XXIV. FRANCE: SURVEY OF COMMERCIAL DEVELOPMENT
=264. Natural advantages of France in the modern period.=—In preceding sections we have considered countries which for a time took the leading place in commerce among the states of Europe. We have now to study the development of the other states, to understand the share they took in commerce, and to note so far as possible the causes which kept them below the leaders.
Taking first France, we find a country which throughout the period enjoyed the reputation of being the richest state of Europe. Not only in area and population did it greatly exceed its traditional rival, England; it had also advantages of soil and climate which caused it to be regarded as favored beyond all others. Fronting both the Mediterranean and Atlantic, with easy access to the North Sea and Baltic, it had a better position for the sea commerce of the period than any other country, while internal transportation was facilitated by a remarkable system of navigable rivers, that brought the interior of the country into easy communication with the coast. Nor can we say that the French people of this period were inferior to those of other countries in their economic capacity. Before the beginning of the period and at intervals during its course they give evidence of productive ability which would have led to very different results under conditions such as more favored people, like the English, enjoyed. This holds true even of manufacturing, a branch of production in which the French have commonly been considered inferior by natural bent to the English.
=265. The chief reason why France did not rise to leadership.=—In spite of size, resources, and population, France did not rise above the second place mainly through the fault of the French organization, the arrangements that the French nation had for working together. We may compare the French state to a modern industrial corporation, which has a large capital invested in a valuable plant, and has good business openings; but in which the business is wrecked by quarrels among the stockholders, and by such a poor organization that president and directors can disregard the interests of the stockholders, can conduct affairs for their selfish profit, and can waste the company’s resources in enterprises that do not pay. The point will be made more clear if, as an introduction to the history of commerce in France, we sketch the general history of the country from the later Middle Ages to the French Revolution of 1789.
=266. Progress checked by the Hundred Years’ War with England, and by religious conflicts.=—In the fourteenth century it seemed as though France were going to lead Europe in the development of a new period. Agriculture and manufactures were flourishing; internal trade was active; and French ship-owners, growing accustomed to longer voyages, ventured far down the west coast of Africa and established trading stations even on the coast of Guinea. The country was plunged again into a condition of medieval chaos by the Hundred Years’ War (1336-1453), a war that hurt France vastly more than England because it was fought entirely on French soil. French and English armies, and “free companies” of organized bandits ravaged the country; the weight of taxes grew; trade dwindled, cities declined, and artisans emigrated.
The country had hardly recovered from this war (which ended in 1453), when it was again disturbed, this time by a series of civil wars between Protestants and Catholics, attended by the same unfortunate economic effects. The religious conflict was finally closed by a settlement which was even more disastrous; the French Protestants, to the number of nearly half a million and making up the most valuable industrial element in the population, were expelled from France as the Jews and Moriscoes had been expelled from Spain. The loss to France can be measured by the gain of other countries; the establishment and development of important manufactures can be traced in each of three countries, England, Prussia, and the Netherlands, to the influx of the Huguenot refugees.
=267. Effect of the absolute monarchy on French development.=—France secured finally freedom from foreign invasion and from internal dissension, but at a terrible cost. The whole power of the state was vested in the hands of the king. The stockholders lost all power to direct the concerns of the company. Rarely this power was exercised by a king both wise and strong, like Henry IV. During the long reign of Louis XIV it was wielded by a king who was strong but who was not wise; who wasted the rich resources of his country in fruitless wars, while he neglected the opportunities for reforms at home and for commercial expansion abroad. Too often the rule was held only in name by the king, but in fact by the royal favorites, worthless adventurers who by pleasing the taste of the sovereign gained the power to direct as they chose the policy of this great country. This evil is especially marked in the eighteenth century, when England was prepared to take advantage of every mistake of France, in building up her world power.
=268. Failure to reform conditions inherited from the feudal period.=—The absolute monarchy played a vital part in the history of French commerce, not only by its disregard of commercial interests abroad, but by its lack of business sense in home affairs. As the details will appear in the following pages it is necessary here to call attention only to some general points. The kings did not complete the unification of the country by breaking down the feudal toll barriers, of which some remained until the Revolution. They encouraged the separation of classes, just as they allowed the separation of sections; the French were split into groups, mutually jealous and hostile, which lacked the feeling of common interest, and were unable to cooperate. The most serious distinction between classes was in regard to taxation. Nobles and clergy were granted privileges, often of a kind that hindered production, while they paid very little to the public treasury. The productive classes, on the other hand, the business men and laborers, bore nearly the whole burden. The weight of this burden was tremendous, for the machinery of government had become more and more complicated and more and more inefficient with the passage of time, so that the government had to demand a great deal from the taxpayers to accomplish very little in the public service. An idea of the condition in the eighteenth century can be gathered from the fact that the peasant is estimated to have paid from one half to four fifths of his gross income to a government which gave him almost nothing in return.
=269. Bloom of French commerce in the fifteenth century as shown in the business of Jacques Cœur.=—Returning now from this political survey to the history of commerce proper, we find before the year 1500 one name standing out prominently in the history of French commerce, that of Jacques Cœur, a merchant of Bourges. A contemporary says of him: “His ships carried to the East the cloths and merchandise of the kingdom. On their return they carried back from Egypt and the Levant different silk stuffs, and all kinds of spices. On their arrival in France some of these ships ascended the Rhone, while others went to supply Catalonia and the neighboring provinces, competing in this way with the Genoese and the Catalonians in a branch of trade that up to that time they alone had exploited.” At the height of his fortunes, about 1450, he had a silk factory in Florence, did business with England and thought of establishing an office in Flanders also. The work of Cœur survived him, and French commerce developed rapidly in the intervals of peace following. Great interest was felt in France in the explorations of the sixteenth century, and though the French were behind the Spanish and Portuguese in the work, they led the English and Dutch, and the names of Verrazano (an Italian in the French service) and Cartier testify to their energy.
=270. The bulk of French commerce still with nearby countries.=—France was still unprepared, however, to engage extensively in oceanic commerce. The chief part of its trade in the sixteenth century was with its immediate neighbors; it found the best market for its exports in Spain, and it sought a large part of its imports in Italy. French military expeditions to Italy about 1500 had far more effect at the time than the discovery of the New World or of the sea route to India; the Italians stimulated and gratified new tastes and introduced new methods in business. The best days of the Levant trade had passed away, but the number of French ships engaged in it increased rapidly, until the outbreak of the religious wars at home. France shared with Venice the profits of its trade, and was the first of the European states to secure from the Sultan at Constantinople a “capitulation” in the modern form, defining the condition on which foreigners could trade.
=271. Decline during the period of the religious wars.=—The promising development was checked by the religious wars of the later sixteenth century; France must endure a period of anarchy at home and powerlessness abroad. French commerce declined at its source, as production languished; and was attacked abroad by competitors and by the pirates who infested the coasts. About 1600 the French merchant marine had almost disappeared from the Atlantic; voyages to foreign lands had ceased, and even the coasting trade had passed into the hands of the English, Flemish, and Dutch. Marseilles still maintained relations with the Levant, but the French merchants there were being mercilessly bled by Turkish governors, and were being rapidly driven out of the market by the English and Dutch. France seemed actually saved from ruin by the few years of peace and good government given by Henry IV and his minister Sully.
=272. Recovery after 1600.=—The first three quarters of the seventeenth century, until the disastrous foreign wars of Louis XIV, were on the whole a period of peace and progress. Under Henry IV taxes were low, the means of internal communication by land and water were restored and improved, and new industries were introduced. The revival of trade was shown in the prosperity of fairs. The great foreign minister, Richelieu, was interested mainly in questions of politics, and hampered the development of French resources by heavy taxes, but in some ways he continued the work of Henry IV. The English of this period called themselves “Kings of the Sea” and termed Richelieu a “fresh-water admiral”; French ships, afraid to refuse the English a salute and unwilling to accord it, sailed under the Dutch flag. Richelieu said, in the government newspaper, “France, bounded by two seas, can maintain herself only by sea power,” and began the construction of a navy which would give confidence to the merchant marine.
=273. Founding of commercial companies, and colonial expansion.=—The revival of French commerce was evidenced by the incorporation of companies designed to trade with distant parts of the world, and by the encouragement and growth of colonization. The list of commercial companies founded, 1599-1642, including reorganizations, amounted to twenty-two, including in its scope Canada, the West Indies, Guinea, the west coast of Africa, Madagascar, East India, and the Malay Archipelago (Java, etc.). The government accorded great privileges to the companies, and the royal influence was exerted in every way to help them; men were forced even by intimidation to invest in them, and nobles were allowed to participate without lowering the dignity of their order. The colonies were likewise pushed by the force of the government; emigration was encouraged and discharged soldiers and poor girls were sent out by the government to further the growth of population. The number of Europeans in Canada was perhaps 2,500 in 1660, and increased to 10,000 in the next twenty years; a considerable number of French settled also in various islands of the West Indies. France stood next to Spain as a colonial power, measuring merely by the area to which she could lay claim.
=274. Reasons for the failure of these enterprises.=—Most of these commercial and colonial enterprises were failures. They showed the characteristic faults of the time: inefficiency of organization, a failure to appreciate the difficulties of their task, and impatience in their attempts to solve the problems. They had special elements of weakness, moreover, in their rather artificial character, and in the fact that they carried with them abroad the class distinctions and prejudices of the home country. Still, the seventeenth century was for all nations a time of experiment in distant commerce and colonization; a large proportion of failures was natural, and the French had attained a sufficient measure of success before 1700 to have enabled them to enter the international competition of the eighteenth century with good prospects. Their prospects were blighted, and France lost its opportunity to become a “world-power” by the fault of the French political constitution, which put the interests of the people at the mercy of one man, the king.
=275. Mistaken policy of Louis XIV.=—The “Great Monarch,” Louis XIV, did not lack good advisers. The philosopher Leibnitz proposed, at this critical period in French history when the country could choose to be either a land or a sea power, that it should select the latter alternative, and base its greatness on control of the sea and of commerce. He said that France needed peace at home to permit an expansion of its power abroad, where the richest prizes of power were to be had; and he urged the occupation of Egypt, to give France the control of trade to the Levant and the far East. But Louis thought that the French frontier was too near to Paris and saw tempting morsels of territory on the other side of it; he found the arrogance of the Dutch galling to his pride; he wanted to raze the Pyrenees by putting a French prince on the Spanish throne. He engaged, therefore, in a series of continental wars continuing nearly fifty years, which returned little or no gain in Europe, and destroyed the power of France in the other continents. Louis’ policy prompted his biographer to a comment of sad significance, “The inhabitants of the several nations of Europe have scarce ever any interest in the wars of their sovereigns.”
This sovereign found France vigorous and offering brilliant promises of development; he left her weighted with taxes and debt. A distinguished Frenchman said toward the close of this reign that a tenth of the people were reduced to beggary, and of the remainder over one half were in no condition to give alms, they were so near to beggary themselves.
=276. Decline of the French colonial empire in the eighteenth century.=—The colonial possessions which France surrendered to England at the close of the wars (the Hudson’s Bay Territory, Nova Scotia, and Newfoundland) seem comparatively unimportant, but their loss was significant. The two countries had chosen different paths. England continued to build up a colonial empire; France continued to spend her resources in continental wars, at the cost of her commerce and her colonies. The Seven Years’ War, ending in 1763, marks practically the end of the conflict. France surrendered all her possessions on the North American continent, and some of those in the West Indies and Africa; and abandoned forever the hope, at one time most promising, of building up an empire in India. So little were the colonies appreciated in France that some good Frenchmen rejoiced at their loss, and only wished that more of “those wretched possessions” might have been transferred, to ruin the enemy!
=277. Growth, notwithstanding, in the commerce of France.=—The reader must not infer from preceding paragraphs that French commerce was stationary or declining in the eighteenth century. Colonial expansion was often a long-time investment, from which a country could hope to recover the full return only after the lapse of generations, sometimes after the colony had established its freedom. The full effect of the French policy is apparent only in the nineteenth century, and elements which we have not yet considered must be taken into account to explain why France has been passed by other countries in the race for industrial supremacy. In the eighteenth century, in spite of a misguided foreign policy, in spite of burdensome taxes, and in spite of a vicious organization of internal trade and manufactures which will be described later, France profited by her size and resources to build up a great foreign trade. Some features of this trade will be apparent from the following table, to which the same remarks apply that have already been made on the subject of statistics. The figures show in millions of livres (and a rough equivalent) the trade of France with the various continents in 1716, when the country was just recovering from war and commerce was unduly depressed, and 1787, when a short period of unusually active trade preceded the French Revolution.
COMMERCE OF FRANCE BY CONTINENTS
============+========================+====================== | 1716 | 1787 ------------+------------------------+---------------------- Europe | liv. 176.6 $ 35. | liv. 804.3 $ 161 America | 25.8 5. | 269.9 54 Asia | 9.2 2. | 52.1 10 Africa | 1.1 0.2 | 6.5 1 | ------ ----- | ------- ---- Total | 214.9 43. | 1153.5 230 ============+========================+======================
=278. Analysis of French commerce in the eighteenth century.=—Without attempting to draw too much from figures which are known to be inaccurate, we can base on this table some few important conclusions. The commerce of France grew at a rate not far from that of England’s in the eighteenth century. The commerce of France, however, continued in much greater degree to be European; the chief trade of the country was with its neighbors, Italy and Germany, and, after them, with England and the Baltic. To these countries France sent manufactures amounting to less than one third of the total exports (122 million), the remainder being made up of articles of food and drink and various other raw materials. The failure of France to manufacture goods which would hold their own in the world market must be regarded as her vital weakness. We see it especially well illustrated in the trade with the United States. During the later years of the Revolution (1781-1783) France sent to the United States exports amounting to over eleven million livres a year. A few years afterward (1787-1789), when the restoration of peace should have stimulated the trade, it had dropped to less than two millions. The French had sent poor wares, and could not hold the trade when the English were free to compete again.
=279. Value of the French sugar colonies.=—It was the fortune of the French to keep of their colonies in America just those which were capable of the most rapid economic development. They were West India islands in which sugar was produced by slave labor. Comparatively few Frenchmen had settled in the islands, and in the long run they were to prove of little advantage to the home country, but in the eighteenth century they were veritable gold mines. The leading position in sugar production, which had first been taken by the Portuguese in Brazil, passed early from them to the English, and was taken before 1750 by the French, who soon controlled the European market. A part, also, of the imports from Africa comprised sugar from islands in the Indian ocean, while the African slave trade was exploited for the benefit of American planters.
QUESTIONS AND TOPICS
1. Striking characteristics and chief weaknesses of the political system of France. [Seebohm, Prot. rev., 40-46, 210-212; Cheyney, Eur. background, 115-121; Taine, Ancient régime.]
2. Effect of the Hundred Years’ War (a) on the people, (b) on the power of the king. [Adams, Growth, chap. 9.]
3. Effect upon France of the religious wars, and the emigration of the Huguenots. [Adams, 180 ff., 227 ff.]
4. Write a report on the career of Jacques Cœur. [Encyc. Brit.]
5. Write a report on one of the French explorers. [Manuals of U. S. history and references; Thwaites, France in Amer., chap. 1: Parkman, Pioneers of France.]
6. Write a brief report on the history of the commerce of Marseilles. [Encyc.]
7. Reforms under Henry of Navarre. [Adams, Growth, p. 183 ff.; P. F. Willert, Henry of Navarre, N. Y., Putnam, 1893, $1.50, chap. 8.]
8. Reforms by Richelieu, 1624-1642. [J. B. Perkins, Richelieu, N. Y., Putnam, 1900, $1.50, chaps. 6, 9.]
9. Economic organization and commerce of the French in America. [Bateson in Camb. mod. hist., vol. 7, chap. 3; Thwaites, France, chap. 8; Parkman, Old régime, part 2.]
10. Make a written summary of the wars of Louis XIV, showing gains and losses of territory, in Europe and in the rest of the world. [Adam Growth, p. 216 ff.]
11. Opportunity lost by Louis XIV to build up an empire by sea power. [Mahan, Sea power, chap. 2, and pp. 141 ff., 198 ff., 219 ff.]
12. Prepare a written summary of the results of the French wars of the eighteenth century. [Adams, Growth, chap. 14.]
13. Prepare a graphic chart from the table of figures, sect. 277, as suggested above in the case of England, and study the conclusions to be drawn from figures and chart.
14. Combine the charts for England and for France, and draw conclusions from the comparison. Endeavor, if possible, by extending your reading, to settle the questions which this comparison will suggest. Note, however, that the figures refer to different dates, that they are a far less accurate index of the facts than you would suppose, and, finally, that the reduction to modern currency is very rough.
15. Write a report on the history and commerce of one of the following West India islands under French rule: (a) San Domingo, (b) Guadeloupe, (c) Martinique. [Encyclopedia; Homans’ Cyc. of commerce; C. B. Norman, Colonial France, or Bryan Edwards’ History, if that book is available.]
BIBLIOGRAPHY
Of the general works on French history, Adams, **Growth of the French nation, is excellent.
Of the works on particular periods all the books of James Breck Perkins can be highly recommended for the attention paid to economic conditions; I refer above only to the small book on Richelieu. See the A. L. A. Catalogue for titles of others. Paul Lacroix, The XVIIIth century, London, no date, is a popular illustrated work, with a chapter on commerce, of no great importance. Books discussing the conditions leading to the French Revolution are valuable for the light they throw on the organization of France in the period of modern history. Books by Taine, E. J. Lowell, and R. H. Dabney will be useful in this connection; and vol. 4, no. 5, of the Univ. of Penn. Translations (Typical Cahiers of 1789) is a convenient selection from sources.
A bibliography of French colonial history in America will be found in the Guide of Channing and Hart, in the Cambridge mod. hist., vol. 7, pp. 766-771, or in R. G. Thwaites, France in America, N. Y. Harper, 1905. The last named book is not so serviceable for purposes in view here as others in the same series; and the student will turn by preference to Cambridge mod. hist., vol. 7, chap. 3, where the subject of the French in America (1608-1744) is treated by Miss Mary Bateson, with due regard to economic interests. Of Parkman’s works see especially The old régime, Boston, Little, 1902, $2. Norman, Colonial France, London, 1886, covers briefly the history of all the French colonies; the French West Indies are included in A. K. Fiske. S. L. Mims, Colbert’s West India policy, New Haven, 1912, is a scholarly study of a particular topic.
XXV. FRANCE: POLICY
=280. History of the French customs tariff.=—After this survey of the development of French commerce we can gain an appreciation of the opportunities for still greater growth that were lost, by considering the obstacles with which the merchant had to contend.
First of all, as a matter of course, there was the customs tariff on the frontier. This went through the normal course of development in the period under consideration. The government attempted to reduce to some sort of system the scattered duties of the earlier period; and under the influence of mercantilist doctrines it ceased to use the duties chiefly for raising revenue. The idea of using the tariff to protect home industries, which was at first held vaguely and applied only occasionally, gained strength with time and was made by Colbert, a minister of Louis XIV, the chief point in the tariff system. In 1664, and again three years later, the duties were raised to protect home manufactures; duties were raised twofold and more, and when wares were found still entering the kingdom they were in some cases absolutely prohibited. The high tariff led to reprisals on the part of other countries, and strained political relations with them; it was one of the causes of open war with the Dutch. It remained throughout the period a serious obstacle to commerce with advanced industrial countries like England and Netherland; the breaches made in it by commercial treaties were comparatively unimportant; and smuggling formed in France as in England the real safety-valve of the commercial system.
=281. Persistence of customs frontiers inside France.=—Far more serious than the frontier tariff were the customs duties inside of France. The French kings had made their country by the political union of feudal fragments, and had never used their great power to abolish the evidences of former separation and to unify their territory for the purposes of commerce. We must distinguish three different sections of the country. The North, roughly speaking, was an area in which internal trade was free, i.e., in which the provinces were not separated by customs barriers. The South, on the other hand, was composed of provinces “reputed foreign” which had kept their tariffs, so that trade here was not free, and wares passing between this and other parts of France had to pay duty. Still a third section was the East, “provinces foreign in fact”; these provinces did not form part of France at all, commercially speaking, for they were outside the national customs frontier, enjoying free trade with other countries and paying duties when they sent wares to other parts of France. If the reader will recall the economic evils that resulted in the Middle Ages from the separation of districts he will readily appreciate how much France lost by carrying over a medieval system to modern times. It was impossible for a district to make the most of its resources by specializing in production. A producer did not have France for a market; a consumer did not have France for his source of supply; each was bound by provincial restrictions.
=282. Persistence of local toll barriers.=—Still the picture is not complete. There were not only provincial tariffs inside of France but also local customs inside the provinces. Let us consider the case of a merchant of Paris who desired to export a package of cloth to England in the sixteenth century. He had to pay not only the national export duty, but also at fifteen places on the way down the Seine he had to pay local customs; at Rouen he must pay provincial customs; and we must add to his list of expenses freight, pilotage, etc. Wine carried from Bercy (near the Swiss frontier) to Paris, in the next century, had to pay sixteen different dues on the way to market. In the sixteenth century there were over a hundred tolls or customs on the Loire; in the next century there were still twenty-eight on the stretch from Orleans to Nantes; and some persisted till the French Revolution. Conditions improved in the course of time, as the above figures suggest, but improvement was obstructed by the opposition of local interests and retarded by the delay of the law; and the Revolution was needed to wipe away these remnants of the Middle Ages with many others.
=283. Manufactures; the gild system maintained in spite of its bad effects.=—Before we leave the commercial history of France in this period we must consider still another subject, the organization of manufacturing, to understand why the country did not make better use of its resources, and why it entered the nineteenth century handicapped in competition with a country like England. Three general topics will be considered: (1) the gild system; (2) the national regulation of manufactures; (3) the royal or privileged manufactures.
