Fragments of the old dual monarchy were _A history of commerce

countries. Galicia, the great crescent-shaped province lying to the

east of the Carpathian mountains, went to the new state of Poland. It

had been grievously ravaged in the course of the war, but promised

to develop in time considerable agricultural resources, and was

particularly prized for its supply of petroleum in the east and

the coal mines of the Teschen district attached to it in the west.

Transylvania, with parts of some adjacent provinces, brought to

Rumania an area rich in forest products, with some mineral resources

and some fertile grain land (Banat of Temesvar). Rumania became by

these accessions and by the acquisition of Bessarabia, on the Russian

border, one of the larger states of Europe, with a population (about

16 million) double that of Jugo-Slavia, the next largest state in

the Balkan peninsula. This new state grew out of the old Kingdom of

Serbia, in which the World War began, and which was finally rewarded

for its sufferings in the war by union with the kindred people along

the Adriatic coast and in the southwest of the old dual monarchy. The

trials of Jugo-Slavia were not ended with the war, for it had still to

make good its claims to Fiume, its natural outlet at the head of the

Adriatic. The justice of its claims were not, in the opinion of the

writer, open to serious dispute, but Italy, which had already pushed

its Alpine frontier far past the Austrian districts occupied by an

Italian population, was jealous of a possible rival in the Adriatic,

and refused to agree to the occupation of Fiume by another power. The

unfortunate exploits of the Italian bravado, D’Annunzio, complicated

the issue, but it was at least settled by a compromise between the two

powers which promised in the course of time to give Jugo-Slavia the

commercial outlet essential to its prosperity.

=761. Czecho-Slovakia.=—Of the new states formed within the

boundaries of Austria-Hungary that which gave the greatest promise

of prosperity was Czecho-Slovakia, comprising the old kingdoms of

Bohemia and Moravia, and extending to the southeast to include the

Slovak population which had formerly been included in the kingdom of

Hungary. This new state took that part of the old monarchy which was

most richly endowed with natural resources and which had attained the

highest industrial development. Stating the proportions approximately

it included only one-fifth of the area of Austria-Hungary, but in that

fraction comprised one-third of the factory workers and over one-third

of the mining population. The land was fertile and highly cultivated,

supporting a dense population and providing a surplus of food for

export. The Czechs could look back with pride to a period in the past

when they were one of the leading peoples of Europe, and they had

prepared themselves for self-government by long struggles against the

oppressions of German rulers.

Although Czecho-Slovakia is far distant from the sea it has means of

access to it both by the Elbe and by the Danube, and is at the heart

of the railroad system of central Europe. Provided with a surplus of

products keenly desired in neighboring states, particularly coal, iron

and food, its commercial future appears to be assured.

=762. Magyar Hungary; German Austria.=—Far less favorable was the

condition of the two states, Austria and Hungary, which had been the

seat of the power of the Hapsburgs in the past, and which had prospered

when they had been supported by the labor of subject peoples, but which

were now shorn of this support, and given each its own way to make in

the world.

The Magyar state of Hungary offered at least tolerable prospects of

success. Although it lost the border lands which had formerly supplied

practically all its forest products and much of its minerals, it

retained a compact and fertile territory, one of the granaries of

central Europe, and could hope to exchange its surplus wheat for the

products which it needed.

German Austria was left by the terms of peace in a pitiable condition.

It retained a population of only 6 million, including less than half

of the German-speaking people in the old dual monarchy. Of this total

nearly one-third (1.8 million, 1920) was comprised in the single city

of Vienna, which had grown to this size largely by the political

advantage that it enjoyed as one of the capitals of a great state.

Much of the area of the new state was mountainous, suited to grazing

but not adapted to intensive agriculture. Before 1914 the territory

of the present state was able to produce perhaps two-thirds of the

necessary food supplies consumed by its inhabitants; in 1920, with

powers depleted by the war, it could render only one-quarter. Endowed

with only one mineral resource, iron mines in Styria, Austria could

buy the food required for the maintenance of life only by the exchange

of industrial products made with imported coal out of imported raw

materials. At the close of the war the situation of the country was

indeed desperate, for the people had no resource with which to make a

start in the process of foreign trade. Gradually markets were opened,

and some basis of credit was found for the beginning of commercial

transactions, but meanwhile the government had plunged deep in the

issue of paper money, which depreciated so far that itself formed a

grave obstacle to economic recovery. Austria seemed destined for years

to come to rely upon charity, whether private, public or international;

and many questioned the wisdom of the peace settlement which forbade

the union of this fragment of the German-speaking people with the rest

of Germany.

=763. Poland; earlier history.=—The World War made its greatest

change in the map of Europe not by the transfers of territory between

bordering states, important as these were to the parties concerned,

not by the creation of new states like Czecho-Slovakia but by the

resurrection of an old state, Poland. Poland had played no great part

in commerce in the previous period of its existence. The surplus

supplies of wheat grown on the great estates of its landlords had been

carried by road and river to Danzig, to be shipped to western Europe

in exchange for metals, manufactured wares and exotic products that

made the life of the Polish nobleman more comfortable. The country as a

whole was too backward and too far removed from the centers of European

progress to become an important member of the commercial system of the

time.

The partitions of Poland at the end of the eighteenth century keenly

as they were felt by patriots, made little difference in the life

of the mass of the people. The divided people went their separate

ways: neglected by Austria, schooled and drilled by Prussia, given in

Russia at least access to an enormous market which was later to be a

great stimulus to manufacture. Most of the people were employed in

agriculture under a system of serfdom like the medieval. They were

freed from this in the nineteenth century, and acquired in small

holdings much of the land which had formerly been held in great

estates. A turning point in the economic history of the Polish people

came in the last quarter of the nineteenth century, when manufactures

developed rapidly in Russian Poland, fostered by the high protective

tariff.

=764. Resources of the new Poland.=—The new state of Poland was

welcomed and supported by the Entente as a check on Germany. With a

population of about 25 million it had claim to a place among the larger

powers of Europe. Its economic endowment was adequate if not abundant;

besides a sufficiency of arable land and great forests it had coal

supplies comparable in amount to those of France, the oil of Galicia,

and other mineral resources. Its gravest lack was that of experience

in organization, group-action, both in economics and in politics. In

manufactures the Poles have looked to Jews and Germans for leadership;

the Poles have supplied labor, but have only by exception taken a place

among those responsible for control. Their manufactures showed a high

labor cost and heavy capital charge per unit of product. Behind the

barrier of the Russian tariff they prospered. They could doubtless be

maintained for the supply of domestic needs by protection, but they

have shown slight capacity to win in the world market the opening which

was formerly afforded to them by Russia.

=765. Prospects of Poland.=—In the field of politics, as in economic

affairs, the Poles have yet to prove their mastery of the complicated

problems that arise in the organization of a modern great state. In

the years following the armistice that closed the war they showed a

readiness for military adventure that boded ill for the future of a

country needing all its resources for economic reconstruction. They

soon contracted a heavy debt, by the accumulation of huge deficits in

the budget and the endeavor to pay their way by printing paper money.

The Polish mark, nominally equal to the German and therefore worth

about $.24, declined to a point (Sept., 1921) at which 6,700 were

exchanged for the American dollar. The position of Poland is difficult

at best, and the prospects of the new state will be seriously impaired

if a more sober spirit does not prevail in the national councils.

