EASTERN EUROPE
=543. Great size and small commerce of the Russian Empire.=—The
attention and imagination of men have long been impressed by the
size of the Russian empire, which included an area greater than that
presented by the moon at the full. Combining the characteristics
both of Europe and of Asia, Russia was almost a world in herself,
and, indeed, was called by one of her rulers “a sixth part of the
world,” worthy to rank as a continent. Yet this great state took a
place in modern commerce below petty countries like the Netherlands
and Belgium. A country of such vast size might, of course, secure
by internal trade many of the advantages which smaller countries
must seek in international exchange. The United States presents an
example of a territory so large and so richly endowed that it can
afford, in considerable degree, to renounce commerce with the rest
of the world, and can still maintain from its own resources a high
industrial civilization. Russia has not enjoyed a similar success. It
had a comparatively sluggish internal trade; and it lacked industrial
civilization. We must seek in the history of commerce an explanation of
these facts.
=544. Historical reasons for backward development.=—The few paragraphs
devoted to Russia in a previous chapter suggested the main reason for
the country’s backwardness. During many centuries, while the peoples
of the West were advancing in civilization, the people of Russia were
facing away from Europe, occupied in defending themselves against
Asiatic princes. Russia shared in none of the great movements of early
European history: feudalism, chivalry, crusades, rise of towns,
Reformation, Renaissance. It was devoted entirely to the struggle
for self-preservation. When it became part of the European world,
therefore, about 1700, it brought with it into modern times many
characteristics of an unformed, half-developed organization; and since
that date it has been trying, and it is now still trying, to catch up
with the rest of Europe.
=545. Russian commerce about 1800.=—The movement toward progress,
initiated by Peter the Great about 1700, continued, with various
fluctuations, during the century. In so far as it found expression in
commerce we can regard the last fifty years before 1800 as a time of
rapid advance; commerce grew to nine fold the volume which it showed
in 1750. So slight, however, had been the beginnings of Russian trade,
that it amounted in 1802 only to about fifty million dollars.
Russia was still practically in the position which it had occupied
in the time of the Hansa, dependent on the West for all its finer
manufactures, and supplying raw materials in exchange. Hemp and flax,
crops which rapidly exhaust the soil, and for the cultivation of
which the great tracts of fresh land in Russia offered an advantage,
were the chief exports. Among others on the list were wood, grain,
tallow, hides, furs, feathers, etc. The Russian nobles exported a
certain amount of linen, which they forced their serfs to make for
them that they might have the means of purchasing foreign luxuries,
and manufactured also iron for sale abroad. The appearance among the
exports of this metal, which we are used to associate with advanced
industrial countries, is explained by the fact that charcoal was still
an important source of fuel for the iron manufacture, and of this the
boundless Russian forests offered an abundant supply.
=546. Means of transportation.=—Almost nothing had been done as yet
to unite by means of transportation the vast stretches of territory
in Russia. Roads were practically non-existent, and goods were
transported by land only in winter, when they could be sledged over
the rough ground on the snow. The waterways, with which the country
is so abundantly provided, had been connected by a few important
canals, and were the chief means of transportation. Goods were brought
to them on sledges in winter, to await the high water of the spring
freshets. They were laden on flat-boats, holding sometimes several
hundred tons, but built to draw only two or three feet of water, and
were floated down with the current when the ice melted. The boats were
rudely constructed, and were broken up for timber or fire-wood at the
end of the trip. The inconvenience and uncertainty of such a system of
transportation are obvious, but it was, nevertheless, remarkably cheap;
rates on some water routes were only one or two cents per ton-mile.
=547. Chief ports.=—The conditions of transportation confined almost
all the foreign trade of Russia to the sea, and the commerce across the
western frontier was insignificant. Archangel, situated on the river
Dwina, a few miles from the coast of the White Sea, and the leading
port of Russia before the time of Peter the Great, still retained a
respectable share of commerce, and was visited every year by ships from
England and the Netherlands. In relative importance, however, it had
declined greatly after the foundation of St. Petersburg, which soon
became the most important outlet for the country’s trade. A rival was
at this time, however, growing up in the South, where Russia had only
recently secured the territory on the shore of the Black Sea. Odessa,
which was founded in 1793, rose rapidly in commercial importance,
especially during the Napoleonic wars, when the Baltic trade suffered a
severe check.
=548. Development up to the Crimean War (1854-1856).=—During the first
half of the nineteenth century Russian commerce grew steadily but
slowly; the rate of increase was much behind that of the preceding
fifty years. A partial explanation of this check to progress can
be found in the adoption, in 1822, of a prohibitive tariff; the
importation of many foreign manufactures (clocks, textiles, porcelain,
glassware, etc.), was absolutely forbidden. Shortly after the middle
of the century, however, came a turning-point. The Crimean War, in
which England and other states were engaged with Russia, is generally
admitted to have yielded to neither of the chief combatants advantages
proportional to the costs which it involved. It was in one way,
however, of immense benefit to Russia. It awakened the country to a
realization of its backwardness. It raised a demand for reform of
antiquated conditions in economic and political life, which the Czar
himself was the first to heed.
=549. Reforms; growth of the railroad system.=—The reform movement bore
fruit in many lines to which we can pay but scant attention. It led to
the emancipation of the serfs in 1861, by which a considerable part of
the Russian people were liberated from a condition resembling medieval
bondage, and became free land-holders. It secured at least a partial
improvement in the system of government. It was, finally, to name the
result of the greatest influence on commerce, the occasion for the
introduction of the modern railroad system in Russia. The government
had found itself so hampered in carrying on the war by the lack of
transportation facilities, that it now bent every energy to remedying
the defects. The railroads of Russia measured at the outbreak of the
war only about 600 miles. In the ten years following the railroad
system grew to over 2,000 miles, and in the next decade to about
10,000. Though the first lines were built mainly to serve military
purposes, those constructed later were designed to develop the economic
resources of the country; and it is hard to overestimate the importance
of this development of the means of modern transportation, to a country
which stood in such sore need of it as Russia.
=550. Development of commerce.=—The results of the reforms can be
followed in the growth of Russian commerce after the middle of the
century. In the decade 1860-1870 the foreign commerce of the country
increased to more than double what it had been, and was growing at
this time faster than the commerce of any other country in Europe,
except that of a neighboring state, Austria-Hungary. Some significant
changes, moreover, appeared in the direction and character of Russian
trade. The great gains of the period were made by southern Russia,
where the wheat fields of the rich “black-earth” district were brought
within reach of a market. It was about this time that wheat won the
first place among the exports away from flax and its products. Commerce
by way of the Black Sea increased very rapidly, while the Baltic did
not keep its proportional share in the commerce of the country, and
the proportion of trade finding its outlet by the Arctic Ocean had
sunk to insignificance. Commerce with the west of Europe across the
land frontier, which formerly had been restricted by the difficulty of
transportation, grew even faster than the Black Sea commerce, and gave
an entirely new importance to trade relations with neighboring states.
England had enjoyed the largest share of Russia’s commerce during the
first part of the century, but could not hold her own henceforth in
competition with Germany. This last-named country, then in course of
rapid industrial development, was enabled by the railroads to win her
way rapidly in Russian commerce, and soon was the largest sharer in it.
=551. Character of industries and commerce.=—Russia, like many other
of the European states, enjoyed the greatest freedom of trade in the
period following closely after the middle of the century. The customs
duties levied in Russia at this time would have been considered high in
western Europe, but they were much lower than the rates ruling in the
first half of the century, and much lower than the rates in force at
the century’s close.
Russia at this time was still almost exclusively agricultural. The
serfs had learned to supply their simple needs for clothing and
implements by domestic industries, but nothing like the western factory
organization, with its extensive use of power machinery, had as yet
appeared. Attempts to stimulate such an organization, by privileges
and protection, had resulted in failure. The Russians are not a people
with a gift for mechanism. It has been said of them that their only
invention is the samovar, their apparatus for making tea. The world
exposition of 1867 displayed samples of Russian industry, but most
of these were the products of village craftsmen, and the few samples
of modern manufacture came from factories owned for the most part by
Germans. The exports of the country were still almost entirely raw
products, and the manufactured wares which the country contributed to
the commerce of the world were of the most simple description: yarn of
flax and hemp, cordage, string, and sacking.
=552. Recent history of the tariff.=—In spite of these conditions the
government pursued since about 1870 a policy of protection, which grew
constantly more strict with the passage of time, and which furnished
at the end of the century the most extreme example of protection to be
found among civilized states. Comparing the tariff of 1868, which was
comparatively liberal, with the tariff of 1891, we find that duties on
some important manufactures rose in the following measure: on cotton
goods and glassware, to double; on rails and locomotives to quadruple
or more. Even more striking and more serious was the increase on partly
manufactured wares. Duties rose on leather and yarns to twofold or
more; on petroleum and wrought iron to threefold; on sulphuric acid
to four or seven fold; on cast iron to tenfold. This is the period in
which Germany was seeking commercial advantage by bargaining in tariff
rates with other countries, and in which occurred the tariff war with
Germany that has been noted above. At this time and again later Germany
was able to bring her eastern neighbor to terms by financial pressure;
Russia was a great borrower and needed the support of the Berlin money
market. Russia raised still more, however, the rates of the tariff in
a revision in 1903, and even after these had been reduced by treaty
bargains they left the general level higher than before.
=553. Development and cost of manufactures.=—The protectionist policy
in Russia gained its object, an increase in the manufacturing industry
of the country. The product of home manufactures rose greatly in value,
and the importation of foreign manufactures declined in proportion.
This object, however, was attained at a great cost. Russia was even
less suited to the modern system of manufactures than Italy or
other states which we have considered. It lacked capital, technical
knowledge, leaders, laborers of steadiness and intelligence—practically
everything except raw materials, which were present in abundance.
Manufactures, therefore, were conducted at an expense far above that
common in other countries, and could be maintained only by forcing the
people to pay far higher prices for their wares. A person could not get
so much as a sewing needle without contributing an extra sum to the
support of the home manufactures. The policy was the more questionable,
as the profits of these manufactures went in large part to foreign
stock holders, who utilized an opportunity for which the native
Russians were still unprepared. Even from the political standpoint the
policy of protection in Russia was attended with danger; many events
indicated that the factory laborers would be the first to turn against
the autocracy which had brought them into being.
=554. Effect of the tariff on agriculture.=—The most serious aspect,
however, of the Russian tariff was its effect upon agriculture. The
great plains of the country were peculiarly adapted to the use of
modern cultivating and harvesting machinery, such as contributed
so much to the progress of agriculture in America. The tariff made
such machinery so costly, whether it were imported or manufactured
in Russia, that it was introduced to only a slight extent. A Russian
estimated that the farmers of the United States found it profitable
to spend nearly twenty times as much for agricultural implements and
machinery as the Russians. The peasants could not afford even plows,
harrows, or scythes of a modern type, and still used antiquated
makeshifts. The mass of the people, at best, were ignorant and bound
by custom, showing still the bad effects of the servile condition from
which they had so recently emerged; and needed every encouragement to
be induced to advance to better methods of cultivation. Even artificial
fertilizers, however (superphosphates, etc.), were burdened with a
duty, because there seemed a chance to manufacture them in the country;
the result, naturally, was an increase in price, and a restriction in
the use of this important aid to production.
=555. Effect on railroads.=—We must note further the effect of the
tariff on the railroad system. Russia has never gone through the period
of transportation by highroads. It passed from conditions described
above as existing during the first part of the century, to the use of
the railroad, without the transition such as was marked by the use of
turnpikes in England. Even in 1914 the highroads of the country were
of the crudest character, and internal trade depended mainly upon the
waterways and railroads, contributing nearly the same tonnage to each.
The railroads, therefore, had peculiarly important functions to perform
in Russia. They served agriculture, moreover, to an unusual degree; the
cereals supplied in 1897 more tonnage than any other ware carried on
Russian railroads. Yet if we measure the development of railroads by
comparing their length with the area or population of the country, we
find that even at the close of the century the Russians had made but a
beginning, and took the lowest rank among all important peoples. Taking
merely Russia in Europe, and contrasting it with the United States, a
country which also has a vast area and great vacant spaces, the Russian
railway system in 1913 had not reached one ninth the development of the
American in comparison with population, not one tenth in comparison
with area. An important reason for this backwardness was the increased
expense of the construction, equipment, and operation of railroads due
to the high tariff on railroad supplies. Iron may be said, roughly, to
cost double or more of what it cost in other countries. The government
has not always been blind to these facts, and has made concessions from
time to time, but the general tendency of its policy has been made
only more glaring by these occasional exceptions.