(1) The gilds which in England during this period gave place to a more modern and more efficient system persisted in France and even extended their influence. When the government was in want of money it found the gilds more convenient subjects of taxation than scattered artisans; for fiscal reasons, therefore, and not for any economic advantages, it encouraged and even compelled artisans to unite in gilds on the old model. The result was a rigid separation of allied trades and a complication of processes which would seem incredibly stupid to a modern merchant or to the head of a modern factory.
=284. Separation of trades.=—At Amiens there were nine distinct corporations, each with its specific regulations, engaged in the manufacture of woolens alone. Every gild watched jealously to see that another gild did not infringe on its petty field, and there was an interminable bickering among them over the question of monopoly. The quarrel of the goose-roasters and the poulterers lasted half a century, and went against the poulterers, who were restricted to the sale of uncooked game; but the roasters emerged from the conflict only to meet another foe, the cooks, who were flushed with a recent triumph over the gild of “vinegarers-mustarders” (who made sauces); and after another half-century the cooks succeeded in limiting the right of the roasters to sell cooked meat. This is an example of the conflicts which all the time absorbed the energy and the resources of people who were engaged in kindred lines of retail trade and manufactures; cobblers and shoemakers; old-clothes men and tailors; watchmakers and clock-makers; bakers and restaurant-keepers; and so on through a list that seems interminable. Some tradesmen had a specially long list of enemies. The mercers, for instance, who dealt in certain lines of dry-goods, in the course of a century had sixteen decisions of the supreme court (Parlement) in their conflict with the glovers; and fought also the “bonneters-cappers,” and nearly all the other tradesmen whose wares they sold. The question, who had the right to make and sell buttons, rose nearly to the dignity of a question of state; search was made in private houses for illegal buttons, and private individuals were arrested in the street for wearing them.
=285. Influence of the gilds in preventing technical progress.=—Space is lacking for a description of all the evils that the gild system entailed on French industry in this period, and the reader is referred to the general discussion of the gilds in a previous chapter, with the assurance that all the evils there enumerated were well represented in France. We cannot leave the topic, however, without notice of the obstacles which the gilds put in the way of inventions and technical improvements. A coppersmith who devised a new helmet was set upon by the armorers; a hatter, who improved his wares by mixing silk with the wool, was attacked by all the other hatters; the inventor of sheet lead was opposed by the plumbers; a man who had made a success in print-cloths was forced to return to antiquated methods by the dyers. The gildsmen opposed not only new wares and methods, but also the use of machinery and production on a large scale. A Lyons silk-weaver could keep only four looms; a Lille serge-maker secured the right to have twenty looms, that he might carry on experiments looking to improvement of the manufacture, only by special privilege and against the vigorous protest of the city government. In spite of all opposition there was improvement, but the difficulties were so great that nine reformers must have failed where one succeeded. The history of the French gilds of this period is a history of wasted opportunities.
=286. Narrow restrictions imposed on manufactures by the government.=—(2) Industries were tied down not only by the narrow regulations of the gilds but also by laws of the central government. Every government believed in this period that it was unwise to let manufacturers follow their own ideas in all respects, to stand or fall according to their success in pleasing the public. Even England had an extensive system, prescribing the standards for the products of certain manufactures. The English system, however, did comparatively little harm, if it accomplished little good, while there can be no question that a similar system in France was carried so far that it was a serious check to industrial development. This excessive growth of government regulation was most marked under Colbert, the minister of Louis XIV, to whom reference has already been made as a leader in the extension of the protective tariffs; and the system continued throughout the period. Taking the cloth manufacture for an illustration, Colbert fixed by law, for each kind of cloth, the length and breadth, the dimensions of the selvage, the number of threads in the warp, the quality of the raw materials, and the method of manufacture. His instructions for dyeing contained 317 articles, to which dyers must conform. To fix responsibility and force compliance all cloth had to bear the special marks of the weaver, dyer, and finisher, the seal of the gild, and sometimes another mark. These regulations grew constantly more complicated; an official said in 1787 that the regulations on manufactures filled eight volumes in quarto.
=287. Burden of these restrictions on manufactures.=—There can be no question, either of the honesty of Colbert’s intentions or of the energy he showed in carrying them out. He sent out agents everywhere to study industries and to talk with the manufacturers, that he might legislate to the best advantage. One man, however, cannot know a hundred businesses better than the men who are carrying them on. Colbert and his successors were ignorant of many points, were deceived in many others. The result was a mass of regulations of which many were utterly bad, injuring both producer and consumer. The regulation prescribing a minimum breadth for cloth would have killed an industry in one part of France that wove strips for flags, an industry in another part that could sell cloth cheaper by weaving so narrow a breadth that one man could tend the loom. These industries, after a tedious and expensive delay, secured exemption from the law; others, less fortunate, were destroyed. A manufacturer ran always the risk of having his wares confiscated, not because they were bad and people did not want them, but because they failed to conform in some point to hide-bound regulations. An official inspector, shortly before the French Revolution, said that in every week of years past he had seen 80 or 100 pieces of cloth, good except from the government standpoint, cut in pieces or burned because they were irregular. Even the French revolted at some of the regulations, and half of the laws were evaded with the connivance of officials.
=288. Special privileges granted to certain manufactures; resulting abuses.=—(3) While the government restricted in this fashion the natural development of manufactures, it granted not only exemption from its own rules but liberal grants of money taken from taxpayers to stimulate favored industries. This practice, begun in the sixteenth century, grew under and after Colbert. It enabled certain industries to expand as they would otherwise have been unable to do, and to reach the higher grade of organization which was coming as a natural growth in England. Unfortunately, however, the privileges went not to the most deserving but to the loudest and most adroit claimants. To gain the privileges, which included everything from exemption from taxes and handsome subsidies down to titles of nobility, the manufacturer did not need to show that he had some technical improvement to introduce; it was sufficient if he promised to bring in a foreign industry or even to extend one already in existence at home. The royal factories abused their power to raise prices to the consumers and to lower the wages of the laborer. Some of them came to be regarded as public calamities. They showed in general the characteristics of the hothouse plant, which cannot thrive unaided, and most of them failed after a longer or shorter career. We can say of them as of many other manifestations of the French policy of the period; some good may have resulted in ways unknown to us, but the evils are apparent, and justify us in calling the policy bad.
QUESTIONS AND TOPICS
1. The protective policy, as applied by Colbert. [Palgrave’s Dict.; A. J. Sargent, Economic policy of Colbert, N. Y., 1899, chap. 4.]
2. Measure on a map the length of one or more of the stretches on which tolls were levied, sect. 282; estimate the average distance separating toll barriers; apply to a map of your own vicinity.
3. If you are familiar with the organization of some modern manufacture write an essay showing how efficiency would be impaired by insisting on the separation of allied trades. [The advanced student will find helpful and suggestive on this and similar topics, Bücher, Indust. ev., chaps. 6, 7, 8.]
4. Write a report on any instances known to you of bad results following the strict division of occupations among trade unions.
5. Write a report on any instances known to you of opposition to technical improvements, the introduction of machinery, etc., by modern trade unions.
6. Attempt of Colbert to establish regulations for manufacturers: object, methods, variety of regulations, results. [Sargent, Colbert, chap. 3.]
7. With what object and to what extent do governments now seek to regulate manufactures? [Farrer, State in relation to trade, London & N. Y., Macmillan, $1.]
8. Compare with the French the English experience with privileged manufactures. [Hewins, Eng. trade, chap. 1; Encyc. Brit., article Monopoly.]
9. Origin and early history of the modern system of patents for inventions. [Same references; Encyc., article Patents.]
BIBLIOGRAPHY
See preceding chapter.
XXVI. THE GERMAN STATES
=289. Political survey of Germany about 1500.=—After considering a country in which the central government was, so to speak, too strong for the interests of commercial development, it will be instructive to take up countries in which it was certainly too weak, Germany and Italy.
Germany presented a striking contrast in its political and in its economic development at the beginning of the period, about 1500. In political organization, the central government had almost no power; it was the mere shadow of a reality. The real power rested in hundreds of petty states, of which some were but a few square miles in extent. There was no authority which could keep in order these little states and the different classes of people which composed them. The history of Germany in this period is a sad story of conflicts between classes,—peasants, burghers, knights, and princes; conflicts between Catholics and Protestants; conflicts between the states themselves. In these struggles the best energies of the Germans were absorbed; they were marking time or even going backward while the more fortunate peoples of Europe were advancing. The Germans learned at last to despair of realizing their dream of a national government. Not all parts of the country, however, were equally unfortunate; some came under the rule of princes who managed to build up a strong power at home and abroad. Two of these local states are of especial importance, for between them they have divided the fragments of the old Germany, and made great states in modern Europe. One of them, Prussia, is the nucleus of what we now call Germany. The other, Austria, which included the Germans of the South, added to them fragments of territory peopled by other races, and made the state of Austria-Hungary.
=290. Development of the economic organization.=—There was a contrast, it was said, between the political and the economic development. The very lack of a central power had enabled some of the sections and classes to advance rapidly by freeing them from control. In the fifteenth century the agricultural classes, who had been serfs in the Middle Ages and who were to be reduced again to serfdom later by the political oppression to which constant wars gave rise, were free and prosperous. The cities were more rich and populous than those of any other country north of Italy. Not only had manufacturing and mining made rapid progress, but banking and commerce too. The Fuggers and the Welsers of southern Germany were great promoters and financiers, with interests extending over all Europe, from which they drew enormous wealth. German merchants showed the most enterprise and energy of any north of the Alps; they distributed among other countries of the Continent the Levant wares which they secured from Venice, and they controlled the commerce of the West of Europe with the North and East. We shall begin our sketch of the decline of German commerce by returning now to the history of the Hanseatic League, which we left in full control of this last branch of trade.
=291. Condition of the Baltic trade.=—The Baltic trade suffered in the period about 1500 from influences over which merchants had no control. The Protestant Reformation caused a decline in the demand for some of its staple wares: wax, which had been largely used for candles in church services, and fish, of which the consumption had been greatly furthered by the Catholic periods of fasting. The most valuable fish, moreover, the herring, ceased to enter the Baltic Sea, and by limiting their feeding ground to the North Sea enabled the Dutch to become leaders in the fishing industry. Imitation of Italian fashions in dress, with which the French became acquainted about 1500, caused less demand for furs. All these changes hurt the Baltic trade, but they were far from destroying it. This trade grew, in fact, throughout the period; it could afford to dispense with the luxuries of commerce for it controlled the necessaries, grain and meat, lumber and naval stores. The reasons for the decline of the Hanseatic League are to be sought not in the character of the trade but in the character of the League itself.
=292. Decline of the Hanseatic League.=—The League lacked organization. The many towns of which it was composed were so separated by physical distance and by divergence of interests that they could not cooperate efficiently. They were strong enough to crush other towns which sought to enter their field, but they were unequal to the contest with national states; and the political consolidation of the countries of northern and western Europe raised up enemies with whom they could not compete. In nearly twenty years (1476-1494) only one common meeting of delegates was held. Dissensions broke out inside the towns, and they began to quarrel among themselves. Lübeck, in the center, put forth claims opposed to the interests of towns on the edge of the League, on the lower Rhine and in Prussia. Rising commercial towns in the western part of the Netherlands, like Rotterdam and Amsterdam, grew up outside the League and in opposition to it. The turning-point in the decline may be put at 1535, when Denmark and Sweden were strong enough to break the Hansa’s monopoly by opening the passage into the Baltic to the ships of all peoples. Soon other states were carrying the war into the enemy’s country. Sweden threw the larger part of the Russian trade to the Dutch. The English built up a prosperous trade in the Baltic Sea and on the Arctic Ocean at Archangel. They flooded the German market with English cloths, and when the Hansa resisted, Elizabeth expelled the members of the League from England. In 1601 an Englishman could say of the Hansa towns: “Most of their teeth have fallen out, the rest sit but loosely in their head.” Of the great League soon only three towns remained as Hanseatic members, Lübeck, Bremen, and Hamburg.
=293. Decline of the commerce of south Germany.=—While the cities of north Germany were losing their hold on a growing commerce, the cities of the South found a large share of their trade taken from them by the discovery of the ocean route to India. The German cities (Nuremberg, Augsburg, Ulm, etc.) fought with desperation to maintain their commerce, and proof exists that they carried on an active commerce with Italy after they ceased to obtain there the Oriental wares, and had to content themselves with Italian products. Even this trade, however, fell to a large extent into the hands of the Italians, who flooded southern Germany and drove native Germans out of business.
The Germans were not entirely unprepared for the changes following the discoveries, for they had long gone in considerable numbers to the Spanish peninsula, by land through southern France or from a French or Italian harbor to Barcelona. Many Germans had settled in Portugal, and for a time the great merchants of south Germany shared in the Indian trade at its source, in Lisbon. The great German financiers shared also for a brief period in the commerce of the New World. The Ellingers and Welsers leased the copper mines of San Domingo; the Crombergers had silver mines at Sultepeque; the Tetzels exploited the copper mines of Cuba. The Welsers founded Venezuela by a military expedition which they financed, and held the country for a few years.
=294. The chief cause of decline of German commerce in this period was political.=—The most obvious explanation of the failure of Germany to take a place with the other states in the commercial expansion following the discoveries is the disadvantage of her position. It has been said that the diversion of commerce to the oceanic routes exposed the countries of central Europe (Italy, Germany, etc.) to a condition of commercial glaciation, such as Norway would experience physically if it lost the warm current of the Gulf Stream. The difference in distance of a few hundred miles in voyages of thousands does not explain the matter. No physical differences suffice to explain why Amsterdam rose and why Hamburg fell so rapidly. The weakness of Germany was not physical. Nor was it economic; German merchants of this period had more free capital, more business ability and greater energy than the merchants of any other country. Germany’s weakness was political. The payments which merchants and other Germans made in the form of taxes and loans to political authority did not form a single fund which could be used for furthering German interests at home and abroad. The money went to a great number of rival governments, and was consumed in their particular quarrels, not helping but actually hurting German business interests.
=295. The natural outlets of commerce stopped by hostile states.=—The political weakness of Germany enabled other states, now rising to power, to crumble off fragments of the country, in which they established a commercial policy hostile to German interests. Before long the mouth of every one of the large rivers which were the natural commercial outlets of the country had passed under foreign control. The Rhine was Dutch; the Weser Swedish; the Elbe Danish; the Oder Swedish; the Vistula Polish. Tolls hampered the passage of wares as effectually as though Germany were surrounded by a physical barrier on the sea side; and German ships almost disappeared from the ocean.
German commerce suffered especially by the rise of the Dutch to an independent position. So long as Antwerp was the great market of the Continent Germans traded freely with it, and through it to Lisbon. The substitution of Amsterdam for Antwerp was a most serious blow to German interests. The Dutch had very different ideas from those of the Flemish; they wanted to do all the trade themselves and to force other people to a position of commercial dependence on them. They made the lower Rhine practically useless for their rivals, raising the tolls sixfold and more, and thereby coming into a control of the trade as far as Frankfort on the Main.
=296. The damage done by internal dissensions and by the Thirty Years’ War.=—Germany was not only cut off from the outside world by tariff barriers, but cut up inside by the tolls of cities and territories. Every city on a trade route wanted to make itself a “staple,” i.e., have all goods passing the vicinity brought there for taxation and for sale. Frankfort on the Oder, for instance, demanded that all boats passing down the river Warthe should come up to Frankfort before they could continue their journey down the Oder to Stettin. The cities of Stettin, Frankfort, and Breslau, all situated on the Oder, instead of using that river for peaceable exchange, made bitter commercial war on each other with tolls and prohibitions. Conditions grew still worse after the Thirty Years’ War (1618-1648), a terrible conflict which, without exaggeration, cost Germany one hundred, perhaps two hundred, years of development. The physical means of transportation declined. On the Elbe, for instance, the dikes ceased to be repaired, the tow-path disappeared, the banks crumbled; and sand bars and snags became so common that navigation was difficult and costly. Tolls not merely doubled; they increased fivefold and more. Space is lacking for a description of all the evils; they were practically a reproduction of the conditions which happier states had left behind them five hundred years before.
=297. Restriction of manufactures by the gilds.=—German manufactures followed about the same course as that of the French which we have traced above. The gilds merited the term given them by an economist of the seventeenth century who said they were the “curse of Germany”; they seem to have been in some respects even more narrow than the French gilds. The same old evils reappear, but the reader must be asked to take these for granted and to direct his attention to some new aspects of the gild organization. Specially noteworthy are the obstacles put in the way of any man who desired to become a full member of a gild. Many gilds succeeded in making the exercise of the trade a family monopoly by the regulation that no man could become a master who did not marry the daughter or the widow of a master. One gild expelled a man because he had married a wife whose grandmother was alleged to have come from a shepherd’s family; other gilds expelled members because they had ridden an executioner’s horse or drunk with an executioner. A man had at best to pay very high fees to become a master, and this artificial restriction on the number of full members not only kept the ordinary workmen in a wretched position, but also raised the price of goods to the consumer.
The monopoly of the gilds became more oppressive all the time. Most of their money, except the considerable part they spent in carousing, they used in lawsuits and in quarrels with rivals. For miles around a German town the gilds permitted no competitors, and they made it a regular part of their business to hunt down and exterminate independent producers.
=298. The eighteenth century marked by general depression, with some signs of improvement.=—In Germany, in general, there was little improvement in conditions in the eighteenth century. The country was still intersected with tariff barriers. The Rhine was cut into four sharply defined parts, and the Elbe, by reason of tolls, had lost its trade in some wares of the first importance: steel, iron, copper, olive oil, wine, fish, etc. To the conflicts between cities there was still no end. The cities of southern Germany, weighted with taxes and surrounded by closed markets, declined still more in commercial importance. There were, however, some hopeful signs of progress. Two cities of the interior, Frankfort on the Main and Leipzig, were building up a business which rested not only on trade in wares but on dealings in bills of exchange, currency, commercial loans, etc. Beside the rise of these banking centers special importance attaches to the revival of commerce on the coast of the North Sea. Hamburg and Bremen seized the opportunity offered by the American Revolution and the European wars to which it gave rise to extend their trade as neutral carriers, and had soon passed their old rivals, the Dutch.
=299. The rise of Prussia important mainly from the political standpoint.=—Taking German commerce as a whole, we leave it in 1800 still depressed and sluggish. The picture would be incomplete, however, if nothing more were said. In one part of Germany there had been great activity for centuries; in the North and East, namely, where the ancestors of the present Emperor William II were building up the state of Prussia. This activity, however, was mainly political, and the history of it does not belong here; we can refer to it only as a most remarkable example of state-making, in which commercial and industrial interests were made subordinate to the establishment of a strong government over a united people. The Hohenzollern rulers did not succeed in making a rich state out of a group of scattered territories of which some were, in natural resources, among the poorest in Germany. They did make a strong state, which won for itself a place among the great powers, and later took the lead in unifying Germany.
There was a moment in the history of the Hohenzollerns when it seemed possible that they might anticipate the idea of William II: “Our future lies upon the water.” If the Great Elector (1640-1688) had secured the Pomeranian coast of the Baltic or kept even Stettin, he might have realized the plans he held to turn Prussia into a sea power, with fleet, colonies, and transmarine commerce. Fortune fixed the interests of the state on land, however, and when a good Baltic harbor was secured later it was too late to change. Frederick the Great was urged, a century afterward, to direct his policy to the sea, and actually founded some companies for trade with the East, but the time had passed, or had not yet come, for the success of Prussia in oceanic trade.
=300. Reforms in Prussia favoring economic development.=—In regard to their internal conditions, however, the territories of the Prussian state enjoyed a great advantage over others in Germany. The obstacles to trade in the form of tolls and staples were removed when political interests did not require their maintenance. The tariff systems, enormously complicated and cumbrous, were revised. The growth of manufactures was furthered by attracting skilled artisans from other countries; and the city of Berlin received a great stimulus from the Huguenots who found a refuge there. Some of the worst abuses of the gilds were reformed, and manufactures were protected, as in France, by customs duties and by royal privileges. New methods were applied in agriculture, and new land was opened to settlement and cultivation; a large number of the laborers, however, still remained unfree. It would be easy to add many details, but in closing this section on Germany the reader is again advised that the important side of Prussian history in this period was political, not economic. Prussia was preparing herself for the work of unifying Germany, and to accomplish that work a strong government was needed rather than a rich people. The riches have come to Germany in our own time.
=301. Contrast of Prussia and Austria.=—Prussia was a state which started in the heart of Germany (near Berlin), and remained almost entirely German as it spread. Austria, on the other hand, was originally a territory on the southern border of the German people, the rulers of which managed by skill and luck to extend their power over fragments of adjoining peoples of a different stock, over Bohemians and other Slavs (relatives of the Russians), and over the Magyars or Hungarians (relatives of the Turks). These other peoples were behind the Germans in their industrial development; they had come into Europe later, had been less subject to civilizing influences and more exposed to internal quarrels and wars. Furthermore, the Austrian Germans were behind the other Germans, on whom they were industrially dependent in the sixteenth century. Germans from the North took their manufactures into Austria for sale, carried on the trade of Austria and controlled the mines of Austria.
=302. Political factors hindering development of the lands subject to Austria.=—The territories subject to the ruling family of Austria, the Hapsburgs, began the period, therefore, in a backward condition, and they had no opportunity throughout the period to catch up. Internal trade was hindered not only by the national diversity of German, Slav, and Magyar, but also by the persistence of provincial tariffs, which underwent no important reform until nearly 1800, and which were not abolished even then. Austria did not suffer so much as Germany from civil war, but like Germany went through the crisis of the religious wars, which nearly ruined Bohemia; and had a plague of its own in resisting the advance of the Turks from the Balkan Peninsula. Austria suffered like France, moreover, from an absolute government which too often used the national resources in the interests of the royal family and not in the interests of the people as a whole.