=766. Russia and the revolution of 1917.=—From the beginning of the war

southern Russia was cut off from commercial contact with the Entente

by the closing of the straits leading into the Black Sea. In the north

the Baltic was likewise closed. Contact was maintained only on Russia’s

Arctic coast, and by the Siberian railroad. Means of access by both

routes were difficult and expensive; the exchange of products was

restricted to those that served imperative military needs.

Since the Russian-Japanese war of 1904 the forces of revolution had

been gathering in Russia. The World War brought these to an explosion

by the sufferings that it imposed upon the people and by the exposure

that it made of the weakness and corruption of the autocratic

government. In March, 1917, an outbreak at Petrograd initiated a

revolution that in six months ran through nearly as many stages,

tending always in a radical direction and leaving the government

finally in the control of the Communist or Bolshevik party.

=767. Soviets and Bolsheviks.=—In the earlier stages of the revolution

great influence was exercised by _soviets_, councils, formed on a

democratic basis to represent workers in factories, peasants and

soldiers, against the traditional leaders of the old régime. The

soviets were features of a world-wide popular movement, which found

their counterpart in the shop-councils of England and of the United

States. The close of the war left the future of this movement still

in doubt, but it appeared to offer a wholesome and welcome change in

industrial relations, provided the workers were willing to accept

responsibilities corresponding to the powers that they claimed. It is

important to an understanding of the Russian revolution to realize that

the democratic features of the soviet system were soon abandoned. The

Bolsheviks counted less than a million in a population of 120 million;

they numbered certainly less than 2 per cent of the adult population.

By their boldness and vigor they dominated the situation, and while

they maintained the pretence of deferring to the popular will they

acted as tyranically and unscrupulously as the autocracy which had

preceded them.

=768. Difficulties of the Bolsheviks.=—The Bolsheviks accepted

as gospel the economic doctrines of Karl Marx, the founder of

modern socialism, and many enthusiasts for social experiments

(“parlor-Bolsheviks”) have expressed regret that they did not have a

better field in which to try out these doctrines. Russia was already

war-worn to desperation when the revolution took place. Fighting

continued, not alone on the external front but now also in civil

conflicts which ravaged the face of the country. The states of the

Entente found not merely that they had lost an ally, but also that a

new enemy to them had arisen, preaching doctrines subversive of the

established order and threatening to undermine their power when the

struggle with Germany was at its height. They stimulated in Russia

opposition to the rule of the Bolsheviks, and sought so far as they

were able to seal Bolshevik Russia in isolation lest it profit by the

exchange of goods, and spread its doctrines.

=769. Failure of Bolshevist communism.=—Under the conditions Bolshevism

was a disastrous failure. Curiously enough it showed its greatest

efficiency in the field of military affairs. In its own particular

department, the production and distribution of economic goods, it

brought Russia to destitution. Fixed capital inherited from the old

order wore out and was not replaced. Railroads and factories ceased

to function properly, not only because of depreciation of equipment

but also because of a decline in the efficiency of laborers. The yield

of agriculture declined so far that a large part of the population

was threatened with the starvation that visited whole provinces.

Pretensions to forms of social service which other governments did not

render were too often found on critical examination to be mere shams;

they certainly counted for nothing over against the gross neglect to

provide for the elementary needs of the people.

=770. Prospects of Russia.=—Years after it had begun the Russian

revolution was still in process of development, and promised to

disturb the life of the people for years to come. By 1921 communism

was a recognized failure, but the lines that would be followed in the

re-establishment of society on the basis of private property defied

prediction. Of this we may be sure, that for decades, perhaps for a

generation following the war, Russia will count for little in the

history of commerce. Little by little its economic structure will be

re-organized. The leaders in the process will be private individuals

from other countries, including probably a large proportion of Germans.

The process will be slow because it will be retarded by political

instability. Russia can hardly be divided into parts; Russia can

hardly be governed as a whole. Economic recovery will be a tedious and

painful process because it must wait upon the political education of

a people who in 1914 had made but the barest beginnings in national

self-government.

QUESTIONS AND TOPICS

1. Territorial losses of Germany in the peace settlement. [Haskins in

What really happened, etc., chap. 3; Bowman, chap. 10.]

2. Effect of the blockade on Germany. [A. E. Taylor in American

World’s Work, Oct., 1919, 38: 590-600; W. J. Ashley in Quart. Rev.,

Oct., 1915, 224: 444 ff.]

3. German war finance. [W. S. Ford in Fortnightly Rev., Apr., 1919,

111: 616-624.]

4. The new government in Germany. [W. J. Shepard in Amer. Polit. Sci.

Rev., Aug., 1919, 13: 361-378.]

5. Partition of Austria-Hungary. [Seymour in What really happened,

etc., chap. 5.]

6. The enlarged state of Rumania. [Bowman, chap. 15.]

7. Jugo-Slavia. [Bowman, chap. 14.]

8. Problem of Fiume and the Adriatic. [Johnson in What really

happened, etc., chap. 6.]

9. Czecho-Slovakia. [Bowman, chap. 13; M. O. Williams in Nat. Geog.

Magazine, Feb., 1921, 39: 111-156.]

10. The new Hungary. [Bowman, chap. 12.]

11. The republic of Austria. [Bowman, chap. 11; Fortnightly Review,

April, 1919, 111: 625-635; S. Hoare in Nineteenth Century, 1920, 87:

409-423.]

12. The resurrection of Poland. [Lord in What really happened, etc.,

chap. 4; in Haskins and Lord, Some problems, chap. 5.]

13. Problems of the new Poland. [Bowman, chap. 19.]

14. Agriculture and landownership in Poland. [Arctowski, Geog. Rev.,

Apr., 1921, 11: 161-171.]

15. Elements in the Russian revolution. [Sir S. Buchanan in

Fortnightly Rev., 1918, 110: 819 ff.; P. Vinogradoff in Quarterly

Review, July, 1917, 228: 184-200.]

16. The Soviets. [Spargo, chap. 2, 3.]

17. The land question and the revolution. [Spargo, chap. 5.]

18. Industry under the Soviets. [Spargo, chap. 8.]

19. Nationalization of industry. [Spargo, chap. 9, 10.]

BIBLIOGRAPHY

The German government supplied no official statistics of trade during

the period of the war, and the student is obliged to look to the

publications of other governments for information. C. D. Snow and J.

J. Kral, *German trade and the war, Washington, 1918, Bureau of For.

and Dom. Commerce, Misc. Series no. 65, will be found a convenient

compilation; this covers trade, manufacture, raw materials and

substitutes, cartels, labor, finance, etc.

References to the effect of the peace settlement on the interests of

Germany and Austria-Hungary will be found in the Questions and topics,

and in the bibliography of the preceding chapter.

Literature on the new states in central and eastern Europe is mainly

in foreign languages; readers of English have to depend on accounts in

annual encyclopedias, on statistics gathered in annuals such as the

Statesman’s Year Book, and on reports of American and English consular

agents. On Poland the reader may consult a brief encyclopedic account

edited in the English version by E. Piltz, entitled *Poland; her

people, history, industries, etc., London, 1916; A. B. Boswell, Poland

and the Poles, N. Y., 1919; and an elaborate study on The Polish

peasant in Europe and America, by W. S. Thomas and F. Znaniecki, in 5

volumes, Chicago 1918, Boston 1919-1920.