=556. Commercial reasons for Russia’s eastern movement.=—Preceding
sections have sketched some of the historical influences which
prevented Russia from taking a part in world commerce commensurate
with the space she covered on the map. This great state, which in the
sixties took only sixth place in commerce among European countries,
rose above Belgium and the Netherlands in the early part of the
seventies, and secured fourth place, only to be passed again by these
little states and for a time even by Austria-Hungary. In 1912 Russia
still ranked sixth among European countries, eighth among all countries
of the world, in the value of foreign trade.
This decline in commercial importance was due largely to the conscious
and voluntary action of the government, which restricted commerce
between its people and the people of the West. No government, however,
regards all commerce as injurious, and the Russian government
endeavored to atone for losses in the West by expansion in the East.
In that direction Russia met people who were her industrial inferiors.
By trade with them she hoped to secure imports which would not compete
with her own products, and sought to win a market for her newly founded
factories. The manufactured products which were too high in price to
compete in European markets could be sold in the East so long as the
cheaper wares of western Europe did not reach the field. As commerce
extended, however, in the last decades of the century, Russia saw that
her eastern markets were threatened unless she could apply to them the
same policy of protection which she had established in the West; and
the government was forced into the policy of military and political
expansion, designed to close the doors of eastern markets to other
powers, which received its check in the the war with Japan.
=557. Course of the Asiatic trade.=—In no period of the nineteenth
century has Russian commerce across her Asiatic frontier formed any
important fraction of her total foreign trade. At the beginning
and end of the century it was about one tenth of the total; in the
intervening time it was rather less. The difficulty of transportation
over the great stretches of almost trackless territory confined the
trade with the Far East to objects comprising great value in small bulk
(tea, cloth, etc.), and directed Russian commerce rather to the Asiatic
countries on her southeastern frontier (Persia, etc.). In the second
half of the century, for reasons noted above, the government showed an
increased interest in this branch of trade, and lent liberal aid in
furthering Russian interests in the East. The most striking evidence
of the determination of the Russian government to extend its influence
toward the Pacific Ocean was the construction of the Siberian Railway
(1891). This was rather a political than an economic undertaking; it
was enormously expensive, and failed to develop sufficient traffic to
pay its way as a commercial enterprise. Its failure also in the field
of international politics was signalized by the victory of Japan in the
war with Russia in 1905, which checked definitely Russia’s ambitions to
play a dominant part in the Far East and put in her place an Asiatic
power.
[Illustration:
THE
TRANS-SIBERIAN
RAILROAD
]
=558. States of the Balkan Peninsula.=—If the reader will examine a map
of Europe about 1800 he will find that at that date the state of Turkey
occupied the whole of the Balkan Peninsula, and included considerable
territories even to the north of the Danube. The nineteenth century has
witnessed the liberation of most of this land from Turkish rule; and
some half dozen independent states have emerged and taken their place
in the European system. These states, however, have neither in their
political nor in their economic organization reached maturity. Like the
Russians, the peoples of southeastern Europe belonged for centuries to
Asia rather than to Europe, and the period of Turkish misrule, lasting
down into very recent times, has effectually checked their development.
Their states were still in the making, constantly disturbed by racial,
religious, and dynastic quarrels. Their economic organization was
still, in large part, medieval. Roads were scarce, and good roads were
almost unknown. The implements and methods of agriculture were of the
most primitive description. Some cultivators still used for a plow a
crooked piece of wood with a single handle, and threshed their grain
on the open ground by driving horses over it. Manufactures were still
in the stage of the handicrafts, and were, in some cases, exercised by
gilds like those of the Middle Ages.
=559. Commerce of the Balkan States.=—Conditions have been rapidly
changing, as railroads and steamers have reached the peoples of the
Balkans, and have brought them in touch with the advanced civilization
of the West. The commerce of the Balkans, however, has been as yet
important rather by its promise than by its performance. The total
commerce between the contiguous states Servia and Bulgaria amounted in
1882 to less than a million dollars. The aggregate commerce of the four
Balkan countries, Roumania, Bulgaria, Servia and Greece, in 1910-11,
amounted to considerably less than one per cent of the total trade of
the world, and was exceeded by the commerce of Sweden or Spain or even
of the little country Denmark. The foreign commerce of the kingdom of
Greece depended almost entirely on one product, the so-called Zante
currant, a seedless raisin which got the name of currant from Corinth,
whence it was carried to the island of Zante. The pig took in Servia a
position almost equal in importance to that of the currant in Greece;
great herds of swine were kept in the oak forests, and contributed
largely to the chief export, that of animal products. On the plains
of Roumania wheat was grown for export by a wretched population of
tenants and laborers, who were still serfs until 1864. The governments
of some of the states have endeavored by protective tariffs and various
privileges to stimulate the growth of a mining and manufacturing
industry; but the countries of the Balkan Peninsula will find in
agriculture their chief resource for a long time to come, and will
develop their commerce most rapidly by exchanging their surplus of raw
products for the manufactures of central and western Europe.
QUESTIONS AND TOPICS
1. Character of internal trade in Russia. [Wallace, chap. 12; Palmer,
chaps. 10-12; Schierbrand, chap. 9.]
2. The period of Mongol rule and its effects. [Wallace, chap. 14;
Rambaud, History of Russia, N. Y., Burt, $2, vol. 1, chap. 10;
Thompson, chap. 2; Noble, chap. 3.]
3. Condition of people and production in the time of serfdom.
[Wallace, chap. 28; Palmer, chap. 5.]
4. Traveling by roads and rivers in modern Russia [Wallace, chap. 1.]
5. The Crimean War. [Seignobos, chap. 27, first part.]
6. The period of reforms. [Wallace, chap. 27.]
7. Faults of the Russian administration. [Wallace, chap. 24,
Schierbrand, chap. 11; Thompson.]
8. Emancipation of the serfs. [Wallace, chap. 29; Thompson, chap. 4;
Noble, chap. 7.]
9. What were the chief exports and imports of Russia; with what
countries was the most important commerce of Russia conducted?
[Statesman’s Year-Book.]
10. Character and significance of the foreign trade of modern Russia.
[Hourwich in Journal of Polit. Econ., 1892-3, 2: 284-290.]
11. Domestic manufactures. [Palmer, chap. 20.]
12. Recent fiscal policy and protection. [Wallace, chap. 36;
Schierbrand, chap. 3.]
13. Manufactures in modern Russia. [Palmer, chap. 19; Schierbrand,
chap. 4; Oseroff, The industrial development of Russia, Forum, 1899,
27: 129-144.]
14. Condition of the agricultural population after emancipation.
[Wallace, chap. 31; Palmer, chap. 8; Schierbrand, chaps. 5, 6;
Thompson, chap. 4; Noble, chap. 7.]
15. Political, social, and economic life of the rural population.
[Palmer, chap. 4; Wallace, chaps. 6-9.]
16. Famines in modern Russia. [Articles by various authors in
Fortnightly Review, 1891, 56: 636-652; Forum, 1892, 13: 575-582:
Nineteenth Century, 1892, 31: 1-6; Century, 1893, 46: 560 ff., etc.]
17. Faults of the modern system of agriculture. [Hourwich in Yale
Review, 1892-3, 1: 411-433; in greater detail, in Columbia Studies,
vol. 2, N. Y., 1892.]
18. Russian trade in China. [Calderon in Contemporary Review, 1900,
78: 389-396.]
19. Russia’s hold on Persia. [Forum, 1900, 29: 147-153.]
20. Russian railway policy in Asia. [Long in Fortnightly Review, 1899,
72: 914-925, with map.]
21. Territorial expansion in the East. [Wallace, chap. 38; Noble,
chap. 10; Schierbrand, chap. 1.]
22. The Siberian railroad. [See A. L. A. Catalogue, or use one of
the following periodical articles: Norman in Scribner’s, 1900, 28:
515-541; Davidson in Century, 1904, 67: 940 ff.; Kinloch in Monthly
Review, 1901, 2: 60-71, with map, and with special reference to trade
possibilities; Mikhailoff, in North Amer. Rev., 1900, 170: 593-608;
Colquhoun in Monthly Review, 1900, 1: Nov., 40-55, with two maps.]
23. Choose one of the more important states (Turkey, Roumania,
Bulgaria, Servia, Greece) and
(_a_) Trace its political history during the century. [Seignobos,
chaps. 20, 21.]
(_b_) Study its recent commerce. [Statesman’s Year-Book.]
BIBLIOGRAPHY
Though no history of Russian commerce has appeared in English, there
are many good books on the history and conditions of the Russian
Empire; and a considerable number have been published within a few
years. For bibliography see the A. L. A. Catalogue and recent issues
of the American Historical Review; a more complete bibliography, with
chronological classification, will be found in Skrine, pp. 347-358.
Compare, also, A. L. Morse, Reading list on Russia, Univ. of State of
N. Y., State Library Bulletin, Jan., 1899, Bibliography, nos. 15-17.
References to articles on Russian commerce in the first half of the
century, in English and American periodicals, will be found in Homans,
Cyclopedia, p. 1659.
Mavor, *Economic History of Russia, London, 1914, 2 vol., is a
monumental work, particularly valuable for its study of institutional
development. The history of Russia in the nineteenth century is
treated by Seignobos, adequately for most purposes; more fully by
Skrine, Expansion of Russia, London, 1900 (N. Y., Macmillan), in the
Cambridge Historical Series.
The most useful books for our purposes are the descriptive works, most
of which contain considerable historical material. First of these
should be mentioned D. M. Wallace, **Russia, N. Y., Holt, 1877, 1905;
references in the topics are to the revised edition, 1905. Anatole
Leroy-Beaulieu, ** The empire of the tsars, N. Y., Putnam, 1893, has
the rank of a classic, but a large part of its three volumes treats
topics removed from our direct interest. Among the smaller books the
most useful are the following: Francis H. E. Palmer, *Russian life, N.
Y., Putnam, 1901, W. von Schierbrand, *Russia, N. Y., Putnam, 1904,
Edmund Noble, Russia, Boston, Houghton, 1900, H. M. Thompson, Russian
politics, N. Y., Holt, 1896.
A work deserving special mention is **Industries of Russia, published
for the World’s Columbian Exposition at Chicago, and edited in the
English translation by John M. Crawford, St. Petersburg, 1893, 5 vols.
with maps and charts. Volumes 1 and 2, paged continuously, cover
Manufactures (with historical surveys) and Trade (brief on foreign
commerce); volume 3 covers Agriculture and Forestry; 4, Mining; 5,
Siberia and the Trans-Siberian Railroad. I cannot cover here the
mass of literature on Russia’s eastern policy, and refer for that to
the bibliographical aids mentioned above. The U. S. Monthly Summary,
Commerce and Finance, April, 1899, contained a compilation of various
material on the Russian Empire and the Trans-Siberian railroad, with a
map; another monograph, on European Russia, appeared in this series in
1904.
On Finland, a distinct part of Russia for the treatment of which the
text offers no space, see N. C. Frederiksen, **Finland, London, 1902,
with bibliography; this is an excellent book, especially full on
economic matters.
The Balkan States have attracted more attention from writers than
accords with their recent commercial importance; for a general survey
see Laveleye, *The Balkan Peninsula, N. Y., Putnam, 1887. On the
conditions of commerce in the peninsula just before the World War see
Day, The pre-war commerce and the commercial approaches of the Balkan
Peninsula, Geographical Rev., N. Y., May, 1920, 9: 277-298.
TOPICS FOR REVIEW
Among topics suitable for general review of the recent period,
(1800-1900), the following may be suggested: (_a_) shipping; (_b_)
transportation by canals; (_c_) transportation by railroads; (_d_)
production and exchange of raw textiles; (_e_) finished textiles;
(_f_) coal; (_g_) iron and steel; (_h_) introduction of steam and
power machinery in manufactures; (_i_) commercial policy.
