplies and raw materials from distant parts of the world, and
exporting manufactured products in exchange. Beside Europe stands
the continent of North America, supplying in large part the needs of
its own people for manufactures, and producing a surplus for export.
North America, indeed, stands in one aspect above Europe, for it has
unexhausted stores of natural resources which it lavishes on other
parts of the world less richly endowed. The other continents take
subordinate positions. They are enabled by commerce to procure from
Europe and North America the manufactured goods which they require, and
specialize in the production of various food supplies and raw materials
for the means of purchasing these goods.
=373. Abolition of the slave trade.=—The description of the present
world-organization of production, and of the exchange of wares to which
it gives rise, belongs to the department of commercial geography. It is
proper here, however, to call attention to some of the marked changes
in the wares of trade which have taken place since 1800.
One ware which was, before 1800, of great commercial importance, and
which yielded immense profits to those who dealt in it, has disappeared
with the abolition of the slave trade by all civilized nations. Long
before the abolition of slavery itself, humanity revolted against the
horrors of the “middle passage,” and the protests took effective form
about 1800; the states of Europe and America agreed, one after another,
that the slave-trade under their flags, and for the supply of their
territories, should cease.
=374. The great wares of commerce. Coal.=—For the purpose of a
summary survey the most important wares of commerce before 1800 can
be designated as belonging to the two classes, colonial products and
textiles. We shall have to note, in ensuing sections, striking changes
affecting both of these classes, and the addition to the important
wares of commerce of two new classes, mineral products and foodstuffs.
Taking first the mineral products, and including coal with them, as
common usage justifies us in doing, we find, at first sight, that this
article takes a far lower rank among the modern wares than we should
expect from its commanding importance in industrial life. There has
been, it is true, a great growth in the coal trade, and considerable
quantities are exported from England, Belgium, Germany, on occasion
the United States, etc., for use in countries lacking coal mines, or
at sea. There is an immense internal commerce in coal. In 1900 more
than half of the tonnage carried on the railroads of the United States
consisted of mining products; and of these coal certainly formed a very
considerable, perhaps the major, part. Still coal does not rank among
the chief wares of foreign trade.
=375. Metals and Manufactures.=—An explanation of the comparative
insignificance of coal in foreign trade is found in its bulk. An active
industrial people can compress the value of coal, as it were, by using
it near the mines for the production and transformation of other
materials. Coal is transmuted into iron and manufactures, and so loses
its identity, though it remains still the real power behind the exports
of that character.
Commerce in iron and steel, and the manufactures depending on them, has
increased enormously in the course of the century, as the reader may
readily suppose. Supplies of iron and machinery flow from the centers
of production to the less advanced countries, and the simpler tools
penetrate every nook and corner of the earth. Copper has grown greatly
in importance, as its use for electrical appliances has extended, and
now forms a considerable item in exchanges of countries like the United
States and Germany.
=376. Petroleum.=—Nor is the new commercial significance of mineral
products confined to the metals. In the last half century the trade
in mineral oil (petroleum, “kerosene”) has become a necessary part
of the world’s economy. One result of the great improvements in
manufactures and transportation was a demand, from all sides, for more
light. Artificial illumination was needed for the full utilization
of machinery and means of transportation; and to provide light for
the newspaper reading, study, and recreation to which people gave
themselves in increasing numbers. The first half of the century
witnessed many improvements: the invention of matches, the introduction
of glass lamp-chimneys, the spread of gas lighting, and the use of
new oils for illumination. No previous advance, however, compares in
importance with the discovery that crude petroleum could be made the
source of a cheap and efficient means of illumination. The development
of the petroleum trade in the space of little more than a generation
is a matter of common knowledge, and is readily explained by the
importance of the service which it performs.
=377. The grain trade; slight development before 1800.=—Important and
characteristic as the trade in mineral products has grown to be in the
nineteenth century, it is still far from first place among the branches
of the world’s commerce. The primacy belongs, without question, to the
trade in foodstuffs, especially grain.
