Chapter XCIII: Section 63: of this latter act reads: 'For all purposes (8)

As English commerce slowly freed itself from foreign hands, it
fell under the control of monopolies at home. The merchants of
the Middle Ages, in England and elsewhere, had formed
themselves into societies, or guilds, just as the artisans and
mechanics in different trades had done. Such associations had
originally grown out of the disorderly state of the times,
when government and law were weak, and when men who had common
interests were forced to unite to protect themselves, and to
establish customs and rules for regulating their business
affairs. But the guilds almost always became, in time,
oppressive monopolies, each acquiring, in its own department
of business, such exclusive rights and privileges as
practically shut out from that business all persons not
admitted to its membership. This occurred among the merchants,
as it did elsewhere, and English commerce grew up under the
control of various societies of "Merchant Adventurers," as
they were called.

See MERCHANT ADVENTURERS (page 2153).

The disputes and contests of these companies, at home and
abroad, and their suppression of individual enterprise, appear
to have hindered the growth of English commerce for a long
period. But it did grow steadily, notwithstanding, and through
the reigns of Henry VIII. and Elizabeth, the number of English
ships set afloat and of English merchants trading abroad, was
rapidly multiplied. Meantime the English people gained skill
in weaving, dyeing and other arts, and were fast extending the
manufacture at home of their own famous Wool. This, in turn,
made the sheep farming more profitable, and so much land was
taken for that purpose that other products were diminished and
most articles of food rose in price. That occurrence caused
grave anxiety, and the meddling statesmen of the time, who
thought that nothing could go well if their wisdom did not
regulate it by law (as too many meddling statesmen think yet)
began to frame acts of Parliament which directed how farming
lands should be managed and how many sheep a single farmer
should be permitted to own. The same kind of statesmanship
took alarm at the spread of weaving, in a small way, among
industrious villagers and country people, who set up looms and
made and sold cloth, outside of the guilds of the town
weavers. So the complaints of the latter were listened to, and
Parliament forbade weaving to be done outside of certain
towns, except for home use in the family of the weaver. There
was much of that sort of legislation during Tudor times, and
the industry and enterprise of the country had to struggle
long and hard for freedom to fairly exercise themselves. But
in spite of meddling statesmen and tyrannical monopolies, the
people went all from year to year, learning more, doing more,
producing more, wanting more, buying and selling more, and
living in a better way. After about 1511, there appears to
have been a considerable direct trade growing up between
England and the countries of the eastern Mediterranean (the
Levant), and consuls, to look after the rights and interests
of English merchants, began to be appointed, at Candia, and
elsewhere, as early as 1530. The voyage from London to the
Levant and return then occupied from eleven months to a year.
About 1535 the English made their appearance as traders on the
Guinea coast of West Africa, disputing the exclusive rights
which the Portuguese claimed there, and in 1537 they opened
trade with the Moors of the Barbary coast, in northern Africa.
In 1553 a chartered company of London merchants was formed
with the object of exploring for a northeastern passage to
China, around Europe, through the Arctic seas, as a means of
dividing the trade of the East with the Portuguese, who
controlled the southern route, around Africa. This is believed
to have been the first joint stock corporation of shareholders
that was organized in England. Sebastian Cabot, then "Grand
Pilot of England," was at the head of it. The northwestern
passage was not found, but the company opened a trade with
Russia which proved to be exceedingly valuable. Accepting
this, in lieu of the China trade which it could not reach, it
became, as the Russia Company, a rich and powerful
corporation. The success of the Russia Company stimulated the
adventurous disposition of the English people and set other
enterprises in motion. But still more energy was roused by the
hostility of national feeling toward Spain. The destruction of
the Armada broke the Spanish naval power and made the English
bold. They began to navigate the sea from that time with
intent to become its masters, though the Dutch were still
superior to them in maritime strength and experience. During
the reign of Elizabeth there rose a new race of Vikings, very
much like the old Norse heroes of the sea, and pursuing a very
similar career.
{3718}
The most daring and most famous among them, such as Grenville,
Drake and Hawkins, were more than half pirates, and their
voyages were chiefly expeditions for plunder, directed against
the Spaniards and Portuguese. The trade which they first gave
attention to was the trade in negro slaves. But those
piratical adventurers of the 16th century made England the
"mistress of the seas." They trained for her a body of sailors
who were able in time to more than cope with the Dutch, and
they opened the newly known regions of the world for her
merchants and colonists to spread over them. Before the end of
the 17th century, the English had become the foremost power in
the western world and were making the most of its
opportunities for production and trade. Meantime they were
pushing their way with equal energy in the East. On the last
day of the year 1600 the "Company of Merchants of London
trading into the East Indies," which became afterwards so
great and famous as the "East India Company" of England, was
chartered by the Queen. The Company sent out its first fleet
of five vessels in 1601. The expedition returned, after an
absence of two years and seven months, richly laden, in part
with pepper from Sumatra and in part with the spoils of a
Portuguese ship which it had captured in the straits of
Malacca. It had settled a trading agency, or factory, at
Bantam—and that was the beginning of the vast empire which
England now rules in the East.

See INDIA: A. D. 1600-1702 (page 1709).

COMMERCE: MODERN: The English:
17-18th Centuries.
The Colonial or Sole Market Commercial System.

