CHAPTER XLIV

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.

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