=303. Slow progress of industry and commerce.=—It is, therefore, not surprising that in 1700 Austria stood commercially in about the same position it had occupied two centuries before. The country exported the raw products of industry, wool, flax, linen, hides, copper, etc., and received them again after they had been manufactured by other peoples. An economist of the time said that the total manufactures of Austria were not equal to those of a single Dutch city like Leyden. Even this small amount of manufacture was controlled by gilds, and suffered from the characteristic faults of the gild system.
In the eighteenth century, however, the government began to appreciate the importance of national commercial development. It fought the claims to monopoly put forward by the gilds, and encouraged manufacturers to extend their business, by premiums and privileges, as in France and Prussia. Austrian iron and steel wares made a place for themselves in commerce; the cloth industry of Bohemia, once ruined by war, revived again under the factory system; stockings, glass, porcelain, etc., were produced in increasing quantities.
=304. Attempts of the government to stimulate development.=—The government stimulated the development of manufacture by its customs tariffs as well as by its internal policy. The duties on articles which the government thought could be made at home were raised rapidly, especially after 1700, and became in many cases prohibitory. Undoubtedly the growth of manufactures was furthered by this policy, though many industries betrayed the weakness of their origin by failing after a short period of apparent prosperity. The tariff gave rise, however, to much smuggling and corruption, and injured greatly some parts of the country: the Tyrol, which lies between Italy and Germany and had prospered on the transit trade; and sections like Hungary which produced only raw materials.
To atone in some measure for these necessary results of a protective system, the government attempted also to extend aid to foreign commerce. Triest and Fiume were made free-ports, i.e., they were put on the outside of the tariff frontier to attract trade. Venice was forced to renounce her claim to the exclusive right to navigate the Adriatic, and commercial treaties were made with Turkey, Russia, and states in northern Africa. Consuls were sent out to represent Austrian interests in foreign countries, and attempts were made to secure a share even in the trade with India.
=305. Austrian commerce still backward in 1800.=—Still Austrian trade attained no great development. The government which gave with one hand took with the other. Special privileges did not make up for the general weakness of the productive organization. Rulers complained that in spite of all their efforts commerce languished. Most of the foreign trade was absorbed by five companies, which divided the field. Two of them were limited locally, trading with Turkey and with Asia Minor respectively; while the other three traded in special wares with various countries. One imported colonial wares like sugar; another exported linens; while the third exported various raw materials to Italy, France, and Spain. During the wars beginning in 1776 Austrian merchants attempted to build up a trade with North America, and an agent of the government was installed at Philadelphia in 1783, but during the following years of peace Austria had no chance of success in competition with trade rivals.
QUESTIONS AND TOPICS
1. Write a report on the political constitution of Germany at the end of the Middle Ages, and the resulting conditions. [Baring-Gould, Story of Germany, chaps. 46, 52; Seebohm, Prot. rev., 26-33; Janssen, Hist., vol. 2, book 4, chap. 1; Freytag, Pictures, XVIIIth cent., vol. 1, chap. 4.]
2. Development of business and business methods at the beginning of the period. [See above, chap. 18; Cunningham’s chapter on Economic change in Cambridge mod. hist., vol. 1; Janssen, Hist., vol. 2, book 3, chap. 3; Freytag, Pictures, XVth cent., vol. 1, chap. 10.]
3. Condition of manufacturing. [Janssen, Hist., vol. 2, book 3, chap. 2.]
4. Condition of agriculture. [Janssen, Hist., vol. 1, book 3, chap. 1.]
5. Decline of the Baltic trade. [Zimmern, Hansa towns, period 3.]
6. Decline of the Hansa in England. [Zimmern, 324-353]
7. Write a brief report on the commercial history of (a) Nuremberg, (b) Augsburg. [Encyc.; Guide books of south Germany.]
8. Class conflicts, political and economic troubles about 1500. [Seebohm, ** Prot. rev., 136-140; Janssen, Hist., vol. 4, book 7; Frank Goodrich, *A social reformer of the fifteenth century, Yale Review, Aug., 1896, 5: 168-181.]
9. Do the Germans control the mouths of all the rivers mentioned in sect. 295 at the present time?
10. Write a report on the effects of the Thirty Years’ War, from the economic and commercial standpoint. [S. R. Gardiner; Thirty Years’ War (Epoch Ser.), N. Y., 1874, 217-221; Anton Gindely, Hist. of the Thirty Years’ War, N. Y., 1884, vol. 2, chap. 11; Freytag, Pictures, XVth cent., vol. 2, chaps. 3, 5, 6.]
11. Write a brief report on the commercial history of one of the following towns: Frankfort on the Main, Leipzig (or Leipsic), Hamburg, Bremen. [Encyc.; Homans, Cyc. of commerce, for the early nineteenth century.]
12. Effect of the protective tariff in building up the Prussian silk industry. [Schmoller, Merc. syst., pp. 81-91.]
13. Indicate on a sketch map of Austria-Hungary the spaces occupied by the following peoples: Germans, Bohemians, Ruthenians, Hungarians, Southern Slavs. [Atlas, Encyc.]
14. The wars with the Turks: how long did they last; how far did the Turks penetrate Europe; what was the effect on industry? [S. Whitman, Austria, N. Y., Putnam, 1899, $1.50, chap. 16; E. A. Freeman, Ottoman power in Europe, London, 1877, chaps. 4, 5.]
15. Reforms in Austria in the eighteenth century, and their effect. [L. Leger, Hist. of Austro-Hungary, N. Y., Putnam, 1889, 379 ff., 388 ff.].
16. Write a brief report on the commercial history of Vienna. [Encyc.]
BIBLIOGRAPHY
Writings in German are voluminous; English books on the history of the period are concerned almost entirely with political affairs. The translation of Janssen’s *History, St. Louis, Herder, 1897 ff., can be recommended for the beginning of the period, and Freytag’s *Pictures of German life, London, 1862, contains some readable and useful descriptions.
XXVII. ITALY AND MINOR STATES
=306. Political condition of Italy in the modern period.=—In the history of Germany we have seen the fate of a country that entered the modern period lacking a political organization that would enable it to hold its own in competition with rivals. The history of Italy in this period presents the same conditions and the same results. At the end of the Middle Ages there were five important states in the peninsula: Milan, Venice, Florence, Rome, and Naples. None was strong enough to unite the country; each was strong enough to prevent another from reaching that end. The border territory of Savoy, whose rulers have united the peninsula in recent times, resolving, in the words of one, to “treat Italy as an artichoke, to be eaten leaf by leaf,” counted as yet for little. The quarrels of the Italian states invited interference by stronger neighbors, Spanish, French, and Austrian; and Italy became the prey of adventurers and tyrants who lived as parasites on the resources that should have nourished industry and commerce.
=307. Position of Venice at the beginning of the period.=—Venice, which had enjoyed the commercial primacy among the Italian states, saw in the Portuguese discoveries a threat to her prosperity which only the strongest measures could avert. There was no physical reason why Venice should not adopt the sea route to India, and, if necessary, fight with the Portuguese for the Indian trade at its source. All her traditions, however, pointed the other way; all her investments were tied up in the route through Egypt; and, most important, all her resources were required in the Mediterranean. The island city had been drawn into an expansion on the mainland which involved her in continental intrigues and sapped her strength at sea, at the very time when her sea power was of the greatest importance; the navy of the Ottoman Turks was rapidly developing and the scourge of the Barbary pirates (from the Mediterranean coast of Africa) had begun.
=308. Blows at Venetian trade both by sea and land routes to India.=—For a moment Venice halted undecided between the two routes. Venetian ambassadors were especially instructed to procure maps, letters from voyagers, and all other information that would help the home government determine its policy with respect to the recent developments. Venice made repeated attempts to buy from Portugal the right to dispose of all the spices brought to Lisbon, a proposition that naturally was declined. Venice had to buy in small lots, on what terms the Portuguese chose to set; more and more silver flowed from Italy to Lisbon, and it became increasingly difficult to get spices in Venice. Meanwhile the government was sending explorers eastward, in the hope of opening one of the old routes to trade, and seriously considered for a time the piercing of the Suez isthmus with a canal. Venice found the Ottoman Turks favorable to trade through their dominions, but had not the strength to maintain her old commercial connections when Cairo was finally captured by the Turks in 1517.
=309. Relative decline of Venetian commerce.=—From this time the energies of Venice were absorbed in an unequal conflict with the Turks in the eastern Mediterranean. Venice had prepared herself in a measure for the Turkish advance, by removing her chief staple from Alexandria to the island of Cyprus, but this too was lost in 1571 after a heroic defense. The battle of Lepanto and others following it were empty victories; on the east coast of the Mediterranean Venice had to surrender, and consent to trade on the terms which the Turks imposed. Trade was still maintained. Aleppo became in the later period a market in which the Venetians had great establishments, drawing thence the wares that came by caravan from Bagdad, Persia, and India. Venice herself became constantly more beautiful, and was in the seventeenth century, as now, one of the show-places of Europe, where foreign visitors flocked by thousands. Her manufactures of glass and silk and many artistic luxuries remained unexcelled. It is, however, by quantity and not quality that we measure the greatness of a state’s commerce; Venetian trade scarcely entitled the city to a place even in the second rank of commercial states, when it finally lost its independence in 1797.
=310. Decline of commerce and industry in Tuscany.=—The history of decline in other parts of Italy must be dismissed more briefly. Florence, which at the beginning of this period ranked next to Venice in manufactures, trade, and banking, found the markets of northern Europe closed by the Dutch revolution, by the religious wars and by the tariff barriers of the protective policy. Bankruptcy became frequent in the latter part of the sixteenth century. The woolen manufactures of Florence, which, it is said, employed 30,000 men in 1338, employed 971 in 1767. Hampered not only by weakness abroad but also by restrictive legislation at home, the Tuscan people declined to poverty and indolence. Prosperity was to be found in only one spot, the city of Leghorn, which had been made a free port; but this city prospered just because it had been placed on the outside of Tuscany, and the riches amassed there went largely into the hands of foreign residents.
=311. Decline in other parts of Italy.=—South of Tuscany conditions grew still worse. The Roman territory had never been of commercial importance, and the Neapolitan territory lost in this period what prosperity it had once had. Under a Spanish government, which was almost incredibly bad, the national resources were wasted abroad while Turks ravaged the coast, kidnapping slaves, at home; and the producing classes were crushed by heavy and unfair taxes.
North of Tuscany conditions were little better. The report of a commercial agent who was sent by the Austrian state to investigate upper Italy in 1754 shows commercial weakness everywhere. The country was divided by tariff barriers into a great number of distinct territories, of which scarcely any were large enough to give play for the development of industries which they were endeavoring to protect. The forces of industry and commerce were scattered and lost among a great number of small towns, and trade was largely controlled by foreigners, both Jewish and Christian.
=312. Conditions in the Scandinavian countries.=—It would be unprofitable to attempt here to trace the course of commerce in all the other states of Europe during this period, and this part of the book will close with a brief description of commercial conditions in the North and East. The districts included in Scandinavia are already familiar to the reader as forming an important field for the Hanseatic trade in the Middle Ages. The population was sparse, industry was undeveloped, towns were few and small; the knowledge and capital necessary for an active independent trade were lacking, and people were content to stay at home and let foreign merchants come to them with manufactures and take away their surplus products. The iron industry of Sweden, favored by rich ores, extensive forests for fuel and abundant water power, attained considerable importance; but the exports continued in general to be raw materials, especially those used in food and for ship building. Governments attempted to hurry the development of their peoples by protective duties and by the founding of commercial companies, with slight success. Gustavus Adolphus, a king of Sweden in the seventeenth century, formed the bold project of making the Baltic “a Swedish lake,” by control of the entrance and the coasts, but his successors proved unable to maintain the position which he won. The keys of the Baltic fell into the hands of Denmark, and that country made a good profit by collecting tolls on the flow of a trade to which it contributed little itself.
=313. Rise of Russia to a position among the European states about 1700.=—Russia was even more backward than the Scandinavian states. Like them it had been dependent on the Hanseatic merchants for its commerce with western Europe, and remained passive after their fall, accepting what wares reached it overland or through the port of Archangel on the Arctic coast, whither English and Dutch shippers ventured. Until Peter the Great opened his “window on the West,” by the founding of St. Petersburg on the Baltic about 1700, Russia was hardly a European state. Peter attempted, with remarkable energy, to bring Russia to the European standard in commerce and industry as well as in politics. He reformed, though he did not abolish, the system which gave the Czar a monopoly of trade in the most important wares; he revised the tolls on trade; he sent young men abroad to study commerce, and tried in other ways to elevate the merchant class. Peter did not succeed in his attempt to free Russian commerce from its dependence on western merchants, and his attempt to build up a merchant marine was a failure. In the East, Russian commerce fared better. Occasional caravans had gone before this from Siberia to China. The Czar now sent on his own account caravans which consumed three years on the long trip from Peking to Moscow; and individuals developed the trade which the crown had stimulated.
=314. Character of Russian commerce in the eighteenth century.=—Russia could be regarded in the eighteenth century as a European state. It belonged, however, to the Europe of the Middle Ages rather than of the modern period. Most of the population, including even the few who were occupied with manufacturing, were serfs. The people as a whole were on a low standard of living, and were densely ignorant. Commercial law was undeveloped, and trading practices were those of a half civilized community. The government interfered with exchange by arbitrary and vexatious restrictions. The country could export, with rare exceptions, only raw products. From China it imported tea, silk, gold, jewels, etc., of which only a part was kept at home; while it was dependent on western Europe for most of its colonial wares (sugar, coffee, spices, and drugs), and for all the finer manufactures (textile, metal, pottery, paper, etc.).
QUESTIONS AND TOPICS
1. Condition of Italy about 1500. [Seebohm, Prot. rev., 21-26, with sketch-map.]
2. Venice about 1500: commerce, government, policy on sea and land. [Horatio F. Brown, Venice, chaps. 16, 17; or Cambridge mod. hist., vol. 1, chap. 8, by the same author.]
3. Contest of Venice with the Turks. [Brown, Venice, chap. 19.]
4. Decline of Venetian commerce. [A. H. Lybyer, The Ottoman Turks and the routes of Oriental trade, English Hist. Rev., Oct., 1915, 30: 577-588.]
5. Attempt of Gustavus Adolphus to make of Sweden a great power. [Encyc. Brit., Gustavus II.]
6. Social and economic conditions in Russia about 1700. [W. R. Morfill, Story of Russia, N. Y., Putnam, 1900, $1.50, chap. 13; H. M. Thompson, Russian politics, N. Y., 1896, chap. 2.]
7. History of Russia in the eighteenth century. [Manuals of European history; Thompson, chap. 3.]
BIBLIOGRAPHY
Aside from fragmentary sections in the current manuals the reader of English will find little literature available on the history of commerce in the minor states. Such suggestions for collateral reading as are given above will probably satisfy the needs of students who are not sufficiently advanced to use foreign languages.
TOPICS FOR REVIEW
After covering the history of commerce in different countries the student will find it profitable to review certain general topics, piecing together what he has learned of their local history and endeavoring to get a clear conception of the general development. The following are suggested for study in the modern period (1500-1800): (a) shipping; (b) transportation on roads and rivers; (c) production and exchange of foodstuffs; (d) production and exchange of textile materials (flax, wool, cotton, silk); (e) production and exchange of finished textiles (linen, woolen, cotton, silk); (f) production and exchange of iron; (g) development of the system of manufactures (gild, domestic and factory systems); (h) development of banking; (i) effect of wars on the commerce of different countries; (j) European colonial systems; (k) commercial policy; (l) trade of Europe with Asia; (m) trade of Europe with North and South America.
XXVIII. COMMERCE AND COAL
=315. Statistical survey of development since 1800.=—In entering the nineteenth century the student approaches the period in which commerce has achieved the most notable progress. Great as former advances may have seemed to the people in whose time they occurred, these sink almost to insignificance when compared with the growth of commerce since 1800. A recent estimate by a German author pictures the progress of the export and import trade of the commercial countries of the world as follows, in milliards of marks (roughly, units of 250 million dollars): 1700, 0.5; 1750, 1.0; 1800, 6; 1850, 17; 1899, 76. Some of the striking features of recent growth are shown in the following table. It is necessary, however, to warn the student that these figures, especially those for the earlier part of the century, can be regarded only as approximations to the truth. It may not be out of place, further, to advise the student to turn to the end of the chapter for suggestions as to the best way of studying the figures.
=316. Great growth of foreign commerce.=—Assuming, for purposes of discussion, a fair degree of accuracy in the figures, some conclusions from them may be pointed out. The commerce of the world increased in this century at the astonishing rate of 1,359 per cent. We have before encountered instances of remarkable commercial expansion, in particular countries, but we must bear in mind that the figures here are supposed to include the whole world, the backward as well as the progressive countries, the many millions in the interior of great continents who scarcely trade at all, and the Chinese, perhaps in themselves a quarter of the world’s population, who trade still to but a slight extent. Clearly the growth of commerce in some countries must have been enormous to raise the total figures to the point at which we find them.
FOREIGN COMMERCE AND PRODUCTION OF THE COUNTRIES OF THE WORLD
=========+=================+========+=============+=========== Year | Aggregate | Per | Coal | Pig Iron | Commerce | Capita | Production |Production | Thousand |Commerce| Million | Million |Million Dollars |Dollars | Tons | Tons ---------+-----------------+--------+-------------+----------- 1800 | 1.4 | 2.31 | 11.6 | 0.8 1820 | 1.6 | 2.13 | 17.2 | 1.0 1830 | 1.9 | 2.34 | 25.1 | 1.8 1840 | 2.7 | 2.93 | 44.8 | 2.7 1850 | 4.0 | 3.76 | 81.4 | 4.7 1860 | 7.2 | 6.01 | 142.3 | 7.2 1870 | 10.6 | 8.14 | 213.4 | 11.9 1880 | 14.7 | 10.26 | 340 | 18.0 1890 | 17.5 | 11.80 | 466 | 27.2 1900 | 20.1 | 13.02 | 800 | 40.4 1910 | 33.6 | 20.81 | 1,141 | 65.8 1913 | 40.4 | 24.47 | 1,443 | 77.4 =========+=================+========+=============+===========
=317. Increase in the relative importance of commerce.=—Not less striking than this growth in absolute quantity, as measured in current values, is the growth compared with the estimated increase of the world’s population. The value per capita (“by head”) of a country’s commerce is secured by dividing the total amount of trade by the number of inhabitants; it shows the average share of each person in commerce, and furnishes, therefore, some index of the relative importance of commerce in different times and places. Now, even if this value per capita had remained the same we should regard the absolute increase in commerce as a very important fact. Commerce, however, has actually increased much faster than population; the share of the average human being in the world’s trade has grown over tenfold. Let the student reflect on the difference it would make to him whether he had $2 or $20 for spending money in a given time, and consider the extra articles he could buy with the larger sum; he will then be better able to appreciate the broadening and deepening of the commercial current in recent times.
=318. The world now passing through a commercial revolution.=—The student is now in a position to understand the significance of the statement of an English writer, that “the commerce of the world may almost be said to be the creation of the past seventy-five years.” We are living in the midst of a vast, though silent, revolution. Reference to the figures will show that the process of change quickened strikingly in the latter half of the century, and at its close we still do not dare to say when the movement will slacken. The change which we find so marked in commerce affects equally other sides of human life. An American author, Adams, writing in 1871, could say with truth that “the discoveries of Guttenberg and Columbus have produced more startling and more clearly defined results upon the destinies of the human race within the last twenty-five years than in any other equal period of time during the four previous centuries.” Have the results been less startling in the quarter-century that followed? Another American economist, Wells, said about 1890, “When the historian of the future writes the history of the nineteenth century he will doubtless assign to the period embraced by the life of the generation terminating in 1885 a place of importance, considered in its relations to the interests of humanity, second to but very few, and perhaps to none, of the many similar epochs in time in any of the centuries that have preceded it.” Is the generation terminated in 1915 willing to admit that it takes a less important place in history than its predecessor?
=319. Share of modern countries in the commerce of the world.=—It is unnecessary, I hope, to say more to impress upon the student the fact that a period of great change in the world’s history, which began half a century ago, still continues; and that the coming generation will be called upon to carry on this change, and guide it for the welfare of humanity in the future. Leaving, therefore, general discussion and speculation, and returning to the concrete and well-defined facts that form the subject of our study, I insert in this place, as likely to be of use for reference later and of interest now (though not deserving painstaking study as yet), a table showing the share of different countries in commerce about 1900.
RECENT TRADE OF LEADING COMMERCIAL COUNTRIES (Approximate annual averages in millions of dollars, special trade)
====================+================+================+============== | 1891-1900 | 1901-1910 | 1912 +-------+--------+-------+--------+-------------- | | | | |Percentage of |Imports|Exports |Imports|Exports |total general | | | | |trade of world --------------------+-------+--------+-------+--------+-------------- United Kingdom | 1725 | 1190 | 2525 | 1700 | 16.6 Germany | 1140 | 880 | 1800 | 1470 | 12.9 United States | 780 | 1050 | 1185 | 1655 | 9.9 France | 835 | 710 | 1065 | 995 | 9.0 Holland[1] | 660 | 550 | 1020 | 835 | 6.9 Belgium[1] | 362 | 309 | 578 | 453 | 4.2 Austria-Hungary | 302 | 337 | 464 | 459 | 3.3 Russia[1] | 276 | 339 | 386 | 503 | 3.5 Spain[1] | 177 | 172 | 201 | 185 | 1.1 Italy | 255 | 219 | 480 | 343 | 3.1 ====================+=======+========+=======+========+==============
A similar statement, showing the relative rank about 1850, would present only one very striking change; France held at that time the place second to that of the British Empire, and Germany came after the United States.
=320. Possible explanations of recent commercial development.=—One topic of prime importance demands our attention as we enter on the study in detail of the commerce whose growth has been sketched above. What were the causes of this great commercial development? When we know them we shall truly understand the commercial history of the past century, and shall be prepared to face the problems of the present and the future.