"The doctrine that the commercial prosperity of a country
depends on the creation, maintenance, and extension of a sole
market for its products and for its supplies, was prevalent
from the discovery of the New World and the Cape Passage down
to the war of American Independence. This was the principal
object of Borgia's Bulls. This was what animated the Dutch, in
their successful, in the end too successful, struggle, after a
monopoly of the Spice islands. This was the motive which led
to the charters of the Russian Company, the Levant Company,
the East India Company, the Turkey Company, the Hudson's Bay
Company, in England. The theory was organized in the colonial
system, which Adam Smith examined, attacked, and as far as
argument could go, demolished in his great work. But the dream
of a sole market is still possessing the Germans and the
French. … The early wars of Europe were wars of conquest. …
After them came the wars of religion, from the outbreak of the
Insurrection in the Low Countries, and the civil wars in
France, down to the Peace of Westphalia in the middle of the
17th century. From that day to our own, European wars have
been waged on behalf of the balance of power, the principal
mischief-maker in the contest being France. The English, the
French, and the Dutch were the competitors in the wars for a
sole market. But Holland was practically ruined at the peace
of Aix-la-Chapelle, and France was stripped … of her colonies
at the peace of Paris, and England became not only the
principal maritime, but the principal manufacturing and
mercantile country in the world. As regards English trade,
however, though India was an outlet to some extent for English
goods, its trade was in the hands of a chartered company, whom
the Seven Years' War had left in serious straits. The most
important sole market which Great Britain had acquired by her
wars was the seaboard of North America. To support the
finances of the chartered company, the British Parliament
determined on taxing the inhabitants of her sole market, and
the result as you know was the war of American Independence. …
The colonial or sole-market system was based on a strict
reciprocity. The English Government admitted colonial produce
into the English markets at differential duties, or prohibited
the produce of foreign nations and foreign colonies
altogether. The Colonies were not only the customers of
English manufacturers only, to the absolute exclusion of
foreign manufactures, but were prohibited from undertaking
those manufactures themselves. The English Government adopted
with their colonies the policy which they adopted with Irish
manufactures, which they also prohibited, but with this
difference, that they disabled the Irish from having any trade
whatever with England, with the Colonies, and with foreign
countries. They wished to extinguish, with one exception,
every Irish product, and to constitute themselves the sole
manufacturers and shopkeepers for the Irish. They allowed only
the linen manufacture of Ulster. The Irish were to be, with
this exception, agriculturists only, but they were to be
disabled from selling their agricultural produce in England,
or elsewhere. They were practically denied the right of trade.
… It was the doctrine of the sole market in its most
exaggerated form. … The colonial system, under which
advantages were secured to the colonial producer by giving him
a preferred market in Great Britain, while the colonist was
debarred from engaging in manufactures, was a selfish one on
the part of the English merchants and manufacturers. It gave
the colonist a sole market, it is true. But it does not follow
that a sole market is a high market. On the contrary, it is
probable that the offer of a sole market is intended to secure
a low market. The Virginian planter sent the whole of his
tobacco to England. The English trader re-exported it to other
countries, say Holland or Germany. It may be presumed that he
made a profit on the original consignment, and on the
re-exportation, or he would not have undertaken the business.
… The colonial system did not preclude the plantations from
sending, under the strict conditions of the Navigation Act,
certain kinds of produce to other countries than England.
These were called non-enumerated commodities, the principal
being corn, timber, salted provisions, fish, sugar, and rum.
There was a reason for this, which was to be found in the
fiscal system of England. We did not want colonial corn, for
there were duties on corn, levied in the interest of the
landlords, nor colonial timber, salted meat and salted fish,
for the home produce of these articles were similarly
assisted. Sugar and rum were allowed to be exported, for the
owners of the plantations in the Leeward isles were chiefly
absentee English proprietors, who had already a monopoly of
English supply, and were powerful enough in Parliament to get
an extended market elsewhere. But in 1769, just before the
troubles broke out with the American plantations, an Act was
passed, disabling the colonists from sending even the
non-enumerated commodities to any country north of Cape
Finisterre, in Northern Spain. … The enumerated goods, and
there was a long list of them, could be exported to Great
Britain only. They consisted, as Adam Smith says, of what
could not be produced in this country, and what could be
produced in great quantity in the Colonies."

_J. E. T. Rogers,
The Economic Interpretation of History,
lecture 15._

{3719}

COMMERCE: MODERN: The Americans:
Colonial Trade.