On the Russian revolution John Spargo, **The greatest failure in all

history, N. Y., 1920, can be recommended as a book filled with facts,

which has in general stood well the criticism of those inclined to

favor the Bolsheviks. The failure of Bolshevism is amply evidenced

by the writings of honest partisans of the revolution, such as

Albert H. Williams, Lenin, N. Y., 1919; Arthur Ransome, The crisis

in Russia, London, 1921; C. L. Malone, The Russian republic, N. Y.,

1920; Bertrand Russell, The practice and theory of Bolshevism, London,

1920. Maurice G. Hindus, *The Russian peasant and the revolution,

N. Y., 1920, gives a good account of the agrarian question, and a

questionnaire prepared from documentary material by the International

Bureau of Labor, entitled in the English version Labour conditions

in Soviet Russia, London, 1920, throws much light on the industrial

conditions.

CHAPTER LVIII

THE UNITED STATES, 1914-1920

=771. Statistics of American Commerce, 1914-1920.=—The course of the

commerce of the United States during the war and the few years of peace

immediately following appears in the statistics of the accompanying

table, in which, for reasons that will appear later, the movement both

of merchandise and of specie is indicated.

TRADE OF UNITED STATES, 1914-1920

(_Values in millions of dollars; calendar years, ending Dec. 31_)[10]

=====+==========================+===================+=========+======

| Merchandise | Gold | |

| | | Silver | Price

+-------+--------+---------+---------+---------+ | level

-----+-------+--------+---------+---------+---------+---------+------

1914| 1,789 | 2,114 | 324 | 165 | | 26 | 100

1915| 1,779 | 3,555 | 1,776 | | 421 | 19 | 101

1916| 2,392 | 5,483 | 3,091 | | 530 | 38 | 124

1917| 2,952 | 6,226 | 3,274 | | 181 | 31 | 176

1918| 3,031 | 6,149 | 3,118 | | 21 | 181 | 196

1919| 3,904 | 7,920 | 4,016 | 292 | | 150 | 212

1920| 5,279 | 8,228 | 2,949 | | 107 | 26 | 243

|------ | ------ | ------ | --- | ----- | --- | ---

Total|21,127 | 39,675 | 18,548 | 457 | 1,259 | 471 |

=====+=======+========+=========+=========+=========+=========+======

=772. Interpretation of the Statistics.=—With the figures of this table

should be compared those given in section 663, covering the course of

trade from 1860 to 1913. Attending only to the figures giving the value

of merchandise the reader will note that the imports in the early years

of the war remained about at their former level, that they increased

in the latter part of the war, and particularly after its close. The

exports, on the other hand, showed the effect of the war almost from

its beginning. They had first exceeded 1 milliard dollars in 1896, and

had grown steadily with the growth of population and with the rise

in prices due to the increase in gold output, passing the mark of 2

milliards in 1911. From that level they now shot up to 3, 4, 5, 6,

6, 8, 8 milliards in the individual years; history does not provide

another example of such prodigious growth. As a result the excess value

of exports over imports, which had in recent years been about half a

milliard, grew to 1, 2, 3, even 4 milliard dollars a year.

Part of the increase in the value, both of imports and of exports,

was of course due to the rise in prices which accompanied the war. To

enable the student to make the necessary correction for this factor

a column of the table supplies the “index-number” of the Department

of Labor, showing what the average wholesale prices were in any year

compared with the years 1913-1914. Evidently if prices in 1918-1919

were double what they had been just before the war, the figures for the

value of trade in those years should be divided by 2 to give an idea

of the actual quantities of goods exchanged. Applying this process of

correction the student will note that the volume of imports actually

shrank in the course of the war, but that the exports, in spite of this

process of reduction, reached a level which had not before been dreamed

of. In fact the figures for exports in 1918 and for parts of 1917 and

1919 do not take account of the great quantities of stores shipped from

the country in transports of the government, and therefore not reported

to the customs officials; the figures should be raised by perhaps

one-third to give a comprehensive idea of the total quantity of goods

sent out in that period of greatest national exertion.

=773. Increase in value of exports to Europe.=—Not only did the

thoughts of the whole world center in Europe during the war; the wares

of the world flowed thither, in unexampled volume, to be used to

destroy and to be destroyed. For reasons already given the European

belligerents cut down their exports, and strove so far as they could

to increase the volume of their imports. The United States was in

the reverse position. While it was still neutral, and likewise after

it entered the war (April, 1917), it was the great source from which

the European states supplied the needs which they had not time or

strength to supply themselves. Although the larger part of central and

of eastern Europe was cut off by the blockade and by the difficulties

of transportation, the exports of the United States to Europe, which

before the war had run a little over 1 milliard, increased to 2, 3 and

4 milliards. In the first full year of peace, 1919, when the larger

part of Europe was again open to trade, and the exhausted peoples were

endeavoring to restock, the value of exports to Europe exceeded 5

milliard dollars in value.

=774. Increase in value of exports to other continents.=—The figures of

the preceding section give, however, but a partial and misleading idea

of the peculiar position which the United States assumed in the economy

of the world during the war. In spite of the great increase in value,

and increase in quantity, of exports to Europe, the _proportion_ of the

total exports which went to Europe rose very little. As shown above

(sect. 708), the United States had tended, in the years before the war,

to distribute its exports more widely. The proportion which exports to

Europe formed of the total dropped from four-fifths in the ‘80’s to

three-quarters about 1900, then to two-thirds; in 1913 the proportion

was 60 per cent.

The figures for the war period were 71, 69, 69, 63; in 1920 the figures

dropped to 54. It is apparent that there was a great expansion of

exports in this period, not only to Europe but to other parts of the

world as well.

To understand this situation we must remember that the United States

had not only to meet the demands of the emergency in Europe, but also

had to take the place of the great industrial states of Europe in

meeting the demands of the rest of the world. England, Germany, and

France were unable to sell goods in their usual markets, and the United

States for the time took over their old customers.

=775. Statistics of distribution of exports.=—Exports from the United

States, therefore, increased greatly in value, not only to Europe

but also to other continents. The following table indicates the

distribution of exports in the period of the war; Oceania and Africa,

taking together five per cent or less of American exports, are omitted.

EXPORTS OF THE UNITED STATES, IN MILLIONS OF DOLLARS, TO

===========+==========+===========+===========+==========

| Europe | North | South | Asia

| | America | America |

-----------+----------+-----------+-----------+----------

1914 | 1,486 | 529 | 125 | 113

1915 | 1,971 | 477 | 99 | 114

1916 | 2,999 | 733 | 180 | 279

1917 | 4,325 | 1,164 | 259 | 380

1918 | 3,732 | 1,236 | 315 | 447

1919[11] | 5,188 | 1,296 | 442 | 701

1920[11] | 4,466 | 1,929 | 624 | 772

===========+==========+===========+===========+==========

The distribution of American exports in Europe has already been

described. Of the countries grouped under the heading North America,

Canada accounted for rather more than half of the total; Cuba and

Mexico also bought greatly increased amounts of the exports of the

United States. In South America, Argentina, Brazil, and Chile increased

their purchases three-or four-fold; in Asia, Japan raised the value of

its purchases from about 50 to over 300 million dollars.

=776. Changes in the composition of exports.=—This expansion was shared

unequally by the different groups of commodities which together

made up the total exports. Raw materials for manufacture declined in

importance; before the war they had accounted for about one-third of

the total exports, but by 1917 they made up only about one-eighth. On

the other hand there was a great increase in the export of foodstuffs.