PART V.—THE UNITED STATES
CHAPTER XLV
THE ORGANIZATION OF PRODUCTION, 1789
=560. Comparison of conditions in 1789 and in 1914.=—The United States
was in 1914 recognized as one of the greatest countries of the world
in area, in population, in wealth, in efficiency of the organization
of production and business, and in the volume of internal trade and
foreign commerce. Little more than a century before, when it began its
career as an independent state, it was an aspirant struggling merely
for a respectable position among the minor powers. Its population,
which in 1914 was nearly one hundred million, was in 1790 less than
four million, placing it in this respect far below the great states
of Europe, and not far above such little states as the Netherlands,
Portugal, or Sweden. The whole settled area, comprising a strip along
the Atlantic coast, and the mere beginnings of settlement beyond the
Appalachian Mountains, was less than the area of the present state of
Texas. The people were poor, and backward in industrial development.
The amount of internal trade was small, even in proportion to the
scanty population. The people were forced into foreign commerce by
the necessities of their condition. They were as yet unable to supply
the needs of civilization by wares of their own production. They had
as yet developed no resources which assured their economic position
in commerce with European powers, and in their political and military
position they were so weak that they must beg as favors rather than
demand as rights the opening of markets which were essential to their
commercial growth.
[Illustration:
NORTH AMERICA
in 1782
]
The sharp contrast between 1789 and 1914 indicates clearly the
importance of the subject which will be treated in the following
chapters of the book, the history of the commerce of the United States.
The student is asked to give his attention first to a detailed study of
conditions existing about the year 1789. A survey of conditions at that
date will furnish a summary of the development of the colonial period,
and a basis for appreciating the national progress of more recent times.
=561. Chief exports in 1790.=—Following the plan pursued in earlier
chapters we shall attend first to the exports of the country, composed
of those wares which could be produced to such advantage that the
people could sell a surplus of them abroad, and so secure the imports
of which they stood in need. The following table gives the chief items
for the first year of our national existence:
EXPORTS, 1790, IN MILLIONS OF DOLLARS
Northern products.—Flour 4.5
Wheat 1.3
Lumber 1.2
Corn 1.0
Fish .9
Potash .8
Southern products.—Tobacco 4.3
Rice 1.7
Indigo .5
----
Total (including decimals omitted) 16.6
Total exports, including items omitted 20.2
One characteristic of this table is noteworthy because it has marked
the exports of the country from this early time to the present. The
exports of the United States have always consisted not of a great many
articles sold in small quantities, but of a few great staples sold in
large quantities. Nine items, it will be observed, comprised over three
fourths of the total value, and the two items, breadstuffs and tobacco,
made up over half.
=562. Predominance of agriculture; experiments with crops.=—The table
shows clearly that the strength of the United States at this time
lay in what the economists call extractive industries, devoted to
the production of raw materials. Some of the wares, it is true, had
undergone the first stages of manufacture (flour, lumber, potash,
indigo), but their chief value consisted still in the original
material. In contrast with present conditions it was estimated at
this time that nine tenths of the people were engaged in agricultural
pursuits, and that even in New England, where industrial pursuits were
most diversified, only one eighth were employed in manufactures, trade,
or other occupations besides agriculture. Of twenty-one presidents of
the United States (to 1880) fifteen were farmers or the sons of farmers.
The agricultural products of the table above represent the results of
nearly two centuries of experiment in the search for profitable crops.
It is not easy to determine what cultures will pay under the conditions
of a new country. Early settlers had extravagant hopes of supplying
the European market with silk, wine, olive oil, drugs, dyes, etc., and
learned only by bitter experience that the conditions of nature and man
destined America to a commercial career different from that of southern
Europe or Asia. Most of the important crops and grasses were introduced
to this country from other continents, Indian corn being, of course,
the notable exception; and so thoroughly had the process of experiment
been carried out that in the hundred years following the Revolution
only one species of cultivated plant (sorghum) was introduced, of
sufficient importance to be enumerated in the census.
=563. Breadstuffs.=—The crop of greatest importance to the people of
the American colonies was, without question, maize or Indian corn. This
crop, of native origin, flourished in all parts of the colonies, and
yielded, under the conditions of a primitive agriculture, far richer
returns than could be secured from any of the European grains. To
the domestic food supply it was indispensable. For export purposes,
however, it was less desirable, and though moderate quantities were
shipped abroad every year, the demand of foreign markets, as appears
in the table, was chiefly for wheat and wheat flour. Wheat was at this
time a costly luxury in New England, but it could be grown to advantage
in the middle colonies and in Virginia; and in the particular period
which we are studying it assumed a leading position among the exports.
European countries had formerly been unwilling to receive a product
which competed with their own agriculture, but the failure of crops in
Europe, the outbreak of the French Revolution (1789), and the long wars
following, caused a great increase in the demand for our food products,
and gave rich returns to the wheat farmers who had been suffering from
the lack of a market.
=564. Other products of northern agriculture.=—Aside from the cereals
the agricultural exports of the middle and northern colonies were
unimportant. Many attempts had been made to grow flax and hemp, to sell
in competition with the produce of Russia and other Baltic countries.
The seed of the flax was exported, but the preparation of the fiber
was too troublesome to pay the producer, and though coarse fabrics for
home wear were made of it and it was used for sewing shoes until the
invention of the wooden shoe peg, the export of flax and hemp fiber
remained insignificant.
The second place among exports of northern agriculture, after
breadstuffs, was taken by stock and meat products. The abundance of
pasture land encouraged farmers to raise a surplus of live stock for
sale, though as yet they paid but little attention to breeding or to
the proper care and fattening of the animals. Horses were shipped to
Canada and to the West Indies, while salt beef and salt pork had a
ready sale for provisioning ships, and for export to the West Indies.
The export of live animals and provisions amounted, however, to less
than one million dollars.
=565. Southern staples; tobacco.=—Many of the export products above
mentioned could be raised in the southern colonies, and all of them
were, in fact, produced there to some extent. The people of the South,
however, were fortunate in finding conditions suited to the production
of some special crops, which, unlike those of the North, could not be
produced to advantage in Europe, and which therefore were more readily
taken in trade. The Southerners followed their interests, therefore, by
raising of foodstuffs only what they absolutely needed, and by applying
themselves to their special staples. Of these tobacco was by far the
most important throughout the colonial period. It was asserted at one
time that a man could provide grain for five men and clothes for two,
by the sale of the tobacco which he could grow unassisted. Until the
rise of the cotton culture tobacco was king among the southern staples,
and had no rival export at the North of equal importance; through the
eighteenth century it formed about half of the total exports of the
colonies to England, and only just before the close of the century
did it yield the leading place to wheat. Disadvantages of a one-crop
system, entailing sharp fluctuations in price and periods of dearth,
the rapid exhaustion of the soil under tobacco, and the encouragement
of negro slavery,—all these evils could not turn the planters of
Maryland and Virginia from a crop which, on the whole, yielded rich
returns.
=566. Rice and indigo.=—In Carolina rice took the position held by
tobacco in other southern colonies. Its cultivation became of practical
importance only toward 1700, starting, it is said, from the gift of
a small parcel of rough rice by the captain of a ship bound from
Madagascar to Liverpool, who was forced to put into Charleston for
repairs. The grain found a ready market in southern Europe and in the
West Indies, and became soon an important article of export, though the
modern method of water culture was not introduced until nearly 1800.
The only other item of southern produce deserving special mention in
this place is indigo. This plant, the reader will remember, was the
source of a blue dye which at the time was highly prized and which,
indeed, has only recently been displaced by anilin colors. Attempts
had been made in the early colonial period to raise indigo, but no
success attended them until about 1750. After that date the culture
flourished in South Carolina and Georgia; aided by a bounty from
the British government the planters exported large quantities and
secured handsome returns. The preparation of indigo was, however, an
unwholesome occupation, as the plant, after being soaked in water,
was left to rot, giving out an offensive odor and drawing innumerable
flies. It was an indication of progress, therefore, that indigo culture
declined rapidly after 1790; planters gladly took up the cotton
culture, and the United States soon secured by importation from abroad
the ware of which it had formerly produced a surplus.
=567. Methods of agriculture.=—Though agriculture as a source of wealth
overshadowed all other industries in the colonies, it was conducted
with methods which we should now consider extremely inefficient and
wasteful. Washington wrote to an agricultural specialist in England:
“An English farmer must have a very indifferent opinion of our American
soil when he hears that an acre of it produces no more than from 8 to
10 bushels of wheat; but he must not forget that in all countries where
land is cheap and labor is dear the people prefer cultivating much to
cultivating well.”
The plow, the most important implement of agriculture, was still at
the time of the Revolution substantially unchanged from the models
of ancient times. The mould-board, of wood as the name implies, was
sometimes plated with sheet iron or with strips made out of old
horseshoes. President Jefferson improved the shape of the mould-board,
and about the end of the century the cast-iron plow began to come
into common use. The sickle gave place to the scythe and cradle, but
threshing was still done with a flail or by driving horses over the
grain. There was a marked increase in the interest in agricultural
science and methods about the time when the national government began,
agricultural societies were founded in many states, and progress
thenceforth was more rapid.
=568. Forest products; potash.=—If the reader, after this review of the
agricultural exports of the country at the beginning of its national
existence, will refer again to the table above, he will find that
export products of considerable importance were derived also from the
fisheries and the forests.
The eastern slope of the country was so heavily wooded that trees were
regarded rather as a hindrance than a help by the colonists. It was
good philosophy, however, to make the best of them; and the British
government, during the colonial period, encouraged the export of forest
products, to avoid depending on the Baltic countries for the supply of
wood and naval stores. The most spectacular export of this description
was that of the great masts and spars, which formerly had been reserved
for the government by the mark of the broad arrow, and which were
hauled out of the woods in winter by fifty yoke or more of oxen. Most
of the wood, however, left the country in smaller form: staves and
heading, which were sent to the West Indies and there set up into casks
and hogsheads for the carriage of sugar products; boards, shingles, etc.
When wood ashes are leached, and the water evaporated, the product is
potash; if this be refined by heating it is termed pearlash. It is an
impure carbonate of potassium, and at this early stage of chemical
industry it had an immense importance in the arts, being used in
bleaching, the manufacture of glass, soap, etc. Besides enjoying a
ready sale potash had another peculiar advantage in this period; it
was, besides the naval stores (pitch, tar, turpentine, rosin), the
only wood product which could be readily transported on land. It was,
therefore, a great resource when land was cleared; and practically
every new settlement, in the northern colonies at least, had its potash
works, in which useless wood was converted into a valuable export
product.
=569. Fisheries.=—“The fisheries first and mainly placed New England
on its legs.” The people of the northern shore were driven to the
sea by the difficulties of life on land; and used the proceeds of
the fishing industry as the means of purchasing their imports from
abroad, and part even of their food supply from other colonies. They
had advantages over European competitors in their nearness to the great
fishing grounds and in their skill in building and navigating boats;
and though the proportion of the total population engaged in fisheries
was never large (about one thousandth at this time), the product was
sufficiently important to take a respectable rank among the exports of
the country. Every year more than five hundred boats left the towns
of the Massachusetts coast, especially Gloucester and Marblehead, for
the banks of Newfoundland, while Nantucket and New Bedford became the
source of whaling voyages that reached from the Arctic to the Antarctic
oceans.
In comparison with the fisheries the fur trade had become of little
importance; the European demand for furs was met at this time by
territory lying to the north of the limits of the United States.
=570. Chief imports, 1791.=—The method, or rather the lack of method,
followed by the government in keeping its commercial statistics in
early days, renders it impossible, unfortunately, to present here
a table of imports in 1790 comparable in accuracy and in detail to
the table of exports given above. We must content ourselves with the
following estimates for the year 1791.
IMPORTS, 1791, IN MILLIONS OF DOLLARS
Articles paying duties _ad valorem_ 17.0
Wines, spirits, malt liquors 2.6
Colonial wares.—Sugar 1.6
Molasses 1.4
Coffee .5
Tea .3
----
Total, Colonial, including minor 4.0
Total, including minor items omitted 25.0
=571. Classes of wares imported; manufactures.=—The table shows,
on its face, only one thing with clearness, that the people used
already a considerable part of their surplus to purchase articles
of food, of the nature rather of luxuries than of necessaries, which
could not be produced to advantage at home. This feature has ever
since characterized the import trade of the country. In the recent
commerce of the United States we find, beside the class of colonial
products, two other classes comprising the bulk of the remaining
imports, manufactures and material for manufacturing. Were articles
of these two classes masked behind that large item of the table which
classifies the imports only with reference to tariff schedules?