"We are a nation of land-traffickers, but our ancestors in the
colonies traded and traveled almost entirely by water. There
were but twelve miles of land-carriage in all the province of
New York; beyond Albany the Indian trade was carried on by
'three-' or 'four-handed batteaus,' sharp at both ends, like
the Adirondack boat of to-day. Yachts, with bottoms of black
oak and sides of red cedar, brought wheat in bulk and peltries
down the Hudson; other craft carried on the domestic trade of
New York town with the shores of Long Island, Staten Island,
and the little ports beyond the Kill von Kull. … The first
regular wagon-carriage from the Connecticut River to Boston
did not begin until 1697; Massachusetts had then been settled
seventy years. The flat-bottomed boat, which has since played
so important a part in the trade of the Ohio and the
Mississippi, and whose form was probably suggested by that of
the 'west country barges' of England, appears to have been
used for floating produce down the Delaware before 1685. In
the Chesapeake colonies, until late in the provincial period,
there were almost no roads but the numerous bays and
water-courses, and almost no vehicles but canoes, row-boats,
pinnaces and barks. Places of resort for worship or business
were usually near the waterside. … But of all means of travel
or trade the Indian canoe was the chief. … Roads in the
colonies were hardly ever laid out, but were left where Indian
trail or chance cart-track in the woods had marked them. …
From England, along with bad roads, the colonists brought the
pack-horse which, in Devon and Cornwall, at the close of the
last century, still did the carrying, even of building-stones
and cord-wood. Most of the inland traffic of the colonial
period was done by packing. … The Germans, whose ancestors had
four-wheeled vehicles in the days of Julius Cæsar, made good
roads wherever they planted themselves. While their English
neighbors were content to travel on horseback and to ford and
swim streams, the Salzburgers in Georgia began by opening a
wagon-road twelve miles long, with seven bridges, 'which
surprised the English mightily.' Pennsylvania, the home of the
Germans, alone of the colonies built good straight roads; and
the facility which these afforded to ten thousand
freight-wagons was the main advantage that gave Philadelphia
the final preeminence among the colonial sea-ports, and made
Lancaster the only considerable inland mart In North America.
… Proximity to the wampum-making savages at one end of Hudson
River navigation and to the beaver-catchers at the other made
New York the chief seat of the fur trade. Wagon-roads, soil,
climate, and an industrious people made Philadelphia the
principal center of the traffic in bread and meat. The
never-ending line of convenient shore that bordered the
peninsulas of Maryland and Virginia, and gave a good
landing-place at every man's door, with a tobacco currency,
rendered it difficult to build towns or develop trade among
the easy-going planters of the Chesapeake and Albemarle
regions. A different coast-line, and rivers less convenient,
made Charleston the rich and urbane commercial and social
center of southern Carolina. Until about 1750 Boston was the
leading sea-port, and its long wharf, 2,000 feet in length
with warehouses on one side of it, was the New World wonder of
travelers. Five or six hundred vessels annually cleared out of
Boston in the middle of the 18th century for the foreign trade
alone, and the city contained between twenty and thirty
thousand people at the outbreak of the Revolution. But
Newport, with its thirty distilleries to make rum of the
molasses brought from the islands, and its seventeen sperm-oil
and candle factories to work up the results of the whaling
industry, had nearly half as many ships in foreign trade as
Boston, and three or four hundred craft of all sorts in the
coast-wise carrying trade. He was thought a bold prophet who
said then that 'New York might one day equal Newport'; for
about 1750 New York sent forth fewer ships than Newport, and
not half so many as Boston. … But Philadelphia—planted late in
the 17th century—outstripped all rivals, and for the last
twenty years of the colonial period was the chief port of
North America. … The imports and exports of the two tobacco
colonies together were far larger than those of Philadelphia,
but their profits were far less."

_E. Eggleston,
Commerce in the Colonies
(Century, June, 1884)._

COMMERCE: MODERN: The English:
18-19th Centuries.
Rising prosperity and commercial supremacy.
Successful War, Free Trade and Steam Power.

"If we look at the state of the European powers after the
conclusion of the Seven Years' War in 1763, we shall see how
favourable our position then was. In the first place, England
had seriously crippled her commercial rival, France, both in
her Indian and American possessions, and thereby had gained
extensive colonial territories which afforded a ready market
for British goods. Spain, which had been allied with France,
had lost at the same time her position as the commercial rival
of England in trade with the New World. Germany had for some
time ceased to be a formidable competitor, and was now being
ravaged by internal conflicts between the reigning houses of
Austria and Prussia. Holland, which had once been England's
most serious rival—especially in foreign commerce—was at this
time in a similar condition, and had greatly declined from the
prosperity of the 16th and 17th centuries. Hence England alone
had the chance of 'the universal empire of the sole market.'
The supply of this market was in the hands of English
manufacturers and English workmen, so that the great
inventions which came into operation after 1763 were thus at
once called into active employment, and our mills and mines
were able to produce wealth as fast as they could work,
without fear of foreign competition. It is not surprising,
therefore, to find that in the ten years, from 1782 to 1792,
our entire foreign trade was nearly doubled, the exact figures
being:
1782, imports £10,341,628, exports £13,009,458;
1792, Imports £19,659,358, exports £24,905,200.
And this remarkable progress was still kept up even during the
great continental wars which were caused by the French
Revolution, and which lasted for almost a quarter of a
century. …
{3720}
In spite of the almost entire loss of our trade in some
directions, English commerce improved in others; and, in fact,
any loss was more than counterbalanced by an increase in
regard to the (now independent) United States, Russia, Venice,
Germany, and Northern Europe, as well as with the West and
East Indian colonies, both British and foreign. In fact, many
of the countries whom France had compelled to become our
enemies found themselves unable to do without British
manufactures, especially as their own industries were
suffering from the warfare that was going on on the Continent,
and therefore had to find means to procure our goods. … The
close of the 25 years of continental war (1815) is sometimes
taken as being the date when the modern system of commerce may
be said to have had its beginning. Up to that time, although
great changes and advances had been made, the spirit of
monopoly and the general restrictive policy which
characterised previous centuries, were still, to some extent,
in force. But not very long after the peace that was won by
the battle of Waterloo, a remarkable change was made in the
commercial policy of England. … We now come to the beginnings
of freedom of trade."