The topic will be discussed under the heads which have been employed previously in similar discussions. The advances have been achieved either by a gain in the power of man to control nature and natural forces (technical progress); or by the more efficient cooperation of men in business (industrial and commercial organization), or in politics (political organization, domestic and foreign policy).
=321. Prime importance of technical factors, especially the use of coal.=—Hard as it is to disentangle these different factors, all of which have contributed much to the recent progress of the world, there need still be no question which has been of the leading importance during the nineteenth century. This century has been the great era of material invention, of scientific discovery, and of the increase in power of man over nature. Technical progress, therefore, is the first subject to be studied.
Again, there need be no question as to which feature of technical progress holds first place. Electrical appliances? Machinery? The steam-engine? Applied chemistry? All those things, with the vast benefits which they confer on humanity, rest now on practically one basis: coal. Vegetable matter of past geological ages, that has become fossilized, has undergone mysterious chemical changes and has shrunk to one tenth of its former bulk, furnishes now, after hundreds or thousands of centuries, the means by which we maintain and develop our material civilization and our great commerce.
=322. Power in coal.=—Coal offers men what all men seek, power. There is “spring” enough in it, when properly applied, to raise a million times its own weight a foot high. A man who sends a horse and cart to fetch a ton of coal, occupying four hours on the way, secures a power in the coal theoretically 2,800 times that expended in bringing it; and can probably get from it an amount of useful force exceeding by 100 times or more that of the horse employed in carting. A few decades ago (1865), when the output of coal was far less than it is now, an English economist calculated that forests of an area two and a half times as large as that of the United Kingdom would be required to furnish even a theoretical equivalent of the annual coal produce; practically, of course, the use of wood for an equivalent is out of the question. It was estimated, somewhat later (before 1880), that if the whole area of England were good land, devoted solely to raising forage, it would not support a horse-power equal to that obtained from the English coal mines; and that an area perhaps ten times as large would be required for the mere food supply of human beings of equivalent force.
=323. Dependence of modern industry on coal.=—It would be a great mistake to consider coal necessary now only in its most common application, that of generating steam for engines. The chemical industry depends largely, though not entirely, on the heat obtained from coal, to break down its raw materials and build up its finished products. Metallurgical industries would shrink almost to infinitesimal proportions if they were denied the use of coal. It has been estimated that the manufacture of a ton of pig iron requires the use of two tons of coal or more; while an equal quantity of steel requires six to eight tons. Still, the use of coal for the steam-engine is undoubtedly its most important application; and we can gain some conception of the place that coal has taken in the world’s economy by considering the growth of steam power.
=324. Importance of coal, estimated in steam horse-power.=—A horse-power, the technical unit adopted for measuring the working capacity of an engine, is for practical purposes equal to the force that can be got from several (perhaps three) horses, or from a number of men variously estimated at ten to twenty-four. Now in round numbers the steam horse-power of the world was a million and a half in 1840, and had increased, at the end of the century, to fifty times that amount. A simple operation in arithmetic will show the amount of work, in human equivalent, now done by steam. Taking, for example, a modern country, Germany, we find engaged in industry and transportation slightly over ten million people, while we find engaged beside them another population of mechanical iron slaves (steam-engines), variously estimated as equivalent to one hundred to two hundred and fifty million people. These slaves cost for food (coal), attendance, doctor’s bills (repairs), and burial expenses (including the cost of replacing them once in twenty-five years), only about $2.50 a year apiece. Admit some exaggeration in the figures, and still the contrast with the cost of human labor is most striking.
=325. Technical history of the steam-engine.=—The steam-engine has been in practical use in Europe since about 1700. The earliest engines, however, seem ludicrously crude now, and could be used only for pumping water. Progress was slow until the last part of the eighteenth century, when James Watt introduced improvements (separate condenser, double-acting piston, use of cut-off, etc.), which greatly increased the efficiency of the engine, and caused a gradual extension of its use from mining to manufactures. The introduction of the non-condensing, high-pressure engine about 1800 prepared the way for the use of steam on railroads. The compound engine, in which the steam passes through two or more cylinders before it is allowed to escape, was invented about the same time, though it was not brought into general use until about 1850. Since then improvements in details of the engine and in the form of boilers have enhanced still further the efficiency of steam power, until it now produces about two thirds of the work possible under ideal conditions. Practical engineers expect now no rapid progress or startling changes. Some measure of the progress achieved is furnished by the fact that Watt’s engines required ten pounds of coal an hour for each horse-power, the engines of the next generation required five, while the best modern engines require but one and a half, or, in rare cases, one.
The previous paragraph referred to the reciprocating engine in which the piston moves constantly forward and back. Since rotary motion is the form in which the power is commonly transmitted and applied, it would be desirable to get the motion in this form originally, and many attempts have been made to make rotary engines. Success has been attained in the case of the steam turbine, in which jets of steam strike against the blades of a turbine wheel, and cause it to revolve. Originally applied by Dr. De Laval of Sweden to operate the centrifugal cream separator which he had devised, it has come into common use for the generation of electricity and for the propulsion of ships. While the steam turbine has proved its efficiency for special purposes it is less adaptable than the old form of reciprocating engine, and still leaves to that the larger part of the field.
=326. The internal combustion engine.=—In the ordinary power plant there are two units, the boiler in which steam is generated, and the engine in which the steam is put to work. An internal combustion engine is designed to burn the fuel in the engine itself. This is practicable when the fuel is a gas or a liquid whose vapor will unite with the oxygen of the air to form an explosive mixture. The internal combustion engine offers several advantages over the steam power plant: it uses more effectively the heat that is generated, it is less bulky, it is more easily tended. In spite of characteristic disadvantages, particularly the need of an auxiliary starter, and restricted flexibility as regards speed and power, the internal combustion engine has proved indispensable. In large units it serves the steel mills, which put the waste gases from their blast furnaces to work, and in its application to the automobile it has effected a revolution in transportation and travel. Although in the manufactures of the United States in 1914 the internal combustion engine still accounted for less than 5% of the total horsepower, the aggregate horsepower of the gasoline engines of automobiles has since that time considerably exceeded the total horsepower from all sources employed in manufacturing industry.
QUESTIONS AND TOPICS
1. Do not attempt to remember any of the figures in sect. 316, unless possibly the first two of the last line.
Prepare a graphic chart in the following way. Lay off the time periods on the horizontal line at the bottom of your paper, and on the perpendicular, near the right-hand margin, lay off the figures of the last line of the table. This will insure space in the chart for all the lines. Divide the perpendicular into, say, forty units. Each unit may then be made to represent: 1,000 million dollars of value; $1 per capita; 40 million tons of coal; 2 million tons of iron. Indicate the figures for 1913 on the perpendicular (commerce 40, per capita commerce 24, coal 36, iron 39); and perform the same operation for the figures on perpendiculars above each of the other dates. Use for each item a characteristic mark, (cross, circle, triangle, square), which will enable you to distinguish it from the others. Then unite the marks of each kind by a curved or crooked line. Choose a characteristic form of line (dotted, wavy, or colored) for each item. If the chart be made on a large scale and with sufficient neatness, later tables of statistics (development of railroads, trade of particular countries, etc.), can be entered upon it.
With regard to each one of the items: when was the increase (measured by the slope of the line) greatest? When least? What relation is apparent in the increase of different items? Many of the questions suggested by a study of the figures will be treated in later sections.
2. Prepare a small chart of the figures, giving the estimated value of commerce 1700-1899; note the enormous gains made in the nineteenth century.
3. Development of printing, especially of periodical publications, in recent years. [Encyc., preferably the new International or Supplement to the Britannica, under Printing, Newspaper, etc. Cf. Scribner’s Magazine, 1897, vol. 22, p. 447 ff., on the modern newspaper business; Taylor in Depew, One hundred years, chap. 25, Williams in same, chap. 26.]
4. Divide the perpendicular on the right-hand side of your chart into spaces, indicating the shares of the chief countries in commerce.
5. Make out a list of three changes coming under each one of the three heads discussed. Example: technical progress, wireless telegraphy; business organization, trusts; political, international arbitration, reciprocity.
6. Early history of the coal trade. [R. L. Galloway, The rise of the coal trade, Contemporary Review, 1892, 62: 569-578.]
7. Industrial and commercial importance of coal. [Edward Atkinson, Coal is king, Century Magazine, 1897-98, 55: 828-830.]
8. Effect of a stoppage of the coal supply. [Stephen Jeans, The coal crisis and the paralysis of British industry, Nineteenth Century, 1893, 34: 791-801.]
9. How does the increase in steam horse-power compare with the increase in the output of coal? With the growth of commerce?
10. Earliest history of the steam-engine (to about 1700). [Thurston, chap. 1, sect. 1.]
11. Earliest applications of the steam-engine. [Thurston, chap. 1, sect. 2.]
12. Development of the engine before Watt. [Thurston, chap. 2.]
13. Development by Watt and his contemporaries. [Thurston, chap. 3.]
14. Recent improvements. [Thurston, chap. 6; Iles, chap. 5.]
BIBLIOGRAPHY
Bibliographical aids become broader in the recent period. The great literature scattered through periodicals, in which articles of lasting value are often to be found, is made accessible by Poole’s Index and its continuations; books in print, if not too technical for the general public, will be found in the A. L. A. (American Library Association) Catalogue, which supplies full titles and prices.
Various cyclopedias and dictionaries of commerce have been published in the nineteenth century; they are useful repositories of information, especially of statistics. Among them the following, in English, may be mentioned: McCulloch, **Dictionary, various editions; Waterston, Cyclopædia, 1847; Macgregor, *Commercial statistics, 1850; Homans, Cyclopædia, 1858. Statistics are brought up to date in various year-books and periodicals; the **Statesman’s Year-Book is an indispensable annual, and will meet all ordinary demands of teacher and class.
The student of the history of commerce is often forced to turn to narrative political histories for information. Among the general histories of Europe in the nineteenth century may be mentioned Charles D. Hazen, *Modern Europe, N. Y., Holt, 1920; C. M. Andrews, *Modern Europe; N. Y., Putnam, 1899; Seignobos, **Pol. hist.
Much has been written, of course, on the progress of the century in various technical lines. Ure’s Dictionary, various editions, describes the advances of the first part of the century; and the student will probably find one of the modern encyclopedias (Britannica, with Supplement; International) the most satisfactory source of information on recent progress. No attempt can be made in this or the following chapters to cover the great field of technical literature. Jevons’ **Coal question should, however, be mentioned as still of great interest and value. Nicolls, * Story; Edward A. Martin, *Story of a piece of coal, N. Y., Appleton 1896; or R. Meldola, *Coal and what we get from it, N. Y., Young, 1897 can be assigned for reading by the class. Edwin C. Eckel, Coal, iron and war, N. Y., Holt, 1920, is an interesting and suggestive study in the physical bases of national industry. On the steam-engine, Robert H. Thurston’s History, N. Y., Appleton, 1902 will probably be found most useful. The biographies by Samuel Smiles are a valuable history of technical progress, interesting and trustworthy. Of more recent books, designed for popular reading, George Iles, Flame, electricity and the camera, N. Y., Doubleday, 1900 contains attractive accounts of many features of technical progress.
XXIX. MACHINERY AND MANUFACTURES
=327. Development of agriculture.=—Pursuing now our survey of the technical advances of the century, we must notice first the oldest and perhaps the most important branch of production, agriculture. An American reader does not need to be told that farm work has been greatly changed by the introduction of improved tools and machinery. Even an implement so old and apparently so simple as the plow will do now better work with half the force formerly required. Cultivating and harvesting machines of various kinds spare land and labor. The introduction of artificial fertilizers has given new freedom and efficiency to the agriculturist.
=328. Progress less in agriculture than in other branches of production.=—Still, when all is said, agriculture is the branch of production which has been affected least by the changes of the century. The farmer is still bound to the soil and subject to the weather. Steam power has not made for itself the place which sanguine men once thought it would win. In Europe reforms have been effected in sweeping away antiquated institutions affecting the personal liberty and property rights of cultivators, who now, in free association, can work far more efficiently than before. In other continents the extension of the modern transportation system has effected a revolution in the choice of crops and the means of marketing them. Neither transportation, steam power, nor machinery, however, has vitally affected the methods by which crops are grown; and when the first fertility of new land has been exhausted and a growing population clamors for a cheap food supply, the world will find that one of its great problems is still unsolved.
=329. Function of machinery.=—For the great changes effected by the use of steam we look, of course, not to agriculture but to manufactures and transportation. These changes have been wrought through the medium of machinery, and the reader is asked to give particular attention now to the part which machinery plays in modern life. I spoke above of coal as offering power to men. How can you apply this power to a useful purpose? First, you must burn the coal under a boiler to produce steam; second, you must translate the expansive power of steam into regular forceful motion in an engine; finally, you must apply the force and the motion in just the way that is wanted by means of a machine. Evidently machinery does not depend altogether upon steam. Rude machines, mills for grinding grain, for example, were run by wind or water power long before the steam-engine was invented; water power is being transmitted by electricity in increasing quantities at present; and men hope that we shall be able to use the heat of the sun or the force of the tides to run machinery in the future.
=330. Advantages of machines.=—Practically, however, the great extension in the use of machinery has depended on the power obtained from coal through steam. Only in the period since the adoption of improved forms of steam-engine have we realized the possibilities of machines. They can be applied only to certain classes of work, especially that involving the constant repetition of an operation which can be easily regulated either by the machine itself or by a laborer supervising it. We can use machines, for instance, to make cloth and even to make clothes, but we do not use them in the operations of dressing and undressing. In their proper field, however, they are indispensable. They will accomplish tasks which are too great or too small for human hands. They repeat a process or copy a model with absolute fidelity. They never grow tired and they have no human failings; they often economize time and materials. Finally, and this is the point of decisive importance, in many lines of work they, furnish the product at a cost far below that of hand labor.
=331. Revolution in old industries effected by machinery.=—To describe the manifold applications of machinery in the nineteenth century, within the limits of this manual, is impossible. Let the reader glance from the book to the objects surrounding him, and make a list of the ten objects which first attract his attention. If he will trace their history he will find, in all probability, that they are all the products of complicated machinery, which has been developed from the simplest beginnings in the course of the century. He will probably experience difficulty in finding a familiar object which has not been subjected to machine processes unknown in 1800. Machinery has heightened human productivity in certain lines a hundred or even a thousand fold. At the Atlanta Cotton Exposition of 1881, two carders, two spinners, and one weaver, from the mountain region of Georgia, could produce eight yards of coarse cotton cloth in a day of ten hours. The same number of persons in a modern cotton factory could produce 800 yards by machinery. The cotton goods produced for home consumption in the United States by 160,000 laborers at that time, would have required the services of 16,000,000 laborers without machinery. Again, a skilful woman can knit 80 stitches a minute by hand; a machine enables her to make 480,000.
=332. Introduction of new industries.=—Machinery has not only revolutionized old industries; it has created many new ones. A distinguished American economist expressed the opinion, about 1890, that half of all those who were then earning their living by industrial pursuits did so in occupations that not only had no existence, but which had not even been conceived of, a hundred years before. I may write with a steel pen, with a fountain pen, or with a typewriter; whichever choice I make I am giving employment to a group of mechanical laborers who did not exist in 1800. Taking a particular city as an example, the industrial specialities of Leipzig are said to have increased from 118 in 1751 to 557 in 1890, a growth of 372 per cent. Nor must we limit our view of the effects of machinery to the mechanical pursuits which are carried on about us. Increased efficiency due to the use of machinery has set men free from other pursuits to engage in commerce, education, domestic service, etc.
=333. Importance of iron in the age of machinery.=—One particular industry deserves special consideration here, by reason of the quality of its product rather than of the quantity of laborers employed or the mere exchange value of the output. Without iron the modern age of machinery would be, at best, of stunted growth. Jevons characterized admirably the modern industrial system when he said that steam is its motive power and iron is the fulcrum and the lever. It is safe, I think, to challenge the ordinary reader of the present day to name a machine which is not composed largely or almost wholly of iron. The whole structure of our modern industry depends on the means of getting cheap iron. “Without it the engine, the spinning-jenny, the power-loom, the gas- and water-pipe, the iron vessel, the bridge, the railway—in fact, each one of our most important works—would be impracticable from the want and cost of material.”
=334. Scarcity of iron before the nineteenth century.=—Returning to the period about 1800 we find ourselves in a different world. I have described in a previous chapter the improvements effected in the manufacture of iron in the eighteenth century. Great as was the promise of these improvements, it waited long for full realization; well into the nineteenth century iron remained relatively scarce and dear and was spared in every possible way. A youth destined to play a leading part in the iron age (Joseph Nasmyth) visited the Carron Iron Works in 1823, and here is the description which he gives of a celebrated foundry and machine shop, associated with the construction of the first working steam-engine by Watt. “Much of the machinery continued to be of wood. Although effective in a general way it was monstrously cumbrous. It gave the idea of vast power and capability of resistance, while it was far from being so in reality.” If this was the condition at the Carron Iron Works, what must it have been in ordinary factories?
=335. Development of machine tools for working iron.=—Iron was little used, partly because it was hard to get and partly because it was hard to work. There were in England about 1800 only three good machine shops, where small steam-engines were built. The equipment of even the best machine shop would seem now wretchedly inadequate, and Stephenson was greatly hampered, in building his first locomotive, by the lack of good machine tools, for working metals. William Fairbairn said in his presidential address before the British Association at Manchester, “When I first entered this city [about 1813] the whole of the machinery was executed by hand. There were neither planing, slotting, nor shaping machines; and, with the exception of very imperfect lathes, and a few drills, the preparatory operations of construction were effected entirely by the hands of the workmen.” About 1825 to 1830, however, with the growth in demand for iron-working apparatus, there began a rapid development of this branch of manufacture, one step in advance leading rapidly to another. We may trace the process in the description that Nasmyth gives us of his first machine shop, a shed measuring 24 by 16 feet. “I removed thither my father’s foot-lathe, to which I had previously added an excellent slide-rest of my own making. I also added a ‘slow motion,’ which enabled me to turn cast-iron and cast-steel portions of my great Mandsley lathe. I soon had the latter complete and in action. Its first child was a planing machine capable of executing surfaces in the most perfect style; it was 3 feet long by 1 foot 8 inches wide. Armed with these two most important and generally useful tools, and by some special additions, such as boring machines and drilling machines, I soon had a progeny of legitimate descendants crowded about my little workshop, so that I often did not know which way to turn.” Nasmyth himself made one specially important contribution to iron-working machinery, by the invention of the steam hammer in 1839; the old “bit by bit” system of welding became henceforth unnecessary.
=336. Steel, character and utility.=—While the limits of our space will not permit us to trace further the development of machine tools, which have been made marvelously efficient in recent years, and while we must also forego a study of the details of iron production, the topic of steel manufacture certainly deserves some consideration. Ordinary cast iron, while strong and hard enough for many purposes, still is brittle by reason of the large proportion of carbon and other impurities which it contains. These impurities may be burned out in the puddling process, and the nearly pure iron thus obtained, called malleable or wrought iron, has a toughness enabling it to resist far greater strains than cast iron can stand. Intermediate between the two irons, and containing one per cent of carbon, more or less, is still another product, steel, which may be made even more tenacious than wrought iron, or even harder than cast iron. Its peculiar property of “taking a temper” is probably known to most readers. The valuable properties of steel have been known and prized for ages, but till well into the nineteenth century it could be used only sparingly; it was commonly manufactured by first making wrought iron, by the tedious process of puddling, and then heating the iron bars in contact with charcoal until they had absorbed the proper amount of carbon. The expense of this process prohibited the use of steel for most purposes; the wrought iron cost $75 a ton and the finished steel $250 or more; and the output would seem to-day inconsiderable.
=337. Recent improvements in the manufacture of steel; the Bessemer process.=—Many men have contributed to bring the manufacture of steel to its present efficiency, and we may notice only the names associated with the greatest improvements. An Englishman, Bessemer, patented in 1855 the idea, as simple as it is ingenious, of turning cast iron directly into steel by blowing air through it when melted, and so consuming the excess of carbon. It has not proved possible to make good steel according to Bessemer’s original idea, but with a slight modification his process has been wonderfully successful; in present practice all the carbon is burned out by the air current, and then the requisite amount is added before the metal is poured out. Ore containing a large amount of phosphorus is treated by melting it in a converter lined with lime, which removes this dangerous impurity (“basic process”).
=338. The open-hearth (Siemens-Martin) process.=—Still another contribution to modern methods of steel manufacture, known as the “open-hearth,” or, from the names of its introducers, the Siemens-Martin process, has been of great importance since about 1870. The steel is made from ore or from a combination of different kinds of iron, and, by peculiar devices for economizing the heat of the furnace, the process may be continued so long and regulated so carefully that a product of high quality may be turned out at a moderate cost. The result of all these processes has been to change steel from a luxury to a necessity of modern life. Modern mild steel is 40 per cent stronger than iron, and is tough enough to be tied in a knot or punched in the shape of a bowl when cold. The increase in efficiency due to its substitution for iron in machinery, railroads, ships, and structural work is simply incalculable.
=339. Development of the modern chemical industry.=—In detailing at such length as I have done the exploits of machinists in the past century, I may tempt the reader to undervalue the contributions of scientists. To guard against that error let us consider briefly the development of the chemical industry, which, like the iron industry, renders a service to modern civilization beyond any measure of dollars and cents. The Frenchman, Lavoisier, had established chemistry on a scientific basis before 1800, but industrial chemistry used still the primitive methods which had been employed for ages. Let us take, for instance, the single substance, carbonate of soda, of prime importance in industrial chemistry, for on it depend the various industries of glass, pottery, soap, photography, paper, etc. This substance was still obtained in the eighteenth century, by burning seaweed and seashore plants and treating their ashes; Spain had a considerable export of barilla, and owed to this product whatever success she attained in the soap manufacture. Leblanc emancipated the soda industry from kelp and barilla, by introducing the process based on sulphuric acid and salt; step by step improvements have been made since then. Sulphuric acid, discarded in the soda industry, has grown in importance notwithstanding; it is the controlling element in the manufacture of other acids, commercial fertilizers, alum, ether, glucose, etc., and in oil refining; and it is produced at a price and of a quality formerly unknown. The discovery of the anilin colors, in 1859, has revolutionized the art of dyeing. The chemist will make you, from coal tar, almost any color or shade desired. He will make you perfumes or flavors; and, if he has failed to construct quinine artificially, he has at least learned, in his attempts, to make substances such as antipyrin and phenacetin, of equal value for other purposes.