The answer can be given, without hesitation, in the affirmative.
Raw materials for manufacturing were still, however, comparatively
unimportant; most of the imports to this country, at the beginning
of its national existence, were finished manufactures. The statement
made by a writer in 1818 held true at this time: “Our imports consist
chiefly of articles which habit and fashion have made necessary for our
consumption: but a very small proportion of them is subservient to our
arts and manufactures.”
To describe the character of these imported manufactures in detail
would be an arduous task, for they included the products of practically
all the handicrafts and factories of Europe. In contrast with the
exports of the country, which have been restricted always to a few
great staples, the imports, from earliest times to the present, have
been extraordinarily diversified. The imports included, besides the
items specified in the table above, a large part or the whole of the
metals used in the country (tin, copper, lead, pewter, brass, and
iron), and manufactures of metal. They comprised, further, a great
quantity of the various textiles, of woolen, cotton, linen, and silk;
and miscellaneous manufactures such as glass and earthen ware, paper,
leather wares, etc.
=572. Significance of the import of manufactures.=—Accepting now as
the most important characteristic of the imports of this period the
preponderance of manufactured articles, we must seek to realize why
this was so, and what it signified. Anticipating the substance of
following sections it may be said, in summary, that the people of the
United States supplied their need for manufactured articles by their
own handiwork, so far as possible, but that they found it unprofitable
to attempt to make wares the manufacture of which required high
technical skill, the use of machinery, and an advanced organization
of business. They depended on Europe, therefore, for all the finer
manufactures. The total amount of manufactures imported annually was
not large in proportion to the population, being less than $5 per head;
yet this amount comprised most of the comforts and luxuries as well as
many of the necessaries, which the people enjoyed. Even at the end of
the colonial period the average American led a life of struggling and
privation, and could think himself fortunate if he won by his toil on
land or at sea a surplus sufficient to provide him with a few articles
beyond the bounds of his absolute necessities.
=573. Household self-sufficiency.=—In contrast with the modern scale
of living the simplicity of the standard of life at this period can
scarcely be exaggerated. Most of the articles consumed in a family
were produced at home. The house was begun with the help of neighbors,
and was finished, perhaps long afterwards, by the inmates themselves.
Domestic utensils, household furniture, and farm implements were
still made, to a large extent, on the farm where they were used. The
every-day clothing of the people, made from linen or wool or from a
combination of the two (“linsy-woolsey”), was spun and woven, cut out
and made into clothes, with comparatively little professional help.
Carpets were made from woolen yarn spun in the family, sent away only
to be dyed, and then woven either at home or in the neighborhood. The
self-sufficiency of the family group was not so complete in 1800 as it
had been in 1700, but it continued still to be the dominant feature in
economic life, and in some districts lasted for decades to come.
=574. Town self-sufficiency.=—Articles which were not made in the
household were, as a rule, made in the town, and did not contribute
to the volume of distant trade or of foreign commerce. The important
unit in the economic organization of the United States at this period
was the rural group of perhaps a few hundred inhabitants. Most of the
people were farmers, as has been said above, and very few were entirely
independent of farming. Some, however, had the skill and implements
which enabled them to supply the needs which could hardly be met by
household production. Nearly every village had a gristmill, and, if
conditions favored, a sawmill. The village blacksmith was to be found
in almost every settlement, and performed an astonishing variety of
work for the people. Toward 1800, moreover, a tannery had become a
common though not a universal feature of village life, and most towns
could now boast of a shoemaker. Some still depended, however, on the
itinerant cobbler, and few were large enough at this time to furnish
paying custom to special artisans; and relied on traveling tinkers,
glaziers, coopers, curriers, etc., to perform the services proper to
their trades.
=575. Development of household manufactures.=—Only in a few lines of
manufacture had the organization developed beyond the simple lines
sketched above. The making of cloth is an operation requiring much
time, considerable technical skill, and, for some processes, machinery
such as few households would possess. By 1700 it had become customary
to rely upon professionals for fulling, the process which compacts the
fibers of the cloth, and fulling mills were widely distributed in 1800.
Carding machines, for straightening the fibers of wool before spinning,
were to be found in many towns, and it was more and more common, also,
to have the weaving done out of the house, though this process was
ordinarily attended to in the immediate neighborhood. With outside aid
of this character the people of some parts of the country were able to
produce cloth in excess of their needs, and could use the surplus in
trade.
Nearly every town, moreover, in the northern and central colonies, had
some industry which utilized the spare time of the inhabitants, and
gave them the means of exchange with people in the colonies or abroad.
For a characteristic description take the following of Raynham, Mass.,
1793, when the town had a population of about 1,000: “Besides the usual
business of husbandry, numbers are here employed in the manufactories
of bar iron, hollow ware, nails, irons for vessels, iron shovels,
potash, shingles, &c.”
=576. Appreciation and criticism of American manufactures at this
time.=—It would be tedious and unprofitable to study in detail the
petty manufactures which cropped up in the various towns of this
period. Let us accept as a summary the following statement, applying to
the decade ending in 1800: “The domestic manufactures best established
are those of leather, iron, flax, potters’ wares, including bricks,
ardent spirits, malt liquors, cider, paper of all kinds, hats, stuff
and silk shoes, refined sugars, spermaceti and tallow candles, copper,
brass and tin wares, carriages, cabinet wares, snuff, gunpowder and
salt.”
In studying this description the reader should bear certain facts in
mind. First, the list, however long it seems, is far from including
all the wares required for the satisfaction of ordinary wants. Second,
though these manufactures are stated to be the ones best established,
there was, among them all only one sufficiently strong to produce a
considerable surplus for sale outside the country; this was the rum
manufacture. The people still relied largely on importations from
foreign countries for many of the wares enumerated. Third, many of
these manufactures (bricks, cider, snuff, and salt, for example;
flour and sawmill products might properly be included) were of a very
simple character, requiring no great technical skill or elaborate
machinery. Water power was used widely, but steam power had not yet
been applied, and improved machinery had not yet been introduced from
Europe. The factory system, with its extensive use of machinery and its
strict organization of labor, was first permanently established in the
United States in 1790, at Pawtucket, R. I.; and the American factories
did not, for many years, reach the English standard of efficiency.
An English committee reported in 1791 that the American cotton
manufactures were of a coarse grade, of worse quality and of higher
price than those produced at Manchester.
QUESTIONS AND TOPICS
1. How do the population and settled area of the United States in 1790
compare with those of the State in which you live now?
2. Has any country ever enjoyed such growth as that of the United
States in the nineteenth century? What country or countries come near
us in rapidity of progress?
3. Prepare a chart, in the way previously suggested, and preserve it
for comparison with the exports in later periods.
4. What is the proportion of persons now occupied in agriculture in
your State? in the State where the proportion is highest? [Abstract of
Census.]
5. What are the comparative advantages and disadvantages of corn and
wheat as commercial crops? Which crop occupies the greater acreage in
your vicinity, and why?
6. Write a report on one of the following crops, its preparation,
uses, and history in the United States:
(_a_) Flax. [Encyclopedias; E. A. Whitman, Flax culture, Boston, 1888,
Barker in Quarterly Jour. Econ., 1917, 31: 500-529.]
(_b_) Hemp. [Encyclopedias; C. R. Dodge, Report no. 8, U. S. office of
fiber investigations.]
7. Profits and losses in the colonial tobacco culture. [Bruce.]
8. Do you know of any region which suffers from the evils of the
single-crop system now?
9. Advantages and disadvantages of rice as a crop; where is it chiefly
grown now? [Encyc.; commercial geographies.]
10. Experience of a woman as an indigo planter. [Earle, Colonial
dames, Boston, Houghton, 1895, $1.50, pp. 76-83.]
11. What is the average crop of wheat per acre now, in the U. S., and
in your vicinity? [Census.]
12. Details of colonial agriculture. [Coman, 47-62.]
13. The lumber industry in New England. [Lord, Indust. exper., part 3,
chap. 1; Wright, 71-79.]
14. History of the American fisheries. [Coman, index; Van Metre in
Carnegie Hist., vol. 2, part 2.]
15. The whale fishery. [Weeden, chap. 11; McMaster, Hist., 1: 63, with
references.]
16. Manufactures imported by Virginia in the colonial period. [Bruce,
chaps. 15, 16.]
17. What parts of the United States are now in a position like that
of the colonies, devoting their labor to the production of raw
materials and importing manufactures from the regions of advanced
industry? What foreign countries are still in this position?
18. Write a report on the household industries of the colonial period.
[Books by Alice M. Earle.]
19. What household industries are declining now? [The preserving of
fruit may suggest other examples.]
20. A typical New England town. [See the description of Braintree,
Mass., in C. F. Adams, Three episodes, Boston, 1892.]
21. The textile industry in the colonial period. [Wright, Ind. ev.,
43-60.]
22. The rise of manufactures and the attitude of Great Britain. [Lord,
Indust. exper., part 3, chap. 2; Coman, 62-76.]
23. The iron industry. [Wright, Ind. ev., 80-103.]
BIBLIOGRAPHY
GENERAL BIBLIOGRAPHY.—Channing, Hart and Turner, Guide, revised ed.,
Boston, 1914, (general); Bogart, Lippincott, Emery in Cambridge Mod.
Hist., 7: 825-829, (classified); Coman, (alphabetical); E. R. Johnson,
(railways); Dewey, Financial History, N. Y., Longmans, (fiscal); A.
L. A. Catalogue, (popular books in print). The Literature of American
History, ed. J. N. Larned, Boston, 1902, has been continued (for most
years, to and including 1917), by annual lists, Writings on American
history, published since 1912 by the Yale University Press.
GENERAL.—The most important single works are the **Contributions
to American economic history from the Department of economics and
sociology of the Carnegie Institution of Washington: History of
domestic and foreign commerce of the U. S., by E. R. Johnson, T.
W. Van Metre, G. G. Huebner and D. S. Hanchett, 2 volumes (cited
hereafter as Carnegie History); History of transportation in the
U. S., before 1860, under direction of B. H. Meyer; History of
Manufactures in the U. S., 1607-1860, by Victor S. Clark. Foreign
trade is treated in connection with other topics in N. S. Shaler, ed.,
*The U. S., N. Y., Appleton, 1894; C. M. Depew, ed., *Amer. commerce;
T. D. Woolsey, ed., First century of the Republic, N. Y., Harper,
1876; McMaster, *Hist. (general narrative); Bogart, *Econ. hist.,
(manual); Lippincott, *Econ. development (manual); Wright, Ind. ev.
(manual); Coman, *Ind. hist. (manual). On special branches of foreign
trade see S. J. Chapman, History of trade between United Kingdom and
U. S., Lond. and N. Y., 1899; F. R. Rutter, The South American trade
of Baltimore, Baltimore, 1897; J. M. Callahan, American relations in
the Pacific, Baltimore, 1901.
COMMERCIAL POLICY.—On tariff history **Taussig is by far the best
guide; of the many other books on the subject (see bibliographies
above) most are too prejudiced to be put in the hands of immature
students. On the merchant marine and shipping policy see **W. L.
Marvin, **J. R. Spears, and *W. J. Abbot. For defence of protection
and subsidies, W. W. Bates, American marine, Boston, 1893, American
Navigation, Boston, 1902; for criticism, D. A. Wells, Our merchant
marine, N. Y., 1890.
SPECIAL TOPICS.—Readers should consult the bibliographies listed above
for references on particular industries. The histories of Ringwalt,
Hammond, and Swank are likely to prove especially useful.
SOURCES.—The chief source is the annual report on commerce and
navigation, which is cited hereafter by abbreviation, Com. & Nav.
Reports for the years from 1789 to 1823 are in the collected set
of American State Papers; later reports must be sought in the set
of Congressional documents. The Check-list of Public Documents,
Washington, 3d. ed., 1911, is an indispensable aid in using government
publications.
EARLY AMERICAN COMMERCE
COLONIAL.—**Weeden, **Bruce, **Beer. More general in character are
the various writings (see A. L. A. Catalogue) of *John Fiske, *C.
M. Andrews, *Alice Morse Earle, *Sydney G. Fisher. On commercial
policy of the colonies see (besides Beer, and Hill cited below) A.