_H. de B. Gibbins,
British Commerce and Colonies,
pages 91-102._

"When the wars of the French Revolution began, the foundations
of a great empire had already been broadly laid; and when it
ended, England stood out as a power which had grown greater in
the struggle. … Dutchman, Dane, and Spaniard, Frenchman and
Venetian, all ancient competitors of England, fell before her;
and, when the sword was sheathed in 1815, it was no
exaggerated boast to call her mistress of the seas. These
facts should never be lost sight of in any consideration of
the causes which have led us to where we now are. Without
these preparatory steps, both in domestic industries and in
foreign wars and conquests, England would not, with all her
material advantages, have been so entirely the gainer by the
progress of the last fifty years as she has so far proved to
be. … There is the more need to remember this because the time
immediately following the war was one of severe domestic
suffering, and of much retrograde legislation, conceived with
a view to, if possible, lessen that suffering. … The worst of
all the laws which then restricted trade were those relating
to the exports and imports of corn, which the younger men of
to-day have well-nigh forgotten. … It was not till after long
years of agitation by John Bright, Richard Cobden, and other
leaders of the Anti-Corn Law League, that the landed party
gave way sullenly, and assented, amid the most gloomy
predictions of impending ruin, to the repeal of the sliding
scale altogether, and the virtual abolition of all corn laws
by the substitution of a fixed duty of 1 s. per quarter. Thus
recently was one of the most oppressive pieces of fiscal
legislation that man could have conceived withdrawn; and not
until 1849, when that law came into force, could the
industries of the country be said to be anything like
unfettered. Yet twenty years more passed before this shilling
duty—the last rag of protection—was itself flung aside, and
the import of corn became perfectly free. … But many other
changes had in the meantime taken place, all tending more and
more to throw off the shackles of trade. … As late as 1840 our
customs tariff was described in the report of a committee of
the House of Commons as 'presenting neither congruity nor
unity of purpose;' as 'often aiming at incompatible ends,'
seeking both to produce revenue and to protect interests in
ways incompatible with each other. There were no fewer than
1,150 different rates of duty chargeable on imported articles,
… and the committee gave a list of 862 of such articles which
were subject to duty, seventeen of which then produced 94 per
cent. of a revenue amounting to £23,000,000. … The present
customs tariff contains less than two dozen articles all told,
and including those on which duty is imposed to countervail
the excise charges on internal products. The ordinary import
articles on which duty is charged number only seven. … But
there is yet another hindrance the removal of which has to be
noticed, and which, till removed, cramped England very
seriously, viz. the navigation laws and the great trade
monopoly of the East India Company. … It took longer time … to
accomplish the complete deliverance of our mercantile marine
from the baneful influence of 'protective' jealousy than to
accomplish any other great free-trade reform. A tentative
effort to lessen the consequences of confining the carrying
trade of England to English ships was made in 1825 by Mr.
Huskisson; but it was not till 1854 that complete free trade
on the sea was granted by the abolition of any restriction as
to the nationality of vessels engaged in the coasting trade of
the kingdom. … Here, then, we have noted briefly the various
steps and leading characteristics of the commercial reforms
which, in this country, either paved the way for or secured
the benefit of the great outburst of enterprise and influx of
wealth which began in the second quarter of the present
century. These various reforms constitute, so to say, the
negative side of the modern commercial prosperity which this
country built upon the foundations of her world-wide empire;
and, in order to get a complete outline of the position which
we at present occupy, we must now revert briefly to the
positive side of the subject; we must find out where the great
modern wealth has come from, and on what it has been based.
Freedom of trade no doubt did much to call wealth and
enterprise into being; but in what did this wealth consist?
Happily the leading features are not difficult to trace.
Although the foundations of the great manufacturing industries
of this country lie far back in the past, their development,
like the growth of free-trade principles, is quite modern, and
dates in reality from the day when George Stephenson won the
competition at Liverpool with his locomotive 'the Rocket,'
settling thereby the question of railroad travelling by steam
beyond dispute. The mere stimulus to all kinds of mining and
manufacturing industries which this victory and the subsequent
railway operations gave, was itself enough to cause the trade
of this country to press forward by 'leaps and bounds.' Since
November 1830, it may be said to have done so; and the mere
fact that England was the originator of the railway systems of
the world, and that she contained within herself almost
boundless materials wherewith to supply those systems, would
itself suffice to explain the pre-eminence which from that day
to this has been unquestionably hers.
{3721}
The great natural resources of the country were first employed
in supplying the materials for home development, and then
gradually the wealth thus acquired by digging in the bowels of
the earth was utilised in tempting or leading other nations
into a career of 'progress' similar to our own. In spite of
the many losses which individuals suffered in the early days
of this progress, the nation grew steadily richer and its
stores of realised wealth increased with every new enterprise
almost that it took up. … Each year the realised wealth of the
one before told, as it were, in swelling the working power of
the nation, and in enlarging the business capacities and scope
of its credit. … Side by side with the increased produce of
the country, the increased manufactures, and the increasing
wealth, there were growing up facilities for
intercommunication with all parts of the world, and with that
an increasing tendency to emigration. The home hives were
constantly throwing off young swarms, which, settling now in
America, now in Australia, now in Africa, became so many new
centres of demand, so many links in the trade chain that we
had bound round the world."