The United States had tended in the period immediately preceding the

war to consume an ever-increasing proportion of the foodstuffs that it

produced. The export of foodstuffs, raw and manufactured, had declined

to about 500 million dollars in the years 1910-1913. In the early years

of the war it rose to about 1 milliard; in 1918 it amounted to almost 2

milliards, and in the first two years of peace it exceeded that figure.

That part of American trade which showed the most extraordinary

expansion was the export of manufactures. Before the war the value

of finished manufactures exported had averaged about 700 million. In

1915 the figure exceeded 1 milliard; in 1916 and succeeding years, 2

milliards; in 1920, 3 milliards. The growth was particularly noticeable

in trade with non-industrial countries, which had previously relied in

large part on Europe for manufactured wares and found now the supply

from that source cut off. Exports of manufactures from the United

States to Asia, South America, and Africa increased about five-fold,

comparing the years 1914 and 1920. Exports of manufactures increased

even to Europe, including such important items as railroad supplies,

agricultural implements, machinery, petroleum products, etc.; and it

was estimated that in 1920 the United States was supplying one-third of

the total demand for manufactured wares in the trade of the world.

=777. Effect of the war upon the import trade.=—The United States made

its commercial contribution to the World War, as has already been said,

by following a course which was the reverse of that of the European

belligerents; it expanded its exports, and restricted its imports.

Of necessity it renounced a very large part of that trade which had

been the greatest source of supply, the trade in imports from Europe.

Before the war Europe supplied about half of our needs (49 per cent

of total value of imports, 1913). In the last year of the war imports

from Europe amounted to less than one-seventh of the total (14 per

cent in the year ending June 30, 1918). The varied manufactures which

we had been used to import from the industrial states of western

Europe were no longer in the market. Many of these wares were luxuries

appealing indeed to the taste of the consumer, but not involving any

serious economic consequences when the supply failed. Others, notably

the chemicals and the special kinds of glass and porcelain which had

previously been imported from Germany, played an important part in

industrial processes, and had if possible to be replaced. American

manufacturers entered a field which the Germans had long regarded as

their own peculiar province, and which, indeed, they would probably

have long continued to dominate if they had not broken the peace.

Forced to an extension and diversification of industry by the demands

not only of the American but also of many foreign consumers, the

country imported an increased proportion of crude materials for use

in manufacturing as the proportion of finished manufactures ready for

consumption declined. Raw wool, raw silk, crude rubber and items of

that character rose toward the top of the list of wares imported, and

gave a new importance to the trade with South America and Asia.

=778. The excess value of exports over imports.=—The war led, for

reasons already given, to an enormous increase in the excess value

of exports over imports. The table at the beginning of the chapter

presents figures which were without parallel in the history of this, or

indeed of any other country: an annual excess in the years 1915-1920

averaging over 3 milliard dollars a year, a total excess for the period

1914-1920 amounting to 18.5 milliards. The following table shows how

unequal was our balance in trade with the different continents, and

indicates the close connection of the great excess of exports with the

European war.

BALANCE OF TRADE IN MERCHANDISE OF UNITED STATES, 1913-1920

(_Calendar years; figures in millions of dollars, giving excess value

of imports, [-], or of exports, [+], of the U. S._)

========+========+=========+=========+========+=========+========

--------+--------+---------+---------+--------+---------+--------

1913 | +635 | +211 | -52 | -155 | +47 | +5

1914 | +556 | +40 | -139 | -168 | +29 | +6

1915 | +2,027 | +49 | -178 | -156 | +31 | +3

1916 | +3,180 | +266 | -207 | -152 | +12 | -8

1917 | +3,511 | +389 | -287 | -327 | +16 | -27

1918 | +3,541 | +351 | -308 | -408 | -31 | -26

1919 | +4,437 | +138 | -246 | -340 | +41 | -14

1920 | +3,238 | +266 | -137 | -512 | +78 | +15

========+========+=========+=========+========+=========+========

Taking Europe alone the excess of exports to the credit of the United

States was over 20 milliards in the years 1914-1920. North America

was the only other continent showing a large “favorable” balance, and

Canada was the single country that accounted for most of this. The

balance in trade with South America and with Asia was against the

United States, as had been usual in the past, but to an extent which

passed the bounds of any previous experience.

=779. Items in the international balance before the war.=—In

approaching the subject of the balance of trade of the United States

during the war it is desirable to have in mind the most important items

which, before 1914, constituted the international credits and debits

of the country. The table below pictures these items in the form of a

simple balance sheet, as they were estimated in 1910.[12] The figures

are given in round sums, indicating that they make no pretence to

statistical accuracy; they are to be understood merely as showing the

tendency of a normal year. In the case of several items no attempt is

made to do more than indicate the net balance that might be expected,

year in and year out.

INTERNATIONAL BALANCE OF THE UNITED STATES BEFORE THE WAR

(_Figures in millions of dollars_)

========================+========+=======+================

| Credit | Debit | Balance

| | +----------------

| | | Credit | Debit

------------------------+--------+-------+--------+-------

Merchandise | 2,000 | 1,500 | 500 |

Bullion | | | 30 |

Freight, etc | | | | 25

Remittances | | | | 150

Tourists | 30 | 200 | | 170

Interest and dividends | 75 | 300 | | 225

Investment | | | 40 |

| | | --- | ---

| | | 570 | 570

========================+========+=======+========+=======

=780. Explanation of the “favorable” balance.=—The most important

feature of the table is the great credit item due to the excess of

exports over imports. Ever since 1873, with rare exceptions (only

four years altogether) the United States has shown a credit balance

of this kind, a “favorable” balance as it was called in the days when

people believed that it would bring precious metals into the country.

Actually, the “favorable” balance implied nothing more than that we

were a debtor country, bound to export more than we could import from

the rest of the world, to meet our obligations. The character of these

obligations is indicated in the column of debit balances. Foreigners

did more ocean carriage for us than we did for them, and had a

balance due to them on that account; the figure in the table would be

considerably larger if the freight bill had not been partially offset

by the considerable purchases of coal and stores made by foreign ships

in our ports, which counted of course to the credit of the United

States. The remittances of private persons, largely of immigrants to

this country sent to agents or relatives in their old home, amounted

to a surprisingly large aggregate. Funds would be remitted, say, by a

postal money-order, but of course the foreign government that honored

this order would look for payment to the American post-office, which

would have to depend on our surplus of exports to meet the debt. So in

the case of the other items, expenses of American travelers and the

claims for interest and dividends of European investors, we were bound

to make heavy payments, and made them by delivering our cotton, copper,

petroleum products, and so on, to a value much exceeding the value of

our imports.

=781. Movement of specie in the period of the war.=—Some part of the

total exports of the war period was a free gift. The food, clothing,

and medical supplies that were donated by private individuals, by

associations, and by the government, demanded no commercial return and

no acknowledgment of indebtedness from the foreigner. Large as were

these gifts in absolute value, they can be omitted from consideration;

they may have formed a considerable portion of a milliard and still

be negligible. For most of the exports that appear in the commercial

returns the foreigner had to pay in the present or promise to pay in

the future.

One means of payment was hard cash. In the few years immediately

preceding the outbreak of the war the European banks, nervous because

of the political outlook, had been trying to build up their reserves,

and had been drawing gold from the United States. In the single month

of July, 1914, over $40,000,000 were shipped from New York. American

bankers and business men owed at this time several hundred million

dollars, maturing before the end of 1914; the city of New York owed

$80,000,000. For a brief period sterling exchange rose far above the

normal par; an American was willing to pay over $5 for the right to

a pound sterling payable in London. Soon the tide set in the other

direction. The total gold stock of the United States at the outbreak of

the war was about 1.8 milliard dollars. In 1920 it was 2.7 milliard,

roughly one third of the world’s total stock of gold used for monetary

purposes. In the interval the United States received from Europe over

1.2 milliard dollars in gold, of which it kept the larger part.