A. Giesecke, American commercial legislation before 1789, Univ. of
Penn., N. Y., 1910. On manufactures see Rolla M. Tryon, *Household
manufactures in the U. S., 1640-1860, Univ. of Chicago Press; on
shipping, R. D. Paine, *Ships and Sailors of old Salem, N. Y., 1909,
and R. E. Peabody, *Merchant venturers of old Salem, Boston, 1912.
EARLY NATIONAL PERIOD.—Mahan, **War of 1812, vol. 1; Fiske, **Critical
period, Boston, Houghton, 1899, $2; McMaster, **History, and **Chapter
9 of Cambridge Mod. Hist., vol. 7. On the development of the
commercial organization, S. E. Baldwin, American business corporations
before 1789, Amer. Hist. Review, April, 1903, 8: 449-465; G. S.
Callender, **Early transportation and banking enterprises, Quarterly
Jour. of Econ., Boston, Nov., 1902, 17: 111-162. On commercial policy,
William Hill, **First stages of tariff policy, Pub. Amer. Econ.
Assoc., 1893, 8: 452-614; T. W. Page; **Earlier commercial policy,
Journal of Pol. Econ., Chicago, 1901-2, 10: 161-192; Henry C. Adams,
*Taxation in U. S., Baltimore, 1884.
CHAPTER XLVI
INTERNAL TRADE AND FOREIGN COMMERCE, 1789
=577. Development of internal trade 1789-1914.=—It will be impossible,
in the later chapters of this book, to describe in detail the
development of the internal trade of the United States. This trade has
grown to such proportions that, at the present day, it far outranks in
volume and importance the foreign commerce of the country. The reader
may be trusted to realize this fact, and to have some knowledge of the
character and organization of internal trade at the present day. It is
not probable, however, that he knows the humble origins from which this
trade has risen; and a description of the conditions and character of
internal trade about 1789 will enable him to appreciate the progress of
the past century, even though the different steps in progress receive
but scant mention in the narrative.
=578. Condition of the roads; effect on freight traffic.=—The roads,
which furnished the only means of communication and transportation
by land, were still the earth roads of the colonial period, thick
with dust in summer, and absolute sloughs, with mud a foot or more
deep, during the thaws of winter and spring. During the greater part
of the colonial period wagons were a rarity, because there was so
little opportunity to use them. Men used mere sledges on the farm,
and traveled or carried their produce from one farm to another on
horseback. In the northern States the facilities for land carriage were
good in only one season, winter, when the periods of sleighing enabled
the people to make the market trips and visits which were impracticable
at other times. Even near the large towns laden carts had to be drawn
by two to six oxen, when there was no snow on the ground.
When there was no other means of transportation, as in the case of the
settlements west of the Alleghany Mountains, wares were carried over
the roads in wagons, sometimes for a distance of hundreds of miles; but
such instances of extensive land transport were exceptional, and the
freight charges were so high that only articles of the first necessity,
as salt and iron, could pay for carriage.
=579. Sparsity of passenger traffic.=—Some men lived and died in the
town where they were born, without visiting another town a dozen miles
distant. There was so little intercourse between the adjoining towns of
Easthampton and Southampton, on Long Island, that each town preserved
individual peculiarities of pronunciation down even to 1800. Throughout
the colonial period, and even in the days of the early Federal
government, it was very difficult to collect delegates at a political
gathering; and it was not uncommon for men to make their wills before
starting to a State convention in Pennsylvania. Travel by stage-coach
did not become of importance until well into the nineteenth century.
In 1783 two stage-coaches, consuming a week or ten days on the trip,
sufficed for the travel between Boston and New York; though a few years
later (1794) twenty stages were employed. Postage rates for a single
letter ranged from 8 to 25 cents, according to the distance, and mails
were infrequent.
=580. Relatively great importance of waterways.=—Like the people
of the Middle Ages, the inhabitants of the United States at this
period were driven to the use of water transport by the difficulty
of transportation on land. Rivers which are used now only by canoes
and pleasure boats were then important means of communication and
transportation. The Connecticut River has now a scant traffic as
far as Hartford, about forty miles from its mouth; in 1816 we read,
“The Connecticut River is navigable 200 miles above Hartford, for
Boats, of 15 tons, and 50 miles higher, for Floats and Pine Timber”;
large quantities of potash were carried down the river even from the
Canada line. The Hudson and other rivers were the channels through
which export products were collected and brought to the sea, and the
farmers of central and western New York sent their wares to market by
rafts and “arks” on the Delaware and Susquehanna. Waterways were of
especial importance in the southern States, where the means of land
transportation were even less developed than in the North; tobacco was
brought to the wharves on inlets and rivers by “rolling-roads,” rough
tracks over which the hogsheads were rolled with the assistance of a
horse.
=581. Importance of the country store.=—The great institution of
trade at this period was the country store, which collected the
surplus products of the townspeople and gave them in exchange the
wares imported from abroad. Every town of any size had one of these
stores, and only the largest towns had distinct shops for the sale of
special articles. The stock in trade of one of the typical country
stores included all of the articles which have been mentioned among
the imports of the country: sugar, molasses, tea, coffee, metals, and
hardware, cloth, thread, books, glass, earthenware, etc. The list on
the other side of the store-keeper’s books would be as long, for it
included all the export products of the country, and some wares which
were sent to market in the large towns or in other States. The merchant
must always be prepared to receive in pay for his goods “Grain of
all kinds, beef, pork, poultry, cheese, butter, eggs, nuts, berries,
hides, tallow, candles, lard, domestic flannels, feathers, quills,
braided straw hats, potatoes, apples and other fruits, both green and
dried, home-made brooms, flax and flax seed, cider and domestic wines,
etc.” At the period which we are studying, well past the close of the
colonial period, barter was still the usual form of exchange, and money
rarely passed at the transactions in the store or in the trade between
the townspeople and the village artisans.
=582. Benefits and disadvantages of the country store.=—The country
store was the focus of the village, not only in economic but in
political and social life as well. There was no better training school
in the world for the study of human nature and the development of
business sense. Practically all of the business life of the times was
concentrated in these stores, and it is, therefore, not surprising,
that few men rose to eminence later in the mercantile world who had
not passed a period of apprenticeship in one of them. Charles Tiffany,
Levi P. Morton, E. D. Morgan, H. B. Claflin; of a later period Marshall
Field, Pullman, Pillsbury, Armour, J. D. Rockefeller, J. J. Hill, and
many others; all these rose from the position of clerk in a general
store to the place which they attained in later life.
From the standpoint of the villagers, however, it was a great
disadvantage to have the market for their produce restricted to the
store in their immediate vicinity. The store-keeper in the smaller
towns had no competitors, and enjoyed a practical monopoly of trade of
which he took full advantage in driving his bargains. In the northern
colonies, where the difficulties of transportation were leveled by
the snows of winter, the people could attain a certain measure of
independence of the country store by making market trips to one of
the larger towns. Neighbors would agree upon a date and set off,
sometimes in a troop of fifty or sixty. They loaded their sleighs
with a supply of food for the journey, and with the produce of the
farm and household, and sought out the nearest large town, Portland,
Newburyport, Boston, Providence, Springfield, Hartford, etc. In one of
these market centers they could make much better bargains than at home.
=583. Relative smallness of interstate trade.=—When the products of
the country had been collected at the large coast towns by the farmers
and store-keepers, they were, for the most part, exported to foreign
countries. Interstate commerce was as yet comparatively small. There
was, it is true, an active coasting trade, but this was employed
chiefly in the collection and distribution of goods along short
stretches of coast. Small vessels plied frequently from the large ports
like Boston, New York, Philadelphia, and Charleston, to the country
districts on either side, but rarely made extensive trips, as from
Boston to Charleston, for instance.
Commerce between States as distant even as Massachusetts and South
Carolina existed and was by no means insignificant in absolute amount.
The northern colonies sent a part of their surplus of rum, live stock,
dairy products, and home-made cloth to the South, and brought back
tobacco or bills on England which they could cash. Still, comparing
this trade with other elements of internal trade, with the foreign
commerce of the time, or with interstate commerce of later times, the
striking thing about it is not that it was so large, but that it was so
small.
=584. Share of different States in foreign commerce.=—The relative
contributions of different parts of the country to its foreign
commerce can be shown by the following summary, giving the exports by
localities in the year 1791. The chief States ranked as follows, giving
values in millions of dollars and indicating the leading ports in
parenthesis: Pennsylvania, 3.4 (Philadelphia); Virginia, 3.1 (Bermuda
Hundred, Norfolk); South Carolina, 2.6 (Charleston); Massachusetts, 2.5
(Boston); New York, 2.5 (New York); Maryland, 2.2 (Baltimore). No other
State or port exported as much as one million; and exports from all the
other States together amounted to little over one tenth of the total of
nineteen millions.
The striking feature of the table is the relative importance of the
southern States in foreign commerce, an importance which they were
destined to hold for a long time to come, as the cotton industry was
developed. It must be remembered, however, that the figures refer only
to the export trade, and that there would be considerable changes in
rank if we could include the import trade. Taking as a rough means of
measuring imports the amount of duties collected, we find, for example,
in the first year of the national government, that though Pennsylvania
again headed the list, the second and third in rank were New York and
Massachusetts respectively, while the southern States ranked lower
by very considerable amounts. This period which we are studying was,
moreover, one of rapid change, marked especially by the development of
the central and northern colonies. Taking the year 1795, when these
colonies were profiting by a great increase in their food exports, and
when the cotton trade was still undeveloped, New York had risen to the
second place in exports and Massachusetts to the third.
=585. Development of the chief seaports into cities.=—The seaports
named in the preceding section had gained from trade an amount of
wealth and population, which, however small it may seem from the modern
standpoint, put them in a class above the ordinary towns, and made them
the representatives of a more advanced business organization. The most
populous of these places had in 1790 a population of only about 30,000
(in thousands, New York 33, Philadelphia 28, Boston 18, etc.); and the
total number of people living in towns of over 8,000 inhabitants was
still only about 130,000. In other words, only one person in thirty
lived in a large town or city. The budding cities retained many of
the rural characteristics of the towns from which they had grown. A
mere beginning had been made in paving the streets, and many people
still kept kitchen gardens. The price of provisions, however, was
rising rapidly, and the cities had become dependent on trade with the
country districts for most of their supply. Cattle were fattened in
the Connecticut valley for the New York and Philadelphia markets, and
wood for heating and building was brought by coasting vessels from
considerable distances.
The large towns could boast of a diversified industrial population, in
which many special branches of manufacture were represented, and of
numerous shops; Boston was credited with 366 stores in the enumeration
of 1789. The first commercial bank of discount and deposit in the
United States began operations in Philadelphia in 1782, and about 1800
there were 33 banks of this kind in the country.
=586. Foreign countries of the greatest commercial importance to the
United States.=—An indication of the direction of commerce is furnished
by the following table, showing the chief countries to and from which
the United States shipped wares in 1790. Figures give the values in
millions of dollars.
_Exports_ _Imports_
Great Britain and her dominions 9.3 15.2
Including British West Indies 2.0
France and her dominions 4.6 2.0
Including French West Indies 3.2
Spain and her dominions 2.0 .3
Including Spanish West Indies .1
The Netherlands and her dominions 1.9 1.1
Including Dutch West Indies .6
Portugal and her dominions 1.2 .5
The figures of imports are based on estimates, and no sum is given for
the total amount of the year; the total exports were but slightly above
twenty million, and countries the names of which do not appear received
but insignificant amounts of our goods.
=587. Insignificance of direct trade with Asia and Africa.=—Some
reasons for the direction of American commerce at this period will
appear in the next chapter, in which the commercial policy of European
countries will be discussed. I propose here merely to point out some of
the striking facts shown by the table, and to indicate their connection
with the development of American commerce in the colonial period.
Attention may be drawn, first of all, to the significance of omissions
from the table. In the year in question the United States sent to
the two great continents of Africa and Asia less than one third of a
million dollars of exports. The imports, especially from Asia, were
probably somewhat larger, for American vessels had begun to frequent
the ports of East India and China, and to bring direct from them the
rich cargoes which formerly had reached America through the hands of
English middlemen. Still, any reasonable estimate of the trade with
distant continents would leave it insignificant in comparison with the
European trade, which formed the mainstay of American commerce.