_A. J. Wilson,
British Trade
(Fraser's Magazine, September, 1876),
pages 271-277._

"The almost unlimited expansion which becomes marked about
1850 and culminates in 1873, has been pointed to by many
different people as proof of the great effect of different
measures or inventions; as a matter of fact, it was due to no
one cause, but was rather the result of multitudinous
discoveries and events, acting and reacting on each other.
Perhaps the following list of dates shows this most clearly;—

Opening of first English railway, 1830;
Wheatstone's telegraph, 1837;
first ocean steamer, 1838;
settlement in New Zealand, 1840;
reduction of duties on raw materials, 1842;
repeal of Corn Laws, 1846;
commercial treaty with France, 1860.

Here are seven events of widely different natures, each of
which must have had its effect in the period under
consideration, and it would be useless, even if it were
possible, to weigh the separate result of each. We cannot
estimate, we can obtain no criterion of the vast effects of
the adoption of Free Trade. Three things, however, are clear;—
First, that till the suffocating restrictions were removed,
trade could not expand; when exports were prohibited, imports
could not be plentiful; when imports were taxed, the demand at
enhanced prices could not be great. Secondly, if every
restriction was removed from every branch of trade, there
would be no increase without natural causes of manufacture and
demand, no increased demand without a cheapening or
improvement of supply; that, in fact, Free Trade is the
method, not the source, of commerce, and that the claim of
this increase as the direct result of freedom and a proof of
its expediency is an inaccurate exaggeration. Thirdly, that
the date of the marked commencement of the expansion coincides
exactly with the reductions and abolitions of duties, pointing
to the fact, borne out by all concurrent events, that the
adoption of Free Trade was the opening of the valve which
allowed the forces of commerce full play. … It was in the
trades of comparatively recent establishment, in England
especially, that there were immense outputs (of cotton goods
and machinery, for instance), in great excess of the home
demand; and this could only pay if the foreign demand grew in
proportion to the growing efficiency; that is to say, our
newer industries became the most important, and were marked as
our division of international labour. The foreign demand,
indeed, for our manufactures and our machines was
extraordinary. Now, every country is trying to rival our
goods, and each to produce for herself the manufactures she
requires; then, rivalry was out of the question. … On every
side new markets were opened; old trades were increased, new
developed. The railways built with our materials opened up
districts hitherto inaccessible; this acted as a fresh
stimulus to our manufacturers—more capital was forthcoming,
and more railways were built. Not only were countries, with
which we had already established some trade, brought nearer
and in closer relation, but new countries were discovered.
Australia and New Zealand were ready to take our surplus
population, and were not behindhand in the new system of
development. Our older colonies also increased. With each
emigration the number of our customers abroad was multiplied.
In 1850 and 1852 this process was accelerated by the news of
the gold discoveries in California and Australia. So great was
the emigration and the consequent demand for ships that all
freights were increased, and, with a short lull, this
continued till 1856. … The last great impetus was given by the
Suez Canal, by which the journey to India and the East was
quickened by one-half, and, at the same time, rendered more
secure."

_A. L. Bowley,
England's Foreign Trade in the Nineteenth Century.
chapter 4._

See, also, TARIFF LEGISLATION (pages 3073-3077).

COMMERCE: MODERN:
The Americans: A. D, 1856-1895.
Decay of American shipping interests.

"Down to the year 1856, the United States had rapidly advanced
in commercial greatness, and had overcome all the obstacles
which had clustered about their path. At that time we were
close upon the heels of England, and everything pointed to our
speedily passing her in the race for commercial supremacy.
Since then our commerce has steadily declined,—a misfortune
usually attributed to the civil war, and subsequently to the
competition of more profitable forms of investment. These
circumstances no doubt hastened the loss of our commerce; but,
as Lieutenant Kelley points out, they are not the true causes
of its decline, inasmuch as that began before the civil war.
The origin of our difficulties lay in the abandonment of our
old policy, which, from the beginning of the century,
consisted in surpassing all the world in the quality and speed
of our ships and in our naval architecture. With the
substitution of iron for wood we began to drop behind, until,
with a population of 55,000,000, we have a tonnage but little
greater than we had when half as numerous. Moreover, our
percentage of wrecks is larger than that of any other
seafaring people, and our ships and steamers are
shorter-lived.