Before the development of the modern system of transportation commerce
in foodstuffs concerned itself largely with the condiments rather than
the aliments, with spices and seasoning rather than the substantial
food staples. Even at a freight rate of 15 cents per ton-mile (and
the expense of transportation on European roads before 1800 was
certainly far above that), wheat at $1.50 a bushel would be limited
to a trade-radius of 330 miles; the whole value of the wheat would be
consumed in transporting it that distance. Transportation by sea was,
of course, much less costly, and enabled limited amounts of food to
be imported under favorable conditions. Still, food has to be grown
on land, and often on land distant from any means of water carriage;
and the countries of Europe were forced in general to a policy of
self-sufficiency, raising the requisite supplies of food at home under
conditions however unfavorable. We may appreciate the short space of
time separating us from this state of affairs by noting that in France,
even in 1817, people were dying of famine in Lorraine, while wheat was
abundant in Brittany; the carriage of provisions from one province to
the other quadrupled prices. In Russia, even later (Pskov, 1845), the
same conditions prevailed.
=378. Extent and importance of the grain trade at present.=—Grain
formed, therefore, one of the least considerable of the wares of
foreign commerce before 1800. A French economist estimated the
international trade in grain at 30 million bushels at most. From that
figure, comparatively insignificant, the grain trade of the world had
risen, even in 1887, to over 1,500 million bushels; grain formed then,
in value, almost one tenth of the total of the wares of trade, and in
importance far exceeded any other ware. The expense of transportation
had undergone such a vast diminution that one day’s wages of a common
laborer would pay for the carriage over a thousand miles of all the
grain and meat which he needed for a year’s subsistence.
It would be interesting, if time permitted, to note the far-reaching
social and political effects of this revolution. We must, however,
confine ourselves to its economic aspect. The English people, to take
the most striking example, depend for more than half of their food
supply, perhaps two thirds of their wheat supply, on imports from
abroad. It is said that in every month in the year wheat is harvested
in some country, of the northern or of the southern hemisphere, for the
English market; a Floating Cargoes List reported 163 vessels bound
for England with cereals, at sea at one time. As formerly the citizens
of London depended on the farmer of a nearby county for the supply of
his daily bread, so now the inhabitants of England in general depend
upon people in the Dakotas, in California, in the Argentine Republic,
in Egypt, in India, or in Australia. The Englishman is enabled, by
commerce, to share in the agricultural advantages of any and all those
countries; he applies himself to his specialty and exchanges the
product for his food.
=379. Commerce in other foodstuffs.=—In some respects even more
striking, though on the whole of far less importance, has been the
growth of foreign commerce in stock and meat. About 1800 the common
way of marketing meat was to drive it to market on the hoof; the trip
might consume a number of days, and the animal would arrive in poor
condition and with weight diminished. For transportation to distant
countries meat had to be preserved by pickling in brine. Fresh meat
of good quality was a luxury, and the average consumption of meat
was small. Modern progress has solved the problem of using the great
grazing spaces of North and South America and Australia for the supply
of distant peoples, in two ways. Improvements in transportation by
land and sea have allowed the carriage of live-stock for thousands
of miles, in good condition. The use of refrigerating appliances,
especially artificial refrigeration by means of steam power, has
permitted the carriage of dead meat the same distance without
deterioration. Furthermore, the application of scientific principles
to the preservation of meat has enabled supplies of that article to
be utilized which would otherwise be wasted, and has contributed
a new form of ware to modern trade. Other foodstuffs (fruit and
fresh vegetables) have profited by similar advances in the means of
transportation and preservation.
=380. The textiles; changes in relative importance.=—In this brief
survey only two more classes of wares may be noted, the textiles, and
colonial products. Trade in wares of both these classes has undergone
a great development and important transformation in the course of the
century, though it presents no such revolutionary changes as in the
case of wares described above.
The textiles have continued to be among the most important wares of
commerce. A population, advancing rapidly not only in numbers but in
average purchasing power, has demanded constantly increasing supplies
of clothing material. There has been, however, a noteworthy change
in the kind of fabric demanded. Measuring by the weight of the raw
material consumed, the English textiles about 1800 were composed as
follows: over two fifths woolen, over two fifths linen, considerably
less than one fifth cotton. Note now the change as shown by conditions
about 1880: wool made up one fifth of the total, linen little more than
one tenth, while cotton had risen to two thirds. For some purposes
cotton fabrics are better than those of any other material, for
other purposes they present a cheap and satisfactory substitute; and
consequently they have been able to displace other textiles to a large
extent.