Reference to the table at the beginning of the chapter will show

that silver flowed in the opposite direction. The United States as a

silver-producing country, has had regularly a surplus to export, but

parted with the very large sums appearing in the table in the years

1918-1919 as a means of liquidating part of the balance owed to Asia.

The demand for silver to be shipped to the East was so strong that for

a brief period the bullion in the silver dollar, which so recently as

1915 was worth only forty cents, was actually worth more than a dollar

in gold.

=782. Securities and loans.=—Another means of payment employed by the

peoples of Europe to meet the balance against them was the sale in

the United States of American securities owned abroad. It is supposed

that in the period 1914-1920 Americans repurchased 4 to 5 milliards in

value of stocks and bonds that had been issued in the United States

and held by foreigners. For example, of the common stock of the U. S.

Steel Corporation 1,286,000 shares, over one-fourth of the total issue,

were in 1914 held abroad. At the end of 1918 the number had dropped to

484,000, and in 1919 it declined still further.

American investors, furthermore, purchased several milliard dollars

worth of foreign, mainly European securities, issued by governments, by

municipalities, by railroads, and by business enterprises. Evidently

the European, in debt to the American for the goods sent across the

sea, could square the account by selling his stocks and bonds in this

country and paying the proceeds to his creditor here.

Finally, and most important, the American government, after the entry

into the war of the United States (April, 1917) took upon itself the

task of financing the purchases made by associated European governments

in this country, and advanced to them a sum amounting to nearly 10

milliards of dollars. In July, 1921, the account stood as follows,

including only the advances made under the Liberty Loan acts, and

omitting considerable sums due to the United States for the sale of

surplus war material and for grain supplied to impoverished districts.

(_Figures in millions of dollars._)

United Kingdom 4,166

France 2,951

Italy 1,648

Belgium 348

-----

Total of these items 9,113

Total including items omitted 9,435

=783. Position of the United States as a creditor country.=—Although

it is not possible to describe with perfect precision the process by

which the European peoples arranged to pay for the excess exports

of the United States, the general situation is well enough known to

warrant one conclusion of the greatest significance. The process

resulted in turning the United States from a debtor country to a

creditor country. Even if we disregard the 10 milliard loans made by

the American government, and take account only of the investments made

by private citizens in this country, it is apparent that the United

States at the close of the war, instead of owing every year a balance

to other countries on account of interest and dividends, was entitled

to demand such a balance from abroad. So many items enter into the

general international balance that this single one cannot be taken as

determining the outcome, and deciding that after the war there would

be in normal years an excess of imports over exports. The country

will doubtless remain a debtor under some heads (private remittance,

tourists). At the close of the war it certainly was not collecting

interest and dividends in the form of an excess of imports, as the

figures show. It continued to invest capital in foreign countries,

particularly in Europe, in North America, and in South America;

the capital value of the loans far exceeded any annual interest

charge on them. Perhaps this process will continue in the period

of reconstruction. So long as the flow of capital for investment in

other countries exceeds the annual charges due from them, the surplus

of exports (so far as determined by this one item) will continue.

It is reasonable to believe, however, that sooner or later the tide

will turn, and the United States will have, year in and year out, a

surplus of imports over exports. The change will require a readjustment

of ideas that have been fixed by generations of habit. Investors,

demanding interest payments from foreign debtors, will no longer be

able to maintain the attitude that imports menace the prosperity of

the country and should be cut down by the restrictions of the tariff.

Exporters will find that the current is set against them, and that

they can broaden their market only as they stimulate still greater

growth in the import trade. The American people will realize at last

that, without a conscious exercise of their will, they have become

a “world-power,” and that in their own interest, quite apart from

humanitarian motives, they must accept new responsibilities and take an

active part in international affairs.

=784. Shipbuilding before the war.=—An excess of imports into the

United States, over the exports from this country, will come sooner and

will be larger if the country resumes an important position in ocean

shipping, as some believe it will. The United States continued, before

the World War, to build shipping in considerable volume. The statistics

of Lloyds Register show that in the first decade of the twentieth

century, American shipyards contributed about one-seventh of the total

tonnage built in the world. Most of the vessels built, however, were

destined for service on the Great Lakes or in the coasting trade; the

tonnage of steamers built for the foreign carrying trade was relatively

unimportant. Foreign ships carried regularly about nine-tenths of our

sea-borne trade in merchandise.

=785. Shipbuilding by the American government.=—In the first year of

the war the tonnage of ships built actually declined. The provision of

adequate cargo space became, however, a matter of urgent importance,

as ships were drawn into service as transports and the ravages of the

submarine extended. The government established in 1916 a Shipping

Board, for the construction of ships as a public enterprise, and

when it entered the war in 1917 it proposed to make one of its most

important contributions to the war by the supply of new tonnage. The

results are presented in the statistics of the accompanying table.

VESSELS BUILT IN THE UNITED STATES, 1914-1920

(_Figures in thousands of gross tons; fiscal years ending June

thirtieth._)

=========+===========+==========+=========

| Sailing | Steam | Total[13]

---------+-----------+----------+---------

1914 | 14 | 224 | 316

1915 | 8 | 142 | 225

1916 | 15 | 238 | 325

1917 | 43 | 461 | 664

1918 | 84 | 1,000 | 1,301

1919 | 79 | 3,107 | 3,327

1920 | 132 | 3,603 | 3,881

=========+===========+==========+=========

=786. American shipping at the close of the war.=—Comparing the

figures of the table with the years of the war (and noting that each

year of the table ends June 30, not Dec. 31) it is apparent that the

contributions of the United States to relieve the dearth of shipping

were of real importance in the last year of the war, but that the new

industry developed slowly and reached its maximum of output only after

peace had been declared. The peak of monthly production was attained

in August, 1919, when about 400,000 tons of sea-going steel steamers

were constructed. The sudden expansion of the industry, demanding the

training of nearly a million men called from other occupations, was

necessarily expensive. In three years, ending in 1920, the Shipping

Board expended about 3 milliard dollars, a sum greater than the book

value of the total shipping of the world in 1914. As a result of its

activity the government owned about 8 million tons of ocean shipping.

In the period of depression which followed the war fully half of this

amount was idle, and the operation of ships by the government proved to

be a losing venture. An act of 1920 directed that the ships be sold to

private owners, but the close of the period left their future still in

doubt.

=787. Foreign exchange at the close of the war.=—To understand the

commercial position of the United States at the close of the war it

is necessary to return again to questions of currency and foreign

exchange. The situation appears in the following table.

AVERAGE ANNUAL RATE OF EXCHANGE IN NEW YORK

==============+=======+======+=======

| 1913 | 1919 | 1920

--------------+-------+------+-------

On London | 100 | 90 | 75

On Paris | 100 | 71 | 36

On Rome | 100 | 56 | 26

On Berlin | 100 | 7 | 7

==============+=======+======+=======

The table signifies, for example, that the American in New York could

buy in 1919 for $90 or in 1920 for $75 as many pounds sterling as

had cost him $100 before the war; that he could pay a debt at Rome

with half as many dollars in 1919, with a quarter as many dollars in

1920, as he would have had to pay in 1913. During the war the rate of

exchange, like many other prices, was subject to government control;

the figures for 1919 and 1920 show the tendency of the rates when

they were left free to represent the actual value of the different

currencies in international transactions.