_The Question of Ships
(Atlantic Monthly, June, 1884, pages 859-861)._

{3722}

"The first symptoms of the decadence appeared in 1856, in the
falling-off in the sales of American tonnage to foreigners;
the reduction being from 65,000 in 1855 to 42,000 in 1856, to
26,000 in 1858, and to 17,000 in 1860. During the war,
however, the transfers of American tonnage to foreign flags
again increased very largely, and, for the years 1862 to 1865
inclusive, amounted to the large aggregate of 824,652 tons, or
to more than one-fourth of all the registered tonnage (the
tonnage engaged in foreign trade) of the United States in
1860. But these transfers, it is well understood, were not in
the nature of ordinary business, but for the sake of obtaining
a more complete immunity from destruction upon the high seas
than the United States at that time was able to afford. The
year 1856 also marks the time when the growth of our foreign
steam-shipping was arrested, and a retrograde movement
inaugurated; so that … our aggregate tonnage in this
department was 1,000 tons less in 1862 than it was in 1855.
The total tonnage of every description built in the United
States also declined from 583,450 tons in 1855 (the largest
amount ever built in any one year) to 469,393 in 1856, 378,804
in 1857, and 212,892 in 1860, a reduction of 68 per cent in
five years. During the year 1855, American vessels carried
75.6 per cent of the value of the exports and imports of the
United States. After 1855 this proportion steadily declined to
75.2 per cent in 1856, 70.5 in 1857, 66.9 in 1859, and 65.2 in
1861, the year of the outbreak of the war. … Of the enormous
increase in the foreign commerce of the United States since
1860, as above noted, every maritime nation of any note, with
the exception of the United States, has taken a share.
American tonnage alone exhibits a decrease. Thus, comparing
1880 with 1856, the foreign tonnage entering the seaports of
the United States increased nearly 11,000,000 of tons; whereas
the American tonnage entered during the same period exhibits a
decrease of over 65,000 tons. British tonnage increased its
proportion from 935,000 tons in 1856 to 7,903,000 in 1880;
Germany, during the same time, from 166,000 to 1,089,000; and
Sweden and Norway from 20,662 to 1,234,000. Austria, limited
to almost a single seaport, jumped up from 1,477 tons in 1856
to 206,000 tons in 1880, and had, in 1879, 179 large-class
sailing-vessels engaged in the American trade. Sleepy Portugal
increased during the same period from 4,727 tons to 24,449
tons. … How is it, that the United States, formerly a maritime
power of the first class, has now no ships or steamers that
can profitably compete for the carrying of even its own
exports; not merely with the ships of our great commercial
rival, England, but also with those of Italy, Sweden, Norway,
Germany, Holland, Austria, and Portugal? … The facts already
presented fully demonstrate that the war was not the cause,
and did not mark the commencement, of the decadence of
American shipping; although the contrary is often and perhaps
generally assumed by those who have undertaken to discuss this
subject. The war simply hastened a decay which had already
commenced. … The primary cause was what may be termed a
natural one, the result of the progress of the age and a
higher degree of civilization; namely, the substitution of
steam in place of wind as an agent for ship-propulsion, and
the substitution of iron in the place of wood as a material
for ship-construction. … The means and appliances for the
construction of iron vessels did not then [in 1855] exist in
the United States; while Great Britain, commencing even as far
back as 1837 (when John Laird constructed his first iron
steamers of any magnitude for steam navigation), and with
eighteen years of experience, had become thoroughly equipped
in 1855 for the prosecution of this great industry. The
facilities for the construction of steam machinery adapted to
the most economical propulsion of ocean vessels, furthermore,
were also inferior in the United States to those existing in
Great Britain; and, by reason of statute provisions, citizens
of the United States interested in ocean commerce were
absolutely prevented and forbidden from availing themselves of
the results of British skill and superiority in the
construction of vessels when such a recourse was the only
policy which could have enabled them at the time to hold their
position in the ocean carrying trade in competition with their
foreign rivals. … The inability of the ships of the United
States to do the work which trade and commerce required that
they should do as well and cheaply as the ships of other
nations having been demonstrated by experience, the decadence
of American shipping commenced and was inevitable from the
very hour when this fact was first recognized, which was about
the year 1856. Here, then, we have the primary cause of the
decay of the business of ship-building in the United States
and of our commercial marine. … The question which next
naturally presents itself in the order of this inquiry and
discussion is, Why is it that the people of the United States
have not been permitted to enjoy the privileges accorded to
other maritime nations, of adjusting their shipping interests
to the spirit and wants of the age? Why have they alone been
debarred from using the best tools in an important department
of commerce, when the using meant business retained, labor
employed, and capital rewarded, and the non-using equally
meant decay, paralysis, and impoverishment? The answer is,
Because of our so-called navigation laws."

_D. A. Wells,
Our Merchant Marine,
chapters 2-3._

"Somewhat curtailed, the navigation laws may be summarized as
follows: No American is allowed to import a foreign-built
vessel in the sense of purchasing, acquiring a registry, or
using her as his property; the only other imports, equally and
forcibly prohibited, being counterfeit money and obscene
goods. An American vessel ceases to be such if owned in the
smallest degree by a naturalized citizen, who may, after
acquiring the purchase, reside for more than one year in his
native country, or for more than two years in any other
foreign state. An American ship owned in part or in full by an
American citizen who, without the expectation of relinquishing
his citizenship, resides in any foreign country except as
United States Consul, or as agent or partner in an exclusively
American mercantile house, loses its register and its right to
protection. A citizen obtaining a register for an American
vessel must make oath that no foreigner is directly or
indirectly interested in the profits thereof, whether as
commander, officer, or owner. Foreign capital may build our
railroads, work our mines, insure our property, and buy our
bonds, but a single dollar invested in American ships so
taints as to render it unworthy of the benefit of our laws. No
foreign-built vessel can, under penalty of confiscation, enter
our ports and then sail to another domestic port with any new
cargo, or with any part of an original cargo, which has once
been unladen previously, without touching at some port of some
foreign country.
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This law is construed to include all direct traffic between
the Atlantic and Pacific ports of the United States via Cape
Horn, the Cape of Good Hope, or the Isthmus of Panama; and
being a coasting trade, foreigners cannot compete. An American
vessel once sold or transferred to a foreigner, can never
again become American property, even if the transaction has
been the result of capture and condemnation by a foreign power
in time of war. Vessels under 30 tons cannot be used to import
anything at any seaboard town. Cargoes from the eastward of
the Cape of Good Hope are subject to a duty of 10 per cent. in
addition to the direct importation duties. American vessels
repaired in foreign ports must pay a duty on the repairs equal
to one-half the cost of the foreign work or material, or pay
50 per cent. ad valorem, the master or owner making entry of
such repairs as imports. This liberal provision, which dates
from 1866, is made to include boats obtained at sea, from a
passing foreign vessel, in order to assure the safety of our
own seamen. … All other nations have the power of buying ships
for foreign trade in the cheapest market, and the effort to
protect our shipbuilders by the denial of this right forbids
the return of commercial prosperity."