=340. Influences determining the local distribution of manufactures.=—A review of the contents of this chapter, with its discussion of the factors which have built up modern industry, should suggest to the reader the countries which have enjoyed exceptional advantages in the modern manufacturing period. Resources of coal and iron, clearly, are of great importance. That they are not decisive, however, is proved by the absence of modern manufactures in China, where there are abundant supplies of coal and iron, and their presence in districts like the North of Ireland, where, for instance, a great ship-building industry is fed with imported iron and coal. Factories can exist at a considerable distance from their source of supply if they are served by a transportation system which will fetch raw materials and carry finished products cheaply; efficient transportation is essential. Many other elements might be suggested as going to form the basis of national success in manufactures, but of them all I desire here to emphasize only two: good government and intelligent men. Manufactures cannot thrive in a country where unwise or corrupt methods of taxation rob the investor of his gains. Nor can they prosper, whatever other advantages a country may have, if it lacks intelligent and steady laborers, or clear-sighted and energetic leaders. The reader will have an opportunity, in later chapters, to test the truth of these statements; meanwhile, in anticipation, attention may be directed to the United States, England, and Germany, as those countries which have most signally proved their fitness for manufacturing.
QUESTIONS AND TOPICS
1. Development of the science and art of agriculture in the nineteenth century. [Encyclopedia.]
2. Artificial fertilizers. [Peacock, in Cosmopolitan Magazine, Nov., 1895.]
3. A modern wheat farm. [Scribner’s Magazine, 1897, vol. 22, p. 531 ff.; Edgar, Story of a grain of wheat. Note that “bonanza” farms are not typical of modern agriculture in general.]
4. What use is coal without a steam-engine? What use is machinery without a steam-engine? What use is a steam-engine without coal or machinery? Which would the world give up most readily, coal, steam-engine, or machinery?
5. Character and advantages of machinery. [Hobson, Mod. cap., chap. 3, sects. 1-3.]
6. How much have women gained by being relieved of the necessity of making cloth for family use? [Read description of the labor of spinning, weaving, etc., in colonial times; see Alice M. Earle, Colonial dames and goodwives, Boston, 1895, or Syndey G. Fisher, Men, women and manners in colonial times. Philadelphia, 1898.]
7. Effect of the introduction of machinery on the demand for labor in different occupations. [Hobson, Mod. cap., chap. 8.]
8. The growth of factories. [Bourne, Romance, chap. 9.]
9. Organization of a modern factory. [P. G. Hubert, The business of a factory, Scribner’s Magazine, 1897, vol. 21, p. 306 ff.; Fred J. Miller, The machinist, same, 1893, vol. 14, p. 314 ff.]
10. Progress in the iron manufacture. [Iles, chap. 4; R. R. Bowker, A bar of iron, Harper’s Magazine, 1893-4, 88: 408-424, F. W. Taussig, The iron industry in the U. S., Quarterly Journal of Economics. Feb., 1900, reprinted in Bullock’s Selected Readings in Economics.]
11. Development of machine tools for iron working. [Sellers, in Depew, One hund. years, chap. 49.]
12. Progress in the steel manufacture. [R. R. Bowker, A steel tool, Harper’s Magazine, 1893-4, 88: 587-602; Waldon Fawcett, The center of the world of steel, Century Magazine, 1901, 62: 189-203.]
13. Write a biographical sketch of one of the following: Bessemer, Siemens, Whitworth, Brown, Thomas, Snelus. [W. T. Jeans, The creators of the age of steel, N. Y., 1884.]
14. Write a report on advances in the manufacture of one of the articles named. [Encyclopedias; on coal tar products see Meldola.]
15. What conditions have led to the rise of the characteristic manufactures of your own vicinity? In what regions are their chief competitors? What are the relative advantages of different places with respect to some particular manufacture?
BIBLIOGRAPHY
See the previous chapter for books of general reference. The modern manufacturing organization and the influence of machinery have been treated, from the economic standpoint, by Hobson, Modern capitalism, and Schulze-Gaevernitz, The cotton trade, Manchester, 1895. A history and analysis of the factory system by C. D. Wright was published in the Tenth U. S. Census, 1880, vol. 2; further references to U. S. public documents will be given below, in the chapters on the United States. The English parliamentary papers and accounts contain an immense amount of material on this subject; the last volume of Cunningham, Growth, has useful references to them. The technical history of manufacturers defies compression. Much interesting material may be found in the reports of the U. S. Commissioners to various world expositions.
A good account of the history of machine making is provided by Joseph W. Roe, **English and American tool builders, New Haven. Yale Univer. Press, 1916.
XXX. ROADS AND RAILROADS
=341. Commercial importance of the subjects of the chapter.=—“Of all inventions, the alphabet and the printing-press alone excepted, those inventions which abridge distance have done most for the civilization of our species.” Macaulay’s celebrated sentence applies to civilization in general. With regard to the material civilization depending upon commerce, certainly no factor has been of greater importance than improvement in the means of transportation and communication. An improvement in these means has been effected during the past century, without a parallel in the world’s history; and a description of the changes deserves the most careful attention of the student in the short space which can be allowed the subject.
=342. Statistical survey of development.=—For a convenient means of reference I introduce, in this place, a statistical table (on opposite page) showing the development of the most important modern instruments of transportation and communication.
=343. Improvement in the condition of roads.=—Aside from the stretches of canal which had been brought into operation, the universal means of inland transportation about 1800 was the road. Some reference has been made in an earlier chapter to the condition of English highways in the eighteenth century, and to the improvements which marked that period. Conditions on the Continent were worse than those in England. French roads were mere tracks in the first part of the eighteenth century, and for the most part were still hopelessly bad at its close, when the system of maintaining the roads by forced labor was abolished.
From near the close of the eighteenth century, however, we may date the beginning of a period of rapid improvement in the roads of western Europe. The turnpike system, which allowed tolls to be charged for the use of improved highways, encouraged the investment of capital in these undertakings. The teachings of Telford and Macadam, two great road-engineers who emphasized the necessity of using good materials and securing proper drainage, were generally applied. In the period from 1800 to 1850 the roads of Europe were reformed to meet the demands which commerce made upon them, before the introduction of the railroad, and were put in the excellent condition which attracts the attention of American travelers to-day. The cost of freight transportation was reduced to half or less of what it had been, and the speed of passenger service increased correspondingly. An Englishman, Porter, notes that in 1798 he occupied nineteen hours in traveling eighty miles by what was considered a “fast coach”; when he wrote, in 1838, the trip was made in eight hours.
=====+========================+======================== | SHIPPING | RAILWAYS | MILLION TONS | TELEGRAPHS CABLES +-----+------------------+------------------------ |Sail | Steam | Carrying | Thousand Miles | | | Power | -----+-----+-------+----------+-------+--------+------- 1800 | 4.0 | | 4.0 | | | | | | | | | 1820 | 5.8 | .02 | 5.8 | | | | | | | | | 1830 | 7.1 | .1 | 7.5 | .2 | | | | | | | | 1840 | 9.0 | .3 | 10.4 | 5.4 | | | | | | | | 1850 |11.4 | .8 | 14.9 | 23.9 | 5. | .02 | | | | | | 1860 |14.8 | 1.7 | 21.7 | 67.3 | 100. | 1.5 | | | | | | 1870 |12.9 | 3.0 | 25.1 | 139.8 | 281. | 15. | | | | | | 1880 |14.4 | 5.8 | 37.9 | 224.9 | 440. | 49. | | | | | | 1890 | 9.1 | 8.2 | 42.3 | 390.0 | 768. | 132. | | | | | | 1900 | 6.6 | 13.8 | 62.1 | 500.0 | 1,180 | 200. | | | | | | 1910 | 4.6 | 22.0 | 92.8 | 637.0 | 1,307 | 291. | | | | | | 1913 | 3.8 | 26.5 | 109.9 | 690.0 | 1,462 | 330. =====+=====+=======+==========+=======+========+=======
=344. Importance of roads in the present transportation system.=—A word of warning may be advisable before we leave this subject to study more recent means of transportation. Not many years ago a French economist estimated that not one twentieth of the settlements of the inhabited world were within less than a day’s distance from a railroad. Even in the most advanced countries the extent of roads far exceeds that of railroads, and only in the rarest cases do products reach the consumer without having traversed a stretch of common road. The road, therefore, takes a place in our modern economy more important than, in our carelessness, we generally admit.
The unit for measuring the expense of transportation is the cost of moving a ton one mile; on a modern American railroad the average cost of a ton-mile is less than one cent. Even on the excellent roads of Europe the cost is ten cents or more; while it has been estimated that the average cost of moving farm produce to market over the common roads of the United States is twenty-five cents per ton-mile. Assuming that the average haul is twelve miles, and that three hundred million tons are carried in a year, the expense reaches the total of nine hundred million dollars, a sum greater than the operating expenses of all the railroads of the United States before 1900.
It has been proved by actual test that the same force which draws one ton on a muddy earth road will draw four tons on a hard macadam road. One of the greatest improvements in transportation is still, in large part, neglected by the American people; and intelligent energy will find in no field richer results than in the reform of our common roads. Such a reform would economize time and force, would reduce wear and tear, and would greatly better the business position of the farmer by enabling him to choose his own time for marketing his goods and making his purchases.
=345. Advantage of transportation by water; canals.=—The student may, perhaps, remember that in the Middle Ages the expense of transportation by road led people to choose rivers for conveying their goods, whenever this was practicable. It has been estimated that a horse which could carry on its back two or three centner (a centner is about 110 lbs.) could with equal exertion drag twenty centner on a highway, or 1,200 through dead-water. This enormous gain in efficiency, resulting from the avoidance of the slightest difference in level and from the reduction of force wasted in friction, suggested to people in early times the idea of establishing channels for water where none had previously existed, that is, of building canals. Locks, for controlling the flow and level of the water, were invented toward the end of the Middle Ages, and a considerable extent of canals had been constructed on the Continent before the Bridgewater canal, described above, was opened in England. The real era of the canal, however, was in the period which may be limited roughly by the dates 1750 and 1850.
=346. Development of canals, 1750-1850.=—Immense amounts of capital were invested in canals in this period of their great importance; and the European and American systems of barge canals were constructed substantially on the lines which they have since retained. A traveler could then, as now, voyage through most parts of central and eastern Europe without leaving a canal-boat. Of a country like England, endowed by nature with advantages for water communication, it could be said in 1838 that no spot south of the county of Durham was more than fifteen miles from the means of water conveyance. Factories were established along the canals, as now along the railroads. Canals relieved the highways of a large part of the growing traffic, carried many raw materials which could not have borne the expense of transportation by road, and enjoyed even a considerable share of passenger traffic.
=347. Relative decline in importance of canals.=—Of canals as of roads it may be said that their days of usefulness are far from past. One class, indeed, that of the great ship canals, has grown rapidly in importance in recent years. Many economists believe that even the barge canals should be maintained and improved. There is still an active canal traffic in Europe, especially in Germany, and in the last-named country a notable project for extending the canal system is under consideration. The future of canals seems to depend largely on the introduction of improved forms of motor (electricity, gasoline).
The canal has certainly yielded the place of first importance in internal transportation to the railroad. Its great merit, cheapness, has declined in importance with the reduction of railroad rates, while its drawbacks are felt more and more under the conditions of modern business. The canal is not only much slower and more uncertain than the railroad; its vital weakness is the fact that in temperate climates its usefulness is destroyed during at least a part of the winter. Since 1850 canal systems have grown slowly, if at all, and in some countries they have declined greatly. Nearly half of the English canals are now controlled by the railroads; some are closed and out of repair, and traffic is diverted from others by heavy tolls.
=348. Origin of the steam railroad.=—Soon after 1800 the American inventor, Evans, asserted more than once that he could manage to drive wagons on railways by steam. He expressed an idea that was by no means new, and that was then floating in the minds of many men. He said truly, however, that one step in a generation is enough, and that the monstrous leap from bad roads to steam railways could not be taken at once. Roads were improved, canals were extended, and still there was a demand for better means of transportation. Rails, first of wood and then of iron, had long been laid to enable horses to draw heavier loads at mines and quarries. George Stephenson, among others, conceived the idea of applying steam as the motive power on these railways, and distinguished himself above all predecessors by constructing, in 1814, a locomotive, Puffing Billy, which proved capable of hauling coal over a stretch of nine miles, from the mine to tide-water. Stephenson improved his original model, especially by the introduction of the steam blast to help the draft and so increase the power of the boiler; and in 1825 secured the adoption of the locomotive on the Stockton and Darlington Railway in Yorkshire. The call for this improvement had now become pressing. The port of Liverpool and the important manufacturing center, Manchester, distant only about thirty miles, were now connected by three canals, yet these were so crowded with traffic that it took sometimes a month for cotton to reach the factories from the sea. The opening of the Liverpool and Manchester Railway in 1830, with a locomotive, the Rocket, which made twenty-nine miles an hour, may be taken as the completion of the period of experiment, and the beginning of the railroad era.
=349. Early period of the railroad.=—Though steam locomotion after 1830 was a proved success, and though railroads were rapidly extended, and 1,600 miles had been brought into operation in 1835, the men of the time had still much to learn concerning their new instrument of transportation. Some men expected from it a speed of 75 or 100 miles an hour, while the State Engineer of Virginia took it as an admitted fact “that a rate of speed of more than six miles an hour would exceed the bounds set by prudence, though some of the sanguine advocates of railways extend this limit to nine miles an hour.” In certain localities the steam railroad, from the start, performed great service in freight carriage. At the Pennsylvania coal mines, for instance, it reduced the cost of hauling a ton nine miles to the river from $4.00 to $.25. Still the cost in general was high; a charge of ten cents per ton-mile was authorized in some early charters; and few people believed that the railroad could compete successfully with the canal in the transportation of ordinary freight.
=350. Improvements in locomotives.=—The technical improvements which have extended the usefulness of the railroad far beyond the dreams of its earlier promoters have been comparatively simple. Mere increase in size of locomotives and cars has been the greatest factor in increased efficiency. The engine which Peter Cooper constructed for experiment on the Baltimore and Ohio, about 1830, had a boiler the size of a flour barrel, weighed less than a ton, and was about the size of a modern hand-car. It was of little practical use. The development from early engines of the class of the Rocket, to those of modern American practice, is shown in the following figures:
===========+=============+======================= | Weight | Hauling Power on Level -----------+-------------+----------------------- Early | 5 to 6 tons | 40 tons Improved | 25 | 1,200 Modern | 50 | 2,400 ===========+=============+=======================
In 1914 the average weight of the simple locomotive in the United States was 82 tons. Not only does a large locomotive put to more economical use the heat applied; the large train, also, costs far less in proportion for the services of men employed in running it.
=351. Importance of steel in railroad construction.=—To many readers practical devices like the air-brake, further reducing the cost and increasing the efficiency of operation, will be familiar. One factor in improvement, however, is not so apparent, and deserves special attention by reason of its commanding importance. The railroad in its modern form would be impossible if Bessemer and others had not taught the world to make steel cheaply. Iron rails, even under comparatively light loads, wore out and had to be replaced constantly. Steel rails, introduced gradually after 1860, could bear double the load on each wheel, and still outlive many iron rails. The modern rail, simple as it appears, is both in material and in proportions a great feat of engineering, “a beam whose every dimension and curve and angle are exactly suited to the tremendous work it has to do.” Steel rails and steel bridges have made possible the economy of the colossal locomotives of modern times. Steel has enabled men, instead of building 10-ton cars to carry 10 tons of cargo, to build 12-ton cars to carry 20, or 14-ton to carry 30; each improvement of this kind represents a saving in the dead weight of the train, and a consequent reduction in cost. Steel has furnished a material for the bridges over which the cars are carried, enabling a span of 500 feet to be constructed as readily as a span of 250 feet, with the iron formerly employed.
=352. Development of the railroad system after 1850.=—Improvements in the construction, the equipment, and the operation of railroads, for the mere suggestion of which there is scarcely space here, explain the rapid growth of the railroad system shown in the figures at the opening of the chapter. It will be noted that over 99 per cent of mileage has been constructed since 1840, and that even in 1850 the world had made but a mere beginning in railroad construction. About the middle of the century began a movement toward the consolidation of existing lines, which had formerly been operated in short stretches by independent companies. The student should note that this consolidation proceeded largely along the length of railroads, not in the modern fashion by the union of parallel and competing lines; and it is almost impossible to exaggerate the benefits that resulted, in increased efficiency of management, improved service, and lower rates. About this time (1854) the first railroad was built across the Alps; the Union and Central Pacific route was opened in 1869, beginning the era of the transcontinental roads; and investors and engineers, who found the older and more advanced sections adequately supplied with railroads, began now to build lines far out into new territory, to open up fresh land and develop new trade.
=353. Importance of railroads at present.=—Some attention will be paid hereafter to the decisive influence which the railroad has exercised on recent commercial development; and in the history of commerce in particular countries the thoughtful student will not fail to recognize this influence even when it is not specifically pointed out. In leaving the subject at this point, however, the student may be grateful for a summary estimate of the relative importance of railroads and other instruments of production in our modern life. A good authority has estimated that one quarter or even one third of the total invested capital of civilized nations has taken the form of railroads. It is doubtful whether the manufacturing establishments of the world are equal in value to its railroads; while the world’s whole stock of money would buy but a fraction of them. The railroads of the United States carried in 1900 a thousand million tons of freight at a cost of a thousand million dollars, and at the rate of less than three quarters of a cent per ton-mile. The student may, from these figures, estimate the service of railroads to the average individual in the country, and may rest assured that the work they do could not be accomplished by the means in use a century ago, even if the whole annual product of the country were squandered in the attempt to carry it on.
QUESTIONS AND TOPICS
1. See the suggestion on the treatment of the statistics in sect. 315. Combine the statistics of the sections 315 and 342 in one chart, if practicable. See below, sect. 354, for the explanation of carrying power; a steamer is estimated to have four times the efficiency of a sailing vessel, in this table.
2. What is the cost of transportation over roads in your vicinity? What system of construction and maintenance is pursued?
3. Write an essay on one of the following topics, from the circulars of the Office of Road Inquiry, U. S. Department of Agriculture. (Copies may probably be secured gratis on application.)
(a) The proper method of constructing and repairing earth roads. [Circular no. 8.]
(b) Methods of constructing macadamized roads. [No. 21.]
(c) Repair of macadamized roads. [No. 30.]
(d) The best system of maintaining roads. [No. 24.]
(e) Systems of State aid. [No. 32, Minn.; No. 35, N. Y.]
4. Effect on the agriculture of the U. S. of the present roads. [Report of the U. S. Industrial Commission, 1900, vol. 10, pp. ccix-ccxvi.]
5. The place of canals in the transportation system of a modern European state. [O. Eltzbacher, The lesson of the German waterways, Contemporary Review, Dec., 1904, 86: 778-797.]
6. Early history of the railroad. [See a biography of Stephenson, by Smiles, or in one of the encyclopedias or biographical dictionaries.]
7. Early locomotives. [Thurston, Hist., chap. 4.]
8. American improvements in locomotives and cars. [Amer. Railway, p. 100 ff.]
9. Improvements in railroad construction. [Same, p. 1 ff.]
10. Feats of railroad construction. [Same, p. 47 ff.; Vernon-Harcourt, chap. 2.]
11. Modern bridges. [Vernon-Harcourt, chaps. 6, 7.]
12. Modern railroad management in the United States. [Amer. Railway, 149 ff.]
13. Development of railroad organization and its effects. [Same, pp. 344-359.]
BIBLIOGRAPHY
A good article on the history of highways will be found in the Edinburgh Review, 1864, vol. 119, p. 340 ff. See also Smiles’ Lives of the engineers, and, for conditions in England before the railroad, Stanley Harris, Old coaching days, London, 1882, or W. O. Tristram’s book on the same subject, London, 1893.
For the bibliography of canals and railroads see Bowker and Iles, and Palgrave’s Dictionary. Among the many books the following will probably be most serviceable: E. J. James, Canal and railway; J. S. Jeans, Water-ways; E. R. Johnson, *Railways; A. T. Hadley, *Railroad transportation. All of these include historical and descriptive matter, along with economic criticism. **The American Railway, made up of articles contributed by various authors to Scribner’s Magazine, has much matter of value and interest to the student of the history of commerce.
XXXI. MEANS OF NAVIGATION AND COMMUNICATION
=354. Transportation by sailing vessels and steamers.=—Steam has won for itself, in the course of the century, the commanding place in sea transportation as well as in land transportation. The struggle with competitors has lasted longer and the victory has been less complete. Steam navigation, however, offers such advantages in sureness, safety, speed, and cost, that sailing vessels have been forced out of some of the most important branches of commerce, and must content themselves with what the steamers leave them. Reference to the table at the opening of the preceding chapter will enable the student to follow the development of the means of transportation by sea in the course of the century, and to observe the growth in importance of the steamer. In explanation of the figures of carrying-power it should be said that a steamer is regarded as having three or four times the efficiency of a sailing vessel of equal tonnage; such an estimate is, of course, a mere approximation, and, indeed, the figures of tonnage, especially in the earlier part of the century, are themselves very uncertain.