=788. Effect of depreciation in stimulating exports.=—The table shows

a great depreciation of the European currencies compared with the

American. The United States had had a great expansion of bank credit

during and after the war, but, after all, had in its enormous stock

of gold the means to maintain the dollar on a gold basis, while the

European countries had in circulation varying amounts of irredeemable

paper. The reactions of this situation on international transactions

were manifold, but two of them are worth particular attention.

When the issue of paper money continued, as in Germany for example,

the value of the mark in foreign exchange fell more sharply than its

purchasing power in the home market. An American importer would be

able to buy more marks for the dollar. The mark would not buy as much

as before in Germany, but the dollar’s worth of marks would buy more

than before; and the importer would find a transaction profitable which

previously he would have been unable to undertake. Unequal depreciation

of this kind acted as a stimulus or premium on exports from Germany,

which was seriously felt by competing producers in other countries.

=789. Effect upon the international money market.=—The situation had

also an important effect on the course of international loans. Let us

assume for example the case of Brazil, desiring to place a loan abroad.

If it borrowed in New York it would get gold dollars and would feel

assured that when it came to repay the loan it would repay it in the

same currency, with units of approximately equal value. If, on the

other hand, it borrowed in London, in terms of pounds sterling, it

would get paper pounds, at a discount in comparison with gold, but must

look forward to repaying the loan with gold units if in the interval

the English had succeeded in putting their currency on a gold basis and

thereby bringing their exchange to par. Even if Brazil desired to make

the loan for financing some expenditure in the European market it would

do better to buy dollar credit in the first instance, and buy with

that the foreign currency that it needed; and to accomplish this end

it would be willing to pay higher rates in New York than in London. It

would be hazardous to assert that as a result of the war New York will

replace London as the world’s money market, but it is clear that the

position of London is seriously prejudiced so long as English currency

is at a discount in comparison with gold.

QUESTIONS AND TOPICS

1. Chart the statistics of trade as in previous exercises.

2. Divide the figures of imports and exports by the figure for the

price level of the year (1.01, 1.24, etc.,), so reducing values to

the level of 1914, and enter results on chart with a dotted line that

gives approximately _volume_ of imports and exports.

3. What was the relative importance of foreign and of domestic trade

in the United States in this period? [B. M. Anderson, in Annalist of

N. Y. Times, Jan. 3, 1921, 17: 9.]

4. What exports of the United States, (_a_) increased most in value,

(_b_) increased most in quantity, in this period? [Statistical

Abstract, 1920, Table of domestic exports, quantities and values, by

years 1911-1920.]

5. What exports declined in quantity and in value? [Same].

6. Compare the exports from the United States to a particular country

at the beginning and at the end of the war. [Use Bureau of Foreign

and Domestic Commerce, Misc. Series, no. 38 and no. 106, Trade of U.

S. with the world, 1914-15 and 1918-19. The student may, for example,

take Argentina, Chile, Japan, or British India.]

7. Using sources given above, report upon the history of a particular

import, or on the imports from a particular country, during the war.

8. How the dyestuffs crisis was met. [E. Hendrick in American World’s

Work, March, 1918, 35: 531-535.]

9. The problem of potash and nitrates. [F. P. Stockbridge in American

World’s Work, May, June, 1918, 36: 28-34, 191-197.]

10. The balance of international payments. [F. W. Taussig, Principles

of Economics, vol. 1, chap. 33.]

11. The trade balance of the U. S. before the war. [G. Paish,

reference in note to sect. 779.]

12. Probable tendencies in the trade balance of the U. S. [J. R.

Smith, The American trade balance, National Foreign Trade Council, N.

Y., 1919.]

13. Function of imports in our foreign trade. [G. E. Roberts, National

City Bank, Foreign Commerce Series, no. 2, N. Y., 1920.]

14. American loans to Europe. [Noyes in Scribners’ Magazine, 61: 131

ff.; Atwood in American World’s Work, 33: 243-250, 399-403.]

15. Application of American methods to the construction of ships.

[Hurley, chap. 5, 8.]

16. Concrete ships. [Mattox, chap. 13.]

17. Development of shipyards. [Hurley, chap. 6; Mattox, chap. 15.]

18. The shipping problem at the close of the war. [E. R. Johnson in

Friedman, chap. 13.]

19. Foreign investments. [F. H. Sisson in Friedman, chap. 19.]

BIBLIOGRAPHY

In addition to sources previously cited see the Miscellaneous Series

of the Bureau of Foreign and Domestic Commerce, numbers 15, 38, 63,

78, 106, etc., giving details of foreign trade by countries. On

the subject of gold movement, foreign exchange and international

finance reference must be made to reports of the Secretary of the

Treasury, Director of the Mint, and Bulletins of the Federal Reserve

Board. References given under chapter 54 are also applicable here. A

monograph on Depreciated exchange and international trade was issued

by the U. S. Tariff Commission, Washington, 1922.

The student should relate the history of commerce during the war to

the military and political history of the period, and should have in

mind the narrative as presented in general accounts such as those by

Charles Seymour, **Woodrow Wilson, 1921; J. S. Bassett, **Our war with

Germany, 1919; J. B. McMaster, *The U. S. in the World War, 1918; F.

L. Paxson, *Recent history of U. S., 1921, chap. 44-56.

The most complete account of industrial and commercial activity

organized for the conduct of war will be found in Benedict Crowell and

R. F. Wilson, **How America went to war, New Haven, Yale University

Press, 1921, 6 vols.: The giant hand (mobilization and control of

industry and natural resources); The road to France, 2 vols.; The

armies of industry, 2 vols.; Demobilization. The subject of shipping

is covered by E. N. Hurley, *The new merchant marine, N. Y., 1920, and

W. C. Mattox, Building the emergency fleet, Cleveland, 1920. On the

various problems of reconstruction see the symposium edited by E. M.

Friedman, American problems of reconstruction, N. Y., 1918, and Isaac

Lippincott, Problems of reconstruction, N. Y., 1919. Many special

topics of commerce, industry and finance are treated in periodicals,

in reports of banks (e.g., Foreign commerce series of National City

Bank) and in government reports (e.g., dyestuffs in Bureau of For. and

Dom. Commerce, Special Agents Series, numbers 96, 11, and 121).

TITLES OF BOOKS CITED BY ABBREVIATIONS

NOTE.—Books of which the full titles have already been given are not,

in most cases, included in the following list, which is supplementary

to the bibliographies and by no means a substitute for them. The list

includes only titles of those books which have been cited so many times

that a repetition of the full title would waste space, and which have

been cited in so many different places that the reader’s time would be

wasted in hunting for the entry of the full title. I have thought it

unnecessary to give full titles of standard narrative histories, of

current manuals in the allied subjects of history and economics, and of

local sources in the history of the United States.

Adams, Charles F., Jr. Railroads, their origin and problems. N. Y., no

date.

Adams, George B. Civilization during the Middle Ages. N. Y., Scribner,

1894.

A. L. A. (American Library Association) Catalogue. Washington, 1904,

and later editions.

American railway, The. N. Y., Scribner, 1897.

Armitage-Smith, G. The free-trade movement. London, 1898.

Ashley, William J., editor. British industries. London (N. Y.,

Longmans), 1903.