_J. D. J. Kelley,
The Question of Ships,
chapters 4-5._

COMMERCE: MODERN:
The recent revolution in Commerce.

"All economists who have specially studied this matter are
substantially agreed that, within the period named
[1860-1885], man in general has attained to such a greater
control over the forces of Nature, and has so compassed their
use, that he has been able to do far more work in a given
time, produce far more product, measured by quantity in ratio
to a given amount of labor, and reduce the effort necessary to
insure a comfortable subsistence in a far greater measure than
it was possible for him to accomplish 20 or 30 years anterior
to the time of the present writing (1889). In the absence of
sufficiently complete data, it is not easy, and perhaps not
possible, to estimate accurately, and specifically state the
average saving in time and labor in the world's work of
production and distribution that has been thus achieved. In a
few departments of industrial effort the saving in both of
these factors has certainly amounted to 70 or 80 per cent; in
not a few to more than 50 per cent. … Out of such results as
are definitely known and accepted have come tremendous
industrial and social disturbances, the extent and effect of
which—and more especially of the disturbances which have
culminated, as it were, in later years—it is not easy to
appreciate without the presentation and consideration of
certain typical and specific examples. … Let us go back, in
the first instance, to the year 1869, when an event occurred
which was probably productive of more immediate and serious
economic changes—industrial, commercial, and financial—than
any other event of this century, a period of extensive war
excepted. That was the opening of the Suez Canal. … The old
transportation had been performed by ships, mainly
sailing-vessels, fitted to go round the Cape, and as such
ships were not adapted to the Suez Canal, an amount of
tonnage, estimated by some authorities as high as two million
tons, and representing an immense amount of wealth, was
virtually destroyed. The voyage, in place of occupying from
six to eight months, has been so greatly reduced that steamers
adapted to the canal now make the voyage from London to
Calcutta, or vice versa, in less than 30 days. The notable
destruction or great impairment in the value of ships
consequent upon the construction of the canal did not,
furthermore, terminate with its immediate opening and use; for
improvements in marine engines, diminishing the consumption of
coal, and so enabling vessels to be not only sailed at less
cost, but to carry also more cargo, were, in consequence of
demand for quick and cheap service so rapidly effected, that
the numerous and expensive steamer constructions of 1870-1873,
being unable to compete with the constructions of the next two
years, were nearly all displaced in 1875-1876, and sold for
half, or less than half, of their original cost. And within
another decade these same improved steamers of 1875-1876 have,
in turn, been discarded and sold at small prices. … Again,
with telegraphic communication between India and China, and
the markets of the Western world, permitting the dealers and
consumers of the latter to adjust to a nicety their supplies
of commodities to varying demands, and with the reduction of
the time of the voyage to 30 days or less, there was no longer
any necessity of laying up great stores of Eastern commodities
in Europe; and with the termination of this necessity, the
India warehouse and distribution system of England, with all
the labor and all the capital and banking incident to it,
substantially passed away. Europe, and to some extent the
United States, ceased to go to England for its supplies. …
Importations of East Indian produce are also no longer
confined in England and other countries to a special class of
merchants; and so generally has this former large and special
department of trade been broken up and dispersed, that
extensive retail grocers in the larger cities of Europe and
the United States are now reported as drawing their supplies
direct from native dealers in both China and India. … In
short, the construction of the Suez Canal completely
revolutionized one of the greatest departments of the world's
commerce and business; absolutely destroying an immense amount
of what had previously been wealth, and displacing or changing
the employment of millions of capital and thousands of men. …
The deductions from the most recent tonnage statistics of
Great Britain come properly next in order for consideration.
During the ten years from 1870 to 1880, inclusive, the British
mercantile marine increased its movement, in the matter of
foreign entries and clearances alone, to the extent of
22,000,000 tons; or, to put it more simply, the British
mercantile marine exclusively engaged in foreign trade did so
much more work within the period named; and yet the number of
men who were employed in effecting this great movement had
decreased in 1880, as compared with 1870, to the extent of
about 3,000 (2,990 exactly). What did it? The introduction of
steam hoisting-machines and grain-elevators upon the wharves
and docks, and the employment of steam-power upon the vessels
for steering, raising the sails and anchors, pumping, and
discharging the cargo; or, in other words, the ability,
through the increased use of steam and improved machinery, to
carry larger cargoes in a shorter time, with no increase—or,
rather, an actual decrease—of the number of men employed in
sailing or managing the vessels. …
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Prior to about the year 1875 ocean-steamships had not been
formidable as freight-carriers. The marine engine was too
heavy, occupied too much space, consumed too much coal. … The
result of the construction and use of compound engines in
economizing coal has been illustrated by Sir Lyon Playfair, by
the statement that 'a small cake of coal, which would pass
through a ring the size of a shilling, when burned in the
compound engine of a modern steamboat would drive a ton of
food and its proportion of the ship two miles on its way from
a foreign port.' … Is it, therefore, to be wondered at, that
the sailing-vessel is fast disappearing from the ocean? …
Great, however, as has been the revolution in respect to
economy and efficiency in the carrying-trade upon the ocean,
the revolution in the carrying-trade upon land during the same
period has been even greater and more remarkable. Taking the
American railroads in general as representative of the
railroad system of the world, the average charge for moving
one ton of freight per mile has been reduced from about 2.5
cents in 1869 to 1.06 in 1887; or, taking the results on one
of the standard roads of the United States the (New York
Central), from 1.95 in 1869 to 0.68 in 1885. … One marked
effect of the present railroad and steamship system of
transportation has been to compel a uniformity of prices for
all commodities that are essential to life. … For grain
henceforth, therefore, the railroad and the steamship have
decided that there shall be but one market—the world."