=355. Development of sailing vessels.=—European sailing vessels at the opening of the century followed substantially the clumsy lines of the old East Indiamen. The chief credit for the improvement of wooden vessels is due to the Americans, whose clipper ships, marvels of grace and speed, were without rivals in their day. The clipper Dreadnought made the passage from New York to Queenstown in less than ten days, and in 1846 the American Tornado, starting from England with an early steamer of the Cunard line, reached America before her. The Great Republic, an American four-masted clipper, was of 3,400 tons and was the largest sailing vessel in the world; British ships of this period rarely exceeded a thousand tons in register.
The suggestion of iron for building ships was met at first with ridicule; some people, of course, thought that an iron ship would surely sink, and more serious objections were found in the cost, the derangement of the compass, and the fouling of the ship’s bottom. Iron, however, came gradually into use for steamers, and, after 1850, was applied more and more generally to the constructions of sailing vessels. Iron vessels were actually superior in buoyancy to wooden, drawing less water and carrying more cargo with a given tonnage; they were cheaper in the long run, because they are stronger, more durable, and less exposed to destruction by fire. Furthermore, iron was absolutely essential if the size of ships was to be increased. Builders of wooden ships were limited by the average height of trees, and, in spite of all devices, could not construct a frame sufficiently strong for a vessel exceeding about 300 feet in length. The size of an iron or steel ship is practically unlimited. The cost of ships constructed of metal has decreased with advances in the manufacture of iron and steel; remedies, fairly satisfactory, have been found for the derangement of the compass; and though it has been found impracticable to apply copper sheathing to steel ships, the fouling of the bottom is an evil of minor importance.
=356. Relative decline of sailing vessels, notwithstanding improvements.=—During the second half of the nineteenth century the wooden ship gradually disappeared from the seas, giving place to vessels constructed first of iron and then of steel. The country which suffered most from the change, as will appear later, was the United States; the country best prepared to profit by it was England. The English now rapidly enlarged the dimensions of their ships, and improved their rig and model. Some of the modern steel ships carry 5,000 tons of cargo, or even more. A study of winds prevailing on the ocean, to which an American officer, Maury, made important contributions, enabled sailing vessels to choose a course which, on many routes, shortened the duration of the voyage a third or more. Steam has been applied for handling the cargo, and for managing the rudder and sails.
In spite of all improvements the sailing vessel has not been able to keep its share of sea-borne commerce. So much depends on certainty in modern business that the merchant will gladly pay a higher freight rate to be relieved of the element of uncertainty which is bound to attend navigation by sails. Steamers now exceed the sailing vessels of the world not only in tonnage, and still more in effective carrying capacity, but even in number also, if only vessels of 100 tons and above are counted.
=357. Steamers used at first chiefly for internal navigation.=—American inventors made a practical success of steam navigation soon after 1800; a brief notice of their work will be given later. The steamer was used at first, however, chiefly for internal navigation and for short coasting voyages. It was of immense importance in furthering the development of the Mississippi Valley in America; and it soon made a place for itself on the European rivers. About 1840 there was a rapid development of steam transportation on the German rivers, and this has not ceased to grow in volume and efficiency. Chains have been laid along some of the river beds; on the Elbe, for instance, a chain extends all the way across Germany and even into Bohemia; and by this means steamboats are enabled to haul their barges up-stream against a strong current. The application of steam to ocean navigation did not become of great importance until about the middle of the century. At that time only one fifth of the steam tonnage entering British ports came from foreign ports; the rest was employed still in the coasting trade.
=358. Beginnings of steam navigation of the Atlantic.=—The credit for the first passage across the Atlantic by steam has often been ascribed to the American ship Savannah, which arrived at Liverpool in 1819 after a voyage of twenty-nine days. This boat, however, should be classed as a sailing ship with auxiliary engine, rather than as a steamer; the paddle-wheels were arranged to be removed and hoisted on deck when the wind was fair. It made most of the distance by sailing, and the scanty supply of coal gave out before it reached its port, so that, as the log reads, there was “no cole to git up steam.” A Canadian boat, the Royal William, actually did make the whole passage under steam in 1833, but stopped at Pictou for coal on the way; while the first regular steamship to cross without recoaling was the Great Western in 1838. The considerable intervals between these trips show that navigation of the ocean by steam was still in its experimental stage. Indeed, in the very year 1838, in which the Great Western and the Sirius began the period of practical application, a leading English scientist set out to prove by arguments and statistics that the project of connecting Liverpool and New York by direct steamer trips was “perfectly chimerical.” The Cunard Company was founded the next year; and some measure of the appreciation of the American people is given by the fact that when Mr. Cunard arrived at Boston in 1840, on the first trip of the new line, he received (it is said) no less than 1,873 invitations to dinner within twenty-four hours!
=359. Improvement of the means of steam navigation.=—The early steamers were moved by paddle-wheels, which offer special advantages for use in shallow water, but which are not so efficient as the screw propeller in the open sea. They require heavier and bulkier engines which must be placed in the best part of the ship, they waste power, and they show the effects of wear and tear more quickly. The Great Britain, which made its first voyage in 1845, was noteworthy on two accounts: it was the first large steamer (over 3,000 tons) to be built of iron, and it was the first to introduce the screw in ocean navigation. These two improvements were adopted by the Inman line (1850) and were gradually accepted by other builders.
In the second half of the century various improvements have added still more to the efficiency of the ocean steamer. Early steamers ran under such a low steam pressure that we find recorded in the log-book of one, “Broke the larboard steam-pipe, lapped it with canvas and rope-yarn and proceeded”! Higher pressures were introduced, and after about 1870 the steam was more fully utilized by compound engines, of which some have three or even four sets of cylinders. The introduction of twin screws, first applied to the City of New York (1889), has added rather to the safety than the speed of a passage, by permitting further development of the system of water-tight compartments.
=360. Gains resulting from increase in size.=—Another most important factor in the development of efficient steamers has been mere growth in size. A ship’s carrying power varies as the cube of her dimensions, while the resistance offered by the water increases only a little faster than the square of her dimensions. Large ships, therefore, consume less coal per ton of cargo, and as large boilers and engines consume coal more efficiently than small ones, there is a double gain. Here again, as in the case of railroads, the introduction of cheap steel has been of immense importance, and may fairly be said to have revolutionized the art of ship-building since 1875. While in 1880 nine tenths of British steamers were still constructed of iron, the proportion had sunk in 1890 to less than one twentieth, and the employment of steel is now almost universal. From steel are constructed the great cargo-carriers and the fast express steamers of the modern oceanic service. Some conception of the progress that has been made can be got by a comparison with earlier conditions. In 1841 the total steam tonnage of the British Empire was 188,000; nowadays a single steamer (Leviathan, Majestic) has a tonnage in excess of 50,000. The horse-power of British steamers in 1841 was estimated at 75,000; nowadays a single steamer, has an indicated horse-power almost equal to that total. The boilers of a modern express steamer (Teutonic) were required to evaporate 120 tons of water every hour, yet so thoroughly is the heat utilized that it was said of a steamer some years ago that the burning of a sheet of paper would move a ton a mile.
=361. Resulting decline in freight rates.=—Even in 1884 a competent writer could make this interesting statement: twenty years before, a steamer of 3,000 tons had to allow for coal and machinery on a given voyage 2,200 tons, and must confine the cargo to the remaining space; at the date when he wrote the great improvements had reversed the proportions, so that only 800 tons were needed for motive power and 2,200 were devoted to cargo. Manifestly steamship owners would be enabled by a change of this character to lower greatly the charges for transportation, and freight rates have, in fact, declined steadily in the course of the century. Lancashire spinners could transport their raw cotton from the source of supply in America at one sixteenth the cost which they had to bear sixty years before. Even in the last quarter of the century ocean freight rates dropped to one half, one third, or even one fourth, of the figures prevailing in 1874.
Conditions such as have been thus briefly suggested explain the immense increase in sea-borne traffic during the century. For the carriage of that traffic the merchant has now at his disposal not only the sailing ship and the “tramp,” the general-utility steamer, but also a multitude of special boats for special services: the tank-steamer for transporting liquids cheaply, the cattle steamer for live stock, and the steamer with refrigerators for dead meat, the fruit steamer, etc. The use of oil as fuel and the introduction of explosion motors of the Diesel type promise to raise still higher the efficiency of transportation.
=362. Modern ship canals.=—This survey of the development of the means of navigation may fitly be closed by a brief consideration of the modern ship canals and their contribution to the growth of trade. There were, in 1900, a round dozen of these canals, capable of receiving sea-going ships. Some, serving special ports (Amsterdam, Manchester, etc.) were of purely local importance. Others have disappointed the expectations of their promoters. The canal across the isthmus of Corinth has been a distinct failure, and the Kaiser Wilhelm Canal, between the North and Baltic seas, has not yet acquired the share of commerce which its projectors promised for it. Leaving aside the St. Mary’s canal in America there was up to 1914 but one ship canal which had proved its commanding importance, namely the Suez Canal.
A map of the world shows two narrow strips of land left by nature almost as though with the design of stimulating men to pierce them, the isthmus of Suez and the isthmus of Panama. A canal at either point unites not countries or small seas, but continents and great oceans, and saves thousands of miles in the routes of trade. The American isthmus presents great difficulties to the construction of a canal, but the Suez route runs through a district composed almost entirely of sand, with no elevation above 50 or 60 feet and with considerable parts actually below the level of the sea.
=363. The Suez Canal, and its services to commerce.=—The scheme of reopening the route across the isthmus of Suez, which, as said in the first chapter, had been made practicable for small vessels before the time of Christ, and had been rendered useless in the Middle Ages, was certain to rise as commerce between Europe and the East increased in volume. It is said to have been entertained by Napoleon I among others, but the credit for its accomplishment belongs to a French engineer and promoter, Ferdinand Lesseps. After more than ten years spent in preparation, work was finally begun in 1860, and the canal was ready for use in 1869.
The success of the Suez Canal may be gaged, from the investor’s standpoint, by the fact that dividends have risen to 20 per cent, from the public standpoint by the fact that the tonnage accommodated by the canal in 1891 exceeded ten million, in 1907 exceeded twenty million, and in general has been roughly equal to the tonnage entering and leaving any one of the great seaports of the world. The duration of the voyage to India has been shortened by a third, and more than half of the voyages to the East are now made through the canal rather than around the Cape of Good Hope. The canal has been an important influence in furthering the growth of the world’s steam tonnage, for it is practically barred to sailing vessels by the difficulties of navigation in the Red Sea; no sea-going sailing vessel has passed through it for years. It has made possible the movement of bulky wares formerly excluded from the trade with the East by the expense of transportation: rice, wheat, petroleum, and coal. It has not, however, produced one result which was expected, the diversion of trade to the countries of southern Europe, as in the time before the passage around the Cape had been discovered. Three quarters, in tonnage, of the ships using the canal have been British, and ships from the countries of northern Europe make up most of the remainder.
=364. The Panama Canal.=—Lesseps could not match in America the success which he had attained at Suez. A French company promoted by him started work at Panama in 1881, but became bankrupt before it had made much progress. Mismanagement at home, disease on the isthmus, above all the tremendous difficulties which nature has placed in the way of a canal at sea level, contributed to this result. The United States took up as a national enterprise a work which now offered but little attraction to private capital, bought out the French company, and in 1904 made arrangements to begin operations. Taught by the experience of the past the government decided on a canal with locks, reaching an altitude of 85 feet above sea level, and took the precautions suggested by sanitary science to protect the laborers against the menaces of plague, yellow fever and malaria. Under army engineers the work was carried on to a successful conclusion, and the canal was opened to traffic in August, 1914. The cost of construction was about $350,000,000.
In the first year of its operation the Panama Canal accommodated about five million tons of shipping; in the year ending in 1920 the figure had risen to about ten. The dislocation of traffic caused by the European War, and interruptions occasioned by earthslides in the Gaillard cut, made the growth of traffic slow and somewhat irregular. Figures for the traffic of the Suez Canal given in the preceding section show that the canal across the American isthmus could not rival in its early years the position of its older competitor for the world’s trade. Even more impressive is a comparison with the figures of traffic through the Sault Ste. Marie canals, on the northern border of the United States. The cargo tonnage by the lake route in 1920 was over eight-fold that carried through the isthmus. The Panama Canal, to 1920, had just about paid the expense of operation and maintenance. There seems no question, however, that apart from important military considerations, the construction of the canal will be justified by the contribution that it will make to the commercial development of the Pacific.
=365. The postal service about 1800.=—Increased facility in sending communications to a distance has attended the improvement of the means of transportation by land and sea. During the early part of the century the postal service was still cramped by old methods and high charges. In England, for instance, in the period after 1827 and before the reform, postage of fourpence (eight cents) was charged for the carriage of a letter any distance not exceeding 15 miles, and the postage increased with the distance: 8 pence for 80 miles, 12 pence for 300, 15 pence for 600, etc. The government charged, in some cases, nearly five hundred times the actual cost. Under these conditions little use, naturally, was made of the post, and it carried, on an annual average, only three letters for each member of the population. Many letters were sent illicitly by private means of conveyance, and the postal revenue remained nearly stationary for many years before 1839, in spite of the growth of the country in population and business activity. Conditions were better in some states of the Continent, notably Germany, but would still be regarded everywhere as backward.
=366. Postal reforms and their results.=—A new era in the English postal system dates from the introduction by Rowland Hill of the penny post; after 1840 a letter weighing not over half an ounce could be sent to any place in the United Kingdom if prepaid by a stamp costing one penny. Similar reductions were adopted in other countries; and new facilities were extended for the mailing of cards, printed matter, and periodicals, samples of merchandise, etc. An international Postal Union was established in 1874 among the chief countries of the world, which agreed on common rates of foreign postage, and arranged to cooperate in carrying on the postal service. This Union has improved greatly the means of distant postal communication, and has grown to include practically the whole civilized world, with the exception of China.
It is easy to follow the effects of the various reforms and improvements in the increased use of the mails. In the United Kingdom, for instance, the number of letters sent per head of the population has increased as follows: 1839, 3; 1840, 7; 1872, 28; 1882, 35. The post has developed from a luxury into a social and industrial necessity, and the extent to which it is used in any country furnishes a fair index by which to judge of the country’s advancement. The following countries may be taken as examples, the figures showing the number of pieces of mail sent annually about 1900, per head of the population: United States, 100; United Kingdom, 85; Germany, 81; France, 55; Italy, 17; Japan, 13; Spain, 12; Russian Empire, 5.
=367. The telegraph before the application of electricity.=—In passing to another subject, electricity, we may still consider ourselves as continuing the discussion of the applications of steam, so dependent are we still on coal and steam for the means of producing and using this new force. Among the manifold applications of electricity in modern life we must here confine ourselves to its use as a means of communication.
The telegraph, a word meaning “far-writing,” existed long before men thought of applying electricity to its operation. The need of sending messages quickly to distant places had led in many countries, before 1800, to a system of signaling by means of instruments much like the semaphores of the modern railroad. The crudeness of such a system is apparent. Communication depended entirely on clear weather and careful observers. Under favorable conditions the speed of signaling was really surprising; a despatch could be sent, for instance, from Paris to Strassburg, by 45 stations, in 6-1/2 minutes. It was estimated, however, that of the messages received only a quarter reached their destination promptly, another quarter were from six to twenty-four hours late, while half had to be forwarded by the ordinary post. Aerial telegraphy, therefore, never attained to great importance, and was restricted largely to government business.
=368. The electric telegraph.=—Practical telegraphy dates from about 1840, when the inventions of the American Morse, and the Englishman Wheatstone, made the use of electricity possible wherever an insulated conductor could be laid. Imperfect as were the early instruments they accomplished their purpose with remarkable success. The telegraph, indeed, has probably undergone less change in the course of its extension and practical development than any other invention of equal importance. We must look, therefore, to explain the great extension of its use, as shown in the statistics at the opening of the chapter, not so much for technical improvements as for a recognition of the value of the telegraph on the part of the public. It found an immediate application on the railroads, and provided them with a means of intelligence and control almost as important as is the nervous system to a human being. It was used at once, moreover, by governments. Little by little it made its way into business life, where it has found its chief field of usefulness, and where it has effected some most important changes, to be noted later.
Since about 1880 the telephone has made a place for itself beside the telegraph, serving the convenience of individual consumers as the telegraph serves the needs of the great captains of industry and commerce, and constantly strengthening its position also as an instrument for the transaction of business.
=369. Submarine telegraph lines.=—The telegraph, which soon became of national and international importance, was still of restricted influence so long as it was confined to the land lines. Experiments on a modest scale, about the middle of the century, had shown the possibility of conducting the electric current through an insulated cable under water, and the world waited only for men of faith and energy to connect continents by submarine lines. A group of prominent Americans, of whom Cyrus W. Field was the leader, took up the project of an Atlantic cable, failed twice in their attempts to lay it, and succeeded in 1858 only to find, after a few days of successful operation, that the cable had ceased to work. The project rested during the Civil War, but in 1866 was finally accomplished. The extension of submarine cables since that time may be followed in the statistics of the preceding chapter. Cables now unite the peoples of all civilized nations, and form an indispensable part of the modern world of thought, politics, and commerce.
=370. Wireless telegraphy.=—To the men who were struggling to unite continents by electrical conductors the idea that connection for the purposes of communication could be established without any conductors whatever would have seemed an idle dream. Yet this result has been attained by wireless telegraphy. Electrical waves sent broadcast from a transmitting station affect delicate instruments “tuned” to receive them at a distance of thousands of miles, and enable messages to be sent across unsounded seas or untraversed deserts with equal facility. Wireless telegraphy has not displaced the older form, which still is and probably always will be more reliable in operation. For many purposes, however, it is a useful supplement, and for one important use it is an indispensable substitute. Wireless instruments can be established as readily on board ship as on land, and so permit ships to communicate with each other and with the shore. Ships can summon aid in time of emergency, and can regularly keep in touch with their agents so that their movements can be directed to suit the need of markets. In 1914 over 500 wireless stations had been established on land, and nearly ten-fold that number on board ship.
QUESTIONS AND TOPICS
1. American clippers. [Marvin, Amer. merchant marine, chap. 12; Clark, in Harper’s Magazine, 1908, vol. 117, p. 92 ff.]
2. Is it probable that steamers will drive sailing vessels entirely from the seas? People once thought that railroads would cause a decline in the demand for draft-horses; has that been the case?
3. The life of the merchant sailor. [W. Clark Russell, Scribner’s Magazine, July, 1893, 14: 3-19.]
4. Early voyages by steam across the Atlantic. [Fry, 33-42.]
5. Improvement of marine engines. [Thurston, chap. 5: Maginnis, chap. 11 (technical, good plates and pictures); Chadwick in Ocean steamships, pp. 1-56.]
6. The building of an ocean steamer. [Rideing, in Ocean steamships, pp. 91-111.]
7. Freight traffic by ocean steamers. [Gould, Scribner’s Magazine, Nov., 1891, or in Ocean steamships, p. 217 ff.]
8. Passenger travel. [Same, Magazine, April, 1891, Steamships, p. 112 ff.]
9. Steamship lines of the world. [Hunt, Scribner’s Magazine, Sept., 1891, Ocean steamships, p. 253 ff.; Encyc. Brit.]
10. Write the history of one of the great steamship companies: Cunard, Inman, White Star, North German Lloyd, Hamburg American, etc. [Fry, Maginnis.]
11. Engineering achievements in modern ports. [Vernon-Harcourt, chaps. 9, 10.]
12. The Manchester ship canal. [Vernon-Harcourt, chap. 13; Porritt in Yale Review, vol. 3, 295-310.]
13. The Corinth Canal. [Vernon-Harcourt, chap. 14; U. S. Monthly Summary, Dec., 1901.]
14. Construction of the Suez Canal. [Vernon-Harcourt, chap. 14; Encyc.]
15. Effects of the Suez Canal. [Fairlie; U. S. Monthly Summary, Dec., 1901.]
16. Effect of the Panama Canal on routes and traffic. [Hutchinson gives a study of results as anticipated; see U. S. Statistical Abstract and periodical literature for actual results.]
17. Development of the English postal system in the nineteenth century. [Social England, 6: 237-246; Ward, Reign of Queen Victoria, 2: 118 ff.]
18. The railroad mail service. [Amer. railway, p. 312 ff.]
19. From the figures of trade given in sect. 319 and from the figures of population in the Statesman’s Year-Book a table can be constructed giving the commerce per head of the people of different states, for comparison with the postal statistics in the text. Note, however, that these statistics include domestic mail, while figures of internal commerce are lacking. The U. S., for instance, would seem to have but slight commerce per capita, in spite of the active use of the mails, because the bulk of our trade is internal and does not appear in statistics.
20. Development of the telegraph. [Iles, chap. 13.]
21. Extension of the telegraph system in the United States. [Eckert in Depew, One hund. years, chap. 19.]
22. History of the submarine telegraph. [Iles, chap. 14; Charles Bright, The story of the Atlantic cable, N. Y., Appleton, 1903, $1; U. S. Monthly Summary, Commerce and Finance, Jan., 1899, pp. 1653-1675.]
23. Development of the telephone. [Hudson in Depew, One hundred years, chap. 20.]
24. Distribution of wireless stations. [Map in Statesman’s Year Book, 1914, plate 4.]
BIBLIOGRAPHY
For carefully studied accounts of ocean transportation in its different aspects see Joseph R. Smith, *Organization of ocean commerce, Boston, 1905, The ocean carrier, by the same author, N. Y., 1908, and Emory R. Johnson and G. G. Huebner, *Principles of ocean transportation, N. Y., 1919. These books offer bibliographies which may be used to supplement references here given. On the development of sailing ships, beside the older books by Lindsay and Cornewall-Jones, see Adam W. Kirkaldy, British shipping, London, 1914, A. H. Clark, The clipper ship era, 1911, books by Basil Lubbock on ships of the clipper period, and references given later for American shipping; on steamships there are satisfactory accounts in Fry and Maginnis and in the collection entitled Ocean steamships. Excellent chapters on the different ship canals, with further references, are given in Johnson and Huebner. See also Lincoln Hutchinson, The Panama Canal, N. Y., 1915.