=588. Unique position of England in trade with the United States=.—Of
the European countries there was one which occupied a position of
commanding prominence. Great Britain received of our goods more than
all the rest of Europe together, and sent us of her own far more
than all the other European states could supply. It is noteworthy,
and was so regarded at the time, that this country, after a bitter
struggle for political and commercial independence, and after having
broken the bonds which were supposed to hold her in subjection to
the English market, should voluntarily resume the trade relations
which had formerly been considered so oppressive. The great amount
of our trade with England is the more remarkable, as it covered a
considerable amount of trade with other countries. England felt as yet
no great need for our export products, and forwarded to other countries
a considerable part of what she received. Of the imports which we
received from England, on the other hand, while the greater part was
doubtless the product of English manufacturing industry, there were
many wares which came from other countries, but which we found could be
purchased more conveniently in England than at the original place of
production.
=589. Commerce with the rest of Europe.=—It was but natural that the
United States should have a commerce of some importance with states
like France and the Netherlands, which were still among the leaders;
and it can only be regarded as surprising that this commerce was so
small in comparison with that with England. Our trade with eastern
Europe was carried on so largely through England that Germany and
the Baltic countries would make but an insignificant showing if they
were included in the table. Our trade with southern Europe, however,
was evidently governed by other conditions. Portugal and Spain could
furnish few desirable wares of their own production, except wine; the
table shows that the imports from those countries were small. They
offered, however, what we sought in vain in northern Europe, a ready
market for our fish, cereals, and other foodstuffs, and were hence of
great importance to our export trade. Commerce with the Mediterranean
countries, which had been interrupted during the Revolution, had not
since then been developed to any considerable proportions, because of
the ravages of the Algerine pirates. These countries had formerly taken
a quarter of our fish exports, and about one sixth of our wheat and
flour shipments; and trade with them revived later when our navy had
brought the pirates to terms.
=590. Importance of the West Indies as an outlet for wares excluded
from Europe.=—A place of very peculiar importance in the commercial
economy of the American people, in the colonial period and well past
the time which we are now studying, was taken by the West Indian
islands. Of the chief products of the United States those coming from
the South, especially tobacco, were sure of a good market in Europe,
and were a ready means of purchasing the manufactures which the people
needed to import. The chief products of the North, however, including
breadstuffs, provisions, and fish, enjoyed no such favorable reception.
The statesmen of England and other countries clung still to the plan
of protecting domestic agriculture by assuring it the home market, and
desired to encourage domestic fisheries as a means of supporting the
navy. In the colonial period, therefore, the staple products of the
central and northern colonies were kept out of England and other states
by heavy duties or by prohibitions. The people of those colonies,
therefore, were at a great disadvantage in their trade with the mother
country: they found it difficult to secure the means of paying for the
English manufactures which they imported, and were forced to rely in
some measure on the crude products of their own domestic manufactures,
as described in a previous chapter.
=591. Character of commerce with the West Indies; triangular
trade.=—The very products, however, which were rejected in Europe,
were keenly desired in the West Indies. The islands had become the
great source of the world’s sugar supply, and the advantages of
sugar production, under the system of slave labor, were so great
that planters neglected all other crops and did not produce even a
sufficient amount of food for their laborers. They were eager to
purchase food either by the direct exchange of sugar and molasses, or,
what amounts to the same thing, by giving the seller bills on Europe
drawn against sugar products shipped thither. They offered a ready
market, therefore, for the wheat, flour, corn, meat, and fish of the
mainland, and purchased also large quantities of lumber and shingles
for building, staves for hogsheads, etc. The colonies of the mainland
took in pay considerable amounts of sugar and molasses for their own
use, and took molasses also for the manufacture of rum, of which part
was exported. On the whole, however, the mainland exported to the
islands more than it received from them, and had thus a credit balance
with which it could liquidate its debts for European manufactures. The
conditions thus gave rise to a triangular trade: the mainland shipped
food and lumber to the West Indian islands; the islands shipped sugar
products to Europe; and Europe shipped manufactures to the American
mainland, thus closing the transaction. So strong was the economic
demand for a trade of this description, that the attempts of European
governments to check it had proved entirely unsuccessful in the
colonial period; restrictions were evaded by smugglers or were openly
defied. The problems of policy relating to this and other parts of the
American trade after 1789 will be treated in the next chapter.
=592. Development of ship-building in the colonial period.=—A resource
of the United States which deserves to be mentioned, before we close
this survey of the conditions of commerce about 1789, was the building
and sailing of ships. The colonies were at first dependent on the
mother country for the vessels which they used. Most of the raw
materials for ship-building were, however, abundant in America; and
the construction of ships, unlike other manufacturing industries,
was rather helped than hindered by British colonial policy, which
put colonial vessels on the same footing as those which were built
at home, and protected them from the competition of the ships of
other countries. An active ship-building industry grew up, therefore,
especially in New England, where ship timber of the finest quality was
abundant, and where the difficulties of life and the discouragement of
staple exports forced the people to make the most of every resource. A
petition of Boston citizens in 1746 calls ship-building “the ancient
and almost the only Manufacture the Town of Boston ever had.” In the
Massachusetts towns a ship could be built of oak for $24 a ton, while
in England, France, or the Netherlands an oak vessel cost $50 to $60
a ton, and even the fir vessels, built on the Baltic, inferior in
strength and durability, cost $35 a ton. The colonies, therefore, could
supply not only their own wants, but also could sell ships abroad;
before the Revolution more than a third of British tonnage, it is said,
was American built.
=593. Extension of American shipping.=—The colonists were as proficient
in the sailing as in the building of ships, and carried on a large
part of the ocean traffic which served the needs of American commerce.
In the first year of the national government considerably more than
half of the tonnage entering the ports of the United States from
foreign countries was American, and English ships were the only
serious competitors. The bulk of American shipping was engaged in the
West India trade, but American ships carried also nearly half of the
commerce between the United States and Europe, in spite of the adverse
policy of European states, designed to exclude American ships from
commerce with them and with their colonies. Driven further afield by
this policy, American skippers began to seek commercial connections
with more distant countries, from which wares had reached them hitherto
only through middlemen. An American ship sailed for the first time to
China in 1784; in 1788 two ships were advertised as loading at Boston
for the Isle of France (Mauritius) and India, and “anybody wishing to
adventure to that part of the world may have an opportunity of sending
goods on freight”; soon afterward a Philadelphia ship made the round
voyage to China in less than a year. A vivid impression of the boldness
and skill of American mariners of this period is given by the voyage of
the _Experiment_ to China. This boat, a sloop of eighty tons, no larger
and no more seaworthy than the sloops which now bring bricks down the
Hudson River to New York, carried her crew of fifteen men and boys
safely to Canton and back, despite the perils of the sea and of pirates.
QUESTIONS AND TOPICS
1. Name another country in which transportation was easier in winter
than in summer, before the introduction of railroads.
2. History of the navigation of the Connecticut River. [W. D. Love,
Proc. Amer. Antiq. Society, April, 1903, reprinted Worcester, 1903.]
3. Write an essay on the economic, social, and political importance of
the country store, in the past and present.
4. Write a biographical sketch of one of the business men named in
section 582. [Poole’s Index and continuations; current biographical
dictionaries.]
5. What is now the interstate commerce of the State in which you
live? To what States does it export its products, what products of
other States does it import? How does its commerce with other States
compare with its foreign commerce in bulk and value? [Ask questions of
railroad and steamship men; visit freight yards.]
6. Comparing the figures of sect. 584 with the figures for total
exports, sect. 561, what do you guess formed the bulk of the exports
from each State or port?
7. Write a brief commercial history of one of the cities named. [Local
histories; Encyc.; commercial cyclopedias.]
8. Episodes of Boston commerce. [M. A. D. Howe, Atlantic Monthly,
1903, 91: 175-184.]
9. Prepare and study a graphic chart, sect. 586, and preserve it for
comparison with later conditions.
10. The African slave trade. [Weeden, chap. 12; Abbot, chap. 3.]
11. What reasons occur to you why the Americans should have traded
with England so much more than with other states of Europe?
12. History of the commerce of the colonies with the West Indies.
[Pitman; Weeden or Bruce, Index, West Indies.]
13. Character of production and commerce in the West Indies at this
time. [Pitman; Fiske.]
14. History of ship-building in the colonies. [Weeden, 252-267,
573-581; Wright, 23-42; Marvin, chaps. 1, 2.]
15. Pirates and privateers of the colonial period. [Weeden, chap. 9,
559-565; Abbot, chap. 5, Howard Pyle, The buccaneers.]
BIBLIOGRAPHY
See preceding chapter.
CHAPTER XLVII
COMMERCE AND POLICY, 1789-1815
=594. Importance of commercial policy in this period.=—The two
preceding chapters have described the conditions of commerce in the
United States about 1789, with but an occasional reference to the
influence which governments exercised in directing and restricting
the movement of wares. In every period governments interfere with the
free exchange of commodities, that the interests of the people as a
whole may not suffer from the selfishness of individual merchants. In
the period under consideration, lasting through the second war with
England, the influence of governments on the fortunes of our foreign
trade was more pronounced than it has ever been in later times; and
the topic of commercial policy must occupy the leading place in this
present chapter.
=595. Questions of policy.=—The Revolution of 1776, by which a group
of English colonies was transformed into an independent state,
claiming to rank as England’s equal, shocked the ideas of European
statesmen to an extent which we can hardly conceive. There was no
place in the political system of the time for an independent American
state. For centuries the states of Europe had been the sole source of
active political and commercial power; in other continents were to be
found only semi-civilized states, subject to European influence, and
colonies, under the complete control of the mother countries. Each
European state had regulated as it pleased the commercial relations of
its colonies with the mother country, with other European countries,
and with their colonies. Now that the United States had won its
political independence, was it to be treated by England as though it
was still an English colony, and given its former privileges though it
was no longer subject to the former restrictions? Were other European
states to welcome its commerce, now that England could no longer
prevent, or were they to treat it like a European state, and restrict
its trade with themselves and with their colonies? Finally, what
attitude was the United States itself to adopt, now that it could frame
its policy as it pleased? These were among the serious problems that
perplexed the statesmen of the Old and New Worlds, as the success of
the American Revolution became assured.
=596. Policy of England.=—Reference has been made in a previous
paragraph to the striking fact that the colonists had no sooner won
the war of independence than they returned to an active commerce with
the country against which they had been fighting. Comparing the six
years preceding the Revolution with the six years following the treaty
of peace (1783), we find that the volume of trade between the United
States and England was substantially the same. The American people
suffered during the war for lack of the manufactures which they had
been accustomed to purchase from England, and which they found then
could be purchased to such advantage nowhere else; and as soon as
peace permitted they began eagerly to buy English products again. For
a moment it appeared that England was ready to welcome this trade; the
English statesman, Pitt, introduced a bill which aimed to encourage
the American trade not only with England but also with her colonies.
Such a policy implied too serious a breach in the old system, and was
not carried into effect. The Americans were, indeed, permitted and
encouraged to trade still with England; that country could not afford
to give up the growing market for its manufactures which the United
States afforded. The ports of the West Indies, however, were closed
to American merchants; the Americans were to be punished for their
insubordination by exclusion from a branch of commerce which was to
them of the first importance.
=597. Policy of France and other states.=—The Americans learned,
not only from England but also from other European powers, that
an independent state must shift for itself and could hope for no
commercial favors. They might fairly suppose that the countries
which had joined in their war against England (France, Spain, the
Netherlands) would take advantage of the successful issue of the
conflict to seek to secure the American trade which England had
hitherto monopolized. They found, indeed, that these and other
countries were willing to sell their goods to the United States; but
still these countries were reluctant to take in exchange American wares
for which they felt no special need, and were most reluctant to open
the trade of their colonies to people of any nationality but their
own. John Adams might say of France in 1780, “All the world will allow
the flourishing state of her marine and commerce, and the decisive
influence of her councils and negotiations, to be owing to her new
connections with the United States”; whatever truth there might be in
the statement, France certainly refused to express her gratitude by
the grant of commercial privileges. France found, actually, that after
the return of peace the Americans ceased to buy her manufactures, and
flocked for trade to the English markets. French merchants complained
that none of them ever gained in commerce with the United States: when
all the best part of the American custom went to English merchants,
why should France or any other country on the Continent relax the
restrictions which were designed to protect the home market and the
colonial market for the benefit of natives?