=381. Commerce in raw materials for the textile manufacture.=—The
rise in importance of cotton is partly, not entirely, responsible
for a great change in the character of the textile trade. With the
exception of silk, which has always, because of its high price, been of
restricted use, the raw materials for the textiles had formerly been
produced in the country of manufacture. England and the Netherlands,
it is true, had begun before 1800 to import wool from Spain, but
wool was then an object of internal rather than foreign trade, in
general, and flax was raised for home consumption in practically all
the European countries. The introduction of the cotton manufacture
in Europe introduced a change, for in the case of this textile the
raw material as well as the finished product was necessarily a ware
of foreign trade. The past century has witnessed a vast increase in
the commerce in raw cotton, and, moreover, the establishment of an
important trade in raw wool. In 1850 Europe still supplied four fifths
of the wool consumed, and has continued since that date to produce
about the same quantity as then. The proportion which it contributes to
the total supply has, however, declined to less than one third. There
has been an immense increase in the production of wool in South America
and Australia, and a less notable advance in the amounts furnished by
Africa and Asia. At the present time, therefore, raw wool flows to
Europe from all the other continents, and returns to them in the form
of finished goods.
=382. Colonial products.=—The last class of wares to engage our
attention will be that of the so-called colonial products, of which
tea, coffee, and sugar are familiar examples. The wares received their
name because, before 1800, Europe depended entirely on distant parts of
the world for their supply. The reader will remember what an important
part they played in the commerce of countries like England and France,
in the modern period.
At least one ware of considerable commercial importance has been added
to the list of colonial products in the course of the century. Rubber
(using that word to cover also gutta-percha, an article with somewhat
different qualities), counted for little in commerce before 1830. Soon
after that time, however, it was regarded as “promising,” and the
discovery of the vulcanizing process by Goodyear enabled manufacturers
to gain the full benefit of its valuable qualities, elasticity,
impermeability, etc. It is now an indispensable article in many
applications, and though the production has risen to a hundred million
pounds a year the demand for it has increased still more rapidly, and
the price has risen.
The old wares have not only retained but also increased their
importance as elements in human consumption. The people of Germany
consumed, on an individual average, about 2 pounds of coffee in 1840, 6
pounds in 1900; 4 pounds of sugar in 1840, 30 pounds in 1900. Figures
from other countries present, with some variations, the same growth in
demand. The people of the United States now demand over 10 pounds of
coffee _per capita_, and over 70 pounds of sugar.
=383. Rise of beet sugar, and effect on commerce.=—One of the colonial
wares, sugar, demands special attention. The methods of production
have undergone a complete change in the course of the century, and
the former currents of trade in sugar have, in some cases, actually
been reversed. Before 1800 people relied entirely for their sugar
supply on the cane plantations of the colonies. It was known already,
however, that beets contained a large percentage of sugar, and during
the Napoleonic wars, when the Continent was closed in large part
to colonial imports, an attempt was made to secure sugar from this
native source of supply. The attempt was sufficiently successful to
stimulate further efforts. With the aid of liberal protection from the
governments a beet sugar industry was established on the Continent
in the first half of the century. That industry supplied in 1860 one
quarter of the total amount of the sugar of the world, in 1882 one
half, in 1900 nearly two thirds.
The change in the method of manufacturing sugar has had far-reaching
effects on commerce. Countries with cane plantations have seen the
price of sugar fall under the increased output of European factories,
equipped and operated with scientific accuracy; they have lost a
large part of their former market; some of them have been almost
ruined. England, which once made great profit by importing cane sugar
and distributing it among the other European countries, now, on the
contrary, goes to the Continent for the larger part of its sugar
supply; and continental states like Germany and France export sugar
instead of importing it.
=384. The European sugar bounty system.=—The reader should, however,
note carefully that these changes were due in large part to a system
of protection which had grown to formidable proportions. European
governments have found in sugar a convenient object of taxation, but
have desired at the same time to further the growth of the home sugar
industry, and to secure for it a market in foreign countries. They
have sought to combine the two objects by taxing the home consumer,
and by remitting the tax and giving special premiums to the exporter.
A pound of sugar cost far more in a country of Europe where it was
manufactured, than in the country to which it was exported; every pound
sold at home had to bear a tax, and every pound sent abroad received a
premium which enabled it to be sold more cheaply. The orange marmalade
industry, for which the town of Dundee is famous, could flourish in
spite of the expense of transporting the fruit from Spain to Scotland,
because sugar was artificially cheap in the English market. Such a
condition of affairs was admitted to be unwholesome; in some aspects it
became absurd. The burden of the bounty system became intolerable and
the governments of the Continent agreed upon measures of reform, which
went into effect in 1903.