_D. A. Wells,
Recent Economic Changes,
pages. 27-47._

A recent English writer says: "Formerly we [the English] were
the great manufacturers of the world; the great distributors
and the great warehousemen of the world. Our country was the
point on which the great passenger traffic impinged from
America and from our Colonies, and from which passengers
distributed themselves over the continent of Europe. The
products of the world as a general rule came to English ports,
and from English ports were distributed to their various
markets. All this has much changed. Probably the alteration is
more marked in our distributing trade than in that of our
manufacturing trade or in any other direction. About twenty
years ago all the silk that was manufactured or consumed in
Europe was brought to England from the East, mostly in a raw
state, and was thence distributed to continental mills.
Notwithstanding the increased consumption in Europe, silk now
coming to England for distribution is only about one-eighth of
the quantity that came here some twelve years ago. This is one
single example of an Oriental product. The same diversion of
our distributing trade can be traced in almost every other
commodity. Many people believe that the opening of the Suez
Canal has caused this diminution of our distributing trade,
and it cannot be denied that the Suez Canal has done much to
divert Oriental trade from this country, and to send goods
direct through the Canal to the continental ports, where they
are consumed, or where they can be placed on railways and be
forwarded without break of bulk to their destinations. But
whatever the Suez Canal may have done to divert trade in
Oriental goods such as tea or silk, it cannot account for the
diversion of the trade coming from America. Yet we find the
same diversion of American products which formerly came to
England for distribution. With cotton the same result is
found, and with coffee from the Brazil. Nor does the diversion
of these articles merely demonstrate that our distributing
trade is being lost to us: it also shows that the
manufacturers of England now permit the raw material of their
industries to be sent straight to the factories of their
competitors on the Continent. It shows that the great
manufactures of the world are being transferred from England
to Belgium, France, Germany, and even to Portugal and Spain.
In the train of these manufactures are rapidly following all
the complex and complicated businesses which are the
hand-maidens of commerce. For instance, the financial business
which used to centre in London is being transferred to Paris,
Antwerp, and Germany, mainly because the goods to which this
business relates are now consigned to continental countries
instead of as formerly being brought to England to be
distributed therefrom. … The loss of our distributing trade is
to my mind in a great measure due to the fact that goods
consigned to continental ports can be there put upon railways
and sent straight to their destination; while goods sent to
English ports must be put upon a railway, taken to our coast,
there taken out of the railway, put on board a vessel, taken
across to the Continent, there unloaded, then put on the
railway and sent off to their ultimate destination. These
transhipments from railway to vessel and from vessel to
railway are always costly, always involve time, and in the
case of some perishable articles render the transaction almost
prohibitive. To get over this difficulty and to retain our
distributing trade, there appears to me to be only one course
open, and that is in some way to obtain direct
railway-communication from Liverpool, from London, from
Bristol, from Hull, from Glasgow, and from Dundee, to the
continental markets where the goods landed at those ports are
consumed."

_H. M. Hozier,
England's Real Peril
(Macmillan's Magazine, July, 1888)._

COMMERCE: MODERN:
Waterways and Railways in modern inland commerce.

"There are three great epochs in the modern history of canal
navigation, each marked by characteristics peculiar to itself,
and sufficiently unlike those of either of the others to
enable it to be readily differentiated. They may be thus
described:

1. The era of waterways, designed at once to facilitate the
transport of heavy traffic from inland centres to the
seaboard, and to supersede the then existing systems of
locomotion—the wagon and the pack-horse. This era commenced
with the construction of the Bridgewater Canal between 1766
and 1770, and terminated with the installation of the railway
system in 1830.

2. The era of interoceanic canals, which was inaugurated by
the completion of the Suez Canal in 1869, and is still in
progress.

3. The era of ship-canals intended to afford to cities and
towns remote from the sea, all the advantages of a seaboard,
and especially that of removing and dispatching merchandise
without the necessity of breaking bulk.

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