Ashley, William J. English economic history. N. Y., Longmans, 1892-3,

2 vol.

Ashley, William J. The Tariff problem. London, 1903.

Baring-Gould, Sabine. Story of Germany. N. Y., Putnam, 1886.

Bastable, C. F. Commerce of nations. N. Y., Scribner, 1899.

Beazley, C. R. Prince Henry the Navigator. N. Y., Putnam, 1895.

Beer, George L. Commercial policy of England toward the American

colonies. N. Y., Macmillan, 1893, Columbia Studies, 3, II.

Beer, G. L. The old colonial system, 1660-1774. N. Y., 1912, 2 vol.

Bishop, J. Leander. History of American manufactures. Philadelphia,

1861-68. 3 vol.

Bourne, Edward G. Spain in America. N. Y., Harper, 1904.

Bourne, H. R. Fox. Romance of Trade. London, no date.

Bowker, R. R. and George Iles. Reader’s guide in economic, social, and

political science. N. Y., Putnam, 1891.

Bowley, Arthur L. England’s foreign trade in the nineteenth century.

London (N. Y., Scribner), 1893.

Bowman, Isaiah. The new world, problems in political geography.

Yonkers-on-Hudson, 1921.

Bruce, Philip A. Economic history of Virginia. N. Y., Macmillan, 1896,

2 vol.

Bücher, Carl. Industrial evolution. N. Y., Holt, 1901.

Callender, G. S. Early transportation and banking enterprises of the

States. Quarterly Journal of Economics, Boston, 1902-3, 17: 111-162.

Cambridge Modern history. N. Y., Macmillan, 1902 ff.

Carnegie History of domestic and foreign commerce of the United

States, by Emory R. Johnson, T. W. Van Metre, G. G. Huebner, and D. S.

Hanchett. Washington, 1915, 2 vol.

Chapman, S. J. History of trade between United Kingdom and U. S.,

London (N. Y., Scribner), 1899.

Chapman, Sydney J. Work and wages. London, Longmans, 1904-1914. 3 vol.

Cheyney, Edward P. European background of American history. N. Y.,

Harper, 1904.

Clapham, J. H. The economic development of France and Germany,

1815-1914. Cambridge, 1921.

Coman, Katharine. Industrial history of the U. S. N. Y., Macmillan,

1910.

Cornewall-Jones, R. J. British merchant service. London, 1898, 14s.

Cunningham, William. Growth of English industry and commerce.

Cambridge (N. Y., Macmillan), 1896-1903, 2 vol. in 3.

Cunningham, William. Rise and decline of the free-trade movement.

London, 1904.

DeBow, J. D. B. Industrial resources of the southern and western

States. New Orleans, 1853, 3 vol.

Depew, Chauncey M., editor. One hundred years of American commerce. N.

Y., 1895, 2 vol.

Edgar, William C. Story of a grain of wheat. N. Y., Appleton, 1903.

Fairlie, J. A. Economic effects of ship canals. Annals of Amer. Acad.,

Philadelphia, 1898, 11: 54-75.

Fisher, Sydney G. Men, women and manners in colonial times. Phila.,

1898, 2 vol.

Fry, Henry. History of North Atlantic steam navigation. N. Y.,

Scribner, 1896.

Gastrell, W. S. H. Our trade in the world. London, 1897.

Green, Mrs. J. R. Town life in the fifteenth century. N. Y.,

Macmillan, 1894, 2 vol.

Hadley, Arthur T. Railroad transportation. N. Y., Putnam, 1903.

Hammond, Matthew B. The cotton industry. Pub. Amer. Econ. Assoc.,

1897, 2 series, no. 1. N. Y., Macmillan.

Hatfield, Henry R., editor. Lectures on commerce. Chicago, 1904.

Hewins, W. A. S. English trade and finance. London (N. Y., Scribner),

1892.

Hobson, John A. Evolution of modern capitalism. N. Y., Scribner, new

ed., 1916.

Homans, J. Smith, editor. Cyclopedia of commerce. N. Y., Harper, 1858.

Hulbert, Archer B. Historic highways of America. Cleveland, 1902-5, 16

vol.

Hunter, William W. History of British India. London (N. Y., Longmans),

1899, 2 vol.

James, Edmund J. The canal and the railway. Pub. Amer. Econ. Assoc.,

1890, 5:282-329.

Jeans, J. S. Waterways and water transport. London (N. Y., Spon), 1890.

Jessopp, Augustus. Coming of the friars. London, (N. Y., Putnam), 1889.

Jevons, W. S. The coal question. London, 2 ed., 1866.

Johnson, Emory R. American railway transportation. N. Y., Appleton,

1903 and later editions.

Jusserand, J. J. English wayfaring life. N. Y., Putnam, 1890.

Keller, Albert G. Colonization. Boston, 1908.

Lectures on British commerce, with preface by W. P. Reeves. London,

1912.

Levi, Leone. History of British commerce, 1763-1878. 2 ed., London,

1880.

Lindsay, W. S. History of merchant shipping. London, 1876, 4 vol.

Lippincott, Isaac. Economic development of the United States. N. Y.,

1921.

Lord, Eleanor L. Industrial experiments in the British colonies. Bryn

Mawr dissertation, 1896.

McCarthy, Justin. History of our own times. N. Y., Harper, 1901, 3

vol. and various other editions.

M’Culloch, J. R. Dictionary of commerce. Philadelphia, 1847, 2 vol.

Macgregor, John. Commercial statistics. 2 ed., London, 1850, 5 vol.

Macpherson, David. Annals of commerce. London, 1805, 4 vol.

Maginnis, A. J. The Atlantic ferry. N. Y., Macmillan, 1900.

Mahan, A. T. Influence of sea power upon history. Boston, Little, 1893.

Marvin, Winthrop L. The American merchant marine. N. Y., Scribner,

1902.

Mayo-Smith, Richmond, and E. R. A. Seligman. Commercial policy of the

U. S., 1860-90. Leipzig, 1892, Schriften Ver. f. Soc., XLIX.

Mongredien, Augustus. History of the free-trade movement in England.

London, Cassell, no date.

Morley, John. Life of Richard Cobden. London (N. Y., Macmillan), 1881,

2 vol.

Nicholson, J. S. History of the English corn laws. London, 1904.

Nicolls, W. J. Story of American coals. 2 ed., Philadelphia,

Lippincott, 1904.

Ocean steamships. N. Y., Scribner, 1891.

Ogg, Frederic A. Economic development of modern Europe. N. Y., 1917.

Oxley, J. M. Romance of commerce. N. Y., Crowell, 1897.

Page, T. W. Earlier commercial policy of the U. S. Journal of Pol.

Econ., Chicago, 1901-2, 10:161-192.

Palgrave, R. H. I. Dictionary of political economy. London (N. Y.,

Macmillan), 1894-99, 3 vol.

Porter, G. R. Progress of the nation. London, 1836 ff., 3 vol.; new

ed., London, 1912.

Rand, Benjamin. Selections illustrating economic history, 4 ed., N.

Y., Macmillan, 1903.

Report of a Committee of the Lords of the Privy Council on the trade

of Great Britain with the U. S., 1791. Reprinted, Washington, 1888.

Ringwalt, J. L. Development of transportation systems in the U. S.

Philadelphia, 1888.

Schmoller, Gustav. The mercantile system. N. Y., Macmillan, 1902.

Schooling, J. H. The British trade book. London, 4th issue, 1911.

Seebohm, Frederic. Era of the Protestant Revolution. N. Y., Longmans,

1903.