Summary accounts of the development of the postal service, satisfactory for the purposes of most readers of this book, will be found in the encyclopedias. A scholarly study of the development, particularly in the first half of the nineteenth century, is provided by J. C. Hemmeon, History of the British post office, Cambridge, Harvard University, 1912. The various applications of electricity are fully treated by Iles. Other books aiming to describe electrical applications for the general public are by Tunzelmann in the Contemporary Science Series, Park Benjamin, and Philip Atkinson. Consult the A. L. A. Catalogue for further references.
XXXII. THE WARES OF COMMERCE
=371. Effect on commerce of technical progress.=—It is now time to discuss the effects on commerce of the technical changes which have been described in preceding chapters. Following back the substance of those chapters, the effects may be briefly summarized as follows. First, an improvement in the means of communication and transportation which has brought men and goods of different regions vastly nearer to each other than they have ever been before in the world’s history. Second, a control over the forces and materials of nature which has enabled men to manufacture old wares more cheaply and new wares which were before unknown. Third, as a result of the development of the transportation system, the settlement of new countries with virgin soil and rich mineral resources, and the connection of these countries with each other and with the countries of the Old World.
Of these three factors any one alone would be a powerful stimulus to trade; the three working together account for the astounding growth of commerce during the nineteenth century. Comparing the present and earlier periods we may characterize the advance by saying that in the Middle Ages commerce concerned itself almost entirely with the luxuries of life; that in the modern period (1500-1800) it served mainly men’s comfort; while in the recent period, since 1800, it has become necessary to the very existence of a considerable part of mankind.
=372. Growth of the sphere of commerce and resulting specialization of production.=—The world has gone far toward realizing the ideal of the early free trader, that wherever a man might be, he should share in the productive advantages of all other men, wherever they might be. Customs tariffs have been able to check the movement of commerce; they have been powerless to stop it. The sphere of ordinary trade, which was once the manor, a mere hamlet or village; which grew in time to be the town with its surrounding country; then included the whole nation; and became in the modern period international,—this sphere of regular and ordinary trade is now the world. Whole countries now specialize in the production of different articles, as individuals or small districts once did.
Northwestern Europe has become a great factory, drawing its food supplies and raw materials from distant parts of the world, and exporting manufactured products in exchange. Beside Europe stands the continent of North America, supplying in large part the needs of its own people for manufactures, and producing a surplus for export. North America, indeed, stands in one aspect above Europe, for it has unexhausted stores of natural resources which it lavishes on other parts of the world less richly endowed. The other continents take subordinate positions. They are enabled by commerce to procure from Europe and North America the manufactured goods which they require, and specialize in the production of various food supplies and raw materials for the means of purchasing these goods.
=373. Abolition of the slave trade.=—The description of the present world-organization of production, and of the exchange of wares to which it gives rise, belongs to the department of commercial geography. It is proper here, however, to call attention to some of the marked changes in the wares of trade which have taken place since 1800.
One ware which was, before 1800, of great commercial importance, and which yielded immense profits to those who dealt in it, has disappeared with the abolition of the slave trade by all civilized nations. Long before the abolition of slavery itself, humanity revolted against the horrors of the “middle passage,” and the protests took effective form about 1800; the states of Europe and America agreed, one after another, that the slave-trade under their flags, and for the supply of their territories, should cease.
=374. The great wares of commerce. Coal.=—For the purpose of a summary survey the most important wares of commerce before 1800 can be designated as belonging to the two classes, colonial products and textiles. We shall have to note, in ensuing sections, striking changes affecting both of these classes, and the addition to the important wares of commerce of two new classes, mineral products and foodstuffs.
Taking first the mineral products, and including coal with them, as common usage justifies us in doing, we find, at first sight, that this article takes a far lower rank among the modern wares than we should expect from its commanding importance in industrial life. There has been, it is true, a great growth in the coal trade, and considerable quantities are exported from England, Belgium, Germany, on occasion the United States, etc., for use in countries lacking coal mines, or at sea. There is an immense internal commerce in coal. In 1900 more than half of the tonnage carried on the railroads of the United States consisted of mining products; and of these coal certainly formed a very considerable, perhaps the major, part. Still coal does not rank among the chief wares of foreign trade.
=375. Metals and Manufactures.=—An explanation of the comparative insignificance of coal in foreign trade is found in its bulk. An active industrial people can compress the value of coal, as it were, by using it near the mines for the production and transformation of other materials. Coal is transmuted into iron and manufactures, and so loses its identity, though it remains still the real power behind the exports of that character.
Commerce in iron and steel, and the manufactures depending on them, has increased enormously in the course of the century, as the reader may readily suppose. Supplies of iron and machinery flow from the centers of production to the less advanced countries, and the simpler tools penetrate every nook and corner of the earth. Copper has grown greatly in importance, as its use for electrical appliances has extended, and now forms a considerable item in exchanges of countries like the United States and Germany.
=376. Petroleum.=—Nor is the new commercial significance of mineral products confined to the metals. In the last half century the trade in mineral oil (petroleum, “kerosene”) has become a necessary part of the world’s economy. One result of the great improvements in manufactures and transportation was a demand, from all sides, for more light. Artificial illumination was needed for the full utilization of machinery and means of transportation; and to provide light for the newspaper reading, study, and recreation to which people gave themselves in increasing numbers. The first half of the century witnessed many improvements: the invention of matches, the introduction of glass lamp-chimneys, the spread of gas lighting, and the use of new oils for illumination. No previous advance, however, compares in importance with the discovery that crude petroleum could be made the source of a cheap and efficient means of illumination. The development of the petroleum trade in the space of little more than a generation is a matter of common knowledge, and is readily explained by the importance of the service which it performs.
=377. The grain trade; slight development before 1800.=—Important and characteristic as the trade in mineral products has grown to be in the nineteenth century, it is still far from first place among the branches of the world’s commerce. The primacy belongs, without question, to the trade in foodstuffs, especially grain.
Before the development of the modern system of transportation commerce in foodstuffs concerned itself largely with the condiments rather than the aliments, with spices and seasoning rather than the substantial food staples. Even at a freight rate of 15 cents per ton-mile (and the expense of transportation on European roads before 1800 was certainly far above that), wheat at $1.50 a bushel would be limited to a trade-radius of 330 miles; the whole value of the wheat would be consumed in transporting it that distance. Transportation by sea was, of course, much less costly, and enabled limited amounts of food to be imported under favorable conditions. Still, food has to be grown on land, and often on land distant from any means of water carriage; and the countries of Europe were forced in general to a policy of self-sufficiency, raising the requisite supplies of food at home under conditions however unfavorable. We may appreciate the short space of time separating us from this state of affairs by noting that in France, even in 1817, people were dying of famine in Lorraine, while wheat was abundant in Brittany; the carriage of provisions from one province to the other quadrupled prices. In Russia, even later (Pskov, 1845), the same conditions prevailed.
=378. Extent and importance of the grain trade at present.=—Grain formed, therefore, one of the least considerable of the wares of foreign commerce before 1800. A French economist estimated the international trade in grain at 30 million bushels at most. From that figure, comparatively insignificant, the grain trade of the world had risen, even in 1887, to over 1,500 million bushels; grain formed then, in value, almost one tenth of the total of the wares of trade, and in importance far exceeded any other ware. The expense of transportation had undergone such a vast diminution that one day’s wages of a common laborer would pay for the carriage over a thousand miles of all the grain and meat which he needed for a year’s subsistence.
It would be interesting, if time permitted, to note the far-reaching social and political effects of this revolution. We must, however, confine ourselves to its economic aspect. The English people, to take the most striking example, depend for more than half of their food supply, perhaps two thirds of their wheat supply, on imports from abroad. It is said that in every month in the year wheat is harvested in some country, of the northern or of the southern hemisphere, for the English market; a Floating Cargoes List reported 163 vessels bound for England with cereals, at sea at one time. As formerly the citizens of London depended on the farmer of a nearby county for the supply of his daily bread, so now the inhabitants of England in general depend upon people in the Dakotas, in California, in the Argentine Republic, in Egypt, in India, or in Australia. The Englishman is enabled, by commerce, to share in the agricultural advantages of any and all those countries; he applies himself to his specialty and exchanges the product for his food.
=379. Commerce in other foodstuffs.=—In some respects even more striking, though on the whole of far less importance, has been the growth of foreign commerce in stock and meat. About 1800 the common way of marketing meat was to drive it to market on the hoof; the trip might consume a number of days, and the animal would arrive in poor condition and with weight diminished. For transportation to distant countries meat had to be preserved by pickling in brine. Fresh meat of good quality was a luxury, and the average consumption of meat was small. Modern progress has solved the problem of using the great grazing spaces of North and South America and Australia for the supply of distant peoples, in two ways. Improvements in transportation by land and sea have allowed the carriage of live-stock for thousands of miles, in good condition. The use of refrigerating appliances, especially artificial refrigeration by means of steam power, has permitted the carriage of dead meat the same distance without deterioration. Furthermore, the application of scientific principles to the preservation of meat has enabled supplies of that article to be utilized which would otherwise be wasted, and has contributed a new form of ware to modern trade. Other foodstuffs (fruit and fresh vegetables) have profited by similar advances in the means of transportation and preservation.
=380. The textiles; changes in relative importance.=—In this brief survey only two more classes of wares may be noted, the textiles, and colonial products. Trade in wares of both these classes has undergone a great development and important transformation in the course of the century, though it presents no such revolutionary changes as in the case of wares described above.
The textiles have continued to be among the most important wares of commerce. A population, advancing rapidly not only in numbers but in average purchasing power, has demanded constantly increasing supplies of clothing material. There has been, however, a noteworthy change in the kind of fabric demanded. Measuring by the weight of the raw material consumed, the English textiles about 1800 were composed as follows: over two fifths woolen, over two fifths linen, considerably less than one fifth cotton. Note now the change as shown by conditions about 1880: wool made up one fifth of the total, linen little more than one tenth, while cotton had risen to two thirds. For some purposes cotton fabrics are better than those of any other material, for other purposes they present a cheap and satisfactory substitute; and consequently they have been able to displace other textiles to a large extent.
=381. Commerce in raw materials for the textile manufacture.=—The rise in importance of cotton is partly, not entirely, responsible for a great change in the character of the textile trade. With the exception of silk, which has always, because of its high price, been of restricted use, the raw materials for the textiles had formerly been produced in the country of manufacture. England and the Netherlands, it is true, had begun before 1800 to import wool from Spain, but wool was then an object of internal rather than foreign trade, in general, and flax was raised for home consumption in practically all the European countries. The introduction of the cotton manufacture in Europe introduced a change, for in the case of this textile the raw material as well as the finished product was necessarily a ware of foreign trade. The past century has witnessed a vast increase in the commerce in raw cotton, and, moreover, the establishment of an important trade in raw wool. In 1850 Europe still supplied four fifths of the wool consumed, and has continued since that date to produce about the same quantity as then. The proportion which it contributes to the total supply has, however, declined to less than one third. There has been an immense increase in the production of wool in South America and Australia, and a less notable advance in the amounts furnished by Africa and Asia. At the present time, therefore, raw wool flows to Europe from all the other continents, and returns to them in the form of finished goods.
=382. Colonial products.=—The last class of wares to engage our attention will be that of the so-called colonial products, of which tea, coffee, and sugar are familiar examples. The wares received their name because, before 1800, Europe depended entirely on distant parts of the world for their supply. The reader will remember what an important part they played in the commerce of countries like England and France, in the modern period.
At least one ware of considerable commercial importance has been added to the list of colonial products in the course of the century. Rubber (using that word to cover also gutta-percha, an article with somewhat different qualities), counted for little in commerce before 1830. Soon after that time, however, it was regarded as “promising,” and the discovery of the vulcanizing process by Goodyear enabled manufacturers to gain the full benefit of its valuable qualities, elasticity, impermeability, etc. It is now an indispensable article in many applications, and though the production has risen to a hundred million pounds a year the demand for it has increased still more rapidly, and the price has risen.
The old wares have not only retained but also increased their importance as elements in human consumption. The people of Germany consumed, on an individual average, about 2 pounds of coffee in 1840, 6 pounds in 1900; 4 pounds of sugar in 1840, 30 pounds in 1900. Figures from other countries present, with some variations, the same growth in demand. The people of the United States now demand over 10 pounds of coffee per capita, and over 70 pounds of sugar.
=383. Rise of beet sugar, and effect on commerce.=—One of the colonial wares, sugar, demands special attention. The methods of production have undergone a complete change in the course of the century, and the former currents of trade in sugar have, in some cases, actually been reversed. Before 1800 people relied entirely for their sugar supply on the cane plantations of the colonies. It was known already, however, that beets contained a large percentage of sugar, and during the Napoleonic wars, when the Continent was closed in large part to colonial imports, an attempt was made to secure sugar from this native source of supply. The attempt was sufficiently successful to stimulate further efforts. With the aid of liberal protection from the governments a beet sugar industry was established on the Continent in the first half of the century. That industry supplied in 1860 one quarter of the total amount of the sugar of the world, in 1882 one half, in 1900 nearly two thirds.
The change in the method of manufacturing sugar has had far-reaching effects on commerce. Countries with cane plantations have seen the price of sugar fall under the increased output of European factories, equipped and operated with scientific accuracy; they have lost a large part of their former market; some of them have been almost ruined. England, which once made great profit by importing cane sugar and distributing it among the other European countries, now, on the contrary, goes to the Continent for the larger part of its sugar supply; and continental states like Germany and France export sugar instead of importing it.
=384. The European sugar bounty system.=—The reader should, however, note carefully that these changes were due in large part to a system of protection which had grown to formidable proportions. European governments have found in sugar a convenient object of taxation, but have desired at the same time to further the growth of the home sugar industry, and to secure for it a market in foreign countries. They have sought to combine the two objects by taxing the home consumer, and by remitting the tax and giving special premiums to the exporter. A pound of sugar cost far more in a country of Europe where it was manufactured, than in the country to which it was exported; every pound sold at home had to bear a tax, and every pound sent abroad received a premium which enabled it to be sold more cheaply. The orange marmalade industry, for which the town of Dundee is famous, could flourish in spite of the expense of transporting the fruit from Spain to Scotland, because sugar was artificially cheap in the English market. Such a condition of affairs was admitted to be unwholesome; in some aspects it became absurd. The burden of the bounty system became intolerable and the governments of the Continent agreed upon measures of reform, which went into effect in 1903.
QUESTIONS AND TOPICS
1. Make a brief written summary of the contents of preceding chapters under the heads of section 371.
2. On an outline map of Europe indicate areas corresponding to the sphere of commerce in different periods, with approximate dates.
3. Suppression of the slave trade. [Schuyler, Amer. diplomacy, N.Y., 1886, chap. 5.]
4. Recent slave trade in Africa. [Biography of a modern missionary or explorer.]
5. The coal trade at the close of the century. [Special Consular Report, No. 21, 1900, part 1, Foreign markets for American coal; U. S. Monthly Summary of Commerce and Finance, April, 1900, vol. 7, no. 10, pp. 2815-2927, or Sept., 1902, vol. 10, no. 3, pp. 663-757.]
6. On the wares of 375 and the following sections prepare reports, indicating, where it is possible, the following points: total amount of the world’s product; the leading countries (perhaps six), the share of each, and their relative advantages; the chief importing countries; peculiar characteristics of the trade. [Commercial geographies, encyclopedias.]
7. Report on one of the following topics:
(a) Development of the uses of petroleum.
(b) History of the production and transportation of petroleum.
(c) The Standard Oil Company.
[Martin, Coal; encyclopedias; Gilbert H. Montague, The rise and progress of the Standard Oil Company, N. Y., Harper, 1903, $1; Ida M. Tarbell, The History of the Standard Oil Company, N. Y., 1904.]
8. Indicate on an outline map the distance from your home to which wheat could profitably be carried by different means of transportation. [See below, sect. 387, for convenient statistics.]
9. Character and value of wheat. [Edgar, Story, chaps. 1, 2.]
10. Explain the great fluctuations in the export of wheat from the U. S. in the nineteenth century. [See statistics in U. S. Statistical Abstract.]
11. Wheat in modern commerce. [Edgar, Story, chap. 4.]
12. Provision trade of the world. [U. S. Monthly Summary, Feb., 1900, vol. 7, no. 8, pp. 2297-2347.]
13. American canning interests. [Judge in Depew, One hundred years, chap. 57.]
14. What amount does an American household, your own for instance, spend in a year for each of the chief textiles: cotton, wool, linen, silk?
15. The cotton trade of the United States and of the world. [See above, sect. 378, for suggestion of a simple mode of treating a large subject; the topic may be amplified as time permits. F. Wilkinson, Story of cotton, N. Y., Appleton, $1; S. J. Chapman, The cotton industry, London, 1905; George Bigwood, Cotton, London, 1918; statistics in U. S. Monthly Summary, vol. 7, no. 9, pp. 2543-2635.]
16. The wool trade. [John H. Clapham, The woolen industries, London, 1907; Frank Ormerod, Wool, London, 1918.]
17. Write a history of one of the following, as a ware of commerce in the nineteenth century: rubber, tea, coffee.
18. History of sugar as a commodity. [See the doctor’s dissertation by Ellen D. Ellis, Philadelphia, 1905.]
19. What amount of tea, coffee, and sugar does your household consume in a year? (Note that sugar is frequently purchased in preserves, cake, etc.)
20. History of beet sugar. [Encyclopedias; index to periodical literature; U. S. Monthly Summary, Jan., 1902, vol. 9, no. 7, pp. 2585-2763.]
21. Some effects of the system of sugar bounties. [Charles S. Parker, Free trade and cheap sugar, Fortnightly Review, 1898, 70: 44-53.]
22. The Brussels sugar conference. [Economic Journal, June, 1902, 12: 217 ff.; same, March, 1904, 14: 34 ff.; Quarterly Journal of Economics, Nov., 1902, 17: 1 ff., Contemporary Review, Jan., 1903, 83: 75.]
BIBLIOGRAPHY
As this chapter touches the field of commercial geography I refer, for bibliography and general reading, to the current manuals on that subject: C. C. Adams, Text-book, N. Y., Appleton; G. S. Chisholm, Handbook, N. Y., Longmans; Joseph Russell Smith, Industrial and commercial geography, N. Y., Holt.
References in quantity sufficient for ordinary students are given in the Questions and Topics above; further references will be given when the history of the commerce of specific countries is considered.
XXXIII. THE MODERN ORGANIZATION
=385. Qualities of modern commerce. Certainty.=—The changes in the instruments and objects of commerce, described in preceding chapters, have had far-reaching effects on commercial methods and organization, to which the reader is now asked to give his attention. As a partial summary of what has gone before, and a preparation for what is to follow, modern commerce may be said to have made great gains in four important qualities: certainty, regularity, economy, sensitiveness.
In former times a merchant who gave an order involving the transportation of goods over considerable distances took a leap in the dark. He was fortunate if he could estimate with some accuracy the expense of transportation; he was almost helpless in estimating the time that would be consumed. So dependent were men on wind and weather, heat and cold, war and peace, and all the manifold conditions of nature and man, that loss was frequent and delay was constant. The element of chance, great by nature, was heightened by man; carriers were emboldened to make the most of their opportunities and to extort from the merchant all that the difficulties of his position might force him to pay.
Contrast these conditions, as they existed in the period before 1800, with conditions at the present time. The modern system of transportation has been likened to clockwork. The modern merchant feels aggrieved if a telegram is delayed a few minutes, a train a few hours, a steamer a few days. His expectations, indeed, are seldom disappointed, and even then he is often informed of the probable duration of the delay, and is enabled to prepare for it. The rates of transportation now are relatively stable, and, for the most part, are a matter of public knowledge. We have not yet reached perfection in this respect, as is shown by the wide-spread complaints against American railroad managers, but we have approached nearer to it than would have been imagined possible a century ago.
=386. Regularity.=—Certainty brings with it regularity. Steamers which are sure to arrive within a certain period can be advertised to leave on certain days. Merchants and producers are encouraged to make their preparations, and the whole body of people is stimulated to new activity and efficiency. Consider the following example, which, however trivial in itself, is typical of the course of development in the nineteenth century. “Before the establishment of steam-vessels, the market at Cork was most irregularly supplied with eggs from the surrounding district; at certain seasons they were exceedingly abundant and cheap, but these seasons were sure to be followed by periods of scarcity and high prices, and at times it is said to have been difficult to purchase eggs at any price in the market. At the first opening of the improved channel of conveyance to England (the steamer), the residents of Cork had to complain of the constant high price of this and other articles of farm produce; but as a more extensive market was now permanently open to them, the farmers gave their attention to the rearing and keeping of poultry, and, at the present time (1838), eggs are procurable at all seasons in the market at Cork, not, it is true, at the extremely low rate at which they could formerly be sometimes bought, but still at much less than the average price of the year. A like result has followed the introduction of this great improvement in regard to the supply and cost of various other articles of produce.”
=387. Economy.=—As to the economy in the carriage of wares resulting from recent improvements much has already been said in other chapters, but the student may find in the following estimate, by a German author, a helpful summary. For $3 a hundred kilograms of wheat (220 pounds, a little less than 4 bushels) could be carried the following distances in kilometers (about five eights of a mile): on a common road 100, on a good road 400, on an early railroad 1,500, on a modern railroad 4,500, on an ocean steamer 25,000. There is little danger that the student will underestimate the advantage to commerce of this reduction in the cost of carriage, but he should note also the economy resulting from the speed and certainty of modern instruments of transportation. A considerable part of the world’s capital, a century ago, was locked up in goods in transit or in warehouse. These goods were of no use to anybody. Nowadays not only are goods put where they are wanted, they are put there with such speed and certainty that merchants do not need to keep a large stock on hand, and the stock in transit is relatively small. In the India trade, for instance, when a voyage around the Cape of Good Hope took a good part of a year, and the time of arrival could not be calculated within a month or two, India merchants had to keep great stocks to meet the varying demand. Now that steamers make the trip by the Suez Canal in a month, and the time of their arrival is exact to a day, dealers order goods as they are needed, and the great India warehouses have been rendered in large part useless for their original purpose.