=598. Conditions of American trade with Europe in 1789.=—In spite of
the unfavorable attitude of the powers which controlled the great
markets of the world, the United States maintained a considerable
commerce, as was shown by the descriptions of previous chapters.
This commerce was, however, carried on under serious disadvantages.
Reviewing the staple exports of the country we find that breadstuffs
were generally subject to prohibitory duties in England, and that
fish and salt provisions were actually prohibited in England, and were
heavily dutied in France. The southern staples fared little better,
for they competed with the products of European colonies even though
they did not threaten European industries. Tobacco and rice were
subject either to actual prohibitions or to heavy duties in most of the
important European markets.
=599. Conditions of trade with the West Indies.=—Conditions of trade
with the West Indies were even worse. Spain and Portugal absolutely
forbade all direct intercourse with their colonial possessions; and
wares destined for their colonies had either to be carried by smugglers
or else exported to Europe and then re-exported in ships of the mother
country. England closed her possessions on the American mainland
completely, and while, as a temporary favor, she admitted some wares
to her West India colonies, by proclamations renewed from year to
year, she prohibited salt provisions and fish, and excluded American
ships from the trade. Her vessels alone could take our produce and
bring back the molasses, sugar, etc., which formed the objects of the
return trade. The French West Indies, also, were open to us only as a
temporary concession, and in them and in the colonial possessions of
other powers the trade was burdened with duties.
=600. Weakness of the United States at this time.=—These were by no
means all the hardships under which American commerce labored at
this time. The government was too young and weak to furnish adequate
protection to ships flying the American flag in foreign waters and on
the high seas, and it had as yet obtained no guarantee that American
fishermen would be allowed to pursue their calling as before the
Revolution. Furthermore, the attention of American statesmen was
distracted by the need of getting the machinery of the new government
in running order, and by the serious fiscal difficulties which pressed
for settlement. These were the dark days of American commerce. From the
lofty position which the United States has reached to-day, courted for
its commerce and its political influence by other great powers of the
world, it is hard to realize how humble was our national position in
1789, and how precarious seemed our commercial future.
=601. Survey of American commerce, 1789-1815.=—Starting from these
beginnings we have now to trace the course of our commerce through the
period. So sharp were the fluctuations in this early stage that I give
the annual statistics, and, for reasons which will be apparent later,
call particular attention to the distinction between domestic exports,
of articles produced in the United States, and foreign exports, of
articles brought from some other country and re-exported. No exact
figures for the imports of this period can be given, but it is safe
to say that the value of the imports did not diverge greatly from the
value of the exports.
EXPORTS OF THE UNITED STATES, IN MILLIONS OF DOLLARS
(_Fiscal years, ending Sept. 30 of the date given_)
=====+==========+=========+=======
| Domestic | Foreign | Total
-----+----------+---------+-------
1790 | ---- | ---- | 20.4
1791 | ---- | ---- | 19.0
1792 | ---- | ---- | 20.7
1793 | ---- | ---- | 26.1
1794 | ---- | ---- | 33.0
1795 | ---- | ---- | 47.9
1796 | 40.7 | 26.3 | 67.0
1797 | 29.8 | 27.0 | 56.8
1798 | 28.5 | 33.0 | 61.5
1799 | 33.1 | 45.5 | 78.6
1800 | 31.8 | 39.1 | 70.9
1801 | 47.4 | 46.6 | 94.1
1802 | 36.7 | 35.7 | 72.4
1803 | 42.2 | 13.5 | 55.8
1804 | 41.4 | 36.2 | 77.6
1805 | 42.3 | 53.1 | 95.5
1806 | 41.2 | 60.2 | 101.5
1807 | 48.6 | 59.6 | 108.3
1808 | 9.4 | 12.9 | 22.4
1809 | 31.4 | 20.7 | 52.2
1810 | 42.3 | 24.3 | 66.7
1811 | 45.2 | 16.0 | 61.3
1812 | 30.0 | 8.4 | 38.5
1813 | 25.0 | 2.8 | 27.8
1814 | 6.7 | 0.1 | 6.9
1815 | 45.9 | 6.5 | 52.5
1816 | 64.7 | 17.1 | 81.9
1817 | 68.3 | 19.3 | 87.6
=====+==========+=========+=======
=602. Fluctuations in the export trade; share of domestic and of
foreign exports.=—If the reader will cast his eye down the column of
totals he will appreciate at once the unsteadiness of our trade during
the period under consideration. For a few years the figure of exports
was almost constant. Then, in 1793, began a rapid rise; the export
trade doubled, tripled, more than quadrupled. A check to this growth
was apparent in the few years after 1801, but it began again, and the
figures of exports reached their highest point in the years 1806 and
1807. They had grown more than fivefold in fifteen years. The year of
1808 showed a precipitous decline, and, after an interval of partial
recovery, the figures reached their lowest point in 1814. At the close
of the period prospects seemed brighter.
Returning to the table, to analyze the part borne in the changes by
domestic and by foreign exports respectively, we find that the foreign
exports were chiefly responsible for the great fluctuations. No figures
can be given for the earlier years, but it can be stated with assurance
that of the total exports in 1790 only an insignificant fraction,
probably much less than one million, was composed of the products
of other countries. There had been a tremendous gain, therefore, in
this branch of our trade, before 1796, and it proved capable of great
expansion afterwards, while, on the other hand, it declined in one year
almost to nothing. Domestic exports, also, showed a great increase in
the early years of the table, but they soon came near to the limit
of their expansion, and hovered generally about the figure of forty
millions; the table shows, moreover, that they resisted depressing
influences better than the foreign exports.
=603. Varying fortunes of foreign trade not explained by conditions
at home.=—The reasons for the growth of American trade after 1790 are
to be sought mainly in conditions abroad. There was no development of
resources at home sufficient to account for the great expansion of
trade. The United States, it is true, gained a new export product in
cotton, which was shipped in rapidly increasing quantities after the
invention of the cotton-gin in 1793. Cotton took the first place among
southern exports after 1800, and the extension of the cotton culture
helps to explain the growth of domestic exports. Still cotton did not
rise to the position of king among exports until the following period,
and the description of the rise of the cotton trade will be referred to
a later chapter.
We cannot give American statesmen the credit for removing the
restrictions on our commerce, described above, and so enabling it to
expand uncramped. In spite of all their persistence and ingenuity they
secured only slight and partial concessions. The treaty with England,
negotiated by John Jay in 1794, removed some of our grievances, but
proposed to open the West India trade on such humiliating conditions
that the offer was indignantly refused. A treaty with Spain gave us
merely the right to navigate the lower Mississippi River, without other
commercial privileges; and even the acquisition of Louisiana, in 1803,
had but an inconsiderable effect on our commerce at the time.
=604. Conditions abroad; effect of the European wars on domestic
exports.=—We owed our rapid commercial growth not to our own strength,
and not to the favor of European states; we owed it to the necessities
of the position in which the countries of Europe found themselves after
the outbreak of the wars following the French Revolution. These wars
were of decisive importance to our commerce in two ways. In the first
place they caused an immense increase in the demand for our foodstuffs.
When the states of Europe were fighting for their very existence they
could not afford to uphold the principles of their former protective
policy, and welcomed the means of subsistence, from whatever source
they might come. The withdrawal of men from agriculture to serve in the
armies diminished the supply of food in Europe and called for large
exports from the United States, for which high prices were paid. Taking
for illustration the little country of Portugal, we find that our
exports to that country increased about ten-fold in the course of the
period, being especially large in the years from 1810 to 1813. These
years mark the time when the Peninsular War was at its height, and when
the large armies quartered in the country demanded a supply of food
which could not possibly be met from native sources.
=605. Effect on foreign exports and the carrying trade.=—The European
wars were not only responsible for a great gain in our domestic
exports; they were the sole cause of the tremendous increase in the
foreign exports, which figured so largely in our commerce at this
period. The wars involved most of the important states of Europe. A
ship flying the flag of France or of any of her allies was constantly
exposed to capture by British cruisers; a ship flying the flag of
Great Britain or of one of her allies was a fair prize for the French
privateers which swarmed over the seas. In the great conflict there
was but one country, with an extensive merchant marine, which managed
to maintain neutrality, and this was the United States. The carrying
trade of the world fell into our hands. The countries of Europe,
forced by the exigencies of war, gave up the cherished principles of
their colonial policy, and threw open the trade with their colonies
and themselves. The rights of neutral states in time of war were, it
is true, still unsettled. American ship captains and merchants were
subject to arbitrary and humiliating interference on the part of the
belligerents. In the early part of the war, however, the results
of this interference were of sentimental rather than of practical
importance, and means were found to evade the restrictions which
the belligerents imposed. When England forbade all trade between
her enemies (France, Spain, the Netherlands) and their colonies,
American skippers did not sail direct from the West Indies to Europe,
but touched at some port of the United States, entered the cargo
for import, and sometimes actually landed it. It was not meant for
consumption in this country and was soon withdrawn and exported to its
destination in Europe, as though it were composed of domestic products.
=606. Prosperity of American commerce and shipping.=—The European wars,
therefore, introduced American commerce to a new era of prosperity.
“No one was limited to any one branch of trade; the same individual
was concerned in voyages to Asia, South America, the West Indies,
and Europe.” Our ships gathered the products of distant countries,
coffee, sugar, tea, pepper, etc., and purveyed them to the people of
Europe. In many years the value of foreign exports exceeded that of
domestic exports; in 1806 it was half as large again. The reader will
better appreciate the contrast with present conditions when he learns
that in 1914 the foreign exports of the country amounted only to one
sixty-seventh part of the domestic.
The merchant marine of the United States grew rapidly under these
favoring conditions, and in spite of complaints that former conditions
had been reversed, and that ships could be built cheaper abroad than
at home. The national tonnage engaged in foreign trade, which in 1789
appeared to be not much in excess of 100,000, exceeded 500,000 in 1795,
and 900,000 in 1810. The proportion of American ships in the total of
those entering the ports of the United States grew correspondingly; and
the merchant tonnage of the United States was second only to that of
Great Britain and superior to that of any other country in the world.
=607. Checks to prosperity after 1800.=—The check on the growth of
our commerce apparent in the figures for the few years after 1801 is
explained by the conclusion of a peace between the states of Europe,
which lasted from 1801 to 1803. Had the peace proved permanent
there would have been, without doubt, a further decline in American
commerce, as the European countries resumed their former commercial
relations. With the reopening of war, however, the Americans enjoyed
the advantages of their previous position; the exports of 1806 and 1807
exceeded a hundred millions in value, and marked a height which exports
did not again reach for nearly twenty years. Our commercial prosperity
at this time was very precarious. It was the period in which Napoleon
and England were waging war over the Continental System, as described
in a previous chapter. Each belligerent looked on the neutral carrier
now not as a source of gain to itself so much as a source of help to
the enemy, and determined to restrict neutral trade, even though it
were necessary to destroy it. In the period between 1803 and 1812
some 1,500 American ships were seized in Europe, and the greater part
of them condemned, for violating the restrictions then carried into
effect. The best sailors were impressed from American ships to fight
the battles of England. American shipping was involved in an unequal
struggle.
=608. Decline of commerce; embargo and war.=—The United States was
not prepared to enforce by arms the rights which it claimed for its
merchants and sailors. The government shrank from war, and adopted
instead the policy of commercial restriction, hoping to bring the
European powers to terms by refusing to trade with them until they
reformed their conduct. A short trial was made with an act forbidding
the importation of English manufactures, and in December, 1807, a
general embargo was laid on all vessels, forbidding them to leave port
for a foreign country. The embargo was evaded in various ways, but its
effect on our foreign commerce and export industries was disastrous,
and forced the substitution of milder measures in February, 1809. Our
commerce, now suffering both from the attacks of its enemies abroad and
the restrictions of its friends at home, could not recover the position
which it had reached before the embargo, and declined still further
after the declaration of war with England, to which we were finally
forced in June, 1812.