Seeley, J. B. Expansion of England. Boston, Little, 1900.

Seignobos, Charles. Political history of Europe since 1814. N. Y.,

Holt, 1899.

Seybert, Adam. Statistical annals. Philadelphia, 1818.

Shadwell, Arthur. Industrial efficiency. London, 1906, 2 vol.; new

edition, 1 vol., 1909.

Social England, ed. by H. D. Traill and J. S. Mann. London (N. Y.,

Putnam), 1894 ff., 1901 ff., 6 vol.

Spears, John R. The story of the American merchant marine. N. Y.,

1910, new ed., 1917.

Statesman’s Year-Book. London (N. Y., Macmillan), annual.

Stephens, H. M. Story of Portugal. N. Y., Putnam, 1891.

Swank, J. M. History of the manufacture of iron. 2 ed., Philadelphia,

1892.

Taussig, Frank W. Tariff history of the U. S. N. Y., Putnam, 1897.

Vernon-Harcourt, L. F. Achievements in engineering. N. Y., Scribner,

1891.

Ward, T. H. editor, Reign of Queen Victoria. London, 1887, 2 vol.

Waterston, William. Cyclopedia of commerce. London, 1847.

Weeden, W. B. Economic and social history of New England. Boston,

Houghton, 1890, 2 vol.

Wells, David A. Our merchant marine. N. Y., Putnam, 1890.

Wells, David A. Recent economic changes. N. Y., Appleton, 1898.

Williams, Ernest E. “Made in Germany,” 5 ed., London, 1897.

Wilson, A. J. Resources of modern countries. London, 1878, 2 vol.

Wright, Carroll D. Industrial evolution of the U.S. N. Y., Scribner,

1895.

Zimmern, Helen. The Hansa towns. N. Y., Putnam, 1889.

FOOTNOTES:

[Footnote 1: Figures are averages for the decade 1900-1909, not

1901-1910.]

[Footnote 2: The figures of the table, quoted from Lloyd’s Register

in Report U.S. Department of Commerce, 1920, p. 170, differ slightly

from U.S. official figures. It should be noted that the gross tonnage

of American vessels employed in foreign trade was very much less: 1.0

million in 1914, 9.9 million in 1920, according to official figures.]

[Footnote 3: I do not pretend to recognize technical distinctions in

this elementary exposition.]

[Footnote 4: Figures of gold movement for 1917 and 1918 are unofficial;

figure for 1919 is lacking.]

[Footnote 5: In July, 1917, and thereafter the accounts included

merchandise imported and exported in public as well as private

ownership, except exports for the use of British troops in the field.

Before July, 1917, the figures of exports included property of the

allied governments, but omitted a large part of that of the British

government; figures of imports omitted property both of the British and

of allied governments, except that they included all articles of food.

Some idea of the divergence of the figures from the facts may be got by

comparing the American statistics of exports from the United States to

the United Kingdom with British statistics for the same calendar year

of imports from the United States.

=======+==================+=================

| American figures | British figures

| $ millions | £ millions

-------+------------------+-----------------

1913 | 591 | 142

1914 | 600 | 139

1915 | 1,198 | 238

1916 | 1,887 | 292

1917 | 2,009 | 376

1918 | 2,061 | 515

1919 | 2,279 | 542

=======+==================+=================

Normally the British figures of imports, c.i.f., would exceed the

American figures of exports, f.o.b., as they did in 1913. The

divergence in the opposite direction of the two sets of figures in

following years is sufficiently striking even if the pound sterling is

rated at $5.]

[Footnote 6: War loans on the books of the British government stood as

follows, 1920, (figures in million pounds sterling):

To dominions and colonies 120

To France 515

To Russia 568

To Italy 457

To Belgium 99

To other allied governments 85

-----

1,844

]

[Footnote 7: In 1915 Egypt was changed in the British classification

from the position of foreign country to that of British Possession.

Imports from Egypt were in 1913 £16,000,000 and increased rapidly

toward the end of the war, to £5,000,000 in 1918.]

[Footnote 8: These figures of exports omitted, before July, 1917,

most British government property, and even after that date government

supplies for British troops in the field. The inclusion of these items

would make even more impressive the concentration in France of the flow

of goods from England.]

[Footnote 9: The franc, nominally worth $.193, declined rapidly in

purchasing power in the course of the war, but was kept close to par in

foreign exchange by the action of the allied governments in “pegging”

the exchange. When the government ceased to control the rate, in the

Spring of 1919, it fell sharply; it was below $.10 in Dec., 1919, was

below $.06 in Dec. 1920, and then made a recovery.]

[Footnote 10: The table is taken from Report of Comptroller of the

Currency, 1920, vol. 1, p. 14, a convenient source because both

merchandise and specie are enumerated by calendar, not fiscal year.

I have corrected the table by reducing by 1 milliard the figure for

exports in 1914, to accord with verified commercial statistics, and

have altered the figures of excess of exports in 1914, and for total

exports and total excess to accord with this correction. The student

who checks the figures by reference to U. S. Statistical Abstract,

1920, p. 773, should not be dismayed by finding there the exports for

1915 listed at 2,555 millions; it is another example of a milliard

dollar error.]

[Footnote 11: Calendar years; 1914-1918 fiscal years ending June 30.]

[Footnote 12: I have adapted the figures from the report of George

Paish to the National Monetary Commission, 61st Congress, 2d session,

Senate Document No. 579, pp. 153-213.]

[Footnote 13: Figures of total tonnage include gas vessels, canal boats

and barges, not separately enumerated in the table.]

INDEX

Aegina, 19.

Africa, circumnavigation of, 10, 130;

commerce with England, 221;

with the United States, 491, 586, 651.

Agriculture, medieval, 35;

modern, 139;

recent, 280.

Agricultural implements, 569.

Alexander the Great, 10, 11, 21.

Alexandria, 22, 27.

Alum, 82.

Amber, 103.

America, discovery of, 133.

Spanish, 180-184.

Amsterdam, 159, 194.

Antioch, 22, 27.

Antwerp, 74, 109, 154, 434.

Archangel, 267, 456.

Arkwright, 214.

Asia, in Middle Ages, 128. See also China, India, Japan, Levant.

Assize of bread, 51.

Assyria, 11.

Athens, 19 ff.

Australia, commerce with England, 361.

Austria-Hungary, modern, 259;

recent, 436, 639 ff.;

and Prussia, 396.

Austria, Republic, 641.

Babylon, 11.

Bagdad, 84.

Balboa, 133.

Balkan Peninsula, 465.

Baltic trade, medieval, 102 ff.;

modern, 252;

recent, 350.

Baltimore, 489, 548, 585.

Banking, early, 120, 150;

recent, 339.

Barcelona, 99.

Belgium, 433. See also Flanders, Netherland.

Bessemer, 285.

Bill of exchange, 120.

Bismarck, 406.

Bodeck, John von, 142.

Bolsheviks in Russia, 644.

Bordeaux, 74.

Boston, 489, 490, 548, 585.

Brazil, 185.

Bremen, 257.

British Dyes, limited, 615.

British North America, 221.

British Trade Corporation, 616.

Bruges, 75, 97, 105, 109, 115.

Bulgaria, 465.

Bullionist policy, 167.

Cable, submarine, 313.

Cadiz, 14.

Cabral, 133.

Canada, commerce with United States, 549, 589, 651.

Fragments of the old dual monarchy were absorbed by bordering