=388. Sensitiveness.=—The modern commercial organization has been likened to clock work, because of its regularity. Carrying further this comparison, it may be said that it is like a delicate chronometer, in which every movement is attended with the minimum of friction. The power of modern commerce appears in the vast quantities of wares which are exchanged through its agency; its sensitiveness is shown by the readiness with which the currents of trade are turned or even reversed to suit the occasion. It has been said that commerce turns from one side of the globe to the other on a difference of a cent on a bushel of grain, a dollar on a ton of metal, a quarter of a cent a yard on a textile fabric, or a sixteenth of a cent on a pound of sugar. So sensitive has the commercial world become to every stimulus that it feels also every shock. When the McKinley tariff bill was passed in the United States, it is said that the next day several thousand workmen, employed in the manufacture of pearl buttons in a city of far-off Austria, were thrown out of work. Brief interruptions of commerce, by the outbreak of epidemic diseases, by storms or other natural phenomena, or by strikes of workers engaged in transportation, rouse serious anxiety. The sensitiveness of modern commerce may be shown, further, by the refinements to which the principle of the division of labor has been carried. It is said that in the leather manufacture skins are sometimes sent across the ocean four times, to effect economies in subordinate treatments.
=389. Importance of the telegraph, illustrated by conditions preceding its introduction.=—While the various changes in commerce indicated above can be ascribed largely to the use of steam in transportation, they would be inconceivable, in their present form, if the electric telegraph had not been extended over all lands and under all seas.
The importance of the telegraph in commerce can be illustrated by conditions in Shanghai about 1870, before the cable reached that port. The rate of foreign exchange, a decisive factor in all commercial calculations, was at that time determined by European advices brought by post steamers. The news brought by one steamer would make the Chinese tael equivalent to 7.25 francs; on the arrival of another steamer the rate would rise to 8.10. As merchants bought in taels and sold in francs or other European currency, their profits and losses were largely dependent on variations in the rate. Two mercantile houses of Shanghai had found it worth their while to invest a large sum in the construction of special vessels, which could be made like modern torpedo boats, practically all machinery and hence very fast, as the only cargo they had to carry was a single letter, bringing from Singapore or Hong-Kong the European news affecting the rate of exchange, many hours in advance of the regular steamer. The few merchants who enjoyed the benefit of this news service had, of course, a great advantage over their competitors, buying and selling with full knowledge of what the rate would be. With the introduction of the cable, however, all merchants shared alike in such information, and, furthermore, by the continuous communication thus established, the former violent fluctations in rates became a thing of the past.
=390. Services of the telegraph to the modern organization.=—Newspapers spread broadcast the market quotations which are carried by the telegraph to all parts of the world, and the farmer in the American West, the cotton grower in the South, or the sheep raiser in Australia, can learn with ease what prices his staple brings in the great markets and what price he can ask for it. At the centers of business the great merchants, in touch, by the post and telegraph, with both consumers and producers, study to apportion the supply so that it will reach those who stand most in need of it, and seek to regulate future production so that there may be neither waste nor want when the product is brought to market. The remarkable progress of Brazil in coffee production has been explained by a student of the subject as due in large part to the spread of the telegraph in South America and the laying of a cable to Pernambuco in 1874, bringing the country into communication with the world’s coffee markets.
The telegraph has, moreover, enabled commerce to dispense with a whole army of middlemen, commission merchants, and brokers, who were necessary under the old system, but who have now been released to find more useful employments. Merchants in the wool trade, for example, send their buyers to the countries of production on fast steamers, transmit their instructions by telegraph, and bring the wool directly to the country of consumption, cutting out entirely the middlemen of London, Antwerp, and Havre, who once controlled the trade. Before the first Atlantic cable was laid it cost about 3 per cent to get cotton through the hands of the commission merchant and broker; the cable did away with the old consignment system, and in a dozen years the charge was reduced to about 1 per cent.
=391. Functions of the merchant.=—I spoke above of the elimination of unnecessary middlemen. To many people all middlemen seem unnecessary, and fit only for elimination. These people regard as worthless drones all who are not engaged in the work of raising raw materials, of manufactures, or of transportation; they see no reason why a man who merely sits in an office, receives reports and writes letters, who perhaps rarely sees the wares he “handles,” should grow rich off society.
The defence of the middleman may be given in the words of an English writer, describing the important part which merchants play in marketing the great output of the British iron industry. “The merchant usually has a better knowledge of the conditions affecting different markets than the producer. He comes more directly in contact with the buyer; he knows better to whom credit can safely be given, and is prepared to risk credits that the manufacturer would often refuse; he is well posted in railway and shipping rates and conditions, understands the peculiarities, practices, and requirements of particular markets, and has all other necessary commercial information, including freights and tariff duties, at his fingers’ ends.” Surely the functions thus suggested are sufficiently important to keep specialists employed, with profit to society as well as to the individuals engaged.
=392. Growth in number and variety of the mercantile class.=—In fact, the class of middlemen, those who are occupied merely in the exchange of wares, has increased greatly in the course of the century. The great commercial machine runs now with such power and smoothness, only by the help of myriads of men who get their livelihood by tending it. In Prussia, for example, the number of wholesale merchants or firms increased twenty-fold in sixty years.
The change would lack a large part of its present significance if it affected only the number of middlemen. It has been a change in quality as well as quantity. The increase in business has furnished the opportunity for a redistribution of tasks, and has led to a specialization which was before impracticable. To be a jack of all trades nowadays one must be a man of supreme genius; to be master of one branch of trade is sufficient for the energy and the ambitions of the ordinary man. It pays a few men to take the position of Charles Broadway Rouse, to offer to buy anything and to sell everything. Most wholesale merchants are content to confine themselves to one branch of trade: lumber, iron, wool, leather, grain, etc. Most of these merchants, moreover, rely further on specialists to help them with certain parts of their business. They depend constantly on the banker, the speculator, the broker, the forwarder, the warehouseman, the commission merchant, and agents of many different kinds. It is impossible, in this book, to do more than suggest the complex commercial organization which has grown up in the course of the century. Only a few of the most prominent features can be treated in the following sections.
=393. Insurance and speculation.=—The practice of insurance has made us familiar with the means by which producers secure themselves against some of the risks of their business. A farmer can insure his growing crop against hail, a merchant can insure his stock against loss by fire, a shipowner can insure his vessel against loss at sea. For a small annual payment, which the producer can well spare, he secures himself against a loss which might prove ruinous, if it chanced to come to him. He gains relief from anxiety, strengthens his credit (he could not borrow on the security of uninsured goods), and secures that regularity of operation which is essential to the greatest efficiency.
So obvious are the advantages of insurance that every one accepts it as a benefit. We have now to see how the same service which is performed for the producer by the insurance company is performed for the merchant by the speculator. Among the greatest risks in commerce is that of price changes due to great events (wet seasons or dry seasons, war or peace, etc.) which the merchant can neither control nor foresee. A grain merchant, for instance, who has bought some excellent wheat in Dakota, has made advantageous arrangements for its transportation, and is confident of finding a ready sale to an English miller, may find the whole transaction results not in profit but in loss, if the level of wheat prices falls before his sale is accomplished, by reason, perhaps, of the unexpected yield of wheat in a distant country, or by the conclusion of a great war. Why does he not sell the wheat in advance to the miller, and so protect himself from this danger? He would simply be shifting the burden to shoulders still less able to bear it. The miller is a manufacturer, who needs to give all his thought to the technical details of his business, and who can ill afford to buy wheat when it is high, only to find when he comes to market the flour that it has dropped in price, in sympathy with a decline in wheat.
=394. Services of the speculator to commerce.=—The class of speculators has grown up in the course of the century, to assume such risks. It can do great harm to business by creating risks where none naturally existed, producing artificial scarcity by “corners,” etc.; this danger should not blind us to the benefits it confers when it confines itself to its legitimate business. Let us see how, in practice, this business of speculation serves commerce.
A merchant who has bought wheat or cotton in America, for sale in the Liverpool market, sells immediately an equal quantity for future delivery, at a time when he expects to have his ware ready for sale in England. It makes no difference to him then whether the general price of his ware goes up or down. If prices go up he will have to pay more to “cover” his sale of futures, but he will also get more for his real ware. If prices go down he may not be able to get as much for his real wheat or cotton as he expected, possibly not as much as he paid for it; but he will make up just the difference, by the low price at which he can cover. He renounces all chance at great gains, but also secures himself against great loss, and is glad to pay the speculator’s commission to attain this result. He makes his profit by the differences in the price of wheat or cotton not at different times, but in different places; reference to the section above, in which the description of the modern merchant was quoted, will suggest how he earns his living. In a manner similar to this many manufacturers (millers or cotton manufacturers) protect themselves against variations in the price of their raw material.
=395. Decline of the market and fair, and rise of the produce exchange.=—I spoke above of the regularity of modern commerce as one of its distinctive features. The gain in regularity shows itself notably in institutions like the market, the fair, and the exchange. The old system of market-days, under which country people came to town on stated days to display their wares and enable housewives to lay in a supply of provisions, has given place to a steady flow of products through city shops and market halls to the consumers. Fairs have lost their significance in modern countries, because the volume of trade is now so great, and the instruments of trade are so highly developed, that commerce has developed into one permanent fair. The great expositions, which began toward the close of the eighteenth century, but of which the London Exposition of 1851 (Crystal Palace) was the first of world-wide significance, seem to have continued to the present time the principle of periodical recurrence, but a tendency to permanence is to be noted even with respect to them. Many of these expositions have led to the establishment of museums of industry, art, and commerce, and the use of permanent expositions of models and samples has come to be a recognized means of furthering industry and commerce. Finally, the nineteenth century has witnessed the foundation of most of the modern produce exchanges, which have proved indispensable to the rapid development of commerce in the great staples. The experience of Hamburg is significant in this respect. The coffee trade of that port declined after 1882, when Havre adopted the system of dealings in futures, and did not recover until 1887, when Hamburg adopted the system also, and then enjoyed a rapid growth of the trade. These produce exchanges are to be found, with variations in the wares handled and in the system pursued, in all advanced countries. Germany, for instance, offers facilities for the characteristic trade of a produce exchange (including dealings in futures), in the following articles: wheat, rye, maize, oats, rye flour, crude alcohol, rape-seed oil, kerosene, cotton, coffee, raw sugar, granulated sugar, and carded wool.
=396. Contrast of the character of association in commerce and in manufactures or transportation.=—A previous section, describing the specialization of merchants in the nineteenth century, suggests the gain which commerce has made in the way of cooperation. The tendency, however, has been to split tasks up into small pieces, and to distribute these among individuals or small groups, rather than to associate great numbers of men under one management. We do not find in strictly commercial undertakings the tremendous aggregations of men and capital which have become characteristic of modern transportation and manufactures. Modern trusts, it is true, have invaded the field of commerce to a certain extent, and have effected some of their chief economies in improved methods of marketing their products. What the development may be along the line thus indicated is an interesting subject for speculation, but a subject which cannot be allowed to detain us here. Mercantile enterprises are still, for the most part, carried on by individuals, by partnerships, or by corporations in which the personal and local element is predominant.
=397. More efficient utilization of capital in modern trade.=—The middleman, therefore, cannot as a rule secure the capital which he needs for carrying on his business by offering securities for public subscription through the stock exchange. He seems, in this respect, at a disadvantage in comparison with the manufacturer, the railroad, or the steamship operator. He is, however, better off in at least two respects than his predecessors of an earlier time. First, he can do much more business with the same amount of capital than was possible under the old conditions. The great technical improvements have resulted in a much more rapid “turn-over” of capital, and a merchant now sells out and replenishes his stock far more rapidly than he could formerly do. The instance of the India trade, given in a section above, illustrates this fact. The “merchant princes” who once ruled this trade by their great capital have given place to many smaller merchants, who can make less capital suffice by its rapid turn-over.
=398. Benefit of banks to trade.=—Second, the deserving merchant can manage with a smaller capital than formerly, because he can borrow more easily and to much better advantage. The reader must be content with a summary of the results of the development of banking in the course of the century, for there is no space in which to treat the details of its history. Banks have followed business throughout the world. They have attracted the unused capital of the community until they control now a fund of enormous dimensions, available for mercantile loans. On the security of business paper (bills of exchange, bills of lading, drafts, notes, etc.), merchants secure the use of this capital, and find their means limited now only by the extent of their business. It is the function of the banker to judge of the soundness of this business, and to accord or withhold the use of the bank’s money according to the promise of the enterprise. Mistakes are made, of course, but they are comparatively rare because a mistake in either direction compromises the bank’s success. Special institutions, the commercial and credit agencies, have grown up since 1841, to aid bankers and merchants in this delicate task of judging the credit of individuals.
=399. Criticism of the present organization; crises.=—Of the general power and efficiency of the present organization there can be no question. It meets the supreme test of maintaining a population greater than in any previous period of the world’s history, on a scale of comfort formerly unknown. That it is perfect, however, no sensible man believes. We cannot discuss the many criticisms directed against it from various points of view, but must not omit the consideration of one confessed weakness. The organization is wonderfully efficient in normal times, but it is unsteady. It passes, at intervals, through periods of feverish activity, culminating in a crisis and followed by dull stagnation. A curve showing the course of the world’s trade during the century would not present a steady rise, but a series of waves, with distinctly marked crest and trough. There is a waste of labor and capital in all periods of a crisis. In the good times men strain themselves to build railroads where they are not needed, or to make machines for which there is no profitable use. Sooner or later they come to their senses with a shock, and realize that they have been wasting their time; then they are as depressed as they formerly were sanguine, and are too timid for a time to make good use of the capital which the crisis has left on their hands.
=400. Crises before 1850.=—The tendency of the commercial organization to these interruptions in its regularity of operation, which was apparent in advanced countries before 1800, has grown more marked in the nineteenth century; and, with the spread of the modern organization, crises now affect the whole world. Crises have occurred at intervals of about eleven years since 1800. A crisis marked the end of the Napoleonic wars in 1815. Another followed in 1825, occasioned, in England, by speculation in banks, turnpikes, and canals, and by unwise investments in South America. Commerce recovered from its depression only to decline again after the crisis of 1836-39, which was felt with particular severity in the United States in 1837. The last of the crises in the first half of the century, and the first crisis for which railroad speculation can be held largely responsible, followed in 1847, and was the more severe on the Continent because it coincided with a period of political revolution.
=401. Crises since 1850.=—Toward the middle of the century the new instruments of steam transportation began to work their great changes. At just this time, moreover, the discovery of gold in California (1848) and in Australia (1851) led to an immense increase in the world’s stock of gold, which is said to have doubled in little more than ten years. The results, inflation and speculation, were as marked as though the new money had been of paper, and a period of over-trading ceased only with the outbreak of the crisis of 1857, which spread quickly from the United States to England and thence to the Continent.
A longer period than usual intervened, broken only by local disturbances (failure of a great English banking firm in 1866, “Black Friday” in the United States, 1869). The crisis of 1873 was, perhaps, on this account, more serious; it led to a depression of many years, affecting all branches of trade, and even distant countries like Australia and South America. Beginning, this time, on the Continent, where the outcome of the Franco-Prussian war and the payment of the great war indemnity had led to unprecedented speculation, it found a ready field in the United States, where there had been an active speculation in land and stocks, and proved to be the greatest international crisis which the world has known. As though the air had been cleared by this great storm, succeeding disturbances have been far more restricted in their action. A banking crisis in France in 1882 and a railroad crisis in the United States in 1884 were the chief events of the next period of danger; and in more recent times have followed the American currency crisis of 1893, and the German industrial crisis of 1901.
=402. Rise in the price level since 1896.=—Toward the close of the nineteenth century a change became apparent in the very basis of business, namely in the world’s money in which prices are expressed. The prices of different commodities never rise or fall exactly in unison, but it is possible by statistics to show the change in the average of prices or the price level, as it is called; and a study of recent statistics shows a rise in prices so extensive and so rapid as to make it clearly a topic deserving serious attention from the student of commercial development.
Taking for the basis of comparison the average of prices in the decade 1890-1899, the price of staple raw commodities in the United States had risen in 1910 by almost 40%; or, comparing 1910 with 1896, when prices were lowest, by 66.3%, almost two-thirds. The change has been less marked in manufactured wares, for it has been offset to a certain extent by improvements in methods of production, but still it is very great: nearly 30% compared with the decade before 1900, and over 40% compared with 1896.
=403. Effects of increase in the world’s gold production.=—Countless factors have contributed to this result, in one way or another, but economists are generally agreed that the one cause overshadowing all others is the increase in the world’s output of gold. The metal which is the basis of the world’s currency system has become so plentiful that it has cheapened; and the purchaser of wares has now to give more gold for them, that is, prices have risen.
From the time of the Californian and the Australian gold discoveries, for almost half a century, the world’s annual gold output was curiously constant, at a figure somewhat over one hundred million dollars. The discovery of new gold fields and the perfection of new processes effected a revolution. The output of 1896 first exceeded the figure of two hundred million, in 1899 it passed the mark of three hundred, in 1906 and in succeeding years past 1910 it never fell below four hundred million.
While some classes in the community lose in a period of rising prices, particularly wage-earners and bond-holders whose income rises slowly in comparison with the increase in the cost of living, the speculators, merchants and manufacturers find in such a period a great opportunity to make money and business rapidly expands. The following pages will describe a noteworthy development of industry and trade in the period immediately preceding the World War; and the reader will realize, even when no reference is made to it, that the change in the price level has been an important factor in the development. One caution, however, seems at this point particularly advisable. Many of the statistics following, in which the development is pictured, are given in terms of money values. These figures grow with the rise in prices, even when there is no change in the physical amount of business transacted, and are an accurate index of the volume of trade only when they are reduced to an extent corresponding with the rise of prices.
QUESTIONS AND TOPICS
1. In the example given, sect. 386, distinguish the producer, the transporter, and the consumer. Show how each one of these gained by the advance in organization. Did any one lose by it?
2. Of what wares are large amounts still kept in storehouses, and why? [Cf. U. S. Monthly Summary, Oct., 1903, vol. 11. no. 4, pp. 1033-1095, Warehousing industry in U. S.]
3. Study, from newspaper accounts, the effect of an interruption of commerce by one of the causes suggested in the text.
4. Distinguishing producer, middleman, and consumer, show what has been the effect on each of the introduction of the telegraph.
5. Service of the postal system to commerce. [James in Depew, One hund. years, chap. 5.]
6. Development of the modern system of advertising. [Ayer in Depew, One hund. years, chap. 13.]
7. Nobody complains because the farmer who grows wheat or wool does not also make flour or cloth. Is there any good reason why the man who makes the flour or cloth should also market it?
8. Study the biography of some great merchant, and find out whether he made money out of people, or made money for people and kept only a share for himself. [James Burnley, Millionaires and kings of enterprise, Lond. and Phila., 1901; Fortunes made in business, London, 1884, 2 vols.]
9. Make a genealogical chart, showing how, from a single ancestor (the medieval artisan) the many specialists in modern manufactures and trade have proceeded. [Small and Vincent, Introduction to Study of society, contains a chart of this character, which may be used for guidance. See the U. S. Census or a business directory for suggestions of the present organization.]
10. If you have personal knowledge of some trade or manufacture, write a report on the development of its organization and the resulting specialization.
11. Write a report on the advantages to society of (a) fire insurance, or (b) speculation. [Hadley, Economics, chap. 4, or other manual of economics; H. C. Emery, Speculation on the stock and produce exchanges of the United States, N. Y., 1896, Columbia Studies, 7: 283-512.]
12. Write the history of any institution for periodical trade, like a market or fair, which has ever existed in your neighborhood. Has it any commercial importance at present? [Residents of the original thirteen colonies and of the older States will find in local histories and early legislation much information on this subject.]
13. The London exposition of 1851. [McCarthy, Hist., vol. 1, chap. 21.]
14. Write the history of some produce exchange. [Emery, Speculation; local history and biography, reports of the exchange.]
15. Note, in connection with sect. 394, that the industrial organization has become so complex in recent times that this book cannot follow out topics which were treated in earlier periods. For the importance of capital and of large scale enterprise at present see the books on economics, on railroads, trusts, etc.
16. Advantages of the modern department store. [Scribner’s Magazine, 1897, vol. 21, p. 4 ff.; restrictions of space forbid the treatment of the organization of retail trade in the text, but many interesting and fruitful topics may be found in studying it.]
17. The business of a modern bank. [Scribner’s Magazine, 1897, vol. 21, p. 575 ff.; manuals on economics and banking.]
18. The benefits of commercial and credit agencies. [Question bankers and business men; I find no historical treatment of the topic available in English.]
19. Character and course of a commercial crisis. [Manuals of economics.]
20. Write the history of some particular crisis. [Bibliography in Jones, Bowker and Iles, and Palgrave; consult narrative histories of the period, and periodical articles.]
21. Effect of the gold discoveries about 1850. [Rand, Ec. hist., chap. 10, from Cairnes.]
BIBLIOGRAPHY
This chapter touches so closely the field of economics that it seems unnecessary to duplicate the references which are supplied in abundance by the manuals on that subject. See for bibliography Bowker and Iles, and Bullock’s Introduction to the Study of Economics, N. Y., 1897. A full classified bibliography of commercial crises will be found in Edward D. Jones, Economic crises, N. Y., Macmillan, 1900, pp. 225-245. The book which covers most fully the topics treated here is Wells, **Recent econ. changes. References on special topics are given above.