=609. Effect of the decline of commerce on the development of American
manufactures.=—While the people maintained an active commerce with
Europe they obtained most of their manufactured wares from that
source, as they had done in colonial times. The interruptions of
commerce due to acts like the embargo and to the war with England
cut them off from this source of supply, and home manufactures grew
up as commerce declined. The letters of Jefferson, written at this
period, contain many references to the growth of manufactures in his
State, Virginia, and in other parts of the country, especially in New
England, the development of a native manufacturing industry was even
more marked. American manufactures began, in this period, to outgrow
the simple forms of domestic industry, and to attract the capital
necessary for the establishment of regular factories. Many companies
were incorporated to manufacture goods by means of power machinery, and
industrial methods which had long been practised in England were now
first introduced in this country on an extensive scale. The development
of the textile industries was especially rapid. It was estimated that
in 1800 the cotton factories of the country had consumed only 500 bales
of raw material, while in 1810 the number had risen to 10,000 and in
1815 to 90,000. A cotton factory established by Francis C. Lowell at
Waltham, Mass., in 1814, is said to have been the first in the world
in which all the processes involved in the manufacture of goods, from
the raw material to the finished product, were carried on in one
establishment, under a carefully studied system.
=610. Considerations determining early tariff policy.=—The development
of manufactures at this time gave rise, in the following period, to
a demand for protection which marks a turning-point in the tariff
history of the country. When the first national tariff was adopted, at
the founding of the Federal government in 1789, the legislators had a
difficult problem of policy to solve. They found the commerce of the
country fenced in by foreign tariffs composed of high duties and of
some actual prohibitions. They desired the reduction of these duties
that American commerce might expand. Many of them expressed their
belief in a policy of retaliation, if no other means availed to secure
the reduction. At this time, however, the commercial position of the
country was not strong enough to permit the tariff to be used as a
weapon with which to menace foreign states. Other countries showed but
a languid desire for the products which were then our staple exports,
and we had great need of the foreign wares composing our imports.
We could not afford even to discriminate against the importation of
manufactured goods, with an idea of protecting native manufactures;
our manufactures were then so weak that a policy of high protection,
to exclude foreign wares, would have caused serious distress to the
consumers at home.
=611. Survey of tariff policy.=—Barred by these considerations from a
tariff of high duties, the legislators framed the first tariff mainly
as a revenue measure. Comparatively few articles were placed upon the
free list, duties being levied on articles like tea and coffee as well
as on manufactured wares, which might possibly be produced at home. The
general scale of duties was much lower than in foreign countries at the
time, or in the United States later; it was estimated that an assorted
cargo paid about 7-1/2 per cent. Of the results of the first tariff
a recent investigator says: “The most careful examination fails to
show that it affected the volume, variety, or direction of our foreign
trade in the slightest degree.” In the course of the period the tariff
was frequently amended, and rates were raised considerably; but the
tariff continued to be used chiefly as a source of revenue, and was not
seriously affected by protectionist ideas until after 1815.
QUESTIONS AND TOPICS
1. Prepare yourself for studying the policy of this period by mentally
reviewing the present commercial policy. Does the government now
encourage or discourage exports or imports? Does it grant favors to
one foreign country over another? Do foreign countries prohibit or
restrict trade with their dependencies? What is the present policy of
this and other countries with respect to shipping?
2. When England excluded the United States from trade with the West
Indies, what classes would be hurt, what classes would be helped, in
England, in the West Indies, and in the United States?
3. Indicate on a rough sketch map the markets wholly or partially
closed to American commerce about 1789.
4. Financial, military, and naval weakness of the United States in
1789. [Manuals and standard works on U. S. History.]
5. Make a chart first of the figures of total exports in sect. 601;
then indicate the relative share of foreign and domestic exports.
Leave room at the top or bottom, where the dates are written, to write
in the chief historical events affecting the course of commerce in the
period.
6. It has been generally believed that the adoption of the Federal
Constitution led to a great growth in business and prosperity. Prof.
G. S. Callender has suggested that the growth of prosperity, due to
influences acting from outside America, caused, on the contrary, the
Constitution to be popular and successful. What facts support this
latter view?
7. Prepare a list of the dates showing the beginning and spread of the
European wars, and insert on the chart as suggested above.
8. Study the relative importance of foreign exports to total exports
in the last half of the century, as a contrast to conditions about
1800. [U. S. Statistical Abstract, Index, Exports, merchandise, total
values.]
9. Expansion of the merchant marine, 1789-1800. [Marvin, chap. 4.]
10. Grievances of neutral carriers, leading to the second war with
England. [Marvin, chap. 7; Coman, 171-180; McMaster, Hist.]
11. The Embargo. [Manuals of U. S. history; references in Channing and
Hart.]
12. Rise of manufacturing industry. [Coman, 180-193; Wright, 117-131.]
13. Considerations determining the earlier commercial policy. [Page;
see above, chap. xlv.]
BIBLIOGRAPHY
See chapter xlv for general works; Henry Adams, *History, N. Y.,
1889-91, covering the period 1800-1817 in nine volumes, is the most
complete general narrative. Mahan, **War of 1812, Boston, Little, 2
vols., is now by far the best special account. Ralph D. Paine, The
fight for a free sea, New Haven, 1920, is an interesting description.
The commercial statistics of the period may be found elaborated in
Adam Seybert, *Statistical annals, Phila., 1818, or in Timothy Pitkin,
*Statistical view, New Haven, 1817, 2d ed., 1835.
CHAPTER XLVIII
NATIONAL EXPANSION, 1815-1860
=612. Survey of commerce, 1815-1860.=—In contrast with the period
ending in 1815, the next period which we study, extending from 1815
to 1860, was marked by the slowness and the comparative steadiness in
the growth of foreign commerce. An indication of the course of trade
in this period is given by the following table, in which the figures
represent millions of dollars.
Imports Exports Total
1820 74 69 144
1830 62 71 134
1840 98 123 221
1850 173 144 317
1860 353 333 687
Though the statistics of selected years can give only a rough picture
of commercial development, the figures here given suggest the striking
features of our trade in this period with sufficient accuracy. For
about twenty years after 1815 the foreign commerce of the country was
nearly stationary, or actually declined. Not until 1835 did our exports
reach again the mark attained in the year 1807. Towards the end of the
period, however, they showed increasing strength; the figures for 1860
show the upper limit which they attained, but for some years previously
they had been approaching the sum of three hundred millions.
=613. Reasons for slowness of growth.=—The reasons for these changes
in our foreign trade must be sought both abroad and at home. Our
prosperity in the preceding period had been due mainly to the European
wars. With the return of peace the states of Europe escaped from their
commercial dependence on the United States. Our domestic exports of
breadstuffs and provisions declined as Europe returned to the policy of
protecting the domestic food supply; and our foreign exports declined
even more rapidly when we lost our privileged position of the great
neutral carrier, and our merchants had to face not only the active
competition but also the adverse legislation of other countries.
Through most of the period the annual foreign exports of the country
were about twenty million dollars in value. Not until near the end of
the period did conditions change to our advantage. The repeal of the
English Corn Laws in 1846, as was noted in a previous chapter, marked a
departure in commercial policy, which offered new openings to American
export industries.
=614. Absorption of the national energy in territorial expansion.=—At
home, moreover, the people of the United States were occupied in
this period with tasks which turned their thoughts and interests to
a large extent away from foreign trade. It was a period of great
territorial expansion. A comparison of maps indicating the distribution
of population shows that extraordinary changes occurred in the
interval between 1810 and 1860. At the former date the people were
still gathered mainly along the Atlantic seaboard, face to face with
Europe; and most of the territory west of the Appalachian mountains was
still left to the Indians. The center of population was not far from
Washington, D. C. In 1860, on the other hand, the center of population
was near Chillicothe, Ohio. This change indicates an enormous movement
of population westward. The country extending west to the Mississippi
river had, by 1860, been covered almost continuously with settlements;
many people had spread out on the great plains facing the Rocky
Mountains; and the population on the Pacific Coast was sufficient to
entitle that district to the two States California and Oregon.
=615. Relative decline in the importance of foreign trade.=—The
expansion of population, necessary as it was to the development of
the country, proved in its early stages to contribute comparatively
little to the growth of foreign commerce. The growth of our trade did
not keep pace with the growth of population. While the share of the
average inhabitant in foreign trade was over $30 in 1800, it was little
over $20 in 1860, and ranged between $10 and $15 through much of the
intervening period.
[Illustration:
UNITED STATES
ACQUISITION OF TERRITORY
1783-1853
]
It seems as if the people of the country, after the close of the war of
1812, had turned their gaze away from Europe, the continent which they
had for centuries regarded as the source of civilization, and had fixed
their attention on their own continent, with the determination to make
its resources satisfy their needs, so far as they were able. Many of
the settlers in the western country led lives of extreme simplicity,
unable to find a market for the surplus which the fertile soil returned
to them, and consequently forced to restrict their purchases of foreign
goods to the bare minimum.
=616. Importance of the problem of transportation in this period.=—As
the American people expanded and occupied territory far beyond the
limits of their original settlements, the question of transportation
became one of increasing importance. The early colonists had evaded
rather than solved the problem of transportation, by choosing for
settlement districts connected with the sea by short water routes, and
by renouncing, in large part, the attempt at intercommunication by
land. The problem could no longer be set aside, as the people spread
out in the great interior valley. The resources of the West could be of
no advantage to the people of the East, and could contribute nothing to
the foreign commerce of the country, unless means were found to bring
the wares to market with a profit.
In the remaining sections of this chapter, therefore, we shall study
the development of the means of transportation in this period, that we
may be better able to appreciate the details of the export and import
trade, described in following chapters.
=617. The turnpike era.=—Even in the earlier period, following 1789,
the condition of the common roads was felt to be intolerable, and a
movement for their reform set in. Stock companies were chartered, to
improve the more important roads, and were allowed to secure a return
on their investment by charging toll on traffic—so much for a one-horse
cart, so much for a two-horse wagon, etc. Hundreds of turnpike
companies were chartered in the different States, and in Pennsylvania
alone over 2,000 miles of improved roads had been constructed by them
at the close of the first quarter of the century.
Until better means of transportation were provided the turnpikes were
important channels of trade. They united the districts of the interior
with the coast and with navigable rivers, and made possible throughout
the year a freight traffic which formerly had been restricted to the
sleighing season. A great highway, like the Mohawk and Hudson turnpike,
running from Schenectady to Albany, was studded so thickly with taverns
that the traveler was never out of sight of the swinging sign-boards.
=618. Failure of the turnpikes to meet the country’s demands.=—The
success of the turnpikes stimulated the national government to
construct a road from Cumberland, on the Potomac River in the western
part of Maryland, to Wheeling on the Ohio River. This road was designed
to furnish the connection, that was so keenly desired, between the
districts lying on either side of the mountains; and was for many
years an important route for passenger travel. The expense of wagon
transportation, however, prevented a great growth of freight traffic on
this or on other land routes of considerable length. The cost of moving
freight over the roads of this period has been estimated roughly at ten
cents per ton-mile, and this cost prohibited the movement of ordinary
freight to a great distance. The turnpike, therefore, did not solve
the problem of transportation for the country, and turnpikes declined
as better means of transportation were brought into use. About the
middle of the century the idea of building roads of wood took strong
hold of the minds of men, and plank roads were constructed with great
vigor for a few years; but the idea proved impracticable and led to no
important results.
=619. Importance of the western waterways.=—Vastly more important in
its effects on the internal and foreign commerce of the country was
the development of the means of water transportation. It has been said
of North America that no other continent, with perhaps the exception
of South America, offers such excellent natural facilities for
intercommunication as is furnished by the system of rivers and lakes
lying east of the Rocky Mountains. Early in the history of our western
settlements traders used the rivers flowing into the Mississippi to
secure connection with the market at New Orleans, then under Spanish
rule; and the Louisiana purchase of 1803 gave the United States
control of the river route from source to mouth. A line of packet
boats plying between Pittsburg and Cincinnati was started in 1794, and
many flatboats were employed to float cargoes down the Mississippi.
The swift current of that river, however, made ascending navigation
difficult. The crews of the flatboats had to return home by land, going
generally on foot through nearly a thousand miles of wilderness, and
using about six months on the round trip. The stream could be ascended
only in small boats propelled by poles and sails. Though the freight
rate down the river was as low as one cent per ton-mile, the charge
in the other direction was about six times as much. The need of some
better means of propelling boats against the current was strongly felt;
and long before the steamboat had been made a practical success the
prediction was common that it would be developed to serve the needs of
commerce on our western rivers.