QUESTIONS AND TOPICS
1. Make a brief written summary of the contents of preceding chapters
under the heads of section 371.
2. On an outline map of Europe indicate areas corresponding to the
sphere of commerce in different periods, with approximate dates.
3. Suppression of the slave trade. [Schuyler, Amer. diplomacy, N.Y.,
1886, chap. 5.]
4. Recent slave trade in Africa. [Biography of a modern missionary or
explorer.]
5. The coal trade at the close of the century. [Special Consular
Report, No. 21, 1900, part 1, Foreign markets for American coal; U. S.
Monthly Summary of Commerce and Finance, April, 1900, vol. 7, no. 10,
pp. 2815-2927, or Sept., 1902, vol. 10, no. 3, pp. 663-757.]
6. On the wares of 375 and the following sections prepare reports,
indicating, where it is possible, the following points: total amount
of the world’s product; the leading countries (perhaps six), the share
of each, and their relative advantages; the chief importing countries;
peculiar characteristics of the trade. [Commercial geographies,
encyclopedias.]
7. Report on one of the following topics:
(_a_) Development of the uses of petroleum.
(_b_) History of the production and transportation of petroleum.
(_c_) The Standard Oil Company.
[Martin, Coal; encyclopedias; Gilbert H. Montague, The rise and
progress of the Standard Oil Company, N. Y., Harper, 1903, $1; Ida M.
Tarbell, The History of the Standard Oil Company, N. Y., 1904.]
8. Indicate on an outline map the distance from your home to
which wheat could profitably be carried by different means of
transportation. [See below, sect. 387, for convenient statistics.]
9. Character and value of wheat. [Edgar, Story, chaps. 1, 2.]
10. Explain the great fluctuations in the export of wheat from the U.
S. in the nineteenth century. [See statistics in U. S. Statistical
Abstract.]
11. Wheat in modern commerce. [Edgar, Story, chap. 4.]
12. Provision trade of the world. [U. S. Monthly Summary, Feb., 1900,
vol. 7, no. 8, pp. 2297-2347.]
13. American canning interests. [Judge in Depew, One hundred years,
chap. 57.]
14. What amount does an American household, your own for instance,
spend in a year for each of the chief textiles: cotton, wool, linen,
silk?
15. The cotton trade of the United States and of the world. [See
above, sect. 378, for suggestion of a simple mode of treating a
large subject; the topic may be amplified as time permits. F.
Wilkinson, Story of cotton, N. Y., Appleton, $1; S. J. Chapman, The
cotton industry, London, 1905; George Bigwood, Cotton, London, 1918;
statistics in U. S. Monthly Summary, vol. 7, no. 9, pp. 2543-2635.]
16. The wool trade. [John H. Clapham, The woolen industries, London,
1907; Frank Ormerod, Wool, London, 1918.]
17. Write a history of one of the following, as a ware of commerce in
the nineteenth century: rubber, tea, coffee.
18. History of sugar as a commodity. [See the doctor’s dissertation by
Ellen D. Ellis, Philadelphia, 1905.]
19. What amount of tea, coffee, and sugar does your household consume
in a year? (Note that sugar is frequently purchased in preserves,
cake, etc.)
20. History of beet sugar. [Encyclopedias; index to periodical
literature; U. S. Monthly Summary, Jan., 1902, vol. 9, no. 7, pp.
2585-2763.]
21. Some effects of the system of sugar bounties. [Charles S. Parker,
Free trade and cheap sugar, Fortnightly Review, 1898, 70: 44-53.]
22. The Brussels sugar conference. [Economic Journal, June, 1902,
12: 217 ff.; same, March, 1904, 14: 34 ff.; Quarterly Journal of
Economics, Nov., 1902, 17: 1 ff., Contemporary Review, Jan., 1903, 83:
75.]
BIBLIOGRAPHY
As this chapter touches the field of commercial geography I refer,
for bibliography and general reading, to the current manuals on that
subject: C. C. Adams, Text-book, N. Y., Appleton; G. S. Chisholm,
Handbook, N. Y., Longmans; Joseph Russell Smith, Industrial and
commercial geography, N. Y., Holt.
References in quantity sufficient for ordinary students are given in
the Questions and Topics above; further references will be given when
the history of the commerce of specific countries is considered.